Cineplex’s Chief Will Share Power : Representatives of MCA and Bronfmans Join Drabinsky

Cineplex Odeon said Monday that it has created a three-man “office of the chairman,” in which beleaguered top executive Garth Drabinsky will share supreme power at the movie theater company with representatives of major shareholders MCA Inc. and the Bronfman clan of Canada.

In the latest wrinkle in Cineplex’s continuing corporate crisis, the Toronto company said Drabinsky will share the office with Charles S. Paul, president of MCA’s consumer products group, and James D. Raymond, president of the Claridge Inc. investment firm and a member of the Bronfmans faction on the board. The triumvirate, who are all directors, will “approve all significant actions, policies and commitments” by the company, Cineplex said.

Plans to Make Offer

The turmoil began at Cineplex five weeks ago, when Drabinsky and Vice Chairman Myron I. Gottlieb moved to buy out the Bronfmans’ 30% interest. That deal was squelched after it was opposed by MCA and Canadian securities regulators.

Drabinsky has since indicated that he will make an offer for all Cineplex shares, but no such offer has been forthcoming.

The announcement about the new office was one of several changes that apparently stemmed from the corporate crisis. The company said MCA will no longer be bound to give Cineplex first chance to buy MCA’s 49% interest in the case of any offer for all Cineplex shares that is not voted down by the Cineplex board.

Cineplex also said it has signed new employment agreements with Drabinsky and Gottlieb that would give the two executives severance payments “under certain circumstances” in a takeover by an independent third party who ends up with more than 50% of the company’s shares.

A total of $9.5 million (Canadian) would be shared by Drabinsky, Gottlieb and two other senior officers in such event.

Will Reimburse Expenses

The employment agreements are of “indefinite duration,” and can be terminated by the company or the executive after Sept. 30, with 15 days notice, Cineplex said. Under such termination, the two would be entitled to a total of $8 million (Canadian), the company said.

Cineplex also said it agreed to reimburse Drabinsky and Gottlieb up to $5 million (Canadian) for certain expenses they incur in connection with a possible takeover bid.

John Olds, an analyst with Paul Kagan Associates, a Carmel, Calif., entertainment research firm, speculated that the changes were the result of pressure brought to bear by the powerful MCA and Bronfman interests. If the Drabinsky camp cannot mount an offer and break the impasse, Olds said, the powerful stockholders may be ready to “let someone else come in and do it.”

As a result of the changes, Cineplex said, it again postponed its annual meeting, this time to June 30. It had previously been put off to June 6 from the original date of May 9.

Neither Cineplex nor MCA officials were available to elaborate on the announcement.