UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 12, 2024, TKO Group Holdings, Inc. (“TKO” or the “Company”) entered into a Term Employment Agreement (the “Agreement”) with Seth Krauss, the Company’s Chief Legal and Administrative Officer.
The term of the Agreement is effective from January 1, 2024 and expires on December 31, 2027. The Agreement provides that Mr. Krauss shall serve as TKO’s Chief Legal and Administrative Officer and will report to TKO’s President or Chief Operating Officer (currently Mark Shapiro) or any successor position thereto. The Agreement provides that Mr. Krauss may continue to provide services in his role and position at Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC and their respective subsidiaries, including as such roles and positions may be modified.
The Agreement provides for an annual base salary of $2,000,000 for the term, which will be pro-rated for any partial calendar year and subject to increase from time to time as approved by TKO’s Board of Directors (the “Board”) or an applicable delegate thereof (the Board or such delegate(s), as applicable, the “Governing Body”).
Mr. Krauss will be eligible for a discretionary annual bonus in respect of fiscal year 2023. Thereafter, during the term of the Agreement, Mr. Krauss will be eligible to receive an annual bonus with a target bonus amount equal to $2,000,000. The amount of the annual bonus will be based on the achievement of performance metrics based on TKO performance, as determined by the Governing Body in good faith.
The Agreement also entitles Mr. Krauss to receive a one-time equity award composed of 39,109 restricted stock units (“RSUs”) of the Company (the “2024 Equity Award”). The equity award will vest in four equal installments on each of December 31, 2024, December 31, 2025, December 31, 2026 and December 31, 2027, subject to Mr. Krauss’s continued employment through each such date. Further, Mr. Krauss is eligible to receive an annual equity award (the “Annual Equity Awards”) in respect of fiscal year 2023 (but granted in fiscal year 2024) and each fiscal year thereafter during the term of the Agreement, with a target amount equal to $1,216,438 in respect of fiscal year 2023 (a pro-rated portion of $4,000,000 in respect of the period from September 12, 2023 through December 31, 2023) and $4,000,000 in respect of each such full fiscal year thereafter. The actual amount of the Annual Equity Awards for each fiscal year shall be based on the attainment of specified annual performance metrics, continued service and/or other criteria, in each case, determined in the sole good faith discretion of the Governing Body. Subject to the approval of the Governing Body, each Annual Equity Award will consist of RSUs (or similar awards) and vest in three equal installments on each of the one-year, two-year and three-year anniversaries of the grant date, subject to Mr. Krauss’s continued employment through the applicable grant date and vesting date.
If Mr. Krauss’s employment is terminated without “Cause” or due to a resignation for “Good Reason” (each as defined in the Agreement) prior to the end of the term of the Agreement, Mr. Krauss is entitled to (i) continued payment of his base salary through the later of (a) December 31, 2027 and (b) the first anniversary of the date of termination, (ii) payment of his target bonus for the calendar year in which the termination occurs and (iii) accelerated vesting of the portion of the 2024 Equity Award and Annual Equity Awards subject to time-vesting, in each case, that remains unvested as of the date of termination.
If, before the end of the term of the Agreement, TKO fails to give Mr. Krauss a bona fide offer of renewal of his employment on terms that provide compensation that is substantially comparable to the compensation provided under the Agreement (excluding, for the avoidance of doubt, the 2024 Equity Award), and Mr. Krauss’s employment is then either timely terminated by TKO without Cause or by Mr. Krauss for any reason (an “Employer Non-Renewal”), Mr. Krauss shall be entitled to (i) continued payment of his base salary through the first anniversary of the date of termination and (ii) accelerated vesting of the portion of the 2024 Equity Award and Annual Equity Awards subject to time-based vesting, in each case, that remains unvested as of the date of termination.
Any severance that Mr. Krauss is entitled to receive upon his termination by the Company without Cause, due to a resignation for Good Reason or due to an Employer Non-Renewal is subject to Mr. Krauss’s execution and non-revocation of a release of claims.
Mr. Krauss is subject to certain non-competition and non-solicitation restrictions for up to two years following termination of employment. However, in the event of a termination without Cause or for Good Reason, the non-competition restrictions shall only apply to the extent the Company continues to pay base salary to Mr. Krauss (and, in such case, such restrictions (and corresponding base salary payments) will not continue for more than six months following termination).
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit No. |
Description | |
| 10.1 | Term Employment Agreement, dated as of January 12, 2024, by and between TKO Group Holdings, Inc. and Seth Krauss. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TKO GROUP HOLDINGS, INC. | ||
| By: | /s/ Andrew Schleimer | |
| Name: | Andrew Schleimer | |
| Title: | Chief Financial Officer | |
Date: January 12, 2024