01—Abstract
Summary
Summary of the 8-K filed January 12, 2024. Cited figures are marked; the original filing is the authoritative source.
On January 12, 2024, TKO Group Holdings, Inc. entered into a Term Employment Agreement with Seth Krauss, its Chief Legal and Administrative Officer, under Item 5.02 of this Form 8-K.
The agreement is effective January 1, 2024 and expires December 31, 2027. Mr. Krauss reports to TKO's President or Chief Operating Officer (currently Mark Shapiro) and may continue to serve in his roles at Endeavor Group Holdings, Inc. and its subsidiaries. The agreement provides an annual base salary of $2,000,000a and an annual target bonus of $2,000,000 for years after 2023, with a discretionary bonus for fiscal 2023.
It also grants a one-time award of 39,109 restricted stock units vesting in four equal annual installments through December 31, 2027. Annual equity awards carry a target of $1,216,438b for fiscal 2023 (pro-rated from September 12, 2023) and $4,000,000 for each full fiscal year thereafter, subject to performance and service criteria, with three-year ratable vesting. Severance protections apply on termination without Cause, resignation for Good Reason, or an Employer Non-Renewal.
These include continued base salary through the later of December 31, 2027 and the first anniversary of termination, target bonus for the year of termination, and accelerated time-based vesting, subject to a release of claims. Restrictive covenants apply for up to two years after termination.
02—Key points
Key Highlights
- Term Employment Agreement with Seth Krauss, Chief Legal and Administrative Officer, effective January 1, 2024 through December 31, 2027
- Annual base salary of $2,000,000, subject to increase as approved by the Board or its delegate
- Annual target bonus of $2,000,000 for years after fiscal 2023, based on TKO performance metrics
- One-time equity award of 39,109 RSUs vesting in four equal installments on December 31, 2024 through December 31, 2027
- Annual equity award target of $4,000,000 per full fiscal year (fiscal 2023 pro-rated at $1,216,438 from September 12, 2023), with three-year ratable vesting
- Severance includes continued base salary, target bonus, and accelerated time-based vesting on termination without Cause, for Good Reason, or on Employer Non-Renewal, conditioned on a release of claims
- Non-competition and non-solicitation restrictions for up to two years post-termination; non-compete applies after Cause-less or Good Reason termination only while base salary is paid, for no more than six months
03—Questions
Frequently Asked Questions
Who is Seth Krauss and to whom does he report?
Seth Krauss is TKO's Chief Legal and Administrative Officer. He reports to TKO's President or Chief Operating Officer, currently Mark Shapiro, or any successor position. The agreement also allows him to continue providing services at Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC, and their subsidiaries.
What is the total target compensation structure under the agreement?
The agreement provides a $2,000,000 annual base salary and a $2,000,000 annual target bonus for years after fiscal 2023, plus annual equity awards with a $4,000,000 target for each full fiscal year. A one-time 2024 equity award of 39,109 RSUs is also included. Actual bonus and equity amounts depend on performance and service criteria.
What happens to Mr. Krauss's compensation if he is terminated?
If terminated without Cause, for Good Reason, or through an Employer Non-Renewal, he receives continued base salary (through the later of December 31, 2027 and the first anniversary of termination, or through the first anniversary for Employer Non-Renewal), and accelerated time-based vesting of unvested equity. Termination without Cause or for Good Reason also includes payment of his target bonus for the year of termination. All severance is conditioned on a release of claims.
What restrictive covenants apply to Mr. Krauss?
He is subject to non-competition and non-solicitation restrictions for up to two years after employment ends. After a termination without Cause or for Good Reason, the non-compete applies only while the company continues paying his base salary, and for no more than six months after termination.
04—Continue