TKO Group Holdings, Inc. appointed Ariel Emanuel as new CEO

Item 5.02 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Appointment of Directors 

Effective as of the Closing Date, the following individuals were appointed to serve on the Board:


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Peter C.B. Bynoe


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Egon P. Durban


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Ariel Emanuel


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Nick Khan


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Steven R. Koonin


- 
Jonathan A. Kraft


- 
Vincent K. McMahon


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Sonya E. Medina


- 
Mark Shapiro


- 
Nancy R. Tellem


- 
Carrie Wheeler


Each of the foregoing directors were appointed to the Board pursuant to the Governance Agreement and supersede the incumbent Board, whose then members, Nick Khan, Frank A. Riddick and Karen Mullane, tendered their resignation from the Board on and effective as of the Closing Date, contingent upon, and effective concurrently with, the consummation of the Transactions. Pursuant to the Governance Agreement, each of Egon P. Durban, Ariel Emanuel, Jonathan A. Kraft, Sonya E. Medina, Mark Shapiro and Carrie Wheeler were designated as Endeavor's director designees, and Peter C.B. Bynoe, Nick Khan, Steven R. Koonin, Vincent K. McMahon and Nancy R. Tellem were designated as WWE's director designees.

Effective as of the Closing Date, the following committees of the Board were established and constituted as follows:


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Audit Committee: Sonya E. Medina, Nancy R. Tellem, Carrie Wheeler (Chair)


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Compensation Committee: Peter C.B. Bynoe, Steven R. Koonin (Chair), Sonya E. Medina


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Nominating and Corporate Governance Committee: Ariel Emanuel, Nick Khan, Mark Shapiro (Chair)


Appointment of Officers 

In connection with the Transactions, effective as of the Closing Date, Ariel Emanuel was appointed as the Company's Chief Executive Officer, to serve as principal executive officer, Mark Shapiro was appointed as President and Chief Operating Officer, to serve as president and as principal operating officer, Andrew Schleimer was appointed as the Company's Chief Financial Officer, to serve as principal financial officer, and Seth Krauss was appointed as the Company's Chief Legal Officer, in each case pursuant to the terms of the Transaction Agreement.

Biographical information and business experience required by Item 5.02(d) with respect to the directors of the Company following the consummation of the Transactions and of Messrs. Emanuel, Shapiro, Schleimer and Krauss required by Item 5.02(c) is described under the sections "Management and Directors of New PubCo After the Transactions-Board of Directors" and "Management and Directors of New PubCo After the Transactions-Management" of the Information Statement/Prospectus and incorporated herein by reference.

In addition, on the Closing Date, Shane Kapral was appointed as the Company's Chief Accounting Officer, to serve as principal accounting officer. Mr. Kapral, age 38, became Chief Accounting Officer of the Company on September 12, 2023. Mr. Kapral has served as Senior Vice President, Finance & Chief Accounting Officer of UFC since 2016 and joined UFC in 2012. He has also served as Senior Vice President and Treasurer of Endeavor since May 2021 and relinquished that role in September 2023. Mr. Kapral is a certified public accountant. Mr. Kapral graduated with a Bachelor of Science from Pitzer College and a Master of Business Administration from Claremont Graduate University.


The Company's directors and the foregoing named officers have entered into customary indemnification agreements that provide them, in general, with customary indemnification in connection with their service to the Company or on its behalf. The foregoing description of the indemnification agreements is qualified in its entirety by reference to the full text of each indemnification agreement, a form of which is filed as Exhibit 10.15 hereto and is incorporated herein by reference.

Director Compensation 

Following the consummation of the Transaction, we implemented a policy (the "Director Compensation Policy") pursuant to which each non-employee director receives an annual director fee of $107,000 as well as an additional annual fee of $15,000 for service as the chair of the audit committee and an additional annual fee of $21,000 for service (including as chair) on the audit committee, each earned on a quarterly basis. The policy provides for an additional annual fee of $20,000 for service as the chair of the compensation committee and an additional annual fee of $10,000 for service (including as chair) on the compensation committee, each earned on a quarterly basis, and an annual fee of $15,000 for service as the chair of the nominating and corporate governance committee and an additional annual fee of $7,500 for service (including as chair) on the nominating and corporate governance committee, each earned on a quarterly basis.

Effective as of the Closing Date, each non-employee director who is serving and will continue to serve on the Board was granted a restricted stock unit award with a grant date value of $182,000, calculated based on the fair market value of such shares on the Closing Date.

Each non-employee director will also receive an annual restricted stock unit award with a grant date value of $182,000, calculated based on the average closing price (as reported on the applicable stock exchange on which shares of TKO Class A Common Stock are traded for the 20 trading days preceding the date of grant or, if such shares have been trading for less than 20 days, the number of days these shares have been trading preceding the date of grant), entitling them to receive shares of TKO Class A Common Stock upon vesting. Additionally, each non-employee director who was initially elected or appointed to the Board following the Closing Date will receive a grant of TKO Class A Common Stock with a grant date value, calculated based on the average closing price (as reported on the applicable stock exchange on which shares of TKO Class A Common Stock are traded for the 20 trading days preceding the date of grant or, if such shares have been trading for less than 20 days, the number of days these shares have been trading preceding the date of grant), equal to the product of $182,000, and a fraction calculated as follows: (i) before the Company's first annual shareholder meeting, the numerator of which is (x) the number of days between the Closing Date and the anticipated date of the Company's first annual shareholder meeting (as determined by the Board) minus (y) the number of days in the period beginning on the date of the effective time and ending on such non-employee director's start date, and the denominator of this fraction is the number of days in the period between the Closing Date and the anticipated date of the Company's first annual shareholder meeting and (ii) following the Company's first annual shareholder meeting, the numerator of this fraction is (x) 365 minus (y) the number of days in the period beginning on the date of the annual shareholder meeting immediately preceding such non-employee director's start date, and ending on such non-employee director's start date, and the denominator of this fraction is 365.

Each equity grant will vest in full on the date of the Company's annual shareholder meeting immediately following the date of grant, subject to the non-employee director continuing in service through such meeting date, and is further subject to accelerated vesting upon a Change in Control (as defined in the TKO Group Holdings, Inc. 2023 Incentive Award Plan (the "2023 Plan")).

Officer Compensation 

Employment Agreements 

On the Closing Date, the Company entered into employment agreements with each of Mr. Emanuel and Mr. Shapiro (the "Employment Agreements"), effective as of the Closing Date. A summary of the principal terms of the Employment Agreements is set forth in the section titled "Management and Directors of New PubCo After the Transaction" contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the Employment Agreements, copies of which are filed as Exhibits 10.16 and 10.17 hereto, respectively, and are incorporated herein by reference.

Equity Awards 

Following the consummation of the Transactions, Mr. Emanuel received a grant of RSUs with respect to a number of shares of TKO Class A Common Stock equal to $40,000,000 divided by the closing price of TKO Class A Common Stock on the Closing Date. The RSUs will vest in four equal installments on each of the one-year, two-year, three-year and four-year anniversaries of the Closing Date, subject to his continued employment through the applicable vesting date.

Following the consummation of the Transactions, Mr. Shapiro received a grant of RSUs with respect to a number of shares of TKO Class A Common Stock equal to $6,250,000 divided by the closing price of TKO Class A Common Stock on the Closing Date. The RSUs will vest on the one-year anniversary of the Closing Date, subject to his continued employment through the vesting date.

Related Person Transactions 

Vincent K. McMahon 

On April 2, 2023, concurrently with the execution of the Transaction Agreement, Endeavor and Mr. McMahon entered into a stockholders agreement (the "Stockholders Agreement"), pursuant to which, among other things and subject to certain exceptions set forth therein, Mr. McMahon agreed:


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not to transfer shares of WWE Common Stock prior to completion of the Transactions;


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to provide customary assistance in respect of any required regulatory filings and comply with the "clear skies" provision of the transaction agreement; and


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following the completion of the Transactions, to provide Endeavor with a right of first offer in respect of the transfer of his shares of common stock, subject to certain exception, including in connection with any margin loans or pledges with respect to such securities.


Certain provisions of the Stockholders Agreement terminated upon the closing of the Transactions.

The foregoing description of the Stockholders Agreement is qualified in its entirety by reference to the full text of the Stockholders Agreement, a copy of which is filed as Exhibit 10.18 hereto and is incorporated herein by reference.


In addition, Mr. McMahon is party to the Registration Rights Agreement and the Governance Agreement, the material terms of which are described in Item 1.01 and are incorporated herein by reference.

Endeavor Directors and Officers 

Mr. Emanuel is a director and an officer and Messrs. Shapiro and Mr. Krauss are officers, of Endeavor, the Company's parent. Each receives compensation from Endeavor for his services to Endeavor, the cost of which is not borne by TKO.

TKO Equity Plan 

Prior to the Closing Date, the Company adopted, and stockholders of the Company approved, the 2023 Plan, effective as of the Closing Date, and the forms of award agreements thereunder. A summary of the principal terms of the 2023 Plan is set forth in the section titled "Compensation Programs of New PubCo After the Transactions" contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the 2023 Plan, a copy of which is filed as Exhibit 10.19 hereto and is incorporated herein by reference. Copies of forms of award agreements under the 2023 Plan are filed as Exhibits 10.20 through 10.22 hereto and incorporated herein by reference.