Form 4: TCG Capital Management Reports Acquisition of Funko Equity and Options for Director Compensation

TCG Capital Management, LP, a significant shareholder and director of Funko, Inc., reported the acquisition of Restricted Stock Units and stock options for its nominated directors, Jesse Jacobs and Mike Kerns, as part of their board compensation.

Summary

• TCG Capital Management, LP, identified as a Director and 10% Owner of Funko, Inc. (FNKO), reported transactions on June 12, 2025.
• The filing details the acquisition of 34,838 Restricted Stock Units (RSUs) and 52,000 options to purchase Class A Common Stock.
• These securities were granted to Jesse Jacobs (17,419 RSUs and 26,000 options) and Mike Kerns (17,419 RSUs and 26,000 options) as compensation for their service on Funko's board of directors.
• The RSUs and options are held by Mr. Jacobs and Mr. Kerns for the benefit of TCG Capital Management, LP.
• Both the RSUs and options will vest and become exercisable on June 12, 2026, contingent upon Mr. Jacobs' and Mr. Kerns' continued service with Funko through that date.
• The options have an exercise price of $5.2 per share and an expiration date of June 12, 2035.
• Jesse Jacobs and Mike Kerns serve on Funko's board as nominees of TCG 3.0 Fuji, LP, an affiliate of TCG Capital Management, LP, pursuant to a Stockholders Agreement.

Sentiment

Score: 6

Explanation: Slightly positive, as it indicates continued alignment of a significant investor's interests with the company's performance through director compensation, which is generally viewed favorably for corporate governance.

Positives

• The grants align the interests of TCG Capital Management, LP, a significant shareholder and director, with the long-term performance of Funko, Inc. through equity compensation.
• The compensation structure incentivizes the continued service of key directors, Jesse Jacobs and Mike Kerns, who represent a major investor.

Future Outlook

The vesting schedule for the RSUs and options on June 12, 2026, indicates an expectation of continued service from Jesse Jacobs and Mike Kerns on Funko's board of directors.

Management Comments

• Each restricted stock unit represents a contingent right to receive one share of Class A Common Stock or, at the election of the Issuer, an equivalent cash payment.
• The RSUs and options were granted to Jesse Jacobs and Mike Kerns as compensation for their service on the Issuer's board of directors and are held by them for the benefit of the reporting person (TCG Capital Management, LP).
• The vesting of RSUs and exercisability of options are subject to Mr. Jacobs' and Mr. Kerns' continued service with the Issuer through the vesting date.
• Jesse Jacobs and Mike Kerns serve on the Issuer's board of directors pursuant to a right granted to TCG 3.0 Fuji, LP (an affiliate of the reporting person) under a Stockholders Agreement, which allows for the nomination of up to two directors.

Industry Context

This Form 4 filing reflects a routine insider transaction related to director compensation, common across publicly traded companies. It demonstrates how significant shareholders, particularly private equity firms like TCG Capital Management, align their interests with portfolio companies through board representation and equity-based compensation for their nominees.

Corporate Governance

Related Party Transactions

• The grant of Restricted Stock Units and stock options to Jesse Jacobs and Mike Kerns, who are partners of TCG Capital Management, LP (the reporting person and a 10% owner), and serve on Funko's board as nominees of an affiliate of TCG Capital Management, LP, constitutes a related party transaction. These grants are held for the benefit of the reporting person.

Stakeholder Impact

• Shareholders: Increased alignment of a significant institutional investor (TCG Capital Management, LP) with the company's long-term performance through equity compensation for its nominated directors.
• Employees: No direct impact mentioned, but continued board stability from key investor representatives could indirectly benefit employees.

Next Steps

• Vesting of 34,838 Restricted Stock Units on June 12, 2026, subject to continued service.
• Vesting and exercisability of 52,000 stock options on June 12, 2026, subject to continued service.
• Potential exercise of stock options by June 12, 2035.

Key Dates

Keywords

SEC Form 4, Funko Inc., FNKO, TCG Capital Management, Restricted Stock Units, Stock Options, Insider Trading, Director Compensation, Equity Compensation, Beneficial Ownership