Form 4: TCG Capital Management Reports Changes in Beneficial Ownership of Funko, Inc.

TCG Capital Management reports the acquisition of restricted stock units and options for Funko, Inc. by affiliated directors Jesse Jacobs and Mike Kerns as compensation for their board service.

Summary

• TCG Capital Management, LP, filed a Form 4 detailing changes in beneficial ownership of Funko, Inc. securities.
• The report covers transactions made on June 4, 2024.
• Jesse Jacobs and Mike Kerns, who are affiliated with TCG Capital Management and serve on Funko's board, were granted restricted stock units (RSUs) and options as compensation.
• Each RSU represents a contingent right to receive one share of Class A Common Stock or an equivalent cash payment.
• 20,408 RSUs were acquired, with 10,204 granted to Jesse Jacobs and 10,204 to Mike Kerns, vesting on June 4, 2025, contingent on continued service.
• 51,000 options to purchase Class A Common Stock were acquired, with 25,500 granted to Jesse Jacobs and 25,500 to Mike Kerns, exercisable on June 4, 2025, contingent on continued service.
• The exercise price for the options is $9.43.
• TCG 3.0 Fuji, LP, an affiliate of TCG Capital Management, has the right to nominate up to two directors to Funko's board under a Stockholders Agreement.

Sentiment

Score: 7

Explanation: The document reflects a standard practice of equity compensation for board members, indicating a continued alignment of interests between the company and its directors. The sentiment is neutral to slightly positive.

Positives

• The grant of RSUs and options to directors aligns their interests with the company's performance.
• Continued service requirements for vesting incentivize directors to remain engaged.

Future Outlook

The document does not contain specific forward-looking statements regarding Funko's future performance, but the equity grants suggest a continued relationship between TCG Capital Management and Funko.

Management Comments

• Jesse Jacobs and Mike Kerns serve on the Issuer's board of directors pursuant to the right of TCG 3.0 Fuji, LP to nominate up to two directors.
• Mr. Jacobs is Managing Partner of the reporting person, and Mr. Kerns is a Co-founder and Partner of the reporting person.
• Each of Mr. Jacobs and Mr. Kerns may be determined to represent the interests of the reporting person on the Board of Directors of the Issuer, and accordingly, the reporting person may be deemed to be directors for purposes of Section of the Securities Exchange Act of 1934, as amended.

Industry Context

Equity grants to board members are a common practice in publicly traded companies to align their interests with shareholders. The size and terms of the grants are typical for director compensation.

Comparison to Industry Standards

• Director compensation packages, including stock options and restricted stock units, are common across publicly traded companies.
• Companies like Mattel (MAT) and Hasbro (HAS) also utilize equity-based compensation for their board members.
• The vesting schedules and exercise prices are generally in line with industry standards for incentivizing long-term value creation.

Stakeholder Impact

• Shareholders may view the equity grants positively as aligning director interests with long-term value creation.
• Employees may see the grants as a sign of confidence in the company's future.

Key Dates