Form 4: Stephen G. Berman, Chairman, CEO, and Secretary of JAKKS Pacific, Awarded 83,334 Restricted Stock Units

Stephen G. Berman, Chairman, CEO, and Secretary of JAKKS Pacific, was granted 83,334 Restricted Stock Units (RSUs) on February 18, 2025, subject to certain market conditions and vesting in three equal installments.

Summary

• On February 18, 2025, Stephen G. Berman, Chairman, CEO, and Secretary of JAKKS Pacific, received a grant of 83,334 Restricted Stock Units (RSUs).
• The RSUs were issued under the company's 2002 Stock Award and Incentive Plan and are subject to the terms of an agreement between JAKKS Pacific and Mr. Berman.
• The RSUs will vest in three equal installments, contingent upon meeting specific market conditions outlined in Amendment No. 9 to the Second Amended and Restated Employment Agreement dated February 18, 2025.
• Any unvested RSUs will be forfeited if the vesting conditions are not met within the period specified in Amendment No. 9.
• The closing price of JAKKS Pacific's common stock on the NASDAQ preceding the grant date was $34.07.
• The reporting person's signature is dated February 20, 2025.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The grant of RSUs aligns management with shareholder interests, but the vesting conditions introduce some uncertainty.

Positives

• The grant of RSUs to the CEO aligns his interests with those of the shareholders, incentivizing him to improve the company's performance and stock price.
• The vesting conditions based on market performance suggest a focus on achieving specific financial goals.

Negatives

• The potential forfeiture of unvested RSUs if market conditions are not met could be seen as a negative if the market conditions are unlikely to be met.

Risks

• Failure to meet the market conditions specified in Amendment No. 9 could result in the forfeiture of the RSUs.
• The minimum stock ownership provisions adopted by the Issuer's Board of Directors may restrict the transfer of certain shares.

Future Outlook

The vesting of the RSUs is contingent upon meeting certain market conditions as stipulated in Amendment No. 9, suggesting that future compensation is tied to company performance.

Industry Context

Granting stock options and restricted stock units are common practices in the industry to align management's interests with those of shareholders.

Comparison to Industry Standards

• Executive compensation packages, including RSUs, are common in publicly traded companies like JAKKS Pacific.
• The specific vesting terms and market conditions attached to the RSUs would need to be compared to those of peer companies to assess their competitiveness and rigor.

Stakeholder Impact

• Shareholders: The RSU grant aligns management's interests with shareholder value creation.
• Employees: The RSU grant could have a positive impact on employee morale as it shows the company is investing in its leadership.

Key Dates