DEF 14A of Funko, Inc.
Filed Apr 30, 2025 · FY20240001704711-25-000064
CONTENTS
| EXECUTIVE COMPENSATION TABLES | 41 | | 2024 SUMMARY COMPENSATION TABLE | 41 | | GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024 | 42 | | NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE | 43 | | SUMMARY OF EXECUTIVE COMPENSATION ARRANGEMENTS | 43 | | OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | 49 | | OPTION EXERCISES AND STOCK VESTED IN FISCAL 2024 | 50 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | 51 | | DIRECTOR COMPENSATION | 53 | | CEO PAY RATIO | 55 | | PAY VERSUS PERFORMANCE TABLE | 56 | | NARRATIVE DISCLOSURE TO PAY VERSUS PERFORMANCE TABLE | 58 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 60 | | CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | 63 | | POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS | 63 | | TAX RECEIVABLE AGREEMENT | 64 | | FAH LLC AGREEMENT | 64 | | STOCKHOLDERS AGREEMENT | 65 | | REGISTRATION RIGHTS AGREEMENT | 66 | | INDEMNIFICATION AGREEMENTS | 66 | | DELINQUENT SECTION 16(A) REPORTS | 66 | | COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | 66 | | STOCKHOLDERS’ PROPOSALS | 67 | | OTHER MATTERS | 67 | | SOLICITATION OF PROXIES | 67 | | FUNKO'S ANNUAL REPORT ON FORM 10-K | 68 | | PROXY CARD | 69 |
Comparative Market Pay Analysis
Comparative Market Pay Analysis In consultation with Semler Brossy, our Compensation Committee focuses on publicly disclosed information from the peer group as well as broader market survey data for companies similarly sized to Funko for general benchmarking purposes for evaluating our executive compensation program. The Compensation Committee periodically reviews the composition of the peer group to assess its continued relevance based on a combination of quantitative and qualitative factors including size, revenue and market capitalization, business fit, talent market overlap, and other relevant factors. For 2024, the peer group (which was unchanged from the 2023 peer group) consisted of:
Annual Performance-Based Cash Incentive Compensation
Annual Performance-Based Cash Incentive Compensation We consider annual cash incentive bonuses to be an important component of our total compensation program and provides incentives necessary to retain executive officers and align their compensation with Company performance. For 2024, target and maximum cash incentive bonuses as a percentage of salary were as set out below.
Annual Performance-Based Cash Incentive Compensation
| Named Executive Officer(1) | Target Cash Incentive | Maximum Cash Incentive | | Cynthia Williams | 100% | 200% | | Yves Le Pendeven | 75% | 150% | | Tracy Daw | 75% | 150% | | Andrew Oddie | 75% | 150% |
Annual Performance-Based Cash Incentive Compensation
(1) Mr.. Lunsford was not eligible for annual performance-based cash incentive compensation. Mr. Lunsford received a monthly salary of $30,000 without additional cash incentive compensation. As a result of their resignations as Chief Financial Officer and Chief Operating Officer and President, respectively and as employees of the Company, Messrs. Nave and Perlmutter were not eligible for and did not receive any bonus for 2024. Such target bonuses for Messrs. Daw and Oddie were consistent with corresponding targets from 2023 following consideration of the factors set forth above under “Determination of Executive Compensation”. Under the Executive Incentive Plan, our Compensation Committee establishes company performance goals each year and, at the completion of the year, determines actual bonus payouts after assessing company and, if applicable, individual performance against these goals. The Executive Incentive Plan for fiscal 2024 was based solely on company performance goals and was based on the achievement of: (i) Adjusted EBITDA (weighted at 50%); (ii) Net Sales (weighted at 25%) and (iii) Direct-to-Consumer (“DTC”) Revenue (weighted at 25%). For fiscal 2024, achievement against targets was measured on a semi-annual basis, with achievement against first-half targets accounting for 1/3rd of each executive’s target bonus opportunity and achievement against second-half targets accounting for 2/3rd of each executive’s target bonus opportunity. “Adjusted EBITDA” is defined as: net (loss) income before interest expense, net, income tax expense (benefit), depreciation and amortization, further adjusted for non-cash charges related to equity-based compensation programs, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction losses, Tax Receivable Agreement liability adjustments and other unusual or one-time items. “Net Sales” is defined as: revenue less sales allowances and discounts. “DTC Revenue” is defined as: net sales earned from the Company’s e-commerce platform, retail stores and events. Adjusted EBITDA is a non-GAAP financial measure. This non-GAAP financial measure is not a substitute for or superior to the comparable financial measures under GAAP. The targeted Company performance goals under the Executive Incentive Plan for 2024 were split into two equal performance periods during the 2024 fiscal with each of the six month periods within the fiscal year having its own targets. The following table sets forth the threshold, target and maximum bonus opportunities with respect to each Company performance component:
Annual Performance-Based Cash Incentive Compensation
| Financial Goals Achievement | Payout of Company performance goal (1) | | Less than 85% of Target | 0% | | 85% of Target | 50% of the Target Bonus | | 100% of Target | 100% of the Target Bonus | | 130% or more than Target | 200% of the Target Bonus |
Annual Performance-Based Cash Incentive Compensation
(1) Determined on a linear interpolation basis.
2024 Performance Goals
2024 Performance Goals
2024 Performance Goals
| For the six months ended June 30, 2024: | | | | | | | | Metric | Weighting | Threshold | Target | Maximum | Actual Achievement | Payout (% of target) | | Adj. EBITDA ($MM) | 50% | $29 | $34 | $44 | $38 | 133% | | Net Sales ($MM) | 25% | $413 | $486 | $632 | $463 | 83% | | DTC Revenue ($MM) | 25% | $101 | $119 | $155 | $110 | 73% | | Total Weighted Attainment | | | | | | 106% |
2024 Performance Goals
| For the six months ended December 31, 2024: | | | | | | | | Metric | Weighting | Threshold | Target | Maximum | Actual Achievement | Payout (% of target) | | Adj. EBITDA ($MM) | 50% | $60 | $70 | $91 | $57 | 0% | | Net Sales ($MM) | 25% | $551 | $648 | $842 | $586 | 70% | | DTC Revenue ($MM) | 25% | $146 | $172 | $224 | $150 | 57% | | Total Weighted Attainment | | | | | | 32% |
2024 Performance Goals
Based on the Company’s achievement against the goals for 2024, the Compensation Committee determined that the overall performance goals with respect to the 2024 bonuses were achieved at 56%. In 2024, the Compensation Committee elected to eschew any individual component for NEOs under the fiscal 2024 Executive Incentive Plan, electing to focus instead on achievement of the company-wide goals set forth above. Pursuant to the terms of the Williams Agreement (as defined below), Ms. Williams was entitled to a minimum bonus payout of 75% of her target bonus amount for 2024, prorated for the number of days she served as Chief Executive Officer during 2024. Total actual cash incentives earned for 2024 under the Executive Incentive Plan were as set out below:
2024 Performance Goals
| Named Executive Officer | Fiscal 2024 Payout | | Cynthia Williams | $462,329 | | Yves Le Pendeven | $215,770 | | Tracy Daw | $195,794 | | Andrew Oddie | $272,650 |
2024 Performance Goals
As a result of their resignations as Chief Financial Officer and Chief Operating Officer and President, respectively and as employees of the Company, Messrs. Nave and Perlmutter were not eligible for and did not receive any bonus for 2024. The NEOs’ 2024 performance bonuses based on actual performance achievement are set forth in the column entitled “Non-Equity Incentive Plan Compensation” in the “2024 Summary Compensation Table” below. The portion of Ms. Williams’ 2024 bonus attributable to the guaranteed bonus payout for 2024 provided for under the Williams Agreement is set forth in the column entitled “Bonus” in the “2024 Summary Compensation Table” below.
Equity-Based Long-Term Incentive Awards
Equity-Based Long-Term Incentive Awards We view equity-based compensation as a critical component of our balanced total compensation program. Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns interest of executives with those of our stockholders. Long-term incentive grant values are determined holistically in the context of total compensation levels. This process, as described above, considers comparative market analysis, retention, role criticality, and individual performance. We generally make our annual equity awards following the Compensation Committee meeting held in the first quarter. Our Compensation Committee believes it is essential to provide equity-based compensation to our executive officers in order to link the interests and risks of our executive officers with those of our stockholders, reinforcing our commitment to ensuring a strong linkage between company performance and pay. In 2024, in light of significant anticipated changes to our management team during 2024, as well as to emphasize retention of other key members of management, our Compensation Committee determined not to grant performance stock units, or PSUs, as part of the equity grant mix for our executives. For 2024, the Compensation Committee determined the appropriate weighting for the equity grant mix in 2024 was 50% restricted stock units and 50% stock options in order to emphasize retention while still tieing a significant portion of the awards to overall stock price performance. The Compensation Committee will review and assess the mix of equity awards in the future to ensure it remains appropriate and aligned with stockholder interests.
Performance of Prior Equity-Based Long-Term Incentive Grants
Performance of Prior Equity-Based Long-Term Incentive Grants Achievement of Targets for Third Year of 2022-2024 PSUs
Performance of Prior Equity-Based Long-Term Incentive Grants
| Performance Metric | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Achievement | % of Target Payout Earned (2024) | | Net Sales (in millions) | $1,360 | $1,600 | $2,080 | $1,050 | 0% | | Adjusted EBITDA Margin | 16.0% | 16.5% | 17.5% | 9.0% | 0% | | Achievement for Year Three of Performance Period | | | | | 0% | | Overall Achievement for 2022 - 2024 PSUs(1) | | | | | 16.7% |
Performance of Prior Equity-Based Long-Term Incentive Grants
(1) The PSUs are tied to two equally weighted performance metrics, Net Sales and Adjusted EBITDA Margin, and vest based on the average annual achievement of the applicable performance goals over the three-year performance period. For 2022, the first year of the performance period, based on achievement of the applicable performance metrics the percentage of target payout earned for Net Sales was 94% and for Adjusted EBITDA Margin was 0%. For 2023, the second year of the performance period, based on achievement of the applicable performance metrics the percentage of target payout earned for Net Sales was 0% and for Adjusted EBITDA Margin was 0%. Overall Achievement was determined by averaging the annual achievement across the three year performance period. Achievement of Targets for Second Year of 2023-2025 PSUs
Performance of Prior Equity-Based Long-Term Incentive Grants
| Performance Metric | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Achievement | % of Target Payout Earned (2023) | | Net Sales (in millions) | $1,211 | $1,425 | $1,853 | $1,050 | 0% | | Achievement for Year Two of Performance Period(1) | | | | | 0% |
Performance of Prior Equity-Based Long-Term Incentive Grants
(1) Performance targets are established at the beginning of the three-year performance period. No PSUs are eligible to vest until the completion of the applicable three-year performance period. For 2022, the first year of the performance period, based on achievement of the applicable performance metrics the percentage of target payout earned for Net Sales was 0%. The Adjusted EBITDA Margin metric for the 2023-2025 Performance Based Stock Units is only measured following year three of the Performance Period.
2024 Equity-Based Long-Term Incentive Grants
2024 Equity-Based Long-Term Incentive Grants 2024 equity awards were granted through a combination of restricted stock units (“RSUs”) and stock options to our NEOs as follows:
2024 Equity-Based Long-Term Incentive Grants
| | RSUs | Stock Options | | Weighting | 50% | 50% | | Vesting Period | 25% annually over four years | 25% after year one, 1/36th monthly thereafter |
2024 Equity-Based Long-Term Incentive Grants
RSUs and stock options reward long-term stock price appreciation, promote retention, facilitate stock ownership, and align our NEOs’ interests with those of our stockholders. In March 2024, we made the following grants to our NEOs:
2024 Equity-Based Long-Term Incentive Grants
| Name | Target Grant Value ($) | Number of Shares Underlying Stock Options | Number of Shares Underlying RSUs | | Yves Le Pendeven | 495,000 | 83,900 | 33,600 | | Tracy Daw | 725,000 | 125,900 | 50,400 | | Andrew Oddie | 725,000 | 125,900 | 50,400 |
2024 Equity-Based Long-Term Incentive Grants
As a result of their resignations as Chief Financial Officer and Chief Operating Officer and President, respectively and as employees of the Company, Messrs. Nave and Perlmutter were not eligible for and did not receive any equity-based long-term incentive awards in 2024. Grants were converted from the target dollar values to shares based on a conversion price equal to the thirty-day trailing average closing price. The actual closing price on the date of grant was $6.37. For our named executive officers, other than Mr. Lunsford (who was not eligible to receive an annual equity award for 2024) and Ms. Williams (who received an initial sign-on grant under our 2024 Inducement Award Plan (the “Inducement Plan”) as set forth in the Williams Agreement, as defined below), the Compensation Committee determined that it was appropriate to grant an annual equity mix targeted at approximately 50% RSUs and 50% options in order to promote a long-term compensation structure that emphasizes both retention and commitment to the financial performance of the Company. The amount of each award was based on several factors, including managing the Company’s available share pool, maintaining our ability to compete for outstanding talent while committing to the alignment of our executive compensation program with stockholders’ interests and long-term Company performance, and the NEO’s experience and position. In connection with her appointment to the role of Chief Executive Officer on May 20, 2024, pursuant to the Williams Agreement Ms. Williams was granted (i) an award of 96,302 restricted stock units, which vest in three equal installments on each of the first three anniversaries of May 20, 2024, (ii) an award of 385,208 restricted stock units, which will vest in four equal installments on each of the first four anniversaries of May 20, 2024, and (iii) an option to purchase 297,974 shares of the Company’s Class A Common Stock with a per unit exercise price of $8.39. The option award will be eligible to vest based on the achievement of a stock price hurdle equal to three times the exercise price, or $25.17, measured based on the average of the Company’s closing share price over a 90 trading day trailing average, prior to May 20, 2028, subject to her continued employment with the Company; provided, that the option shall not be eligible to vest until at least May 20, 2026; and, provided further, that the option may be subject to acceleration upon the occurrence of a change in control of the Company so long as the per share consideration to be received by Company stockholders in connection with such change in control equals or exceeds the stock price hurdle (which hurdle may be adjusted by the board of directors in its reasonable discretion in order to reflect such change in control). In addition to the annual grants set forth above, in connection with his appointment to the role of Acting Chief Financial Officer, the Compensation Committee determined to grant Mr. Le Pendeven an award of 5,000 restricted stock units which vested on September 15, 2024. In connection with his appointment as permanent Chief Financial Officer on August 8, 2024, the Compensation Committee determined to grant Mr. Le Pendeven (i) an award of 11,800 restricted stock units, which will vest in four equal installments on each of the first four anniversaries of Mr. Le Pendeven’s appointment, and (iii) an option to purchase up to 42,000 shares of the Company’s Class A Common Stock, which will vest with respect to 25% of the shares subject thereto on the first anniversary of Mr. Le Pendeven’s appointment and the remaining 75% of the option will vest in thirty-six equal monthly installments thereafter. In connection with his service as Interim Chief Executive Officer and as an advisor to the Company, the Compensation Committee determined to award Mr. Lunsford an award of 17,000 restricted stock units that vested in full on September 30, 2024. Equity Plans Common Units. Prior to our initial public offering, certain of our employees were granted profits interests in FAH, LLC pursuant to the Amended FAH, LLC Agreement. Upon our initial public offering, these profit interest grants were converted into Common Units in FAH, LLC, but remained subject to vesting. As of December 31, 2023, all such common units were fully vested. Options and Restricted Stock Units. In connection with our initial public offering we adopted the 2017 Incentive Award Plan, or the 2017 Plan, pursuant to which we may grant cash and equity-based incentive awards, including stock options and restricted stock units, to eligible service providers in order to attract, motivate and retain the talent for which we compete. In addition, in 2019 we adopted the 2019 Incentive Award Plan, or the 2019 Plan. The 2019 Plan supplements our 2017 Plan by providing us with an additional tool to grant cash and equity-based incentive awards, including stock options and restricted stock units, to eligible service providers in order to attract, motivate and retain the talent for which we compete. In addition, in 2024 we adopted the Inducement Plan, under which awards may only be issued to eligible recipients under the applicable listing rules of the Nasdaq Stock Market LLC.
Severance and Change in Control Arrangements
Severance and Change in Control Arrangements We were party to employment agreements with each of our NEOs other than Mr. Lunsford (who entered into a letter agreement providing for his appointment as Interim Chief Executive Officer), which provide for severance benefits and payments upon certain qualifying terminations of employment. Our Compensation Committee believes that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation. In addition, certain of our executives may be entitled to enhanced benefits in connection with a qualifying termination following a change in control, which can mitigate a potential disincentive for our executives when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction. The payments and benefits provided under our severance and change in control arrangements are designed to be competitive with market practices. A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2024, are set forth in “Potential Payments Upon Termination or Change in Control” below. Additionally, effective April 19, 2023, we adopted an Executive Severance Policy pursuant to which eligible employees may be eligible to receive six to 12 months continued base salary payments and continuing healthcare, as well as, in certain instances, limited acceleration of equity awards with time-based vesting in the event such employees are terminated by the Company involuntarily or without “cause” or resign for “good reason” (each as described in the policy). The Executive Severance Policy does not apply to our NEOs who have employment agreements which provide for comparable severance benefits. Mr. Lunsford declined to be covered by the Executive Severance Policy due to the expected short-term nature of his appointment.
Severance and Change in Control Arrangements
| OTHER POLICIES AND CONSIDERATIONS |
COMPENSATION COMMITTEE REPORT
| 2024 SUMMARY COMPENSATION TABLE |
COMPENSATION COMMITTEE REPORT
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | | Cynthia Williams | 2024 | 577,506 | 132,146(6) | 4,039,869 | 1,510,644 | 330,183 | 213 | 6,590,561 | | Chief Executive Officer(5) | | | | | | | | | | Yves Le Pendeven | 2024 | 507,779 | — | 347,884 | 642,190 | 215,770 | 166,078 | 1,879,701 | | Chief Financial Officer(7) | | | | | | | | | | Andrew Oddie | 2024 | 648,153 | — | 416,598 | 574,217 | 272,650 | 179,477 | 2,091,095 | | Chief Commercial Officer(8) | 2023 | 627,429 | — | 494,434 | 235,113 | 235,286 | 46,536 | 1,638,798 | | | 2022 | 594,892 | — | 6,044,187 | 237,556 | 259,489 | 44,852 | 7,180,976 | | Tracy Daw | 2024 | 450,000 | — | 416,598 | 574,217 | 195,794 | 14,712 | 1,651,321 | | Chief Legal Officer and Secretary | 2023 | 450,000 | — | 400,183 | 180,436 | 168,750 | 13,200 | 1,212,569 | | | 2022 | 440,385 | 7,500(9) | 445,314 | 219,360 | 166,465 | 12,896 | 1,291,920 | | Michael Lunsford | 2024 | 285,231(10) | 360,000(11) | 146,370 | — | — | 36,097 | 827,698 | | Former Interim Chief Executive Officer | 2023 | 155,077 | — | 1,011,578 | 102,349 | — | 66,893 | 1,335,897 | | Steve Nave | 2024 | 187,500 | — | — | — | — | 515,701 | 703,201 | | Former Chief Financial Officer and Former Chief Operating Officer | 2023 | 723,769 | — | 1,163,135 | 400,512 | 227,163 | 11,182 | 2,525,761 | | Andrew Perlmutter | 2024 | 237,981 | — | — | — | — | 1,953,551 | 2,191,532 | | Former President | 2023 | 825,000 | — | 748,838 | 330,115 | 618,750 | 9,493 | 2,532,196 | | | 2022 | 814,423 | — | 2,564,342 | 452,872 | 371,377 | 11,311 | 4,214,325 |
COMPENSATION COMMITTEE REPORT
| GRANTS OF PLAN-BASED AWARDS IN FISCAL 2024 |
COMPENSATION COMMITTEE REPORT
| NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE |
Named Executive Officer Employment Agreements
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE |
Named Executive Officer Employment Agreements
| OPTION EXERCISES AND STOCK VESTED IN FISCAL 2024 |
Named Executive Officer Employment Agreements
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL |
Estimated Potential Payments
Estimated Potential Payments The following table summarizes the payments that would be made to our NEOs (other than Messrs. Lunsford, Nave and Perlmutter, who were not employed on December 31, 2024) upon the occurrence of certain qualifying terminations of employment or a change in control, in any case, occurring on December 31, 2024. Amounts shown do not include (i) accrued but unpaid base salary through the date of termination or (ii) other benefits earned or accrued by the NEO during his employment that are available to all salaried employees, such as accrued vacation. The amounts payable to Messrs. Lunford, Nave and Perlmutter in connection with the terminations of their employment with us are described above under “Summary of Executive Compensation Arrangements – Named Executive Officer Employment Agreements”.
Estimated Potential Payments
| Name | Benefit | Termination Without Cause or for Good Reason / Cause (no Change in Control) ($) | Change in Control (no Termination) ($) | Termination Without Cause or for Good Reason / Cause in Connection with a Change in Control ($) | Termination due to death or disability ($) | | Cynthia Williams | Cash | 1,000,000 | — | 1,000,000 | — | | | Equity Acceleration(1) | 1,719,303 | — | 6,447,419 | 1,719,303 | | | Continued Healthcare(2) | 18,219 | — | 18,219 | — | | | Total(3) | $2,737,522 | $— | $7,465,638 | $1,719,303 | | Yves LePendeven | Cash | 500,000 | — | 500,000 | — | | | Equity Acceleration(1) | 560,980 | — | 560,980 | 560,980 | | | Continued Healthcare(2) | 28,073 | — | 28,073 | — | | | Total(3) | $1,089,053 | $— | $1,089,053 | $560,980 | | Andrew Oddie | Cash | 648,152 | $— | 648,152 | $— | | | Equity Acceleration(1) | 2,839,074 | — | 2,839,074 | — | | | Continued Healthcare(2) | 5,492 | — | 5,492 | — | | | Total(4) | $3,492,718 | $— | $3,492,718 | $— | | Tracy Daw | Cash | $450,000 | — | $450,000 | — | | | Equity Acceleration(1) | 967,143 | — | 967,143 | 967,143 | | | Continued Healthcare(2) | 28,073 | — | 28,073 | — | | | Total(3) | $1,445,216 | $— | $1,445,216 | $967,143 |
Estimated Potential Payments
(1) With respect to options, the value of equity acceleration was calculated by (i) multiplying the number of accelerated shares of common stock underlying the options by $13.39, the closing trading price of our common stock on December 31, 2024 (the last trading day of 2024) and (ii) subtracting the exercise price for the options. Assuming the closing trading price of our common stock on December 31, 2024 would be equal to the per share consideration to be received by Company stockholders in connection with a change in control which occurred on that date, such price would not equal or exceed the stock price hurdle applicable to the performance-based options held by Ms. Williams and such options would not be eligible to vest on such date. With respect to RSUs, the value of equity acceleration was calculated by multiplying the number of accelerated RSUs by $13.39, the closing trading price of our common stock on December 31, 2024(the last trading day of 2024). With respect to the PSUs, the value of equity acceleration was calculated by multiplying the number of accelerated PSUs by $13.39, the closing trading price of our common stock on December 31, 2024 (the last trading day of 2024). (2) Amounts represent 12 months of continued COBRA payments. (or, for Mr. Oddie, a lump sum payment equal to the 12 months of the private medical insurance premiums Mr. Oddie would have received from the Company and paid as an employee under the private medical insurance arrangement to which the Company provides him with access (based on his healthcare elections for the purposes of such private medical insurance scheme which are in force as at the date of the May 2024 amendment to the Service Agreement). (3) Amounts shown are the maximum potential payment the NEO would have received as of December 31, 2024. Amounts of any reduction pursuant to the 280G best pay provision, if any, would be calculated upon actual termination of employment.
Estimated Potential Payments
| DIRECTOR COMPENSATION |
Estimated Potential Payments
The following table provides information regarding the total compensation that was earned by or paid to each of our non-employee directors during the year ended December 31, 2024.
Estimated Potential Payments
| Name (1) | Fees Earned or Paid in Cash ($) | Option Awards (2) ($) | Stock Awards (3) ($) | Total ($) | | Charlie Denson | 203,967 | 167,338 | 96,224 | 467,529 | | Trevor Edwards | 95,000 | 167,338 | 96,224 | 358,561 | | Jason Harinstein(4) | 4,905 | 63,418 | 36,395 | 104,717 | | Diane Irvine | 120,000 | 167,338 | 96,224 | 383,562 | | Jesse Jacobs | 105,000 | 167,338 | 96,224 | 368,561 | | Michael Kerns | 95,000 | 167,338 | 96,224 | 358,561 | | Sarah Kirshbaum Levy | 95,000 | 167,338 | 96,224 | 358,562 |
Estimated Potential Payments
(1) Ms. Williams and Mr. Lunsford also served as executive officers in 2024 and as a result have been excluded from this table. Their compensation for 2024 is described above in the “Summary Compensation Table”. (2) While the number of award shares granted to directors pursuant to the target equity compensation values are based on 30-day trading-day average closing prices, as noted above, amounts reflect the grant-date Black-Scholes value of the stock options granted during 2024, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual, and accordingly, will not equal the target equity compensation values. For a discussion of the assumptions used to calculate the value of all option awards made to our directors, see Note 18 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. (3) While the number of award shares granted to directors pursuant to the target equity compensation values are based on 30-day trading-day average closing prices, as noted above, amounts reflect the full grant-date value of the restricted stock units granted during 2024, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual, and accordingly, will not equal the target equity compensation values. For a discussion of the assumptions used to calculate the value of the restricted stock units made to our directors in 2024, see Note 18 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. (4) Mr. Harinstein was appointed to the Board effective December 13, 2024. The table below shows the aggregate numbers of vested options to purchase Class A Common Stock, unvested options to purchase Class A Common Stock and unvested Restricted Stock Units held as of December 31, 2024 by each non-employee director who was serving as of December 31, 2024.
Estimated Potential Payments
| Name(1) | Vested Options Outstanding at Fiscal Year End | Unvested Options Outstanding at Fiscal Year End | Unvested Restricted Stock Units Outstanding at Fiscal Year End | | Charles Denson | 63,210 | 25,500(2) | 10,204(3) | | Trevor Edwards | 15,100 | 25,500(2) | 10,204(3) | | Jason Harinstein | — | 7,800(4) | 3,108(5) | | Diane Irvine | 93,710 | 25,500(2) | 10,204(3) | | Jesse Jacobs | 17,137 | 25,500(2) | 10,204(3) | | Michael Kerns | 7,180 | 25,500(2) | 10,204(3) | | Sarah Kirshbaum Levy | 30,699 | 25,500(2) | 10,204(3) |
Estimated Potential Payments
(1) Ms. Williams and Mr. Lunsford also served as executive officers in 2024 and as a result have been excluded from this table. Their outstanding equity awards are described above in the “Outstanding Equity Awards at Fiscal Year End” table. (2) 100% of options vest and become exercisable on June 4, 2025, subject to continued service through the vesting date. (3) 100% of restricted stock units vest on June 4, 2025, subject to continued service through the vesting date. (4) 100% of options vest and become exercisable on December 13, 2025, subject to continued service through the vesting date. (5) 100% of restricted stock units vest on December 13, 2025, subject to continued service through the vesting date. Pursuant to our non-employee director compensation policy, each non-employee director will be eligible to receive annual cash retainers as follows:
Estimated Potential Payments
| Annual Retainers | | | Board: | | | All non-employee members of the Board | $90,000 | | Chairperson of the Board | $90,000 | | Audit Committee: | | | Additional Retainer for chairperson | $25,000 | | Additional retainer for other members of the Audit Committee | $5,000 | | Compensation Committee: | | | Additional Retainer for chairperson | $20,000 | | Additional retainer for other members of the Compensation Committee | $5,000 | | Nominating and Corporate Governance Committee: | | | Additional Retainer for chairperson | $15,000 | | Additional retainer for other members of the Nominating and Corporate Governance Committee | $5,000 |
Estimated Potential Payments
Each director will also receive an annual equity award comprised of stock options with a targeted value of $75,000 and restricted stock units with a targeted value of $75,000, with prorated awards made to directors who join on a date other than an annual meeting. Such awards will generally vest in full on the first anniversary of the grant date, subject to the non-employee director continuing in service through such date. The equity awards granted pursuant to this policy will accelerate and vest in full upon a change in control (as defined in the 2019 Plan). * * * * *
Estimated Potential Payments
| CEO Pay Ratio |
Estimated Potential Payments
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the ratio of our Chief Executive Officer’s annual total compensation to the annual total compensation of our other employees. The annual total compensation for 2024 for Cynthia Williams, who was serving as our Chief Executive Officer as of the determination date, was $6,590,561, as reported in the Summary Compensation Table. The annual total compensation for 2024 for our median employee, an associate in our distribution center identified as discussed below, was $52,810, calculated in accordance with the rules applicable to the Summary Compensation Table. Based on this information, for 2024, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of our other employees was approximately 125 to 1.
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure We chose December 31, 2024 as the date for establishing the employee population used in identifying the median employee and used calendar year 2024 as the measurement period. We identified the median employee using the consistently applied compensation measure of annual salary plus actual bonus for each employee employed as of December 31, 2024 (other than our Chief Executive Officer). We annualized the compensation measure for permanent employees who joined in 2024. We captured all full-time, part-time, seasonal and temporary employees in the United States, European Union and United Kingdom consisting of approximately 1,200 individuals. In determining the median employee, we excluded our employees based in China who collectively comprise less than five percent of our total employee population. Although Ms. Williams began serving as Chief Executive Officer effective May 20, 2024, we determined that it was more appropriate to use her annual compensation for purposes of this disclosure than to combine the compensation paid to Ms. Williams and Mr. Lunsford(who served as our Interim Chief Executive Officer during 2024 through such date) in 2024, given Mr. Lunsford’s 2024 compensation reflected payments in connection with his provision of services following his resignation as Interim Chief Executive Officer as an employee advisor and then as a non-employee director. The annual total compensation of the median employee and the annual total compensation of the CEO were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported above should not be used as a basis for comparison between companies by other companies. In addition, we expect the Company’s annually reported pay ratio may vary significantly year over year, given the size of the Company and the potential variability in Company employee compensation.
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
| PAY VERSUS PERFORMANCE TABLE |
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2020, 2021, 2022, 2023 and 2024, and our financial performance for each such fiscal year:
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
| Year | Summary Compensation Table Total for PEO (Mariotti) ($)(4) | Compensation Actually Paid to PEO (Mariotti) ($)(1)(4) | Summary Compensation Table Total for PEO (Perlmutter) ($)(5) | Compensation Actually Paid to PEO (Perlmutter) ($)(1)(5) | Summary Compensation Table Total for PEO (Lunsford) ($)(6) | Compensation Actually Paid to PEO (Lunsford) ($)(1)(6) | Summary Compensation Table Total for PEO (Williams) ($)(7) | Compensation Actually Paid to PEO (Williams) ($)(1)(7) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) (1) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($) (in thousands) | Net Sales(3) ($) (in thousands) | | | | | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) (2) | | | | 2024 | — | — | — | — | 827,698 | 1,637,588 | 6,590,561 | 10,157,314 | 1,703,370 | 2,167,141 | 78.03 | 153.74 | (15,070) | 1,049,850 | | 2023 | 2,247,043 | (823,086) | — | — | 1,335,897 | 1,257,263 | — | — | 1,665,765 | 1,185,547 | 45.05 | 142.24 | (164,438) | 1,096,086 | | 2022 | 3,130,262 | (3,979,745) | 4,214,325 | (298,106) | — | — | — | — | 2,562,172 | 1,448,176 | 63.58 | 113.10 | (5,240) | 1,322,706 | | 2021 | 5,439,651 | 13,984,354 | — | — | — | — | — | — | 2,362,586 | 5,430,853 | 109.56 | 163.03 | 67,854 | 1,029,293 | | 2020 | 2,627,245 | (2,902,267) | — | — | — | — | — | — | 1,357,551 | (625,704) | 60.49 | 126.95 | 9,763 | 652,537 |
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
(1)Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year:
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
| Year | PEO | Non-PEO NEOs | | 2024 | Michael Lunsford and Cynthia Williams | Yves Le Pendeven, Andrew Oddie, Tracy Daw, Steve Nave and Andrew Perlmutter | | 2023 | Brian Mariotti and Michael Lunsford | Steve Nave, Andrew Perlmutter, Andrew Oddie, Tracy Daw, and Scott Yessner | | 2022 | Brian Mariotti and Andrew Perlmutter | Scott Yessner, Andrew Oddie, Tracy Daw, and Jennifer Fall Jung | | 2021 | Brian Mariotti | Andrew Perlmutter and Jennifer Fall Jung | | 2020 | Brian Mariotti | Andrew Perlmutter and Jennifer Fall Jung |
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
Effective March 15, 2024, Mr. Nave ceased serving as our Chief Financial Officer and Chief Operating Officer, and Mr. Le Pendeven commenced serving as our Acting Chief Financial Officer. Mr. Le Pendeven was subsequently appointed Chief Financial Officer effective August 8, 2024. Effective May 20, 2025, Ms. Williams succeeded Mr. Lunsford (who had been serving as the Company's Interim Chief Executive Officer) as Chief Executive Officer. Compensation actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as follows:
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
| | 2024 | | | | Adjustments | PEO (Lunsford) | PEO (Williams) | Average Non-PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | (146,370) | (5,550,513) | (594,341) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | — | 9,117,266 | 1,089,570 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | 207,740 | — | 11,160 | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | — | — | 381,928 | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | 880,672 | — | (234,019) | | Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | (132,152) | — | 190,527 | | TOTAL ADJUSTMENTS | 809,890 | 3,566,753 | 844,825 |
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
The fair values of RSUs, PSUs, and stock options included in the compensation actually paid to our PEOs and the average compensation actually paid to our NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in our Annual Report on Form 10-K for the year ended December 31, 2024. Any changes to the RSU and PSU fair values from the grant date (for current year grants) and from prior year-end (for prior year RSU grants) are based on our updated stock price at the respective measurement dates as well as updated performance metric projections (for PSUs). Changes to the stock option fair values are based on the updated stock price at the respective measurement dates, in addition to updated expected option term, peer volatility, and risk-free rate assumptions. For all years presented, the meaningful increases or decreases in the year-end stock option fair value from the fair value on the grant date were primarily driven by changes in the stock price. (2)For the relevant fiscal year, represents the cumulative TSR (the “Peer Group TSR”) of the Russell 2000 Consumer Discretionary Index (the “Peer Group”).I (3)Net Sales is a GAAP measure. The Company selected Net Sales as the Company-Selected Measure due to it being an important financial performance measure that helps link compensation actually paid to the Company’s NEOs to the Company’s performance for the most recently completed fiscal year. Specifically, Net Sales is used to evaluate performance under the Executive Incentive Plan, a short-term cash incentive plan under which participating executives are eligible to earn cash bonuses based on the Company’s achievement of Net Sales as well as several other Company performance goals. Net Sales is also used as a performance metric in our long-term equity incentive program for our PSUs, which are eligible to be earned over a three-year performance period based on achievement of Net Sales and Adjusted EBITDA Margin targets. (4)Represent summary compensation and compensation actually paid to Mr. Mariotti, who reassumed the role of Chief Executive Officer effective December 5, 2022 until June 13, 2023. (5)Represents summary compensation and compensation actually paid to Mr. Perlmutter, who served as Chief Executive Officer from January 3, 2022 until December 5, 2022. (6)Represents summary compensation and compensation actually paid to Mr. Lunsford, who served as Interim Chief Executive Officer from June 13, 2023 until May 20, 2024. (7)Represents summary compensation and compensation actually paid to Ms. Williams, who assumed the role of Chief Executive Officer effective May 20, 2024.
Methodology, Assumptions and Estimates Used in Determining our Pay Ratio Disclosure
| NARRATIVE DISCLOSURE TO PAY VERSUS PERFORMANCE TABLE |
Pay Versus Performance Tabular List
Pay Versus Performance Tabular List We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2024: •Net Sales; •Adjusted EBITDA; •Adjusted EBITDA Margin; and •Stock price. For additional details regarding our most important financial performance measures, please see the sections titled “Elements of Compensation—Annual Performance-Based Cash Incentive Compensation” and “—Equity-Based Long-Term Incentive Awards”.
Pay Versus Performance Tabular List
| Security Ownership of Certain Beneficial Owners and Management |
Pay Versus Performance Tabular List
The following table sets forth information with respect to the beneficial ownership of our Class A common stock and Class B common stock for: •each person known by us to beneficially own more than 5% of our Class A common stock or our Class B common stock; •each of our directors (which includes all nominees); •each of our named executive officers; and •all of our executive officers and directors as a group. As described in “Certain Relationships and Related Person Transactions,” each common unit of FAH, LLC (other than common units held by us) is redeemable from time to time at each holder’s option (subject in certain circumstances to time-based vesting requirements) for, at our election (determined solely by our independent directors (within the meaning of the rules of the Nasdaq) who are disinterested), shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case in accordance with the terms of the FAH LLC Agreement; provided that, at our election (determined solely by our independent directors (within the meaning of the Nasdaq Rules) who are disinterested), we may effect a direct exchange of such Class A common stock or such cash, as applicable, for such common units. The Continuing Equity Owners may exercise such redemption right for as long as their common units of FAH, LLC remain outstanding. In connection with our IPO, we issued to each Continuing Equity Owner, for nominal consideration, one share of Class B common stock for each common unit of FAH, LLC it owned. As a result, the number of shares of Class B common stock listed in the table below correlates to the number of common units of FAH, LLC each such Continuing Equity Owner owns. The number of shares beneficially owned by each stockholder as described in this proxy statement is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power. Applicable percentage ownership is based on 54,283,715 shares of Class A common stock and 647,833 shares of Class B common stock outstanding as of April 28, 2025. In computing the number of shares beneficially owned by an individual or entity and the percentage ownership of that person, shares of Common Stock subject to options, or other rights, including the redemption right described above with respect to each common unit of FAH, LLC, held by such person that are currently exercisable or will become exercisable within 60 days of April 28, 2025, are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated, the address of all listed stockholders is 2802 Wetmore Avenue, Everett, Washington 98201. Each of the stockholders listed has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.
Pay Versus Performance Tabular List
| | Shares of Class A Common Stock Beneficially Owned (1) | | Shares of Class B Common Stock Beneficially Owned | | Combined Voting Power (2) | | Name of beneficial owner | Number | Percentage | Number | Percentage | Percentage | | 5% Stockholders | | | | | | | TCG 3.0 Fuji, LP(3) | 12,528,171 | 23.1% | — | * | 22.8% | | Cooper Creek Partners Management LLC(4) | 3,130,427 | 5.8% | — | * | 5.7% | | Working Capital Partners, Ltd.(5) | 5,129,838 | 9.5% | — | * | 9.3% | | Fund Investments, LLC(6) | 4,965,424 | 9.1% | — | * | 9.0% | | Named Executive Officers and Directors | | | | | | | Cynthia Williams(7) | 142,402 | * | — | * | * | | Yves Le Pendeven(8) | 105,613 | * | — | * | * | | Andrew Oddie(9) | 288,333 | * | 29,448 | 4.5% | * | | Tracy Daw(10) | 414,675 | * | 21,245 | 3.3% | * | | Michael Lunsford(11) | 41,521 | * | — | * | * | | Steve Nave | — | * | — | * | * | | Andrew Perlmutter(12) | 99,124 | * | — | * | * | | Charles Denson(13) | 335,798 | * | 14,557 | 2.2% | * | | Trevor Edwards(14) | 56,834 | * | — | * | * | | Jason Harinstein(15) | 15,000 | * | — | * | * | | Diane Irvine(16) | 143,783 | * | — | * | * | | Jesse Jacobs(17) | 59,704 | * | — | * | * | | Michael Kerns(18) | 45,761 | * | — | * | * | | Sarah Kirshbaum Levy(19) | 79,672 | * | — | * | * | | All executive officers and directors as a group (14 individuals)(20) | 1,729,096 | 3.1% | 65,250 | 10.1% | * |
Pay Versus Performance Tabular List
*Less than one percent. (1) For the reasons described above, in this table, beneficial ownership of common units of FAH, LLC has been reflected as beneficial ownership of our Class A common stock for which such common units may be exchanged. When a common unit is exchanged by a Continuing Equity Owner who holds our Class B common stock, a corresponding share of Class B common stock will be cancelled. (2) Represents the percentage of voting power of our Class A common stock and Class B common stock voting as a single class, based on the applicable holder's ownership of Class A common stock and Class B common stock only (and not including any options or restricted stock units). Each share of Class A common stock and each share of Class B common stock entitles the registered holder thereof to one vote per share on all matters presented to stockholders for a vote generally, including the election of directors. The Class A common stock and Class B common stock will vote as a single class on all matters except as required by law or the Company’s certificate of incorporation. (3) Based on a Schedule 13D filed on May 27, 2022. TCG 3.0 Fuji, LP (“Fuji”), TCG Capital Management, LP (“TCG Management”), TCG 3.0-A, LP (“TCG A”), TCG 3.0-B, LP (“TCG B”), TCG 3.0 Co-Invest, LP (“TCG Co-Invest”), and TCG 3.0 Fuji Co-Invest, LP (“Fuji Co-Invest” and collectively, “TCG”) have shared voting and dispositive power over 12,520,559 shares of Class A common stock. TCG A, TCG B, TCG Co-Invest and Fuji Co-Invest are referred to collectively as the “Partners.” Fuji directly owns 12,520,559 shares of Class A common stock. The Partners collectively own all of Fuji. TCG Management acts as investment manager for Fuji and the Partners. In addition, Jesse Jacobs holds 6,863 shares of Class A common stock, 17,137 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025 for the benefit of TCG Management. In addition, Michael Kerns holds 2,877 shares of Class A common stock, 7,180 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025 for the benefit of TCG Management.The address for TCG is 12180 Millennium Drive, Suite 500, Playa Vista, CA 90094. (4) Based on a Schedule 13G/A filed on February 14, 2025, Cooper Creek Partners Management LLC has sole voting and dispositive power with respect to 3,130,427 shares of Class A common stock. The address of Cooper Creek Partners Management LLC is 501 Madison Avenue, Suite 302, New York, NY 10022. (5) Based on information obtained from a Schedule 13G/A filed on November 14, 2024. Working Capital Partners, Ltd. (“Working Capital Fund”) has shared voting and dispositive power with respect to 2,849,431 shares of Class A common stock, High Street Partners, Ltd. (together with Working Capital Fund, the “Private Funds”) has shared voting and dispositive power with respect to 2,280,407 shares of Class A common stock, and each of Working Capital Advisors (UK) Ltd. (the "Investment Manager"), Working Capital Management Pte. Ltd. (the “Parent Company”) and Kenneth Chan has shared voting and dispositive power with respect to 5,129,838 shares of Class A common stock, respectively. Kenneth Chan is the sole owner of Parent Company, which is the sole owner of Investment Manager. Investment Manager is the investment manager of the Private Funds. The address of the Private Funds, Investment Manager, Parent Company and Kenneth Chan is Queripel House, Unit 2, 1 Duke of York Square, London SW3 4LY, United Kingdom. (6) Based on information obtained from a Schedule 13G/A filed on February 14, 2025. Fund 1 Investments, LLC has shared voting and dispositive power with respect to 4,965,424 shares of Class A common stock. The address of Fund 1 Investments, LLC is 100 Carr 115 Unit 1900, Rincon, Puerto Rico 00677. (7) Cynthia Williams has sole voting and dispositive power over 14,000 shares of Class A common stock and 128,402 restricted stock units that will vest within 60 days of April 28, 2025. (8) Yves Le Pendeven has sole voting and dispositive power over 41,345 shares of Class A common stock, vested options to purchase 59,259 shares of Class A common stock, and options to purchase 5,009 shares of Class A common stock that will vest within 60 days of April 28,2025. (9) Andrew Oddie has sole voting and dispositive power over 42,459 shares of Class A common stock, 29,448 common units of FAH, LLC, vested options to purchase 189,443 shares of Class A common stock, 19,324 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 7,629 shares of Class A common stock that will vest within 60 days of April 28, 2025. (10) Tracy Daw has sole voting and dispositive power over 27,826 shares of Class A common stock, 73,485 common units of FAH, LLC, vested options to purchase 306,114 shares of Class A common stock, and options to purchase 7,250 shares of Class A common stock that will vest within 60 days of April 28, 2024. (11) Michael Lunsford has sole voting and dispositive power over 11,613 shares of Class A common stock and 29,908 options to purchase shares of Class A common stock that are currently vested. (12) Andrew Perlmutter has sole voting and dispositive power over 99,124 shares of Class A common stock. (13) Charles Denson has sole voting and dispositive power over 207,769 shares of Class A common stock, including 14,300 shares of Class A common stock held by Fielding Road, LLC and 25,000 shares of Class A common stock held by Denson Investments, LLC, 29,115 common units of FAH, LLC that are currently vested, 63,210 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. (14) Trevor Edwards has sole voting and dispositive power over 6,030 shares of Class A common stock, 15,100 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. (15) Jason Harinstein has sole voting and dispositive power over 15,000 shares of Class A common stock. (16) Diane Irvine has sole voting and dispositive power over 14,369 shares of Class A common stock, 93,710 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. (17) Jesse Jacobs has sole voting and dispositive power over 6,863 shares of Class A common stock, 17,137 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. Mr. Jacobs has entered into an arrangement with TCG pursuant to which he holds such restricted stock unit and option awards for the benefit of TCG. Mr. Jacobs disclaims any beneficial ownership, except to the extent of his pecuniary interest therein.
Pay Versus Performance Tabular List
(18) Michael Kerns has sole voting and dispositive power over 2,877 shares of Class A common stock, 7,180 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. Mr. Kerns has entered into an arrangement with TCG pursuant to which he holds such restricted stock unit and option awards for the benefit of TCG. Mr. Kerns disclaims any beneficial ownership, except to the extent of his pecuniary interest therein. (19) Sarah Kirshbaum Levy has sole voting and dispositive power over 13,269 shares of Class A common stock, 30,699 options to purchase shares of Class A common stock that are currently vested, 10,204 restricted stock units that will vest within 60 days of April 28, 2025, and options to purchase 25,500 shares of Class A common stock that will vest within 60 days of April 28, 2025. (20) Includes 388,420 shares of Class A common stock, 132,048 common units of FAH, LLC, vested options to purchase 811,760 shares of Class A common stock, 208,950 restricted stock units that will vest within 60 days of April 28, 2025 and options to purchase 172,918 shares of Class A common stock that will vest within 60 days of April 28, 2025.
Pay Versus Performance Tabular List
| Certain Relationships and Related Person Transactions | | POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS |
Pay Versus Performance Tabular List
Our Board has adopted a written Related Person Transaction Policy and Procedures, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we (including any of our subsidiaries) are, were or will be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person has, had or will have a direct or indirect material interest. Under the policy, the Company’s legal staff is primarily responsible for developing and implementing processes and procedures to obtain information regarding related persons with respect to potential related person transactions and then determining, based on the facts and circumstances, whether such potential related person transactions do, in fact, constitute related person transactions requiring compliance with the policy. If the Company’s legal staff determines that a transaction or relationship is a related person transaction requiring compliance with the policy, the General Counsel is required to present to the Audit Committee all relevant facts and circumstances relating to the related person transaction. The Audit Committee must review the relevant facts and circumstances of each related person transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related person’s interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of the Company’s Code of Business Conduct and Ethics, and either approve or disapprove the related person transaction. If advance Audit Committee approval of a related person transaction requiring the Audit Committee’s approval is not feasible, then the transaction may be preliminarily entered into by management upon prior approval of the transaction by the Chair of the Audit Committee subject to ratification of the transaction by the Audit Committee at the Audit Committee’s next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. If a transaction was not initially recognized as a related person transaction, then upon such recognition the transaction will be presented to the Audit Committee for ratification at the Audit Committee’s next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. Management will update the Audit Committee as to any material changes to any approved or ratified related person transaction and will provide a status report at least annually of all then current related person transactions. No director may participate in approval of a related person transaction for which he or she is a related person. The following are certain transactions, arrangements and relationships with our directors, executive officers and stockholders owning 5% or more of our outstanding Class A common stock or our Class B common stock since January 1, 2024. All of the transactions, agreements or relationships described in this section occurred prior to the adoption of this policy. We believe that the terms of such agreements are as favorable as those we could have obtained from parties not related to us.
Pay Versus Performance Tabular List
| TAX RECEIVABLE AGREEMENT |
Pay Versus Performance Tabular List
On November 1, 2017, we entered into a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by us to the Continuing Equity Owners and certain transferees of the Continuing Equity Owners that have been joined as parties to the Tax Receivable Agreement (the parties entitled to payments under the Tax Receivable Agreement are referred to herein as the “TRA Parties”) of 85% of the amount of certain tax benefits, if any, we actually realize, or in some circumstances are deemed to realize, as a result of the redemption and exchange transactions described below in the section titled “FAH LLC Agreement”, including basis adjustments in our share of the tax basis of the assets of FAH, LLC, and certain other tax benefits attributable to payments made under the Tax Receivable Agreement. The applicable basis adjustments (as well as any amounts payable to the TRA Parties under the Tax Receivable Agreement) will vary depending on a number of factors including the timing of any future redemptions or exchanges, the price of shares of our Class A common stock at the time of any applicable redemptions or exchanges, the extent to which such redemptions or exchanges are taxable, and the amount and timing of our income. These tax benefit payments are not conditioned upon one or more of the TRA Parties maintaining a continued ownership interest in FAH, LLC. If a TRA Party transfers common units of FAH, LLC but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such TRA Party generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such common units. In general, the TRA Parties' rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without our prior written consent (which should not be unreasonably withheld, conditioned or delayed) and such person’s becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable TRA Party’s interest therein. During the year ended December 31, 2024, we recognized $547 thousand in Tax Receivable Agreement liabilities for payments due to the TRA Parties under the Tax Receivable Agreement. There were $9.0 million of payments made pursuant to the Tax Receivable Agreement during the year ended December 31, 2024, all of which related to prior periods.
Pay Versus Performance Tabular List
| FAH LLC AGREEMENT |
Pay Versus Performance Tabular List
On November 1, 2017, FAH, LLC amended and restated the FAH LLC Agreement to, among other things, (i) provide for a new single class of common membership interests in FAH, LLC, the common units; (ii) exchange all of the then-existing membership interests of the Original Equity Owners for common units of FAH, LLC; and (iii) appoint the Company as the sole manager of FAH, LLC. The LLC Agreement also provides that the Continuing Equity Owners may from time to time at each of their options require FAH, LLC to redeem (subject in certain circumstances to time-based vesting requirements) all or a portion of their common units in exchange for, at our election (determined solely by our independent directors (within the meaning of the Nasdaq Rules) who are disinterested), shares of the Company’s Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case in accordance with the terms of the FAH LLC Agreement; provided that, at our election (determined solely by our independent directors (within the meaning of the Nasdaq Rules) who are disinterested), we may effect a direct exchange of such Class A common stock or such cash, as applicable, for such common units. The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding. Simultaneously with the payment of cash or shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units pursuant to the terms of the FAH LLC Agreement, a number of shares of our Class B common stock registered in the name of the redeeming or exchanging Class B common stock owners will be cancelled for no consideration on a one-for-one basis with the number of common units so redeemed or exchanged. The FAH LLC Agreement also requires that FAH, LLC, at all times, maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of common units of FAH, LLC owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and the number of common units of FAH, LLC owned by the Continuing Equity Owners. On May 3, 2022, we entered into a Stockholders Agreement with TCG . Pursuant to the Stockholders Agreement, TCG is entitled to designate up to two directors, apportioned among the classes, for as long as the TCG Related Parties beneficially own directly or indirectly, in the aggregate, at least 20% of our Class A common stock; and one director for as long as the TCG Related Parties beneficially own directly or indirectly, in the aggregate, less than 20% but at least 10% or more of our Class A common stock (assuming in each such case that all outstanding common units in FAH, LLC are redeemed for newly issued shares of our Class A common stock on a one-for-one basis). The TCG Related Parties are not entitled to designate any director if at any time, the TCG Related Parties beneficially own directly or indirectly, in the aggregate less than 10% of all issued and outstanding shares of Class A common stock (assuming in each such case that all outstanding common units in FAH, LLC are redeemed for newly issued shares of our Class A common stock on a one-for-one basis). Additionally, we are required to take all commercially reasonable action to cause (1) the Board to be comprised of at least seven directors or such other number of directors as our Board may determine; (2) the individuals designated in accordance with the terms of the Stockholders Agreement to be included in the slate of nominees to be elected to the Board at each annual meeting of our stockholders at which a director’s term expires; and (3) the individuals designated in accordance with the terms of the Stockholders Agreement to fill the applicable vacancies on the Board. In addition, the Stockholders Agreement provides that for as long as the TCG Related Parties beneficially own directly or indirectly, in the aggregate, 22% or more of all issued and outstanding shares of our Class A common stock (assuming that all outstanding common units in FAH, LLC are redeemed for newly issued shares of our Class A common stock on a one-for-one basis), we will not take, and will cause our subsidiaries not to take, certain actions or enter into certain transactions (whether by merger, consolidation, or otherwise) without the prior written approval of TCG, including: •entering into any transaction or series of related transactions in which any person or group (other than the TCG Related Parties and any group that includes the TCG Related Parties) acquires, directly or indirectly, in excess of 50% of the then outstanding shares of any class of our or our subsidiaries’ capital stock, or following which any such person or group has the direct or indirect power to elect a majority of the members of our board of directors or to replace us as the sole manager of FAH, LLC (or to add another person as co-manager of FAH, LLC); •the reorganization, voluntary bankruptcy, liquidation, dissolution or winding up of us or any of our subsidiaries; •the sale, lease or exchange of all or substantially all of our and our subsidiaries’ property and assets; •the resignation, replacement or removal of us as the sole manager of FAH, LLC, or the appointment of any additional person as a manager of FAH, LLC; •the creation of a new class or series of capital stock or other equity securities of us or, in the event such creation would materially and adversely impair the rights of the TCG Related Parties as holders of our Class A common stock, any of our subsidiaries; •the issuance of additional shares of Class A common stock, Class B common stock, preferred stock or other equity securities of us other than (x) under any stock option or other equity compensation plan approved by our board of directors or the compensation committee, or (y) pursuant to the exercise or conversion of any options, warrants or other securities existing as of the date of the Stockholders Agreement or, in the event such creation would materially and adversely impair the rights of the TCG Related Parties as holders of our Class A common stock, equity securities of any of our subsidiaries; •any amendment or modification of our certificate of incorporation or bylaws or any similar organizational documents of any of our subsidiaries that would, in either case, materially and adversely impair the rights of the TCG Related Parties as holders of our Class A common stock; and •except to the extent of the express restrictions applicable to TCG and its controlled affiliates in the Stockholders Agreement, any action to adopt, approve or implement any plan, agreement or provision that would, among other things, negatively affect TCG’s or its controlled affiliates’ ability to continue to hold or acquire additional shares of our capital stock or other securities. The Stockholders Agreement will terminate upon the earliest to occur of (1) the TCG Related Parties cease to own any shares of our Class A common stock or other equity securities of the Company, (2) the TCG Related Parties no longer have any right to designate a director as set forth in the Stockholders Agreement, and (3) the unanimous written consent of the parties to the Stockholders Agreement.
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| REGISTRATION RIGHTS AGREEMENT |
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In connection with our IPO, we entered into a Registration Rights Agreement with the Original Equity Owners and we entered into a joinder and amendment to the Registration Rights Agreement with TCG on May 3, 2022. The Registration Rights Agreement, as amended, provides TCG with certain “demand” registration rights whereby TCG can require us to register under the Securities Act the offer and sale of shares of Class A common stock held by them. The Registration Rights Agreement also provides for customary “piggyback” registration rights for all parties to the agreement. We have agreed to pay certain expenses of the registration rights holders in connection with the exercise of their registration rights, and that we will indemnify the registration rights holders against certain liabilities which may arise under the Securities Act or other federal or state securities laws.
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| INDEMNIFICATION AGREEMENTS |
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Our Amended and Restated Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. In addition, our Amended and Restated Certificate of Incorporation provides that our directors and officers will not be liable for monetary damages for breach of fiduciary duty. We have entered into indemnification agreements with our executive officers and directors. We also purchased directors’ and officers’ liability insurance.
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| Delinquent Section 16(a) Reports |
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Section 16(a) of the Exchange Act requires our directors, officers (as defined under Rule 16a-1(f) under the Exchange Act) and stockholders who beneficially own more than 10% of any class of our equity securities registered pursuant to Section 12 of the Exchange Act (collectively, the “Reporting Persons”) to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). Based solely on our review of the copies of such forms received by us and upon written representations of the Reporting Persons received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to the fiscal year ended December 31, 2024, other than two Form 4s reporting two late transactions for Jesse Jacobs and TCG Capital Management, LP, and one Form 4 reporting one late transaction for each of Michael Kerns and Michael Lunsford.
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| Compensation Committee Interlocks and Insider Participation |
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During the fiscal year ended December 31, 2024, the members of our Compensation Committee were Sarah Kirshbaum Levy, Diane Irvine and Trevor Edwards. None of the members of our Compensation Committee is our current employee. During the fiscal year ended December 31, 2024, none of the relationships required to be disclosed by the rules of the SEC existed aside from those identified herein. None of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee.
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| Stockholders’ Proposals |
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Stockholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our 2026 Annual Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Secretary at our offices at 2802 Wetmore Avenue, Everett, Washington 98201 in writing not later than December 31, 2025. Stockholders intending to present a proposal at the 2026 Annual Meeting of Stockholders, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Amended and Restated Bylaws. Our Amended and Restated Bylaws require, among other things, that our Secretary receive written notice from the stockholder of record of their intent to present such proposal or nomination not less than 90 nor more than 120 days prior to the one-year anniversary of the preceding year’s annual meeting. Therefore, we must receive notice of such a proposal or nomination for the 2026 Annual Meeting of Stockholders no earlier than February 12, 2026 and no later than March 14, 2026. The notice must contain the information required by the Amended and Restated Bylaws. In the event that the date of the 2026 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after June 12, 2026, then our Secretary must receive such written notice not more than the 120th day prior to the 2026 Annual Meeting of Stockholders and not later than the 90th day prior to the 2026 Annual Meeting of Stockholders or, if later, the 10th day following the day on which public disclosure of the date of such meeting is first made by us. In addition to satisfying the foregoing requirements under our Amended and Restated Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees for the 2026 Annual Meeting of Stockholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.
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| Other Matters |
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Our Board is not aware of any matter to be presented for action at the Annual Meeting other than the matters referred to above and does not intend to bring any other matters before the Annual Meeting. However, if other matters should come before the Annual Meeting, it is intended that holders of the proxies will vote thereon in their discretion.
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| Solicitation of Proxies |
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The accompanying proxy is solicited by and on behalf of our Board, whose Notice of Annual Meeting is attached to this proxy statement, and the entire cost of our solicitation will be borne by us. In addition to the use of mail, proxies may be solicited by personal interview, telephone, e-mail and facsimile by our directors, officers and other employees who will not be specially compensated for these services. We will also request that brokers, nominees, custodians and other fiduciaries forward soliciting materials to the beneficial owners of shares held by the brokers, nominees, custodians and other fiduciaries. We will reimburse these persons for their reasonable expenses in connection with these activities. Stockholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed with the SEC without charge from the SEC’s website at: www.sec.gov.
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| Funko’s Annual Report on Form 10-K |
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A copy of Funko’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, including financial statements and schedules but not including exhibits, as filed with the SEC, will be sent to any stockholder of record on April 28, 2025 without charge upon written request addressed to: Funko, Inc. Attention: Secretary 2802 Wetmore Avenue Everett, Washington 98201 A reasonable fee will be charged for copies of exhibits. You also may access this proxy statement and our Annual Report on Form 10-K at www.proxyvote.com. You also may access our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 at www.funko.com. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING VIRTUALLY, WE URGE YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, AS DESCRIBED IN THIS PROXY STATEMENT. IF YOU RECEIVED A COPY OF THE PROXY CARD BY MAIL, YOU MAY SIGN, DATE AND MAIL THE PROXY CARD IN THE ENCLOSED RETURN ENVELOPE. PROMPTLY VOTING YOUR SHARES WILL ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING AND WILL SAVE US THE EXPENSE OF FURTHER SOLICITATION. By Order of the Board of Directors Tracy D. Daw, Chief Legal Officer and Secretary Everett, Washington