Apollo Global Management, LLC (NYSE:APO) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02
On November13, 2017, Apollo Global Management, LLC (“AGM,” and together with its consolidated subsidiaries, “Apollo”) issued a press release announcing that effective January1, 2018, Scott Kleinman and James Zelter will become its Co-Presidents. At that time, Messrs. Kleinman and Zelter also will become non-voting members of the Executive Committee (the “Executive Committee”) of the Board of Managers of AGM Management, LLC, the manager of AGM. Messrs. Kleinman and Zelter will report to Co-Founder and Senior Managing Director Joshua Harris.
Mr.Kleinman, age 44, has served since 2009 as Lead Partner for Apollo’s private equity business and a member of Apollo’s management committee. He joined the firm in 1996. Prior to 1996, he was a member of the Investment Banking division at Smith Barney Inc. from 1994 to 1996. Mr.Kleinman serves on the board of directors of Constellis Holdings, CH2M Hill Companies, Ltd., Hexion Holdings, LLC, Momentive Performance Materials Holdings, Inc., and Vectra Co. In 2014, he founded the Kleinman Center for Energy Policy at the University of Pennsylvania. He is a member of the Board of Overseers at the University of Pennsylvania School of Design. Mr.Kleinman received a B.A. and B.S. from the University of Pennsylvania and the Wharton School of Business, respectively, graduating magna cum laude, Phi Beta Kappa.
Mr.Zelter, age 55, currently serves as the Managing Director and Chief Investment Officer of Apollo’s credit business and has served in such capacity since 2006. He is a member of Apollo’s management committee. Mr.Zelter is also Chief Executive Officer and a director of Apollo Investment Corporation. Prior to joining Apollo, Mr.Zelter was with Citigroup Inc. and its predecessor companies from 1994 to 2006. From 2003 to 2005, Mr.Zelter was Chief Investment Officer of Citigroup Alternative Investments, and prior to that he was responsible for Citigroup’s Global High Yield franchise. Prior to joining Citigroup in 1994, Mr.Zelter was a High Yield Trader at Goldman, Sachs& Co. Mr.Zelter has significant experience in global credit markets and has overseen the broad expansion of Apollo’s credit platform. He is a board member of DUMAC, the investment management company that oversees both Duke University’s endowment and the Duke Endowment. Mr.Zelter has a B.A. in Economics from Duke University.
As senior Apollo professionals, Messrs. Kleinman and Zelter invest their own capital (or capital of estate planning vehicles that they control) directly in funds managed by Apollo and Apollo-affiliated entities as described in AGM’s Annual Report on Form 10-K for the fiscal year ended December31, 2016.
Messrs. Kleinman and Zelter (or certain transferees) also indirectly hold Apollo Operating Group Units that they may exchange for ClassA shares of AGM to an exchange agreement and receive certain payments in connection therewith to a tax receivable agreement, as described in AGM’s Annual Report on Form 10-K for the fiscal year ended December31, 2016.
Effective on January1, 2018, in connection with their respective new appointments, the Executive Committee has approved new compensation arrangements for Messrs. Kleinman and Zelter and, on November12, 2017, Apollo entered into letter agreements with each of Messrs. Kleinman and Zelter providing for these arrangements in connection their appointment as Co-Presidents. These new compensation arrangements for the Co-Presidents were designed to further align their interests with AGM’s investors. The material terms of the new compensation arrangements are summarized below.
Under his letter agreement, Mr.Kleinman will receive a one-time grant of 800,000 restricted share units (“RSUs”) covering ClassA shares of AGM, such grant to be made in the first quarter of 2018 under AGM’s omnibus equity incentive plan. The RSUs will vest on the first five anniversaries of January1, 2018, subject to Mr.Kleinman’s continued employment on each such date and the terms of the associated RSU award agreement. The RSUs will accrue distribution equivalents from the date of grant, irrespective of vesting.
Mr.Zelter’s letter agreement, which amends his existing employment agreement, provides for a base salary of $100,000. Under the letter agreement, Mr.Zelter will receive a one-time grant of 2,500,000 RSUs under AGM’s omnibus equity incentive plan, which RSUs will be granted contemporaneous with and subject to the same vesting and other terms as Mr.Kleinman’s RSU grant, including the accrual of distribution equivalents from the date of grant, irrespective of vesting.
Mr.Zelter’s letter agreement also provides for his participation, directly or indirectly, in incentive income distributions made by funds managed, sponsored or advised by Apollo’s credit business, with the same vesting terms as apply to other participating credit investment professionals generally. These amounts are payable partly in cash and partly in RSUs or ClassA shares of AGM. Mr.Zelter’s participation in this incentive income supersedes and replaces the profits interests and other similar interests and rights in respect of funds managed, sponsored or advised by Apollo’s credit business that were previously granted to him.
Apollo also is entering into a customary indemnification agreement with Mr.Kleinman in the same form that applies to AGM’s other executive officers and to its Board.Mr.Zelter already is party to such an indemnification agreement with Apollo.
Item 5.02 Regulation FD Disclosure.
A copy of the press release regarding the matters described above has been furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 5.02 Financial Statements and Exhibits.
(d) Exhibits
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The following documents are attached as exhibits to this Current Report on Form 8-K:
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Apollo Global Management LLC ExhibitEX-99.1 2 d467412dex991.htm EX-99.1 EX-99.1 Exhibit 99.1 Apollo Global Management Names Scott Kleinman and James Zelter Co-Presidents New York,…To view the full exhibit click here
About Apollo Global Management, LLC (NYSE:APO)
Apollo Global Management, LLC (Apollo) is an alternative investment manager in private equity, credit and real estate. The Company raises, invests and manages funds on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. The Company operates through three segments: Private equity, Credit and Real estate. The Private equity segment invests in control equity and related debt instruments, convertible securities and distressed debt instruments. The Credit segment invests in non-control corporate and structured debt instruments, including performing, stressed and distressed instruments across the capital structure. The Real estate segment invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt, including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities.
