A knockout tournament (also known as a bounty hunter or bounty tournament) is a tournament in which a percentage of the prize pool is awarded in bounties. Every player has a bounty on their head, and by knocking out a player you get to keep their bounty. For example, in a $100+20 buy-in Knockout tournament with $20 bounties, you win $20 for each player you eliminate from the tournament, in addition to the normal payout structure.
Another format of this tournament is known as a Progressive Knockout Tournament, where the price on your elimination increases with every player you bust. For example, if you win a $100 bounty for eliminating a player, a percentage of the $100 will go directly to your account, and the remaining portion will be added to the progressive bounty on yourself. If you win the tournament, you then win your own bounty as well.