CONSTRUCTION PARTNERS, INC. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Approval of Form of LTIP-B Award Agreement
OnDecember 29, 2021 , the Compensation Committee (the "Compensation Committee") of the Board of Directors ofConstruction Partners, Inc. (the "Company") approved a form of award agreement for performance stock unit awards ("LTIP-B awards") granted pursuant to theConstruction Partners, Inc. 2018 Equity Incentive Plan (the "Equity Incentive Plan"). The following description of the form of LTIP-B award agreement does not purport to be complete and is qualified in its entirety by the full text of the form of LTIP-B award agreement, which is attached hereto as Exhibit 10.1. The LTIP-B awards represent performance stock units ("PSUs"), with each unit having a notional value equivalent to one share of the Company's Class A common stock for purposes of determining the number of shares subject to the award. Each LTIP-B award provides for a target number of PSUs that the grantee may earn, with the preliminary number of vested PSUs to be determined based on the Company's actual performance compared to its targets over a three-year performance period for the following metrics: (i) compound aggregate revenue growth rate and (ii) average annual return on capital employed ("ROCE"). Fifty percent (50%) of the target PSUs (the "Revenue Target PSUs") will be eligible to vest based on the achievement of compound aggregate revenue growth rate as compared to the revenue growth rate target, as set forth in the following table. The number of vested PSUs will be interpolated for performance between each performance level (based on whole percentages), and there will be no vested PSUs if the performance level is less than 89% of the revenue growth rate target over the performance period. Revenue Growth Rate vs. Performance Level Revenue Growth Target Payout % (Vested PSUs) Below Threshold < 89% 0% of Revenue Target PSUs Threshold 89% 75% of Revenue Target PSUs Target 100% 100% of Revenue Target PSUs Maximum > 112% 150% of Revenue Target PSUs Fifty percent (50%) of the target PSUs (the "ROCE Target PSUs") will be eligible to vest based on the achievement of ROCE as compared to the ROCE target, as set forth in the following table. The number of vested PSUs will be interpolated for performance between each performance level (based on whole percentages), and there will be no vested PSUs if the performance level is less than 92% of the ROCE target over the performance period. Performance Level ROCE vs. ROCE Target Payout % (Vested PSUs) Below Threshold < 92% 0% of ROCE Target PSUs Threshold 92% 75% of ROCE Target PSUs Target 100% 100% of ROCE Target PSUs Maximum > 108% 150% of ROCE Target PSUs Following a determination of the preliminary vested PSUs, the final number of PSUs that are eligible to vest will be either increased or decreased by up to 15% based on a comparison of the total stockholder return ("TSR") over the performance period compared to that of the Russell 2000 over the same period (provided that the Company's TSR must be positive in order for any upward adjustment to be made). Specifically, the LTIP-B award is subject to modification based on the following schedule: Company TSR vs. Russell 2000 Award Modification 25th Percentile or Below -15% ? Straight-line interpolation 50th Percentile 0% ? Straight-line interpolation 75th Percentile or Above +15%
-------------------------------------------------------------------------------- In addition to being subject to all the general terms and conditions of the Equity Incentive Plan, the form of LTIP-B award agreement provides that the PSUs have no rights with respect to dividends until the awards become vested and are settled in shares of Class A common stock. The LTIP-B award agreement provides that the "vesting date" for each LTIP-B award, which is defined as the date on which the administrator of the Equity Incentive Plan determines for the performance period (i) the actual achievement of the compound aggregate revenue growth rate for the performance period, (ii) the actual achievement of the ROCE for the performance period, and (iii) the actual achievement of the Company's relative TSR, will occur within 60 days following the end of the performance period. Provided that the grantee is employed by or providing services to the Company or any affiliate on the applicable vesting date, vested PSUs will be converted and settled in shares of Class A common stock within 60 days following the vesting date. In general, upon a termination of the employment of an LTIP-B award holder prior to the vesting date, vesting will cease, and the LTIP-B award will immediately terminate and be forfeited. Grant of LTIP-B Awards OnDecember 29, 2021 , the Compensation Committee, as administrator of the Equity Incentive Plan, approved grants of LTIP-B awards to certain members of the Company's management, includingFred J. (Jule) Smith , III, the Company's President and Chief Executive Officer. Pursuant to these grants, the number of vested PSUs will be based on the Company's compound aggregate revenue growth rate and average annual ROCE over the three-year performance periods (i) beginningOctober 1, 2020 and endingSeptember 30, 2023 and (ii) beginningOctober 1, 2021 and endingSeptember 30, 2024 , respectively. In connection with the grants,Mr. Smith received an award of 13,750 target PSUs for the performance period beginningOctober 1, 2020 and endingSeptember 30, 2023 and an award of 14,375 target PSUs for the performance period beginningOctober 1, 2021 and endingSeptember 30, 2024 . Item 9.01. Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Form of LTIP-B (Performance Stock Unit) Award Agreement 104 Cover Page Interactive Data File (embedded within
the Inline XBRL document)
--------------------------------------------------------------------------------
© Edgar Online, source
