Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 262

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 262
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 participate in distributions as they are Common Interests; however, are subject to the same forfeiture and
repurchase provisions as the Series A Interests. Holders of Restricted Series C Interests must repay any distributions received on unvested Restricted Series C Interests within 15 days of employment termination.

Subsequent to the IPO, the Company utilizes the option-pricing method (“OPM”) to estimate the fair value of these awards, considering that the
awards are units of Legence Parent and Legence Parent II and act as options that receive value after certain Common Interests receive a return matching the specified thresholds. The expected life assumption represents the period of time the
interests are expected to be outstanding and the risk-free rate is based on the U.S. Treasury yield for a term consistent with the expected life. The total equity value was calculated based on the full market capitalization of the Company. The
expected volatility assumption is based on the volatility of guideline public companies, adjusted for the Company’s size and leverage. Since Legence Parent and Legence Parent II do not have a history or expectation of future recurring
dividends and there are no contractual dividends associated with the equity interests, the expected dividend yield assumption is nil.

F-16

Legence Corp. Notes to Condensed Consolidated Financial Statements - (Continued) (Unaudited) Prior to the IPO, the Company utilized the OPM and the hybrid method to determine the fair value of these awards using certain assumptions. The expected life assumption represents the period of time the interests are expected to be outstanding while the risk-free rate is based on the U.S. Treasury yield for a term consistent with the expected life. The expected volatility assumption is based on the volatility of guideline public companies, adjusted for the Company’s size and leverage. Since the interests do not have a provision for recurring distributions and the issuing entities do not have a history or expectation of future recurring distributions, the expected dividend yield assumption is nil. The hybrid method incorporates various future outcomes and allocates the value in each scenario using the OPM, which included IPO scenarios and delayed exit scenarios. Refer to “Note 1—Nature of Operations and Basis of Presentation” and “Note 11—Stock-Based Compensation” for additional information and further disclosures regarding stock-based compensation. RSUs and Stock Options The Company accounts for RSUs and stock options based on their grant date fair value. RSUs and stock options are subject to service-based vesting conditions, and the corresponding stock-based compensation expense is recognized on a straight