Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 280

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 280
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 also accounts for the Exit
Interests as equity-classified awards under ASC 718 and recognizes compensation expense when or if a Change of Control that triggers vesting occurs. Awards forfeitures are accounted for as they occur.

The Company utilizes the option-pricing method (“OPM”) and the hybrid method to determine the fair value of stock-based payment awards using
certain assumptions. The expected life assumption represents the period of time the Parent 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 Parent interests do not have a provision for recurring distributions and the Parent does not have
a history or expectation of future recurring distributions, the Company’s expected dividend yield assumption is nil. The hybrid method incorporates various future outcomes, including IPO scenarios and a delayed exit scenario, and allocates the
value in each scenario using the OPM.

Once vested, the holders of the Series A Profits Interests may participate in distributions of the Company’s
earnings, assets and properties upon liquidation or a distribution as directed by the Parent’s board of directors. The distributions are first made to the holders of Common Interests until their unreturned contributions are

F-23

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

reduced to zero, and thereafter to the holders of vested Series A Profits Interests and Common Interests pro rata based on their aggregate percentage interests (taking into account any applicable
participation thresholds). Please refer to “” for additional information regarding Common Interests.

The Series A Profits Interests are subject to certain forfeiture and repurchase provisions in the event of interest holder employment termination. Restricted
Series C Common Interests participate in distributions alongside Common Interests and are subject to the same forfeiture and repurchase provisions as the Series A Profits Interests. Holders of Restricted Series C Common Interests must repay any
distributions received on unvested Restricted Series C Common Interests within 15 days of employment termination.

Please refer to “” for additional information and further disclosures regarding stock-based compensation.

Income Taxes

Parent is treated as a partnership for federal and state income tax purposes and indirectly owns 100% of the shares of multiple corporations. The
corporations indirectly owned by Parent are subject to entity-level taxation and, as a result, provision for federal, state