Company: PRMB
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001193125-25-012325
Chunk: 292

Company: Primo Brands Corp
Filing Date: 2025-01-24
Form: S-1
Chunk 292
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 to examination by the tax
authorities for the tax years 2021 and after.

The Company does not anticipate any significant changes in the liability for unrecognized income tax
benefits for uncertain income tax positions within the next 12 months.

The Company is subject to taxation in the United States, various states and
Canada. As of December 31, 2023, the Company has been notified of examinations by the following taxing authorities: California, Georgia, Illinois, Pennsylvania, and Texas. All examinations are for tax periods prior to March 31, 2021. As
such and in accordance with the stock and asset purchase agreement, Nestle S.A. bears the onus for any resulting adjustments of the aforementioned examinations.

NOTE 13—STOCK-BASED COMPENSATION

Certain employees
of the Company were granted Class B units in Triton Water Parent Holdings, LLC (“Parent”) as profit interest units (“PIUs”) in the Parent. The PIUs granted consist of a combination of time-vesting units (approximately 1/2 of
the PIUs) and performance-vesting units (approximately 1/2 of the PIUs).

Fifty percent (50%) of the time-vesting-units will vest on the second
anniversary of the vesting commencement date and sixteen and two-thirds percent (16 2/3%) will vest on the third, fourth, and fifth anniversaries of the vesting commencement date. Performance-vesting units
will vest based on the return on investment by the investors of the Parent, at the time of an exit transaction or final sale. Based on the fair value of PIUs issued by the Parent, the Company recognizes compensation expense for the time-vesting
units on a straight-line basis over the respective requisite service periods of the awards. For performance-vesting units, where vesting is contingent upon both a service and a performance condition of the Parent, compensation expense is recognized
over the respective requisite service period of the award only when achievement of the performance condition is considered probable. The grant date fair value of the performance based PIUs was $2.7 million. As of December 31, 2023 and 2022
(Successor), the performance condition was not considered probable, and therefore no expense has been recorded.

Given the absence of an active market for
the shares underlying the awards, the fair value of the awards was determined with input from management of the Parent and third-party valuation specialists. Based on the charge