Company: THS
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001320695-25-000107
Chunk: 58

Company: TreeHouse Foods, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 58
---
 by a predefined percentage between 0% and 200%, depending on the achievement of certain operating performance measures. Accrued shares are not earned until the end of the full three-year performance period and remain subject to forfeiture until the third anniversary of the grant date.The performance unit awards include a tranche measured using a relative total shareholder return ("TSR") market condition over a three-year performance goal. The units will accrue, multiplied by a predefined percentage between 0% and 150% for years 2022 through 2023 and between 0% and 200% for 2024 and 2025, for the relative TSR measure, depending on the achievement attainment over the three-year performance period based on the Company's absolute annualized TSR relative to the annualized TSR of a Peer Group. These awards will be converted to stock or cash, at the discretion of the Compensation Committee, generally, on the third anniversary of the grant date. The Company intends to settle these awards in stock and has the shares available to do so.Performance unit awards with market conditions are valued using a Monte Carlo simulation model. Expected volatility is based on the historical volatility of the Company’s stock price or the average Peer Group stock price. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant with a term equivalent to the expected term of the award. The expected term is the time period from the grant date to the end of the performance period. The fair value of the portion of the awards based on relative TSR was valued using a Monte Carlo simulation model with a grant-date fair value of $38.26 on approximately 32,900 units granted in 2025. The assumptions used in the Monte Carlo simulation were as follows:Nine Months EndedSeptember 30,2025Dividend yield0 %Risk-free rate4.01 %Expected volatility (TreeHouse Foods, Inc.)33.68 %Expected volatility (Peer Group)36.45 %Expected term (in years)2.84The following table summarizes the performance unit activity during the nine months ended September 30, 2025:PerformanceUnitsWeightedAverageGrant DateFair Value (In thousands) Nonvested, at December 31, 2024378 $38.04 Granted246 31.68 Vested(92)33.14 Forfeited(99)32.95 Nonvested, at September 30, 2025433 35.18