Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 261

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 261
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 compensation expense for equity-classified awards at their fair value measured as of the grant date.

Series A Interests awards are comprised of time vesting interests (60%) (“Time Interests”), performance vesting interests (20%)
(“Performance Interests”), and exit vesting interests (20%) (“Exit Interests”). The Time Interests and Restricted Series C Interests are service-based awards for which the Company recognizes expense based on the fair value of
the awards at the end of each reporting period. While the Time Interests continue to include a below fair value repurchase feature, and were historically accounted for as liability-classified awards by the Company due to this feature, upon the
Corporate Reorganization the obligation to fund the Time Interests is that of the Management Aggregators, and because those entities are outside of the Company’s structure, they do not have the ability to direct settlement by Legence Holdings,
or to direct a distribution by Legence Holdings for settlement. Thus, the expense recognition for these awards is still remeasured to fair value at the end of each period; however, the offset is treated as an indirect contribution from the
Management Aggregators through Legence Parent and Legence Parent II, as they have the sole obligation for settlement. The Company recognizes compensation expense on a straight-line basis over the five-year vesting period with accelerated vesting and
compensation expense when or if a change of control event occurs.

The Company accounts for the Performance Interests as equity-classified awards under
ASC 718 and recognizes compensation expense when or if certain liquidity events occur. The Company also accounts for the Exit Interests as equity-classified awards under ASC 718 and recognizes compensation when or if certain liquidity events occur.
Awards forfeitures are accounted for as they occur.

Once vested, the holders of the Series A Interests may participate in distributions from the
Management Aggregators upon liquidation or a distribution as directed by Blackstone affiliated entities (“BX Aggregators”). The distributions are first made to the holders of Common Interests until their unreturned contributions are
reduced to zero, and thereafter to the holders of vested Series A Interests and Common Interests pro rata based on their aggregate percentage interests (taking into account any applicable participation thresholds). Refer to “Note
1—Nature of Operations and Basis of Presentation” for additional information regarding Common Interests.

The Series A Interests are subject
to certain forfeiture and repurchase provisions in the event of interest holder employment termination. Restricted Series C Interests