Company: CODI-PB
Filing Date: 2025-04-14
Form Type: DEF 14A
Source: 0001140361-25-013771
Chunk: 35

Company: Compass Diversified Holdings
Filing Date: 2025-04-14
Form: DEF 14A
Chunk 35
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ended and Restated Management Services Agreement, which we refer to as the “MSA Amendment”, to restructure the management fee paid to our Manager under the Management Services Agreement to consist of a base management fee and an incentive management fee. Pursuant to the MSA Amendment, the base management fee is calculated as (i) 2% the Company’s adjusted net assets, when the adjusted net assets are less than or equal to $3.5 billion (the “Initial Threshold Fee”), or (ii) the Initial Threshold Fee plus 1.25% of the amount of adjusted net assets exceeding $3.5 billion, when the adjusted net assets are more than $3.5 billion but less than $10 billion, or (iii) 1.5% of the adjusted net assets when the adjusted net assets are $10 billion or more. The incentive management fee is 0.25% of the amount of adjusted net assets exceeding $3.5 billion, but only payable when the adjusted net assets are more than $3.5 billion but less than $10 billion and the Company’s annualized internal rate of return on equity for the trailing three years exceeds 12%. Any incentive management fee paid to our Manager may only be distributed by the Manager among the then-current Employees (as defined in the MSA Amendment) of our Manager. Such incentive management fee is subject to approval by the Compensation Committee of the Company’s Board. The MSA Amendment also eliminates the payment of integration services fees by the Company’s subsidiaries to the Manager and excludes excess cash held by the Company and the Company’s subsidiaries, subject to certain exceptions, from the calculation of the adjusted net assets of the Company, along with certain other changes. Management fees due to our Manager under the Management Services Agreement are required to be paid prior to the payment of any distributions to shareholders. Pursuant to the Management Services Agreement, our Manager is entitled to enter into offsetting management services agreements with each of our operating subsidiaries. The management fee due to our Manager by the Company under the Management Services Agreement is offset on a dollar-for-dollar basis by fees paid to our Manager by our subsidiary businesses under such offsetting management services agreements. For the years ended December 31, 2024, 2023, and 2022, we incurred approximately $74.8 million, $67.9 million and $62.1 million, respectively, in management fees under the Management Services Agreement, approximately $68.0 million, $61.9 million, and $56.6