Company: CODI-PB
Filing Date: 2025-01-15
Form Type: 8-K
Source: 0001345126-25-000008
Chunk: 0

Company: Compass Diversified Holdings
Filing Date: 2025-01-15
Form: 8-K
Item: Item 1.01
Chunk 0
---
Item 1.01 Entry into a Material Definitive Agreement

Amendment of Management Services Agreement

On January 15, 2025, Compass Group Diversified Holdings LLC (the “ Company”) and Compass Group Management LLC (the “ Manager”) amended the Sixth Amended and Restated Management Services Agreement dated as of September 30, 2014 (the “ Existing Agreement”), by entering into a Seventh Amended and Restated Management Services Agreement (the “ Amendment”), which restructures the management fee under the Existing Agreement to consist of a base management fee and an incentive management fee. Pursuant to the Amendment, the base management fee will be (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”), (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 will be 0.25% of the amount of adjusted net assets exceeding $3.5 billion only when the adjusted net assets are more than $3.5 billion but less than $10 billion and only if the Company’s annualized internal rate of return on equity for the trailing three-years, exceeds 12%. Such incentive management fee is subject to approval by the Compensation Committee of the Company’s Board of Directors. The Amendment also eliminates the payment of integration services fee 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.

The foregoing description of the Amendment is not meant to be exhaustive and is qualified in its entirety by the document itself, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Amendment of Indentures

In connection with the Amendment, on January 15, 2025, the Company entered (i) a first supplemental indenture to the indenture dated as of March 23, 2021, between the Company and U. S. Bank National Association, as trustee, with respect to the Company’s 5.250% Senior Notes due 2029 (the “ First Supplemental