Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Fiscal Year 2023 Annual Cash Incentive Plan Design
On May 17, 2022, the Compensation and Management Development Committee (the
"Compensation Committee") of the Board of Directors (the "Board") of Advanced
Drainage Systems, Inc. (the "Company") recommended, and on May 18, 2022 the
Board approved, the Company's annual performance measures, weights and minimum,
target and maximum amounts for the Annual Cash Incentive Plan for fiscal year
2023, under the Company's 2017 Omnibus Incentive Plan. The Annual Cash Incentive
Plan provides annual cash incentive compensation opportunities based on
performance measures that are similar to the performance measures utilized for
fiscal year 2022, as follows:
•Total Net Sales - net sales as reflected in the Company's financial statements.
•Adjusted EBITDA - EBITDA before stock based compensation expense, non-cash
charges and certain other expenses.
•Individual Goal Achievement - performance of the executives versus their
respective annual performance objectives.
For fiscal year 2023, 60% of the incentive award for all named executive
officers other than Mr. Roy E. Moore, Jr. is based upon the achievement of
certain levels of the Company's Adjusted EBITDA, 20% is based upon achieving
certain levels of the Company's net sales and 20% is based upon attainment of
certain individual performance goals. With respect to Mr. Moore, 70% of the
incentive award is based upon the achievement of certain levels of Infiltrator
Water Technologies, LLC's Adjusted EBITDA, 10% is based upon achieving certain
levels of the Company's Adjusted EBITDA and 20% is based upon attainment of
certain individual performance goals. The foregoing percentages are then
multiplied by the named executive officer's total target incentive award
(calculated as a percentage of annual base salary) to arrive at the target
amounts. The Annual Cash Incentive Plan includes a funding trigger that requires
the achievement of the established minimum threshold performance level for
Adjusted EBITDA in order for any potential payout based on the Total Net Sales
or Individual Goal Achievement measures.
For the Adjusted EBITDA and Total Net Sales performance measures, the payouts
will range from 0% of target for minimum performance, 100% of target for target
performance, and 200% of target for maximum performance, for fiscal year 2023.
Payout percentages for performance between the minimum performance goal, the
target performance goal and the maximum performance goal will be determined
using linear interpolation.
In making award determinations under the Annual Cash Incentive Plan, the
Compensation Committee shall have full power and authority to interpret the
terms and conditions of the Annual Cash Incentive Plan and make all
determinations thereunder, as well as the power and authority to make
adjustments to the design of the Annual Cash Incentive Plan that it deems
necessary or proper in its sole and absolute discretion. Annual Cash Incentive
Plan awards will be paid in a lump sum (less applicable withholdings) within the
"applicable 2-1/2 month period," as defined in Treasury Regulations Section
1.409A-1(b)(4)(A) following the Company's March 31, 2023 fiscal year end.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
The following exhibits are being furnished as part of this report:
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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