UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 23, 2018

 

 

Advanced Drainage Systems, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36557   51-0105665

(State or other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

4640 Trueman Boulevard,

Hilliard, Ohio 43026

  43026
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (614) 658-0050

(Former name or former address if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Michael B. Coleman and Ross M. Jones as Directors

On May 23, 2018, the Board of Directors (the “Board”) of Advanced Drainage Systems, Inc. (the “Company”), upon the recommendation of the Nominating and Corporate Governance Committee (the “Governance Committee”), expanded the size of the Board to eleven directors and appointed Michael B. Coleman as a Class I director and Ross M. Jones as a Class III director. Mr. Coleman will serve as a director until the annual meeting of stockholders to be held in 2020. Mr. Jones will serve as a director until the annual meeting of stockholders to be held in 2019.

Mr. Coleman is a partner at Ice Miller in the Public Affairs and Government Law Group and serves as the firm’s Director of Business and Government Strategies. Mr. Coleman served as Mayor of Columbus, Ohio from 2000 to 2015, the first African-American mayor and the longest-serving mayor in Columbus history. Mr. Coleman’s 25 plus years of experience in public service also includes serving as City Council President for Columbus, Ohio from 1997 to 1999 and as a member of City Council from 1992 to 1999. Prior to his term as Mayor, Mr. Coleman was a partner with the law firm of Schottenstein Zox & Dunn LLP. Mr. Coleman has received numerous national awards and is a frequent public speaker on issues involving economic development, neighborhood revitalization and environmental stewardship. Mr. Coleman has a B.S. in Political Science from the University of Cincinnati and a J.D. from the University of Dayton School of Law.

Mr. Jones, a Managing Director at Berkshire Partners since 2000, has over 25 years of private equity experience. During Mr. Jones’ career at Berkshire, he has worked with many companies across a wide range of industries, including advising the Company over a 10-year period prior to its public offering. His prior board experience also includes serving as Chairman of the Board and Nominating & Governance Committee at Bare Escentuals, Inc. and serving as Lead Director and Chairman of the Nominating & Governance and Compensation Committees at Carter’s, Inc. Before joining Berkshire Partners, Mr. Jones worked at a start-up merchant bank, Bain & Co. and in the Investment Banking Division of Morgan Stanley & Co. Mr. Jones has a B.A. from Dartmouth College and a M.B.A. from Stanford University Graduate School of Business.

There were no arrangements or understandings pursuant to which either Mr. Coleman or Mr. Jones was appointed as a director, and there are no related party transactions between the Company and either Mr. Coleman or Mr. Jones reportable under Item 404(a) of Regulation S-K. Mr. Coleman and Mr. Jones have not been assigned to any committee of the Board at this time, with any committee assignments to occur at a later date following the review and recommendation of the Governance Committee of the Board. In connection with their service as directors of the Company, Mr. Coleman and Mr. Jones each will be entitled to the same compensation and benefits made available to the Company’s non-employee directors generally.

Fiscal Year 2018 Annual Cash Incentive Plan Awards

On May 23, 2018 the Compensation and Management Development Committee (the “Compensation Committee”) of the Board recommended and approved, and on May 24, 2018 the Board ratified and approved, the award of cash bonuses to each of the named executive officers (each, an “NEO”) of the Company for the fiscal year ended March 31, 2018, pursuant to the Company’s previously adopted Annual Cash Incentive Plan. The NEOs include (i) D. Scott Barbour, President and Chief Executive Officer (as of September 1, 2017), (ii) Joseph A. Chlapaty, former Chairman of the Board, President and Chief Executive Officer (until his retirement as of September 1, 2017), (iii) Scott A. Cottrill, Executive Vice President and Chief Financial Officer, (iv) Thomas M. Fussner, former Executive Vice President and Co-Chief Operating Officer (until his retirement as of March 31, 2018), (v) Ronald R. Vitarelli, Executive Vice President, and (vi) Robert M. Klein, Executive Vice President.

The Board and the Compensation Committee based their determinations on a review of previously established performance measures related to the Company’s financial performance (20% weighted for net sales and 60% weighted for Adjusted EBITDA), as well as individual performance measures based upon the performance of the relevant executive as compared to the executive’s annual performance objectives, weighted at 20%. The bonus amounts awarded were based upon the performance measures and percentage weights established under the plan for

fiscal year 2018. The amounts awarded for fiscal year 2018 are as follows: D. Scott Barbour, $595,632; Joseph A. Chlapaty, $1,081,420; Scott A. Cottrill, $413,929; Thomas M. Fussner, $305,985; Ronald R. Vitarelli, $311,513; and Robert M. Klein, $266,397.

Fiscal Year 2019 Base Salary and Annual Cash Incentive Plan Design

The Board and the Compensation Committee also approved base salary adjustments for each of the NEOs for fiscal year 2019. The Board and the Compensation Committee based their determinations on a review of each such NEO’s position and responsibility and on available market data. The base salaries established for fiscal year 2019, to be effective as of June 1, 2018, are as follows: Mr. Barbour, $825,000; Mr. Cottrill, $500,000; Mr. Vitarelli, $375,000; and Mr. Klein, $375,000.

The Board and the Compensation Committee also approved the Company’s annual performance measures, weights and minimum, target and maximum amounts for the Annual Cash Incentive Plan for fiscal year 2019, under the Company’s 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”). The Annual Cash Incentive Plan provides annual cash incentive compensation opportunities based on performance measures that generally are similar to the performance measures utilized for fiscal year 2018, 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 2019, 60% of the incentive award is based upon the achievement of certain levels of Adjusted EBITDA, 20% is based upon achieving certain levels of net sales and 20% is based upon attainment of certain individual performance goals. The foregoing percentages are then multiplied by the NEO’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 50% of target for minimum performance, 100% of target for target performance, and 250% of target for maximum performance, for fiscal year 2019. Payout percentages for performance between the minimum performance goal, the target performance goal and the maximum performance goal are 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 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) following the Company’s March 31, 2019 fiscal year end.

Form of Performance Unit Award Agreement

On May 23, 2018, the Compensation Committee adopted a form of Performance Unit award agreement for use in connection with the 2017 Incentive Plan.

The form of award agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated in this Item 5.02 by reference. Such form may be used in connection with future grants of performance units to eligible participants in the 2017 Incentive Plan, in addition to the awards described below.

Non-Qualified Stock Option Grants, Restricted Stock Awards and Performance Unit Awards

On May 24, 2018, based upon the recommendation of the Compensation Committee, the Board approved the following equity grants to its named executive officers as referenced below.

 

Named Executive Officer and Title

   Non-Qualified
Stock Options 		     Shares of
  Restricted Stock   		     Performance Units
(at Target
Performance
Level) 		 

D. Scott Barbour, President and Chief Executive Officer

     80,030        24,272        48,544  

Scott A. Cottrill, Executive Vice President and Chief Financial Officer

     22,408        6,797        13,592  

Ronald R. Vitarelli, Executive Vice President

     12,805        3,884        7,767  

Robert M. Klein, Executive Vice President

     12,805        3,884        7,767  

Each of the foregoing awards was granted in accordance with the applicable form of award agreement described in prior filings (with respect to shares of restricted stock and non-qualified stock options) or described above (with respect to performance units), and will vest in accordance with such form of award agreement.

The restricted stock awards vest in three equal annual installments beginning on May 23, 2019, provided that the grantee remains in continuous service with the Company through the relevant vesting date. Upon death or disability all restricted stock not previously vested or forfeited will vest on such date.

The nonqualified stock options provide for the right to purchase the Company’s common stock at an exercise price of $25.75 per share, with options becoming vested in three equal annual installments beginning on May 23, 2019, provided that the grantee remains in continuous service with the Company through the relevant vesting date. The options have an expiration date of May 23, 2028. Upon death or disability all options not previously vested or forfeited will vest on such date.

The performance units vest on March 31, 2021, provided that the grantee remains in continuous service with the Company through the vesting date and provided further that certain performance measures are met. Upon death or disability all performance units not previously vested or forfeited will vest on such date. The performance units have a 3-year performance period from April 1, 2018 through March 31, 2021. For the performance units, 50% of the award is based upon the achievement of certain levels of Return on Invested Capital for the performance period and 50% is based upon the achievement of certain levels of Free Cash Flow for the performance period. For each of the Return on Invested Capital and Free Cash Flow performance measures, the payouts will range from 50% of target for minimum performance, 100% of target for target performance, and 200% of target for maximum performance. For performance below the minimum performance level, the payout percentage will be 0% and for performance above the maximum performance level, the payout percentage will be 200%. Payout percentages for performance between the minimum performance level, the target performance level and the maximum performance level are determined using linear interpolation. The performance units, and any accrued dividend equivalents, will be settled in shares of the Company’s common stock, if the applicable performance and service conditions are satisfied.

In addition to the foregoing, the Company approved additional awards of 116,982 non-qualified stock options, 52,044 shares of restricted stock and 30,970 performance units, which were granted to key employees under the 2017 Incentive Plan.

The foregoing awards were made under the 2017 Incentive Plan, which was approved by the Company’s stockholders on July 17, 2017. The 2017 Incentive Plan provides for the award of stock options, restricted stock, restricted stock units, stock appreciation rights, phantom stock, cash-based awards, performance awards (which may take the form of performance cash, performance units or performance shares) and other stock-based awards. The 2017 Incentive Plan was included as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 8, 2017, and is incorporated herein by reference. The above descriptions of the awards are qualified in

their entirety by reference to the full text of the forms of such award agreements, which were included as Exhibits 10.2 and 10.3 to the Company’s Current Report on Form 8-K, filed on September 8, 2017, with respect to shares of restricted stock and non-qualified stock options, respectively, and are included as Exhibits 10.1 to this Current Report on Form 8-K, with respect to performance units, and incorporated herein by reference.

 

Item 8.01 Other Events.

On May 30, 2018, the Company issued a press release announcing the appointments of Mr. Coleman and Mr. Jones as referenced in Item 5.02 above. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

 

Exhibit
No.

  

Description

10.1    Form of Performance Unit Award Agreement pursuant to 2017 Omnibus Incentive Plan.
99.1    Press release, dated May 30, 2018, issued by Advanced Drainage Systems, Inc. regarding director appointments.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    ADVANCED DRAINAGE SYSTEMS, INC.
Date: May 30, 2018     By:  

/s/ Scott A. Cottrill

      Scott A. Cottrill
      EVP & CFO

Exhibit 10.1

ADVANCED DRAINAGE SYSTEMS, INC.

Federal Taxpayer Identification No.: 51-0105665

4640 Trueman Blvd.

Hilliard, OH 43026

Performance Unit Award Notice and Award Agreement (“Award Agreement”)

PART I

 

 

        Award Number:   

 

Name of Participant

 

     

Plan:

 

   2017 Omnibus Incentive Plan                

 

Address         City    State             Zip                

Effective                          , 20          (“Award Date”), you have been granted a Performance Unit Award of                      units for                  shares (“Awarded Performance RSUs”) of ADVANCED DRAINAGE SYSTEMS, INC. (the “Company”) common stock, par value $0.01 per share (“Shares”), as further specified in Appendix A of this Award Agreement. These Awarded Performance RSUs are restricted, and not settled in Shares, until both the Service Condition and the Performance Condition are satisfied.

The Service Condition and the Performance Condition will be determined on the date below with respect to the Awarded Performance RSUs:

 

Number of Awarded Performance

RSUs                                                   

   Vesting Date  
  
  
  
  

 

 

By your signature and the Company’s signature below, you and the Company agree that this Award is granted under and governed by the terms and conditions of the Plan and the Award Agreement (including PART I and PART II), all of which are made a part of this document.

 

ADVANCED DRAINAGE SYSTEMS, INC.      
Signature:   

 

   Date:   

 

Print Name:         
Title:         
PARTICIPANT      
Signature:   

 

   Date:   

 

Print Name:         

PART II

General Terms and Conditions

Section  1.      General Terms .

(a)      Size and Type of Award . The Restricted Stock Units for Shares covered by this Award (the “Awarded Performance RSUs”) are listed in Part I of this Award Agreement (“Award Notice”), and are subject to all of the terms and conditions of the Advanced Drainage Systems, Inc. 2017 Omnibus Incentive Plan (the “Plan”).

(b)      409A Compliance .  It is intended that the Awarded Performance RSUs granted pursuant to this Award Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance promulgated thereunder (“Section 409A”), and all provisions of this Award Agreement shall be construed, interpreted, and administered in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. It is further intended that all payments related to, or settlements of, the Awarded Performance RSUs hereunder qualify for the “short-term deferral” exception under Section 409A.

(c)      Employment . Your employment with the Company and/or its subsidiaries constitutes adequate consideration for the issuance of the Shares to you having a value at least equal to the par value of the Shares, but the vesting conditions described below will nevertheless determine your right to acquire unrestricted ownership of the Shares to be issued upon settlement of vested Awarded Performance RSUs.

Section 2.     Vesting .

(a)      Vesting Date . The vesting date (the “Vesting Date”) for your Awarded Performance RSUs is specified in the Award Notice. On the Vesting Date, subject to the provisions of this Award Agreement (including Section 2(b) below), you will obtain the Shares to be issued upon settlement of your Awarded Performance RSUs.

(b)      Vesting Conditions . There are two conditions you must satisfy before your Awarded Performance RSUs will vest:

 

  (i) You must, except as otherwise provided herein, remain in continuous service with the Company and/or its subsidiaries from the Award Date through the Vesting Date (the “Service Condition”); and

 

  (ii) Any Performance Goal(s) specified in Appendix A of this Award Agreement must be met as of the end of the Performance Period as determined by the Committee in accordance with the terms of the Plan (the “Performance Condition”).

(c)      Forfeitures . Except as otherwise provided herein, if you terminate service with the Company and/or its subsidiaries prior to a Vesting Date, you will forfeit any Awarded Performance RSUs that are scheduled to vest on or after such termination of service date. When you forfeit Awarded Performance RSUs, all of your interest in the unvested Awarded Performance RSUs will be automatically canceled.

(d)     [ Change in Control . All of the Awarded Performance RSUs not previously vested or forfeited shall immediately vest in full (and shall be deemed satisfied at the target level of the Performance Goal(s) specified in Appendix A of this Award Agreement) and all other restrictions placed on the Awarded Performance RSUs shall be removed if both (1) prior to the expiration of the Performance Period, a Change in Control occurs, and (2) at any time after the Change in Control and during the

 

RSU-Performance Vesting   Page 2 of 6  

twenty-four (24) month period following the Change in Control, your service with the Company and/or its subsidiaries is terminated other than for Cause. As used in this Award Agreement, “Cause” means an illegal or disreputable or malfeasant conduct which, as determined by the Committee, in any significant respect impairs the reputation, good will or business position of the Company or involves the Company’s funds or other assets.]

(e)      [Death or Disability [; Termination without Cause] . If your service with the Company and/or its subsidiaries ends due to death or disability (within the meaning of Section 22(e)(3) of the Code) [or as a result of a termination by the Company other than for “Cause”] [(as defined in Section 2(d) above)] [(defined as an illegal or disreputable or malfeasant conduct which, as determined by the Committee, in any significant respect impairs the reputation, good will or business position of the Company or involves the Company’s funds or other assets)], all of the Awarded Performance RSUs not previously vested or forfeited will vest on such date of termination of service. [In addition, if your service with the Company and/or its subsidiaries ends as a result of a termination by the Company other than for “Cause” [(as defined in Section 2(d) above)] [(defined as an illegal an illegal or disreputable or malfeasant conduct which, as determined by the Committee, in any significant respect impairs the reputation, good will or business position of the Company or involves the Company’s funds or other assets)], then the Committee may, in its discretion, vest, on such date of termination of service, Awarded Performance RSUs not previously vested or forfeited.]

(f)      Definition of Service . For purposes of determining the vesting of your Awarded Performance RSUs, you will be deemed to be in the service of the Company and/or its subsidiaries for so long as you serve in any capacity as an employee, officer, non-employee director or consultant of the Company and/or its subsidiaries.

(g)      Application of Clawback Policy . Notwithstanding anything in this Award Agreement to the contrary, the Awarded Performance RSUs and any related Shares [and/or Dividend Equivalents] shall be subject to adjustment and/or recovery, in whole or in part, following the date on which they become vested and payable if and to the extent (i) required by any applicable law, rule or regulation or (ii) provided under the terms of any clawback policy or other policy of similar import adopted by the Company and in effect on the date the Awarded Performance RSUs or Shares [or Dividend Equivalents], as applicable, become vested and payable.

Section  3.      Settlement . As soon as reasonably practicable after any of the Awarded Performance RSUs vest, the Company shall, subject to the provisions of this Award Agreement, issue and deliver to you the Shares to be issued upon settlement of such vested Awarded Performance RSUs.

Section  4.      Voting and Other Rights . Except with respect to the Shares issued and delivered to you upon settlement of vested Awarded Performance RSUs, (a) you will not have the right to vote, or direct the voting of, Awarded Performance RSUs, (b) you will not have any other rights of a stockholder [(other than the right to Dividend Equivalents as described below)] and (c) you will not obtain ownership of the Shares for tax or other purposes. [Notwithstanding the foregoing, upon the issuance and delivery to you of the Shares to be issued upon settlement of vested Awarded Performance RSUs, you shall be entitled to receive Dividend Equivalents (within the meaning of, and in accordance with, Section 13.6 of the Plan).]

Section  5.      No Right to Continued Service . Nothing in this Award Agreement, or any action of the Board or Committee with respect to this Award Agreement, shall be held or construed to confer upon you any right to a continuation of service by the Company and/or its subsidiaries. You may be dismissed or otherwise dealt with as though this Award Agreement had not been entered into.

Section  6.      Taxes . Where you or any other person is entitled to receive the Shares to be issued upon settlement of vested Awarded Performance RSUs pursuant to this Award Agreement, the Company shall have the right to require you or such other person to pay to the Company the amount of any tax which the Company is required to withhold with respect to such Shares, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of Shares to cover the amount required to be withheld. Section 14.2 of the Plan is incorporated by reference herein.

 

RSU-Performance Vesting   Page 3 of 6  

Section  7.      Notices . Any communication required or permitted to be given under the Plan, including any notice, direction, designation, comment, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below, or at such other address as one such party may by written notice specify to the other party:

If to the Participant, to the Participant’s address as shown in the Company’s records.

If to the Committee:

Advanced Drainage Systems, Inc.

4640 Trueman Blvd.

Hilliard, OH 43026

Attention: Compensation Committee and Corporate Secretary

Section  8.      Restrictions on Transfer . The Awarded Performance RSUs granted hereunder shall not be subject in any manner to anticipation, alienation or assignment, nor shall such Award be liable for, or subject to, debts, contracts, liabilities, engagements or torts, nor shall it be transferable by the Participant other than by will or by the laws of descent and distribution or as otherwise permitted by the Plan.

Section  9.      Successors and Assigns . This Award Agreement shall inure to the benefit of and shall be binding upon the Company and you and their respective heirs, successors and assigns.

Section  10.      Construction of Language . Whenever appropriate in this Award Agreement, words used in the singular may be read in the plural, words used in the plural may be read in the singular, and words importing the masculine gender may be read as referring equally to the feminine or the neuter. Any reference to a section shall be a reference to a section of this Award Agreement, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings assigned to them under the Plan.

Section  11.      Governing Law . This Award Agreement shall be construed, administered and enforced according to the laws of the State of Ohio without giving effect to the conflict of law principles thereof, except to the extent that such laws are preempted by federal law. The federal and state courts having jurisdiction in Franklin County, Ohio shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. By accepting the Award granted under this Award Agreement, you, and any other person claiming any rights under this Award Agreement, agrees to submit himself or herself, and any such legal action as he or she shall bring under the Plan, to the sole jurisdiction of such courts for the adjudication and resolution of any such disputes.

Section  12.      Amendment . This Award Agreement may be amended, in whole or in part and in any manner not inconsistent with the provisions of the Plan, at any time and from time to time, by written agreement between the Company and you.

Section  13.      Plan Provisions Control . This Award Agreement and the rights and obligations created hereunder shall be subject to all of the terms and conditions of the Plan. In the event of any conflict between the provisions of the Plan and the provisions of this Award Agreement, the terms of the Plan, which are incorporated herein by reference, shall control. By signing this Award Agreement, you acknowledge receipt of a copy of the Plan. You acknowledge that you may not and will not rely on any statement of account or other communication or document issued in connection with the Award other than the Plan, this Award Agreement, or any document signed by an authorized representative of the Company that is designated as an amendment of the Plan or this Award Agreement.

 

RSU-Performance Vesting   Page 4 of 6  

Section  14.      Execution of Executive Responsibility Agreement . The grant of the Awarded Performance RSUs pursuant to this Award Agreement is contingent upon the execution by you, the Participant, of an Executive Responsibility Agreement with the Company in form and substance satisfactory to the President of the Company, if such an Executive Responsibility Agreement has not already been executed and delivered to the Company.

 

RSU-Performance Vesting   Page 5 of 6  

A PPENDIX  A TO P ERFORMANCE U NIT A WARD N OTICE AND A WARD A GREEMENT

[Insert Performance Condition(s) as determined by the Committee, including Performance Period

and Performance Goal(s) to be achieved during Performance Period]

 

RSU-Performance Vesting   Page 6 of 6  

Exhibit 99.1

 

LOGO

Advanced Drainage Systems, Inc. Appoints New Directors

HILLIARD, OH (May 30, 2018) – Advanced Drainage Systems, Inc. (NYSE: WMS) (“ADS”, the “Company”), the leading manufacturer of high performance thermoplastic corrugated pipe and related products, today announced that it has expanded its board of directors and appointed Ross M. Jones and Michael B. Coleman to fill the newly created vacancies, effective May 23, 2018.

Mr. Jones, a Managing Director at Berkshire Partners since 2000, has over 25 years of private equity experience. During Mr. Jones’ career at Berkshire, he has worked with many companies across a wide range of industries, including advising ADS over a 10-year period prior to its public offering. His prior board experience also includes serving as Chairman of the Board and Nominating & Governance Committee at Bare Escentuals, Inc. (formerly NASDAQ: BARE) and serving as Lead Director and Chairman of the Nominating & Governance and Compensation Committees at Carter’s, Inc. (NYSE: CRI).

Before joining Berkshire Partners, Mr. Jones worked at a start-up merchant bank, Bain & Co. and in the Investment Banking Division of Morgan Stanley & Co. Mr. Jones has a B.A. from Dartmouth College and a M.B.A. from Stanford University Graduate School of Business.

Mr. Coleman is a partner at Ice Miller in the Public Affairs and Government Law Group and serves as the firm’s Director of Business and Government Strategies. Mr. Coleman served as Mayor of Columbus, Ohio from 2000 to 2015, the first African-American mayor and the longest-serving mayor in Columbus history. Mr. Coleman’s 25+ years of experience in public service also includes serving as City Council President for Columbus, Ohio from 1997 to 1999 and as a member of City Council from 1992 to 1999. Prior to his term as Mayor, Mr. Coleman was a partner with the law firm of Schottenstein Zox & Dunn LLP.

Mr. Coleman has received numerous national awards and is a frequent public speaker on issues involving economic development, neighborhood revitalization and environmental stewardship. Mr. Coleman has a B.S. in Political Science from the University of Cincinnati and a J.D. from University of Dayton School of Law.

“We are very pleased to welcome Messrs. Jones and Coleman to Advanced Drainage Systems’ board of directors. These appointments add to the depth and breadth of expertise of our board, which we believe are important to effective execution of corporate governance and strategic oversight. We look forward to their contributions to our board and the continued success of ADS in the marketplace,” said Robert Kidder, Chairman of the Board of Directors.

About the Company

Advanced Drainage Systems (ADS) is the leading manufacturer of high performance thermoplastic corrugated pipe, providing a comprehensive suite of water management products and superior drainage solutions for use in the construction and infrastructure marketplace. Its innovative products are used across a broad range of end markets and applications, including non-residential, residential, agriculture and infrastructure applications. The Company has established a leading position in many of these end markets by leveraging its national sales and distribution platform, its overall product breadth and scale and its manufacturing excellence. Founded in 1966, the Company operates a global network of approximately 60 manufacturing plants and over 30 distribution centers. To learn more about the ADS, please visit the Company’s website at www.ads-pipe.com .

ADVANCED DRAINAGE SYSTEMS, INC.       4640 TRUEMAN BOULEVARD, HILLIARD, OH 43026 TEL: 614 / 658-0050       800 / 733-7473

HTTP://WWW.ADS-PIPE.COM

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Forward Looking Statements

Certain statements in this press release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are not historical facts but rather are based on the Company’s current expectations, estimates and projections regarding the Company’s business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “confident” and similar expressions are used to identify these forward-looking statements. Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include: fluctuations in the price and availability of resins and other raw materials and our ability to pass any increased costs of raw materials on to our customers in a timely manner; volatility in general business and economic conditions in the markets in which we operate, including, without limitation, factors relating to availability of credit, interest rates, fluctuations in capital and business and consumer confidence; cyclicality and seasonality of the non-residential and residential construction markets and infrastructure spending; the risks of increasing competition in our existing and future markets, including competition from both manufacturers of high performance thermoplastic corrugated pipe and manufacturers of products using alternative materials; our ability to continue to convert current demand for concrete, steel and PVC pipe products into demand for our high performance thermoplastic corrugated pipe and Allied Products; the effect of weather or seasonality; the loss of any of our significant customers; the risks of doing business internationally; the risks of conducting a portion of our operations through joint ventures; our ability to expand into new geographic or product markets; our ability to achieve the acquisition component of our growth strategy; the risk associated with manufacturing processes; our ability to manage our assets; the risks associated with our product warranties; our ability to manage our supply purchasing and customer credit policies; the risks associated with our self-insured programs; our ability to control labor costs and to attract, train and retain highly-qualified employees and key personnel; our ability to protect our intellectual property rights; changes in laws and regulations, including environmental laws and regulations; our ability to project product mix; the risks associated with our current levels of indebtedness; fluctuations in our effective tax rate, including from the recently enacted Tax Cuts and Jobs Act; changes to our operating results, cash flows and financial condition attributable to the recently enacted Tax Cuts and Jobs Act; our ability to meet future capital requirements and fund our liquidity needs; the risk that additional information may arise that would require the Company to make additional adjustments or revisions or to restate the financial statements and other financial data for certain prior periods and any future periods, any delay in the filing of any filings with the Securities and Exchange Commission (“SEC”); the review of potential weaknesses or deficiencies in the Company’s disclosure controls and procedures, and discovering further weaknesses of which we are not currently aware or which have not been detected and the other risks and uncertainties described in the Company’s filings with the SEC. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the Company’s forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

ADVANCED DRAINAGE SYSTEMS, INC.       4640 TRUEMAN BOULEVARD, HILLIARD, OH 43026 TEL: 614 / 658-0050       800 / 733-7473

HTTP://WWW.ADS-PIPE.COM

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For more information, please contact:

Michael Higgins

Director, Investor Relations & Business Strategy

(614) 658-0050

Mike.Higgins@ads-pipe.com

 

ADVANCED DRAINAGE SYSTEMS, INC.       4640 TRUEMAN BOULEVARD, HILLIARD, OH 43026 TEL: 614 / 658-0050       800 / 733-7473

HTTP://WWW.ADS-PIPE.COM