Form 4: AZEK Executive Jonathan Skelly Disposes of Holdings Following James Hardie Merger Completion

Jonathan Skelly, President of Residential & Commercial at AZEK Co Inc., disposed of all his AZEK equity and derivative holdings as a result of the company's merger with James Hardie Industries plc, receiving cash and JHX shares.

Summary

• Jonathan Skelly, President of Residential & Commercial at AZEK Co Inc., disposed of all his direct beneficial ownership in AZEK securities on July 1, 2025.
• This disposition was a direct result of the closing of the merger between The AZEK Company Inc. and James Hardie Industries plc (JHX), as outlined in the Merger Agreement dated March 23, 2025.
• Each outstanding share of AZEK common stock was converted into the right to receive $26.45 in cash and 1.0340 JHX ordinary shares.
• The JHX ordinary shares were valued at $26.053018 per share, based on the five-trading day volume-weighted average price ending June 30, 2025.
• Skelly disposed of 194,358 shares of Class A Common Stock.
• Performance-Based Restricted Stock Units (PSUs) totaling 75,358 units were converted into time-based restricted stock unit awards of JHX and cash awards, with performance-based vesting conditions removed for fiscal years 2026 and 2027.
• Non-qualified stock options, totaling 230,489 units across various tranches with exercise prices ranging from $17.39 to $53.51, were converted into options to purchase JHX ordinary shares with adjusted exercise prices and share counts.

Sentiment

Score: 7

Explanation: The Form 4 reports the expected disposition of securities by an executive due to the successful completion of a previously announced merger. The conversion terms for equity awards, including the removal of performance conditions for PSUs, are clearly defined and appear standard for such transactions, indicating a smooth transition for the executive's compensation.

Positives

• The merger successfully closed, providing AZEK shareholders, including the reporting person, with a defined cash and stock consideration.
• Performance-based vesting conditions for PSUs were removed for future fiscal years (2026 and 2027), converting them to time-based awards, which reduces uncertainty for the recipient.

Future Outlook

NA

Management Comments

• Shares (including in respect of shares underlying Company RSU Awards, Company PSU Awards, and Company Stock Options) were disposed of pursuant to the closing of the transactions contemplated by the Merger Agreement.
• In accordance with the Merger Agreement, each share of Company Common Stock was converted into the right to receive $26.45 in cash and 1.0340 JHX ordinary shares.
• Upon the Effective Time, each outstanding Company RSU Award held by the reporting person was assumed by JHX and converted into a time-based restricted stock unit award of JHX and a cash award.
• Upon the Effective Time, each outstanding Company PSU Award was assumed by JHX and converted into a time-based restricted stock unit award of JHX and a cash award, with the number of shares determined based on actual performance for fiscal years 2024 and 2025, and target performance for fiscal years 2026 and 2027.
• Each time-based restricted stock unit award of JHX and each cash award is subject to the same terms and conditions as were applicable to the Company PSU Award immediately prior to the Effective Time, including the vesting schedule, except that performance-based vesting conditions do not apply from and after the Effective Time.
• Upon the Effective Time, each outstanding Company Stock Option held by the reporting person was assumed by JHX and converted into an option to purchase JHX ordinary shares, with an adjusted exercise price and number of shares based on the Equity Award Exchange Ratio.

Industry Context

NA

Related Party Transactions

• The disposition of securities by Jonathan Skelly, an officer of AZEK, as part of the merger with James Hardie Industries plc, constitutes a related party transaction in the context of the merger agreement.

Stakeholder Impact

• Shareholders (AZEK): Received the agreed-upon merger consideration ($26.45 cash + 1.0340 JHX shares) for their AZEK shares, indicating the successful completion of the acquisition.
• Shareholders (JHX): James Hardie Industries plc has successfully acquired AZEK, expanding its business.
• Employees (AZEK, including Jonathan Skelly): Equity awards (RSUs, PSUs, stock options) were converted into JHX equivalents, maintaining their value and vesting schedules, ensuring continuity of compensation incentives for employees who remain with the combined entity.

Next Steps

• The reporting person now holds James Hardie Industries plc (JHX) ordinary shares, JHX time-based restricted stock units, and JHX stock options, subject to their original vesting schedules (with adjustments for PSUs).

Key Dates

Keywords

AZEK, James Hardie Industries, JHX, Merger, Acquisition, SEC Form 4, Insider Trading, Stock Options, Restricted Stock Units, Equity Compensation, Corporate Transaction, Jonathan Skelly