CERTAIN
TRANSACTIONS
Related Party Transactions
North Houston Pole Line, L.P. (North Houston), a wholly-owned subsidiary of Quanta, is a party to certain facility leases with
Properties, Etc., the general partner and 50% owner of which is Earl C. (Duke) Austin, Jr., who is our President, Chief Executive Officer, Chief Operating Officer and a director. During 2020, North Houston paid an aggregate of $469,956 to
Properties, Etc. in rent expense related to these leases. These leases have terms through August 2021, and as of December 31, 2020, provided for aggregate remaining lease obligations of $313,304 through the conclusion of the lease terms. In
addition, North Houston is a party to a facility lease with Mr. Austin and paid Mr. Austin $158,400 in rent expense for 2020 related to this lease. As of December 31, 2020, the aggregate remaining lease obligations under this lease
were $105,600 through the conclusion of the lease term in August 2021. Further, North Houston is a party to a facility lease with Mr. Austins father and paid Mr. Austins father $198,000 in rent expense for 2020 related to this
lease. As of December 31, 2020, the aggregate remaining lease obligations under this lease were $132,000 through the conclusion of the lease term in August 2021. These leases relate primarily to facilities that were occupied by North Houston
when Quanta acquired North Houston in 2001. Based upon an independent market valuation, we believe that the rental rates of these leases do not exceed fair market value.
Probst Electric Inc. (Probst Electric) and Summit Line Construction, Inc. (Summit), each a wholly-owned subsidiary of
Quanta, are party to certain facility leases with Three String Holdings, LLC, the 40% owner of which is Redgie Probst, who is our President Electric Power Division. During 2020, these subsidiaries of Quanta paid an aggregate of $816,127 to
Three String Holdings in rent expense related to these leases. These leases have terms through extending through October 2028, and as of December 31, 2020, provided for aggregate remaining lease obligations of $5,237,118 through the conclusion
of the lease terms. Additionally, in March 2021, 3 String Cattle Co. LLC, the sole owner of which is Mr. Probst, sold a custom-built emergency response vehicle to the Company for $1,316,720, which represents the actual cost of the vehicle
without mark-up or profit to the seller. Quanta believes that this transaction has legitimate business purpose and was beneficial to Quanta, as the vehicle will be utilized in the Companys emergency
response operations, and a similar vehicle purchased from an unrelated third party would have been more expensive and required significant lead time to accommodate construction. In addition, Probst Electric and Summit are party to an aircraft dry
lease with Wasatch Aviation 1, LLC, the 50% owner of which is Mr. Probst. This dry lease provides for certain business and operational-related travel, and subsidiaries of Quanta paid an aggregate of $843,631 in 2020 to Wasatch Aviation under
the lease. During 2020, Jim Madson, the brother-in-law of Mr. Probst, received an aggregate of $153,712 from Summit in salary, bonus, health and welfare coverage
and 401(k) plan matching. In addition, during 2020 we granted 507 RSUs to Mr. Madson, with a grant date fair value of $40.24 per share, vesting in three equal annual installments beginning in the first quarter of 2021. The RSUs were granted on
the same terms and conditions as RSUs granted to other U.S. employees in 2020. The employment of Mr. Madson predated Quantas acquisition of Probst Electric and Summit in 2013.
Quanta employed Travis Grindstaff, the brother of Nicholas M. Grindstaff, one of our executive officers, during 2020. Travis Grindstaff received an
aggregate of $260,577 from Quanta in salary, non-equity incentive compensation, health and welfare coverage and 401(k) plan matching contributions for 2020. In addition, during 2020 we granted 931 RSUs to
Travis Grindstaff, with a grant date fair value of $40.24 per share, vesting in three equal annual installments beginning in the first quarter of 2021. The RSUs were granted on the same terms and conditions as RSUs granted to other U.S. employees in
2020.
Review of Related Party Transactions
We have a written policy and procedures for the review, approval and ratification of transactions with related persons. Under our policy, related
persons include, among others, our executive officers and corporate employees, certain employees of our subsidiaries, directors, principal stockholders, and immediate family members of such persons. The transactions covered under our policy
generally include any business transaction between Quanta and a related person, including, among others, the lease of real property from a related person, the employment of a related person, the sale of inventory or supplies to or the purchase of
inventory or supplies from a related person, and the supply of services to or receipt of services from a related person. Related party transactions involving an amount exceeding $120,000 and in which any of our directors, director nominees,
executive officers, beneficial owners of greater than five percent (5%) of any class of our voting securities, or any immediate family members of the foregoing may have an interest require the approval of the Audit Committee. In considering the
approval of any related party