The multiplier for Performance Shares based on Cost Performance will be determined by a straight line interpolation based on Cost Performance as follows:
≥2% annualized cost increase
0% annualized cost increase
≥2% annualized cost reduction
EBITDA Margin Objective
The Company’s EBITDA Margin performance is measured by the Company’s adjusted EBITDA as a percentage of VAR over the Performance Period.
Adjusted EBITDA shall equal the sum of the Company’s adjusted EBITDA as reflected in the Company’s Reconciliations of Non-GAAP Measures - Consolidated, as reported in the Company’s earnings materials, for the three years over the Performance Period.
VAR shall equal the sum of the Company’s Net Sales less the hedged cost of alloyed metal for three years over the Performance Period.
The EBITDA Margin target is [a target performance level approved by the compensation committee] (the “Target EBITDA Margin Performance”). The payout for Target EBITDA Margin Performance (a multiplier of 1.00x) is 100% of the applicable Performance Shares. If the EBITDA Margin is equal to or less than [the threshold level], no Performance Shares will be earned. If the EBITDA Margin equals or exceeds [the maximum performance requirement], Performance Shares will be earned at the maximum level. The payout for performance at the maximum level (a multiplier of 2.00x) is 200% of the applicable Performance Shares.
The multiplier for Performance Shares based on EBITDA Margin Performance will be determined by a straight line interpolation based on EBITDA Margin targets approved by the compensation committee.
Determination of Number of Performance Shares Potentially Earned:
The number of Performance Shares earned, if any, will be determined as follows:
Following December 31, 2021, the Committee will approve a multiplier (“LTI Multiplier”) for each of the performance metrics described above based on the Company’s performance.
The number of Performance Shares earned, if any, will equal the sum of the product (rounded down to the nearest whole number) of (1) the target number of Performance Shares granted under each performance metric and (2) the LTI Multiplier determined based on each of the applicable Company performance metrics (rounded to the nearest whole percentage point); provided, however, such number will not exceed two times the target number of Performance Shares granted hereunder.
The Committee will approve the LTI Multiplier for each performance metric no later than March 15, 2023.
Additional administrative provisions are reflected in the terms of the applicable grant documents.