1. Time-Based Restricted Shares and Performance-Based Restricted Shares. _________ of the Shares of Restricted Stock are designated as Time-Based Restricted Shares, _________ of the Shares of Restricted Stock are designated as EPS Restricted Shares and _________ of the Shares of Restricted Stock are designated as FCF Restricted Shares.
a. Adjusted EPS shall mean, with respect to each fiscal year during the Performance Period, Net Income as adjusted consistent with the adjustments made to Net Income as reflected in the Companys Annual Report on Form 10-K for the applicable fiscal year, divided by the weighted-average Shares outstanding during the relevant fiscal year, calculated on a diluted basis and reported in the Companys financial statements in accordance with generally accepted accounting principles in the United States (GAAP). The performance goal for Cumulative Adjusted EPS shall be subject to adjustment upon the occurrence of certain corporate events in accordance with Section 11.1 of the Plan.
b. Credit Agreement shall mean the Term Loan Credit Agreement dated as of August 19, 2015, among PC Intermediate Holdings, Inc., Party City Holdings Inc., Party City Corporation, the subsidiaries of the borrowers from time to time party thereto, the financial institutions party thereto, as the Lenders, and Deutsche Bank AG New York Branch, as Administrative Agent.
c. Cumulative EPS shall mean the sum of Adjusted EPS for each of the fiscal years during the Performance Period.
d. Cumulative FCF shall mean the sum of Free Cash Flow for each of the fiscal years during the Performance Period.
e. Determination Date shall mean the date on which the Committee determines the number of Shares that have been earned with respect to the EPS Restricted Shares and the FCF Restricted Shares, which date shall not be later than March 15 of the year following the year in which the Performance Period ends.
f. Free Cash Flow shall mean, with respect to each fiscal year during the Performance Period, Consolidated Adjusted EBITDA, as such term is defined in the Credit Agreement, less capital expenditures, as reported in the Companys financial statements in accordance with GAAP.
g. Net Income shall mean, with respect to each fiscal year during the Performance Period, the Companys net income, as reported in accordance with GAAP.
h. Performance Period shall mean the period beginning on January 1, 2019 and ending on December 31, 2021.
i. Vesting Start Date shall mean January 1, 2019.