|AECOM filed this Form 10-Q on 02/06/2019|
PERFORMANCE CRITERIA AND EARNOUT SCHEDULE
FY2019 PERFORMANCE EARNINGS PROGRAM (PEP)
This schedule outlines the performance conditions attached to the vesting of your PEP award. Your PEP award is just one component of your overall long-term incentive package. Another important aspect is your Restricted Stock Unit (RSU) award in which the number of RSUs you originally received upon grant will not change over time.
The FY2019 Performance Earnings Program is administered in accordance with provisions of the AECOM Amended & Restated 2016 Stock Incentive Plan and associated documents, including this Performance Criteria and Performance Earnout Schedule and the Standard Terms and Conditions as established by the Administrator.
The payment from earned target units will be determined based on AECOMs 3-Year Cumulative Free Cash Flow Per Share and AECOMs 3-Year Average Return on Invested Capital (ROIC), each weighted 50.0%. For both objectives, performance will be determined after the end of the three-year performance cycle beginning on October 1, 2018 and ending on September 30, 2021.
The total award will vest and be paid in year three (December 2021). The value of your PEP award may appreciate based on AECOMs stock price during the three-year vesting period.
1. PERFORMANCE CRITERIA
The following definitions shall apply for purposes of the performance criteria at the overall enterprise level:
A. 3-Year Cumulative Free Cash Flow Per Share (50.0% weighting) is the sum of fiscal years 2019, 2020, and 2021 cash flow from operations less capital expenditures net of proceeds from disposals divided by the average of fiscal years 2019, 2020, and 2021 Weighted Average Number of Common Shares Outstanding, on a diluted basis
B. 3-Year Average Return on Invested Capital (50.0% weighting) is the average of fiscal years 2019, 2020, and 2021 Adjusted Net Operating Profit After Taxes (Adj. NOPAT) divided by the Average Quarterly Invested Capital over fiscal years 2019, 2020, and 2021.
(i) Adj. NOPAT is the sum of Adjusted Net Income and Adjusted Interest Expense net of interest income (tax effected at a normalized 25% rate). Adjusted Net Income is the Net Income Available to Common Stockholders excluding acquisition and integration related expenses, restructuring related expenses, financing charges in interest expense, the amortization of intangible assets, and financial impacts associated with expected and actual dispositions of non-core businesses and assets. Adjusted Interest Expense excludes deferred financing fees.