Free Cash Flow Clause Samples
The Free Cash Flow clause defines how the amount of cash generated by a business, after accounting for operational expenses and capital expenditures, is calculated and used within the context of the agreement. Typically, this clause outlines the specific formula or adjustments to be made when determining free cash flow, such as including or excluding certain non-cash items or extraordinary expenses. Its core practical function is to provide a clear and consistent method for measuring available cash, which is often used for purposes like determining payments, distributions, or financial covenants, thereby reducing ambiguity and potential disputes between parties.
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Free Cash Flow a. Free Cash Flow shall be measured on a cumulative basis over the entire three-year performance period commencing January 1, 2021 and ending December 31, 2023. The payout percentage for the Company’s cumulative Free Cash Flow shall be determined in accordance with the Free Cash Flow targets and payout percentages established by the Committee prior to the grant date of the award.
b. The payout percentage for the Free Cash Flow target shall range from a minimum of zero percent (0%) to a maximum of two hundred percent (200%) based on actual performance relative to targets
c. For any actual performance figure which falls between two defined payment thresholds, the payout with respect to such performance criteria shall be determined by straight-line interpolation.
Free Cash Flow. The remaining one-half of the Performance Shares (the “FCF Performance Shares”) will be earned based on the Company’s average annual free cash flow performance as a percentage of net income over each of the three calendar years in the Performance Cycle (the “FCF Performance Goals”), subject to further adjustment as provided under Paragraph 2(c) below. The Committee has established a threshold, target and maximum FCF Performance Goal for the 2025 calendar year, as set forth in Appendix A attached hereto. The Committee will establish and communicate to the Participant a threshold, target and maximum FCF Performance Goal for the 2026 and 2027 calendar years prior to March 30, 2026, and March 30, 2027, respectively, in accordance with the requirements of Section 6.7 of the Plan. Following the end of the Performance Cycle, the Committee shall compare the actual performance of the Company with the FCF Performance Goals and certify, in writing, whether and to what extent the FCF Performance Goals have been achieved for such Performance Cycle. Subject to the provisions of Paragraph 3 below, upon written certification by the Committee on the Vesting Date as to whether, and to what extent, the FCF Performance Goals have been achieved, the FCF Performance Shares will become vested on the Vesting Date and will be eligible for conversion in accordance with the following schedule, in each case, subject to further adjustment as provided under Paragraph 2(c) below:
(i) If the FCF Performance Goal achieved is less than the threshold, the FCF Performance Shares will not vest.
(ii) If the threshold FCF Performance Goal is achieved, then 50% of the FCF Performance Shares will vest.
(iii) If the target FCF Performance Goal is achieved, then 100% of the FCF Performance Shares will vest.
(iv) If the maximum FCF Performance Goal is achieved or exceeded, then 200% of the FCF Performance Shares will vest.
(v) If the FCF Performance Goal achieved is between the threshold and the target or between target and maximum, the number of FCF Performance Shares that will vest will be interpolated on a straight-line basis between the two nearest designated points.
(c) Relative Total Shareholder Return Modifier. ROIC Performance Shares and FCF Performance Shares which vest pursuant to the foregoing Paragraphs 2(a) and 2(b) shall be subject to adjustment in the aggregate based on the Company’s relative total shareholder return performance as compared to the total shareholder return performance ...
Free Cash Flow. The Committee will calculate the Company’s Free Cash Flow by subtracting Capital Expenditures from Net Cash Provided by (Used in) Operating Activities, as reported in the Company’s Audited Consolidated Statement of Cash Flows for the Company’s 2014 through 2016 fiscal years, and as adjusted by eliminating the impact of the settlement of individual legal matters in excess of $15 million funding.
Free Cash Flow. To be tested as of the last day of each calendar quarter, on a consolidated basis with respect to Borrower and its Subsidiaries, Free Cash Flow for the following periods of at least (i) ($9,000,000.00) for the three (3) month period ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) ($11,000,000.00) for the six (6) month period ending June 30, 2016, (iii) ($12,000,000.00) for the nine (9) month period ending September 30, 2016, (iv) ($4,000,000.00) for the twelve (12) month period ending December 31, 2016, (v) ($4,000,000.00) for the twelve (12) month period ending March 31, 2017, (vi) ($6,500,000.00) for the twelve (12) month period ending June 30, 2017, (vii) ($8,000,000.00) for the twelve (12) month period ending September 30, 2017, (viii) ($6,000,000.00) for the twelve (12) month period ending December 31, 2017, (ix) ($7,500,000.00) for the twelve (12) month period ending March 31, 2018, (x) ($9,500,000.00) for the twelve (12) month periods ending June 30, 2018 and September 30, 2018, (xi) ($3,500,000.00) for the twelve (12) month period ending December 31, 2018, (xii) ($4,500,000.00) for the twelve (12) month period ending March 31, 2019, (xiii) ($1,500,000.00) for the twelve (12) month period ending June 30, 2019, (xiv) $3,500,000.00 for the twelve (12) month period ending September 30, 2019 and (xv) $5,000,000.00 for the twelve (12) month period ending December 31, 2019 and for each twelve (12) month period ending on the last day of each calendar quarter thereafter.”
Free Cash Flow. To be tested as of the last day of each calendar quarter, on a consolidated basis with respect to Borrower and its Subsidiaries, Free Cash Flow for the following periods of at least (i) ($9,000,000.00) for the three (3) month period ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) ($11,000,000.00) for the six (6) month period ending June 30, 2016, (iii) ($12,000,000.00) for the nine (9) month period ending September 30, 2016, (iv) ($4,000,000.00) for the twelve (12) month period ending December 31, 2016, (v) ($4,000,000.00) for the twelve (12) month period ending March 31, 2017, (vi) ($6,500,000.00) for the twelve (12) month period ending June 30, 2017, (vii) ($8,000,000.00) for the twelve (12) month period ending September 30, 2017, (viii) ($6,000,000.00) for the twelve (12) month period ending December 31, 2017, (ix) ($7,500,000.00) for the twelve (12) month period ending March 31, 2018, (x) ($9,500,000.00) for the twelve (12) month periods ending June 30, 2018 and September 30, 2018, (xi) ($3,500,000.00) for the twelve (12) month period ending December 31, 2018, (xii) ($750,000.00) for the twelve (12) month period ending March 31, 2019, (xiii) ($1,250,000.00) for the twelve (12) month period ending June 30, 2019, (xiv) ($2,500,000.00) for the twelve (12) month period ending September 30, 2019, (xv) $2,000,000.00 for the twelve (12) month period ending December 31, 2019, (xvi) $2,250,000.00 for the twelve (12) month period ending March 31, 2020, (xvii) ($4,250,000.00) for the twelve (12) month period ending June 30, 2020, (xviii) ($4,500,000.00) for the twelve (12) month period ending September 30, 2020, (xix) ($2,000,000.00) for the twelve (12) month period ending December 31, 2020, (xx) $0.00 for the twelve (12) month period ending March 31, 2021, and (xxi) $3,500,000.00 for the twelve (12) month period ending June 30, 2021.”
Free Cash Flow. You have been selected to receive a grant of Performance Shares under the American Axle & Manufacturing Holdings, Inc. 2018 Omnibus Incentive Plan as stated below: Participant: [●] Grant Date: March 1, 2021 Number of Performance Shares (Target Award Opportunity): [●] Performance Period: January 1, 2021 – December 31, 2023 Final Acceptance Date: March 31, 2021 THIS AWARD AGREEMENT (the “Agreement”), is made effective as of the Grant Date (shown above) between American Axle & Manufacturing Holdings, Inc., a Delaware corporation (the “Company”), and the Participant.
Free Cash Flow. For each Performance Period, the Free Cash Flow Shares allocable to such Performance Period shall vest on the applicable Performance Vesting Date based upon the achievement of Free Cash Flow of $125 Million.
Free Cash Flow. Free Cash Flow of at least (i) ($2,000,000.00) for the calendar quarter ending ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) ($6,500,000.00) for the calendar quarter ending June 30, 2012, (iii) ($2,000,000.00) for each of the calendar quarters ending September 30 and December 31, 2012, and (iv) $2,000,000.00 for the calendar quarter ending March 31, 2013, and for each calendar quarter thereafter, to be tested in each case as of the last day of each calendar quarter.”
Free Cash Flow. “FCF”) Restricted Stock Unit: A Restricted Stock Unit with respect to which the terms and conditions are set forth in Section 3(c) of this Agreement.
Free Cash Flow. EBITDA less “Capital Expenditures” (as defined under GAAP), plus or minus Changes in Trade Working Capital, minus cash outflows from Special Charges and restructuring costs (not included in Special Charges or included in purchase accounting) plus cash recoveries associated with expenses recognized after January 1, 2005, in each case without duplication.