Common use of Payout Percentage Clause in Contracts

Payout Percentage. Your Award Agreement sets forth your Revenue Growth and EBITDA Margin targets for the Company or applicable profit centers during the Performance Period. Based upon this performance matrix, you can earn up to 250% of your base Award (the “Payout Percentage”). No payout will be earned if either or both of the Revenue Growth or the EBITDA Margin thresholds are not met. Payouts will be interpolated for achievement falling between the target levels shown in the Award Agreement. A. EBITDA Margin for the Company or applicable profit centers is their cumulative Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) over the Performance Period divided by the total Revenue over the Performance Period. B. Revenue Growth for the Company or applicable profit centers will be the compound annual growth rate (“CAGR”) of the Total Incremental Revenue compared to the Base Year Revenue. “Base Year Revenue” is the total Revenue of the Company or applicable profit centers in the fiscal year immediately preceding the Performance Period. “Total Incremental Revenue” is the cumulative Revenue of the Company or applicable profit centers during the Performance Period, minus two times the Base Year Revenue. For example, assume a profit center has Base Year Revenue of $500 million and a targeted Revenue Growth of 4%. At the targeted 4% CAGR, the $500 million in Base Year Revenue would grow to $520 million in the first year, and the $520 million would grow to $541 million in the second year. Therefore, to achieve the 4% Revenue Growth Target, the profit center must produce Total Incremental Revenue of $61 million [$520 + $541 – (2 X $500)].