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SEC Filings

DEF 14A
ARCH COAL INC filed this Form DEF 14A on 03/18/2019
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annual cash incentive awards for performance levels that fall between the threshold, target and maximum performance levels. There is no payout for performance that does not meet the threshold level criteria.

Performance Measure
  Threshold   Target   Maximum  

Adjusted EBITDA

    25 %   100 %   200 %

Free Cash Flow

    25 %   100 %   200 %

Safety Incident Rate(1)

    50 %   100 %   200 %

Environmental Compliance

    50 %   100 %   200 %

(1)
In the event of a work-related fatality at any of our mine locations, there is no payout for the safety incident rate component.

    Adjusted EBITDA —

        "Adjusted EBITDA" is determined based on our earnings before interest, taxes, depreciation and amortization, on a consolidated basis in accordance with generally accepted accounting principles, and excludes items such as acquisition-related expenses and amortization of acquired sales contracts. The Committee reviewed the budget approved by the Board for 2018, which included Adjusted EBITDA, and set the "target" level for this performance measure at 100% of budget. The threshold payout value for 2018 was set at 70% of the Adjusted EBITDA budget and the maximum payout value was set at 130% of the Adjusted EBITDA budget. The following table shows the threshold, target and maximum levels for the 2018 Annual Incentive Compensation Program.

 
  2018 PERFORMANCE GOALS  
Performance Measure
  Threshold   Target   Maximum  

Adjusted EBITDA

  $ 242,900,000   $ 347,000,000   $ 451,100,000  

    Free Cash Flow —

        A Free Cash Flow performance measure was added to the program for 2018. "Free Cash Flow" is defined as cash flow from operating activities minus royalty payments and capital expenditures used for maintaining the asset base. Capital spending, if any, applied to new mine development is not deducted from the Free Cash Flow calculation. The Committee reviewed the budget approved by the Board and set the "target" level for this performance measure at 100% of budget. The threshold payout value was set at 70% of the Free Cash Flow budget and the maximum payout value was set at 130% of the budget. The following table shows the threshold, target and maximum levels for the 2018 Annual Incentive Compensation Program.

 
  2018 PERFORMANCE GOALS  
Performance Measure
  Threshold   Target   Maximum  

Free Cash Flow

  $ 176,100,000   $ 251,600,000   $ 327,100,000  

    Safety Incident Rate —

        Safety is an important emphasis for the Company and, the Board believes, each of the Company's stakeholders. Strong safety performance leads to improved employee performance and lower costs associated with regulatory citations, insurance and litigation matters, which in turn lead to improved operating performance.

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