L ong T erm Inc en tiv e P lan Hur d les T he s truc tur e and subs t anc e o f hur d les f or the 2016 2017 and 2018 a w ar ds ar e se t out on the f ol lo wing pages T he P lans apply R e turn on C apit al Emplo y ed R OCE T o t al Shar eholder R e turn T SR r ela tiv e t o the A SX100 Inde x r ela tiv e EBITD A mar gin and underlying e arnings per shar e EPS gr o w th hur d les t o de t ermine v es ting amoun ts T he L TI P lan is designed t o r e w ar d and mo tiv a t e our senior e x ecutiv es f or superior c ompan y per f ormanc e o v er a thr ee y e ar per f ormanc e period T he principal goals o f the L TI P lan ar e t o a F ocus e x ecutiv es on long t erm out c omes r equir ed b y the Boar d b Minimise risk b y ensuring per f ormanc e w as me asur ed acr os s multiple f ac t ors impor t an t t o shar eholder v alue and pr o vide a c oun t er balanc e f or an y t endenc y t o f ocus on shor t t erm out c omes c R e t ain k e y high per f orming e x ecutiv es d Align e x ecutiv es r e w ar d with shar eholders in t er es ts b y pa ymen t in equit y e Enc our age shar e o wnership in ALS and f Enc our age t e am w ork thr ough c ompan y per f ormanc e hur d les R emuner a tion under the L TI P lan is in the f orm o f equi t y se ttled per f ormanc e righ ts and in jurisdic tions wher e securities legisla tion does no t permit this the righ ts ar e cash se ttled T he number o f per f ormanc e righ ts gr an t ed t o an e x ecutiv e is calcula t ed b y dividing the amoun t o f the e x ecutiv e s L TI ma ximum po t en tial pa ymen t b y the v olume w eigh t ed a v er age pric e VW AP o f the C ompan y s shar es o v er the 10 tr ading da ys f ol lo wing the da t e o f announc emen t o f the fnal ful l y e ar r esults f or the fnancial y e ar pr ec eding the period t o which the gr an t o f per f ormanc e righ ts r ela t es P er f ormanc e Hur d les P er f ormanc e hur d les ar e as ses sed a t the end o f the per f or manc e period and the per f ormanc e righ ts bec ome e x er cis able in whole or in par t or lapse fr om 1 July f ol lo wing the end o f the per f ormanc e period Each equit y se ttled per f ormanc e righ t which v es ts and is e x er cised c on v er ts t o an or dinary shar e in the C ompan y a t a nil e x er cise pric e T he amoun t pa y able per e ach v es t ed cash se ttled per f ormanc e righ t is the VW AP o f the C ompan y s shar es o v er the 10 20 f or a w ar ds in 2016 tr ad ing da ys f ol lo wing the r ele ase o f the C ompan y s ful l y e ar r esults f or the fnal y e ar o f the per f ormanc e period T he L TI plan rules pr ohibit those who ar e gr an t ed per f or manc e righ ts fr om en t ering in t o arr angemen ts tha t limit their e xposur e t o shar e pric e decr e ases and the e x ecutiv e mus t be emplo y ed in the Gr oup on the v es ting da t e t o be eligible f or is sue o f the shar es equit y se ttled righ ts or r ec eip t o f pa ymen t cash se ttled righ ts C ompound annual underlying EPS gr o w th on a ful ly dilut ed basis w as chosen because it pr o vides a good indica t or o f the shar eholder v alue deriv ed fr om e arnings gr o w th and can be dir ec tly in fuenc ed b y managemen t R ela tiv e T SR pr o vides a good indica t or o f the v alue deriv ed fr om capit al gr o w th and dis tributions t o shar eholders T he peer gr oup c omprises the A SX100 inde x c ompanies T hese c ompanies r epr esen t the alt erna tiv e in v es tmen t choic es f or man y o f our in v es t ors T he r ela tiv e EBITD A mar gin hur d le w as chosen because it is f ocused on driving cash e arnings and pr oduc tivit y T he EBITD A hur d le me asur es ALS r ela tiv e EBITD A mar gin agains t the EBITD A mar gins o f its k e y global c ompe tit ors It is a me asur e o v er which managemen t has dir ec t in fuenc e and pr o vides f or a f air as ses smen t o f per f ormanc e agains t our global c ompe tit ors T he R OCE hur d le is used as a me asur e t o as ses s the C ompan y s suc c es s or o therwise in incr e asing its ne t w or th ie it needs t o gener a t e r e turns in e x c es s o f its c os t o f capit al in or der t o add t o its v alue In or der t o pr o vide an inc en tiv e f or superior per f ormanc e the r espec tiv e R OCE hur d les ar e se t e ach y e ar a t 2 per c en t and 7 per c en t abo v e the w eigh t ed a v er age c os t o f capit al W A C C as a t 31 M ar ch with s tr aigh t line v es ting in be tw een the lo w er and upper hur d les T he per f ormanc e hur d les and v es ting pr opor tions f or the a w ar ds gr an t ed in 2016 2017 and 2018 ar e as f ol lo ws L ong T erm Inc en tiv e P lan audit ed 31 ALS LIMITED AND IT S SUBSIDIARIES A NNU AL F INANCIAL R EPOR T F OR THE Y EAR E NDED 31 M AR CH 2019 F INANCIAL REPOR T D IRE CT ORS REPOR T R EM UNERA TION REPOR T L ong T erm Inc en tiv e P lan audit ed