Aeropostale filed with the U.S. Bankruptcy Court a motion for entry of an order approving the Debtors’ (i) key employee incentive plan (KEIP) and (ii) key employee retention plan (KERP).
The motion explains, “The Debtors worked extensively with FTI to assist in the development of the KEIP and KERP, which apply to 10 executive employees (the ‘KEIP Participants’) and 41 non-insider employees (the ‘KERP Participants’). Collectively, these employees have an in-depth knowledge of the Debtors’ prepetition businesses, assets, liabilities, counterparties, and operations and are absolutely essential for the Debtors to maximize the value of their estates during these chapter 11 cases.”
The motion continues, “Given the challenges posed by the highly-competitive industry in which the Debtors operate, the Debtors and FTI developed the KEIP and KERP with the goals of (i) incentivizing the KEIP Participants to create value for the benefit of all stakeholders, (ii) motivating and retaining the KERP Participants throughout the Debtors’ restructuring process, and (iii) rewarding the KEIP and KERP Participants at market level compensation.” The motion continues, “The aggregate maximum amount of the KEIP is $3,406,900, with individual proposed maximum payouts ranging from 75% to 112.4% of base compensation….The total maximum amount of the KERP is $1,445,000, including $150,000 for a discretionary pool set up for additional participants.”
The Court scheduled a July 13, 2016 hearing on the motion, with objections due by July 1, 2016. Read more retail bankruptcy news.