The U.S. Bankruptcy Court issued an order approving Basic Energy Services’ key employee retention program (KERP).
As previously reported, “For the KERP to achieve an appropriate offset of the reduced compensation available to employees under the Prepetition Incentive Programs (as well as the Compensation Reductions), the Debtors created two subsets of KERP Participants: (i) 116 employees who would only be eligible for the Quarterly Bonus Program (the ‘Non-LTIP KERP Participants’) and (ii) twenty (21) employees who would be eligible to receive bonuses under the Annual Bonus Plan, the Quarterly Bonus Program, and the LTIP (the ‘LTIP KERP Participants’).”
Court-filed documents continue, “The LTIP KERP Participants’ Retention Award is made up of two components designed to offset a portion of the reduction in payments under both the Quarterly Bonus Program/Annual Bonus Plan and the LTIP: (x) one component is 75% of an amount that is 40-75% of such employees’ base salaries and (y) the second component is an amount equal to 50% of an amount that is 75-150% of such employees’ base salaries.”
In addition, “The Retention Awards of two-thirds of the LTIP KERP Participants were further reduced by another 5% to 65%. Payments under the KERP are divided into four (4) equal installment payments (the ‘KERP Installment Payments’)…..The total maximum amount of Retention Awards available under the KERP is $6,603,985, of which $3,287,617 has been distributed as of the date hereof (June 2016). On November 15, 2016, the Debtors are scheduled to pay out $1,374,553 in Retention Awards to KERP Participants…. The maximum cost of the KERP is approximately $6.633 million, yielding an average payout of $48,800 per KERP Participant.”
Read more energy bankruptcy news.