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Ciber KEIP, KERP Approval Sought

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Ciber filed with the U.S. Bankruptcy Court a motion for entry of an order approving the Debtors’ key employee incentive plan (KEIP) and key employee retention plan (KERP).

The KEIP, KERP motion explains, “Under the proposed KEIP, the KEIP Participants would be eligible to receive an incentive payment (the ‘KEIP Payment’) corresponding to the incremental value generated by the KEIP Participants for the benefit of all creditors. The ‘threshold’ KEIP Payment is not earned unless the Debtors outperform the DIP budget by generating at least $2 million of incremental cash flow and close the Sale at a price at least equal to the Sale consideration offered by the Stalking Horse Bidder (the ‘Stalking Horse Bid’). All other KEIP Payments are tied to obtaining additional Sale consideration or recovering other non-operating receipts (collectively, ‘Incremental Proceeds’). The payout structure for the KEIP Payments is as following: The performance level ‘threshold’ for the performance metric of the stalking horse bid & outperform DIP budget by $2M with 15% base salary the total cost is $235,950; for ‘Tier 1’ with the performance metric of $5M of incremental proceeds with 25% base salary the total cost is $393,250; for ‘Tier 2’ with the performance metric of $10M of incremental proceeds with 50% base salary the total cost is $786,500 and for ‘Stretch’ with the performance metric of $25M of incremental proceeds with 100% base salary, the total cost is $1,573,000….Pursuant to the proposed KERP, the KERP Participants would be eligible to receive retention payments (the ‘KERP Payments’) in 3 equal instalments on May 31, 2017, August 31, 2017, and November 30, 2017 (each, a ‘KERP Payment Date’). The KERP includes a discretionary pool of $200,000 that would be established to provide retention payments to other critical employees that are neither KERP Participants nor insiders. A high level summary of the proposed KERP is as follows: For the program ‘KERP’ with 17 participants the total cost is $407,891 with cost of $23,994 per participant; for the ‘Discretionary Pool’ with to be determined participants the total cost is $200,000; and for the ‘Total’ program with to be determined participants the total cost is $607,891.” The Court scheduled a May 15, 2017 hearing to consider the KEIP, KERP motion with objection due by May 8, 2017.

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