According to the U.S. Bankruptcy Court docket, the Court approved Molycorp’s motion for an order authorizing and approving a modified key employee incentive program to address the Court’s concerns for the Debtors’ seven most senior executives.
As previously reported, “The Restructuring Committee of the Board continues to believe that it is critically important to properly incentivize the Senior Executives to achieve goals that will preserve and maximize value for the benefit of the Debtors’ stakeholders. Therefore, the Debtors hereby seek approval of the Modified KEIP….In its ruling on the First KEIP Motion, the Court identified two features of the original proposed key employee incentive plan that on balance rendered the Original KEIP more retention based than incentive based – the LOP Metric and the Restructuring Metric.”
Court-filed documents continue, “The Original KEIP has been altered to address the two principal issues raised by the Court by (a) removing the LOP Metric and replacing it with a metric requiring the achievement of actual, measurable operating cash flow results at the Mountain Pass Facility over the next three months (the ‘Mountain Pass Cash Flow Metric’) and (b) eliminating the Restructuring Metric entirely for the time being, and making a corresponding reduction in the overall size of the awards available under the Modified KEIP at this time….This will result in the reduction of the aggregate target Total Direct Compensation for the three executives originally eligible for this award (and the overall cost of the Modified KEIP at target achievement levels) by $389,000.”
The Court also approved the Debtors’ motion to file under seal certain information contained in the modified KEIP motion. Read more Molycorp bankruptcy news.