According to the U.S. Bankruptcy Court docket, GreenHunter Resources filed a motion for entry of an order authorizing GreenHunter Resources filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing the Debtors to implement a key employee incentive plan (KEIP).
The motion explains, “The aggregate amount that the Debtors seek to have allowed as an administrative expense and paid under Stage 1 of the Incentive Plan is $95,000 and will be paid upon closing of a sale transaction. Under Stage 2, additional bonus amounts will only be paid out to members of management and other employees in the event that the sale of the Debtors’ assets closes in an amount of at least $20 million (which is approximately $2,500,000 in excess of the stalking horse bid price).”
The KEIP motion continues, “The Debtors believe that the Incentive Plan is vital to the success of the sale process and the orderly and efficient wind-down of the Debtors’ affairs for the benefit of their creditors….The second stage incentivizes the Key Employees to maximize the price earned in such Qualified Transaction. The payouts under the second stage (the ‘Stage 2 KEIP Payouts’) are not earned until a minimum sale price of $20 million is achieved (the ‘Minimum KEIP Threshold’). Once the Minimum KEIP Threshold is reached, the Stage 2 KEIP Payouts are determined via the attached chart (starting at 0.5% of the sales price and up to 1% of the sales price for sales in excess of $25 million dollars), if a Qualified Event occurs. The Qualified Event for Stage 2 is a sale of substantially all of the Debtors’ assets approved by the Court at a purchase price in excess of $20 million (either through an increased stalking horse offer or an alternative sales transaction).”
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