Sears Holdings – Seeks Approval of KEIP for 18 Employees and KERP for 322 Employees

November 15, 2018 – Sears Holdings requested Court approval of (i) a Key Employee Incentive Plan (the “KEIP”) for 18 employees and (ii) a Key Employee Retention Plan (the “KERP”) for 322 non-insiders [Docket No. 766]. 

The motion explains, “The [KEIP] program provides a total, incentive-based award opportunity ranging from approximately $1.06 million per quarter in the aggregate at threshold performance, to approximately $2.12 million per quarter in the aggregate at maximum performance, based on the achievement of targeted Net Cash Flow for the quarterly periods ended January 15, 2019, and April 15, 2019, respectively, and upon an Acceleration Event, a total potential award opportunity of up to approximately $8.50 million in aggregate for KEIP Participants, and (b) KERP for 322 non-insider employees providing a total award pool of approximately $16.9 million payable on a quarterly basis over 12 months; provided that no KERP Participant shall be eligible to receive one or more KERP Awards in excess of $150,000 in the aggregate….The KERP Participants comprise a wide and diverse range of roles, with job titles such as ‘Manager,’ ‘Director,’ ‘Vice President,’ and ‘Head,’ and the KERP Participants have an average salary of approximately $172,000. At this critical juncture, KERP Participants may be understandably concerned with their employment prospects and ability to provide for themselves and their families at this juncture, and the Debtors cannot afford attrition among such individuals this time….The maximum aggregate cost of the KERP shall be $16,930,000 (the ‘KERP Award Pool’); provided that no KERP Participant shall be eligible for a total KERP Award in excess of $150,000 in the aggregate.” 

The Court scheduled a December 20, 2018 hearing to consider the motion, with objections due by November 29, 2018.