The U.S. Bankruptcy Court approved Abengoa Bioenergy US Holdings’ motion for entry of an order approving a key employee incentive plan (KEIP) and an incentive and severance plan for eligible non-insider employees.
As previously reported, “Based on the KEIP developed by A&M, the Debtors’ management team initially proposed the KEIP to incentivize 12 critical employees (the ‘KEIP Participants’) to utilize their unique operational knowledge and industry expertise in order to obtain the highest possible value for the Debtors’ assets. The KEIP includes eight insiders and four non-insiders. None of the KEIP Participants will participate in the 2016 Incentive and Severance Plan. The KEIP Participants who are insiders, have forfeited approximately $1.23 million in 2015 bonus payments (to have been paid in 2016), and have further agreed to waive approximately $344,000 in claims for unexpired employment contracts.”
The motion continued, “The KEIP provides for performance bonuses that may be earned as a result of successful sales of one or more of the Debtors’ plants located in Ravenna, Nebraska, York, Nebraska, Colwich, Kansas, and Portales, New Mexico (the ‘Plants’), i.e. each of the ethanol plants of the entities that are currently Debtors in these chapter 11 cases, at specified levels, and is designed to increase on a marginal basis as sale proceeds increase. The proposed KEIP payout depends on each Plant’s sale price expressed in dollars per gallon of maximum annual ethanol production capacity for each Plant….Consistent with its historic practices, the Debtors have implemented an incentive plan for 2016… As with the earlier plans, employees will not receive payments under the 2016 Incentive and Severance Plan until the second quarter of 2017….The Debtors propose to include 135 employees (the ‘Eligible Non-Insider Employees’), who are not covered by the KEIP, into the 2016 Incentive and Severance Plan.”
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