EaglePicher requests court OK to pay maximum retention benefit to top employees

By Caroline Salls

Pittsburgh, March 2 - EaglePicher Holdings, Inc. requested court approval to modify the payment of tier I top management employees under its key employee retention plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

Tier I initially applied to three employees, but one is no longer employed by EaglePicher, according to the filing.

The key employee retention plan sets a maximum benefit that tier I employees will be entitled to receive upon confirmation of a plan of reorganization, with the benefit decreasing over time.

Specifically, each tier I employee will be entitled to the maximum benefit if a plan of reorganization is confirmed before March 1, 66.67% of the maximum benefit if a plan of reorganization is confirmed after June 30 and for the time period between March 1 and July 1, the plan provides a mathematical equation to calculate the percentage between 66.67% and 100% of the maximum benefit to be paid to tier I employees.

However, according to the motion, senior management employees has done virtually everything within their control to file a consensual plan of reorganization at the earliest possible date, but it is not possible for plan confirmation to occur by March 1.

The company said it believes it would be unfair to penalize the tier I employees under these circumstances, so it is asking the court to pay the two tier I employees the maximum benefit.

EaglePicher, a Phoenix-based diversified manufacturer, filed for bankruptcy on April 11, 2005. Its Chapter 11 case number is 05-12601.

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