Global Home Products seeks court approval of management incentive and sales bonus plans

By Caroline Salls

Pittsburgh, Dec. 8 - Global Home Products LLC requested court approval of a management incentive plan and sales bonus plan for eligible employees of GHP Operating Co. LLC, Anchor Hocking Operating Co. LLC and Anchor Hocking CG Operating Co., according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The management incentive plan will award each eligible employee, on a quarterly basis and as a percentage of their base salary, up to four potential incentive payments.

The incentive payments will be paid if the plan's minimum EBITDAR and/or cash flow objectives are met for each of the periods, including April 1, 2006 to Sept. 30; Oct. 1 to Dec. 31; Jan. 1 to March 31; and the entire 2007 fiscal year, which ends on March 31.

The plan is comprised of two components: EBITDAR goal objectives and cash flow objectives. Each is weighted to count for 50% of the total quarterly payment.

If the company fails to achieve at least 75% of either the required EBITDAR or cash flow objectives during a quarter, then no quarterly incentive payments will be made.

The payment will be calculated by taking the sum of the EBITDAR and cash flow percentage payouts for a given quarter and multiplying that amount against the quarterly target bonus percentage for each employee.

The quarterly target bonus percentage ranges from 12.5% to 62.5% of the employee's annual salary, according to the motion.

To remain eligible for the incentive payments, employees must be employed with the company on the last day of the applicable period.

Global Home Products said the minimum cost of the management incentive plan will be $890,000, with a maximum cost of $2.7 million.

Under the sales bonus plan, eligible sales managers are entitled to receive up to 30% of their annual salaries based on the annual percentage increase of annual sales for their division, calculated at the end of the 2007 fiscal year, plus a 15% target bonus percentage payment payable under the same terms as the management incentive plan.

The company said the maximum cost of the sales bonus plan will be $640,000.

A hearing is scheduled for Dec. 28.

Global Home Products is a Westerville, Ohio-based designer, marketer and manufacturer of branded consumer and specialty products to retail and hospitality customers and original equipment manufacturers. The company filed for bankruptcy on April 10, 2006. Its Chapter 11 case number is 06-10430.

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