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  "documentTitle": "Oil Gas EP Incentive Compensation",
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  "notes": "The slide provides a narrative overview of bankruptcy compensation strategies for E&P companies.",
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      "text": "If a balance sheet restructuring or bankruptcy filing is on the horizon, there are certain immediate changes to the incentive plans that should be considered in order to motivate and retain key talent. Because the company’s equity will generally become worthless in the event of a bankruptcy filing, a common defensive approach is to collapse the annual and LTI program into a single cash-based incentive program that pays out over shorter measurement periods based on hitting established performance metrics. In addition, often the annual incentive program will be modified to incorporate performance metrics that are more commonly utilized in bankruptcy and acceptable to the creditors. This allows the annual incentive plan to be easily transitioned into a KEIP in the event of a filing, thus reducing disruption to the key employees.",
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      "text": "In the event of a bankruptcy filing, the type and magnitude of the changes to the compensation plans will be influenced by the anticipated time frame to perform a restructuring or emergence from bankruptcy. In a “free fall” situation (where the debtor enters into bankruptcy proceedings in response to a significant liquidity event without having restructuring arrangements in place with its major stakeholders), the entire incentive compensation program will generally need to be revamped. In a prepackaged bankruptcy (where the debtor has negotiated, documented and disclosed to creditors a plan of reorganization that has been approved by creditors before the bankruptcy case is filed), there might be fewer changes to existing incentive programs and more of an emphasis on equity to be granted to management upon emergence from bankruptcy. Many bankruptcy filings will fall somewhere in between these two extremes, but in any case, the annual and LTI programs will need to be adjusted or overhauled.",
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      "text": "To remain resilient under current market conditions, E&P companies must reevaluate their traditional executive incentive programs.",
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      "text": "Prior to 2005, companies entering bankruptcy typically retained executives by implementing key employee retention plans (KERPs) whereby executives were paid for simply remaining on the job through specified dates. However, changes to the bankruptcy code enacted in 2005 effectively ended the use of KERPs for “insiders.” As a result, many companies now implement key employee incentive plans (KEIPs) for “insiders” — performance-based plans that are essentially designed to fall outside of the bankruptcy code’s restrictions on the use of KERPs. Conversely, retention plans are generally utilized for “non-insiders.” An “insider” is generally defined as a director, an officer or a person in control of the company.",
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      "text": "BANKRUPTCY FILING",
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