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  "documentTitle": "Oil Gas EP Incentive Compensation",
  "authorId": "AlvarezMarsal",
  "authorName": "Alvarez & Marsal",
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  "notes": "The slide is structured as two distinct sections: Bankruptcy Filing and Post-Emergence Incentive and Retention.",
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      "text": "When a company's financial health is not optimal, a general practitioner may not have the required expertise to guide the company through these issues during the recovery period, so retaining a qualified compensation specialist is critical.",
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      "text": "What percentage of the new company's equity should be reserved for employee equity awards?\nWhat portion of the equity pool should actually be granted at emergence?\nWho should receive emergence grants (e.g., officers, middle management, all employees)?\nHow will the emergence grants be structured (i.e., size and type of award, vesting, etc.)?\nShould the emergence grant be structured as time-vesting or performance-vesting?\nWhat should be the targeted total direct compensation upon emergence from bankruptcy?",
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      "text": "Production targets;\nExpense reductions (e.g., lease operating or general and administrative expenses);\nFinancial metrics (e.g., EBITDA, EBITDAR);\nConfirmation of plan of reorganization / emergence from bankruptcy by a specified date; and / or\nAmount of proceeds realized from sale of company or designated assets.",
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      "text": "When emerging from bankruptcy, most pre-bankruptcy company stock, along with unvested equity awards held by employees, have lost their value. Lack of meaningful equity ownership in the go-forward entity, coupled with an uncertain company future, leads to difficulties retaining and motivating key executives post-emergence. Consequently, emergence equity grants are a way to ensure that companies retain motivated personnel who are vital to a successful post-emergence entity. Some important considerations for emergence grants include:",
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      "text": "The KEIP performance metrics must be carefully chosen and structured to be sufficiently challenging. The metrics should also coincide with the company's business plan or objectives. Bankruptcy courts have refused to approve KEIPs where performance metrics are easily attainable and considered “lay-ups,” finding such arrangements to be impermissible retention plans. Some performance metrics used by E&P companies in bankruptcy include:",
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      "text": "The amount of potential payout is also a consideration, as it should be sufficiently motivating, but should be reasonable when compared to other similar payments made in bankruptcy. The potential payout should also result in total compensation that is reasonable when compared to market compensation levels and other bankruptcy filings.",
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      "text": "When a company's financial health is not optimal, a general practitioner may not have the required expertise to guide the company through these issues during the recovery period, so retaining a qualified compensation specialist is critical.",
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      "text": "POST-EMERGENCE INCENTIVE AND RETENTION",
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