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Refco asks for court OK to implement key employee compensation program
By Caroline Salls
Pittsburgh, Dec. 22 - Refco, Inc. requested court approval to implement a key employee compensation program, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
According to the motion, none of the key employees are officers or directors of the company.
The program will cover 11 employees of Refco Capital Markets, Ltd. and six employees of Refco F/X Associates LLC, as well as 15 additional employees in human resources, information technology and accounting.
Under the program, key employees are eligible for a year-end bonus, which will be paid in two installments after Jan. 1, and a performance bonus based on the successful and timely sale and wind-down of the Refco's businesses.
In addition, key employees will still be eligible for severance benefits under the company's severance policy, which provided for two weeks' salary per year of service, capped at six months' salary.
The program divides key employees into two tiers.
First-tier employees will receive a year-end bonus equal to four-months' salary and a performance bonus equal to one month of their base salary for each month that they work for Refco from Dec. 1, 2005 through March 31, 2006.
Key employees in the second tier will receive a year-end bonus equal to two-months' salary and a performance bonus equal to one-half month of their base salary for each month they work for Refco from Dec. 1 to March 31.
Any key employee who voluntarily leaves the company before the target dates will forfeit their right to future payment under the program.
Any remaining amounts will be available for distribution to Refco's secured and unsecured creditors.
A hearing is scheduled for Jan. 10.
Refco, a New York-based commodities brokerage company, filed for bankruptcy on Oct. 17. Its Chapter 11 case number is 05-60006.
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