GSE Holdings Inc. (fka GSEHQ)

[z_deville]

Form 8-K for GSE HOLDING, INC.

18-Feb-2014

Change in Directors or Principal Officers


Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Effective as of February 12, 2014, the Board of Directors of GSE Holding, Inc. (the "Company") approved an incentive plan (the "Incentive Plan") for its officers designed to preserve and enhance the financial condition of the Company and to sell the Company in accordance with the seventh amendment to the Company's first lien credit facility as disclosed in the Company's Form 8-K dated January 10, 2014 and filed with the Securities and Exchange Commission on January 10, 2014.

The Company formulated the Incentive Plan based on advice from Alvarez & Marsal and Kirkland & Ellis LLP, the Company's advisors.

The Incentive Plan covers eight of the Company's nine officers (the "Plan Participants") and provides an opportunity to earn a "Bonus" upon the closing of a sale (a "Sale") of the Company or in the event of a recapitalization of the Company (a "Recapitalization"). The Company's President and CEO is not participating in the Incentive Plan.

In the case of a Sale or Recapitalization, a Plan Participant's bonus amount (the "Target Bonus") will be 98% of the mid-point of the officer's standard annual short term incentive bonus opportunity. For example, if an officer has a base salary of $200,000 and a standard annual short term incentive bonus opportunity of 30% - 60% of base salary, the midpoint would be 45% of $200,000. The Target Bonus for such officer in the event of a Sale or Recapitalization would be 98% of the product of (i) 0.45, and (ii) $200,000 for a total of $88,200.

The Plan Participants have an opportunity to earn an additional bonus equal to one third of the Target Bonus under certain circumstances. The Target Bonus amounts for the named executive officers range from 44% to 73% of such officers' base salaries.

Bonuses under the Incentive will be paid in cash lump sums at the time the Sale or a Recapitalization is completed. A Plan Participant will forfeit any bonus under the Incentive Plan in the event his employment is voluntarily terminated by the Plan Participant or terminated by the Company for cause.

The Incentive Plan has an estimated cost ranging from $1.0 million to $1.3 million.

No other cash incentive bonuses for fiscal years 2013 or 2014 will be paid to any named executive officer other than pursuant to the Incentive Plan.

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