hhgregg, Inc. (NYSE:HGG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 12, 2017, the United States Bankruptcy Court for the Southern District of Indiana approved a key employee incentive program (the “KEIP”) for certain employees of hhgregg, Inc. (the “Company”), including Kevin J. Kovacs, the Chief Executive Officer and Chief Financial Officer of the Company. The KEIP is designed to incentivize certain members of executive management who are expected to remain with the Company during the wind-down of the Company and its subsidiaries to achieve benchmarks that will maximize creditor value in connection with the store closing sales and promote monetization of additional assets and control of expenses to be incurred during the wind-down of the Company and its subsidiaries. Payments under the KEIP are tied to five performance goals (the “KEIP Metrics”) including (i) total cash receipts over the course of the store closing process and the Company’s wind-down, starting April 23, 2017 through March 31, 2018, with target receipts of $90 to $110 million; (ii) total cash disbursements over the anticipated life of the bankruptcy case, starting April 23, 2017 through March 31, 2018, with a target of $80 to $85 million (the “Cash Disbursement Metric”); (iii) net recovery from the Company’s phase 2 store closing sales, expressed as a percentage of the cost of the inventory, with a target of 62% to 65%; (iv) the date by which the Company vacates its headquarters, with a target date of August 31, 2017; and (v) cash collected from, and offsets achieved on account of, vendor credits for which the Company or its subsidiaries may be eligible, starting May 25, 2017 through March 31, 2018, with a target of $6.5 to $7.5 million. If all target amounts under the KEIP are achieved, the KEIP will award a total of $675,000 in bonuses. The maximum amount payable under the KEIP – which would only result from extraordinary performance under each of the five KEIP Metrics – is $1.85 million. Payments under the KEIP Metrics will be made in two phases (each a “Measurement Date”): (i) on August 31, 2017, for each metric other than the Cash Disbursements Metric, an amount equal to 50% of awards achieved under each such metric as of such date, up to an aggregate payment cap of $250,000; plus (ii) on March 31, 2018, (a) an amount equal to the incremental achievement under each metric other than the Cash Disbursements Metric since August 31, 2017, plus (b) amounts achieved under the Cash Disbursements Metric as of March 31, 2018, plus (c) amounts that had accrued as of August 31, 2017, which were not paid on that date, without duplication.
About hhgregg, Inc. (NYSE:HGG)
hhgregg, Inc. (hhgregg) is an appliance, electronics and furniture retailer. The Company operates as a multi-regional retailer with approximately 230 brick-and-mortar stores in 20 states that also offer global and local brands across the nation through hhgregg.com. It also sells a suite of services, including third-party premium service plans (PSPs), third-party in-home service and repair of its products, delivery and installation, and in-home repair and maintenance. The Company sells a range of appliances, audio products, computers, consumer electronics, mattresses and tablets. The Company sells appliances, including washers and dryers, refrigerators, cooking ranges, dishwashers, freezers and air conditioners; consumer electronics, including televisions, Blu-Ray and digital versatile disc (DVD) players, audio and small electronics; computers and tablets, including computers, computer accessories and tablets, and home products, including bedding and home furniture.