Birch Telecom requests court OK for $1.6 million in key employee retention, severance plans

By Caroline Salls

Pittsburgh, Sept. 12 - Birch Telecom, Inc. is seeking court authorization to implement $1.6 million in key employee retention bonus and severance plans "to minimize management and other key employee turnover," according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

Birch said the plans would also help it to "retain talent in a tight labor market and motivate key employees to continue to provide essential services during this critical period [in its reorganization efforts]."

The Key Employee Retention Bonus Plan applies to 38 employees, who will be paid $1.4 million in two tiers under the plan.

Under the first tier, $800,000 will be split between three members of Birch's senior management. The remaining $600,000 will be split between 35 other employees.

Also, the company will offer what it is calling the New Key Employee Retention Bonus Plan to 14 employees at a cost of $100,000.

The severance plan would provide a "safety net" for employees not covered under the retention plans, the filing said.

Payments under the severance plan will be made to all terminated employees except to participants in the key employee retention plans, collective bargaining agreements or any other severance plan or arrangement.

Numerous eligible tier I severance plan-eligible employees will be entitled to two weeks' salary plus one week for each year of continuous service up to six weeks of severance.

The 20 employees eligible for tier II severance payments will be entitled to six weeks' salary plus one week for each continuous year of service for a maximum of 12 weeks of severance.

A hearing is scheduled for Sept. 30.

Birch, a Kansas City, Mo.-based comprehensive voice and data services company, filed for bankruptcy on Aug. 12. Its Chapter 11 case number is 05-12237.

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