- 4 - CONTENTS FINDINGS OF FACT ....................... 7 I. Background ........................ 7 II. Loan Commitment and Legal Fees Arising From Acquisition of Petitioner ........................ 8 A. The Commitment Letter ................ 8 B. Takeover Events and Litigation .......... 10 C. Commitment Letter Addendum ............ 12 D. The Bridge Loan .................. 13 E. The Term Loan ................... 14 F. Payment of the Commitment and Legal Fees ..... 15 III. Executive Compensation ................. 15 A. Background .................... 15 B. 1990 Employment Agreements ............ 16 C. Importance of Schneider’s Retaining Petitioner’s Key Executives .................... 20 D. Negotiations Between Retained Executives and Schneider Over New Employment Agreements .......... 21 E. 1991 Employment Agreements ............ 24 F. Mr. Garrett’s Termination ............. 29 G. The 1992 Amendments ................ 29 H. Other 1992 Compensation of Retained Executives .. 32 I. Retained Executives’ Pre- and Postacquisition Compensation ................... 34 J. Retained Executives’ Duties and Responsibilities . 35 IV. Tax Returns, Notice of Deficiency, and Petition .... 36 OPINION ........................... 37 I. Loan Commitment and Legal Fees ............. 37 A. The Legal Obligation To Pay the Loan Costs .... 40 B. Reimbursed Expenses ................ 45 II. Parachute Payments ................... 51 A. General Requirements of Section 280G ........ 52 B. Whether Payments Were Contingent on a Change in Control ......................... 54 C. Reasonable Compensation--Applicable Test ...... 65 D. Determination of Reasonable Compensation ...... 74 1. Overview of Expert Testimony ......... 74 2. Historical Compensation ............ 78 3. Analysis of Comparables ............ 82Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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