- 15 -
into petitioner, which assumed ACQ’s obligations as the surviving
corporation.8 Under the terms of the merger, petitioner’s
shareholders who had not tendered their shares received cash for
their shares. After the merger, Schneider indirectly owned 100
percent of petitioner’s shares.
F. Payment of the Commitment and Legal Fees
Schneider paid a $1,056,020 commitment fee to the French
banks and in December 1991 sent an invoice for reimbursement of
that amount to petitioner. In March 1993 petitioner paid
$1,056,020 to Schneider as reimbursement.
In August 1991, Rogers & Wells submitted an invoice to
Banque Paribas for $699,027 covering services performed and costs
incurred in the period of March 21 through July 31, 1991,
relating to the litigation and Federal Reserve Board proceedings.
Banque Paribas forwarded the Rogers & Wells invoice to Schneider
in August 1991 and petitioner paid it in September of that year.
III. Executive Compensation
A. Background
In December 1990, prior to its acquisition by Schneider,
petitioner, as a result in part of concerns about a possible
8 The form of this transaction is typically known as a
reverse subsidiary merger. See Ginsburg & Levin, Mergers,
Acquisition, and Buyouts, par. 202, at 2-15 (2002).
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