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into new employment contracts with the Retained Executives.
Schneider’s position, as articulated in a fax sent that day by
Schneider’s chief financial officer to Schneider’s executive
compensation consultants, remained that Schneider intended to
stick to a proposal that would put “most of the money ahead of
[the executives] and not behind them.”
The next day, one Retained Executive wrote to Schneider’s
chief financial officer on behalf of the group, stating that “One
way or the other, * * * [the] parachute payments will be paid”,
and that “Not one officer is willing to give up what they are
entitled to under their [1990 Employment Agreement] contract”.
The letter further stated that “The decision by Schneider is very
simple * * * Pay now or pay later.”
By August 1, 1991, Schneider had revised its executive
compensation plan, but bonus payments under its Integration LTIP,
which were intended to compensate the Retained Executives for
forgoing their Termination Awards and SRP Cashout, were still
based on future company performance. The plan was again revised
on August 13, 1991, but the performance component remained. Mr.
Hite, a Retained Executive, who had been assigned to negotiate on
behalf of the group, continued to meet with Schneider’s
representatives throughout August and September in an effort to
arrive at a mutually acceptable compensation arrangement for
periods after 1991. By the beginning of October, Schneider had
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