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agreed to drop the proposal for an Integration LTIP based on
future company performance and to develop instead a “retention
award” plan tied to the length of future employment.
As originally proposed by Schneider, the retention award
plan would have provided each Retained Executive a bonus of 300
percent of base salary plus a 1992 STIP award if that executive
remained with petitioner through December 31, 1994. The bonus
percentage would have increased to 350 percent if certain company
performance objectives were met. As more fully described below,
the final agreement reached by Schneider and the Retained
Executives provided for awards payable to each Retained Executive
based on specified periods of service, without regard to future
company performance, but with a minimum or “floor” amount
designed to compensate the Retained Executives for the
relinquishment of their rights to Termination Awards and SRP
Cashouts under the 1990 Employment Agreements.
E. 1991 Employment Agreements
The Retained Executives entered into the 1991 Employment
Agreements on November 14, 1991.12 The 1991 Employment
Agreements nullified and replaced the 1990 Employment Agreements.
12 Messrs. Francis and Richardson did not enter new
employment contracts until early 1992, but their agreements were
essentially the same as the agreements signed by the other
Retained Executives. Hereinafter, unless otherwise noted, the
term “1991 Employment Agreements” shall include the agreements
signed by Messrs. Francis and Richardson in early 1992.
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