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By signing the 1991 Employment Agreements, the Retained
Executives surrendered their rights to Termination Awards and SRP
Cashouts under the 1990 Employment Agreements.
Petitioner and the Retained Executives had no explicit or
implicit legal obligation under the 1990 Employment Agreements or
any other agreements to enter into the 1991 Employment
Agreements. There were no understandings between Schneider and
the Retained Executives prior to the change in control with
regard to their continued employment by petitioner after the
change in control (other than that contained in the 1990
Employment Agreements).
The 1991 Employment Agreements established a fixed
employment period for each Retained Executive from the date of
the agreement through December 31, 1994, unless terminated sooner
in accordance with the provisions of the agreement. The 1991
Employment Agreements generally increased the 1991 base salaries
for each Retained Executive and provided for a 20-percent
increase in 1992 base salaries and an annual bonus (i.e., STIP
award). The 1991 Employment Agreements also entitled each
Retained Executive to participate in a long-term incentive
compensation plan (LTIP). The 1991 Employment Agreements further
provided that if a Retained Executive remained continuously
employed by petitioner until December 31, 1994, he would receive
a lump-sum payment (Retention Payment) equal to 3.7 times his
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