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J. Retained Executives’ Duties and Responsibilities
The Retained Executives were competent in their positions,
had considerable management experience, worked well together as a
management team, and were major contributors to the successful
operations of petitioner. Under the 1991 Employment Agreements,
the Retained Executives had greater responsibilities, duties, and
authority than they had under the 1990 Employment Agreements.
In 1992, the Retained Executives were managing a company
that had undergone a leveraged buyout and undertaken substantial
debt obligations. Consequently, they had to rapidly develop a
cashflow orientation in running petitioner’s business and raise
cash by selling certain assets that did not fit within
petitioner’s core business of electrical equipment manufacturing.
The departure of Mr. Stead, petitioner’s most senior executive,
shortly after petitioner’s acquisition by Schneider increased the
pressure on the Retained Executives. Furthermore, due to a
recession in the United States, the Retained Executives were
faced with the additional burden of managing a highly leveraged
business in an unfavorable economic climate. In addition, the
Retained Executives had to integrate petitioner’s North American
and European operations with those of Schneider and its other
affiliates. Finally, petitioner’s competitors began lowering
their prices in an effort to take petitioner’s market share,
forcing petitioner to aggressively price its own products and
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