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treated as executed “pursuant to” the former within the meaning
of the proposed regulations. As a consequence, under the
proposed regulations, the latter agreement is “considered to have
been entered into before the change.” Sec. 1.280G-1, A-23,
Proposed Income Tax Regs., supra. Respondent’s argument is that
the Retained Executives were able to obtain key terms of the 1991
Employment Agreements--which entitled each to a Retention Payment
and a 1991 SRP Benefit calculated to exceed the value of his
Termination Award and SRP Cashout--because of the 1990 Employment
Agreements which, in the event of a change in control, entitled
each Retained Executive to a Termination Award and SRP Cashout at
his sole discretion. The Retained Executives’ entitlement to the
Termination Awards and SRP Cashouts under the 1990 Employment
Agreements thus gave them “a significant degree of leverage in
their negotiations with Schneider” over the 1991 Employment
Agreements, respondent argues. In respondent’s view, “the 1991
Employment Agreements were executed pursuant to the 1990
Employment Agreements, within the meaning of Prop. Treas. Reg. �
1.280G-1, Q&A-23, because the terms of the post-acquisition
agreements were dictated by the parachute provisions of the pre-
acquisition agreements.”
We conclude that respondent’s construction of “pursuant to”
is consistent with the meaning of “contingent on a change in the
ownership or effective control of the corporation” used in
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