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vested until the end of 1994 and not paid until 1995. Further,
Ms. Meyer contended, such long-term incentive compensation awards
are not reported in SEC proxy filings until the conclusion of the
performance period53 and thus inclusion of any portion in 1992
would be inconsistent with the conventions under which the
compensation of comparable executives was disclosed. Mr.
Rosenbloom took the position that a ratable portion (i.e., 33
percent) of a Retained Executive’s LTIP award should be treated
as compensation earned in 1992.
For purposes of establishing reasonable compensation under
section 280G(b)(4), we believe Ms. Meyer’s position is untenable.
Ms. Meyer would have us ignore compensatory payments to the
Retained Executives that were generally nearly triple their
annual base salaries, even though it is undisputed that the
payments were earned over a 3-year period that began with 1992.54
Further, Ms. Meyer’s contention that the LTIP award was not
vested until the completion of the 1992-94 performance period is
belied by the evidence in this case. Mr. Pugh, whose employment
was terminated effective April 15, 1994, received an LTIP based
on his services in 1992 and 1993. Moreover, Ms. Meyer’s
53 See 17 C.F.R. sec. 229.402(b)(2)(iv)(C) (1993).
54 Although the Retained Executives were not advised of the
final terms of the LTIP until early 1993, their rights to an LTIP
award were secured in the 1991 Employment Agreements, and certain
of the Retained Executives participated in the development of the
LTIP arrangements during 1992.
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