Magna Entertainment Seeks Incentive Plan for Key Employees
On Friday, Magna Entertainment Corp. requested court authority to implement a key employee incentive plan. Magna and certain affiliates filed for bankruptcy protection in Delaware on March 5, 2009. The companies are one of the leading owners and operators of horse racetracks in North America and owns, among others, Pimlico Race Course (home of the Preakness Stakes, the second leg of horse racing's legendary Triple Crown). The companies also supply live racing content to inter-track, off-track betting (OTB) and account-wagering markets.
Magna and its affiliates are in the midst of auction and sale processes for pools of their assets. According to Friday's motion, the on-going sales process requires "certain of the Debtors' employees to undertake meaningful responsibilities in addition to their day-to-day functions." As a result, Magna's management and advisors, in consultation with the Official Committee of Unsecured Creditors, has determined that implementation of a KEIP is necessary to incentivize these employees.
The proposed KEIP utilizes payment milestones that reflect the terms of Magna's amended debtor-in-possession (DIP) credit agreement. Covered employees (of which there are only five) would receive 1/3 of their total KEIP payment on achievement of each of three objectives (related to sales of assets and confirmation of a chapter 11 plan). The incentive payment would be set at 50% of the participant's base salary with an overall cap of $600,000 for KEIP awards.
netDockets has made a complimentary copy of the KEIP motion available on JDSupra.
About netDockets:
With over 1.4 million documents filed in over 700 of the largest corporate chapter 11 bankruptcy cases, all professionally-coded to be quickly and easily searchable, netDockets allows you to find not just more precedent, but the best, most relevant precedent.
Learn more and sign up for a free trial account by visiting http://www.netdockets.com/. In addition, please contact us directly to learn more about special free trial and payment options for mid-size and large law firms. Contact information can be found on our JDSupra profile page and at http://www.netdockets.com/.
Magna and its affiliates are in the midst of auction and sale processes for pools of their assets. According to Friday's motion, the on-going sales process requires "certain of the Debtors' employees to undertake meaningful responsibilities in addition to their day-to-day functions." As a result, Magna's management and advisors, in consultation with the Official Committee of Unsecured Creditors, has determined that implementation of a KEIP is necessary to incentivize these employees.
The proposed KEIP utilizes payment milestones that reflect the terms of Magna's amended debtor-in-possession (DIP) credit agreement. Covered employees (of which there are only five) would receive 1/3 of their total KEIP payment on achievement of each of three objectives (related to sales of assets and confirmation of a chapter 11 plan). The incentive payment would be set at 50% of the participant's base salary with an overall cap of $600,000 for KEIP awards.
netDockets has made a complimentary copy of the KEIP motion available on JDSupra.
About netDockets:
With over 1.4 million documents filed in over 700 of the largest corporate chapter 11 bankruptcy cases, all professionally-coded to be quickly and easily searchable, netDockets allows you to find not just more precedent, but the best, most relevant precedent.
Learn more and sign up for a free trial account by visiting http://www.netdockets.com/. In addition, please contact us directly to learn more about special free trial and payment options for mid-size and large law firms. Contact information can be found on our JDSupra profile page and at http://www.netdockets.com/.
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