Six Flags to Reimburse Snyder For Most Expenses in Proxy Fight
Wednesday, April 12, 2006
Six Flags Inc. has agreed to pay Redskins owner Daniel M. Snyder $10.4 million to reimburse him for expenses he incurred in his bid to gain control of the company last fall, including a $5 million signing bonus for chief executive Mark Shapiro.
Red Zone LLC, the investment vehicle for Snyder's 11.7 percent stake in Six Flags, spent $11.6 million to persuade shareholders to turn the theme park operator over to Snyder and his team, Six Flags said yesterday in a filing with the Securities and Exchange Commission. Snyder asked to be reimbursed for $11.4 million.
The Six Flags board agreed to reimburse Snyder for $2.4 million he spent on investment banking fees and nearly $1 million for food, lodging and airfare over the course of three months as he and Shapiro crisscrossed the country to meet with shareholders. At the time, the largest investors included Microsoft Inc. Chairman Bill Gates, New York investor Simon Glick and Omaha investment adviser Wallace R. Weitz. Weitz disclosed Monday that his fund has since reduced its stake in the company to 1.6 percent from 10.6 percent.
The Six Flags board also agreed to pay Snyder $2 million to cover a variety of other expenses, such as signing bonuses for new senior executives, legal bills and filing fees.
Snyder will not be reimbursed for the cost of traveling by private aircraft, which totaled $265,236, the company said.
Red Zone and Six Flags declined to comment on the filing. The reimbursement is subject to a shareholder vote at the company's annual meeting in May.
The company's previous management, a group of Wall Street investment bankers and lawyers who had been in place for more than a decade, spent $9.4 million on legal, investment banking and other fees in their effort to retain control.
In deciding whether to reimburse Snyder for Shapiro's signing bonus, the audit committee concluded that a $5 million payout was "reasonable" to compensate Shapiro, then ESPN's top programming executive, "for leaving a promising career" at a time when the outcome of Snyder's proxy fight was uncertain, the filing said.
Since the launch of his campaign in August for control of Six Flags, Snyder has about doubled the value of his more than 11 million shares.