Golden Parachute Cradles Harrah's CEO

FILE-- Gary Loveman, Chariman and CEO of Harrah's Entertainment speaks during a forum on the state of the gaming industry Wednesday, Oct. 6, 2004, in Las Vegas.Loveman, the chief executive of casino giant Harrah's Entertainment Inc., will receive about $94 million in stock options and other rights if the world's largest casino buyout deal is consummated, according to documents filed with the Securities and Exchange Commission Thursday Feb. 8, 2007. It would be the largest going-private deal ever for a publicly held casino company and, excluding debt, the seventh biggest leveraged buyout deal of any kind of company. . (AP Photo/Joe Cavaretta) (Joe Cavaretta - AP)

LAS VEGAS -- Gary Loveman, the chief executive of casino giant Harrah's Entertainment Inc., will receive about $94 million in stock options and other rights if the world's largest casino buyout deal is consummated, according to documents filed with the Securities and Exchange Commission.

Loveman would collect on stock options worth $80.3 million, stock appreciation rights worth $8.8 million, and restricted shares worth $4.9 million, according to a preliminary proxy statement filed Thursday with the SEC.

Loveman would receive an additional $18.9 million in severance pay if he leaves the company under certain conditions, including if he voluntarily quits a year after the buyout is completed.

The board of Harrah's, the world's largest casino operator by revenue, on Dec. 19 recommended that shareholders approve a $90-per-share, $17.1 billion buyout of the company by private equity firms Texas Pacific Group and Apollo Management Group.

It would be the largest going-private deal ever for a publicly held casino company and, excluding debt, the seventh biggest leveraged buyout deal of any kind of company.

Although Loveman spoke with prospective buyers, he was not directly involved in decision-making by a special committee of the board that excluded management in evaluating the deal since Sept. 20.

The SEC document also describes how close Wyomissing, Pa.-based Penn National Gaming Inc. came to merging with Harrah's to become a colossal casino player that would have owned or operated more than 70 casinos, horse tracks and off-track wagering facilities mainly in the U.S., Britain and Canada.

And it offers a detailed look at how the casino giant's board came to grips with competing multibillion-dollar bids in a short time span.

Apollo and Texas Pacific approached Harrah's separately in August about taking the company private before teaming up in September. The pair offered $81 per share, which the company announced Oct. 2.

Shortly after, Penn, referred to in the document as "Company B," called Harrah's financial adviser UBS to express interest in submitting a bid. The two companies have never publicly discussed Penn's interest, but it was confirmed by sources who did not want to be identified because of the sensitivity of the talks.

Although it backed out of the process Oct. 23, about two weeks after Apollo and Texas Pacific raised their offer to $83.50 in cash, Penn was back in early November, asking for more information.

In mid-November, Penn chief executive Peter Carlino talked on the phone with Loveman several times, met with Loveman in Atlantic City, N.J., and had dinner with Harrah's directors Frank Biondi Jr. and Stephen Bollenbach in Los Angeles, according the document.