New Hawker Beechcraft CEO Steve Miller gets a nice bonus if he can keep the company out of bankruptcy. Called “incentive interests,” they amount to six percent of the value of equity holdings held by sponsors, and six percent of the increase in the value of the company’s bonds held by sponsors. However, his three-year contract also warns, if the company enters bankruptcy the incentive interests will be canceled. Aside from that bonus, Miller gets $1.5 million per year for three years as his regular salary, and a 100 percent bonus if he meets financial targets. He makes up to a 200 percent bonus if financial targets are exceeded. Also, it was agreed by the board of directors that he was to get an additional $5 million cash payment upon joining the company to reflect his surrender of comparable value when he left MidOcean Partners. He has to give it back if he gets fired in the first nine months. After that it will be prorated if he is fired. You can read the SEC filing on the contract here. (Click on; “Entire Filing Including Exhibits.” Don’t worry, it’s not that big.) As you probably have read, Hawker has retained Kirkland and Ellis for advice on bankruptcy, according to an unconfirmed report in the Wall Street Journal. Here is a link to a story by AOPA’s Jim Moore containing the link to the WSJ story. So Miller’s work is cut out for him, with bankruptcy attorneys waiting on the other line.
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UPDATE: A Canadian newspaper, The Globe and Mail, has predicted bankruptcy will be difficult for Hawker Beechcraft to avoid.