SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Magna Entertainment Corp.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

[LOGO]

MAGNA ENTERTAINMENT CORP.

2002
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT

Thursday, April 18, 2002
at 11:00 a.m.

----------------

FrontRunner Restaurant
Santa Anita Park
285 West Huntington Drive
Arcadia, California
91007

[LOGO]

A SPECIAL DAY AT THE RACES
HOSTED BY MAGNA ENTERTAINMENT CORP.
FOR ITS STOCKHOLDERS
APRIL 18, 2002
SANTA ANITA PARK

8:00 a.m. Breakfast with Top Jockeys and Trainers
(Clocker's Corner)

9:00 a.m. Tram Tours (a view "Behind the Scenes")
(Starting from Clocker's Corner)

9:30 a.m. Live Handicapping "How To" Session
(Location to be announced)

10:30 a.m. Stockholder and Guest Registration
(FrontRunner Restaurant)

11:00 a.m. ANNUAL STOCKHOLDERS MEETING
(FrontRunner Restaurant)

12:15 p.m. Refreshments and Lunch
(FrontRunner Restaurant)

12:30 p.m. Televised Handicapping "How To" Session
(FrontRunner Restaurant)

1:00 p.m. Post Time

IN ORDER TO ACCOMMODATE ALL WHO WILL ATTEND, PLEASE ADVISE US IF YOU
INTEND TO BE PRESENT AT THE ANNUAL MEETING AND/OR PARTICIPATE IN ANY
OF THE EVENTS PRECEDING IT BY CONTACTING:

LAURA O'MALLEY
MAGNA ENTERTAINMENT CORP.
PHONE: (905) 726-7082
E-MAIL: laura o'malley@magna.on.ca

[LOGO]

Magna Entertainment Corp.

337 Magna Drive
Aurora, Ontario,
Canada L4G 7K1
Tel (905) 726-2462
Fax (905) 726-7172

March 12, 2002

Dear Fellow Stockholder:

It is my pleasure to invite you to attend Magna Entertainment Corp.'s
Annual Meeting of Stockholders on Thursday, April 18, 2002, beginning at 11:00
a.m., at Santa Anita. The Notice of Annual Meeting and Proxy Statement
accompanying this letter describe the business to be transacted at the
meeting, our second annual meeting as a public company.

At the meeting, we will report to you on MEC's performance during 2001 and
our vision for the future. I welcome this opportunity to have a discussion
with MEC's stockholders and I look forward to your comments and questions.

I look forward to seeing you on April 18, 2002 and sincerely hope that you
will take this opportunity to better acquaint yourself with our business and
our industry. To that end, we have scheduled a number of other activities at
Santa Anita on that day that may be of interest to you. A schedule for the day
appears on the inside front cover of this booklet.

Please participate in and enjoy the scheduled activities.

Sincerely,

/s/Jim McAlpine

Jim McAlpine
President and Chief Executive Officer

NOTICE OF ANNUAL MEETING

The Annual Meeting of Stockholders of Magna Entertainment Corp. ("MEC")
will be held on Thursday, April 18, 2002, beginning at 11:00 a.m. local time,
at the FrontRunner Restaurant, Santa Anita Park, 285 West Huntington Drive,
Arcadia, California 91007, to consider and take action upon the following
matters described in the accompanying Proxy Statement:

(1) the election of 12 directors for the ensuing year;

(2) the ratification of the Board of Directors' appointment of Ernst &
Young LLP, certified public accountants, as MEC's auditors for the year
ending December 31, 2002; and

(3) such other matters as may properly come before the meeting.

The Board of Directors has determined that owners of record of MEC's Class
A Subordinate Voting Stock and Class B Stock and MEC Holdings (Canada) Inc.'s
Exchangeable Shares at the close of business on February 27, 2002 are entitled
to notice of and to vote at the meeting, and at any adjournment thereof.

By Order of the Board of Directors

s/Gary M. Cohn (signed)

Gary M. Cohn
Vice-President, Special Projects and
Secretary

Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
Canada L4G 7K1
March 12, 2002

YOUR VOTE IS IMPORTANT

To vote your shares, please complete, sign and date the enclosed proxy
form, and return it in the enclosed postage-paid envelope. You may vote in
person at the meeting even if you send in your proxy.

TABLE OF CONTENTS

Page
----

GENERAL INFORMATION....................................................... 1
Holders of Class A Subordinate Voting Stock and Class B Stock............ 1
Holders of Exchangeable Shares............................................ 1
ITEM A -- ELECTION OF DIRECTORS (Item A on the Proxy Form)................ 2
Nominees................................................................. 2
Vote Required............................................................ 4
MANAGEMENT................................................................ 5
Executive Officers....................................................... 5
SECURITY OWNERSHIP........................................................ 6
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD........................ 8
Executive Committee...................................................... 8
Corporate Governance, Human Resources and Compensation Committee......... 8
Audit Committee.......................................................... 8
Special Independent Committee............................................ 8
Directors' Compensation.................................................. 9
Compensation Committee Interlocks and Insider Participation.............. 9
Certain Relationships and Related Transactions........................... 9
EXECUTIVE COMPENSATION.................................................... 12
Summary Compensation Table............................................... 12
Option Grants in Last Fiscal Year........................................ 13
Fiscal Year End Option Values............................................ 13
Employment Agreements and Termination of Employment Agreements........... 13
Long-Term Incentive Plan................................................. 14
Bonus Stock and Restricted Stock Awards.................................. 15
Section 16(a) Beneficial Ownership Reporting Compliance.................. 16
Comparative Stock Performance Graph...................................... 16
CORPORATE GOVERNANCE, HUMAN RESOURCES AND
COMPENSATION COMMITTEE REPORT............................................. 16
AUDIT COMMITTEE REPORT.................................................... 18
ITEM B -- RATIFICATION OF APPOINTMENT OF AUDITORS (Item B on the Proxy
Form).................................................................... 19
Fees billed to MEC by Ernst & Young LLP.................................. 19
Ratification of Appointment of Ernst & Young LLP as Auditors............. 19
Vote Required............................................................ 19
ADDITIONAL INFORMATION.................................................... 20
Other Action at the Meeting.............................................. 20
Cost of Solicitation..................................................... 20
Stockholder Proposals for 2003 Annual Meeting............................ 20
2001 Annual Report on Form 10-K.......................................... 20
EXHIBIT A -- AUDIT COMMITTEE CHARTER...................................... A-1

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors of Magna Entertainment Corp. ("MEC" or the
"Company") for use at the Annual Meeting of Stockholders to be held on April
18, 2002, and at any adjournment(s) thereof. The solicitation of proxies
provides all stockholders who are entitled to vote on matters that come before
the meeting with an opportunity to do so whether or not they attend the
meeting in person. This Proxy Statement and the related proxy form are first
being mailed to MEC's stockholders on or about March 18, 2002.

Holders of Class A Subordinate Voting Stock and Class B Stock

Owners of record of MEC's Class A Subordinate Voting Stock and Class B
Stock at the close of business on February 27, 2002 are entitled to notice of
and to vote at the Annual Meeting. Such owners of the Class A Subordinate
Voting Stock are entitled to one vote for each share held, and such owners of
the Class B Stock are entitled to 20 votes for each share held.

If you wish to give your proxy to someone other than the three persons
named as proxies on the enclosed form you must strike out all three names
appearing on the enclosed proxy form and insert the name of another person or
persons (not more than three). The signed proxy form must be presented at the
meeting by the person or persons representing you. You may revoke your proxy
at any time before it is voted at the meeting.

As of February 27, 2002, MEC had authorized 310,000,000 shares of Class A
Subordinate Voting Stock, par value $0.01 per share, of which 23,513,599 were
issued and outstanding, and 90,000,000 shares of Class B Stock, par value
$0.01 per share, of which 58,466,056 were issued and outstanding. The owners
of a majority of such issued and outstanding shares, present in person or
represented by proxy, will constitute a quorum for the transaction of business
at the meeting.

The shares represented by a properly signed and returned proxy form will be
voted as specified by the stockholder on such form. If a proxy form is signed
and returned but no specification is made, the shares will be voted "FOR" the
election of all nominees for director (Item A) and "FOR" the ratification of
the appointment of Ernst & Young LLP as MEC's independent auditors (Item B). A
proxy may be revoked by a stockholder at any time before it is voted by
providing notice of such revocation in writing to the Corporate Secretary's
Office (at MEC's address set forth in the Notice of Annual Meeting
accompanying this Proxy Statement), by submission of another proxy properly
signed by such stockholder and bearing a later date, or by voting in person at
the Annual Meeting.

Abstentions are not counted as votes "FOR" or "AGAINST" a proposal, but are
counted in determining a quorum.

It is the policy of MEC that any proxy, ballot or other voting material
that identifies the particular vote of a stockholder will be kept
confidential, except in the event of a contested proxy solicitation or as may
be required by law. Such documents are available for examination only by the
inspectors of election and certain persons associated with processing proxy
forms and tabulating the vote, although MEC may be informed whether or not a
particular stockholder has voted and will have access to each proxy, ballot or
other voting material.

Holders of Exchangeable Shares

Owners of record of MEC Holdings (Canada) Inc.'s Exchangeable Shares at the
close of business on February 27, 2002 are entitled to notice of and to vote
at the Annual Meeting. Such owners of the Exchangeable Shares are entitled to
one vote for each share held.

The Exchangeable Shares are exchangeable at any time at the option of the
holder, on a one-for-one basis, for shares of MEC's Class A Subordinate Voting
Stock. Holders of the Exchangeable Shares are able to exercise essentially the
same voting rights with respect to MEC as they would have if they exchanged
their Exchangeable Shares for shares of MEC's Class A Subordinate Voting
Stock. Pursuant to the Voting and Exchange Agreement between MEC and Magna
International Inc. ("Magna International"), each holder of an Exchangeable
Share, other than MEC and its subsidiaries, on the record date will be
entitled to instruct Magna International, and Magna International has agreed,
to exercise one of the votes attached to a share of MEC's Class A Subordinate
Voting Stock or Class B Stock for each Exchangeable Share held by that holder.
If Magna International does not receive voting instructions covering all the
outstanding Exchangeable Shares, it will refrain from exercising a number of
voting rights attaching to MEC's shares that it holds that is equal to the
number of Exchangeable Shares for which no voting instructions were received.

As of February 27, 2002, 2,116,232 Exchangeable Shares were issued and
outstanding, excluding those held by MEC. If a holder of Exchangeable Shares
wishes to vote directly at the Annual Meeting and give voting instructions to
Magna International, such holder must properly sign and return the enclosed
proxy form. The proxy forms will be treated as described above under "Holders
of Class A Subordinate Voting Stock and Class B Stock."

ITEM A -- ELECTION OF DIRECTORS
(Item A on the Proxy Form)

MEC's Restated Certificate of Incorporation provides that, unless otherwise
approved by ordinary resolution by the holders of the Class A Subordinate
Voting Stock and the holders of the Class B Stock, each voting separately as a
class, (i) a majority of the directors of MEC shall be individuals who are not
officers or employees of MEC or persons related to such officers or employees
and (ii) at least two of the directors of MEC shall be individuals who are not
officers or employees of MEC or its affiliates, including Magna International,
or directors of any of MEC's affiliates, including Magna International, or
persons related to such officers, employees or directors. MEC's bylaws provide
that the number of directors of MEC shall be not less than one and not more
than fifteen, and that the number of directors and the number of directors to
be elected at the Annual Meeting each shall be determined from time to time by
resolution of the Board of Directors. The Board of Directors has fixed 12 as
the number of directors of the Company to be elected at the Annual Meeting.
Each director elected at the Annual Meeting will serve for a term expiring at
the 2003 Annual Meeting of Stockholders, expected to be held in April or May
2003, or until his or her successor has been duly elected and qualified or his
or her earlier resignation or removal.

Nominees

The individuals nominated as directors to be elected at the Annual Meeting
are all incumbent directors of MEC. Certain information regarding each nominee
is set forth below, including age (as of January 1, 2002), principal
occupation, a brief account of business experience during at least the last
five years, certain other directorships currently held and the year in which
the individual was first elected a director of MEC.

Each nominee for director has consented to being named in this Proxy
Statement and to serve if elected. It is the intention of the persons named in
the enclosed proxy to vote for the election of the nominees listed on the
following pages unless otherwise instructed on the proxy form. If you do not
wish your shares to be voted for particular nominees, please strike out the
names of the exceptions in Item A on the proxy form.

If at the time of the Annual Meeting one or more of the nominees is no
longer available or able to serve, shares represented by the proxies will be
voted for the remaining nominees and for any substitute nominee or nominees
designated by the Board of Directors or, if none, the size of the Board will
be reduced. The Board of Directors knows of no reason why any of the nominees
would be unavailable or unable to serve.

The persons nominated for election to the Board of Directors, all of whom
are incumbent directors, are as follows:

Name Age Position
---- --- --------

Frank Stronach (1)(2)....... 69 Chairman of the Company and Director (since
1999)
Jim McAlpine (2)............ 55 President and Chief Executive Officer of the
Company and Director (since 2001)
Jerry D. Campbell........... 61 Vice-Chairman and Director (since 2000)
William G. Davis (1)(2)(3).. 72 Director (since 2000)
Peter M. George (4)(5)...... 58 Director (since 2000)
Joseph W. Harper............ 59 Director (since 2000)
J. Terrence Lanni (2)(4)(5). 59 Director (since 2000)
F. Jack Liebau.............. 63 President, California Operations of the
Company and Director (since 2001)
Edward C. Lumley (1)(4)..... 62 Director (since 2000)
James Nicol (3)............. 47 Director (since 2002)
Gino Roncelli (3)(5)........ 67 Director (since 2000)
John C. York II............. 53 Director (since 2000)

(1) Currently a director of Magna International Inc.

(2) Member of Executive Committee

(3) Member of Corporate Governance, Human Resources and Compensation Committee

(4) Member of Audit Committee

(5) Member of Special Independent Committee

Frank Stronach serves as Chairman of MEC. Mr. Stronach has been a director
since November 1999. Since 1971, Mr. Stronach has been the Chairman of Magna
International, which he founded over 40 years ago. Mr. Stronach is actively
involved in racing and breeding thoroughbred horses in New York, Kentucky,
California, Florida and elsewhere. Mr. Stronach currently serves on the board
of directors of Breeders' Cup Limited, Florida Thoroughbred Breeders and
Owners Association, Intier Automotive Inc. and Tesma International Inc.

Jim McAlpine serves as President and Chief Executive Officer of MEC. Mr.
McAlpine has been a director since February 2001. Mr. McAlpine currently
serves on the board of directors of the NTRA (National Thoroughbred Racing
Association) and the TRA (Thoroughbred Racing Associations of North America,
Inc.). Prior to joining MEC in January 2001, Mr. McAlpine was the President of
McAlpine Ford Lincoln Sales Ltd., an automobile dealership in Aurora, Ontario
that he established in 1990. From 1984 to 1989, Mr. McAlpine was Chief
Financial Officer of Magna International and he also served as Vice-Chairman
of Magna International from April 1988 to October 1989.

Jerry D. Campbell serves as Vice-Chairman of MEC. Mr. Campbell has been a
director since March 2000 and was President and Chief Executive Officer of MEC
from March 2000 to August 2000. Prior to joining MEC, Mr. Campbell served as
Chairman of the Board and Chief Executive Officer of Republic Bancorp Inc.
from its establishment in April 1986 to December 1999, and he still serves as
its Chairman of the Board.

William G. Davis has been a director since March 2000. Mr. Davis has served
as counsel to Torys, an international law firm, since 1985. Mr. Davis is the
former Premier of the Province of Ontario (1971 to 1985). Mr. Davis is also a
director of Magna International, First American Financial Corporation,
Magellan Aerospace Incorporated, Nike Canada Ltd., Power Corporation of
Canada, St. Lawrence Cement, BPO Properties Ltd., First American Title
Insurance Company and Home Capital Inc.

Peter M. George has been a director since March 2000. Mr. George has, since
October 2001, been Senior Vice-President and Managing Director of the
International Group of Park Place Entertainment, an entertainment, hotel and
gaming company. Until his retirement in August 2000, Mr. George served as the
Vice Chairman and Chief Executive Officer of Hilton Group plc (formerly
Ladbroke Group plc), a British publicly-traded company. Mr. George is also a
director of Hilton Hotels Corporation and US Airways Group.

Joseph W. Harper has been a director since March 2000. Mr. Harper has
served as President and General Manager of Del Mar Thoroughbred Club, which
operates the Del Mar racetrack in California, since 1977.

J. Terrence Lanni has been a director since March 2000. Mr. Lanni is
currently the Chairman of the Board and Chief Executive Officer of MGM MIRAGE,
an entertainment, hotel and gaming company. He served as Chief Executive
Officer of MGM Grand Inc. from June 1995 to December 1999 and was President
and Chief Operating Officer of Caesars World, Inc. from April 1991 to February
1995.

F. Jack Liebau serves as the President of MEC's California Operations and
has been a director since August 2001. Prior to joining MEC in November 2000,
Mr. Liebau served as President and General Manager of Bay Meadows for
approximately eight years.

Edward C. Lumley has been a director since March 2000. Mr. Lumley has
served as the Vice-Chairman of BMO Nesbitt Burns Inc. (and its predecessor
company, Burns Fry Limited), a full-service investment bank, since 1991.
Mr. Lumley is also a director of Air Canada, Canadian National Railway
Company, Dollar Thrifty Automotive Group Inc., Magna International and Intier
Automotive Inc.

James Nicol was a director from November 1999 to January 2002 and has been
a director since March 2002. In February 2002, Mr. Nicol joined Tomkins plc,
an industrial and automotive engineering company, as Chief Executive Officer.
From February 2001 to January 2002, Mr. Nicol served as President and Chief
Operating Officer of Magna International and, from May 1998 to February 2001,
as Vice-Chairman of Magna International. Prior to joining Magna International,
Mr. Nicol served for four years as Chairman and Chief Executive Officer of
TRIAM Automotive Inc., a publicly traded automotive parts manufacturer.

Gino Roncelli has been a director since March 2000. Mr. Roncelli has served
as the Chief Executive Officer of Roncelli Plastics Inc., a non-metallic
machining company, since 1969.

John C. York II has been a director since March 2000. Mr. York currently
serves as President and Director of the DeBartolo Corporation and has served
as President and Director of Louisiana Downs, Inc. since 1996.

In addition to the nominees listed above, Andrew Stronach and Ronald J.
Volkman are also currently directors of MEC.

Vote Required

The affirmative vote of a majority of the votes cast with respect to the
shares of Class A Subordinate Voting Stock and Class B Stock, voting together
as a single class, present or represented and entitled to vote at the Annual
Meeting is required for the election of each nominee for director.

Magna International, as the holder of all the outstanding shares of Class B
Stock, has indicated that it intends to vote all such shares (other than those
with respect to which it is otherwise obligated under the Voting and Exchange
Agreement as described under "General Information -- Holders of Exchangeable
Shares") "FOR" the election of each nominee for director.

The Board of Directors recommends that the stockholders vote "FOR" the
election of each nominee for director.

MANAGEMENT

Executive Officers

The executive officers of Magna Entertainment Corp. are as follows:

Name Age Position
- ---- --- --------

Jim McAlpine............ 55 President and Chief Executive Officer of the Company
Donald Amos............. 57 Executive Vice-President and Chief Operating Officer of the Company
Graham J. Orr........... 55 Executive Vice-President and Chief Financial Officer of the Company
Gary M. Cohn............ 41 Vice-President, Special Projects and Secretary of the Company
Frank DeMarco, Jr....... 76 Vice-President, Regulatory Affairs of the Company
Andrew I. Gaughan....... 36 Vice-President, New Media Initiatives of the Company
Edward C. Hannah........ 46 Vice-President and General Counsel of the Company
Douglas R. Tatters...... 40 Vice-President and Controller of the Company

Jim McAlpine -- See "Item A -- Election of Directors -- Nominees".

Donald Amos serves as Executive Vice-President and Chief Operating Officer
of MEC. Mr. Amos has extensive experience breeding and racing thoroughbred and
standardbred horses. Prior to joining MEC in August 2000, Mr. Amos served in
various capacities with Magna International and one of its subsidiaries since
1984, and most recently, held the position of Executive Vice-President,
Administration and Human Resources of Magna International from October 1994 to
May 2000.

Graham J. Orr serves as Executive Vice-President and Chief Financial
Officer of MEC. Prior to joining MEC in that capacity in October 2000, Mr. Orr
held various executive positions with Magna International and one of its
subsidiaries since 1987. Most recently, he served as Executive Vice-President,
Corporate Development of Magna International, where he directed the corporate
development, treasury/insurance, capital markets and investor relations
functions from October 1994 to October 2000. Prior to 1987, Mr. Orr was a
partner with KPMG for nine years.

Gary M. Cohn serves as Vice-President, Special Projects and Secretary of
MEC. From September 1996 to November 2000, Mr. Cohn was Vice-President and
General Counsel of various subsidiaries of Magna International. Prior to that
time, he was a partner in the Canadian law firm of Heenan Blaikie since
January 1995.

Frank DeMarco, Jr. serves as Vice-President, Regulatory Affairs of MEC and
Executive Director, General Counsel and Secretary of Los Angeles Turf Club,
Inc., which is an indirect wholly-owned subsidiary of MEC. Mr. DeMarco has
been a practicing attorney in Los Angeles County since 1951 and has been the
Executive Director, General Counsel and Secretary of Los Angeles Turf Club,
Inc. since April 1998.

Andrew I. Gaughan serves as Vice-President, New Media Initiatives of MEC.
Prior to joining MEC in June 2001, Mr. Gaughan held various positions with
Woodbine Entertainment Group (formerly the Ontario Jockey Club). Most
recently, he served as Vice-President, Business Development of Woodbine
Entertainment Group, where he led the development and management of
interactive and new media platforms and investment and was involved in related
business and development activities.

Edward C. Hannah serves as Vice-President and General Counsel of MEC. Prior
to joining MEC in June 2001, Mr. Hannah served for approximately eight months
as Senior Vice-President and a director of Headline Media Group Inc., a public
corporation listed on The Toronto Stock Exchange. From April to November 2000,
Mr. Hannah was a consultant to a venture capital firm associated with Headline
Media Group Inc. Prior to that time, he was a partner in the Canadian law firm
of Davies Ward Phillips & Vineberg since 1985.

Douglas R. Tatters serves as Vice-President and Controller of MEC. Prior to
joining MEC in March 2001, Mr. Tatters worked as a consultant with Decoma
International Inc., a subsidiary of Magna International, for approximately six
months. From September 1998 to June 2000, he served as Vice-President,
Operations and Finance of Mumby & Associates Ltd., a large manufacturer and
distributor of paint sundry products. Immediately prior to that, he was the
Controller of Magna International from February 1996 to September 1998.

SECURITY OWNERSHIP

The following tables set forth certain information as of February 27, 2002
with respect to beneficial ownership of MEC by (a) any entity or person known
by MEC to be the beneficial owner of more than five percent of the outstanding
shares of MEC's Class A Subordinate Voting Stock and Class B Stock and (b)
each director, nominee for director and Named Executive Officer listed below
in the Summary Compensation Table, and all executive officers and directors of
MEC as a group.

To MEC's knowledge, except as indicated in the footnotes to these tables or
pursuant to applicable community property laws, the persons named in the
following tables have sole voting and investment power with respect to the
shares of MEC's Class A Subordinate Voting Stock and Class B Stock indicated.

(a) Security Ownership of Beneficial Owners of More than 5% of the Company's
Voting Securities

Amount and
Nature of
Name and Address of Beneficial Beneficial Percentage
Class of Securities Owner Ownership of Class
- ------------------- ------------------------------ ---------- ----------

Class B Stock............ Magna International Inc. (1)(2) 58,466,056 100%
337 Magna Drive
Aurora, Ontario L4G 7K1

Class A Subordinate Magna International Inc. (2) 4,362,328 18.6%
Voting Stock............ 337 Magna Drive
Aurora, Ontario L4G 7K1

Class A Subordinate Zweig-DiMenna group (3) 2,225,000 9.5%
Voting Stock............ 900 Third Avenue
New York, N.Y.
10022

(1) Magna International directly owns 53,253,064 or 91.1% of these shares of
MEC's Class B Stock. The remaining shares of Class B Stock are owned
through direct or indirect wholly owned subsidiaries of Magna
International. Magna International is entitled to vote approximately 98%
of the votes attaching to MEC's voting securities.

(2) The Stronach Trust controls Magna International through the right to
direct the votes attaching to Class B shares of Magna International, which
carry a majority of the votes attaching to the outstanding voting shares
of Magna International. Mr. Frank Stronach, the Chairman and founder of
MEC, a director and Chairman of Magna International, and Mr. Andrew
Stronach, an officer and director of MEC and the son of Frank Stronach,
along with two other members of their family, are the trustees of the
Stronach Trust. Mr. Frank Stronach and Mr. Andrew Stronach are also two of
the members of the class of potential beneficiaries of the Stronach Trust.

(3) The entities comprising this group and their respective holdings of Class
A Subordinate Voting Stock as of December 31, 2001 are: Zweig-DiMenna
Select L.P. (791,400 shares), Zweig-DiMenna International Limited (749,700
shares), Zweig-DiMenna Partners, L.P. (413,200 shares), Zweig-DiMenna
Special Opportunities, L.P. (150,500 shares), Zweig-DiMenna International
Managers, Inc., on behalf of a discretionary account (63,200 shares),
Gotham Advisors, Inc., on behalf of a discretionary account (43,000
shares) and Zweig-DiMenna Investors L.P. (14,000 shares).

(b) Security Ownership of Directors and Executive Officers

Class A Percentage Percentage
Subordinate of Exchangeable of
Name of Beneficial Owner Voting Stock Class Shares Class
------------------------ ------------ ---------- ------------ ----------

Frank Stronach (1)............ 5,510,128(2) 23.4% 178,765(3) 8.4%
Jerry D. Campbell (4)......... 238,031 1.0% Nil Nil
Jim McAlpine.................. 20,000 (5) Nil Nil
Donald Amos (6)............... 102,100 (5) 482 (5)
Graham J. Orr................. 50,000 (5) 1,020 (5)
F. Jack Liebau................ Nil Nil Nil Nil
Gary M. Cohn.................. 21,700 (5) 80 (5)
Frank DeMarco, Jr............. Nil Nil Nil Nil
Andrew I. Gaughan............. 3,000 (5) Nil Nil
Edward C. Hannah.............. Nil Nil Nil Nil
Douglas R. Tatters............ Nil Nil Nil Nil
William G. Davis.............. 4,700 (5) 47 (5)
Peter M. George............... 4,700 (5) Nil Nil
Joseph W. Harper.............. 4,700 (5) Nil Nil
J. Terrence Lanni............. 4,700 (5) Nil Nil
Edward C. Lumley.............. 14,700 (5) 247 (5)
James Nicol................... Nil Nil 2,214 (5)
Gino Roncelli (7)............. 101,700 (5) Nil Nil
Andrew Stronach (1)(3)........ 1,000 (5) 70 (5)
Ronald J. Volkman............. 13,150 (5) Nil Nil
John C. York II (8)........... 4,700 (5) Nil Nil
All executive officers and
directors as a group
(21 persons)................. 6,099,009 25.9% 182,925 8.6%

(1) An associate of Mr. Frank Stronach and Mr. Andrew Stronach, the Stronach
Trust, controls Magna International through the right to direct the votes
attaching to Class B shares of Magna International, which carry a majority
of the votes attaching to the outstanding voting shares of Magna
International. Magna International directly and indirectly owns shares
entitling it to vote approximately 98% of the votes attaching to MEC's
voting securities.

(2) This figure includes 1,147,800 shares of Class A Subordinate Voting Stock
which are indirectly owned by The Edelweiss Trust, an associate of Mr.
Frank Stronach, and a further 4,362,328 shares of Class A Subordinate
Voting Stock owned by Magna International, which is in turn controlled by
the Stronach Trust. The Magna Deferred Profit Sharing Plan (Canada) and
the Employees Deferred Profit Sharing Plan (U.S.) of Magna International,
both of which are associates of Mr. Frank Stronach, also own 440,910 and
206,428 shares of Class A Subordinate Voting Stock, respectively. These
figures exclude the shares of Class A Subordinate Voting Stock issuable on
conversion by Magna International of its directly and indirectly owned
Class B Stock of MEC. Taking into account the shares of MEC held by the
deferred profit sharing plans of Magna International named above, Mr.
Frank Stronach and these associates control approximately 26.2% of the
Class A Subordinate Voting Stock of MEC.

(3) 144,965 Exchangeable Shares are owned by the Stronach Trust, an associate
of Mr. Frank Stronach and Mr. Andrew Stronach. In addition, 33,800
Exchangeable Shares are indirectly owned by The Edelweiss Trust, an
associate of Mr. Frank Stronach.

(4) Of these holdings, 217,788 shares of Class A Subordinate Voting Stock are
owned directly, 11,225 are owned jointly by Mr. Campbell and his wife,
4,009 are owned by Mr. Campbell's wife, and 5,009 are owned indirectly
through two wholly-owned corporations, Post It Stables, Inc. and Volan
Corp.

(5) These shares represent less than 1% of the class.

(6) Of these holdings, 100,000 shares of Class A Subordinate Voting Stock are
owned directly and 2,100 are owned by Mr. Amos' wife.

(7) Of these holdings, 4,700 shares of Class A Subordinate Voting Stock are
owned directly, 67,000 are owned indirectly through Roncelli Plastics
Inc., an associate of Mr. Roncelli, and 30,000 are owned by the Roncelli
Family Trust, an associate of Mr. Roncelli.

(8) Mr. York's wife indirectly owns 638,195 shares of Class A Subordinate
Voting Stock through her control of and ownership interest in the
DeBartolo Corporation. Mr. York disclaims beneficial ownership of these
shares.

THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

The business of MEC is managed under the direction of the Board of
Directors (the "Board"). The Board held eight meetings during fiscal year
2001. All directors attended at least 75% of the meetings of the Board and
Committees of which they were members during fiscal year 2001, except for
Frank Stronach (who attended five of the eight Board meetings), Peter M.
George (who attended two of the three Special Independent Committee meetings),
Gino Roncelli (who attended two of the three Corporate Governance, Human
Resources and Compensation Committee meetings held during the period that he
served on such Committee) and John C. York II (who attended four of the eight
Board meetings).

Because of the number of matters requiring Board consideration, to make the
most effective use of individual Board members' capabilities, and to comply
with the National Association of Securities Dealers ("NASD") listing
standards, the Board has established four committees to devote attention to
specific subjects and to assist it in the discharge of its responsibilities.
The functions of these committees, their current members and the number of
meetings held during 2001 are described below.

Executive Committee

The Executive Committee, which was established by the Board on September
19, 2000, is composed of Frank Stronach, Jim McAlpine, William G. Davis and J.
Terrence Lanni. The Executive Committee meets on an "as needed" basis between
meetings of the full Board of Directors. It is empowered to exercise the power
of the Board of Directors in managing the business affairs and property of
MEC, subject to limitations imposed by law and the Board. The Executive
Committee is not empowered to approve an acquisition, a capital expenditure or
a financial commitment that exceeds an amount greater than 10 per cent of the
book value of MEC's shareholders' equity. The Executive Committee did not meet
as a committee during fiscal year 2001.

Corporate Governance, Human Resources and Compensation Committee

The Corporate Governance, Human Resources and Compensation Committee is
composed of William G. Davis, James Nicol and Gino Roncelli. Mr. Davis and Mr.
Roncelli are and have always been independent directors of MEC (i.e.,
directors who do not receive compensation as an officer or employee of MEC or
any of its affiliates). Mr. Nicol was an officer and employee of Magna
International during 2001, but has since resigned those positions. The
Corporate Governance, Human Resources and Compensation Committee administers
MEC's Long-Term Incentive Plan. It also reviews and makes recommendations to
the Board with respect to all direct and indirect compensation, benefits and
perquisites of MEC's Chief Executive Officer, President, Chief Financial
Officer, Chief Operating Officer and certain

other senior management employees, and MEC's policies regarding management
benefits and perquisites. This Committee is also generally responsible for
developing MEC's approach to corporate governance issues, including MEC's
relationship with Magna International, and assessing the effectiveness of the
system of corporate governance employed by the Company as a whole. The
Corporate Governance, Human Resources and Compensation Committee held four
meetings during fiscal year 2001.

Audit Committee

The Audit Committee, composed of Peter M. George, J. Terrence Lanni and
Edward C. Lumley, is entirely independent of MEC. Mr. Lumley is also a
director of Magna International. The Audit Committee operates in accordance
with a charter under which it makes recommendations to the Board regarding the
selection and employment of MEC's independent accountants and, working with
MEC's internal and external auditors, reviews the results and scope of audit
and other services provided by MEC's independent accountants and evaluates
internal control functions. The Audit Committee held six meetings during
fiscal year 2001.

Special Independent Committee

The Special Independent Committee, composed of Peter M. George, J. Terrence
Lanni and Gino Roncelli, is entirely independent of MEC. This Committee was
established on August 1, 2001 with a mandate to review proposed real estate
transactions between MEC (or its subsidiaries) and Magna International and its
subsidiaries. The Special Independent Committee held three meetings during
fiscal year 2001.

Directors' Compensation

Directors who are not officers or employees of MEC or any of its affiliates
are currently paid an annual retainer of $30,000 (one-half in cash and one-
half in stock) and a meeting fee of $1,000 for attendance at each meeting of
the Board. Such directors are also currently paid an annual committee retainer
of $4,000 (Committee Chairmen also receive an $8,000 annual retainer) and a
meeting fee of $1,000 for attendance at meetings of each Committee of the
Board on which they serve. Compensation for Board and Committee work and
travel days ($1,500 per day) and for the execution of written resolutions
($250) is also provided to directors who are not officers or employees. In
addition, each director receives certain stock options as set forth below
under "EXECUTIVE COMPENSATION -- Long-Term Incentive Plan -- Nonqualified
Stock Options."

Compensation Committee Interlocks and Insider Participation

The members of the Corporate Governance, Human Resources and Compensation
Committee for fiscal year 2001 were William G. Davis, James Nicol and Gino
Roncelli (who replaced Ronald J. Volkman effective February 19, 2001). Mr.
Davis is also a director of Magna International. Mr. Nicol was Vice-Chairman
of MEC and the President, Chief Operating Officer and a director of Magna
International. During a portion of fiscal year 2001, Mr. Nicol served as Vice-
Chairman of Magna International. Neither Mr. Davis nor Mr. Roncelli is or has
been an officer or employee of MEC or any of its subsidiaries. In addition,
there are no compensation committee interlocks between MEC and other entities
involving MEC's executive officers and board members who serve as executive
officers of such entities.

Certain Relationships and Related Transactions

Relationship with Magna International

Magna International was incorporated under the laws of Ontario, Canada. The
Class A subordinate voting shares of Magna International are listed for
trading on the New York Stock Exchange and The Toronto Stock Exchange ("TSE").
Magna International's Class B shares are listed on the TSE. Magna
International is the sole holder of MEC's Class B Stock, which means that
Magna International is entitled to exercise approximately 98% of the total
votes attached to all MEC's outstanding stock. Magna International is
therefore able to elect all the directors of MEC and to control MEC.

MEC's Corporate Constitution requires that a minimum of two directors be
individuals who are not MEC officers or employees, officers or employees of
any of MEC's affiliates including Magna International, directors of any of
MEC's affiliates including Magna International, or persons related to any such
officers, employees or directors. The Corporate Constitution also requires
that a majority of MEC's directors be individuals who are not MEC officers or
employees or individuals related to these persons.

Magna International has made a commitment to its shareholders that it will
not, during the period ending May 31, 2006, without the prior consent of the
holders of a majority of Magna International's Class A subordinate voting
shares: (i) make any further debt or equity investment in, or otherwise give
financial assistance to, MEC or any of MEC's subsidiaries; or (ii) invest in
any non-automotive-related businesses or assets other than through its
investment in MEC. Magna International's commitment is contained in a
Forbearance Agreement, dated as of February 8, 2000, between MEC and Magna
International and of which Magna International's shareholders are express
third- party beneficiaries.

Magna International has announced its intention at an undetermined point in
the future to convert part of its holdings of MEC's Class B Stock into shares
of MEC's Class A Subordinate Voting Stock and dispose of such shares of MEC's
Class A Subordinate Voting Stock when market conditions for doing so are
favorable, with the ultimate intention of retaining only a minority equity
position in MEC but continuing to retain control of MEC. Magna International
may reduce its equity position in MEC through a combination of: (i) secondary
sales by Magna International of MEC stock held by it; and/or (ii) the dilution
of its interest through the issuance of Class A Subordinate Voting Stock by
MEC in connection with capital market transactions, acquisitions and/or other
investments by business partners.

Control of MEC

Magna International is able to elect all MEC's directors and controls MEC.
Therefore, Magna International is able to cause MEC to effect certain
corporate transactions without the consent of MEC's minority stockholders,
subject to applicable law and the fiduciary duties of MEC's directors and
officers. In addition, Magna International is able to cause or prevent a
change in control of MEC. The Stronach Trust controls Magna International
through the right to direct the votes attaching to Class B shares of Magna
International, which carry a majority of the votes attaching to the
outstanding voting shares of Magna International. Mr. Frank Stronach, the
Chairman and founder of MEC, a director and Chairman of the Board of Directors
of Magna International, together with Mr. Andrew Stronach, a director and
officer of MEC, and two other members of their family, are the trustees of the
Stronach Trust. Mr. Frank Stronach and Mr. Andrew Stronach are also two of the
members of the class of potential beneficiaries of the Stronach Trust.

Purchase of Land in Aurora, Ontario

In October 2000, MEC purchased from The Alpen House Limited, a company
associated with members of the family of Mr. Frank Stronach, the Chairman of
MEC and the Chairman of the Board of Magna International, and Mr. Andrew
Stronach, a director and officer of MEC, approximately 200 acres of land and
improvements in Aurora, Ontario (the "Purchased Land") for a purchase price of
approximately $11.0 million. The Purchased Land is adjacent to land currently
owned by Magna International and other land which is subject to a conditional
sale agreement providing for its sale by Magna International to MEC. The
purchase agreement for the Purchased Land was originally entered into by a
wholly-owned subsidiary of Magna International during the five-month period
ended December 31, 1998. The purchase was completed in October 2000 after the
satisfaction of certain conditions, including the registration of a
subdivision plan following the approval of the relevant governmental
authorities. The rights to acquire this land and improvements, as well as the
construction then in progress for the Magna Golf Club, were transferred to MEC
as part of the reorganization of MEC's corporate structure which was completed
by Magna International on November 5, 1999 (the "Reorganization").

Transactions with Magna International

Pursuant to a conditional sale agreement, Magna International transferred
land in Aurora, Ontario to MEC with a value of approximately $17.4 million.
The conditional sale agreement is subject to certain conditions, including
approval from the relevant governmental authorities to sever the land from
adjoining land. If these conditions are not satisfied by June 5, 2004, and
Magna International retains ownership of this Aurora land, Magna International
must return to MEC the purchase price paid with interest from the date of
payment. Prior to completion of this conditional sale, the land is being
leased to MEC by Magna International for a nominal amount.

Pursuant to a conditional sale agreement, Magna International transferred
to MEC vacant land in Troy, Michigan with a book value of approximately $2.5
million. The conditional sale agreement is subject to certain conditions,
including approval from the relevant governmental authorities to sever the
land from adjoining land. If these conditions are not satisfied by June 5,
2004, and Magna International retains ownership of the land, Magna
International must return to MEC the purchase price paid with interest from
the date of payment. Prior to completion of this conditional sale, the land is
being leased to MEC by Magna International for a nominal amount.

MEC granted a limited term option to Magna International to reacquire a
parcel of land in Austria for a fixed price equal to its book value of 50
million Austrian Schillings (approximately $3.7 million). This option was
exercised during 2000.

MEC sold approximately three acres of land in Aurora, Ontario to The Alpen
House Limited in October 2000 for a sale price of approximately $200,000.

During the year ended December 31, 2000, MEC sold approximately 24.5 acres
of land in Vaughan, Ontario to Magna International for a sale price of
approximately $5.8 million which was approximately $1.4 million, net of tax,
in excess of its book value and has been recorded as contributed surplus.

On October 31, 2001, MEC completed the sale of two non-core real estate
properties in Milton, Ontario to Magna International, which resulted in total
proceeds of $12.4 million, a gain, before taxes, of approximately $10.0
million and an after-tax gain of approximately $6.0 million. The gain after
tax has been accounted for as contributed surplus.

As a result of the Reorganization, MEC acquired shares in a subsidiary
which has been named as a defendant in a class action suit brought in United
States District Court by various plaintiffs. An Austrian subsidiary of Magna
International has agreed to indemnify this subsidiary for any damages or
expenses associated with this case.

A subsidiary of Magna International has agreed to indemnify MEC in respect
of environmental remediation costs and expenses relating to existing
conditions at some of MEC's Austrian real estate properties.

Access Fees and Rights of First Refusal

Pursuant to access arrangements which are effective as of March 1, 1999 and
January 1, 2001, respectively, Magna International is paying MEC an annual fee
of 2.5 million Euros to access the Fontana Sports golf course and related
recreational facilities in Oberwaltersdorf, Austria, and an annual fee of
CDN$5.0 million to access the Magna Golf Club in Aurora, Ontario, for Magna
International-sponsored corporate and charitable events as well as for
business development purposes. During the year ended December 31, 2001, Magna
International paid MEC $5.3 million in access fees. The access fee relating to
Fontana Sports is payable until March 1, 2004. The access fee relating to the
Magna Golf Club is payable until December 31, 2003. Each of the Fontana Sports
golf course and the Magna Golf Club is subject to a right of first refusal in
favor of Magna International if MEC decides to sell it.

For more detail about MEC's relationship with Magna International and
related transactions, please see "Certain Relationships and Related
Transactions" in MEC's Registration Statement on Form S-1 (No. 333-70520), as
amended, which section is incorporated herein by reference.

EXECUTIVE COMPENSATION

The following tables and narratives discuss the compensation paid in fiscal
years 2001 and 2000 to those who served as MEC's Chief Executive Officer
during 2001 and to the four other most highly compensated executive officers
in 2001 (collectively, the "Named Executive Officers"). The indicated
compensation is only for the period the designated executive officer served in
such capacity.

SUMMARY COMPENSATION TABLE

Annual Compensation (1) Long Term Compensation
---------------------------- ----------------------------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Salary Bonus Compensation Awards Options Payout Compensation
Name & Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------------------- ---- ------- ------- ------------ ---------- ---------- ------ ------------

Frank Stronach (2) 2001 -- -- -- -- -- -- --
Chairman 2000 -- -- -- -- 1,000,000 -- --
Jim McAlpine (3)(4) 2001 409,600 800,000 -- -- 500,000 -- --
President and Chief 2000 -- -- -- -- -- -- --
Executive Officer
Donald Amos (5) 2001 359,600 480,565 -- -- -- -- --
Executive Vice-President 2000 131,250 131,250 -- -- 300,000 -- --
and Chief Operating
Officer
Graham J. Orr (6) 2001 359,600 480,565 -- -- -- -- --
Executive Vice-President 2000 20,000 272,927 -- -- 300,000 -- --
and Chief Financial
Officer
Gary M. Cohn (7) 2001 234,600 120,141 -- -- 25,000 -- --
Vice-President, Special 2000 25,000 12,500 -- -- 75,000 -- --
Projects and Secretary
Edward C. Hannah (3)(8) 2001 182,900 -- -- -- 100,000 -- --
Vice-President and 2000 -- -- -- -- -- -- --
General Counsel

(1) The aggregate amount of perquisites and other personal benefits,
securities or property does not exceed the lesser of $50,000 or 10% of the
total of annual salary and bonus for any of the Named Executive Officers.

(2) Mr. Stronach served as Chief Executive Officer on an interim basis without
compensation (apart from his stock options previously granted) from
December 11, 2000 to January 9, 2001.

(3) The designated executive officer did not serve in such capacity in 2000.

(4) Mr. McAlpine became an executive officer on January 9, 2001.

(5) Mr. Amos became an executive officer on August 3, 2000.

(6) Mr. Orr became an executive officer on October 1, 2000. His compensation
for the last three months of fiscal 2000 was paid by an affiliate of MEC.

(7) Mr. Cohn became an executive officer on November 13, 2000.

(8) Mr. Hannah became an executive officer on June 6, 2001.

Option Grants in Last Fiscal Year

% of Total Options
Number of Securities Granted to Exercise or Grant Date
Underlying Options Employees in Base Price (2) Value (3)
Name Granted (1) (#) Fiscal Year ($/Share) Expiration Date ($ /Share)
- ---- -------------------- ------------------ -------------- ----------------- ----------

Frank Stronach.......... -- -- -- -- --
Jim McAlpine............ 500,000(4) 40.0 4.9375 December 31, 2009 2.54
Donald Amos............. -- -- -- -- --
Graham J. Orr........... -- -- -- -- --
Gary M. Cohn............ 25,000(5) 2.0 4.9375 December 31, 2009 1.99
Edward C. Hannah........ 100,000(4) 8.0 6.96 July 31, 2011 3.59

(1) Options granted were options to acquire shares of Class A Subordinate
Voting Stock.

(2) Market price on date of grant.

(3) Calculated using the Black-Scholes pricing model. Underlying assumptions
used in the calculation include a risk-free interest rate of 4.5 percent
per annum, dividend yields of zero percent, volatility factors of the
expected market price of 0.542 and expected lives from 3 to 5 years. MEC
has elected to illustrate the potential realizable value using the Black-
Scholes pricing model as permitted by the rules of the Securities and
Exchange Commission. This does not represent MEC's estimate or projection
of future stock price or of the assumptions utilized; actual gains, if
any, upon future exercise of any of these options will depend on the
actual performance of the Class A Subordinate Voting Stock.

(4) Vested as to one-fifth of the securities underlying the options granted on
the date of grant and an additional one-fifth on each of the first four
anniversaries of the date of grant.

(5) Vested as to one-third of the securities underlying the options granted on
the date of grant and an additional one-third on each of the first and
second anniversaries of the date of grant.

Fiscal Year End Option Values

Number of Unexercised Value of Unexercised
Options at Fiscal Year- Options at Fiscal Year-
End End
(#) ($) (1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------

Frank Stronach.............. 666,667 333,333 416,667 208,333
Jim McAlpine................ 100,000 400,000 206,250 825,000
Donald Amos................. 150,000 150,000 139,500 139,500
Graham J. Orr............... 200,000 100,000 175,000 87,500
Gary M. Cohn................ 58,333 41,667 85,688 68,625
Edward C. Hannah............ 20,000 80,000 800 3,200

(1) The closing sale price of Class A Subordinate Voting Stock as reported on
the Nasdaq National Market on December 31, 2001 was $7.00 per share. Value
is calculated by multiplying (a) the difference between $7.00 and the
option exercise price by (b) the number of shares of Class A Subordinate
Voting Stock underlying the options.

Employment Agreements and Termination of Employment Agreements

MEC has entered into employment arrangements and agreements with certain
executive officers as described below:

MEC has an employment arrangement with Mr. McAlpine which provides for a
base salary of $409,600 per annum, a guaranteed annual bonus of $400,000 (to
be superseded by a mutually agreeable profit-sharing arrangement to be
established during 2002), a discretionary bonus based on personal performance,
confidentiality obligations, non-competition covenants and a termination
provision permitting his employment to be terminated by MEC by giving minimum
advance written notice of termination or by paying a retiring allowance
instead. Mr. McAlpine's arrangement also provides for the issuance of stock
options to purchase 500,000 shares of MEC's Class A Subordinate Voting Stock.
The grant of these stock options, with an exercise price of $4.9375 per share,
was approved by the Corporate Governance, Human Resources and Compensation
Committee of MEC's Board of Directors on February 19, 2001.

MEC has entered into an employment agreement with Mr. Amos which provides
for a base salary of $359,600 per annum, an annual bonus based on a percentage
of pre-tax profits (with a guaranteed minimum of $350,000), a discretionary
bonus based on personal performance, confidentiality obligations, non-
competition covenants and a termination provision permitting his employment to
be terminated by MEC by giving minimum advance written notice of termination
or by paying a retiring allowance instead. Mr. Amos' contract also provides
for the issuance of stock options to purchase 300,000 shares of MEC's Class A
Subordinate Voting Stock. The grant of these stock options, with an exercise
price of $6.07 per share, was approved by the Corporate Governance, Human
Resources and Compensation Committee of MEC's Board of Directors on August 14,
2000.

MEC has entered into an employment agreement with Mr. Orr which provides
for a base salary of $359,600 per annum, an annual bonus based on a percentage
of pre-tax profits (with a guaranteed minimum of $350,000), a discretionary
bonus based on personal performance, confidentiality obligations, non-
competition covenants and a termination provision permitting his employment to
be terminated by MEC by giving minimum advance written notice of termination
or by paying a retiring allowance instead. Mr. Orr's contract also provides
for the issuance of stock options to purchase 300,000 shares of MEC's Class A
Subordinate Voting Stock. The grant of these stock options, with an exercise
price of $6.125 per share, was approved by the Corporate Governance, Human
Resources and Compensation Committee of MEC's Board of Directors on October
10, 2000.

MEC has entered into employment contracts with the other members of its
senior management. These employment contracts generally provide for base
salaries and annual bonuses (in some cases based on a specified percentage of
MEC's pre-tax profits before profit sharing), confidentiality obligations and
non-competition covenants. Each of these employment contracts provide that MEC
may terminate the senior officer's employment by giving minimum advance
written notice of termination or by paying a retiring allowance instead. With
the approval of the Corporate Governance, Human Resources and Compensation
Committee of MEC's Board of Directors, some of MEC's senior officers have
received options to acquire shares of MEC's Class A Subordinate Voting Stock
at the fair market value of the shares of such stock on the date of grant of
the option.

MEC's Corporate Constitution provides that, beginning with the fiscal year
commencing January 1, 2004, the aggregate incentive bonuses (which may be paid
in cash or deferred for payment in future years or which may be paid in Class
A Subordinate Voting Stock) paid or payable to senior management in respect of
any fiscal year shall not exceed 6% of MEC's pre-tax profits before profit
sharing for that fiscal year.

MEC is not required to make payments under any employment contract or
arrangement with its senior officers in the event of a change in control of
MEC.

Long-Term Incentive Plan

MEC has adopted a long-term incentive plan, referred to as the "Long-Term
Incentive Plan", the purposes of which are: (i) to align the interests of the
Company's stockholders and the recipients of awards under the Long-Term
Incentive Plan by giving recipients of awards an interest in MEC's growth and
success; (ii) to enable the Company to attract and retain directors, officers,
employees, consultants, independent contractors and agents; and (iii) to
motivate these persons to act in the Company's long-term best interests and
those of its stockholders. Under the Long-Term Incentive Plan, MEC may grant
nonqualified stock options, incentive stock options, free standing stock
appreciation rights, tandem stock appreciation rights, restricted stock, bonus
stock and performance shares.

The Long-Term Incentive Plan is administered by the Corporate Governance,
Human Resources and Compensation Committee (the "Committee") of the Board of
Directors, which consists of at least two outside directors. The members of
the Committee serve at the pleasure of the Board of Directors.

Nonqualified Stock Options

Each of the Company's outside directors was granted a nonqualified stock
option to purchase 10,000 shares of Class A Subordinate Voting Stock
immediately following such director's election to MEC's Board of Directors,
and will be entitled to another such grant immediately following the
completion of each five-year period of continuous service as a director. Such
stock options will vest as to 20% of the shares of Class A Subordinate Voting
Stock included in each such grant on the date of such grant, with an
additional 20% of the shares vesting on the second, third, fourth and fifth
anniversaries of such grant. On March 5, 2000, the Board approved stock
options for each outside director to purchase 10,000 shares of Class A
Subordinate Voting Stock at an exercise price of $4.875 per share pursuant to
the provisions of the Long-Term Incentive Plan.

Incentive Stock Options

Incentive stock options may be granted only to the Company's employees and
employees of its subsidiaries. If the recipient of an incentive stock option
owns more than ten percent of the voting power of all shares of MEC's

common stock, the option will not be exercisable later than five years after
its grant date and the exercise price of the option will not be less than the
greater of (i) the price required by the Internal Revenue Code (currently 110%
of the fair market value of MEC's Class A Subordinate Voting Stock on the
option's grant date) and (ii) the price of the last traded board lot of shares
of MEC's Class A Subordinate Voting Stock sold on The Toronto Stock Exchange
prior to the date of grant of the option.

Awards to Named Executive Officers

No awards were made to the Named Executive Officers under MEC's Long-Term
Incentive Plan in 2001.

Bonus Stock and Restricted Stock Awards

The Long-Term Incentive Plan permits the Committee to grant bonus stock
awards, which are vested upon grant, and restricted stock awards which are
subject to a restriction period. An award of restricted stock may be subject
to performance measures during the restriction period. Unless the Committee
decides otherwise, the holder of a restricted stock award will have rights as
an MEC stockholder, including the right to vote and receive dividends with
respect to the shares of restricted stock. Dividends, however, will be subject
to the same restrictions that apply to the shares for which the dividend was
paid.

Performance Share Awards

The Long-Term Incentive Plan also permits the Committee to grant
performance shares. Each performance share is a right, subject to the
attainment of performance measures during a performance period, to receive one
share of Class A Subordinate Voting Stock, which may be restricted stock, or
the fair market value of the performance share in cash. Before a performance
share award is settled in shares of Class A Subordinate Voting Stock, the
holder of the award will have no rights as an MEC stockholder with respect to
the shares of stock subject to the award. All the terms relating to the
satisfaction of performance measures and the termination of the performance
period relating to a performance share award, or any cancellation or
forfeiture of the performance share award upon the holder's termination of
employment with MEC, whether by reason of disability, retirement, death or
other termination, shall be contained in the award agreement.

Performance Goals. Under the Long-Term Incentive Plan, the vesting or payment
of performance share awards and certain awards of restricted stock will be
subject to the satisfaction of certain performance objectives and criteria.
These objectives and criteria may include one or more of the following: the
attainment by a share of Class A Subordinate Voting Stock of a specified fair
market value for a specified period of time, earnings per share, return to
stockholders (including dividends), return on equity, earnings, revenues,
market share, cash flow or cost reduction goals, or any combination of these
criteria.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 and Securities and
Exchange Commission regulations require MEC's directors, certain officers and
greater than ten percent stockholders to file reports of ownership on Form 3
and changes in ownership on Form 4 and Form 5 with the Securities and Exchange
Commission.

Based solely on its review of copies of such reports received or written
representations from such executive officers, directors and ten percent
stockholders, MEC believes that all Section 16(a) filing requirements
applicable to its directors, executive officers and ten percent stockholders
were complied with during 2001.

Comparative Stock Performance Graph

Quarterly Closing Share Price: MEC vs Nasdaq 100
Years 2000 and 2001

[LINE GRAPH CHART]

CORPORATE GOVERNANCE, HUMAN RESOURCES
AND COMPENSATION COMMITTEE REPORT

The Corporate Governance, Human Resources and Compensation Committee of the
Board was formed on March 4, 2000. For a discussion of the composition and
mandate of this Committee, see "THE BOARD OF DIRECTORS AND COMMITTEES OF THE
BOARD -- Corporate Governance, Human Resources and Compensation Committee"
above.

MEC has adopted many of the organizational and operating policies and
principles utilized by Magna International for many years, certain of which
have been embodied in MEC's Corporate Constitution. MEC's Corporate
Constitution balances the interests of stockholders, employees and management
by specifically defining the rights of employees (including management) and
investors to participate in MEC's profits and growth, and reflects certain
operational and compensation philosophies which align employee (including
management) and stockholder interests. These philosophies and MEC's Corporate
Constitution assist in maintaining an entrepreneurial environment and culture
at MEC. MEC wishes this entrepreneurial culture to flourish, and therefore
intends to apply compensation philosophies which will enhance its ability to
attract, retain and motivate skilled, entrepreneurial employees at all levels
of the MEC organization, while assisting in the alignment of the interests of
MEC's stockholders and employees.

Many of MEC's executive officers (including three of the Named Executive
Officers) receive a remuneration package consisting of a base salary and an
annual incentive bonus based, in part, on direct profit participation.

This Committee, in accordance with its mandate, is required to consider and
apply, among other things, the historical operating philosophies and policies
of the Company, including MEC's Corporate Constitution, direct profit
participation and use of stock options and other stock rights granted under
the Long-Term Incentive Plan, to align the interests of management and
stockholders and to create shareholder value. This Committee, therefore,
applies the following criteria in determining or reviewing recommendations for
compensation for management, including where applicable, the executive
officers of MEC:

Base Salaries. Base salaries should not be customarily increased on an
annual basis. As a result, fixed compensation costs are contained, with
increased financial rewards coming principally from variable incentive
compensation.

Incentive Compensation. The amount of direct profit participation and,
therefore, the amount of compensation "at risk," increases with the level of
performance and/or responsibility. Due to the variable nature of profit
participation, incentive cash compensation should generally be reduced in
cyclical or other down periods due to reduced profits. As a result, executive
officers are encouraged to emphasize consistent profitability over the medium
to long term to sustain stable levels of annual compensation.

Under MEC's Corporate Constitution, beginning with the fiscal year
commencing January 1, 2004, the aggregate incentive bonuses paid or payable to
"Corporate Management" (as defined in the Corporate Constitution) in respect
of any fiscal year shall not exceed 6% of "Pre-Tax Profits Before Profit
Sharing" (as defined in the Corporate Constitution) for such year.

Long-Term Incentives. Upon the grant of options under the Long-Term
Incentive Plan, extended vesting and exercise periods are sometimes used to
encourage option recipients to remain as employees or senior officers over the
long term.

Chief Executive Officer Compensation. From December 11, 2000 to January 9,
2001, Mr. Frank Stronach served as Chief Executive Officer of MEC on an
interim basis without compensation (apart from his stock options previously
granted). Mr. Jim McAlpine was appointed President and Chief Executive Officer
on January 9, 2001. The employment contract of Mr. McAlpine, which was
reviewed and approved by this Committee, provides for a base salary of
$409,600 per year, a guaranteed annual bonus of $400,000 and a discretionary
bonus based on personal performance. Mr. McAlpine was awarded a $400,000
discretionary bonus, with the approval of this Committee, in recognition of
his service and accomplishments in several areas during 2001.

Written Employment Contracts. MEC uses written employment contracts with
its executive officers and other members of management to reflect the terms of
their employment, including compensation, severance, stock ownership (if
applicable), confidentiality and non-competition arrangements.

The annual, long term and other compensation referred to in the Summary
Compensation Table above for the Named Executive Officers reflect the
compensation and benefits provided to them under their respective employment
contracts and arrangements.

MEC believes that its objectives for growth, financial returns and growth
in shareholder value require that it offer meaningful financial rewards for
its executive and senior officers which are contingent on the continued
profitability of the Company.

Corporate Governance, Human Resources and Compensation Committee Members

William G. Davis (Chairman)
James Nicol
Gino Roncelli

AUDIT COMMITTEE REPORT

The Audit Committee consists of three independent directors. The Audit
Committee's duties and responsibilities are set forth in a written charter
(the "Audit Committee Charter") adopted by the Board. The Audit Committee
Charter is attached to this Proxy Statement as Exhibit A.

The Audit Committee has reviewed and discussed with management MEC's
audited financial statements as of and for the fiscal year ended December 31,
2001.

The Audit Committee has discussed with MEC's independent public
accountants, Ernst & Young LLP (the "Independent Auditors"), the matters
required to be discussed by Statement on Auditing Standards No. 61,
Codification of Statements on Accounting Standards, as amended.

The Audit Committee has received and reviewed the written disclosures and
the letter from the Independent Auditors required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
amended, and has discussed with the Independent Auditors their independence.

Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the financial statements referred
to above be included in MEC's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001.

Audit Committee Members

J. Terrence Lanni (Chairman)
Peter M. George
Edward C. Lumley

ITEM B -- RATIFICATION OF APPOINTMENT OF AUDITORS
(Item B on the Proxy Form)

The Audit Committee of the Board of Directors has recommended, and the
Board of Directors has appointed, Ernst & Young LLP, certified public
accountants, as auditors of MEC for the fiscal year ending December 31, 2002.
During the fiscal year ended December 31, 2001, Ernst & Young LLP examined
MEC's consolidated financial statements, made limited reviews of the interim
financial reports, reviewed filings with the Securities and Exchange
Commission and provided general advice regarding related accounting matters.

Fees billed to MEC by Ernst & Young LLP

Audit Fees. Audit fees billed to MEC by Ernst & Young LLP in respect of the
fiscal year ended December 31, 2001 for review of MEC's annual consolidated
financial statements and those financial statements included in MEC's
quarterly reports on Form 10-Q totaled $545,456.

Financial Information Systems Design and Implementation Fees. MEC did not
engage Ernst & Young LLP to provide advice regarding financial information
systems design and implementation during the fiscal year ended December 31,
2001.

All Other Fees. Fees billed to MEC by Ernst & Young LLP in respect of the
fiscal year ended December 31, 2001 for all other services rendered to MEC
totaled $473,078, which included fees of $424,508 related to income tax
compliance and planning services, review of registration statements and
reports on Form 8-K, and other regulatory matters.

The Audit Committee has considered whether the provision of the non-audit
services provided to MEC by Ernst & Young LLP in 2001 was compatible with
maintaining Ernst & Young LLP's independence and has concluded that it was.

Ratification of Appointment of Ernst & Young LLP as Auditors

The appointment of Ernst & Young LLP as auditors of MEC will be ratified at
the Annual Meeting if the number of votes cast in favor of ratification
exceeds the number of votes cast opposing it.

The shares represented by the proxies solicited by the Board of Directors
will be voted as directed on the form of proxy or, if no direction is
indicated, will be voted "FOR" ratification of Ernst & Young LLP as the
auditors of MEC.

In the event the appointment is not ratified, the Board of Directors will
consider the appointment of other independent auditors. A representative of
Ernst & Young LLP is expected to be present at the Annual Meeting on April 18,
2002, and will be available to respond to appropriate questions and to make a
statement should he or she desire to do so.

Vote Required

The Board of Directors recommends that the stockholders vote "FOR" the
ratification of the appointment of auditors.

ADDITIONAL INFORMATION

Other Action at the Meeting

The Board of Directors is not aware of any other matter to be presented for
action at the Annual Meeting. If any additional matters are properly
presented, the shares represented by a properly signed proxy form will be
voted in accordance with the judgment of the persons named on the proxy form.

Cost of Solicitation

MEC will bear the cost of soliciting proxies for the Annual Meeting. In
addition to solicitation by mail, directors, officers and other members of MEC
may solicit proxies personally or by telephone or other means of
communication. MEC will also reimburse its transfer agent for expenses in
connection with the distribution of proxy material and brokers and other
persons holding stock in their names or those of their nominees for their
reasonable expenses in sending proxy material to their principals.

Stockholder Proposals for 2003 Annual Meeting

Stockholders may submit proposals on matters appropriate for stockholder
action at MEC's annual meetings consistent with regulations adopted by the
Securities and Exchange Commission and MEC's bylaws. Proposals intended for
inclusion in the proxy statement for the 2003 Annual Meeting must be received
by MEC not later than November 18, 2002. Proposals should be directed to the
attention of the Corporate Secretary's Office, Magna Entertainment Corp., 337
Magna Drive, Aurora, Ontario, Canada L4G 7K1.

2001 Annual Report on Form 10-K

A copy of MEC's Annual Report on Form 10-K, including our 2001 financial
statements, may be obtained, without charge, by addressing a request to the
Corporate Secretary's Office, Magna Entertainment Corp., 337 Magna Drive,
Aurora, Ontario, Canada L4G 7K1.

Stockholders are urged to send in their proxies without delay.

By Order of the Board of Directors

s/Gary M. Cohn (signed)

Gary M. Cohn

Vice President, Special Projects and
Secretary

March 12, 2002

EXHIBIT A -- AUDIT COMMITTEE CHARTER

WHEREAS:

A. The Corporation is required by applicable law to have an Audit
Committee; and

B. the Board of Directors of the Corporation (the "Board") wishes to create
an Audit Committee (the "Committee"), establish the responsibilities of
the Committee relating to audit related matters and delegate certain
powers to the Committee with respect to such matters.

RESOLVED THAT:

1. The Committee shall be composed of not less than three (3) nor more than
five (5) members who shall be financially literate and at least one of
whom shall have accounting or related financial management experience.
Each of such members shall meet the independence standards required by
the rules of the Securities and Exchange Commission ("SEC") and The
Nasdaq Stock Market, Inc. ("NASDAQ") which are in effect from time to
time. In addition, members of the Committee shall have no relationships
that could potentially interfere with the exercise of their independence
from management and the Corporation. The Board shall annually appoint
the members of the Committee and appoint a Chairman from amongst those
appointed, to hold office until the next annual meeting of shareholders
of the Corporation. The members of the Committee shall serve at the
pleasure of the Board and vacancies occurring from time to time shall be
filled by the Board.

2. A majority of the members of the Committee shall constitute a quorum and
all actions of the Committee shall be taken by a majority of the members
present at the meeting.

3. Meetings of the Committee shall be called by the Chairman of the
Committee, and may be called by any member of the Committee, by the
Chairman, the Chief Executive Officer, the President, the Chief
Financial Officer or the principal accounting officer of the Corporation
or by the Auditor of the Corporation.

4. The Secretary of the Corporation shall act as Secretary of the Committee
and shall provide the Auditor, the Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, the principal
accounting officer of the Corporation and each member of the Committee
with notice of each meeting of the Committee and each shall be entitled
to attend each meeting.

5. The Committee shall meet with Executive Management and the Auditor of
the Corporation within:

(a) forty-five (45) days following the end of each of the first three
fiscal quarters of the Corporation, but in any event prior to the
release of the financial results for each such quarter, to review
and discuss the financial results of the Corporation for the
preceding fiscal quarter and report upon such results to the Board;
and

(b) within ninety (90) days following the fiscal year-end of the
Corporation, but in any event prior to the release of the financial
results for the fiscal year, to review and discuss the financial
statements of the Corporation for the preceding fiscal year and
report thereon to the Board and the shareholders as required by
applicable law.

6. With respect to audit related matters and in addition to the duties and
obligations of the Committee under applicable law, the Committee may
examine and consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation to the
financial affairs of the Corporation as the Committee may deem necessary
or desirable including, without limitation, the following:

(a) examine and approve the objectives and general scope of the audit,
including the overall audit plan, the proposed timing and completion
dates together with the estimated audit fees, and review the audit
plan with the Auditor;

(b) satisfy itself that management has established and is maintaining an
adequate system of internal controls, meet with and review
significant reports of the internal auditors and external Auditor
relating to such internal controls and the administrative
efficiencies in the financial reporting process, and review the
appointment of the senior internal auditing executives, the scope of
the internal audit department's work plan and the staffing of the
internal audit department;

(c) review the selection, application and significant amendment by the
Corporation of accounting principles and practices and related
judgments to ensure that they are appropriate and consistent with
the Corporation's needs and applicable requirements, and review and
discuss the same with the Auditor;

(d) monitor, examine and assess, on behalf of the Board, any potential
illegal, improper or fraudulent behaviour which may have a negative
effect on the integrity or reputation of the Corporation, review the
findings of any regulatory agencies in relation to the financial
affairs of the Corporation, and monitor compliance with the
Corporation's Code of Conduct which may be in effect from time to
time;

(e) if satisfied following its review and discussion of the annual
audited financial statements with management and the Auditor, to
recommend to the Board the inclusion of such audited financial
statements in the Corporation's Form 10-K.

(f) satisfy itself that where there are significant unsettled issues
that do not affect the audited financial statements (e.g.
disagreements regarding correction of internal control weaknesses or
the application of accounting principles to proposed transactions),
that there is an agreed course of action leading to the resolution
of these matters;

(g) ensure that there are adequate procedures for the review of interim
financial statements, including timely review by the Auditor, and
other financial information prior to their distribution to the
shareholders of the Corporation;

(h) satisfy itself generally that there is a good working relationship
between management and the Auditor and monitor, examine and assess
any material differences of opinion between them;

(i) evaluate and make recommendations to the Board as to the appointment
or re-appointment of the Auditor and review the Auditor's
independence, including the receipt at least annually of a
disclosure report from the Auditor regarding the Auditor's
independence as required by Independence Standards Board Standard
No. 1, and due consideration of whether the provision of non-audit
services by the Auditor, if applicable, is compatible with
maintaining the Auditor's independence;

(j) approve the Auditor's actual fees for each fiscal year and review
the performance of the Auditor in carrying out its mandate;

(k) assess with management the Corporation's major risk exposures and
the Corporation's actions to monitor and control such exposures;

(l) review and assess the Audit Committee Charter annually and make
recommendations to the Board for such changes to the Charter as the
Audit Committee shall consider necessary or desirable;

(m) discuss with the Auditor the matters required to be discussed by the
Statement of Auditing Standards No. 61, 89 and 90 relating to the
conduct of the audit;

(n) prepare the Audit Committee report as and when required by the rules
of the SEC to be included in the Company's annual proxy statement;

(o) meet separately with the internal auditors and the external Auditor,
with and without management present, to discuss the result of their
examinations on a periodic basis; and

(p) perform such other functions as requested or delegated by the Board
from time to time.

7. For the purpose of performing their audit related duties, the members of
the Committee shall have full access to and the right to inspect all
books, records and facilities of the Corporation and shall be permitted
to discuss such books, records and facilities and any other matters
relating to the financial position of the Corporation with the
employees, officers and the Auditor of the Corporation.

8. The Committee may retain outside financial, legal and other experts at
the expense of the Corporation where reasonably required to carry out
the Committee's responsibilities.

9. Notwithstanding the foregoing and subject to applicable law, the
Committee shall not be responsible to plan or conduct audits or to
determine that the Corporation's financial statements are complete and
accurate and are in accordance with generally accepted accounting
principles as these are the responsibility of management and the
Auditor. The primary responsibility of the Committee is to oversee the
Corporation's financial reporting process on behalf of the Board and
report thereon to the Board.