UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 30, 2011
Six Flags Entertainment Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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1-13703 |
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13-3995059 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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924 Avenue J East |
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Grand Prairie, Texas |
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75050 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(972) 595-5000
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(a) The Company has established a program (the “Project 500 Program”) pursuant to which executive officers and other employees may be granted awards (a “Project 500 Award”), under the Six Flags Entertainment Corporation Long-Term Incentive Plan (the “Equity Plan”). The Project 500 Program sets as a goal attaining $500 million of Modified EBITDA (as defined in the Company’s financial statements) by 2015 and the number and timing of any issuances of common stock under the Project 500 Program will depend on progress toward the $500 million target and the timing thereof. The aggregate share payout under the Project 500 Program if the $500 million target is achieved in 2015 would be 1,400,000 shares but could be more or less depending on achievement and the timing thereof. The issuance date of any shares pursuant to Project 500 Awards will be after the end of the year in which the performance is achieved. Exhibit 99.1 attached hereto sets forth the base number of shares under the Project 500 Program that each of the Company’s executive officers would receive assuming the $500 million of Modified EBITDA target is achieved in 2015.
The Project 500 Awards made to Messrs. Reid-Anderson and Weber are subject to stockholder approval of an amendment to the Equity Plan to increase the number of shares available under the Equity Plan.
The above summary of the material terms of the Project 500 Program does not purport to be complete and is qualified in its entirety by reference to the Overview and the form of award agreement, copies of which are filed as Exhibit 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein as well as the Equity Plan which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2010 and is incorporated by reference herein.
(b) The Company also adopted a director cash retainer deferral program under the Equity Plan. This program allows members of the Board of Directors of the Company (the “Board”) to elect to receive stock units under the Equity Plan in lieu of the cash compensation for such member’s services as a director in 2012 and thereafter. The cash compensation that a director may elect to receive in stock units is only the cash compensation that the director otherwise would receive for services as a director of the Company and does not include any cash compensation for being the lead independent director, or chairman or member of any committee of the Board. The conversion of stock units into shares and the distribution of such shares under this program will occur on the first business day following the thirtieth day after a director’s service as a director terminates.
The above summary of the material terms of the director cash retainer deferral program does not purport to be complete and is qualified in its entirety by reference to the Equity Plan and Director Deferral Election, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated by reference herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SIX FLAGS ENTERTAINMENT CORPORATION |
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By: |
/s/ Lance C. Balk |
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Name: Lance C. Balk |
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Title: Executive Vice President and General Counsel |
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Date: September 1, 2011 |
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Exhibit 10.1
Project 500 Program
PROJECT 500 AWARDS UNDER
SIX FLAGS ENTERTAINMENT CORPORATION
LONG-TERM INCENTIVE PLAN
Overview
The objective of the Project 500 Awards under the Six Flags Entertainment Corporation Long-Term Incentive Plan (“Project 500 Awards”) is to provide management with an equity incentive to achieve $500 million of Modified EBITDA in a calendar year (the “EBITDA Target”) by December 31, 2015. An aggregate of 1,400,000 shares would be issued if the EBITDA Target is achieved in calendar 2015, to the extent provided in the applicable Project 500 Awards agreement.
The Project 500 Awards provide management with incentive to reach the EBITDA Target earlier by providing: (a) a 15% early achievement bonus (1,610,000 total shares) if the EBITDA Target is met for calendar year 2014 and (b) a 35% early achievement bonus (1,890,000 total shares) if the EBITDA Target is met for calendar year 2013, all to the extent provided in the applicable Project 500 Awards agreement.
A minimum achievement hurdle of 95% ($475 million) applies and any overperformance above $475 million would be credited to the immediately subsequent calendar year.
The terms and conditions of the Project 500 Awards are set forth in a separate Project 500 Awards agreement that shall apply in the event of any conflict with this Overview.
Exhibit 10.2
PROJECT 500
PERFORMANCE AWARD UNDER
SIX FLAGS ENTERTAINMENT CORPORATION
LONG-TERM INCENTIVE PLAN
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Award |
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Eligibility : On the terms in the documents governing the Project 500 Award, Mr. / Ms. (“ Executive ”) will be granted a Project 500 Award on the Grant Date after the Company achieves $500 million of Modified EBITDA in the 2013, 2014 or 2015 calendar year (“ Target EBITDA ”) provided such Executive is employed on the first day of the calendar year immediately following the calendar year during which such Target EBITDA is achieved. |
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Target Award : The number of shares included in the Executive’s Project 500 Award if the Target EBITDA is achieved in calendar year 2015 and there has been no Early Achievement Award or Partial Achievement Award will be equal to shares (“ Target Award ”). |
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Early Achievement Awards : |
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2013: If Target EBITDA is achieved in calendar year 2013, the Target Award is increased by 35% and a grant of [135% x Target Award] shares will be made on the Grant Date. No additional grants of shares under this Performance Award would be made. |
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2014: If the Target EBITDA is achieved in calendar year 2014 and there was no 2013 Partial Achievement Award, the Target Award is increased by 15% and a grant of [115% x Target Award] shares will be made on the Grant Date. No additional grants of shares under this Performance Award would be made. |
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Partial Achievement Awards : |
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2013: If $475 million of Modified EBITDA (“ Partial Achievement EBITDA ”) but not Target EBITDA is achieved in calendar year 2013, a grant of [75% x 135% x Target Award] shares ( “ 2013 Partial Achievement Award ”) will be made on the Grant Date. |
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The excess by which the Modified EBITDA for calendar year 2013 exceeds $475 million is referred to as “ Excess 2013 Modified EBITDA ”. |
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2014: A “ 2014 Partial Achievement Award ” is: |
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If no 2013 Partial Achievement Award was earned, then if the Modified EBITDA in calendar year 2014 equals or exceeds $475 million of Modified EBITDA but Target EBITDA is not achieved in calendar year 2014, a grant of [50% x 115% x Target Award] shares will be made on the Grant Date. |
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If a 2013 Partial Achievement Award was earned, then if Modified EBITDA in calendar year 2014 equals or exceeds (i) $475 million less (ii) the Excess 2013 Modified EBITDA, a grant of [25% x 115% x Target Award] shares will be made on the Grate Date. No additional grants of shares under this Performance Award would be made. |
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The excess by which the Modified EBITDA for calendar year 2014 exceeds $475 million is referred to as “ Excess 2014 Modified EBITDA ”. |
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2015 : A “ 2015 Partial Achievement Award ” is: |
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If neither a 2014 Partial Achievement Award nor a 2013 Partial Achievement Award was earned, then if Modified EBITDA in calendar year 2015 equals or exceeds $475 million but Target EBITDA is not achieved in calendar year 2015, a grant of [50% x Target Award] shares will be made on the Grant Date. No additional grants of shares under this Performance Award would be made. |
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If a 2014 Partial Achievement Award was earned but no 2013 Partial Achievement Award was earned, then if Modified EBITDA in calendar year 2015 equals or exceeds (i) $475 million less (ii) the Excess 2014 Modified EBITDA, a grant of [50% x Target Award] shares will be made on the Grant Date. No additional grants of shares under this Performance Award would be made. |
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Grant Date |
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The grant date of any Project 500 Award will be the date of the Compensation Committee’s certification of the achievement of the Modified EBITDA required for the applicable Target Award, Early Achievement Award or Partial Achievement Award after completion of the Audit Committee’s review of the Company’s audited financial statements for the applicable calendar year. Such certification and grant shall occur during the calendar year following the calendar year during which the requisite Modified EBITDA was achieved. To receive a grant of shares under the Project 500 Award, (i) the Company must have a profit for at least one of the 2013, 2014 or 2015 calendar years and (ii) unless otherwise determined by the Compensation Committee, the Executive must be employed by the Company or its affiliates on the first day of the calendar year immediately following the calendar year during which the requisite Modified EBITDA was achieved. |
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Modified
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Modified EBITDA has the meaning contained in the notes to the financial statements filed with the Company’s quarterly earnings releases, subject to potential adjustments by the Compensation Committee as set forth in the following sentence. In the event of acquisitions, dispositions, extraordinary or other unusual or one-time transactions and other events set forth in Section 9(d)(ii) of the Long-Term Incentive Plan, the Compensation Committee, in consultation with the Audit Committee, shall equitably adjust the applicable Modified EBITDA level(s) necessary to earn an Early Achievement Award, Partial Achievement Award and Target Award. |
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[Stockholder
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Executive understands and acknowledges that this Project 500 Award is contingent upon and subject to the receipt by the Company of stockholder approval of an amendment to the Long-Term Incentive Plan to increase the number of shares available under the Long-Term Incentive Plan and, if such stockholder approval is not obtained, this award shall be null and void — J. Reid-Anderson and A. Weber awards.] |
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Other |
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Whether a Partial Achievement Award is earned for any calendar year shall be determined prior to whether a Target Award or Early Achievement Award is earned for such calendar year. The Target Award may be earned only if no Partial Achievement Award or Early Achievement Award was earned in any calendar year. For the sake of clarity, if (i) the Target EBITDA has been achieved in either 2013 or 2014, no additional grants of shares under this Performance Award would be made after such Early Achievement Award, (ii) there has been a 2014 Partial Achievement Award, the number of shares that will be issued upon achievement of the Target EBITDA in 2015 shall be determined pursuant to the rules applicable to 2015 Partial Achievement Awards or (iii) a 2013 Partial Achievement Award is earned but no 2014 Partial Achievement Award is earned, no additional grants of shares under this Performance Award would be made after such 2013 Partial Achievement Award. |
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In the event of any significant merger or acquisition or other extraordinary transaction following the date of this Performance Award and prior to the last possible issuance of any shares, the Compensation Committee shall equitably adjust the Performance Award as it deems appropriate to preserve the value of the Performance Award to the Executive and the intended purpose of the Performance Award; provided that, notwithstanding anything to the contrary contained herein, in the event of a Change in Control, the Compensation Committee may terminate and cancel this Performance Award on such terms and conditions as it determines in its discretion, including without delivery of any shares hereunder or payment of any other consideration. |
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The terms of this Performance Award supersede any applicable employment or other agreement provision which might be construed to vary the terms set forth in this Performance Award or otherwise entitle the Executive to a Target Award, Early Achievement Award or Partial Achievement Award other than on the terms set forth in this Performance Award and the Executive waives any such provision as a condition to receiving this Performance Award. |
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The Project 500 Award may contain other customary terms and conditions determined by the Compensation Committee and is subject to the terms and conditions of the Long-Term Incentive Plan (except as modified herein). |
Exhibit 10.3
DIRECTOR DEFERRAL ELECTION
DEFERRAL : Pursuant to the Six Flags Entertainment Corporation Long-Term Incentive Plan (“Plan”) and the decision to make Deferred Share Units pursuant to Section 8 of the Plan available to directors of the Company, I hereby elect to receive stock units (“Director Deferred Share Units”) in lieu of the cash retainer for my service as a director (but not as a committee chair or member) in 2012 and thereafter as follows:
percent ( %) of cash retainer in Director Deferred Share Units.
For purposes of clarity, cash retainer for purposes of this Deferral Election refers to the cash retainer for being a director and does not include any cash retainer for being the lead independent director or chair of the Board of Directors of the Company or the chair or a member of any committee of the Board of Directors of the Company.
The number of Director Deferred Share Units shall be granted on the day of the Company’s annual meeting (or last day of the calendar year if there is no annual meeting during the calendar year) (collectively, “Annual Meeting Day”) based on the aggregate cash retainer anticipated for the calendar year divided by the closing price of a share of Six Flags Entertainment Corporation common stock (“Share”) on such Annual Meeting Day. If I do not continue as a director of the Company for the full calendar year, Director Deferred Share Units attributable to the cash retainer that would not have been paid me if I was receiving the cash retainer in cash rather than in Director Deferred Share Units for the year shall be forfeited.
I understand that I may revoke or modify this Deferral Election only with respect to director cash retainer fees payable for service on or after the first day of a subsequent calendar year and only by filing a new Deferral Election form before the first day of such subsequent calendar year in accordance with Plan procedures.
DISTRIBUTION : The distribution of Shares with respect to any Director Deferred Share Units will occur on the first business day following the 30 th day after my service as a director of the Company ceases provided that the cessation of my service as a director constitutes a “Separation from Service” for purposes of Section 409A of the Code as set forth in Section 8 of the Plan and such distribution is otherwise in compliance with Section 409A of the Code.
ACKNOWLEDGEMENT : By signing this Deferral Election, I hereby acknowledge my understanding and acceptance of the following:
1. Dividend Equivalents . I understand that I will be credited with dividend equivalents with respect to Director Deferred Share Units. Such dividend equivalents will be credited and treated as additional Director Deferred Share Units.
2. Limited Ability to Change Deferral Election . I understand that I may revoke or modify this Deferral Election only with respect to director cash retainer fees payable for service on or after the first day of a subsequent calendar year and only by filing a new Deferral Election form with the Company before the first day of such subsequent calendar year in accordance with Plan procedures. Otherwise, this Deferral Election is irrevocable with respect to Director Deferred Share Units (except in such limited circumstances as the Committee under the Plan may permit in accordance with law).
3. Company Right to Terminate Deferral Election . Notwithstanding any election made herein but only to the extent permitted by Section 409A of the Code, the Company reserves the right to transfer to me all of the Shares associated with the Director Deferred Share Units following a termination of the Plan.
4. Code Section 409A . This Deferral Election and the Director Deferred Share Units shall be construed in accordance with the terms and provisions set forth in this Deferral Election as well as the Plan and the requirements of Section 409A of the Code and the Company can unilaterally amend this Deferral Election and Director Deferred Share Units to comply with Seciton 409A of the Code. I understand that Section 409A of Code may require changes in this Deferral Election or may otherwise impact the effectiveness of this Deferral Election or may delay the timing of distribution.
5. Undertaking . I hereby agree to take whatever additional action and execute whatever additional documents the Committee under the Plan may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on me, the Director Deferred Share Units or the Shares acquired upon conversion of the Director Deferred Share Units pursuant to the provisions of this Deferral Election or the Plan.
By signing this Deferral Election, I hereby acknowledge my understanding of and agreement with all the terms and provisions set forth in this Deferral Election as well as the Six Flags Entertainment Corporation Long-Term Incentive Plan.