Employment Agreement
Exhibit 10
1. Recitals.
(a) Cedar Fair, L.P., a publicly traded Delaware limited partnership, is affiliated with several corporations and partnerships including, without limitation, Cedar Fair Management Company, Magnum Management Corp., Cedar Point of Michigan, Michigan's Adventure, Inc., Xxxxx'x Xxxxx Farm, Cedar Fair and Boeckling, L.P. (hereinafter collectively referred to as "Cedar Fair" or the "Company").
(b) Cedar Fair Management Company, an Ohio corporation, manages the day-to-day activities of, and establishes the long-term objectives for, Cedar Fair. The Board of Directors of Cedar Fair Management Company (the "Board") wishes to enter into an employment agreement with, or to cause another affiliate to enter into an employment agreement with, Xxxxxxx X. Xxxxxx (the "Executive") to be effective as of June 1, 2003 (the "Agreement").
(c) The Executive has held the position of President and Chief Executive Officer of Cedar Fair since 1986. During his tenure, Executive has consistently met or surpassed performance goals established by the Board. As the President and Chief Executive Officer, Executive has consistently improved the operating results of Cedar Fair.
- The Board desires to retain the employment of Executive in his present capacity and to assure Cedar Fair of his continued services in this capacity. The Board also desires Executive to remain active with Cedar Fair after the completion of Executive's employment with Cedar Fair.
- Executive desires to remain in the employment of Cedar Fair in his present capacity, and to remain active with Cedar Fair, and Executive is committed to serve and assist Cedar Fair on the terms provided in this Agreement.
(f) In consideration of the mutual promises contained herein and other good and valuable consideration, the Executive and Cedar Fair have entered into this Agreement.
2. Term of Employment.
Except as otherwise provided in this Agreement, Cedar Fair and the Executive agree that the Executive will remain in the employ of Cedar Fair until January 2, 2008. The "Term of Employment" shall refer to the period commencing on June 1, 2003 and ending on January 2, 2008.
3. Nature of Duties.
(a) The Executive agrees to devote his full-time to the business and affairs of Cedar Fair so as to achieve the goals and objectives set by the Board, and to use his best efforts to promote the interests of Cedar Fair and to perform faithfully and efficiently the responsibilities assigned to him in accordance with the terms of this Agreement. Executive further understands that he is governed by a duty of loyalty and fidelity to Cedar Fair by virtue of his position.
(b) Except as otherwise provided herein, Cedar Fair agrees that it will not, without the Executive's express written consent, (i) assign to the Executive duties inconsistent with his current position, duties, responsibilities and status with Cedar Fair, (ii) change his titles or offices as currently in effect. As part of a succession planning program at Cedar Fair, effective January 1, 2005, Executive, subject to Board approval, shall appoint a Chief Operating Officer.
4. Board Membership.
Executive is currently Chairman of the Board of Directors. As part of a succession planning program at Cedar Fair, Executive shall continue to be appointed to Chairman of the Board until December 30, 2008 provided he is elected a member of the Board. Thereafter, Executive will serve as member of the Board for a period of at least two more years provided he is elected to the Board.
5. Compensation.
(a) Base Salary. As compensation for Executive's services, Cedar Fair shall pay to the Executive during the term of this Agreement an annual salary ("Base Salary"). The Executive's Base Salary shall be no less than $875,000 per year and may be adjusted upwards each year in an amount determined by the Board.
(b) Incentive Compensation. During the Term of Employment, Cedar Fair agrees that Executive will be eligible to participate in the Corporate Officers Incentive Compensation Plan, the Senior Management Long-Term Incentive Compensation Plan and Equity Incentive Plans and any amendments thereto and any new Plan established subsequent to the effective date of this Agreement. Cedar Fair agrees that during the Terms of Employment, Executive shall participate in the various incentive plans on terms no less favorable then provided other senior managers and/or officers of Cedar Fair.
6. Fringe Benefits.
The fringe benefit plans currently maintained and provided by Cedar Fair in which the Executive will be eligible to participate upon the execution of this Agreement are listed in Schedule A hereto. Cedar Fair agrees that Executive shall be eligible to participate in the fringe benefit plans and other benefit programs on terms no less favorable than provided other senior managers and/or officers of Cedar Fair.
7. Business Expenses and Perquisites.
Reasonable travel, entertainment and other business expenses incurred by Executive in the performance of his duties hereunder shall be reimbursed by Cedar Fair in accordance with Cedar Fair's policies as in effect from time to time.
8. Termination by Cedar Fair Other Than for Cause.
(a) If Cedar Fair shall terminate the Executive's employment prior to January 2, 2008, other than pursuant to Section 11 hereof, then Cedar Fair shall pay to the Executive in a lump sum on the twentieth business day following the Date of Termination, the following amounts:
(i) The Executive's Base Compensation Salary through the Date of Termination; and
(ii) In lieu of any further Base Salary payments for periods subsequent to the Date of Termination, an amount equal to the present value of Executive's Base Salary that Executive would have received had he remained employed with Cedar Fair through the Term of Employment; and
(iii) In lieu of any further Incentive Compensation, an amount equal to the present value of Incentive Compensation that Executive would have received had he remained employed through the Term of Employment. For purposes of this provision, in calculating the amount of Incentive Compensation Executive would have received, the weighted average Incentive Compensation received by Executive over the prior three years shall be multiplied by the number of years (or prorations thereof) remaining from the Date of Termination through January 2, 2008; and
(iv) Executive shall become immediately vested in any Award, Option, Unit Appreciation Right, Restricted Unit Award, Performance Unit, Distribution Equivalent, Other Unit Award, or any other right, interest or option relating to Units or other securities of Cedar Fair issued to Executive, pursuant to the 2000 Equity Incentive Plan, the 2002 Long Term Plan or any amendment thereto, or any new Plan established subsequent to the effective date of this Agreement, and shall be entitled to exercise any Award, Option, Unit Appreciation Right, Restricted Unit Award, Performance Unit, Distribution Equivalent, Other Unit Award, or any other right, interest or option relating to Units or other securities, at any time on or before March 1, 2010.
9. Termination Upon Executive's Death.
In the event of Executive's death, this Agreement shall terminate and Cedar Fair shall pay to Executive's estate any compensation and benefits earned but not so yet paid as of the date of Executive's death. Cedar Fair, at its expense, shall in addition to any other life insurance currently provided to Executive, shall purchase a two million dollar term life insurance policy on the life of the Executive and permit him to designate the beneficiary. The term life insurance shall remain in effect for a period of twelve years. For purposes of this Agreement, upon his death, Executive's employment shall be deemed to have terminated by Cedar Fair other than for cause as set forth in Paragraph 8 and Executive and/or his estate shall be entitled to the compensation and benefits provided in Paragraph 8(a)(iv).
10. Termination for Disability.
Cedar Fair may terminate this Agreement for "Disability" if the Executive is "Disabled." For purposes of this Agreement, the Executive shall be considered Disabled only if, as a result of his incapacity due to physical or mental illness, he shall have been absent from his duties with Cedar Fair on a full-time basis for a period of six (6) consecutive months and a physician selected by Cedar Fair with the consent of the Executive is of the opinion that the Executive is suffering from "Total Disability" as defined in any disability insurance program maintained by Cedar Fair. Any termination of employment pursuant to the provision shall be deemed a termination by Cedar Fair other than for cause as set forth in Paragraph 8 and Executive shall be entitled to compensation and benefits as provided therein. Monetary payments received by Executive from any long term or short term disability plan maintained by Cedar Point shall be used to reduce any salary payments made by Cedar Fair pursuant to this Agreement.
11. Termination for Cause.
(a) Cedar Fair may terminate the Executive's employment for Cause. For the purposes of this Agreement, "Cause" shall mean (i) Executive's conviction of, or plea of guilty or nolo contendere to a felony or a crime of moral turpitude; (ii) upon the willful and continued failure by the Executive to substantially perform his duties with Cedar Fair which failure results in material injury or damage, including damage to the reputation of Cedar Fair; (iii) the failure of Executive to comply with the provisions of Paragraph 14 and 15 hereof; (iv) intentional theft or embezzlement from Cedar Fair; (v) the commission of a fraudulent act or practice by the Executive affecting Cedar Fair; or (vi) an act of gross negligence or gross misconduct that relates to the affairs of Cedar Point. Notwithstanding the foregoing, the Executive's employment shall not be deemed to have been terminated for cause if this termination took place as a result of (i) any act or omission the Executive reasonably and in good faith believed to have been in or not opposed to the best interests of Cedar Fair; or (ii) any act or omission in respect of which a determination be made that the Executive met the applicable standard of conduct prescribed for indemnification or reimbursement or payment of expenses under the Regulation Laws of Cedar Fair or the laws of the State of Ohio, in each case as in effect at the time of such act or omission. Further, Executive shall not be deemed to have been terminated for cause without (1) reasonable written notice ("Cause Notice") to the Executive and (ii) an opportunity for the Executive, together with his counsel, to be heard before the Board provided, that such meeting shall occur within fifteen (15) calendar days of delivery of the Cause Notice.
- Cedar Fair shall give the Executive 30 days' written notice of its intention to terminate the Executive's employment for Cause and the grounds for its decision.
- If the Executive's employment shall be terminated for Cause, Cedar Fair shall pay the Executive his Base Compensation through the Date of Termination and all Incentive Compensation earned but not as yet paid as of the Date of Termination. Cedar Fair shall have no further obligations to the Executive under this Agreement.
- Should a dispute arise between the parties to this Agreement regarding whether Executive's employment was terminated for "Cause", and if the parties cannot resolve the matter, the parties agree to submit the dispute to final and binding arbitration.
- The Executive has carefully considered the nature and extent of the restrictions upon the Executive and the rights and remedies conferred upon the Company under paragraphs 14 and 15, and hereby acknowledges and agrees that the same are reasonable in time and territory, are intended to eliminate competition which otherwise would be unfair to the Company, do not stifle the inherent skill and experience of the Executive, would not operate as a bar to the Executive's sole means of support, are fully required to protect the business interests of the Company and do not confer a benefit upon the Company disproportionate to the detriment to the Executive.
Arbitration shall be conducted by a panel of three (3) arbitrators in accordance with the rules of the American Arbitration Association. Within twenty (20) days after notice from one party to the other of the notifying party's election to arbitrate, each party shall select one (1) arbitrator. Within twenty (20) days after the selection of the two (2) arbitrators by the parties, said arbitrators shall in turn select a third arbitrator. If the two arbitrators cannot agree upon the selection of a third arbitrator, the parties agree that the third arbitrator shall be appointed by the American Arbitration Association. The three (3) arbitrators shall deliver their decision to the parties in writing within ninety (90) days after the selection of the third arbitrator. Judgment on such decision may be rendered in a court of competent jurisdiction. The costs of the arbitrators shall be paid by Cedar Fair. Should the Executive prevail in arbitration, Cedar Fair shall reimburse Executive for reasonable costs, expenses and attorney's fees incurred by Executive. Should the arbitrators decide that Executive's employment was terminated without cause, Executive understands and agrees that the arbitrators may only award Executive compensation and benefits provided for in Paragraph 8 of this Agreement. Executive expressly waives any claims for pain and suffering damages and punitive damages.
12. Other Benefits Upon Termination.
Unless the Executive is terminated for Cause, Executive shall receive and be eligible to participate, until January 2, 2008, in the Plans, fringe benefits and other benefit programs on terms no less favorable than provided to other senior managers and officers of Cedar Fair. In the event that participation in any such Plan, fringe benefits or other benefit programs is barred, Cedar Fair shall arrange to provide the Executive with benefits substantially similar to those which he otherwise would have received had he remained employed though the Term of Employment.
13. Retirement.
As an inducement for Executive to remain employed through the Term of Employment, Executive shall receive, in addition to severance and his normal and supplemental retirement benefits, lifetime health coverage benefits for himself and his spouse. The terms of the coverage shall be the same or substantially similar to coverage provided to active employees of Cedar Fair. Upon Executive's retirement, regardless of whether Executive has remained employed through the Term of Employment, Executive shall become immediately vested in any Award, Option, Unit Appreciation Right, Restricted Unit Award, Performance Unit, Distribution Equivalent, Other Unit Award, or any other right, interest or option relating to Units or other securities issued pursuant to the 2000 Equity Incentive Plan, the 2002 Long Term Plan or any amendment thereto or any new Plan established subsequent to the effective date of this Agreement and shall further be entitled to exercise any Award Option, Unit Appreciation Right, Restricted Unit, Award, Performance Unit, Distribution Equivalent, Other Unit Award or any other right, interest or option relating to Units or other securities, at any time on or before March 1, 2010.
14. Disclosure of Information.
(a) The Executive acknowledges that it is the policy of Company to maintain as secret and confidential all Confidential Information (as defined herein). The parties hereto recognize that the services to be performed by the Execute pursuant to this Agreement are special and unique, and that by reason of his employment by the Company after the effective date, the Executive will acquire, or may have acquired, Confidential Information. The Executive recognizes that all such Confidential Information is and shall remain the sole property of the Company, free of any rights of the Executive, and acknowledges that the Company has a vested interest in assuring that all such Confidential Information remains secret and confidential. Therefore, in consideration of the Executive's employment with the Company pursuant to this Agreement, the Executive agrees that at all times from after the effective date, he will not, directly or indirectly, disclose to any person, firm, company or other entity (other than the Company) any Confidential Information, except as specifically required in the performance of his duties hereunder, without the prior written consent of the Company, except to the extent that (i) any such Confidential Information becomes generally available to the public, other than as a result of a breach by the Executive of this Section 14 or by any other executive officer of the Company subject to confidentiality obligations, or (ii) any such Confidential Information becomes available to the Executive on a non-confidential basis from a source other than the Company, or its executive officers or advisors; provided, that such source is not known by the Executive to be bound by a confidentiality agreement with, or other obligation of secrecy to, the Company or another party. In addition, it shall not be a breach of the confidentiality obligations hereof if the Executive is required by law to disclose any Confidential Information; provided, that in such case, the Executive shall (a) give the Company the earliest notice possible that such disclosure is or may be required and (b) cooperate with the Company, at the Company's expense, in protecting to the maximum extent legally permitted, the confidential or proprietary nature of the Confidential Information which must be so disclosed. The obligations of the Executive under this Section 14 shall survive any termination of this Agreement. During the Term of Employment the Executive shall exercise all due and diligent precautions to protect the integrity of the business plans, customer lists, statistical data and compilation, agreements, contracts, manuals or other documents of the Company which embody the Confidential Information, and upon the expiration or the termination of the Employment Term, the Executive agrees that all Confidential Information in his possession, directly or indirectly, that is in writing or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any person, either by sample, facsimile film, audio or video cassette, electronic data, verbal communication or any other means of communication. The Executive agrees that the provisions of this Section 14 are reasonably necessary to protect the proprietary rights of the Company in the Confidential Information and its trade secrets, goodwill and reputation.
(b) For purposes hereof, the term "Confidential Information" means all information developed or used by the Company relating to the Business (as herein defined), operations, employees, customers, suppliers and distributors of the Company, including, but not limited to, customer lists, purchase orders, financial data, pricing information and price lists, business plans and market strategies and arrangements and any Strategic Plan (as defined herein), all books, records, manuals, advertising materials, catalogues, correspondence, mailing lists, production data, sales materials and records, purchasing materials and records, personnel records, quality control records and procedures included in or relating to the Business or any of the assets of the Company and all trademarks, copyrights and patents, and applications therefore, all trade secrets, inventions, processes, procedures, research records, market surveys and marketing know-how and other technical papers. The term "Confidential Information" also includes any other information heretofore or hereafter acquired by the Company and deemed by it to be confidential. For purposes hereof, the term "Business" shall mean (a) the business of amusement and water parks, (b) any other business engaged in or being developed (including production of materials used in the Company's businesses) by the Company, or being considered by the Company, at the time of the Executive's termination, and (c) any joint venture, partnership or agency arrangements relating to the businesses described in (a) and (b) above.
(c) Return of Company Property. The Executive agrees that following the termination of his employment for any reason, he shall return all property of the Company, its subsidiaries, affiliates and any divisions thereof he may have managed which is then in or thereafter comes into his possession, including, but not limited to, documents, contracts, agreements, plans, photographs, books, notes, electronically stored data and all copies of the foregoing as well as any automobile or other materials or equipment supplied by the Company to the Executive.
(d) Inventions. Any and all inventions made, developed or created by the Executive (whether at the request or suggestion of the Company or otherwise, whether alone or in conjunction with others, and whether during regular working hours or otherwise) during the period of his employment with the Company, which may be directly or indirectly useful in, or relate to, the Business of the Company, shall be promptly and fully disclosed by the Executive to the Board of Directors of the Company, and shall be the Company's exclusive property as opposed to the Executive. The Executive shall promptly deliver to the Board of Directors of the Company all papers, drawings, models, data and other material relating to any invention made, developed or created by him as aforesaid. The Executive hereby assigns any and all such inventions to the Company and hereby agrees to execute and deliver such agreements, certificates, assignments or other documents as may be necessary to effect the assignment to the Company of any and all such inventions as contemplated by this Section 14. The Executive shall, upon the Company's request and without any payment therefore, execute any documents necessary or advisable in the opinion of the Company's counsel to direct issuance of patents or copyrights of the Company with respect to such inventions as are to be in the Company's exclusive property as against the Executive under this Section 14 or to vest in the Company title to such inventions as against the Executive, the expense of securing any such patent or copyright, to be borne by the Company.
15. Non-Competition.
(a) The Executive agrees that, during the Employment Term and during any period in which the Executive is receiving benefits from Cedar Fair or if longer, for a period of 24 months following the date of termination by the Executive of his employment with the Company for any reason (the "Noncompetition Period") the Executive will not (A) directly or indirectly, own, manage, operate, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business (i) in which 10% or more of whose annual revenues are derived from a Business as defined above and (ii) which conducts business in any locality or region of the United States, Canada or Mexico (whether or not such competing entity or business is physically located in the United States, Canada or Mexico), where Business is being conducted by the Company on the date the Executive's employment is terminated hereunder and in each and every area where the Company intends to conduct such Business as it expresses such intent in the written strategic plan (the "Strategic Plan") developed by the Company as of the date the Executive's employment is terminated hereunder (such business, a "Prohibited Business") and (B) either personally or by his agent or by letters, circulars or advertisements, and whether for himself or on behalf of any other person, company, firm or other entity, except in his capacity as an Executive of the Company, canvass or solicit, or enter into or effect (or cause or authorize to be solicited, entered into or effected), directly or indirectly, for or on behalf of himself or any other person, any business relating to the services of the type provided by, or orders for business or services similar to those provided by, the Company from any person, company, firm or other entity who is, or has at any time within two years prior to the date of such action been, a customer or supplier of the Company; provided, that the restrictions of clause (ii) of this sentence shall also apply to any person, company, firm or other entity with whom the Company is specifically seeking to develop a relationship as a customer or supplier of the Company at the date of such action. Notwithstanding the forgoing, the Executive's ownership of securities of a public company engaged in competition with the Company not in excess of 5% of any class of such securities shall not be considered a breach of the covenants set forth in this Section 15 (a) above.
(b) The Executive agrees that, at all times from after the Effective Date, the Executive will not, either personally or by his agent or by letters, circulars or advertisements, and whether for himself or on behalf of any other person, company, firm or other entity, except in his capacity as an Executive of the Company (i) seek to persuade any employee of the Company to discontinue his or her status or employment therewith or to become employed in a business or activities likely to be competitive with the Business; or (ii) solicit or employ any such person at any time within 12 months following the date of cessation of employment of such person with the Company, in any locality or region of the United States, Canada or Mexico and in each and every other area where the Company conducts its Business.
(c) The Executive expressly agrees and understands that the remedy at law for any breach by him of paragraphs 14 and 15 will be inadequate and that the damages flowing from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that upon adequate proof of a violation by the Executive of any provision of paragraphs 14 and 15, the Company shall be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further bread. Nothing in this paragraphs 14 and 15 shall be deemed to limit the Company's remedies at law or in equity for any breach by the Executive of any of the provisions of paragraphs 14 and 15 which may be pursued or availed of by the Company.
16. Termination by Executive.
Except for Paragraphs 13, 14, and 15, in the event Executive voluntary resigns his employment prior to the end of Term of Employment, this Agreement shall become null and void.
17. Successors, Binding Agreement.
Cedar Fair will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Cedar Fair, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Cedar Fair would be required to perform it if no such succession had taken place. Failure of Cedar Fair to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation and benefits from Cedar Fair in the same amount and on the same terms as would apply if the Executive was terminated other than for cause.
18. Amendment or Modification; Conflicts.
No provisions of this Agreement may be amended modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by the Executive and such officer as may be specifically designated by the Board. In the event there is any conflict or ambiguity between any term or condition set forth in this Agreement and any term or condition set forth in any Plan, Incentive Compensation Plan or Program, Equity Incentive Plan or Award, Retirement Plan, Supplemental Retirement Plan, Severance Plan, Award Agreement, Fringe Benefit Plan or any other written document, the terms and conditions of this Agreement shall supersede and control.
19. Validity.
The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio.
20. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
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CEDAR FAIR L.P. By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
CEDAR FAIR MANAGEMENT COMPANY By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
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MAGNUM MANAGEMENT CORP. By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
CEDAR POINT OF MICHIGAN By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
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MICHIGAN'S ADVENTURE, INC. By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
XXXXX'X XXXXX FARM By: /s/ M. D. Xxxxxxxxxxx Date: 06/03/03 |
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Date: 06/04/03
