EXHIBIT 10(af)
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of July 31, 1997, between PREMIER
PARKS INC., a Delaware corporation (the "Company"), and XXXXXX X. XXXXX (the
"Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Executive is and has been for more than seven years the Chief
Executive Officer of the Company;
WHEREAS, the Executive possesses an intimate knowledge of the business and
affairs of the Company;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution as Chairman of the Board and Chief Executive
Officer to the growth and success of the Company has been substantial and
desires to assure the Company the continued employment of the Executive as
Chairman of the Board and Chief Executive Officer of the Company and to
compensate him therefor; and
WHEREAS, the Executive desires to continue to serve as Chairman of the
Board and Chief Executive Officer of the Company, on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual promises, representations
and warranties set forth herein, and for other good and valuable consideration,
it is hereby agreed as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"ACTUAL EBITDA" for any year means EBITDA for such year, PROVIDED that
(i) if, during such year, the Company or any Subsidiary acquires (A) capital
stock (or other equity interests) of any person (other than a person which was,
prior thereto, a Subsidiary), whether by acquisition, merger, consolidation or
otherwise, and, by virtue of such acquisition, the results of operations of such
person for any portion of such year were consolidated with those of the Company
and its Subsidiaries in the preparation of the Company's consolidated financial
statements for such year or (B) all or substantially all of the assets of any
person or any operating unit of any person, and, in either case, such
acquisition was not contemplated in the preparation of Budgeted EBITDA for such
year, the results of operations of such person or attributable to such assets
and the costs and expenses (including financing costs) incurred by the Company
or any Subsidiary in connection with, or arising out of, such acquisition shall
be disregarded in the calculation of Actual EBITDA for such year, and (ii) in
determining Actual EBITDA for any year, the
Committee may (but will not be required to) increase (but not decrease) EBITDA
by an amount that the Committee reasonably deems to be appropriate to eliminate
or offset the effects upon EBITDA for such year of events the Committee deems
extraordinary or unusual in nature.
"AFFILIATE" of a person shall mean any other person that directly or
indirectly controls, is controlled by, or is under common control with the
person specified. For the purposes of this Agreement, "CONTROL," when used with
respect to any person, shall mean the power to direct the management and
policies of such person, whether through the ownership of securities, by
contract or otherwise.
"BASE SALARY" shall have the meaning provided in Section 5(a).
"BOARD" shall have the meaning provided in the third recital to this
Agreement.
"BONUS" shall have the meaning provided in Section 5(b).
"BUDGETED EBITDA" for any year means the amount of EBITDA that the
Company projects to achieve during such year, as specified in the definitive
annual budget of the Company for such year approved by the Board. For the year
ending December 31, 1997, Budgeted EBITDA means $52 million.
"CAUSE" shall mean (i) the willful or repeated failure of the
Executive to perform his obligations hereunder as provided herein, PROVIDED that
such Cause shall not exist unless the Company shall first have provided the
Executive with written notice specifying in reasonable detail the factors
constituting such failure and such failure shall not have been cured by the
Executive within 30 days after such notice; (ii) the conviction of the Executive
of a crime which constitutes a felony involving moral turpitude under applicable
law or the entering by him of a plea of guilty or NOLO CONTENDERE with respect
thereto; (iii) the commission by the Executive of any act involving fraud,
misappropriation of Company funds or other gross misconduct injurious to the
Company; (iv) the good faith determination by the Board that the Executive is
dependent upon alcohol or drugs; or (v) the determination by the Board that the
Executive has violated in any material respect the provisions of Sections 4(c)
or 13(c) hereof.
"CHANGE OF CONTROL" shall have the meaning provided in the Indenture,
dated as of January 15, 1997, between the Company and The Bank of New York, as
trustee, as the same exists on the date of this Agreement.
"COMMITTEE" shall mean the Compensation Committee of the Board.
"CONSTRUCTIVE TERMINATION WITHOUT CAUSE" shall mean a termination of
the Executive's employment at his initiative as provided in Section 10(d) below
following the
-2-
occurrence, without the Executive's prior written consent, of one or more of the
following events (except in consequence of a prior termination): (i) a
reduction in the Executive's then current Base Salary or in the Bonus payable to
him under Section 5(b) (except pursuant to the terms thereof) or the termination
or material reduction of any employee material benefit or perquisite enjoyed by
him during the term of this Agreement; (ii) the failure to elect or reelect the
Executive to any of the positions in the Company described in Section 4(a) below
or removal of him from any such position; (iii) a material diminution in the
Executive's duties or the assignment to the Executive of duties which are
materially inconsistent with his other duties or which materially impair the
Executive's ability to function as the Chairman of the Board and Chief Executive
Officer of the Company; (iv) the relocation of the Company's executive office,
or the Executive's own office location as assigned to him by the Company, to a
location more than 50 miles from New York, New York; (v) the failure of the
Company to obtain the assumption in writing of its obligations under this
Agreement by any successor to the business of the Company on or prior to the
date of a merger, consolidation, sale or similar transaction; or (vi) the
failure by the Company to offer the Executive a new employment agreement with
compensation and benefit provisions on terms at least as favorable to the
Executive as those set forth herein (other than those provided in Section 9
hereof).
"DISABILITY" shall mean the Executive's inability by reason of
physical or mental illness to substantially perform his duties and
responsibilities under this Agreement for a period of 180 consecutive days or a
period of in excess of 180 days during any calendar year during the Term.
"EBITDA" for any period means the income before extraordinary items
and/or cumulative effect of change in accounting principles of the Company and
its Subsidiaries for such period, plus the sum of the following, to the extent
deducted in calculating such income, of (i) income tax expense (or, in the case
of income tax benefit, minus the amount thereof), (ii) interest expense, net of
interest income, and (iii) depreciation and amortization expense, in each case
for such period. All components of EBITDA shall be determined on a consolidated
basis in accordance with generally acceptable accounting principles in the
United States as in effect as of the date of the determination of Budgeted
EBITDA for such period, consistently applied by the Company for all periods
during the Term. Notwithstanding the foregoing, EBITDA shall for all purposes
of this Agreement be calculated for each year without recognition of any expense
incurred in connection with (i) any bonuses paid or payable to the Executive,
the President and Chief Operating Officer, or the Chief Financial Officer of the
Company or (ii) any Restricted Shares and Additional Restricted Shares (as
defined herein) now or hereafter granted to those officers.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any other entity.
-3-
"SUBSIDIARY" shall mean, in respect of any person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of capital stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such person,
(ii) such person and one or more Subsidiaries of such person or (iii) one or
more Subsidiaries of such person.
"TERM" shall mean the period specified in Section 3 below.
2. EMPLOYMENT. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby accepts such employment, upon the terms and
conditions set forth herein.
3. TERM. Unless sooner terminated in accordance with the provisions of
Section 10 hereof, the term of the Executive's employment under this Agreement
shall commence on the date hereof and shall end on the third anniversary hereof
(the "Term").
4. POSITION AND DUTIES. (a) During the Term, the Executive shall serve
as the Chairman of the Board and Chief Executive Officer of the Company and
shall have the authority, functions, duties, powers and responsibilities
normally associated with such positions and as from time to time may be
prescribed by the Board. The Executive agrees, subject to his election as such
and without additional compensation, to serve during the Term in such additional
offices of comparable stature and responsibility to which he may be elected from
time to time in the Company's Subsidiaries and to serve as a director and as a
member of any committee of the Board and as a director of the Company's
Subsidiaries.
(b) During the Term and subject to the provisions of Section 4(c),
(i) the Executive's services shall be rendered on a full-time, exclusive basis,
(ii) he will apply on a full-time basis all of his skill and experience to the
performance of his duties in such employment, and shall report only to the
Board, (iii) he shall have no other employment or outside business activities
and (iv) unless the Executive otherwise consents, the headquarters for the
performance of his services shall be the executive offices of the Company in the
greater New York City area, subject to such reasonable travel as the performance
of his duties in the business of the Company may require.
(c) During the Term, the Executive shall not, directly or indirectly,
without the prior written consent of the Board, render any services to any
person (other than the Company and its Subsidiaries and other persons in which
the Company may have an interest), or acquire any interest of any type in any
such other person that is in competition with the Company or any of its
Subsidiaries or in conflict with his full-time, exclusive position as a senior
executive officer of the Company; PROVIDED, HOWEVER, that the foregoing shall
not be deemed to prohibit the Executive from (i) acquiring, solely as an
-4-
investment, securities of any person which are registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and which are publicly traded, so long as he is not part of any group required
to make any filing under Section 13(d) of the Exchange Act in respect of such
person and such securities do not constitute 2% or more of any class of
outstanding securities of such person, (ii) acquiring, solely as an investment,
any securities of any person (other than a person that has outstanding
securities covered by the preceding clause (i)) so long as he remains a passive
investor in such person and does not become part of any control group thereof
and so long as such person is not, directly or indirectly, in competition with
the Company or any of its Subsidiaries or (iii)(A) serving on the boards of
directors of a reasonable number of other corporations (none of which are in
competition with the Company or its Subsidiaries) or the boards of a reasonable
number of trade associations and/or charitable organizations or, with the prior
written consent of the Committee, to provide consulting services for any such
corporation, trade association and/or charitable organization, (B) engaging in
charitable activities and community affairs and (C) managing his personal
investments and affairs, PROVIDED that the activities referred to in this clause
(iii) do not in the aggregate interfere in any material respect with the proper
performance of his duties and responsibilities as the Company's Chairman of the
Board and Chief Executive Officer. For purposes of the foregoing, a person
shall be deemed to be in competition with the Company or any of its Subsidiaries
if it (or its Subsidiaries or Affiliates) is then engaged in any line of
business that is substantially the same as any line of business in which the
Company or any of its Subsidiaries is engaged.
(d) The Company shall use its best efforts to cause the Executive to
be a member of the Board throughout the Term and shall include him in the
management slate for election as a director at every stockholders' meeting at
which his term as a director would otherwise expire.
5. COMPENSATION. (a) BASE SALARY. The Company shall pay or cause to be
paid to the Executive a base salary (the "Base Salary") of (i) during the
balance of the year ending December 31, 1997, $400,000 per annum, and (ii)
during each succeeding calendar year (or portion thereof) during the Term an
amount per annum equal to $30,000 plus the Base Salary in effect at the end of
the immediately preceding calendar year. The Company may increase, but not
decrease, the Base Salary at any time and from time to time during the Term.
The Base Salary shall be payable in monthly or more frequent installments in
accordance with the Company's regular payroll practices for senior executives.
(b) BONUS. In addition to the Base Salary, the Executive shall be
entitled to receive an annual cash bonus (the "Bonus") in an amount equal to the
sum of (a) .00778 multiplied by the Budgeted EBITDA for the applicable year plus
(b) .02723 multiplied by the amount, if any, by which the Actual EBITDA for such
year exceeded the Budgeted EBITDA for such year; PROVIDED, HOWEVER, that if in
any year, the Actual EBITDA is less than 95% of the amount of the Budgeted
EBITDA for such year, the product obtained by clause (a) above shall be
multiplied by the Applicable Percentage set forth on Exhibit A in
-5-
determining the amount of the Bonus payable with respect to such year. The
Bonus will be payable with respect to each of the Company's fiscal years ending
December 31, 1997, December 31, 1998 and December 31, 1999 and, except as
provided in Section 5(c), will be payable as follows: (i) 75% of the estimated
Bonus will be paid to the Executive in the immediately succeeding January; and
(ii) the remaining amount of the Bonus over the amount previously paid in
January of that year will be paid to the Executive not later than 120 days after
the end of the preceding year.
Within 95 days following the end of each applicable year during the
Term, the independent public accountants of the Company shall deliver to the
Committee a certificate setting forth the calculation of EBITDA for such year
based on the Company's audited financial statements for such year and, if
applicable, an agreed upon procedure report on all adjustments to EBITDA
required by clause (i) of the definition of Actual EBITDA. Within 100 days
after the end of each such year, the Committee shall deliver to the Executive a
notice, in reasonable detail, showing the calculation of Actual EBITDA for such
year, the Bonus payable to the Executive under this Section 5(b) with respect to
such year and the number of Restricted Shares with respect to which the
Restriction Period has expired by virtue of such Actual EBITDA pursuant to
Section 9(c)(ii) hereof.
(c) DEFERRED COMPENSATION. The Executive by timely notice delivered
to the Committee may elect to defer any portion of the Base Salary or Bonus with
respect to any year on terms reasonably acceptable to the Company, PROVIDED such
deferral does not result in the Company incurring any additional expense.
6. EMPLOYEE BENEFIT PROGRAMS. During the Term, the Executive shall be
entitled to participate in all employee pension and welfare benefit plans and
programs made available to the Company's senior level executives or its
employees generally, as such plans or programs may be in effect from time to
time, including without limitation, pension, savings and other retirement plans
or programs, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, and any other employee benefit plans or
programs that may be sponsored by the Company from time to time, whether funded
or unfunded.
7. REIMBURSEMENT OF EXPENSES. During the Term, the Company shall pay or
reimburse the Executive for all reasonable travel, entertainment and other
business expenses actually incurred or paid by the Executive in the performance
of his duties hereunder upon presentation of expense statements or vouchers or
such other supporting information as the Company may reasonably require.
8. VACATIONS. In addition to customary paid holidays, the Executive
shall be entitled to four (4) weeks of paid vacation during each year of the
Term (and a pro rata portion thereof for any portion of the Term that is less
than a full year). Any unused vacation days during any year shall not be
carried forward to subsequent years, nor shall the Executive receive any
additional compensation for such unused vacation days.
-6-
9. THE SHARES. (a) On the date hereof, and in consideration of services
to be performed by the Executive hereunder, the Company has granted to the
Executive, subject to the provisions of this Section 9, 170,010 shares (the
"Restricted Shares") of the Company's Common Stock, par value $.05 per share
(the "Common Stock"). In addition, on the date hereof, the Company shall
reserve for future grant to the Executive, at the sole and absolute discretion
of the Committee taking into account EBITDA and other factors, an additional
170,010 shares of Common Stock (the "Additional Restricted Shares" and together
with the Restricted Shares, the "Shares").
(b) During the Restriction Period (as defined below) relating to any
Restricted Shares, such Restricted Shares may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Executive. Except as
provided in this Section 9, the Executive, as the owner of Restricted Shares,
shall have all the rights of a holder of Common Stock, including but not limited
to the right to receive all cash dividends or distributions paid on and the
right to vote such Restricted Shares until such date as such Restricted Shares
shall have been forfeited pursuant to Section 9(g).
(c) The restrictions contained in this Section 9 on the rights of the
Executive to sell, assign, transfer or encumber the Restricted Shares and on his
ability to hold the certificates representing the Restricted Shares pursuant to
Section 9(d) shall expire as follows:
(i) the restrictions on 28,335 Restricted Shares shall expire
on each of January 1, 1998, January 1, 1999, January 1, 2000, January 1, 2001,
January 1, 2002 and January 1, 2003, PROVIDED that the Executive's employment
hereunder has not been terminated pursuant to Section 10(c) of this Agreement or
the equivalent provision of any successor agreements prior to such date.
(ii) The period during which the restrictions set forth in this
Section 9(c) as to the ownership, transfer and disposition by the Executive of
any Restricted Shares shall be in effect shall be referred to herein as the
"Restriction Period."
(d) Each certificate representing Restricted Shares or Additional
Restricted Shares shall be registered in the name of the Executive, deposited by
him with the Company together with a stock power endorsed in blank and bear the
following, or a substantially similar, legend:
"The transferability of this Certificate and the Common
Stock represented hereby is subject to the terms and
conditions, including forfeiture, contained in the
Employment Agreement, dated July __, 1997, between the
Company and Xxxxxx X. Xxxxx. A copy of the Employment
Agreement is on file in the executive offices of Premier
Parks Inc., 00000 Xxxxxxxxx Xxxxxxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000."
-7-
(e) The Executive hereby represents and warrants that he (i) is
acquiring the Restricted Shares for his own account and not with a view to the
sale or distribution thereof except in compliance with the Securities Act of
1933, as amended (the "Securities Act") and applicable state securities laws and
(ii) is an "accredited investor" as such term is defined in Regulation D under
the Securities Act.
(f) After the Restriction Period relating to any Restricted Shares
has expired, upon the written request of the Executive, or the Executive's legal
representative, permitted successor or heir, the Company shall deliver to the
Executive, or such legal representative, permitted successor or heir, a
certificate or certificates, without the legend referred to in Section 9(d), for
the number of such Restricted Shares. Notwithstanding the foregoing, any
certificate or certificates so delivered shall bear such legends as the Company
may deem advisable to reflect restrictions which may be imposed by law,
including, without limitation, the Securities Act or any state "blue sky" or
other applicable securities laws.
(g) The Executive's rights to any Restricted Shares shall be
forfeited on the first date on which it can be determined that the Restriction
Period with respect to such Restricted Shares is incapable of expiring pursuant
to the provisions of Section 9(c). Any Restricted Shares with respect to which
the Restriction Period has not expired shall be forfeited as of the last day
thereof. Certificates representing any forfeited Restricted Shares shall be
cancelled by the Company, and the Executive shall have no rights with respect to
any such forfeited Shares.
(h) If the Company shall be consolidated or merged with another
corporation, and such consolidation or merger is not a Change of Control, the
Executive will deposit with the successor corporation the certificates for the
stock or securities or the other property that the Executive is entitled to
receive by reason of his ownership of Restricted Shares in a manner consistent
with Section 9(d), and such stock, securities or other property shall become
subject to the restrictions and requirements imposed by this Section 9, and the
certificates therefor or other evidence thereof shall bear a legend similar in
form and substance to the legend set forth in Section 9(d).
(i) In the event of a stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, reorganization,
liquidation or other comparable changes or transactions of or by the Company, an
appropriate adjustment to the number of Shares shall be made to give proper
effect to such event.
10. TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH. The Executive's employment shall
immediately terminate upon his death. In such event, his estate or his
beneficiaries, as the case may be, shall be entitled to:
-8-
(i) Base Salary (at the applicable rate in effect on the date
of his death) for a period of 365 days;
(ii) a Bonus for the year in which the Executive's death occurs
in an amount equal to the Bonus (if any) that would have been payable to the
Executive with respect to such year had his death not occurred, multiplied (in
the event such death occurs before June 30 of such year) by a fraction the
numerator of which shall be the number of days elapsed during such year prior to
the date of the Executive's death and the denominator of which shall be 181,
payable as provided in Section 5(b);
(iii) all Restricted Shares with respect to which the
Restriction Period had expired prior to the date of this death, all Restricted
Shares as to which the Restriction Period under Section 9(c) hereof has not yet
expired (as to which the restriction shall then automatically expire), and such
Additional Restricted Shares as the Committee may in its discretion grant;
(iv) unless otherwise required by any plan, the continued right
to exercise any then vested stock option for the remainder of its term;
(v) any amounts earned, accrued or owing but not yet paid
under Sections 5, 6 or 7 above; and
(vi) other or additional benefits in accordance with applicable
plans and programs of the Company.
(b) TERMINATION DUE TO DISABILITY. The Company may terminate the
Executive's employment, by written notice delivered to him, due to his
Disability. In such event, he shall be entitled to:
(i) an amount equal to 100% of Base Salary, at the rate in
effect at the date of such termination of his employment, for a period of 365
days following the date of termination, less the amount of any disability
benefits provided to the Executive under any disability plan or policy;
(ii) a Bonus for the year in which such termination occurs in
an amount equal to the Bonus that would have been payable to the Executive with
respect to such year had such termination not occurred, multiplied (in the event
such termination occurs before June 30 of such year) by a fraction the numerator
of which shall be the number of days elapsed during such year prior to the date
of such termination and the denominator of which shall be 181, payable as
provided in Section 5(b);
(iii) all Restricted Shares with respect to which the
Restriction Period had expired prior to the date of termination due to his
Disability and all Restricted Shares as to which the Restriction Period under
Section 9(c) hereof has not yet expired (as
-9-
to which the restriction shall automatically expire), and such Additional
Restricted Shares as the Committee may in its discretion grant;
(iv) unless otherwise required by any plan, the continued right
to exercise any then vested stock option for the remainder of its term;
(v) any amounts earned, accrued or owing but not yet paid
under Sections 5, 6 or 7 above;
(vi) continued participation at the expense of the Company in
medical, dental and hospitalization insurance coverage in which he was
participating on the date of termination of his employment for a period equal to
the longest of (x) 12 months from the date of such termination, (y) the minimum
period prescribed by applicable law or (z) the period set forth in the
applicable plan or program of the Company; and
(vii) other or additional benefits in accordance with applicable
plans and programs of the Company.
(c) TERMINATION BY THE COMPANY FOR CAUSE. In the event the Company
proposes to terminate the Executive's employment for Cause, it shall so notify
the Executive in writing, which notice shall include (A) in reasonable detail
the particular act or acts or failure or failures to act that constitute the
grounds on which the proposed termination for Cause is based and (B) the date
(which shall not be earlier than 21 days following the date of such notice),
time and location of a Board meeting at which the Executive shall be entitled to
a hearing as to such grounds. If, within five days after such hearing, the
Executive is furnished written notice that a majority of all then members of the
Board (excluding the Executive) have confirmed that, in their judgment, grounds
for Cause exist, his employment shall thereupon terminate for Cause. In such
event, he shall be entitled to:
(i) the Base Salary then in effect through the date of the
termination of his employment for Cause;
(ii) all Restricted Shares with respect to which the
Restriction Period had expired prior to the date of such termination;
(iii) any amounts earned, accrued or owing but not yet paid
under Sections 5, 6 or 7 above; and
(iv) other or additional benefits in accordance with applicable
plans or programs of the Company.
(d) TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE TERMINATION WITHOUT
CAUSE. In the event the Executive's employment is terminated by the Company
without
-10-
Cause, other than due to his Disability or death, or is terminated by the
Executive due to a Constructive Termination Without Cause, the Executive shall
be entitled to:
(i) the Base Salary through the date of termination of the
Executive's employment;
(ii) the Bonus for the year in which such termination occurs in
an amount equal to the Bonus that would have been payable to the Executive with
respect to such year had such termination not occurred, multiplied (in the event
such termination occurs before June 30 of such year) by a fraction, the
numerator of which shall be the number of days elapsed during such year prior to
the date of such termination and the denominator of which shall be 181, payable
immediately;
(iii) an amount equal to the product obtained by multiplying
three times the aggregate amount paid or payable to the Executive as Base Salary
and Bonus with respect to the calendar year immediately preceding the year in
which such termination occurs, payable in one lump sum within ten Business Days
after such termination;
(iv) (a) all Restricted Shares with respect to which the
Restriction Period had expired prior to the date of termination and all
Restricted Shares as to which the Restriction Period under Section 9(c) hereof
has not yet expired (as to which the restriction shall then automatically
expire), and (b) such Additional Restricted Shares as the Committee in its
discretion has theretofore granted to the Executive (as to which all restriction
periods related thereto shall then automatically terminate);
(v) exercise any stock option to the extent exercisable at the
date of his termination without Cause or Constructive Termination Without Cause,
for a period of 90 days after such termination;
(vi) any amounts earned, accrued or owing but not yet paid
under Sections 4, 5 or 6 above;
(vii) continued participation at the Company's expense in
medical, dental and hospitalization insurance coverage and in all other employee
benefit plans and programs in which he was participating on the date of
termination of his employment for a period equal to of the longest of (x) 6
months from the date of such termination, (y) the minimum period prescribed by
applicable law or (z) the period set forth in the applicable plan or program of
the Company; and
(viii) other or additional benefits in accordance with applicable
plans and programs of the Company.
(e) CHANGE OF CONTROL. (i) In the event of a Change of Control
(whether or not the Executive's employment is terminated), the Executive shall
be entitled to (A) all
-11-
Restricted Shares with respect to which the Restriction Period had expired prior
to the date of the Change of Control and all Restricted Shares as to which the
Restriction Period under Section 9(c) hereof has not yet expired (as to which
the restriction shall then automatically expire), and (b) such Additional
Restricted Shares as the Committee in its discretion has theretofore granted to
the Executive (as to which all restriction periods related thereto shall then
automatically terminate); and (B) all Additional Restricted Shares not
theretofore granted to the Executive, as to which all restriction periods
related thereto shall automatically expire, subject, however, as to the
Additional Restricted Shares not theretofore granted to the Executive to the
condition that the Market Price (as defined herein) of the Common Stock is not
less than $40.00 per share, subject to appropriate adjustments for stock
dividends, stock splits, share combinations, exchanges of shares,
recapitalizations or comparable changes or transactions by the Company to give
proper effect to this provision. For purposes hereof, the term "Market Price"
shall mean the average of the daily closing prices of the Common Stock on the
principal securities exchange or market in which such stock is traded or quoted
for 20 consecutive trading days commencing 30 trading days prior to the
consummation of such Change of Control or in the event the Common Stock is not
so traded or quoted at that time, the fair value of the Common Stock as
determined by the Committee.
(ii) If during the 180 day period following a Change of
Control, the Executive's employment is terminated by the Company (other than due
to his Disability or death) or is terminated due to a Constructive Termination
Without Cause, the Executive shall be entitled to (A) the payments and benefits
provided in Section 10(d); (B) all Additional Restricted Shares, whether or not
theretofore granted to the Executive, and as to which all restriction periods
related thereto shall then automatically expire; and (C) all amounts,
entitlements or benefits under all employee benefit plans as to which the
Executive is not yet vested shall become fully vested except to the extent such
vesting would be inconsistent with the terms of the relevant plan.
(f) VOLUNTARY TERMINATION. In the event of a termination of
employment by the Executive on his own initiative other than a termination due
to a Construction Termination Without Cause, the Executive shall have the same
entitlements as provided in Section 10(c) for a termination for Cause. A
voluntary termination under this Section 10 shall be effective upon not less
than 90 days prior notice written to the Company.
(g) LIMITATION FOLLOWING A CHANGE OF CONTROL. In the event that the
termination of the Executive's employment is pursuant to Section 10(e) above and
the aggregate of all payments or benefits made or provided to the Executive
under Section 10(e) above and under all other plans and programs of the Company
(the "Aggregate Payment") is determined to constitute a Parachute Payment, as
such term is defined in Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), then the Company shall pay the Executive such
additional amounts as are required to be paid by such Executive for any excise
taxes imposed on the Executive in connection with such Aggregate Payments
pursuant to Section 4999 of the Code.
-12-
(h) NO MITIGATION. In the event of any termination of employment
under this Section 10, the Executive shall be under no obligation to seek other
employment.
(i) NATURE OF PAYMENTS. Any amounts due under this Section 10 are in
the nature of severance payments considered to be reasonable by the Company and
are not in the nature of a penalty.
(j) NOTICE OF TERMINATION. Except as otherwise provided in this
Section 10 and except in the case of a termination due to the Executive's death,
the Company or the Executive (as the case may be) shall deliver written notice
of termination of employment to the other party hereto which notice shall
specify the effective date of termination in accordance herewith.
11. INDEMNIFICATION. (a) The Executive shall be entitled to the benefit
of the indemnification provisions contained on the date hereof in the
Certificate of Incorporation and By-Laws of the Company (not including any
amendments or additions hereafter that limit or narrow, but including any that
add to or broaden, the protection afforded to the Executive by those
provisions), to the fullest extent permitted by applicable law at the time of
the assertion of any liability against the Executive in respect of any matter
relating to the period during which the Executive is employed by the Company, no
matter when arising.
(b) During the period in which the Executive is employed by the
Company, the Company agrees to maintain a directors' and officers' liability
insurance policy covering the Executive to the extent the Company provides such
coverage for its other executive officers, which policy shall be maintained on a
claims occurred, rather than claims made, basis.
12. EFFECT OF AGREEMENT ON OTHER BENEFITS. Except as specifically
provided in this Agreement, the existence of this Agreement shall not prohibit
or restrict the Executive's entitlement to full participation in the employee
benefit and other plans or programs in which senior executives of the Company
are eligible to participate.
13. COVENANT NOT-TO-COMPETE. During the two years following the end of
the Executive's employment by the Company (the "Covenant Period"):
(a) The Executive agrees that he will not, directly or indirectly, as
a partner, officer, employee, director, stockholder, proprietor, consultant,
representative, agent or otherwise become or be interested in, or associate with
or render assistance to (i) any person engaged in the ownership, operation
and/or management of any water park, amusement park, theme park, marine or
wildlife park, outdoor mini-theme park or family amusement or entertainment
center (collectively, "Parks") located within the United States of America (or
in the event the Company owns or otherwise operates any Park outside the United
States of America, in any location within a 250 mile radius of such location) or
-13-
(ii) if during the Term, the Company commences any line of business, in addition
to the ownership, operation and/or management of Parks, and if, during the last
full fiscal year of the Company preceding the date of the termination of the
Executive's employment, such other line of business accounted for at least 10%
of the Company's revenue during such year, any person engaged in such other line
of business within a 250 mile radius of any location at which the Company is
then engaged therein. The foregoing provisions shall not, however, prohibit the
ownership by any Executive of securities in accordance with Section 4(c)(i).
(b) The Executive agrees that he will not, directly or indirectly,
during the Covenant Period, for his own benefit or for the benefit of any other
person knowingly solicit the professional services of any employee of the
Company or any Subsidiary or any person who had been such an employee within
three months prior thereto or otherwise interfere with the relationship between
the Company or any Subsidiary and any of such persons.
(c) The Executive recognizes and acknowledges that, in connection
with his employment with the Company, he has had and will continue to have
access to valuable trade secrets and confidential information of the Company and
its Subsidiaries and Affiliates including, but not limited to, customer and
supplier lists, business methods and processes, marketing, promotional, pricing
and financial information and data relating to employees and agents
(collectively, "Confidential Information") and that such Confidential
Information is being made available to the Executive only in connection with the
furtherance of his employment with the Company. The Executive agrees that
during the Term and thereafter, he will not use or disclose any of such
Confidential Information to any person, except that disclosure of Confidential
Information will be permitted: (i) to the Company, its Subsidiaries and
Affiliates and their respective advisors; (ii) if such Confidential Information
has previously become available to the public through no fault of the Executive;
(iii) if required by any court or governmental agency or body or is otherwise
required by law; (iv) if necessary to establish or assert the rights of the
Executive hereunder; or (v) if expressly consented to by the Company.
(d) The parties agree that a violation of the foregoing agreements
not to compete or disclose, or any provision thereof, will cause irreparable
damage to the Company, and the Company shall be entitled (without any
requirement of posting a bond or other security), in addition to any other
rights and remedies which it may have, at law or in equity, to an injunction
enjoining and restraining the Executive from doing or continuing to do any such
act or any other violations or threatened violations of this Section 13.
(e) The Executive acknowledges and agrees that the restrictive
covenants set forth in this Section 13 (the "Restrictive Covenants") are
reasonable and valid in geographical and temporal scope and in all other
respects. If any court determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder
-14-
of the Restrictive Covenants shall not thereby be affected and shall be given
full force and effect, without regard to the invalid or unenforceable parts.
(f) If any court determines that any of the Restrictive Covenants, or
any part thereof, is invalid or unenforceable for any reason, such court shall
have the power to modify such Restrictive Covenant, or any part thereof, and, in
its modified form, such Restrictive Covenant shall then be valid and
enforceable.
14. SEVERABILITY. Should any provision of this Agreement be held, by a
court of competent jurisdiction, to be invalid or unenforceable, such invalidity
or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each individual provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
15. SUCCESSORS AND ASSIGNS. (a) This Agreement and all rights under this
Agreement are personal to the Executive and shall not be assignable other than
by will or the laws of descent. All of the Executive's rights under the
Agreement shall inure to the benefit of his heirs, personal representatives,
designees or other legal representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. Any person succeeding to the
business of the Company by merger, purchase, consolidation or otherwise shall
assume by contract or operation of law the obligations of the Company under this
Agreement.
16. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflicts of laws rules thereof.
17. NOTICES. All notices, requests and demands given to or made upon the
respective parties hereto shall be deemed to have been given or made three (3)
business days after the date of mailing when mailed by registered or certified
mail, postage prepaid, or on the date of delivery if delivered by hand, or by
any nationally-recognized overnight delivery service, addressed to the parties
at their addresses set forth below or to such other addresses furnished by
notice given in accordance with this Section 17: (a) if to the Company, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Board of Directors, and (b) if
to the Executive, 00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000.
18. WITHHOLDING. All payments required to be made by the Company to the
Executive under this Agreement shall be subject to withholding taxes, social
security and other payroll deductions in accordance with the Company's policies
applicable to senior executives of the Company and the provisions of any
applicable employee benefit plan or program of the Company.
-15-
19. COMPLETE UNDERSTANDING. This Agreement supersedes any prior
contracts, understandings, discussions and agreements relating to employment
between the Executive and the Company and constitutes the complete understanding
between the parties with respect to the subject matter hereof. No statement,
representation, warranty or covenant has been made by either party with respect
to the subject matter hereof except as expressly set forth herein.
20. MODIFICATION; WAIVER. (a) This Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company and the Executive or in the case of a waiver, by
the party against whom the waiver is to be effective. Any such waiver shall be
effective only to the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
21. MUTUAL REPRESENTATIONS. (a) The Executive represents and warrants to
the Company that the execution and delivery of this Agreement and the
fulfillment of the terms hereof (i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound and (ii) do not require the consent of any person.
(b) The Company represents and warrants to the Executive that this
Agreement has been duly authorized, executed and delivered by the Company and
that such execution and delivery and the fulfillment of the terms hereof (i)
will not constitute a default under or conflict with any agreement or other
instrument to which it is a party or by which it is bound and (ii) do not
require the consent of any person.
(c) Each party hereto represents and warrants to the other that this
Agreement constitutes the valid and binding obligation of such party enforceable
against such party in accordance with its terms.
22. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.
23. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
-16-
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name, and the Executive has manually signed his
name hereto, all as of the day and year first above written.
PREMIER PARKS INC.
By: /s/
--------------------------------
Xxxx X. Xxxxxxxxx
Chairman of the
Compensation Committee
/s/
-----------------------------------
XXXXXX X. XXXXX
-17-
EXHIBIT A
---------
If the quotient of
Actual EBITDA for the applicable year
-----------------------------------------
Budgeted EBITDA for the applicable year Applicable Percentage
---------------------
(rounded to the nearest thousandths) equals:
between (and including) .945 and (but excluding) .950 95%
between .940 and (but excluding) .945 90%
between .935 and (but excluding) .940 85%
between .930 and (but excluding) .935 80%
between .925 and (but excluding) .930 75%
between .920 and (but excluding) .925 70%
between .915 and (but excluding) .920 65%
between .910 and (but excluding) .915 60%
between .905 and (but excluding) .910 55%
between .900 and (but excluding) .905 50%
between .895 and (but excluding) .900 45%
between .890 and (but excluding) .895 40%
between .885 and (but excluding) .890 35%
between .880 and (but excluding) .885 30%
between .875 and (but excluding) .880 25%
between .870 and (but excluding) .875 20%
between .865 and (but excluding) .870 15%
between .860 and (but excluding) .865 10%
between .850 and (but excluding) .860 5%
less than .850 0%
-1-
