EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement"), dated as of April 1,
2009, is entered into by and among Six Flags, Inc., a Delaware corporation
("SF"), Six Flags Operations Inc., a Delaware corporation, and Six Flags
Theme Parks Inc., a Delaware corporation (collectively, the "Company"), and
Xxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, Executive is currently employed by SF pursuant to that
certain Employment Agreement between Executive and SF dated as of September 26,
2006, as amended (the "Existing Employment Agreement");
WHEREAS, the Company and Executive desire to modify the terms and
conditions of Executive's continued employment by entering into this Agreement;
and
WHEREAS, this Agreement shall supersede and replace the Existing
Employment Agreement (except with regard to outstanding equity awards granted in
accordance therewith).
NOW, THEREFORE, in consideration of the mutual covenants set forth
in this Agreement, it is hereby agreed as follows:
1. Term of Employment. The term of Executive's employment by the
Company pursuant to this Agreement shall commence on the date hereof (the
"Effective Date") and shall expire on the fourth anniversary of the Effective
Date (the "Term"), subject to earlier termination in accordance with Section 4
hereof.
2. Position, Duties and Location. During the Term,
(a) Position and Duties. Executive shall serve as the
President and Chief Executive Officer of the Company, with the duties and
responsibilities customarily assigned to such position and such other customary
duties as may reasonably be assigned to Executive from time to time by the Board
(as defined below) consistent with such position. Executive shall at all times
report solely and directly to the Board. All other employees will report to
Executive either directly or through other employees as determined by Executive.
(b) Attention and Time. Executive shall devote substantially
all his business attention and time to his duties hereunder and shall use his
reasonable best efforts to carry out such duties faithfully and efficiently.
During the Term, it shall not be a violation of this Agreement for Executive to
(i) serve on industry, trade, civic or charitable boards or committees; (ii)
deliver lectures or fulfill speaking engagements; or (iii) manage personal
investments, as long as such activities do not materially interfere with the
performance of Executive's duties and responsibilities as described herein.
Executive shall be permitted to serve on for-profit corporate boards of
directors and advisory committees if approved in advance by the Board, which
approval shall not unreasonably be withheld.
(c) Location. Executive's principal place of employment shall
be located in New York, New York; provided that Executive shall travel and shall
render services at other locations, both as may reasonably be required by his
duties hereunder.
3. Compensation.
(a) Base Salary. During the Term, Executive shall receive a
base salary (the "Base Salary") at an annual rate of $1,300,000. Base Salary
shall be paid at such times and in such manner as the Company customarily pays
the base salaries of its employees. In the event that Executive's Base Salary is
increased by the Board in its discretion at any time during the Term, such
increased amount shall thereafter constitute the Base Salary.
(b) Annual Bonus. During the Term, Executive shall be paid an
annual cash bonus based on the attainment of performance targets in accordance
with Exhibit A hereto. The "Target Bonus" shall be $1,300,000 and the "Maximum
Bonus" shall be $2,600,000. The annual bonus shall be payable at such time as
bonuses are paid to other senior executive officers of the Company but no later
than 2 1/2 months following the end of each fiscal year of the Company. For the
avoidance of any doubt, the annual bonus earned by Executive for fiscal year
2009 shall be calculated on results for the full fiscal year and shall not be
prorated on account of the Effective Date.
(c) Success Fee. Upon the first to occur of: (i) the closing
date of SF's proposed Exchange Offer for its Senior Notes or (ii) the emergence
of the Company from a chapter 11 bankruptcy (the first to occur of (i) or (ii),
a "Triggering Event"), the Company shall pay Executive a lump sum cash payment
of $2,000,000 within ten (10) business days. In addition, if Executive remains
employed by the Company until the first anniversary of the Triggering Event, the
Company shall pay Executive a lump sum cash payment of $1,000,000 within ten
(10) business days of such anniversary date; provided that, if Executive's
employment is terminated (i) by the Company without Cause (as defined below),
(ii) by Executive for Good Reason (as defined below), (iii) by Executive without
Good Reason under circumstances where he is entitled to receive the payments and
benefits specified in Section 4(c)(i) or Section 4(c)(ii) below or (iv) due to
Executive's death or Disability (as defined below), in each instance, on or
after the occurrence of a Triggering Event but prior to the first anniversary of
the Triggering Event, such amount shall instead be paid to Executive within ten
(10) business days of the date of termination.
(d) Equity Awards. Immediately following a Triggering Event,
SF shall issue Executive restricted shares of SF's common stock (the "Common
Stock") equal to 1.25% of the amount of outstanding shares of Common Stock on
such date (the "Restricted Stock") and options to purchase an additional 1.25%
of the outstanding shares of Common Stock on such date (the "Options"). For
purposes of the preceding sentence, the number of shares of Common Stock
outstanding on such date shall be determined immediately after the issuance of
(i) the Restricted Stock and Options and (ii) any other shares, options, shares
of restricted stock or warrants issuable in connection with the Triggering
Event. Subject to the provisions hereof, the Restricted Stock shall vest in four
equal annual installments commencing on the first anniversary of the Effective
Date, provided that Executive remains employed by the Company through each
applicable vesting date. Subject to the provisions hereof, the Options shall
vest and become exercisable on the fourth anniversary of the Effective Date,
provided that Executive remains employed by the Company on such vesting date.
The exercise price of the Options will be equal to the market price per share of
the Common Stock on the date of issuance.
(e) Other Compensation and Benefits. During the Term, the
Company shall provide and Executive shall be entitled to participate in or
receive benefits under any pension plan, profit sharing plan, stock option plan,
stock purchase plan or arrangement, health, disability and accident plan or any
other employee benefit plan or arrangement, including any non-qualified or
deferred compensation or retirement programs made available now or in the future
to senior executives of the Company on a basis no less favorable than provided
any other senior executive of the Company; provided that Executive complies with
the conditions attendant with coverage under such plans or arrangements. In
addition to the Company's group insurance policies, the Company shall provide
Executive with term life insurance with a death benefit equal to his Base Salary
and with a disability insurance policy that provides for full income replacement
for the first thirty-six (36) months of Executive's Disability after which time
the standard disability benefit available to senior executives shall apply to
Executive. Full income shall include Base Salary for the year in which
disability occurs plus the greater of the actual bonus for the year prior to the
occurrence of disability or the Target Bonus for the year in which disability
occurs. Except as expressly provided in this Agreement, nothing contained herein
shall be construed to prevent the Company from modifying or terminating any plan
or arrangement, not including the annual bonus plan described in Section 3(b),
in existence on the date hereof provided that no such modification or
termination adversely affects any award or other entitlement previously granted
to Executive. Without limiting the generality of the foregoing, Executive shall
be entitled to no less than four weeks of paid vacation per calendar year. The
Company shall also reimburse Executive for the cost (including travel costs) of
an annual physical exam provided by an executive health program selected by
Executive.
(f) Perquisites; Expenses. During the Term, Executive shall be
entitled to perquisites no less favorable than those provided to any other
senior executive of the Company. In addition, the Company shall promptly pay or,
if such expenses are paid directly by Employee, Executive shall be entitled to
receive prompt reimbursement, for all reasonable expenses that Executive incurs
during his employment with the Company in carrying out Executive's duties under
this Agreement, including, without limitation, those incurred in connection with
business related travel or entertainment, upon presentation of expense
statements and customary supporting documentation. Executive shall be reimbursed
for the cost of commutation (by train, car or car service at Executive's
discretion) between his home and the Company's office and between his home and
an airport and at all other times when traveling on Company business. When
traveling on company business, Executive shall be entitled to use any aircraft
owned or leased by the Company ("Company Aircraft") or fly commercial
first-class. Any other use of Company Aircraft shall be governed by applicable
Company policy.
(g) Additional Compensation and Benefits. Nothing contained in
this Agreement shall limit the Board in awarding, in its discretion, additional
compensation and benefits to Executive.
4. Termination of Employment; Change in Control.
(a) Death; Disability; Termination For Cause. Executive's
employment shall terminate automatically upon his death or Disability. The
Company may terminate Executive's employment for Cause. It shall not be deemed
to be a breach of this Agreement for the Executive to voluntarily terminate his
employment without Good Reason. Upon a termination of Executive's employment (i)
due to Executive's death or Disability, or (ii) by the Company for Cause or by
the Executive without Good Reason, Executive (or, in the case of Executive's
death, Executive's estate and/or beneficiaries) shall be entitled to: (A) unpaid
Base Salary through the Date of Termination (as defined below); (B) any earned
but unpaid bonus for the prior fiscal year; (C) any benefits due to Executive
under any employee benefit plan of the Company and any payments due to Executive
under the terms of any Company program, arrangement or agreement, including
insurance policies but excluding any severance program or policy and (D) any
expenses owed to Executive ((A), (B), (C) and (D) collectively, the "Accrued
Amounts"). Except as provided in the preceding sentence, Executive shall have no
further right or entitlement under this Agreement to payments arising from
termination of his Employment by the Company for Cause or by Executive without
Good Reason. In the event of a termination of Executive's employment due to
Executive's death or Disability, Executive (or in the case of Executive's death,
Executive's estate and/or beneficiaries) shall be entitled to a lump-sum cash
amount equal to the Target Bonus for Executive for the year of termination
pro-rated based on the number of days from the beginning of the year through the
Date of Termination divided by the total number of days in the year of
termination and all options and shares of restricted stock previously granted to
Executive shall fully vest and all outstanding options shall remain exercisable
for their originally scheduled respective terms (other any options granted to
Executive prior to the date hereof that do not so provide for such continued
exercisability in accordance with its terms).
(b) Termination Without Cause or for Good Reason. The Company
may terminate Executive's employment without Cause and Executive may terminate
his employment for Good Reason, in each case upon thirty days prior written
notice. In the event that, during the Term, the Company terminates Executive's
employment without Cause or Executive terminates his employment for Good Reason,
Executive shall be entitled to the following in lieu of any payments or benefits
under any severance program or policy of the Company within ten (10) business
days:
(i) the Accrued Amounts plus a lump sum cash amount equal to the
Target Bonus for Executive for the year of termination pro-rated based on the
number of days from the beginning of the year through the Date of Termination
divided by the total number of days in the year of termination;
(ii) a lump sum cash severance payment equal to the unpaid balance
of the Base Salary and the Target Bonuses Executive would have been entitled to
for the balance of the Term measured from the Date of Termination to the
expiration date of the Term, but in no event shall such lump sum be less than
three times the sum of (X) Executive's Base Salary and (Y) annual bonus; the
severance payable shall be computed based upon (A) Executive's highest Base
Salary in effect at any time during his employment with the Company and (B)
Executive's actual annual bonus as provided for in this Agreement for the most
recent completed fiscal year of the Company prior to the Date of Termination;
(iii) continued coverage for a period of thirty-six (36) months
commencing on the Date of Termination or until Executive receives comparable
coverage (determined on a benefit-by-benefit basis) from a subsequent employer
(A) for Executive (and his eligible dependents, if any) under the Company's
health plans (including medical and dental) and other welfare benefit plans on
the same basis as such coverage is made available to executives employed by the
Company (including, without limitation, co-pays, deductibles and other required
payments and limitations) and (B) under any Company-provided life insurance and
disability insurance policies and plan under which Executive was insured
immediately prior to the Date of Termination; and
(iv) full vesting of all options and shares of restricted stock
previously granted to Executive, with all outstanding options remaining
exercisable for their originally scheduled respective terms (other than any
incentive stock options granted to Executive prior to the date hereof that do
not provide for such continued exercisability in accordance with their terms).
(c) Change in Control; Significant Change in Board
Composition.
(i) In the event of a Change in Control (as defined below), all
options and shares of restricted stock previously granted to Executive shall
fully vest and all outstanding options shall remain exercisable for their
originally scheduled respective terms (other than incentive stock options
granted to Executive prior to the date hereof that do not provide for such
continued exercisability in accordance with their terms). If, during the ninety
(90) day period following a Change in Control, Executive's employment is
voluntarily terminated by Executive without Good Reason, Executive shall be
entitled to receive the payments and benefits specified in Section 4(b) above.
(ii) If, during the ninety (90) day period following a Significant
Change in Board Composition (as defined below), Executive's employment is
voluntarily terminated by Executive without Good Reason, in addition to the
Accrued Amounts and pro-rata bonus specified in Section 4(b)(i), Executive shall
be entitled to receive (A) 50% of the payment specified in Section 4(b)(ii)
above within ten (10) business days, (B) the continued coverage specified in
Section 4(b)(iii) above for a period of eighteen (18) months, and (C) full
vesting of 50% of all unvested options and shares of restricted stock previously
granted to Executive.
(iii) Notwithstanding the foregoing, under no circumstances may
Executive receive payments and benefits under both Section 4(c)(i) above and
Section 4(c)(ii) above.
(d) Definitions. For purposes of this Agreement, the following
definitions shall apply:
(i) "Affiliate" of a person or other entity shall mean: a person or
other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.
(ii) "Board" shall mean the Board of Directors of SF.
(iii) "Cause" shall mean: (A) Executive's willful and continuing
failure (except where due to physical or mental incapacity) to substantially
perform his duties hereunder, which is not remedied within fifteen (15) days
after receipt of written notice from the Company specifying such failure; (B)
Executive's willful malfeasance or gross neglect in the performance of his
duties hereunder resulting in material harm to the Company; (C) Executive's
conviction of, or plea of guilty or nolo contendere to, a felony or a
misdemeanor involving moral turpitude; (D) the commission by Executive of an act
of fraud or embezzlement against the Company or any Affiliate; or (E)
Executive's willful material breach of any material provision of this Agreement
(as determined in good faith by the Board) which is not remedied within fifteen
(15) days after (I) receipt of written notice from the Company specifying such
breach and (II) the opportunity to appear before the Board. For purposes of the
preceding sentence, no act or failure to act by Executive shall be considered
"willful" unless done or omitted to be done by Executive in bad faith or without
reasonable belief that Executive's action or omission was in the best interests
of the Company.
(iv) "Change in Control" shall mean: (A) any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), but excluding any employee benefit plan of SF)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of SF representing
thirty-five percent (35%) or more of the combined voting power of SF's
outstanding securities then entitled ordinarily (and apart from rights accruing
under special circumstances) to vote for the election of directors; (B) at any
time, the Continuing Directors (as defined below) cease for any reason to
constitute at least a majority of the Board; (C) a sale of all or substantially
all of the assets of SF or (D) any merger, consolidation or like business
combination or reorganization of SF, the consummation of which would result in
the occurrence of any event described in clause (A) or (B) above. Only one (1)
Change in Control may occur during the Term.
(v) "Continuing Directors" shall mean, as of any date of
determination, any member of the Board who (i) was a member of the Board on the
date of this Agreement or (ii) was nominated for election or elected to the
Board with the approval of a majority of the Continuing Directors who were
members of the Board at the time of such nomination or election.
(vi) "Date of Termination" / "Notice of Termination" Any termination
of Executive's employment by the Company or by Executive under this Section 4
(other than termination due to death) shall be communicated by a written notice
to the other parties hereto indicating the specific termination provision in
this Agreement relied upon, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated, and specifying a "Date of
Termination" (a "Notice of Termination") which, if submitted by Executive, shall
be at least thirty (30) days following the date of such notice. A Notice of
Termination submitted by the Company may provide for a "Date of Termination" on
the date Executive receives the Notice of Termination, or any date thereafter
elected by the Company in its sole discretion not to exceed thirty (30) days
following the date of such notice. The failure by Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
Executive or the Company hereunder or preclude Executive or the Company
thereafter from asserting such fact or circumstance within a period of six
months from the Date of Termination in order to enforce Executive's or the
Company's otherwise applicable rights hereunder.
(vii) "Disability" shall have the same meaning as in, and shall be
determined in a manner consistent with any determination under, the long-term
disability plan of the Company in which Executive participates from time to
time, or if Executive is not covered by such a plan, "Disability" shall mean
Executive's permanent physical or mental injury, illness or other condition that
prevents Executive from performing his duties to the Company for a total of six
(6) months during any twelve (12) month period, as reasonably determined by a
physician selected by Executive and acceptable to the Company or the Company's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).
(viii) "Good Reason" shall mean the occurrence, without Executive's
express written consent, of: (A) an adverse change in Executive's employment's
title or change in Executive's duty to report solely and directly to the Board;
(B) a diminution in Executive's employment duties, responsibilities or
authority, or the assignment to Executive of duties that are materially
inconsistent with his position; (C) any reduction in Base Salary, Maximum Bonus
or Target Bonus as set forth in Section 3(b); (D) a relocation of Executive's
principal place of employment to a location outside of the New York area that
would unreasonably increase Executive's commute; (E) at any time during the Term
failure of Executive to be nominated for election as a director of the Company
throughout the Term or removal of Executive as a director of the Company by the
Board other than for Cause; or (F) any breach by the Company of any material
provision of this Agreement (including but not limited to any breach of its
obligations under Section 3 hereof) which, in the case of this clause (F) only,
is not cured within fifteen (15) days after written notice is received from
Executive.
(ix) "Significant Change in Board Composition" shall mean, at any
time, the Continuing Directors for any reason cease to constitute a portion of
the Board that is at least equal to a majority of the Board plus two (2)
additional Board memberships.
(x) "Subsidiary" of the Company shall mean: any corporation of which
the Company owns, directly or indirectly, more than fifty percent (50%) of the
voting stock.
5. Confidentiality of Trade Secrets and Business Information.
Executive agrees that Executive shall not, at any time during Executive's
employment with the Company or thereafter, disclose or use any trade secret,
proprietary or confidential information of the Company or any Subsidiary of the
Company (collectively, "Confidential Information"), obtained by him during the
course of such employment, except for (i) disclosures and uses required in the
course of such employment or with the written permission of the Company, (ii)
disclosures with respect to any litigation, arbitration or mediation involving
this Agreement, including but not limited to, the enforcement of Executive's
rights under this Agreement, or (iii) as may be required by law or by any court,
arbitrator, mediator or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order such disclosure; provided
that, if, in any circumstance described in clause (iii), Executive receives
notice that any third party shall seek to compel him by process of law to
disclose any Confidential Information, Executive shall promptly notify the
Company and provide reasonable cooperation to the Company (at the Company's sole
expense) in seeking a protective order against such disclosure. Notwithstanding
the foregoing, "Confidential Information" shall not include information that is
or becomes publicly known outside the Company or any of its subsidiaries other
than due to a breach of Executive's obligations under this paragraph.
6. Return of Information. Executive agrees that at the time of any
termination of Executive's employment with the Company or expiration of the
Term, whether at the instance of Executive or the Company, and regardless of the
reasons therefore, Executive shall deliver to the Company (at the Company's
expense), any and all notes, files, memoranda, papers and, in general, any and
all physical (including electronic) matter containing Confidential Information
(other than as he properly is retaining in connection with an action or other
proceeding as noted in clause (ii) or (iii) of Section 5) which are in
Executive's possession, except as otherwise consented in writing by the Company
at the time of such termination. The foregoing shall not prevent Executive from
retaining copies of personal diaries, personal notes, personal address books,
personal calendars, and any other personal information (including, without
limitation, information relating to Executive's compensation), but only to the
extent such copies do not contain any Confidential Information other than that
which relates directly to Executive, including his compensation.
7. Noncompetition and Noninterference.
(a) General. Subject to Section 7(c), in consideration for the
compensation payable to Executive under this Agreement, Executive agrees that
Executive shall not, during Executive's employment with the Company other than
in carrying out his duties hereunder and for a period of one (1) year after any
termination of employment (i) render services to a Competitor, regardless of the
nature thereof, (ii) engage in any activity which is in direct conflict with or
materially adverse to the interests of the Company or any Subsidiary, (iii)
directly or indirectly recruit, solicit or induce, any employee, consultant or
independent contractor of the Company or any Subsidiary, to terminate, alter or
modify such person's employment or other relationship with the Company or any
Subsidiary, nor (iv) directly or indirectly solicit any then current customer or
business partner of the Company or any Subsidiary to terminate, alter or modify
its relationship with the Company or the Subsidiary or to interfere with the
Company's or any Subsidiary's relationships with any of its customers or
business partners on behalf of any enterprise that is a competitor with the
Company or a Subsidiary.
(b) Definition. For purposes of this Agreement, "Competitor"
shall mean any business or enterprise in the theme park business.
Notwithstanding the foregoing, Executive's provision of services to an Affiliate
or unit of a Competitor that is not directly engaged in the theme park business,
or service in an executive corporate capacity of an entity that has a theme park
division, such as The Xxxx Disney Company or General Electric, shall not be a
violation of the restrictions of this Section 7. Nothing contained herein shall
prevent Executive from acquiring, solely as an investment, any publicly-traded
securities of any person so long as he remains a passive investor in such person
and does not own more than one percent (1%) of the outstanding securities
thereof.
(c) Expiration of Term. If Executive's employment with the
Company ceases following expiration of the Term, the provisions of Section 7(a)
shall remain in effect; provided that clauses (i) and (ii) of Section 7(a) shall
apply for a period of six (6) months, rather than twelve (12) months, following
the expiration of the Term. If Executive remains employed by the Company at the
expiration of the Term, (i) the Company will pay Executive, within ten (10)
business days, a lump sum cash amount equal to (1) eighteen (18) months' of
Executive's Base Salary plus (2) the annual bonus of the Executive for the
immediately prior fiscal year of the Company, and (ii) all options and shares of
restricted stock previously granted to Executive shall fully vest and all such
outstanding options shall remain exercisable for their originally scheduled
respective terms (other than incentive stock options granted to Executive prior
to the date hereof that do not provide for such continued exercisability in
accordance with their terms).
8. Enforcement. Executive acknowledges and agrees that: (i) the
purpose of the covenants set forth in Sections 5 through 7 above (the
"Restrictive Covenants") is to protect the goodwill, trade secrets and other
confidential information of the Company; (ii) because of the nature of the
business in which the Company is engaged and because of the nature of the
Confidential Information to which Executive has access, it would be impractical
and excessively difficult to determine the actual damages of the Company in the
event Executive breached any such covenants; and (iii) remedies at law (such as
monetary damages) for any breach of Executive's obligations under the
Restrictive Covenants would be inadequate. Executive therefore agrees and
consents that if Executive commits any breach of a Restrictive Covenant, the
Company shall have the right (in addition to, and not in lieu of, any other
right or remedy that may be available to it) to temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting any
bond or other security and without the necessity of proof of actual damage. If
any portion of the Restrictive Covenants is hereafter determined to be invalid
or unenforceable in any respect, such determination shall not affect the
remainder thereof, which shall be given the maximum effect possible and shall be
fully enforced, without regard to the invalid portions. In particular, without
limiting the generality of the foregoing, if the covenants set forth in Section
7 are found by a court or an arbitrator to be unreasonable, Executive and the
Company agree that the maximum period, scope or geographical area that is found
to be reasonable shall be substituted for the stated period, scope or area, and
that the court or arbitrator shall revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law. If any of the
Restrictive Covenants are determined to be wholly or partially unenforceable in
any jurisdiction, such determination shall not be a bar to or in any way
diminish the Company's right to enforce any such covenant in any other
jurisdiction.
9. Indemnification.
(a) The Company agrees that if Executive is made a party to,
is threatened to be made a party to, receives any legal process in, or receives
any discovery request or request for information in connection with, any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he was a director, officer, employee,
consultant or agent of the Company, or was serving at the request of, or on
behalf of, the Company as a director, officer, member, employee, consultant or
agent of another corporation, limited liability corporation, partnership, joint
venture, trust or other entity, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is Executive's
alleged action in an official capacity while serving as a director, officer,
member, employee, consultant or agent of the Company or other entity, Executive
shall be indemnified and held harmless by the Company to the fullest extent
permitted or authorized by the Company's certificate of incorporation or by-laws
or, if greater, by applicable law, against any and all costs, expenses,
liabilities and losses (including, without limitation, attorneys' fees
reasonably incurred, judgments, fines, taxes or penalties and amounts paid or to
be paid in settlement and any reasonable cost and fees incurred in enforcing his
rights to indemnification or contribution) incurred or suffered by Executive in
connection therewith, and such indemnification shall continue as to Executive
even though he has ceased to be a director, officer, member, employee,
consultant or agent of the Company or other entity and shall inure to the
benefit of Executive's heirs, executors and administrators. The Company shall
reimburse Executive for all costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by him in connection with any Proceeding
within twenty (20) business days after receipt by the Company of a written
request for such reimbursement and appropriate documentation associated with
these expenses. Such request shall include an undertaking by Executive to repay
the amount of such advance if it shall ultimately be determined that he is not
entitled to be indemnified against such costs and expenses; provided that the
amount of such obligation to repay shall be limited to the after-tax amount of
any such advance except to the extent Executive is able to offset such taxes
incurred on the advance by the tax benefit, if any, attributable to a deduction
for repayment.
(b) Neither the failure of the Company (including its board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any proceeding concerning payment of amounts claimed by
Executive under Section 9(a) above that indemnification of Executive is proper
because he has met the applicable standard of conduct, nor a determination by
the Company (including its board, independent legal counsel or stockholders)
that Executive has not met such applicable standard of conduct, shall create a
presumption or inference that Executive has not met the applicable standard of
conduct.
(c) The Company agrees to continue and maintain a directors'
and officers' liability insurance policy covering Executive at a level, and on
terms and conditions, no less favorable to him than the coverage the Company
provides other similarly-situated executives until such time as suits against
Executive are no longer permitted by law.
(d) Nothing in this Section 9 shall be construed as reducing
or waiving any right to indemnification, or advancement of expenses, Executive
would otherwise have under the Company's certificate of incorporation or by-laws
or under applicable law.
(e) In addition, the Company agrees to indemnify Executive
against any and all losses, liabilities, damages, expenses (including attorneys'
fees), judgments, fines and amounts incurred by Executive in connection with any
claim, action, suit or proceeding arising as a result of Executive's alleged or
actual violation of any existing contractual or other restrictions on
Executive's employment or business activities if such violation occurs as a
result of Executive's entering into this Agreement or his rendering, or having
rendered, services to the Company or to any Subsidiary.
10. Arbitration. In the event that any dispute arises between the
Company and Executive regarding or relating to this Agreement and/or any aspect
of Executive's employment relationship with the Company, the parties consent to
resolve such dispute through mandatory arbitration under the Commercial Rules of
the American Arbitration Association ("AAA"), before a single arbitrator in New
York, New York. The parties hereby consent to the entry of judgment upon award
rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief. The parties hereby consent to the exclusive jurisdiction
of the state and Federal courts of or in the State of New York for purposes of
seeking such injunctive or equitable relief as set forth above. All
out-of-pocket costs and expenses reasonably incurred by Executive in connection
with such arbitration (including attorneys' fees) shall be paid by the Company
unless the arbitrator determines that Executive shall have brought a claim in
bad faith or without any reasonable basis.
11. Mutual Representations.
(a) Executive acknowledges that before signing this Agreement,
Executive was given the opportunity to read it, evaluate it and discuss it with
Executive's personal advisors. Executive further acknowledges that the Company
has not provided Executive with any legal advice regarding this Agreement.
(b) Executive represents and warrants to the Company that the
execution and delivery of this Agreement and the fulfillment of the terms hereof
(i) shall 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) as to
his execution and delivery of this Agreement do not require the consent of any
other person.
(c) The Company represents and warrants to Executive that (i)
the execution, delivery and performance of this Agreement by the Company has
been fully and validly authorized by all necessary corporate action, (ii) the
person signing this Agreement on behalf of the Company is duly authorized to do
so, (iii) the execution, delivery and performance of this Agreement does not
violate any applicable law, regulation, order, judgment or decree or any
agreement, plan or corporate governance document to which the Company is a party
or by which it is bound and (iv) upon execution and delivery of this Agreement
by the parties, it shall be a valid and binding obligation of the Company
enforceable against it in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
(d) Each party hereto represents and warrants to the other
that this Agreement constitutes the valid and binding obligations of such party
enforceable against such party in accordance with its terms.
12. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when delivered
(i) personally, (ii) by registered or certified mail, postage prepaid with
return receipt requested, (iii) by facsimile with evidence of completed
transmission, or (iv) delivered by overnight courier to the party concerned at
the address indicated below or to such changed address as such party may
subsequently give such notice of:
If to the Company:
Six Flags, Inc.
0000 Xxxxxxxx; 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to Executive:
Xxxx Xxxxxxx
c/o Six Flags, Inc.
0000 Xxxxxxxx; 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. Assignment and Successors. This Agreement is personal in its
nature and none of the parties hereto shall, without the consent of the others,
assign or transfer this Agreement or any rights or obligations hereunder;
provided, however, that in the event of a merger, consolidation, or transfer or
sale of all or substantially all of the assets of the Company with or to any
other individual(s) or entity, this Agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of such successor and such
successor shall discharge and perform all the promises, covenants, duties, and
obligations of the Company hereunder, and such transferee or successor shall be
required to assume such obligations by contract (unless such assumption occurs
by operation of law). Anything herein to the contrary notwithstanding, Executive
shall be entitled to select (and change, to the extent permitted under any
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following Executive's death or judicially determined
incompetence by giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
14. Governing Law; Amendment. This Agreement shall be governed by
and construed in accordance with the laws of New York, without reference to
principles of conflict of laws. This Agreement may not be amended or modified
except by a written agreement executed by Executive and the Company or their
respective successors and legal representatives.
15. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.
16. Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from amounts payable under this Agreement
all federal, state, local and foreign taxes that are required to be withheld by
applicable laws or regulations.
17. No Waiver. Executive's or the Company's failure to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement. Any provision of this
Agreement may be waived by the parties hereto; provided that any waiver by any
person of any provision of this Agreement shall be effective only if in writing
and signed by each party and such waiver must specifically refer to this
Agreement and to the terms or provisions being modified or waived.
18. No Mitigation. In no event shall Executive be obligated to seek
other employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and such
amounts shall not be subject to offset or otherwise reduced whether or not
Executive obtains other employment. The Company's obligation to make any payment
pursuant to, and otherwise to perform its obligations under, this Agreement
shall not be affected by any offset, counterclaim or other right that the
Company may have against Executive for any reason.
19. Section 409A. This Agreement is intended to satisfy the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
("Section 409A") with respect to amounts, if any, subject thereto and shall be
interpreted and construed and shall be performed by the parties consistent with
such intent. To the extent Executive would otherwise be entitled to any payment
under this Agreement, or any plan or arrangement of the Company or its
Affiliates, that constitutes a "deferral of compensation" subject to Section
409A and that if paid during the six (6) months beginning on the Date of
Termination of Executive's employment would be subject to the Section 409A
additional tax because Executive is a "specified employee" (within the meaning
of Section 409A and as determined by the Company), the payment will be paid to
Executive on the earlier of the six (6) month anniversary of his Date of
Termination or death. To the extent Executive would otherwise be entitled to any
benefit (other than a payment) during the six (6) months beginning on
termination of Executive's employment that would be subject to the Section 409A
additional tax, the benefit will be delayed and will begin being provided on the
earlier of the first day following the six (6) month anniversary of Executive's
Date of Termination or death. Any payment or benefit due upon a termination of
employment that represents a "deferral of compensation" within the meaning of
Section 409A shall be paid or provided only upon a "separation from service" as
defined in Treas. Reg. ss. 1.409A-1(h). Each payment made under this Agreement
shall be deemed to be a separate payment for purposes of Section 409A. Amounts
payable under this Agreement shall be deemed not to be a "deferral of
compensation" subject to Section 409A to the extent provided in the exceptions
in Treasury Regulation xx.xx. 1.409A-1(b)(4) ("short-term deferrals") and (b)(9)
("separation pay plans," including the exception under subparagraph (iii)) and
other applicable provisions of Treasury Regulation ss. 1.409A-1 through A-6.
Notwithstanding anything to the contrary in this Agreement or elsewhere, any
payment or benefit under this Agreement or otherwise that is exempt from Section
409A pursuant to Treasury Regulation ss. 1.409A-1(b)(9)(v)(A) or (C) (relating
to certain reimbursements and in-kind benefits) shall be paid or provided only
to the extent that the expenses are not incurred, or the benefits are not
provided, beyond the last day of the second calendar year following the calendar
year in which Executive's "separation from service" occurs; and provided further
that such expenses are reimbursed no later than the last day of the third
calendar year following the calendar year in which Executive's "separation from
service" occurs. To the extent any expense reimbursement (including without
limitation any reimbursement of interest or penalties related to taxes) or the
provision of any in-kind benefit is determined to be subject to Section 409A
(and not exempt pursuant to the prior sentence or otherwise), the amount of any
such expenses eligible for reimbursement, or the provision of any in-kind
benefit, in one calendar year shall not affect the expenses eligible for
reimbursement in any other calendar year (except for any life-time or other
aggregate limitation applicable to medical expenses), in no event shall any
expenses be reimbursed after the last day of the calendar year following the
calendar year in which Executive incurred such expenses, and in no event shall
any right to reimbursement or the provision of any in-kind benefit be subject to
liquidation or exchange for another benefit. Any Gross-Up Payment (as defined
below) shall in all events be paid to Executive no later than the end of the
taxable year next following the taxable year in which the Excise Tax (as defined
below) and any other taxes or interest or penalties thereon on a Payment (as
defined below) are remitted to the Internal Revenue Service or any other
applicable taxing authority.
20. Tax Gross-Up.
(a) Definitions. The following terms shall have the following
meanings for purposes of this Section 20:
(i) "Excise Tax" shall mean the excise tax imposed by Section 4999
of the Code or any similar tax that may hereafter be imposed, together with any
interest or penalties imposed with respect to such excise or other similar tax.
(ii) "Parachute Value" of a Payment shall mean the present value as
of the date of the change of control for purposes of Section 280G of the Code of
the portion of such Payment that constitutes a "parachute payment" under Section
280G(b)(2), as determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax shall apply to such Payment.
(iii) A "Payment" shall mean any payment, benefit, entitlement or
distribution in the nature of compensation (within the meaning of Section
280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or
payable pursuant to this Agreement or otherwise.
(iv) The "Safe Harbor Amount" means 2.99 times Executive's "base
amount," within the meaning of Section 280G(b)(3) of the Code.
(v) "Value" of a Payment shall mean the economic present value of a
Payment as of the date of the change of control for purposes of Section 280G of
the Code, as determined by the Accounting Firm using the discount rate required
by Section 280G(d)(4) of the Code.
(b) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
Payment would be subject to the Excise Tax, then Executive shall be entitled to
receive an additional payment (the "Gross-Up Payment") in an amount such that,
after payment by Executive of all taxes (and any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 20(b), if it shall be determined that
Executive is entitled to the Gross-Up Payment, but that the Parachute Value of
all Payments does not exceed one hundred ten percent (110%) of the Safe Harbor
Amount, then no Gross-Up Payment shall be made to Executive and the amounts
payable under this Agreement shall be reduced so that the Parachute Value of all
Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first reducing the
payments under Section 4(b)(ii), and in any event shall be made in such a manner
as to maximize the Value of all Payments actually made to Executive. For
purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the
reduction of the amount payable under this Agreement would not result in a
reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no
amounts payable under the Agreement shall be reduced pursuant to this Section
20(b). The Company's obligation to make Gross-Up Payments under this Section 20
shall not be conditioned upon Executive's termination of employment.
(c) Subject to the provisions of Section 20(d), all
determinations required to be made under this Section 20, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by a
nationally recognized certified public accounting firm designated by Executive
(the "Accounting Firm"). The Accounting Firm shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business days
of the receipt of notice from Executive that there has been a Payment or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, Executive may appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 20, shall be paid
by the Company to Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments that
shall not have been made by the Company should have been made (the
"Underpayment"), consistent with the calculations required to be made hereunder.
In the event the Company exhausts its remedies pursuant to Section 20(d) and
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive.
(d) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable, but no later than ten (10) business days after Executive is
informed in writing of such claim. Executive shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the thirty (30)
day period following the date on which Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that the Company desires to contest such
claim, Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take any such action for which there is substantial authority
in connection with contesting such claim as the Company shall reasonably request
in writing from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim; provided that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold Executive harmless,
on an after-tax basis, for any Excise Tax or income or other tax (including
interest and penalties) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this
Section 20(d), the Company shall control all proceedings taken in connection
with such contest, and, at its sole discretion, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole
discretion, either pay the tax claimed to the appropriate taxing authority on
behalf of Executive and direct Executive to xxx for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided that, if the Company pays such claim and directs Executive
to xxx for a refund, the Company shall indemnify and hold Executive harmless, on
an after-tax basis, from any Excise Tax or income or other tax (including
interest or penalties) imposed with respect to such payment or with respect to
any imputed income in connection with such payment; and provided, further, that
any extension of the statute of limitations relating to payment of taxes for the
taxable year of Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues with respect to which the
Gross-Up Payment would be payable hereunder, and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(e) If, after the receipt by Executive of a Gross-Up Payment
or payment by the Company of an amount on Executive's behalf pursuant to Section
20(d), Executive becomes entitled to receive any refund with respect to the
Excise Tax to which such Gross-Up Payment relates or with respect to such claim,
Executive shall (subject to the Company's complying with the requirements of
Section 20(d), if applicable) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after payment by the Company of an amount on
Executive's behalf pursuant to Section 20(d), a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such
determination, then the amount of such payment shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
(f) Notwithstanding any other provision of this Section 20,
the Company may, in its sole discretion, withhold and pay over to the Internal
Revenue Service or any other applicable taxing authority, for the benefit of
Executive, all or any portion of any Gross-Up Payment, and Executive hereby
consents to such withholding.
21. Headings. The Section headings contained in this Agreement are
for convenience only and in no manner shall be construed as part of this
Agreement.
22. Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede all prior agreements, whether written or oral, with respect thereto,
including the Existing Employment Agreement (except with regard to outstanding
equity awards granted in accordance therewith). In the event of any
inconsistency between the terms of this Agreement and the terms of any other
Company plan, policy, equity grant, arrangement or agreement with Executive, the
provisions most favorable to Executive shall govern.
23. Duration of Terms. The respective rights and obligations of the
parties hereunder shall survive any termination of Executive's employment to the
extent necessary to give effect to such rights and obligations.
24. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Executive and the Company have caused this
Agreement to be executed as of the date first above written.
SIX FLAGS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chairman of the Compensation
Committee
SIX FLAGS OPERATIONS INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: General Counsel
SIX FLAGS THEME PARKS INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: General Counsel
/s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
EXHIBIT A
---------
Annual Bonus Parameters
Definitions:
"Performance Parameters" shall mean the following, as determined annually by the
Board:
(a) Budgeted Adjusted EBITDA: Total budgeted Adjusted EBITDA (as defined in the
Company's earnings releases).
(b) Budgeted Free Cash Flow: Total Budgeted Free Cash Flow (as defined in the
Company's earnings releases).
(c) Budgeted Attendance: Total budgeted attendance.
(d) Budgeted In-Park Net Revenue Per Capita: Total budgeted in-park net revenue
per capita.
(e) Budgeted Sponsorship/Licensing Revenue: Total budgeted sponsorship/licensing
revenue.
Rules for Calculation of Annual Bonus:
Any annual bonus payable under Section 3(b) of this Agreement, shall be
determined annually by the compensation committee of the Board (the "Committee")
in accordance with the rules below. All determinations by the Committee shall be
final and binding on Executive. All Adjusted EBITDA and other bonus targets
shall be determined by reference to the Company's Budget for each year as
approved by the Board. The Committee shall work with the Executive to determine
appropriate bonus targets for any items that are not specifically contained in
the Company's Budget each year.
1. Subject to the other rules, the Performance Parameters shall be weighted as
follows in determining the amount of the annual bonus: Budgeted Adjusted EBITDA:
50% and 12.5% for each of the remaining Performance Parameters.
2. No annual bonus whatsoever shall be payable in respect of a given fiscal year
if actual Adjusted EBITDA for such year is less than 90% of Budgeted Adjusted
EBITDA.
3. If actual results for a given Performance Parameter are less than 90% of the
Performance Parameter, no amount shall be payable in respect of such Performance
Parameter.
4. If actual Adjusted EBITDA for a given fiscal year equals or exceeds 90% of
Budgeted Adjusted EBITDA, and the results for any given Performance Parameter
(including Budgeted Adjusted EBITDA) equals or exceeds 90% of the Performance
Parameter, then the amount payable in respect of such parameter shall be
determined by multiplying the product of the Target Bonus and the weight
ascribed to the Performance Parameter in Rule 1 above by the appropriate
multiplier below:
Multiplier Performance Level
---------- -----------------
0.5 Actual Performance equals 90% of the
Performance Parameter (including Budgeted Adjusted
EBITDA)
0.75 Actual Performance equals 95% of the
Performance Parameter (including Budgeted
Adjusted EBITDA)
1.0 Actual Performance equals 100% of the
Performance Parameter (including Budgeted
Adjusted EBITDA)
1.5 Actual Performance equals 105% of the
Performance Parameter (including Budgeted
Adjusted EBITDA)
2.0 Actual Performance equals or exceeds 110% of
the Performance Parameter (including Budgeted
Adjusted EBITDA)
Determined Actual Performance exceeds 90% but is below
by 110% of the Performance Parameter (including
interpolation Budgeted Adjusted EBITDA)
between 0.5
and 2.0
5. If actual EBITDA for a given fiscal year is or exceeds 110% of Budgeted
EBITDA, then Executive shall receive the Maximum Bonus notwithstanding the
results of the other Performance Parameters.
6. Notwithstanding anything to the contrary above, Executive shall not receive
an annual bonus greater than the Maximum Bonus.
7. If Executive's employment with the Company ceases upon expiration of the
Term, Executive shall be entitled to a lump sum payment, within ten (10)
business days, equal to the Target Bonus for Executive for the year of
termination pro-rated based on the number of days from the beginning of the year
through the Date of Termination divided by the total number of days in the year
of termination.
