DEF 14A 1 formdef14a2015proxy.htm DEF 14A Form DEF 14A(2015 Proxy Statement)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )
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Soliciting Material under §240.14a-12
Six Flags Entertainment Corporation
(Name of Registrant as Specified In Its Charter)
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SIX FLAGS ENTERTAINMENT CORPORATION
924 Avenue J East
Grand Prairie, Texas 75050
March 24, 2015
Dear Fellow Stockholder:
It is my pleasure to invite you to attend the 2015 Annual Meeting of Stockholders of Six Flags Entertainment Corporation, which will be held on Wednesday, May 6, 2015, at 3:00 p.m. EDT, at The Yale Club of New York City, 50 Vanderbilt Avenue, New York, New York 10017.
The attached Notice of Annual Meeting of Stockholders and Proxy Statement contain details of the business to be conducted at the Annual Meeting.
Consistent with past practice, we are pleased to be using the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their stockholders primarily over the Internet. We believe that this process has expedited stockholders' receipt of proxy materials, lowered the associated costs, and conserved natural resources.
On March 24, 2015, we began mailing our stockholders a notice containing instructions on how to access our proxy materials and vote. The notice also includes instructions on how to receive a printed copy of the materials.
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. We encourage you to promptly vote and submit your proxy over the Internet, by phone or by completing, signing and timely returning a proxy card. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.
On behalf of the directors, officers and employees of Six Flags Entertainment Corporation, we would like to express our appreciation for your continued support.
Sincerely,
 
JIM REID-ANDERSON
Chairman of the Board, President and
Chief Executive Officer
 



SIX FLAGS ENTERTAINMENT CORPORATION
924 Avenue J East
Grand Prairie, Texas 75050
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 6, 2015
NOTICE IS HEREBY GIVEN that the 2015 Annual Meeting of Stockholders (the "Annual Meeting") of Six Flags Entertainment Corporation (the "Company") will be held on Wednesday, May 6, 2015, at 3:00 p.m. EDT, at The Yale Club of New York City, 50 Vanderbilt Avenue, New York, New York 10017, for the following purposes, all as more fully described in the accompanying proxy statement (the "Proxy Statement"):
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To elect seven directors nominated by the Company's Board of Directors and named in the Proxy Statement to serve for the ensuing year and until their respective successors are elected and qualified;
2.
To approve the Company's Long-Term Incentive Plan as amended to increase the number of shares available for issuance under such plan; 
3.
To hold an advisory vote to ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the year ending December 31, 2015; and
4.
To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
You are entitled to vote only if you were a stockholder of the Company as of the close of business on March 11, 2015. Whether or not you plan to attend the Annual Meeting, we encourage you to read the Proxy Statement and submit your proxy or voting instructions as soon as possible. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy. You can find directions to the Annual Meeting on the back cover of the Proxy Statement.
For specific instructions on how to vote your shares, please refer to the instructions in the Notice of Internet Availability of Proxy Materials you received in the mail, the section titled "General Information" beginning on page 1 of the Proxy Statement, or if you requested to receive printed proxy materials, your enclosed proxy card.

By Order of the Board of Directors,
 
WALTER S. HAWRYLAK
Secretary
 
 
 
Grand Prairie, Texas
March 24, 2015
 



PROXY STATEMENT
FOR THE
2015 ANNUAL MEETING OF STOCKHOLDERS
OF
SIX FLAGS ENTERTAINMENT CORPORATION
TO BE HELD ON May 6, 2015

TABLE OF CONTENTS

 
 




GENERAL INFORMATION
This Proxy Statement is being furnished to holders of common stock of Six Flags Entertainment Corporation (the "Company" or "we" or "us") in connection with the solicitation of proxies by the Board of Directors for use in voting at the Annual Meeting of Stockholders (the "Annual Meeting") to be held on Wednesday, May 6, 2015, at 3:00 p.m. EDT, at The Yale Club of New York City, 50 Vanderbilt Avenue, New York, New York 10017, and at any postponement or adjournment thereof.
Internet Availability of Proxy Materials
Pursuant to rules of the Securities and Exchange Commission ("SEC"), the Company is furnishing proxy materials to its stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. On March 24, 2015, the Company began mailing a Notice of Internet Availability of Proxy Materials to stockholders of record as of the close of business on March 11, 2015, other than to those stockholders who previously requested to receive electronic or paper delivery of communications. The Notice of Internet Availability of Proxy Materials contains instructions on how to access an electronic copy of the proxy materials including this Proxy Statement and the Annual Report for the year ended December 31, 2014.
This process is designed to expedite stockholders' receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive the proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.
Quorum
The quorum requirement for holding the Annual Meeting and transacting business is a majority of the outstanding shares of common stock entitled to vote. The shares may be present in person or represented by proxy at the meeting. Abstention votes and broker non-votes (as described below) are counted as present for the purpose of determining whether a quorum exists for the Annual Meeting.
Required Vote
Proposal
Voting Requirement
Tabulation Treatment
Votes Withheld/Abstentions
Broker Non-Votes
Election of Directors
Plurality of votes cast to elect each director; the seven nominees with the highest number of affirmative FOR votes will be elected
Not counted for purposes of calculating approval percentage
Brokers do not have discretionary authority; Not counted for purposes of calculating approval percentage
Long-Term Incentive Plan as amended
Majority of shares present at Annual Meeting
Treated as a vote against the matter for purposes of calculating approval percentage
Brokers do not have discretionary authority; Not counted for purposes of calculating approval percentage
Advisory Vote to Ratify Appointment of KPMG LLP
Majority of shares present at Annual Meeting
Treated as a vote against the matter for purposes of calculating approval percentage
Brokers have discretionary authority
With respect to Proposal 1 (election of directors), stockholders may vote FOR all or some of the nominees or stockholders may vote WITHHOLD with respect to one or more of the nominees. For the other items of business, stockholders may vote FOR, AGAINST or ABSTAIN.
All properly executed proxies delivered pursuant to this solicitation and not revoked in a timely manner will be voted in accordance with the directions given and, in connection with any other business that may properly come before the Annual Meeting, in the discretion of the persons named in the proxy.
A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. A broker is entitled to vote shares held for a beneficial holder on routine matters, such as the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm, without instructions from the beneficial holder of those shares. On the other hand, a broker is not

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entitled to vote shares held for a beneficial holder on certain non-routine items, such as the election of directors and the amendment to the Long-Term Incentive Plan, absent instructions from the beneficial holders of such shares. 
In order to minimize the number of broker non-votes, the Company encourages you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided to you by your broker, bank or other nominee.
Revocation of Proxies
Your proxy may be revoked at any time prior to the Annual Meeting. If you provide more than one proxy, the proxy having the latest date will revoke any earlier proxy. If you attend the Annual Meeting in person, you will be given the opportunity to revoke your proxy and vote in person. If you are a stockholder of record or hold shares through a broker or bank and are voting by Internet or telephone, your vote must be received by 11:59 p.m. EDT on May 5, 2015 to be counted.
Record Date
Only stockholders of record as of the close of business on March 11, 2015 are entitled to notice of, and to vote at, the Annual Meeting or any postponement or adjournment thereof. As of March 11, 2015, the Company had issued and outstanding 94,802,999 shares of common stock, the Company's only class of outstanding securities entitled to vote at the Annual Meeting. Each stockholder of the Company will be entitled to one vote for each share of common stock registered in its name on March 11, 2015.
Proxy Voting Methods
If at the close of business on March 11, 2015, you were a stockholder of record or held shares through a broker or bank, you may vote your shares by proxy on the Internet, by telephone or by mail. You may also vote in person at the Annual Meeting. For shares held through a broker or nominee, you may vote by submitting voting instructions to your broker or nominee. To reduce the Company's administrative and postage costs, we suggest that you vote on the Internet or by phone, both of which are available 24 hours a day. You may revoke your proxies at the times and in the manners described above.
        If you are a stockholder of record or hold shares through a broker or bank and are voting by Internet or telephone, your vote must be received by 11:59 p.m. EDT on May 5, 2015 to be counted.
INTERNET
If your shares are registered in your name:  Go to www.envisionreports.com/SIX and follow the online instructions. You will need the 15-digit control number included on your Notice or proxy card when you access the web page.
If your shares are held in a stock brokerage account or by a bank or other nominee:  Go to www.proxyvote.com and follow the instructions that you receive from your broker, bank or other nominee.
TELEPHONE
If your shares are registered in your name:  Call toll-free (800) 652-8683 and follow the recorded instructions. You will need the 15-digit control number included on your Notice or proxy card when you call.
If your shares are held in a stock brokerage account or by a bank or other nominee:  Vote your shares over the telephone by following the voting instructions that you receive from your broker, bank or other nominee.
MAIL
Request a proxy card by following the instructions on your Notice.
When you receive the proxy card, mark your selections on the proxy card.
Date and sign your name exactly as it appears on your proxy card.
Mail the proxy card in the postage-paid envelope that will be provided to you.
The granting of proxies electronically is allowed by Section 212(c)(2) of the Delaware General Corporation Law. Whether or not you attend the Annual Meeting, your vote is important. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and timely returning a proxy card. You may also vote in person at the Annual Meeting.
Householding
We have adopted a procedure called "householding," which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, the proxy materials, to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon

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written request, we will deliver promptly a separate copy of the Notice and, if applicable, the proxy materials, to any stockholder at a shared address to which we delivered a single copy of any of these documents. To receive a separate copy of the Notice and, if applicable, the proxy materials, stockholders may write or email us at the following address and email address:
Six Flags Entertainment Corporation
924 Avenue J East
Grand Prairie, Texas 75050
Attention: Investor Relations
nkrejsa@sftp.com
972-595-5083
Stockholders who hold shares in street name through a broker, bank or other nominee may contact their broker, bank or other similar organization to request information about householding.
Solicitation of Proxies
This proxy solicitation is being made on behalf of the Company. The expense of preparing, printing and mailing this Proxy Statement is being paid by the Company. Proxies may be solicited by directors, officers, and employees of the Company in person, by mail, telephone, e-mail or other electronic means. The Company will not specially compensate those persons for their solicitation activities.

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CORPORATE GOVERNANCE
The Board of Directors
The Company's business, property and affairs are managed under the direction of the Board of Directors of the Company (the "Board"). The Board is elected by stockholders to oversee management and to assure that the long-term interests of stockholders are being served. The Board has responsibility for establishing broad corporate policies and for the overall performance of the Company. It is not, however, involved in the operating details on a day-to-day basis. The Board is advised of the Company's business through discussions with the Chief Executive Officer and other officers of the Company, by reviewing reports, analyses and materials provided to them and by participating in Board meetings and meetings of the committees of the Board.
The Board has four regularly scheduled meetings during the year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between regularly scheduled meetings. Directors are expected to attend all scheduled Board and committee meetings as well as the annual meeting of stockholders. During the year ended December 31, 2014, the Board held 5 meetings. Each of the directors of the Company attended at least 75% of the aggregate of the meetings of the Board and of the meetings of committees of the Board on which such director served. All of the directors of the Company attended the Company's annual meeting of stockholders in 2014 and the Company expects that each director nominee will attend the Annual Meeting.
The Board only has one class of directors. As a result, all directors are elected each year by the Company's stockholders at the annual meeting. Directors may be removed with or without cause by the holders of a majority of the shares then entitled to vote at an election of directors.
Each current director of the Company was elected at the Company's annual meeting of stockholders in 2014. The Board currently has seven directors and all seven directors of the Company are being nominated by the Board at the Annual Meeting. See "Proposal 1: Election of Directors."
Stockholders and other interested parties may contact Jon L. Luther, the Lead Independent Director, and the other non-management directors by writing to the Lead Independent Director c/o Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050.
Independence
The Board has affirmatively determined that six of the seven current directors, including all members of its Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, are "independent" within the meaning of the Company's director independence standards as set forth in the Company's Corporate Governance Principles. These standards reflect the independence standards adopted by the New York Stock Exchange ("NYSE"). The independent directors are Kurt M. Cellar, Charles A. Koppelman, Jon L. Luther, Usman Nabi, Stephen D. Owens and Richard W. Roedel.
None of the independent directors, their respective affiliates or members of their immediate family, directly or indirectly, receive any fee or payment from the Company or its affiliates other than the director compensation described below or have engaged in any transaction with the Company or its affiliates or have any relationship with the Company or its affiliates which, in the judgment of the Board, is inconsistent with a determination that the director is independent. There is no family relationship among any of the directors or executive officers of the Company.
Corporate Governance Documents
The Company's Corporate Governance Principles, Code of Business Conduct and Ethics, Code of Ethics for Senior Management and the charters of the Board committees provide the framework for the governance of the Company.
Corporate Governance Principles
The Corporate Governance Principles cover, among other things, the functions of the Board, the qualifications of directors, director independence, the selection process for new directors, Board committees, compensation of the Board and the succession plan for the chief executive officer and other senior executives.
Code of Business Conduct and Ethics
The Company has adopted and maintains a Code of Business Conduct and Ethics that covers all directors, officers and employees of the Company and its subsidiaries. The Code of Business Conduct and Ethics requires, among other things, that the directors, officers and employees exhibit and promote the highest standards of honest and ethical conduct; avoid conflicts of interest; comply with laws, rules and regulations; and otherwise act in the Company's best interest.

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Code of Ethics for Senior Management
The Company has also adopted and maintains a separate Code of Ethics for Senior Management that imposes specific standards of conduct on members of senior management including persons with financial reporting responsibilities at the Company. Each member of the Company's senior management is required to annually certify in writing his or her compliance during the prior year with the Code of Ethics for Senior Management.
The Company intends to post amendments to or waivers from the Company's Corporate Governance Principles, Code of Business Conduct and Ethics and the Company's Code of Ethics for Senior Management on the Company's website at www.sixflags.com/investors. No waivers have been made or granted prior to the date of this Proxy Statement.
Availability of Corporate Governance Documents
The Company's Corporate Governance Principles, Code of Business Conduct and Ethics, Code of Ethics for Senior Management and charters of the committees of the Board are available on the Company's website at www.sixflags.com/investors. A printed copy of each of these documents is available, without charge, by sending a written request to: Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050, Attention: Investor Relations, or by sending an email to nkrejsa@sftp.com.
Board Committees
The Board has designated an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The membership of the committees as of March 1, 2015 and the function of each committee are described below.
Director
 
Audit
Committee
 
Compensation
Committee
 
Nominating and
Corporate Governance
Committee
Kurt M. Cellar
 
X*+
 
 
 
 
Charles A. Koppelman
 
X    
 
X  
 
 
Jon L. Luther
 
 
 
X*
 
 
Usman Nabi
 
 
 
 
 
  X*
Stephen D. Owens
 
 
 
X  
 
X
James Reid-Anderson
 
 
 
 
 
 
Richard W. Roedel
 
X+    
 
 
 
X
___________________________
* Chairman
+ Audit Committee Financial Expert
Audit Committee
The overall purpose of the Audit Committee is to oversee the accounting and financial reporting process of the Company and the audits of the financial statements of the Company. In fulfilling this purpose, the Audit Committee's duties and responsibilities include, among other things, (i) the appointment, compensation, evaluation and oversight of the work of the Company's independent auditors; (ii) review and approval of the independent auditor's engagement including the pre-approval of all audit and permitted non-audit engagements; (iii) oversight of the independent auditor's independence; (iv) review of the results of the year-end audit; (v) review of the adequacy and effectiveness of the Company’s accounting and internal control policies and procedures; (vi) review of management’s financial risk assessment and financial risk management policies, and the Company’s major financial risk exposures and the steps taken to monitor and control such exposures; (vii) establishment of procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and (viii) oversight of the Company's legal and regulatory compliance and the Company's safety programs as established by management.
The Audit Committee held 10 meetings during 2014 and met in executive session without management as it deemed necessary. A copy of the Audit Committee charter is available to stockholders on the Company's website at www.sixflags.com/investors. All members of the Audit Committee are independent within the meaning of SEC regulations. In addition, the Board has determined that Messrs. Cellar and Roedel are each qualified as an audit committee financial expert under SEC regulations and that all members of the Audit Committee have the accounting and related financial management expertise required by the NYSE. The SEC has determined that the audit committee financial expert designation does not impose on the person with that

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designation, any duties, obligations or other liability that are greater than the duties, obligations or liabilities imposed on such person as a member of the Audit Committee in the absence of such designation. Members of the Audit Committee may not serve on the audit committee of more than four public companies, including the Company, except that in the event such member serves on more than three public company audit committees, the Board must determine that such simultaneous service would not impair the ability of such member to serve effectively on the Company's Audit Committee. None of the members of the Audit Committee serve on the audit committee of more than three public companies.
Compensation Committee
The Compensation Committee, among other duties, (i) is responsible for establishing and reviewing the Company's overall compensation philosophy; (ii) determines the appropriate compensation levels for the Company's executive officers (which includes the review and approval of corporate goals and objectives used in determining executive officer compensation); (iii) reviews all incentive compensation and equity-based compensation plans, benefit plans and new executive compensation programs and oversees the administration of such plans; (iv) grants awards of shares or stock options pursuant to the Company's equity-based plans; and (v) reviews employee salary levels.
The Compensation Committee may form and delegate any of its responsibilities to a subcommittee so long as such subcommittee is solely comprised of Compensation Committee members. No such delegation with respect to executive compensation was made in 2014. In addition, the Compensation Committee has the direct responsibility for the appointment, termination, compensation and oversight of any compensation and benefit consultants retained by the Company in respect of executive compensation. The Compensation Committee has retained Deloitte Consulting LLP ("Deloitte") to advise it in connection with ongoing compensation matters related to the Company. During 2014, Deloitte affiliates provided tax and other consulting services to the Company. The Company has reviewed the services provided by Deloitte and its affiliates and has approved the provision of such services. The Company does not believe that the non-compensation services impair Deloitte’s ability to provide independent advice to the Compensation Committee, or otherwise present a conflict of interest. During 2014, the aggregate fees paid to Deloitte for executive compensation services to the Compensation Committee were $61,630, and the aggregate fees paid to Deloitte for tax and other consulting services to the Company were $228,997.
The Compensation Committee met 5 times during 2014. At every meeting, the Compensation Committee met in executive session without management. A copy of the written Compensation Committee charter is available to stockholders on the Company's website at www.sixflags.com/investors. The Board has determined that each member of the Compensation Committee is a "non-employee director" as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and meets the independence requirements of the NYSE and the "outside director" requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee serves, or has served, as an officer or employee of the Company. In addition, no interlocking relationship exists between the Board or the Compensation Committee and the board of directors or compensation committee of any other company, nor has any such interlocking relationship existed during 2014.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for recommending qualified candidates to the Board for election as directors of the Company, including the slate of directors that the Board proposes for election by stockholders at the Annual Meeting. The Nominating and Corporate Governance Committee also advises and makes recommendations to the Board on all matters concerning directorship practices, including compensation for non-employee directors, and recommendations concerning the functions and duties of the committees of the Board. The Nominating and Corporate Governance Committee developed and recommended to the Board the Company's Corporate Governance Principles and reviews, on a regular basis, the overall corporate governance of the Company.
The Nominating and Corporate Governance Committee met 4 times during 2014. At every meeting, the Nominating and Corporate Governance Committee met in executive session without management. A copy of the Nominating and Corporate Governance Committee's written charter is available to stockholders on the Company's website at www.sixflags.com/investors. All members of the Nominating and Corporate Governance Committee are independent within the meaning of the NYSE requirements.

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Communications with the Board of Directors
Stockholders who wish to communicate with the Board may do so by writing to a specific director, including the Lead Independent Director, or to the entire Board at the following address: Board of Directors—Stockholder Communications, c/o Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050, Attention: Secretary. The Secretary will forward all such communications to the directors to whom they are addressed.
Meetings of Independent Directors
The Board schedules at least four meetings each year for the independent directors outside the presence of any member of management. The independent directors may meet in executive session at such other times as determined by the Lead Independent Director. At each executive session, the Lead Independent Director or, in his absence, one of the other independent directors will chair that executive session.
Board Leadership Structure and Role in Risk Oversight
Currently, Mr. Reid-Anderson serves as the Company's Chief Executive Officer and as the Chairman of the Board. The Board does not have a policy on whether or not the roles of the Chief Executive Officer and Chairman should be separate. Instead, the Company's By-Laws provide that the Board may designate a Chairman. Accordingly, the Board reserves the right to vest the responsibilities of the Chief Executive Officer and Chairman in the same person or in two different individuals depending on what it believes is in the best interest of the Company. The Board has determined that the most effective leadership structure for the Company is for Mr. Reid-Anderson to serve as both Chairman and Chief Executive Officer. The Board believes that this combined role provides strong unified leadership for the Company, enhances communication between management and the Board and enables management to more efficiently execute the Company's strategic initiatives and business plans. Mr. Luther serves as the Company's Lead Independent Director. As the Lead Independent Director, Mr. Luther presides at meetings of the non-employee directors and serves as the presiding director in performing such other functions as the Board may direct, including advising on the selection of committee chairs and advising management on the agenda for Board meetings. The Board believes that there is no single Board leadership structure that would be most effective in all circumstances and therefore retains the authority to modify this structure to best address the Company's and the Board's then current circumstances as and when appropriate.
The Company's management is responsible for identifying, assessing and managing the material risks facing the business. The Board and, in particular, the Audit Committee are responsible for overseeing the Company's processes for assessing and managing risk. Each of the Chief Executive Officer, Chief Financial Officer, General Counsel and Vice President of Internal Audit, with input as appropriate from other management members, report and provide relevant information directly to either the Board and/or the Audit Committee on various types of identified material financial, reputational, legal, operational, environmental and business risks to which the Company is or may be subject, as well as mitigation strategies for certain salient risks. In accordance with NYSE requirements and as set forth in its charter, the Audit Committee periodically reviews and discusses the Company's business and financial risk management and risk assessment policies and procedures with senior management, the Company's independent auditor and the Vice President of Internal Audit of the Company. The Audit Committee reports its risk assessment function to the full Board and the Board reviews and discusses such risks at a regularly scheduled Board meeting. The roles of the Board and the Audit Committee in the risk oversight process have not affected the Board leadership structure.
Nomination Process
Role of the Nominating and Corporate Governance Committee
The Board has adopted a set of Corporate Governance Principles which includes qualification criteria that the Nominating and Corporate Governance Committee uses to identify individuals it believes are qualified to become directors. In making recommendations of nominees pursuant to the Corporate Governance Principles, the Nominating and Corporate Governance Committee believes that candidates should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the stockholders. The Nominating and Corporate Governance Committee also evaluates whether a candidate has an inquisitive and objective perspective, practical wisdom and mature judgment. With respect to diversity, the Nominating and Corporate Governance Committee and the Board as a whole broadly construe diversity to mean not only diversity of race, gender and ethnicity, but also diversity of opinions, perspectives, and professional and personal experiences. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law. The Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. The Board therefore considers diversity in identifying nominees for director but does not have a separate policy directed toward diversity. In assessing whether a candidate has the appropriate time to devote to Board service, the Nominating and Corporate Governance Committee will consider the number of boards of

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directors on which such candidate already serves. Although candidates must be committed to serving on the Board for an extended period of time, the Board does not believe that directors should expect to be routinely renominated annually.
After identifying the qualified individuals and conducting interviews, as appropriate, the Nominating and Corporate Governance Committee will recommend the selected individuals to the Board. The Nominating and Corporate Governance Committee uses the same process to evaluate all candidates, whether they are recommended by the Company or by one of the Company's stockholders.
The Nominating and Corporate Governance Committee may retain a director search firm to help identify qualified director candidates.
Stockholder Recommendations and Nominations
Stockholders may recommend director candidates for consideration by the Nominating and Corporate Governance Committee by sending the name and supporting information in accordance with Rule 14a-8 of the Exchange Act and the information set forth in the Company's Corporate Governance Principles (available on the Company’s website at www.sixflags.com/investors) to the Secretary or Lead Independent Director, c/o Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050.
The Company's Amended and Restated By-Laws permit a stockholder to nominate one or more persons for election as directors at an annual meeting if written notice of that stockholder's intent to make the nomination has been given to the Secretary of the Company not less than 90 days nor earlier than 120 days before the first anniversary of the Company's previous annual meeting. In order to be considered timely for the 2016 annual meeting, notice of a stockholder's intent to make a nomination at the 2016 annual meeting must be given to the Company no earlier than January 7, 2016 and no later than February 6, 2016. The notice must include all information relating to such nominee that is required to be disclosed in a proxy statement, including, without limitation, the name and address of the nominee, and the nominee's written consent to being named in the proxy statement as a nominee and to serving as a director if elected. The notice must also include, as to the stockholder submitting the nomination: (i) such person's name and address; (ii) the class and number of shares of the Company's capital stock that are owned beneficially and of record; (iii) a representation that the stockholder is entitled to vote at the meeting and intends to nominate the person; and (iv) a representation as to whether the stockholder intends, or is part of a group which intends, to deliver a proxy statement or otherwise solicit proxies from stockholders. The Company may require any proposed nominee to furnish other information as the Company may reasonably require determining the eligibility of the proposed nominee to serve as a director of the Company.


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2014 NON-EMPLOYEE DIRECTOR COMPENSATION
The Nominating and Corporate Governance Committee and the Compensation Committee, consulting with each other, are responsible for recommending to the Board compensation and benefits for non-employee directors. In discharging this duty, the committees are guided by three goals: (i) compensation should fairly pay directors for work required in a company of our size and scope; (ii) compensation should align directors' interests with the long-term interests of stockholders; and (iii) the structure of the compensation should be simple, transparent and easy for stockholders to understand. Annual compensation for non-employee directors for 2014 was comprised of cash compensation (which can be deferred into stock units) and equity compensation in the form of restricted stock awards.
Description of Non-Employee Director Compensation
At least annually, the Nominating and Corporate Governance Committee and the Compensation Committee review non-employee director compensation and benefits. The Compensation Committee retained Deloitte Consulting LLP to provide advice in connection with ongoing compensation matters related to the Company including to reassess the compensation paid to non-employee directors from a corporate governance perspective.
Cash and Equity Compensation
The following table sets forth the annual compensation to non-employee directors in 2014. The cash compensation is paid in equal quarterly installments at the beginning of each fiscal quarter.
 
 
Amount($)
Cash Retainer(1)
 
62,500

Equity Retainer(1)(2)
 
125,000

Audit Committee Chairman Retainer
 
20,000

Compensation Committee Chairman Retainer
 
15,000

Nominating and Corporate Governance Committee Chairman Retainer
 
10,000

Audit Committee Member Retainer
 
12,500

Compensation Committee Member Retainer
 
10,000

Nominating and Corporate Governance Committee Member Retainer
 
7,500

Lead Independent Director Retainer
 
20,000

_________________________
(1)
Effective as of the Annual Meeting, the Board approved an increase to (i) the annual cash retainer for service as a director to $65,000, (ii) the annual equity retainer to $135,000, and (iii) the annual cash retainer for the Lead Independent Director to $30,000.
(2)
Granted in the form of time-vested (12 month) restricted stock awards determined by dividing the amount of the equity retainer by the closing price of the Company's common stock on the date of grant. The restricted stock vests in full on the earlier of the day immediately prior to the first annual meeting of stockholders of the Company after the date of grant or the first anniversary of the date of grant if the director continues to serve as a director through such date (or on the earlier of the death or disability of such director). 

Cash Retainer Deferral Program
The Company maintains a director cash retainer deferral program under the Company's Long-Term Incentive Plan. This program allows members of the Board to elect to receive stock units under the Long-Term Incentive Plan in lieu of the cash compensation for such member's services as a director. The cash compensation that a director may elect to receive in stock units is only the cash compensation that the director otherwise would receive for services as a director of the Company and does not include any cash compensation for being the lead independent director, or chairman or member of any committee of the Board. Each deferred stock unit accumulates dividend equivalents that are converted to additional deferred stock units annually. The conversion of stock units into shares and the distribution of such shares under this program will occur on the first business day following the thirtieth day after a director's service as a director terminates.

9


Stock Ownership Guidelines
To further the Company's objective of aligning the interests of directors with the Company's stockholders, the Board has adopted stock ownership guidelines for directors. Each director should seek to have a level of ownership of Company stock that has a value approximately equal to at least three times the director's annual cash retainer. For purposes of the guidelines, the annual cash retainer does not include any additional cash compensation paid for participation on any committee of the Board or for serving as Chairman of any such committee. The ownership level should be achieved within three years of (i) the effective date of the guidelines for directors serving as of the adoption of the guidelines or (ii) the date the person first becomes a director for newly appointed or elected directors. All of the directors are in compliance with the Company's stock ownership guidelines.
2014 Non-Employee Director Compensation
Employee directors do not receive any compensation in connection with their director service. Mr. Reid-Anderson is the only employee-director and his compensation as an employee is set forth in the 2014 Summary Compensation Table. Mr. Nabi previously advised the Board that he did not wish to receive any director fees. The following table sets forth compensation paid to or earned by each non-employee director for the year ending December 31, 2014:
Director
 
Fees Earned
or Paid
in Cash($)(1)(2)
 
Stock
Awards($)(3)(4)
 
Total($)
John W. Baker(5)
 
34,484

 
124,983

 
159,467

Kurt M. Cellar
 
80,001

 
124,983

 
204,984

Charles A. Koppelman
 
83,334

 
124,983

 
208,317

Jon L. Luther
 
97,492

 
124,983

 
222,475

Usman Nabi
 

 

 

Stephen D. Owens
 
78,334

 
124,983

 
203,317

Richard W. Roedel
 
78,742

 
124,983

 
203,725

_________________________
(1)
The following table sets forth the annual cash compensation earned by each non-employee director in 2014:
 
 
 
 
 
 
Committees
 
 
Director
 
Retainer($)
 
Lead Independent Director($)
 
Audit Committee Chair / Member($)
 
Compensation Committee Chair / Member($)
 
Nominating Corporate Governance Chair / Member($)
 
Total Cash Amount($)
John W. Baker(5)
 
29,484

 

 

 

 
5,000

 
34,484

Kurt M. Cellar
 
60,834

 

 
19,167

 

 

 
80,001

Charles A. Koppelman
 
60,834

 

 
12,500

 
10,000

 

 
83,334

Jon L. Luther
 
62,492

 
20,000

 

 
15,000

 

 
97,492

Usman Nabi
 

 

 

 

 

 

Stephen D. Owens
 
60,834

 

 

 
10,000

 
7,500

 
78,334

Richard W. Roedel
 
62,492

 

 
12,500

 

 
3,750

 
78,742


(2)
Non-employee directors may defer all or a portion of their cash retainer in the form of stock units under the Long-Term Incentive Plan pursuant to the Company's director cash retainer deferral program. The amounts for Messrs. Luther and Roedel include $62,492 ($62,500 rounded to the nearest whole share value), which they each elected to defer pursuant to the director cash retainer deferral program. Accordingly, Messrs. Luther and Roedel were each granted 1,519 deferred stock units in 2014. In addition, Messrs. Luther and Roedel each received 177 deferred stock units representing accumulated dividend equivalents on their deferred stock unit account. See "—Description of Non-Employee Director Compensation" for a discussion of the Company's director cash retainer deferral program.
(3)
The dollar value represents the aggregate grant date fair value computed in accordance with stock-based accounting rules (Financial Standards Accounting Board ASC Topic 718) of the restricted stock awards granted to directors in 2014. Dividends on unvested restricted stock accumulate and are paid on or about the time that the shares of common stock underlying the restricted stock are delivered. The assumptions used in the calculation of these amounts are discussed in Note 9 to the Company's consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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(4)
As of December 31, 2014, each non-employee director (other than Mr. Nabi) had 3,038 shares of restricted stock outstanding, which vest on May 5, 2015. Each non-employee director (other than Mr. Nabi) had only one unvested award outstanding as of December 31, 2014 and therefore, the grant date fair value of such award is reflected in the 2014 Director Compensation Table. There are no outstanding stock option awards for any non-employee director.

(5)
As described in the Company's 2014 Proxy Statement, Mr. Baker was no longer a member of the Board following expiration of his term at the Company's 2014 annual meeting of stockholders.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are nominated for election to the Board to serve for the next year and until their respective successors are elected and qualified. At this time the Board believes it is appropriately sized at seven members but will review possible candidates for the two Board vacancies if and when circumstances merit. Each nominee has consented to be named as a nominee and to serve if elected. Should any of the nominees become unable to serve as a director (which the Board does not expect), the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement.
Information Concerning Nominees
Name
 
Age as of
March 1, 2015
 
Position with the Company
Kurt M. Cellar
 
45
 
Director
Charles A. Koppelman
 
74
 
Director
Jon L. Luther
 
71
 
Director
Usman Nabi
 
40
 
Director
Stephen D. Owens
 
44
 
Director
James Reid-Anderson
 
55
 
Chairman of the Board, President and CEO
Richard W. Roedel
 
66
 
Director
Kurt M. Cellar has served as a director of the Company since May 2010. Since January 2008, Mr. Cellar has been the President of Corner Pocket Investors, LLC. He has also been a consultant to companies in a variety of industries as well as a private investor. From 1999 to 2008, Mr. Cellar worked for the hedge fund Bay Harbour Management, L.C. He was partner and portfolio manager from 2003 until his departure. Prior to Bay Harbour, Mr. Cellar was with the private equity firm Remy Investors. Before that, he was a strategy consultant at LEK/Alcar. He is currently a director of Angiotech Pharmaceuticals, Inc., Edison Mission Energy Trust, Hawaiian Telecom Holdco, Inc., Home Buyers Warranty, Horizon Lines, Inc. and U.S. Concrete Inc. Within the last five years, Mr. Cellar was also a member of the Board of Directors of Aventine Renewable Energy where he was a member of the Audit and Compensation Committees, The Penn Traffic Company where he was a member of the Compensation Committee, RCN Corporation, where he was a member of the Audit and Compensation Committees, and Vertis Communications. Mr. Cellar is well qualified to serve on the Board based on his significant accounting and financial experience and his other public company board experience.
Charles A. Koppelman has served as a director of the Company since May 2010. Mr. Koppelman currently serves as Chairman and Chief Executive Officer of CAK Entertainment Inc., an entertainment consultant and brand development firm, and is a director of Las Vegas Sands. Mr. Koppelman served as Non-Executive Chairman of the board of directors of Martha Stewart Living Omnimedia, Inc. from September 2011 through May 2012 and as its Executive Chairman and principal executive officer from July 2008 until September 2011. Mr. Koppelman joined the board of Martha Stewart Omnimedia, Inc. in July 2004 and became its Chairman in June 2005. From 1990 to 1994, he served first as Chairman and Chief Executive Officer of EMI Music Publishing and then from 1994 to 1997 as Chairman and Chief Executive Officer of EMI Records Group, North America. Mr. Koppelman's business acumen acquired from his extensive experience with media and entertainment companies together with his branding experience make him highly qualified to serve on the Board.
Jon L. Luther has served as a director of the Company since May 2010. Mr. Luther served as Chief Executive Officer of Dunkin' Brands Group Inc., a quick-service restaurant franchisor whose brands include Dunkin' Donuts and Baskin-Robbins, from January 2003 to December 2009 and Chairman from March 2006 to January 2009. In January 2009, he assumed the role of Executive Chairman, and in July 2010, became the Non-Executive Chairman, a position he held until his retirement in May 2013. Mr. Luther serves as a director and member of the Compensation Committee and Nominating and Corporate Governance Committee of Brinker International, Inc., an owner and franchisor of certain restaurant brands, as well as the Chairman of Arby's Restaurant Group, Inc., a privately held quick-service sandwich chain. Mr. Luther is also a member of the Board of Directors of The Culinary Institute of America and also serves as Vice Chairman and a member of its Executive

11


Committee. Within the last five years, Mr. Luther served as Chairman for the International Franchise Association and was a member of its Executive Committee. Mr. Luther brings to the Board executive leadership experience and vast business experience and expertise in the food and beverage segment as well as in brand marketing.
Usman Nabi has served as a director of the Company since May 2010. Mr. Nabi is a Senior Partner at H Partners Management, an investment management firm. Prior to joining H Partners in 2006, Mr. Nabi was at Perry Capital, the Carlyle Group, and Lazard Freres. Mr. Nabi is a member of the board of directors of Global Glimpse, a nonprofit organization committed to creating global leadership opportunities for America's youth. As a Senior Partner at H Partners Management, Mr. Nabi brings to the Board a keen business and financial sense and strong investment experience especially in the leisure sector.
Stephen D. Owens has served as a director of the Company since May 2010. Mr. Owens is co-founder and Managing Director of Staple Street Capital, a private equity firm. Prior to founding Staple Street Capital in 1995, Mr. Owens was a Managing Director at The Carlyle Group in the firm's U.S. Buyout team. While at Carlyle, Mr. Owens co-founded the firm's Global Consumer & Retail Group, was a senior member of the firm's Global Communications & Media Group, and executed and oversaw investments in the business services and transportation sectors. Previously, Mr. Owens was a principal investor and investment banker with Lehman Brothers in their New York and Hong Kong offices. Mr. Owens' business and finance experience, including helping to create value in multi-location consumer-facing businesses, qualifies him to serve on the Board.
James Reid-Anderson has served as Chairman, President and Chief Executive Officer of the Company since August 2010. Prior to joining the Company, Mr. Reid-Anderson was an adviser to Apollo Management L.P., a private equity investment firm, commencing January 2010, and from December 2008 to March 2010 was an adviser to the managing board of Siemens AG, a worldwide manufacturer and supplier for the industrial, energy and healthcare industries. From May through November 2008, Mr. Reid-Anderson was a member of Siemens AG's managing board and Chief Executive Officer of Siemens' Healthcare Sector, and from November 2007 through April 2008 he was the Chief Executive Officer of Siemens' Healthcare Diagnostics unit. Prior to the sale of the company to Siemens, Mr. Reid-Anderson served as Chairman, President and Chief Executive Officer of Dade Behring Inc., a company that manufactured medical diagnostics equipment and supplies, which he joined in August 1996. Mr. Reid-Anderson previously held roles of increasing responsibility at PepsiCo, Grand Metropolitan (now Diageo) and Mobil. Mr. Reid-Anderson previously served as a director of Brightpoint Inc. and Stericycle, Inc. Mr. Reid-Anderson is a fellow of the U.K. Association of Chartered Certified Accountants. Mr. Reid-Anderson's prior experience as Chairman, President and Chief Executive Officer of Dade Behring, a restructured public company, as well as his extensive operational, international and financial background, makes him especially qualified to serve as Chairman and lead the Company to operational and financial success.
Richard W. Roedel has been a director of the Company since December 2010. Mr. Roedel is a director and Chairman of the Audit Committee and member of the Nominating and Corporate Governance Committee of Lorillard, Inc. as well as a director and member of the Audit Committee and Chairman of the Risk Committee of IHS, Inc. Mr. Roedel is the Non-Executive Chairman of Luna Innovations Incorporated and, over the years, has been the chairman of several governance, compensation and special committees. Mr. Roedel served on the Board of Directors of Sealy Corporation in several capacities, including Chairman of its Audit Committee, until March 2013 when Sealy was acquired by Tempur-Pedic International Inc. Mr. Roedel served on the Board of Directors of BrightPoint, Inc. in several capacities until October 2012, when it was acquired by Ingram Micro Inc., including Chairman of its Audit Committee, Chairman of its Compensation Committee and member of its Nominating and Governance Committee. Mr. Roedel was a director of Broadview Holdings, Inc., a private company, and was Chairman of its Audit Committee and a member of its Compensation Committees until 2012. Mr. Roedel was a director and Chairman of the Audit Committee of Dade Behring Holdings, Inc. from October 2002 until November 2007 when Dade Behring was acquired by Siemens AG. From 1985 through 2000, Mr. Roedel was employed by the accounting firm BDO Seidman LLP, having been managing partner of its Chicago and New York Metropolitan area offices and later Chairman and CEO. As a result of these and other professional experiences, Mr. Roedel has extensive experience in finance, accounting and risk management and in public company board and committee practices, which make him well-qualified to serve on the Board.
Vote Required
A plurality of the votes cast is required to elect each director. If you own shares through a bank, broker, or other holder of record, you must instruct your bank, broker, or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this Proposal 1.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL OF THE NOMINEES NAMED ABOVE.

12


AUDIT COMMITTEE REPORT
The members of the Audit Committee have been appointed by the Board. The Audit Committee is governed by a written charter that has been approved and adopted by the Board and which will be reviewed and reassessed annually by the Audit Committee. The Audit Committee is comprised of three independent directors.
The Audit Committee assists the Board in fulfilling its responsibility to oversee management's conduct of the Company's financial reporting process. It does so by reviewing (i) the financial reports and other financial information provided by the Company to any governmental body or to the public, (ii) the Company's systems of internal controls regarding finance, disclosure, accounting and legal compliance and (iii) the Company's auditing, accounting and financial reporting processes generally.
Management is responsible for the preparation and integrity of the Company's consolidated financial statements. The independent registered public accounting firm is responsible for performing an independent audit of the Company's consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report thereon. The Audit Committee has independently met and held discussions with management and the independent registered public accounting firm.
The following is the report of the Audit Committee of the Company with respect to the Company's audited consolidated financial statements for the fiscal year ended December 31, 2014.
To fulfill its responsibility, the Audit Committee has done the following:
The Audit Committee has reviewed and discussed with management the Company's audited consolidated financial statements and management's assessment of the effectiveness of the Company's internal controls over financial reporting.
The Audit Committee has discussed with KPMG LLP, the Company's independent auditors, the matters required to be discussed by Auditing Standard No. 16 regarding the auditors' judgments about the quality of the Company's accounting principles as applied in its financial reporting.
The Audit Committee has received written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP's communications with the Audit Committee concerning independence and has discussed with KPMG LLP its independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Company's audited consolidated financial statements and management's assessment of the Company's internal controls over financial reporting for the fiscal year ended December 31, 2014 be included in the Company's Annual Report on Form 10-K for such year for filing with the SEC.
 
THE AUDIT COMMITTEE
 
Kurt M. Cellar (Chair)
Charles A. Koppelman
Richard W. Roedel
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis below with the Company's management and, based on such review and discussion, the Committee recommended to the Board of Directors that this Compensation Discussion and Analysis be included in this Proxy Statement.
 
THE COMPENSATION COMMITTEE
 
Jon L. Luther (Chair)
Charles A. Koppelman
Stephen D. Owens

13



EXECUTIVE COMPENSATION
Overview
This section of the Proxy Statement contains information regarding our compensation programs, policies and objectives and, in particular, their application to a specific group of individuals that we refer to as our named executive officers. Our named executive officers include the Company's Chief Executive Officer, the Chief Financial Officer and the other executives named in this Proxy Statement. This section is organized as follows:
Compensation Discussion and Analysis.   This section contains a description of the specific types of compensation we pay, a discussion of our compensation policies, information regarding how those policies were applied to the compensation of the named executive officers for 2014 and other information that we believe may be useful to investors regarding compensation of the named executive officers.
Compensation Policies and Risk Management Practices.   This section describes the Company's compensation policies and practices as they relate to the Company's risk management.
Description of Employment Agreements of Named Executive Officers.   This section refers to the employment agreements between the named executive officers and the Company.
2014 Executive Compensation Tables.   This section provides information, in tabular formats specified in applicable SEC rules, regarding the amounts or value of various types of compensation paid to the named executive officers and related information.
Potential Payments Upon Termination.   This section provides information regarding amounts that could become payable to the named executive officers following specified events.
The parts of this Executive Compensation section described above are intended to be read together and each provides information not included in the others. In addition, for background information regarding the Compensation Committee and its responsibilities, please see "Corporate Governance—Board Committees—Compensation Committee" above.
Compensation Discussion and Analysis
Executive Summary
The Company's goals for its executive compensation program are to attract, motivate and retain a talented and experienced management team that will provide leadership for the Company's long-term success. The Company seeks to accomplish these goals in a way that rewards performance and is aligned with its stockholders' interests as exemplified by the Company's Project 500 and Project 600 performance-based award programs described below.
The compensation for the named executive officers consists of four elements—base salaries, annual cash incentives, long-term equity awards, and perquisites and benefits—that are designed to reward performance in a simple and straightforward manner. Each of the named executive officers has an employment agreement with the Company that was negotiated at arm's-length and sets forth the initial basis for the executives' compensation.
The Company believes the compensation program for the named executive officers is instrumental in helping the Company achieve its strong financial performance. Some of the Company's financial results for 2014 include the following:
Key Financial Metric
 
2014 Financial Results
Revenue
 
$1.2 billion (6% increase over 2013)
Cash generated from Operating Activities
 
$392 million (6% increase over 2013)
Investment in New Capital
 
$108 million (9% of revenue)
Stockholder Return
 
23% (including dividends)
Dividend Per Share
 
$1.93 (6% increase over 2013)
Stock Repurchases
 
$195 million (5.2 million shares)


14


The following table highlights certain practices that the Company maintains and others that the Company has avoided or prohibited because the Company believes doing so enhances its pay for performance philosophy and further aligns executives' interests with those of the Company's stockholders:
Practices Maintained by the Company
 
Practices NOT Maintained by the Company
Incentive award metrics that are objective and tied to performance
 
High percentage of fixed compensation
Stock ownership guidelines
 
Repricing of options without stockholder approval
Limited perquisites
 
Excise tax gross-ups upon change in control
Double-trigger change in control severance
 
Excessive perquisites
Four year vesting for equity awards to promote retention
 
Hedging ownership of Company stock
Alignment of compensation with stockholder interests
 
Dividends on equity prior to vesting
 
 
Guaranteed minimum payouts or uncapped award opportunities
The Compensation Committee, which is comprised entirely of independent directors, with the assistance of the entire Board as appropriate, administers the Company's executive compensation program. The Compensation Committee determines the appropriate compensation levels for the Company's named executive officers, evaluates compensation plans, policies and programs, and reviews benefit plans for officers and employees.
The Compensation Committee carefully considers feedback from the Company's stockholders regarding the Company's executive compensation program, including the results of the stockholders' advisory vote on executive compensation at the 2014 annual meeting which was approved by approximately 92% of the votes cast. In accordance with the preference indicated by more than 84% of the votes cast at the Company's 2011 annual meeting of stockholders regarding the frequency of future advisory votes on executive compensation, the Board decided that future advisory votes on executive compensation would be submitted to stockholders every three years. Accordingly, the next advisory vote on executive compensation will occur at the 2017 annual meeting of stockholders. Stockholders are invited to express their views to the Board regarding executive compensation as well as other matters as described in this Proxy Statement under the heading "Communications with the Board of Directors."
Executive Compensation Philosophy and Objectives
The following are the objectives for the Company's executive compensation program:
Establish fair, competitive aggregate compensation, to include base salary, cash incentives and long-term incentives;
Closely align the interests of management with the Company's business objectives; and
Deliver an appropriate mix of fixed and at-risk compensation that is directly related to stockholder value and the Company's overall performance.
The Company's direct compensation program therefore consists of:
Base salary consistent with the executives' role and contributions to the Company;
Annual cash incentives for all executives tied to the Company's and the executives' performance;
A long-term incentive compensation program used to focus executives' efforts on longer-term performance that will enhance the value delivered to stockholders, including awards of stock options, restricted stock units, shares of restricted stock and other performance based equity awards; and
Perquisites and retirement benefits.
Administration of the Executive Compensation Program
The Compensation Committee of the Board is responsible for administering the compensation program for executive officers and certain other members of senior management of the Company. The Compensation Committee's responsibilities include, but are not limited to, reviewing the Company's executive compensation philosophy and strategy, participating in the performance evaluation process for the Chief Executive Officer, setting base salary and incentive opportunities for the Chief Executive Officer and other senior executives, establishing incentive compensation and performance goals and objectives for the Company's executive officers and other eligible executives and management, and determining whether performance objectives have been achieved. The Compensation Committee also recommends to the Board, employment or consulting agreements, and severance arrangements, and approves such agreements or benefits for the named executive officers. The members of the Compensation Committee are not current or former employees of the Company and are not eligible to participate in any of the executive compensation programs.

15


The entire Board (other than the Chief Executive Officer) ratified the 2014 compensation for the Chief Executive Officer and the entire Board ratified the 2014 compensation for the other named executive officers.
Management Participation
The Company's human resources department is responsible for the ongoing management of the executive compensation program. The Senior Vice President, Administration and his staff serve as the primary management liaison to the Compensation Committee and propose compensation programs and policies to the Compensation Committee at the request of the Compensation Committee and the Chief Executive Officer. The Compensation Committee meets at least annually with the Chief Executive Officer and any other corporate officers as the Compensation Committee deems appropriate while it is determining the performance criteria and compensation levels of key executive officers. The Chief Executive Officer makes recommendations to the Compensation Committee regarding individual compensation, such as base salary changes and incentive compensation opportunities for executive officers other than himself. In addition, the Chief Financial Officer and his staff evaluate the financial implications of executive compensation proposals and financial performance measures in incentive compensation arrangements. The Compensation Committee regularly meets in executive session without management.
Compensation Consultants
The Compensation Committee has engaged Deloitte Consulting LLP ("Deloitte") to provide advice to the Compensation Committee on an ongoing basis regarding executive compensation strategy and programs, including the compensation of the Chief Executive Officer, the design of its compensation program, the compensation practices of competitors, and legislation or regulations impacting the Company's executive compensation program.
Determining Executive Compensation
In making compensation decisions regarding executive officers generally, the Compensation Committee considers general market information, as well as business and industry conditions, the Company's strategic business objectives, and the executive's performance and experience. The Compensation Committee believes that market compensation data should only be used as a point of reference, not as the determining factor in the executive officers' compensation. The initial compensation arrangements for the named executive officers were a result of arm's-length negotiations by the Company with the executives in connection with their hire or retention and do not correspond to a specific benchmark level of pay. The compensation for the named executive officers are reviewed annually by the Board, the Compensation Committee and the Chief Executive Officer. An analysis of overall Company performance, budget targets, achievement of individual performance goals and the direct reporting relationship to the Chief Executive Officer is undertaken regarding the compensation of each executive. The Compensation Committee makes compensation determinations and adjustments when determined to be appropriate in accordance with the Company's compensation philosophy and plans. In determining long-term incentive grants in 2014, the Company considered general historical market information on long-term incentive grants from Deloitte, along with past awards, and company and individual performance in making compensation recommendations to the Compensation Committee.
Elements of Compensation
The elements of compensation for the named executive officers include:
Base salary
Annual incentives
Long-term incentives
Perquisites and benefits
In setting total compensation, the Compensation Committee applies a consistent approach for all executive officers. Although the Compensation Committee has a compensation approach, as described below, the Compensation Committee exercises appropriate business judgment in how it applies the approach to the facts and circumstances associated with each executive.
As illustrated in the following charts and discussed in more detail below, over 80% of the Chief Executive Officer’s annual target total direct compensation is variable / ‘at risk’ and tied to Company performance, while on average, over 55% of the other named executive officers’ annual target total direct compensation is variable / ‘at risk.’

16


Base Salary
Salaries are used to provide a fixed amount of compensation for an executive's work. Although initially established in each named executive officer's respective employment agreement, the salaries of named executive officers are reviewed on an annual basis, as well as at the time of a promotion or other change in responsibilities. The Compensation Committee strives to pay a base salary to attract and retain talented executive officers based on the individual's responsibilities, performance and experience, as well as internal equity, and business and industry conditions.
Each of the named executive officers entered into an employment agreement with the Company in 2010, and their base salaries and other compensation were determined as a result of the related individual negotiations, and based on the philosophies and factors described herein. For 2014, Messrs. Duffey, Balk, Hawrylak and Petit received salary increases ranging from 0.9% to 1.4% and Mr. Reid-Anderson did not receive an increase. The following table shows the annual base salaries in 2014 for the named executive officers:
Executive
 
Base Salary($)
James Reid-Anderson
 
1,200,000

John M. Duffey
 
585,000

Lance C. Balk
 
530,000

Brett Petit
 
405,000

Walter S. Hawrylak
 
355,000

Annual Incentives
The Company's annual cash incentive plan closely links pay and performance by providing all eligible full-time employees, including the named executive officers, an incentive compensation opportunity based on the Company achieving key business plan goals.


17


Pursuant to the Company's annual cash incentive plan, a maximum pool was determined from which annual incentives may be paid based on the achievement of Adjusted EBITDA. "Adjusted EBITDA" is defined as Modified EBITDA minus the interests of third parties in the Adjusted EBITDA of properties that are less than wholly owned by the Company. “Modified EBITDA” is defined as the Company’s consolidated income (loss) from continuing operations excluding: the cumulative effect of changes in accounting principles; discontinued operations gains or losses; income tax expense or benefit; restructure costs or recoveries; reorganization items (net); other income or expense; gain or loss on early extinguishment of debt; equity in income or loss of investees; interest expense (net); gain or loss on disposal of assets; gain or loss on the sale of investees; amortization; depreciation; stock-based compensation; and fresh start accounting valuation adjustments.

Unless Adjusted EBITDA for 2014 was more than $402.5 million, no annual incentive would have been earned. Based on achieved Adjusted EBITDA in excess of $402.5 million for 2014, a pool for annual incentives was available. A pool for target annual incentives was determined at Adjusted EBITDA of $435 million and a pool for maximum annual incentives at 200% of target annual incentives was determined at Adjusted EBITDA of $460 million. With achievement of Adjusted EBITDA of $439 million, a pool for annual incentives of 117.6% of aggregate target annual incentives was available under the annual cash incentive plan.
The following table shows the target annual incentive opportunities for the named executive officers for 2014:
Executive
 
Target Annual Incentive
James Reid-Anderson
 
120% of base salary
John M. Duffey
 
75% of base salary
Lance C. Balk
 
75% of base salary
Brett Petit
 
62.5% of base salary
Walter S. Hawrylak
 
62.5% of base salary

No named executive officer may earn more than 200% of his target annual incentive. In addition to achieving the Adjusted EBITDA criteria described above, in order for any named executive officer to receive his target annual incentive, achievement of the following four financial and strategic objectives was required:
Criteria
 
Goal
Adjusted EBITDA (weighted 50%)
 
$435 million
Net debt level (weighted 25%)
 
Equal to or better than budget ($1,216 million after adjustment for share repurchases)
Guest satisfaction (weighted 12.5%)
 
2014 guest satisfaction score exceeds 2013 guest satisfaction score or 2014 guest satisfaction score equals or exceeds 8.0
Success in fostering and maintaining a safe park environment (weighted 12.5%)
 
 2014 guest safety score exceeds 2013 guest safety score or 2014 guest safety score equals or exceeds 8.2 (weighted 50%) and
 prorated based on reduction in workers compensation claims in comparison to the prior three year average (weighted 50%)
Provided Adjusted EBITDA was more than $402.5 million for 2014, attainment of the weighted target annual incentive components is determined separately for each of the four objectives. To the extent that Adjusted EBITDA for 2014 exceeded $435 million, the aggregate earned annual incentive based on the four objectives is increased, resulting in a maximum of 200% of target annual incentive for $460 million of Adjusted EBITDA and full satisfaction of the other strategic objectives. With achievement of Adjusted EBITDA of $439 million and achievement of full target performance with respect to the other three objectives, Mr. Reid-Anderson and the other named executive officers earned 117.6% of their target annual incentive under the annual cash incentive plan based on the criteria set forth above.
The Compensation Committee then determined an additional incentive within the limits of the overall annual incentive pool and 200% of individual named executive officers’ target annual incentive maximum, with respect to Messrs. Duffey, Balk, Hawrylak and Petit, based on the following factors: (i) individual performance during the year, (ii) the performance of the specific business unit or function managed by each respective current named executive officer, and (iii) the Company's significantly stronger financial position at year end versus prior year. Specifically, the Compensation Committee factored the following achievements for each executive: (i) Mr. Duffey's contributions to the growth of the Company's international development opportunities, (ii) Mr. Balk's contributions to the growth of the Company's international development opportunities and the resolution of certain lawsuits, (iii) Mr. Hawrylak's efforts in the resolution of certain lawsuits and favorable insurance program renewals, and (iv) Mr. Petit's success in ticket and season pass pricing and the Company's

18


membership program. Such additional incentives were as follows: Mr. Duffey—$149,030, Mr. Balk—$82,540, Mr. Petit—$142,325 and Mr. Hawrylak—$79,075. In addition, the Compensation Committee granted Mr. Reid-Anderson an award of 200,000 stock options and associated dividend equivalent rights ("DERs") in February 2015, in recognition of the Company's successful financial performance for 2014.
In February 2015, the Compensation Committee approved the following annual incentive awards for the named executive officers that were paid upon completion of the Company's audit for 2014. The amounts paid pursuant to the annual cash incentive plan are set forth in the "Non-Equity Incentive Plan" column of the 2014 Summary Compensation Table because such amounts were paid pursuant to the pre-established criteria under the annual cash incentive plan.
Executive
 
117.6% of Target Annual Incentive Earned at $439 million EBITDA($)
 
Additional Annual Incentive Earned($)
 
Total Annual
Incentive Earned($)
James Reid-Anderson
 
1,693,440

 

 
1,693,440

John M. Duffey
 
515,970

 
149,030

 
665,000

Lance C. Balk
 
467,460

 
82,540

 
550,000

Brett Petit
 
297,675

 
142,325

 
440,000

Walter S. Hawrylak
 
260,925

 
79,075

 
340,000


Long-Term Incentives
The Company's long-term incentive awards are tied to the Company's performance and the value of its common stock over several years. These awards are intended to align the interests of the named executive officers with those of the Company's stockholders and to reward the named executive officers' contribution to the long-term growth and performance of the Company. The Compensation Committee also believes that it is appropriate to evaluate equity grant opportunities on a systematic basis at least annually. The Compensation Committee awards stock options or restricted stock units (or alternatively, restricted stock), or a combination thereof, based on its determination of the relative value of each form of award at the time of grant and the performance and responsibilities of each named executive officer. These awards are granted under the Company's Long-Term Incentive Plan. The Compensation Committee may, from time to time, based on individual circumstances, grant additional equity incentive awards to employees, including named executive officers, due to circumstances such as outstanding performance or in connection with a promotion.
Stock Options.   Stock options vest 25% on each of the first four anniversaries of the grant date. The stock options have a term of ten years and, in all instances, an exercise price of not less than the closing price of the Company's common stock on the date the stock options are granted. The Compensation Committee believes that stock options are appropriate because they are aligned with the long-term interests of stockholders, as the stock options have no value to the named executive officers unless the market value of the Company's common stock increases after the grant date. As discussed below under "Dividend Equivalent Rights," unvested stock options have DERs associated with them. The Compensation Committee granted stock options to the named executive officers in August 2014 as part of a general grant to employees to provide incentives since it had been approximately one year since the Company had awarded any options to its employees. Although Mr. Reid-Anderson had not received a grant of stock options with this general grant to employees in recent years, in August 2014, Mr. Reid-Anderson was granted 250,000 stock options and associated DERs to assure that he would remain highly motivated and committed to the Company in the long term.

Restricted Stock/Restricted Stock Units.   Restricted stock units generally vest 25% on each of the first four anniversaries of the grant date. The number of restricted stock units (or shares of restricted stock) granted is based on the closing price of the Company's common stock on the date of grant. Outstanding shares of restricted stock and restricted stock units receive dividends at the same rate as all other stockholders. Recipients of awards of restricted stock units do not have voting rights on such shares before the awards vest and any dividends paid are credited to a book entry account and are distributed if and when such awards vest. Recipients of awards of restricted stock have rights to dividends (subject to the same vesting requirements as the underlying shares) and have the right to vote such shares. While the Compensation Committee believes that restricted stock units (or shares of restricted stock) are appropriate because they enhance the retention of the named executive officers and increase in value only if the Company's stock price increases, the Compensation Committee has not granted any time-based restricted stock or restricted stock units to the named executive officers since 2011.


19


Project 500.   In order to motivate the Company's management team to continue to improve the Company's financial position, the Compensation Committee established a performance award program, called Project 500, that provides participants with an equity incentive in the event that the Company reaches its goal of $500 million of Modified EBITDA in a calendar year by December 31, 2015. The Compensation Committee believed that Modified EBITDA, rather than Adjusted EBITDA, was the appropriate measurement because it is the most comparable measure to other industry participants and incorporates the full range of the Company's business.
For additional incentive, Project 500 provided that if at least $475 million of Modified EBITDA but less than $500 million of Modified EBITDA was achieved in calendar year 2014, a partial Project 500 award could be achieved and any over-performance above $475 million of Modified EBITDA would be credited to the next calendar year's achievement of $475 million of Modified EBITDA for an additional partial award.
As a result of the Company's achievement of $477 million of Modified EBITDA in calendar year 2014, in February 2015, each named executive officer was awarded the following number of shares of stock in accordance with the partial achievement award under Project 500 along with associated DERs as discussed below:
Executive
 
Shares of Stock
James Reid-Anderson
 
526,125

John M. Duffey
 
115,000

Lance C. Balk
 
57,500

Brett Petit
 
46,000

Walter S. Hawrylak
 
46,000

Since the partial award was earned in 2014, if Modified EBITDA of at least $473 million is achieved in calendar year 2015 (i.e., $475 million less $2 million of excess Modified EBITDA earned in 2014), additional shares of stock may be awarded in the following amounts:
Executive
 
Shares of Stock
James Reid-Anderson
 
457,500

John M. Duffey
 
100,000

Lance C. Balk
 
50,000

Brett Petit
 
40,000

Walter S. Hawrylak
 
40,000

The Company's Audit Committee will determine Modified EBITDA after reviewing the Company's audited financial statements for the applicable year. As a general matter, Modified EBITDA will exclude the impact of one-time or extraordinary events such as acquisitions and dispositions and costs associated with the evaluation of strategic options. Any shares under Project 500 will be issued after the Compensation Committee certifies the achievement of the Modified EBITDA after completion of the Audit Committee's review of the Company's audited financial statements for the applicable calendar year.
To receive shares under Project 500 the following minimum criteria are also required: (i) the Company must have a profit for at least one of the 2013, 2014 or 2015 calendar years and (ii) unless otherwise determined by the Compensation Committee, the executive must be employed by the Company on the first day of the calendar year immediately following the calendar year during which the requisite Modified EBITDA was achieved.
Project 600. Largely due to the Company's substantial progress and the success of Project 500 in motivating the participants, the Compensation Committee determined that a new aspirational goal in the form of a similar program, called Project 600, would be beneficial to the Company and its employees. Project 600 provides participants with an equity incentive for the Company to achieve $600 million of Modified EBITDA in a calendar year (the "Project 600 Target Modified EBITDA") by December 31, 2017. Pursuant to Project 600, the named executive officers will be issued shares of stock if the Company achieves the Project 600 Target Modified EBITDA.
Project 600 provides management with incentive to reach the Project 600 Target Modified EBITDA earlier than 2017 by providing: (a) a 15% early achievement bonus if the Project 600 Target Modified EBITDA is met in calendar year 2016 and (b) a 35% early achievement bonus if the Project 600 Target Modified EBITDA is met in calendar year 2015. If the Project 600 Target Modified EBITDA is first achieved in calendar year 2018, and no

20


early achievement bonus or partial award (as described below) was previously earned, participants will be entitled to receive 50% of their target award.

The number of shares of stock that each current named executive officer is eligible to receive is set forth below if the Project 600 Target Modified EBITDA is first achieved in the year specified and no partial award (as described below) was previously earned:        
 
Shares of Stock
Executive
 
2015 Early
Achievement
 
2016 Early
Achievement
 
2017 Achievement/Target Award
 
2018 Achievement
James Reid-Anderson
 
675,000

 
575,000

 
500,000

 
250,000

John M. Duffey
 
162,000

 
138,000

 
120,000

 
60,000

Lance C. Balk
 
60,750

 
51,750

 
45,000

 
22,500

Brett Petit
 
54,000

 
46,000

 
40,000

 
20,000

Walter S. Hawrylak
 
54,000

 
46,000

 
40,000

 
20,000


If at least $575 million of Modified EBITDA, but less than the Project 600 Target Modified EBITDA, is achieved in calendar year 2015, 2016 or 2017, a partial Project 600 award can be achieved and any over-performance above $575 million of Modified EBITDA can be credited to the next calendar year's achievement of $575 million of Modified EBITDA for an additional partial award. The following table describes the number of shares that may be issued based on the year a partial award is achieved:
 
Shares of Stock
Achievement of Partial Award
 
No Partial Award in Prior Year
 
Partial Award in Prior Year
2015
 
75% of 2015 Early Achievement
 
N/A
2016
 
75% of 2016 Early Achievement
 
25% of 2016 Early Achievement
2017
 
75% of 2017 Achievement
 
25% of 2017 Achievement

The Company's Audit Committee will determine Modified EBITDA after reviewing the Company's audited financial statements for the applicable year. As a general matter, Modified EBITDA will exclude the impact of one-time or extraordinary events such as acquisitions and dispositions and costs associated with the evaluation of strategic options. Any shares under Project 600 will be issued after the Compensation Committee certifies the achievement of the Modified EBITDA after completion of the Audit Committee's review of the Company's audited financial statements for the applicable calendar year.

The value of the potential Project 600 awards is not set forth in the 2014 Summary Compensation Table or the 2014 Grants of Plan Based Awards Table because as an aspirational goal the issuance of shares of stock under the Project 600 awards is not currently considered probable of being earned. Under Financial Accounting Standards Board ASC 718, the value of such awards is zero on the date of grant, and under the proxy reporting rules, the accounting value is used for purposes of the 2014 Summary Compensation Table and 2014 Grants of Plan Based Awards Table.

If a change in control (as defined under Project 600) occurs, then the Project 600 Target Modified EBITDA is deemed earned but no early achievement award would be considered earned (unless such Project 600 Target Modified EBITDA had already been earned by the time of the change in control) and instead if no partial awards were previously made the target award would be treated as earned.

To receive shares under Project 600 the following minimum criteria are also required: (i) the Company must have a profit for at least one of the 2015, 2016, 2017 or 2018 calendar years and (ii) (y) unless otherwise determined by the Compensation Committee, the executive must be employed by the Company on the first day of the calendar year immediately following the calendar year during which the requisite Modified EBITDA was achieved or (z) the executive must be employed by the Company on the date of a change in control (as defined under Project 600), or have had such employment terminated in anticipation of such a change in control.

The Project 600 awards were made subject to stockholder approval to the extent the aggregate number of shares (including related DERs) exceeds the number of shares available under the Company’s Long-Term Incentive Plan. See “Proposal 2: Approval of Long-Term Incentive Plan As Amended.”

21


Dividend Equivalent Rights
In order for stock option holders and Project 500 and Project 600 participants to participate in the Company's quarterly dividend on its common stock, the Compensation Committee determined to grant holders of the Company's unvested stock options and Project 500 and Project 600 awards with DERs. The stock option DERs granted to the named executive officers provide for issuance of shares of stock to holders of unvested stock options in a value equal to any dividends on the common stock from the grant date through the date of option vesting. Similarly, the Project 500 and Project 600 DERs provide for issuance of shares of stock in a value equal to any dividends on the common stock from the award issuance date through the date shares, if any, are issued under Project 500 or Project 600. The Compensation Committee believes that the use of DERs was necessary to keep the executives aligned with stockholders as a significant part of the Company's total stockholder return is in the form of dividends.
Perquisites and Benefits
The named executive officers receive the same health, welfare and other benefits provided to other Company employees. The Company provides limited perquisites to named executive officers such as a fixed automobile and tax and legal allowance for Mr. Reid-Anderson. The "All Other Compensation" column of the 2014 Summary Compensation Table sets forth these perquisites in accordance with the requirements of the SEC. The Compensation Committee reviews the Company's policies on executive officer perquisites on an annual basis.
The Company has a contributory 401(k) Plan available to employees of the Company who meet the age and service requirements. The Company makes matching contributions. In 2014, the Company matched 100% of the first 3% of salary contributions and 50% of the next 2% of salary contributions made by employees (subject to tax law limits). The Company also has a Supplemental 401(k) Plan, which permits eligible participants to defer a portion of their compensation without such portion being limited by Internal Revenue Code restrictions applicable to the contributory 401(k) Plan and receive corresponding matching contributions. For a discussion of the Supplemental 401(k) Plan, see "—Fiscal 2014 Non-Qualified Deferred Compensation."
The Company maintains an employee stock purchase plan, which is made available to substantially all of the Company's employees, and allows participants to acquire the Company's common stock at a discounted price. The employee stock purchase plan was approved by stockholders at the Company's annual meeting in May 2011. The purpose of the plan is to encourage employees at all levels to purchase stock and become stockholders. The plan allows participants to buy the Company's common stock at a 10% discount to the lower of the market value of the common stock at the beginning or end of each successive six-month offering period. Under applicable tax law, no plan participant generally may purchase more than $25,000 in market value (based on the market value of the Company's common stock on the first trading day of each offering period) of the Company's common stock in any calendar year.
Compensation Upon Termination of Employment
In addition to the direct compensation program, the Company believes it is important to provide certain of the executive officers with competitive separation payments and benefits because it provides a measure of financial security for the executive officer and his family in the event of certain terminations of an executive officer's employment and also enables the Company to secure their cooperation following termination. Post-employment compensation consists primarily of two types—severance pay and benefits continuation. Under their respective employment agreements, the named executive officers are entitled to receive these benefits in the event of specified terminations of employment and as a consequence of a change in control. The agreements contain a double-trigger provision, which requires both a change in control and termination of employment in order for the executive officer to receive benefits under the change in control provision rather than a single-trigger provision under which benefits are triggered automatically by a change in control. The Company does not provide an excise tax gross-up in the event of a termination due to a change in control.
The separation payments and benefits are intended to provide the executives with a measure of financial support if their employment is terminated in certain circumstances through no fault of their own. The enhanced and accelerated benefits offered in connection with a change in control are designed to support the following business objectives:
Enhance the Company's value in a consolidation transaction by helping retain and stabilize the management team during periods of uncertainty.
Preserve the objectivity of the Company's management team if they are negotiating and executing a consolidation transaction.
Keep the management team focused on the Company's business instead of their personal financial situation.

22


The Company elects to provide post-employment compensation to the executive officers on a case-by-case basis as the employment market, the qualifications of potential employees and the Company's hiring needs dictate. See "—Potential Payments Upon Termination" for additional information on separation payments and benefits for the named executive officers.
Tax and Accounting Impact and Policy
The financial and income tax consequences to the Company of individual executive compensation elements are important considerations for the Compensation Committee when analyzing the overall design and mix of compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the Company’s Chief Executive Officer or the Company’s other named executive officers, other than the Chief Financial Officer, who are employed as of the end of the fiscal year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance based” compensation (i.e., compensation paid only if performance meets pre-established objective goals based on performance criteria approved by stockholders). Although the Compensation Committee considers the impact of Section 162(m) as well as other tax and accounting consequences when developing and implementing the Company’s executive compensation programs, the Committee retains the flexibility to design and administer compensation programs that are in the best interests of the Company and its stockholders. In addition, due to the ambiguities and uncertainties as to the application and interpretation of Section 162(m) of the Code, no assurances can be given, that compensation even if intended by the Compensation Committee to satisfy the requirements for deductibility under Section 162(m) of the Code would, in fact, do so.
Other Policies

To enhance alignment of interest between management and the Company's stockholders, the Company maintains stock ownership guidelines for executive officers and certain other members of senior management. Under the guidelines, each executive should seek to have a level of ownership of Company stock that has a value approximately equal to at least two times their annual base salary (and five times annual base salary for the Company's Chief Executive Officer). The ownership level should be achieved within three years of (i) the effective date of the guidelines for officers serving as of the adoption of the guidelines or (ii) the date the person first becomes an executive officer or member of senior management for new officers. All of the named executive officers are in compliance with the Company's stock ownership guidelines.
The Company's insider trading policy requires executive officers and directors to consult the Company’s General Counsel prior to engaging in transactions involving Six Flags stock. In order to protect the Company from exposure under insider trading laws, executive officers and directors are encouraged to enter into pre-programmed trading plans under Exchange Act Rule 10b5-1. The Company's insider trading policy prohibits directors and executive officers from hedging or monetization transactions including, but not limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars and other derivative instruments, or through the establishment of a short position in the Company’s securities.
The Company's insider trading policy limits the pledging of Company common stock to those situations approved by the Company's General Counsel. In 2012, the Company's General Counsel approved Mr. Reid-Anderson's pledge of stock to acquire funds to pay taxes in connection with the vesting of certain equity awards as an alternative to the sale of a portion of the acquired stock. The Company believes that supporting Mr. Reid-Anderson's ability to exercise and hold the maximum number of shares under his option awards further aligns his interests with the Company's stockholders. The aggregate pledged shares of 92,550 represent approximately 2% of the total shares of Company common stock owned by Mr. Reid-Anderson. Mr. Reid-Anderson meets the Company's stock ownership guidelines without counting the pledged shares. The Company’s General Counsel expects to approve pledging of stock on a case by case basis only in those situations where the individual is acquiring stock pursuant to Company compensatory programs and because of taxes and acquisition costs, the likely alternative to pledging of the stock being acquired is the sale of such stock.
The Compensation Committee does not employ any form of wealth tally; it believes that grants to executives should be made based on individual and Company performance factors and market compensation conditions at the time of grant, as described herein, and that it is in the interests of the Company's stockholders that executives not be penalized for their past successes.
The Compensation Committee also does not have any specific "clawback" policy but intends to adopt one in conformity with the requirements of any final rules issued by the SEC. Under Section 304 of Sarbanes-Oxley, if the Company is required to restate its financial statements due to material noncompliance with any financial reporting requirements as a result of misconduct, Mr. Reid-Anderson and Mr. Duffey must reimburse the Company for (i) any bonus or other incentive-based or equity-based compensation received during the 12 months following the first public issuance of the non-complying document, and (ii) any profits realized from the sale of securities during those 12 months.

23


Compensation Policies and Risk Management Practices
The Compensation Committee has reviewed the Company's policies and practices for all of the Company's employees, including non-executive officers, and determined that the policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes that the design of the Company's annual cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company's performance is focused on long-term stockholder value creation and does not encourage the taking of short-term risks at the expense of long-term results. The Company has discretion to reduce annual incentive payments (or pay no annual incentive) based on individual performance and any other factors it may determine to be appropriate in the circumstances.
2014 Summary Compensation Table
The following table summarizes the compensation paid by the Company to (i) the Company's Chief Executive Officer, (ii) the Company's Chief Financial Officer, and (iii) the Company's other three most highly compensated executive officers serving as such at the end of the fiscal year ended December 31, 2014.
Name and Principal Position
 
Year
 
Salary
($)(1)
 
Bonus
($)(1)
 
Stock
Awards
($)(2)(3)
 
Option
Awards
($)(3)
 
Non-Equity
Incentive
Plan
Compensation
($)(1)
 
All Other
Compensation
($)(4)
 
Total ($)
James Reid-Anderson
 
2014
 
1,200,000

 

 
1,710,684

 
3,620,500

 
1,693,440

 
129,720

 
8,354,344

Chairman, President
 
2013
 
1,200,000

 

 
1,014,417

 
1,804,190

 
1,296,000

 
285,363

 
5,599,970

and Chief Executive Officer
 
2012
 
1,200,000

 

 
3,666,837

 
2,271,228

 
2,062,080

 
129,918

 
9,330,063

John M. Duffey
 
2014
 
584,808

 
149,030

 
192,034

 
393,300

 
515,970

 
39,772

 
1,874,914

Chief Financial Officer
 
2013
 
578,846

 

 
146,516

 
285,509

 
391,500

 
49,274

 
1,451,645

 
 
2012
 
550,000

 
44,300

 
1,161,607

 
2,004,497

 
590,700

 
48,906

 
4,400,010

Lance C. Balk
 
2014
 
529,808

 
82,540

 
128,023

 
262,200

 
467,460

 
37,658

 
1,507,689

General Counsel
 
2013
 
524,039

 

 
109,887

 
214,132

 
354,375

 
45,630

 
1,248,063

 
 
2012
 
500,000

 
23,000

 
724,589

 
1,503,373

 
537,000

 
38,506

 
3,326,468

Brett Petit
 
2014
 
404,808

 
142,325

 
106,686

 
218,500

 
297,675

 
26,943

 
1,196,937

Senior Vice President,
 
2013
 
397,308

 

 
85,467

 
166,547

 
225,000

 
34,420

 
908,742

Marketing
 
2012
 
330,000

 
124,650

 
521,788

 
300,617

 
295,350

 
25,567

 
1,597,972

Walter S. Hawrylak
 
2014
 
354,808

 
79,075

 
106,686

 
218,500

 
260,925

 
23,602

 
1,043,596

Senior Vice President,
 
2013
 
349,231

 

 
85,467

 
166,547

 
196,875

 
24,512

 
822,632

Administration
 
2012
 
330,000

 
79,650

 
528,430

 
1,085,769

 
295,350

 
23,926

 
2,343,125

_________________________
(1)
Each of the named executive officers deferred portions of their 2014 salary, bonus and/or non-equity incentive plan compensation into the Supplemental 401(k) Plan as set forth in the 2014 Non-Qualified Deferred Compensation Table and the numbers in the columns above are prior to any such deferrals.
(2)
The dollar amount represents the aggregate grant date fair value of the awards granted computed in accordance with the stock-based accounting rules (Financial Standards Accounting Board ASC Topic 718). The assumptions used in the calculation of these amounts are discussed in Note 9 to the Company's consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. These awards were the DERs distributed to reflect the dividend equivalents that had accumulated with respect to stock options vesting during 2014. The value of Project 600 awards on the date the executive officers started to participate in the Project 600 program with a target number of shares of stock (and DERs) is treated as zero because on such date the shares of stock under the Project 600 awards were not considered to be probable of being earned. Such number does not reflect the value of shares of stock that the executive officer may receive under the Project 600 program or the accounting expense to the Company of such shares of stock that may be granted. Any shares of stock under the Project 600 awards will only be granted after completion of the Company's audit for the applicable years if the specified targets are met. Under the Project 600 program, each executive officer has a target number of shares of stock (plus DERs), which may be issued under the Long-Term Incentive Plan if the Company achieves the Project 600 Target Modified EBITDA in calendar year 2017 and a higher number of shares of stock if the Project 600 Target Modified EBITDA is achieved in 2016 or 2015 and lower number of shares of stock if the Project 600 Target Modified EBITDA is achieved in 2018. Partial achievement awards are available. For informational purposes, assuming the highest level of performance for a determinable award under the Project 600 awards, calculated by multiplying the closing price of the Company’s common stock on the date the executive officer started to participate in the Project 600 program by the number of Project 600 award shares issuable upon achievement of the 2015 Early Achievement, the value is $23,287,500, $5,589,000, $2,095,875, $1,863,000, and $1,863,000 for Messrs. Reid-Anderson,

24


Duffey, Balk, Petit and Hawrylak, respectively. See "—Compensation Discussion and Analysis-Elements of Compensation—Long-Term Incentives" for a discussion of Project 600.
(3)
The dollar amount represents the aggregate grant date fair value of the awards granted computed in accordance with the stock-based accounting rules (Financial Standards Accounting Board ASC Topic 718). The assumptions used in the calculation of these amounts are discussed in Note 9 to the Company's consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards (such as by exercising stock options).
(4)
The dollar amount represents 401(k) Plan matching contributions of 100% of the first 3% of salary contributions and 50% of the next 2% of salary contributions (subject to tax law limits), Supplemental 401(k) Plan matching contributions and Company-paid life insurance premiums as follows:
Executive
 
Life Insurance
Premiums($)
 
401(k) Plan
Match($)
 
Supplemental
401(k) Plan
Match($)
 
Total($)
James Reid-Anderson
 
2,880

 
10,400

 
89,440

 
102,720

John M. Duffey
 
720

 
10,400

 
28,652

 
39,772

Lance C. Balk
 
2,291

 
10,400

 
24,967

 
37,658

Brett Petit
 
1,751

 
10,400

 
14,792

 
26,943

Walter S. Hawrylak
 
1,535

 
10,400

 
11,667

 
23,602

The amount shown in 2014 for Mr. Reid-Anderson includes $12,000 for an automobile allowance and $15,000 for a tax and legal allowance. Mr. Reid-Anderson's employment agreement provides that Mr. Reid-Anderson is entitled to a fixed automobile allowance of $1,000 per month as well as a fixed tax and legal allowance of $15,000 per calendar year. For additional information on contributions that the Company makes for the named executive officers under the 401(k) Plan, Supplemental 401(k) Plan and of perquisites and benefits that the Company provides to the named executive officers, see "—Compensation Discussion and Analysis—Elements of Compensation—Perquisites and Benefits."
Description of Employment Agreements of Named Executive Officers
In 2010, the Company entered into employment agreements with each of the named executive officers. See "—Compensation Discussion and Analysis—Elements of Compensation" for additional information on the compensation of the named executive officers pursuant to their respective employment agreements. For a description of separation or change of control payments and benefits provided by these employment agreements, see "—Potential Payments Upon Termination."

25


2014 Grants of Plan-Based Awards
The following table provides information on equity and non-equity awards granted in 2014, except as otherwise noted below, to each of the named executive officers:
 
 
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1)
Estimated Future Payouts
Under Equity Incentive Plan
Awards
All Other
Stock
Awards:
No. of
Shares of
Stock or
Units
(#)
All Other
Option
Awards:
No. of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Awards
($/Sh)
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)
Name
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
James Reid-Anderson


1,440,000

2,880,000








 
2/19/2014








150,000

40.02

1,435,500

 
2/19/2014







(2
)


643,826

 
8/24/2014








250,000

37.54

2,185,000

 
8/24/2014







(2
)


1,066,858

 
10/21/2014(3)




250,000

500,000

675,000





John M. Duffey


438,750

877,500








 
8/24/2014








45,000

37.54

393,300

 
8/24/2014







(2
)


192,034

 
10/21/2014(3)




60,000

120,000

162,000





Lance C. Balk


397,500

795,000








 
8/24/2014








30,000

37.54

262,200

 
8/24/2014







(2
)


128,023

 
10/21/2014(3)




22,500

45,000

60,750





Brett Petit


253,125

506,250








 
8/24/2014








25,000

37.54

218,500

 
8/24/2014







(2
)


106,686

 
10/21/2014(3)




20,000

40,000

54,000





Walter S. Hawrylak


221,875

443,750








 
8/24/2014








25,000

37.54

218,500

 
8/24/2014







(2
)


106,686

 
10/21/2014(3)




20,000

40,000

54,000





_______________________________
(1)
See "—Compensation Discussion and Analysis—Elements of Compensation—Annual Incentives" for details regarding the annual incentive. Because of Mr. Reid-Anderson's participation in the general executive annual cash incentive plan for 2014, the 50% of base salary minimum bonus opportunity set forth in Mr. Reid-Anderson's employment agreement was not applicable during 2014.
(2)
On the August 2014 grant dates of stock option awards (and February 2014 for Mr. Reid-Anderson), DERs were also granted to each named executive officer with respect to the same number of shares as the number of shares underlying the stock option award granted. The number of shares of common stock that vest pursuant to the DERs is based on the conversion of cash DERs accumulated from the grant date through the date that the stock option vests.
(3)
The date executive officers started to participate in the Project 600 program is set forth under the "Grant Date" column. Under the Project 600 program, each executive officer has a target number of shares of stock (plus DERs), which may be issued under the Long-Term Incentive Plan if the Company achieves the Project 600 Target Modified EBITDA in calendar year 2017 and a higher number of shares of stock if the Project 600 Target Modified EBITDA is achieved in 2016 or 2015 and a lower number of shares of stock if the Project 600 Target Modified EBITDA is achieved in 2018. Partial achievement awards are available. See "—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives" for a discussion of Project 600.

26


2014 Outstanding Equity Awards at Fiscal Year-End
The following table provides information on the total outstanding equity awards as of December 31, 2014 for each of the named executive officers:
 
 
Option Awards
Stock Awards
Name
Grant
Date
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
Option
Exercise
Price($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested($)(2)
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units Or
Other Rights
That Have
Not Vested
(#)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested($)(2)
James Reid-Anderson








457,500(3)

22,074,375

 








500,000(4)

21,835,000

 
2/17/2012


60,000


23.53

2/17/2022





 
8/24/2012


100,000


27.76

8/24/2022





 
8/24/2012






  (5)

450,000



 
2/20/2013


187,500


33.45

2/20/2023





 
2/20/2013






  (5)

703,125



 
2/19/2014


150,000


40.02

2/19/2024





 
2/19/2014






  (5)

289,500



 
8/24/2014


250,000


37.54

8/24/2024





 
8/24/2014






  (5)

247,500



John M. Duffey








100,000(3)

4,825,000

 








120,000(4)

5,240,400

 
9/7/2010

300,000



10.00

9/7/2020





 
8/24/2011

72,000

36,000


16.81

8/24/2021





 
2/9/2012






  (5)

183,600



 
8/24/2012

36,000

36,000


27.76

8/24/2022





 
8/24/2012






 (5)

162,000



 
8/24/2013

9,000

27,000


34.49

8/24/2023





 
8/24/2013






 (5)

76,950



 
8/24/2014


45,000


37.54

8/24/2024





 
8/24/2014






 (5)

44,550



Lance C. Balk








50,000(3)

2,412,500

 








45,000(4)

1,965,150

 
8/24/2011


27,000


16.81

8/24/2021





 
2/9/2012






 (5)

137,700



 
8/24/2012

27,000

27,000


27.76

8/24/2022





 
8/24/2012






 (5)

121,500



 
8/24/2013

6,750

20,250


34.49

8/24/2023





 
8/24/2013






 (5)

57,713



 
8/24/2014


30,000


37.54

8/24/2024





 
8/24/2014






 (5)

29,700



Brett Petit








40,000(3)

1,930,000

 








40,000(4)

1,746,800

 
8/24/2011


19,500


16.81

8/24/2021





 
2/9/2012






  (5)

99,450



 
8/24/2012


19,500


27.76

8/24/2022





 
8/24/2012






  (5)

87,750



 
8/24/2013

5,250

15,750


34.49

8/24/2023





 
8/24/2013






  (5)

44,888



 
8/24/2014


25,000


37.54

8/24/2024





 
8/24/2014







24,750



Walter S. Hawrylak








40,000(3)

1,930,000

 








40,000(4)

1,746,800

 
8/24/2011


19,500


16.81

8/24/2021





 
2/9/2012






  (5)

99,450



 
8/24/2012


19,500


27.76

8/24/2022





 
8/24/2012






  (5)

87,750



 
8/24/2013


15,750


34.49

8/24/2023





 
8/24/2013






  (5)

44,888



 
8/24/2014


25,000


37.54

8/24/2024





 
8/24/2014






  (5)

24,750




27


_________________________
(1)
The stock options awarded to all of the named executive officers vest 25% on each anniversary of the grant date with acceleration upon certain events as discussed in "Potential Payments Upon Termination of Named Executive Officers." As described in "—Compensation Discussion and Analysis—Elements of Compensation—Dividend Equivalent Rights," in connection with the dividend increase in 2012, the Board granted DERs to holders of unvested stock options. On a quarterly basis as stockholders are paid cash dividends, the DERs accrue dividends which will be distributed to the named executive officers in shares upon the vesting of their stock option award.
(2)
The value set forth for DERs is based on the number of cash dividend equivalents accumulated from the grant date through December 31, 2014.
(3)
Amount represents the number of shares that may be issued under Project 500 if the Company achieves the Project 500 partial achievement in calendar year 2015. See "—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives" and "—Compensation Discussion and Analysis—Elements of Compensation—Dividend Equivalent Rights" for a discussion of Project 500 and related DERs.
(4)
Amount represents the target number of shares that may be issued under Project 600 if the Company achieves the Project 600 Target Modified EBITDA in calendar year 2017. See "—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives" and "—Compensation Discussion and Analysis—Elements of Compensation—Dividend Equivalent Rights" for a discussion of Project 600 and related DERs.
(5)
On the grant date of the stock option awards, accompanying DERs were also granted to each named executive officer. The number of shares of common stock that vest pursuant to the DERs is based on the conversion of cash dividend equivalents accumulated from the grant date through the date that the stock option vests. In addition, on February 9, 2012, DERs were granted with respect to all then outstanding stock options which were not vested at such time.
2014 Option Exercises and Stock Vested
The following table provides information regarding options exercised and stock vested for the named executive officers during 2014:
 
 
Option Awards
 
Stock Awards
Name
 
Number of Shares
Acquired on Exercise(#)
 
Value Realized
on Exercise($)(1)
 
Number of Shares
Acquired on Vesting(#)
 
Value Realized
on Vesting($)(2)
James Reid-Anderson
 
870,884

 
23,074,921

 
161,427

 
6,279,828

John M. Duffey
 

 

 
47,044

 
1,768,973

Lance C. Balk
 
107,000

 
2,550,649

 
34,975

 
1,334,410

Brett Petit
 
89,250

 
2,117,860

 
30,406

 
1,186,433

Walter S. Hawrylak
 
94,500

 
2,061,988

 
30,819

 
1,191,986

_____________________________
(1)
The amount was calculated based on the difference between the market price of the Company's common stock on the date of exercise and the exercise price.
(2)
The amount was calculated based on the fair market value of the Company's common stock on the vesting date (or the next trading day if the vesting date was not a trading day). The fair market value is determined based on the closing price of the Company's common stock on the applicable date and accumulated dividends/DERs.
Fiscal 2014 Non-Qualified Deferred Compensation
The Company maintains a Supplemental 401(k) Plan that covers selected employees including the named executive officers. The Supplemental 401(k) Plan provides participants the opportunity to defer a portion of their compensation without such portion being limited by Internal Revenue Code restrictions applicable to the Company's 401(k) Plan. In addition, the Supplemental 401(k) Plan provides participants who have made the maximum contribution under the Company's 401(k) Plan to be credited with matching contributions under the Supplemental 401(k) Plan to the extent allocations under the Company's 401(k) Plan were limited and to the extent of contributions to the Supplemental 401(k) Plan subject to an overall matching contribution limit. Aggregate matching contributions for a participant under the Supplemental 401(k) Plan and the Company's 401(k) Plan is limited to 4% of the participant's base salary and annual incentive compensation. Amounts credited to a named executive officer under the Supplemental 401(k) Plan, adjusted for earnings or losses, will generally be distributed on the last business day of the sixth month following the month in which the participant has a separation of service from the Company. The following table sets forth information concerning the named executive officers' participation in the Supplemental 401(k) Plan during fiscal 2014:

28


Non-Qualified Deferred Compensation
Name
 
Executive
Contributions
In Fiscal 2014($)(1)
 
Registrant
Contributions in
Fiscal 2014($)(1)
 
Aggregate
Earnings (Loss)
In Fiscal 2014($)(2)
 
Aggregate
Withdrawals/
Distributions($)
 
Aggregate
Balance
At Fiscal 2014($)
James Reid-Anderson
 
115,738

 
89,440

 
26,651

 

 
747,439

John M. Duffey
 
158,231

 
28,652

 
32,087

 

 
553,908

Lance C. Balk
 
64,789

 
24,967

 
12,995

 

 
264,537

Brett Petit
 
76,033

 
14,792

 
5,990

 

 
165,451

Walter S. Hawrylak
 
3,400

 
11,667

 
1,144

 

 
43,236

_________________________________
(1)
All amounts reported as executive contributions are executive elective deferrals included in the 2014 Summary Compensation Table, as salary or non-equity incentive compensation for 2014. All amounts reported as registrant contributions are Company matching contributions included in the 2014 Summary Compensation Table as all other compensation for 2014.
(2)
None of the amounts reported as aggregate earnings are included in the 2014 Summary Compensation Table.
Potential Payments Upon Termination
Potential Payments Upon Termination of Named Executive Officers
All of the named executive officers have provisions in their employment agreements providing for separation payments and benefits upon certain types of termination of employment.
Payments Upon Death or Disability
Upon a named executive officer's termination of employment, such executive is generally entitled to unpaid earned salary, unpaid earned annual incentive and unpaid benefits. In addition, in the event of termination of the named executive officer's employment due to death or disability such executive would be entitled to receive (i) a pro rata portion of the annual incentive that would otherwise have been paid to such executive if his employment had not so terminated (a "Pro Rata Incentive"); and (ii) immediate vesting of all time-vested options, restricted stock, restricted stock units and other time-vested equity-based incentive awards then held by such executive (excluding any awards issued pursuant to the Company's Project 500 and Project 600 programs) (collectively, "Time-Vested Awards"), with all outstanding options remaining exercisable for the shorter of their originally scheduled respective terms and one year following the executive's date of termination.
Furthermore, in the event of termination of the employment of Messrs. Duffey, Balk, Hawrylak, or Petit due to disability, such executive would be entitled to a lump sum payment of an amount equal to the sum of such executive's base salary and target annual incentive for the year of termination. In the event of termination of the employment of Mr. Reid-Anderson due to disability, he would also be entitled to a lump sum payment of an amount equal to twice the sum of his base salary and target annual incentive for the year of termination.
Termination Without Cause or For Good Reason
If the Company terminates Mr. Reid-Anderson's employment without "cause" (as defined below) or he terminates his employment for "good reason" (as defined below), Mr. Reid-Anderson would be entitled to receive, in addition to accrued payments and benefits, (i) a Pro Rata Incentive; (ii) a lump sum payment in an amount equal to twice the sum of (X) Mr. Reid-Anderson's base salary and (Y) target annual incentive for the year of termination; (iii) continued health care and life insurance coverage for a period of twenty-four months from the date of termination or until executive receives comparable coverage from a subsequent employer on the same basis as such coverage is made available to other executives; and (iv) immediate vesting of the greater of (X) the unvested Time-Vested Awards that are scheduled to vest in the twelve-month period following executive's date of termination and (Y) 75% of the unvested component of each outstanding Time-Vested Award, with all vested options remaining exercisable for the shorter of their originally scheduled term and one year following the date of termination. If Mr. Reid-Anderson's employment is so terminated before and with the cooperation of the acquirer or merger partner in a "change in control" (as such term is defined in his employment agreement) in anticipation of a change in control or on or during the twenty-four month period following a change in control, all of Mr. Reid-Anderson's Time-Vested Awards will fully vest.
Messrs. Duffey, Balk, Hawrylak, and Petit would be entitled to receive, in addition to accrued payments and benefits, (i) a Pro Rata Incentive; (ii) a lump sum payment in an amount equal to the sum of (X) executive's base salary and (Y) target annual incentive for the year of termination; (iii) continued health care coverage for a period of eighteen months from the date of termination or until executive receives comparable coverage from a subsequent employer on the same basis as such coverage is made available to other executives; (iv) immediate vesting of the unvested Time-Vested Awards that are scheduled to vest in

29


the twelve-month period following executive's date of termination, with all vested options remaining exercisable for the shorter of their originally scheduled term and one year following the date of termination; and (v) executive outplacement services as reasonably determined by the Company. If the Company terminates the employment of Messrs. Duffey, Balk, Hawrylak, or Petit without "cause" (as defined below) or if such executive terminates his employment for "good reason" (as defined below) before, on or within two years after or in anticipation of a change in control (as such term is defined in their respective employment agreements), instead of (ii) above, such executive will be entitled to a lump sum payment in an amount equal to twice the sum of (X) executive's base salary and (Y) target annual incentive for the year of termination and instead of (iv) above, all Time-Vested Awards will fully vest.
"Cause" is generally defined under the employment agreements for the named executive officers as follows:
executive's continued failure (except where due to physical or mental incapacity) to endeavor in good faith to substantially perform his duties;
executive's material malfeasance or gross neglect in the performance of his duties;
executive's conviction of, or plea of guilty or nolo contendere to, a misdemeanor involving moral turpitude or a felony;
the commission by the executive of an act of fraud or embezzlement against the Company or any affiliate constituting a crime;
executive's material breach of any material provision of his employment agreement (as determined in good faith by the Board) that is not remedied within fifteen days after (i) written notice from the Company specifying such breach and (ii) the opportunity to appear before the Board;
executive's material violation of a material Company policy that causes demonstrable damage to the Company, which damage is not insignificant;
executive's continued failure to cooperate in any audit or investigation involving the Company or its affiliates or its or their financial statements or business practices that is not remedied within fifteen days of written notice from the Company specifying such failure; or
executive's actual gross misconduct that the Board determines in good faith adversely and materially affects the business or reputation of the Company.
"Good reason" is defined under the employment agreements for the named executive officers to mean the occurrence, without such executive's express written consent, of:
a material diminution in the executive's employment duties, responsibilities or authority, or the assignment to executive of duties that are materially inconsistent with his position;
any reduction in base salary or target annual incentive (or minimum annual incentive or maximum annual incentive in the case of Mr. Reid-Anderson); or
any material breach by the Company of the compensation or indemnification provisions of the executive's employment agreement.
Additionally, the definition of good reason in Mr. Reid-Anderson's employment agreement includes the following circumstances: (i) removal of him as President or Chief Executive Officer of the Company or an adverse change in his reporting obligations and (ii) the failure of the Company to nominate him for election as a member of the Board or the failure to appoint him as Chairman of the Board while he is a member of the Board or the failure of the Company's stockholders to elect him to the Board once nominated.
An executive's employment may terminate for "good reason" only if (i) within 90 days of the date executive has actual knowledge of the occurrence of an event of "good reason," he provides written notice to the Company specifying such event, (ii) the Company does not cure such event within 10 business days (5 business days in the case of Mr. Reid-Anderson) of such notice if the event is nonpayment of an amount due to executive, or within 60 days of such notice for other events and (iii) executive terminates executive's employment within 30 business days of the end of such cure period.

30


Potential Payments Upon Termination of Employment or Change in Control
The table below illustrates payments that would be made to a named executive officer if his employment terminates due to a termination for death or disability, for cause, without cause or for good reason. The table only details additional incremental payments that would be owed by the Company to the executive beyond what the named executive officer has already earned. The amounts shown and discussed in this section assume that a termination was effective as of December 31, 2014 and assume there is no earned but unpaid base salary, annual incentive or expenses at the time of termination.
Executive
 
Cash Severance Payments($)(1)
 
Early Vesting of Stock Options($)(2)
 
Early Vesting of Project 600($)(3)
 
Benefit Continuation/Outplacement Services($)
 
Total($)
James Reid-Anderson
 
 
 
 
 
 
 
 
 
 
Death
 

 
8,097,075

 

 

 
8,097,075

Disability
 
5,280,000

 
8,097,075

 

 

 
13,377,075

Without Cause or for Good Reason—No Change in Control
 
5,280,000

 
6,072,806

 

 
40,600

 
11,393,406

Without Cause or for Good Reason—Change in Control
 
5,280,000

 
8,097,075

 
21,835,000

 
40,600

 
35,252,675

John M. Duffey
 
 
 
 
 
 
 
 
 
 
Death
 

 
2,455,650

 

 

 
2,455,650

Disability
 
1,023,750

 
2,455,650

 

 

 
3,479,400

Without Cause or for Good Reason—No Change in Control
 
1,023,750

 
1,667,700

 

 
40,515

 
2,731,965

Without Cause or for Good Reason—Change in Control
 
2,047,500

 
2,455,650

 
5,240,400

 
40,515

 
9,784,065

Lance C. Balk
 
 
 
 
 
 
 
 
 
 
Death
 

 
1,816,988

 

 

 
1,816,988

Disability
 
927,500

 
1,816,988

 

 

 
2,744,488

Without Cause or for Good Reason—No Change in Control
 
927,500

 
1,244,588

 

 
40,515

 
2,212,603

Without Cause or for Good Reason—Change in Control
 
1,855,000

 
1,816,988

 
1,965,150

 
40,515

 
5,677,653

Brett Petit
 
 
 
 
 
 
 
 
 
 
Death
 

 
1,347,218

 

 

 
1,347,218

Disability
 
658,125

 
1,347,218

 

 

 
2,005,343

Without Cause or for Good Reason—No Change in Control
 
658,125

 
908,685

 

 
40,590

 
1,607,400

Without Cause or for Good Reason—Change in Control
 
1,316,250

 
1,347,218

 
1,746,800

 
40,590

 
4,450,858

Walter S. Hawrylak
 
 
 
 
 
 
 
 
 
 
Death
 

 
1,347,218

 

 

 
1,347,218

Disability
 
576,875

 
1,347,218

 

 

 
1,924,093

Without Cause or for Good Reason—No Change in Control
 
576,875

 
908,685

 

 
34,953

 
1,520,513

Without Cause or for Good Reason—Change in Control
 
1,153,750

 
1,347,218

 
1,746,800

 
34,953

 
4,282,721

___________________________________
(1)
Because termination is assumed to have occurred on December 31, 2014, the Pro Rata Incentive otherwise payable upon death or disability or upon a termination without cause or for good reason is not reflected in the table.
(2)
Unvested portions of stock options would vest. The value is calculated by (a) multiplying the amount by which $43.15 (the closing price of the Company's common stock on December 31, 2014) exceeds the exercise price of the stock option by the number of shares subject to the accelerated portion of the stock option and (b) adding the value of corresponding DERs as of December 31, 2014.
(3)
Project 600 awards would vest at target. The value is calculated by (a) multiplying $43.15 (the closing price of the Company’s common stock on December 31, 2014) by the target number of shares under the Project 600 award and (b) adding the value of corresponding DERs as of December 31, 2014.


31


TRANSACTIONS WITH RELATED PERSONS
Policy and Procedures Regarding Transactions with Related Persons
The Nominating and Corporate Governance Committee has adopted a written policy relating to its review and approval of transactions with related persons in which the amount involved exceeds $120,000. A "related person" includes any director or executive officer of the Company, any person who is the beneficial owner of more than 5% of the Company's common stock, an immediate family member of any of the foregoing persons and any firm, corporation or other entity controlled by any of the foregoing persons. The Nominating and Corporate Governance Committee reviews and approves all related person transactions in which the amount involved exceeds $120,000. At times, it may be advisable to initiate a transaction before the Nominating and Corporate Governance Committee has evaluated it, or a transaction may begin before discovery of a related person's participation. In such instances, the Nominating and Corporate Governance Committee must ratify the related person transaction at its next regularly scheduled meeting or the transaction must be rescinded. Approval of a related person transaction requires the affirmative vote of the majority of disinterested directors on the Nominating and Governance Committee. In approving any related person transaction, the Nominating and Corporate Governance Committee must determine that the transaction is fair and reasonable and on terms no less favorable to the Company than could be obtained in a comparable arm's length transaction with an unrelated third party.
Transactions with Related Persons
During fiscal 2014, there were no transactions, or currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors and persons who own more than ten percent of the common stock, to file initial statements of beneficial ownership (Form 3) and statements of changes in beneficial ownership (Forms 4 or 5) of common stock with the SEC. Officers, directors and greater than ten-percent stockholders are required by SEC rules and regulations to furnish the Company with copies of all such forms they file.
During 2014, to the Company's knowledge, based solely on the Company's review of the copies of such forms received by the Company and written representations from certain reporting persons that no additional forms were required for those persons, all the required reports were filed on a timely basis by officers, directors, and greater than ten percent beneficial owners.
PROPOSAL 2: APPROVAL OF LONG-TERM INCENTIVE PLAN AS AMENDED
The Board, the Compensation Committee and Company management all believe that the effective use of stock-based long-term incentive compensation is vital to the Company’s continued ability to recruit, hire and retain the individuals required to successfully execute the Company’s business plans and achieve strong performance in the future by providing a direct link between compensation and long-term stockholder value creation. The Board has approved, and the Company is hereby soliciting stockholder approval of, the Six Flags Entertainment Corporation Long-Term Incentive Plan as amended (the “Incentive Plan”) to increase the number of shares available for issuance under the Incentive Plan by 5,000,000 shares from 28,133,332 to 33,133,332.
The proposed increase in the number of shares under the Incentive Plan will provide the opportunity to make future grants of awards. The proposed increase is intended to cover potential share issuances under Project 600 above target, DERs, and three years of restricted stock and stock option grants at current grant levels. The awards previously granted subject to stockholder approval are described below under “New Plan Benefits.” In the event that the required votes to approve the Incentive Plan are not obtained, the amendment included in the Incentive Plan will not become effective and the Company will continue to make grants of awards pursuant to the terms of the Incentive Plan as in effect prior to the described amendment and subject to applicable law. In addition, the awards previously granted subject to stockholder approval will be reduced to the extent necessary.
The Incentive Plan is the Company’s primary equity incentive plan. Currently, there are no other equity incentive plans from which the Company can grant options, restricted stock, restricted stock units and other equity awards. As of March 12, 2015, including shares that may be issued pursuant to Project 500 as well as the potential issuance of shares pursuant to Project 600 at target, 139,355 shares were available for the future grant of equity awards under the Incentive Plan.

32


A copy of the Incentive Plan is attached as Appendix A to this Proxy Statement. The description herein is a summary and not intended to be a complete description of the Incentive Plan. Please read the Incentive Plan for more detailed information.

Description of the Incentive Plan
The purpose of the Incentive Plan is to (i) enhance the Company’s ability to attract highly qualified personnel; (ii) strengthen the Company's retention capabilities; (iii) enhance the long-term performance and competitiveness of the Company; and (iv) align the interests of Incentive Plan participants with those of the Company’s stockholders.
Administration
The Compensation Committee administers the Incentive Plan, except that the Board may act in lieu of the Compensation Committee on any matter. The Compensation Committee is authorized to select the individuals to whom awards are granted, to determine the types of awards granted and the number of shares subject to each award, and to establish the other terms, conditions and provisions of awards. The Compensation Committee may also authorize one or more executive officers of the Company to make awards to employees of the Company other than themselves.
Eligibility
Awards may be granted under the Incentive Plan to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its affiliates. As of March 12, 2015, approximately 1,500 employees and six non-employee directors were eligible to participate in the Incentive Plan. For purposes of the Incentive Plan, “affiliate” means any entity that is directly or indirectly controlled by, in control of, or under common control with the Company.
Shares Available for Awards
The Incentive Plan currently authorizes 28,133,332 shares of common stock to be issued, and if this proposal is approved, 33,133,332 shares of common stock will be authorized for issuance under the Incentive Plan. No participant may receive during the life of the Incentive Plan options or SARs that relate to more than 9,666,666 shares.
The closing price of the Company's common stock as reported on The New York Stock Exchange on March 12, 2015 was $47.83 per share.

Types of Awards
The Incentive Plan permits the grant of any or all of the following types of awards:
Stock Options. The Compensation Committee may grant either incentive stock options, which must comply with Section 422 of the Code, or nonqualified stock options. The Compensation Committee sets option exercise prices and terms, except that the exercise price of stock options granted under the Incentive Plan must be at least 100% of the fair market value of the common stock on the date of grant. At the time of grant, the Compensation Committee determines when stock options are exercisable and when they expire, except that the term of a stock option cannot exceed ten years. Unless the Compensation Committee otherwise determines, fair market value means, as of a given date, the closing price of the Company’s common stock on the New York Stock Exchange.
Share Appreciation Rights (SARs). The Compensation Committee may grant SARs as a right in tandem with the number of shares underlying stock options granted under the Incentive Plan or on a stand-alone basis. The Compensation Committee sets the terms of any SARs granted, except that the exercise price of SARs granted under the Incentive Plan must be at least 100% of the fair market value of the common stock on the date of grant and the term of an SAR cannot exceed ten years. Upon exercise, SARs are the right to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the fair market value of the SAR on the date of exercise over the exercise price of the SAR set on the date of grant.
Restricted Shares, Restricted Share Units (RSUs), and Unrestricted Shares. The Compensation Committee may grant awards of shares of common stock, or awards denominated in units of common stock, under the Incentive Plan. These awards may be made subject to forfeiture restrictions at the Compensation Committee’s discretion. The restrictions may be based on continuous service with the Company or the achievement of specified performance criteria, as determined by the Compensation Committee.

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Deferred Share Units (DSUs). The Compensation Committee may grant DSUs to directors, consultants, or members of a select group of management or highly compensated employees of the Company. The DSUs entitle such grantees to elect to have fees paid to them by the Company for their services in the form of shares of common stock. The DSUs represent a future right to receive shares of the Company’s common stock.
Performance and Cash-Settled Awards. The Incentive Plan authorizes the Compensation Committee to grant performance-based awards in the form of Performance Units that the Compensation Committee may or may not designate as “Performance Compensation Awards” that are intended to be exempt from Code Section 162(m) limitations. In either case, Performance Units vest and become payable based upon the achievement, within the specified period of time, of performance objectives applicable to, among others, the individual, the Company or any affiliate of the Company. Performance Units (including those designated as Performance Compensation Awards) are payable in cash or shares of common stock; subject to an individual participant limit of, during any performance period, no more than 1,500,000 shares (or, for Performance Units to be settled in cash, $5,000,000). Any amounts earned under Performance Units in excess of these limitations will be deferred. The Compensation Committee decides the length of performance periods but the periods for Performance Compensation Awards may not be less than one fiscal year.
For Performance Compensation Awards, performance measures mean one or more of the following selected by the Compensation Committee to measure the performance of the individual participant, the Company or of an affiliate or a division, department, park, region or function of the Company or any affiliate in which the participant is employed for a performance period, whether in absolute or relative terms (including, without limitation, terms relative to a peer group or index):  basic, diluted, or adjusted earnings per share; sales or revenue; earnings before interest, taxes, and other adjustments (in total or on a per share basis); basic or adjusted net income; returns on equity, assets, capital, revenue or similar measure; economic value added; working capital; total shareholder return; expenses, cash flow, margin, attendance, and product development, product market share, licensing, mergers, acquisitions, sales of assets of affiliates or business units.  Each such measure is, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently applied by the Company (or such other standard applied by the Compensation Committee) and, if so determined by the Compensation Committee, and in the case of a Performance Compensation Award, to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles, or other events or circumstances that render the performance measures unsuitable.  Performance Measures may vary from performance period to performance period and from participant to participant, and may be established on a stand-alone basis, in tandem or in the alternative.

Dividend Equivalent Rights (DERs). The Compensation Committee may grant DERs to any eligible person, and may do so either pursuant to an agreement that is independent of any other award, or through a provision in another award that DERs attach to the shares of common stock underlying the award. Each DER represents the right of the participant to receive amounts based on the dividends declared on shares of common stock as of all dividend payment dates during the term of the DER as determined by the Compensation Committee. Unless otherwise determined by the Compensation Committee, a DER will expire upon the Participant’s termination of employment, except that a DER that is granted as part of another award will expire only when the award is settled or otherwise forfeited. Generally, DERs will be paid out on the date dividends are paid to the Company’s stockholders if the DER is granted on a stand-alone basis or on the vesting date or later settlement date for another award if the DER is granted as part of such award. Payment of all amounts pursuant to a DER will be in shares of common stock, with cash paid in lieu of fractional shares, except that the Compensation Committee may instead provide in an award agreement for cash settlement of all or part of the DERs. The Compensation Committee may impose such other terms and conditions on the grant of a DER as it deems appropriate in its discretion.
Adjustments
If certain changes in the Company’s stock occur by reason of a stock split, reverse stock-split, stock dividend, combination, recapitalization, merger, consolidation, or other change in the Company’s corporate or capital structure, the Compensation Committee will make equitable adjustments to the number of shares of common stock covered by each outstanding award and the number of shares that remain authorized for issuance under the Incentive Plan.
In the event of a change in control in which the Company is not the surviving corporation, each outstanding award will be assumed or a substantially equivalent award will be substituted by the surviving corporation. Alternatively, however, the Compensation Committee may in its sole and absolute discretion do one or more of the following: (i) if an award is not assumed by the successor corporation or the stock of the successor corporation or its parent is not publicly traded on an established securities market, accelerate the vesting of such awards so that awards fully vest immediately prior to

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consummation of the change in control; (ii) arrange or otherwise provide for the payment of cash or other consideration to participants in exchange for the satisfaction and cancellation of outstanding vested awards; (iii) subject to (i) above, terminate all or some unvested awards upon the consummation of the transaction; or (iv) make such other modifications, adjustments or amendments to outstanding awards or the Incentive Plan as the Compensation Committee deems necessary or appropriate. Notwithstanding the foregoing, and unless provided otherwise in an award agreement or in an employment agreement with the participant, in the event a participant is involuntarily terminated on or within 12 months following a change in control, then any award that is assumed by the surviving corporation will accelerate and become fully vested.
Awards are generally not transferable or assignable unless provided otherwise by the Committee with respect to transferees such as family members. The Incentive Plan includes the ability for the Company to rescind or recapture awards upon certain breaches of duty to the Company.

Amendment and Termination
The Board may amend or terminate the Incentive Plan as it deems advisable except that amendments are subject to stockholder approval to the extent the Board determines such approval is required by applicable law and stock exchange requirements. A termination or amendment may not, without a participant’s consent, materially adversely affect any rights under an outstanding award. Unless sooner terminated by the Board, the Incentive Plan will terminate on April 1, 2020.
U.S. Federal Income Tax Consequences
The following is a brief description of the federal income tax treatment that will generally apply to awards under the Incentive Plan based on current federal income tax rules. Other tax consequences of the Incentive Plan (including federal estate and gift tax consequences and all state, local and foreign tax consequences) are not discussed.
Nonqualified Stock Options and Stock Appreciation Rights
Participants generally do not recognize income for federal income tax purposes upon the grant of a nonqualified stock option or SAR. Upon exercise of a nonqualified stock option, a participant generally recognizes ordinary income in an amount equal to the excess of the fair market value of the common stock received upon exercise over the exercise price of the Option. Upon receipt of cash or shares when a SAR is exercised, a participant generally recognizes ordinary income in an amount equal to the amount of cash and the fair market value of the shares received.
A participant's tax basis in common stock received upon exercise of a nonqualified stock option is equal to the amount of ordinary income recognized upon exercise of the option, plus the amount paid to exercise the option. The holding period for the common stock begins on the day after the option is exercised.
If a participant receives common stock upon exercise of a nonqualified stock option or SAR and thereafter disposes of the common stock in a taxable transaction, the difference between the amount realized in the disposition and the participant's tax basis in the common stock is capital gain (or loss), which is short-term or long-term, depending on whether the participant has held the shares for more than one year on the date of disposition.
Incentive Stock Options
Incentive stock options can be granted only to employees. Options granted to non-employee directors do not qualify as incentive stock options. Employees are not subject to federal income tax upon the grant of an incentive stock option. Employees also are not taxed on the exercise of an incentive stock option, provided that the common stock acquired upon exercise of the incentive stock option is not sold by the employee within two years after the option was granted or within one year after the option is exercised (the “required holding period”).
However, for alternative minimum tax ("AMT") purposes, the difference between the exercise price of an incentive stock option and the fair market value of the common stock acquired upon exercise is an item of tax preference in the year the incentive stock option is exercised. The participant is required to include the amount of such difference in AMT income in such year and to compute the participant's AMT tax basis in the shares so acquired in the same manner as if a nonqualified stock option had been exercised. Whether an employee will owe AMT in the year an incentive stock option is exercised will depend on the employee's particular tax circumstances. AMT paid on the exercise of an incentive stock option will be allowed as a credit to the extent regular tax exceeds AMT in future years.

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On a sale, after the required holding period, of common stock that was acquired by exercising an incentive stock option, the difference between the participant's tax basis in such common stock and the amount realized in the sale of the common stock is long-term capital gain (or loss).
If common stock acquired upon exercise of an incentive stock option is disposed of by the employee during the required holding period (a "disqualifying disposition"), the excess, if any, of (i) the fair market value of the common stock on the exercise date (or, if less, the amount realized in such disposition) over (ii) the exercise price, is taxed to the employee as ordinary income. Further gain or loss, if any, is capital gain or loss, which is long-term or short-term depending on whether the employee has held the common stock for more than one year on the date of the disqualifying disposition. If an employee pays the exercise price of an option by delivering common stock that was previously acquired by exercising an incentive stock option and such delivery occurs before the end of the required holding period for such common stock, the employee is treated as having made a disqualifying disposition of the common stock so delivered.
In the case of incentive stock options, the aggregate fair market value (determined at the time the options are granted) of the common stock with respect to which incentive stock options first become exercisable by an employee during a calendar year cannot exceed $100,000. This limit does not apply to nonqualified stock options or SARs. To the extent an option that otherwise would be an incentive stock option exceeds this $100,000 limit, it is treated as a nonqualified stock option.
Share Awards
A participant generally recognizes ordinary income equal to the fair market value of the stock (reduced by any amount paid by the participant for such stock) at such time as the shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code. However, a participant who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer or the shares equal to the excess of the fair market value of such shares over the purchase price, if any, of such stock.
Unit Awards, DERs and Performance and Cash-Settled Awards
A participant generally will not recognize income at the time a stock unit is granted. When any part of a stock unit is issued or paid, the participant generally will recognize compensation taxable as ordinary income at the time of such issuance or payment in an amount equal to the then fair market value of any shares the participant receives.  
A participant generally will not recognize taxable income upon the grant of a performance award or DER. Upon the distribution of cash, shares or other property to a participant pursuant to the terms of a performance award or DER, the participant generally will recognize compensation taxable as ordinary income equal to the amount of cash or the fair market value of any other property issued or paid to the participant pursuant to the terms of the award.

Section 162(m) and Performance-Based Compensation
As described above, awards granted under the Incentive Plan may (but are not required to) be structured to qualify as performance-based compensation under Section 162(m) of the tax code. To qualify, stock options and other awards must be granted under the Incentive Plan by a committee consisting solely of two or more outside directors (as defined under Section 162 regulations) and satisfy the Incentive Plan’s limit on the total number of shares that may be awarded to any one participant during any calendar year. For awards other than stock options and SARs to qualify, the grant, issuance, vesting, or retention of the award must be contingent upon satisfying one or more of the performance criteria set forth in the Incentive Plan, as established and certified by a committee consisting solely of two or more outside directors. In addition, the material terms of the performance goals under which compensation may be paid must be disclosed to and approved by the stockholders. For purposes of Section 162(m), the material terms include (i) the individuals eligible to receive compensation, (ii) a description of the business criteria on which the performance goal is based, and (iii) the maximum amount of compensation that can be paid to an individual under the performance goal. With respect to the various types of awards under the Incentive Plan, each of these aspects is discussed above, and stockholder approval of the Incentive Plan is intended to constitute approval of each of these aspects of the Incentive Plan for purposes of the approval requirements of Section 162(m).

Section 409A and Deferred Compensation Treatment
Under Section 409A of the Code, certain awards under the Incentive Plan may be nonqualified deferred compensation. Section 409A of the Code imposes on persons with nonqualified deferred compensation that does not meet the requirements of Section 409A of the Code (i) taxation immediately upon vesting of the nonqualified deferred compensation and earnings thereon (regardless of whether the compensation is then paid); (ii) interest at the underpayment rate plus 1%; and (iii) an

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additional 20% tax. To the extent applicable, we intend that awards granted under the Incentive Plan be exempt from or comply with Section 409A of the Code but make no representation or warranty to that effect.
Section 280G and Parachute Cutback Treatment
Under certain circumstances, the acceleration of the exercisability of options, the early lapse of restrictions on other Awards, or the making of a cash payment in connection with a change in control might be deemed to be an “excess parachute payment” for purposes of the golden parachute tax provisions of Sections 280G and 4999 of the Code. To the extent so considered, the participant may be subject to a 20% excise tax, and the Company may be denied a tax deduction. The Incentive Plan provides that such acceleration, early lapse of restrictions or payments shall not occur to the extent the participant's net after tax benefit would be larger if such acceleration, early lapse of restrictions or payments did not occur.
Tax Consequences to the Company   
The Company is not allowed a federal income tax deduction on the grant or exercise of an incentive stock option or the disposition, after the required holding period, of shares acquired by exercising an incentive stock option. On a disqualifying disposition of such shares, the Company is allowed a federal income tax deduction in an amount equal to the amount of ordinary income recognized by the employee as a result of the disqualifying disposition, provided the deduction is otherwise allowable under the Code and the Company satisfies its tax reporting obligations with respect to such income.
With respect to other types of awards, the Company generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Code.

Tax Withholding
The Company may deduct or withhold from any award granted or payment due under the Incentive Plan the amount of any withholding taxes due in respect of the award or payment and to take certain other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. An employee who exercises an incentive stock option is not subject to federal income tax withholding on either the exercise of an incentive stock option or the disposition (whether or not a disqualifying disposition) of common stock acquired upon exercise of an incentive stock option.
New Plan Benefits
Except as set forth below or as set forth in existing awards including Project 500 and Project 600 awards described in "Executive Compensation—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives," the future benefits or amounts that would be received under the Incentive Plan are discretionary and are therefore not determinable at this time. For information regarding certain awards made in respect of 2014 under the Incentive Plan, see “Executive Compensation.”
The following table sets forth the number of shares above the Project 600 target award grants made by the Compensation Committee to executive officers and other employees under the Incentive Plan. The Project 600 awards were made subject to stockholder approval to the extent the aggregate number of shares (including related DERs) exceeds the number of shares available under the Incentive Plan. In addition, the table below sets forth a projection of the dollar value of the annual stock grant to directors at current grant levels for three years:

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Six Flags Entertainment Corporation Long-Term Incentive Plan
Name and Position
 
Dollar Value
 
Number of Shares Above Target Award under
Project 600(1)
 
 
James Reid-Anderson
 

 
175,000

Chairman, President and Chief Executive Officer
 
 
 
 
John M. Duffey
 

 
42,000

Chief Financial Officer
 
 
 
 
Lance C. Balk