DEF 14A 1 bp16450x1_def14a.htm DEF 14A

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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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Six Flags Entertainment Corporation
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SIX FLAGS ENTERTAINMENT CORPORATION
924 Avenue J East
Grand Prairie, Texas 75050

March 19, 2019

Dear Fellow Stockholders:

We are pleased to invite you to attend the 2019 Annual Meeting of Stockholders of Six Flags Entertainment Corporation to be held on Wednesday, May 1, 2019, at 2:00 p.m., Eastern Time, at the Yale Club of New York City, 50 Vanderbilt Avenue, New York, New York 10017. Details regarding the business to be conducted at the Annual Meeting are described in the accompanying notice and proxy statement.

Our dedicated and talented employees achieved the Company’s 9th consecutive year of record revenue and guest satisfaction scores. In 2018, we made notable progress to advance all five of our major growth areas:

upgraded our membership program by offering four premium-priced tiers with enhanced benefits, and launched a membership loyalty program;
raised admission prices, even as we improved our value for money ratings;
increased in-park spending, mainly through sales of all season dining passes;
integrated five new domestic parks into our portfolio; and
grew revenue from our international agreements.

This success demonstrates the power of our strategy, the consistent execution of our growth platforms, and the highest delivery of excellence for our guests.

Our Board of Directors continues to fulfill its critical mission of providing active engagement and oversight of the Company’s long-term strategy, execution of business objectives, leadership, and risk management to ensure the Company is well positioned to continue creating value for our stockholders over the long-term.

On behalf of the directors, officers and employees of Six Flags Entertainment Corporation, we would like to express our appreciation for your continued investment and support.

YOUR VOTE IS VERY IMPORTANT TO US. Whether or not you plan to attend the Annual Meeting, we hope you will please cast your vote as soon as possible via the Internet, telephone or mail.

Sincerely,

JIM REID-ANDERSON
Chairman, President and Chief Executive Officer

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SIX FLAGS ENTERTAINMENT CORPORATION

   
NOTICE OF 2019 ANNUAL MEETING OF
STOCKHOLDERS

   

   

Date and Time

May 1, 2019
2:00 p.m. Eastern Time

   

Place

The Yale Club of New York City
50 Vanderbilt Avenue
New York, New York 10017

YOUR VOTE IS IMPORTANT
Even if you plan to attend the Annual Meeting in person, we encourage you to vote in advance by:

visiting www.proxyvote.com

mailing your signed proxy card

calling toll-free from the United States and Canada to 1-800-690-6903

Items of Business

(1)
Election of seven nominees named in the proxy statement as directors;
(2)
Advisory vote to ratify the appointment of KPMG LLP as independent registered public accounting firm for the year ending December 31, 2019;
(3)
Advisory vote to approve executive compensation; and
(4)
Consideration of such other business as may properly come before the Annual Meeting.

Adjournments and Postponements

Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.

Eligibility to Vote

You are entitled to vote only if you were a stockholder of Six Flags Entertainment Corporation as of the close of business on the record date, March 6, 2019.

By Order of the Board of Directors,

DANIELLE J. BERNTHAL
Secretary

Grand Prairie, Texas
March 19, 2019

Important Notice Regarding Internet Availability of Proxy Materials
The proxy statement and annual report for the fiscal year ended December 31, 2018 are available at www.proxyvote.com. The Notice of Internet Availability of Proxy Materials and the proxy statement are being distributed and made available on or about March 19, 2019.

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PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider before you decide how to vote. For more complete information about these topics you should read this entire proxy statement and the annual report on Form 10-K for the fiscal year ended December 31, 2018 (the “Form 10-K”) of Six Flags Entertainment Corporation (the “Company”).

2019 Annual Meeting of Stockholders

Date and Time:
May 1, 2019 at 2:00 p.m. Eastern Time
Place:
The Yale Club of New York City
50 Vanderbilt Avenue
New York, New York 10017
Record Date:
March 6, 2019
Voting:
You may vote online at www.proxyvote.com; by telephone at 1-800-690-6903; by completing and returning your proxy card; or in person at the Annual Meeting

Voting Matters

Proposal
Voting Standard
Board Voting Recommendation
Page Reference
1. Election of 7 Directors
Plurality of votes cast
FOR EACH NOMINEE
2. Advisory Vote to Ratify
    Appointment of KPMG LLP as
    Independent Registered Public
    Accounting Firm for Fiscal 2019
Majority of shares present
FOR
3. Advisory Vote to Approve
    Executive Compensation
Majority of shares present
FOR

Corporate Governance Highlights (page 5)

The Company’s corporate governance practices serve the interest of stockholders and emphasize integrity, ethics and effective risk oversight:

Expanded stockholder engagement
Proxy access provision in bylaws
Increased transparency to stockholders
Experienced independent Board
Annual election of all directors
Board oversight of risk management
Audit Committee comprised of all “Audit Committee Financial Experts”
Regular executive sessions of independent directors
Annual Board and committee self-evaluations

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PROXY SUMMARY

Director Nominees (page 18)

The Company’s director nominees are highly qualified, proven leaders that provide thoughtful and independent representation of stockholder interests:

Name
Age
Gender
Director
Since
Independent
Other Public
Company Boards
Audit
Committee
Compensation
Committee
Nominating
and
Corporate
Governance
Committee
Kurt M. Cellar
49
M
2010
• U.S. Concrete Inc.

 

Nancy A. Krejsa
61
F
2017
 
 
 
 
 
Jon L. Luther
Lead Independent Director
75
M
2010
• Tempur Sealy
  International Inc.
 

 
Usman Nabi
44
M
2010
 
 


Stephen D. Owens
48
M
2010
 


 
James Reid-Anderson Chairman, President and CEO
59
M
2010
 
 
 
 
 
Richard W. Roedel
69
M
2010
• LSB Industries, Inc.
• IHS Markit, Inc.
• Luna Innovations
   Incorporated
• BrightView Holdings Inc.

 

Number of Meetings in 2018
 
 
 
 
8
5
5
Audit Committee Financial Expert
Committee Chairman
Member

Qualifications and Experience


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PROXY SUMMARY

Executive Compensation Highlights

The Company’s executive compensation program seeks to support long-term growth and stockholder value:

We Pay for Performance
We Seek to Mitigate Compensation-Related Risk
A significant portion of the named executive officers’ total compensation is performance-based:
78% for the CEO
58% for the other named executive officers
No repricing of options without stockholder approval
Long-Term Incentive Plan contains clawback
provisions
Anti-hedging policy applicable to all executive officers and directors
Equity compensation and annual cash incentive compensation are largely tied to performance through objective goals that drive long-term stockholder value creation
Robust stock ownership guidelines for executives and directors
No dividends on equity paid prior to vesting
Limited perquisites
No “single trigger” change in control severance
No guaranteed minimum payouts or uncapped award opportunities
Annual “Say on Pay” Vote
Achievement of safety and guest satisfaction objectives impacts payout of incentives
 
 
Peer group established by Compensation Committee

For additional information, see the “Compensation Discussion and Analysis,” which begins on page 23, and the Summary Compensation Table and other related tables and disclosure under “Executive Compensation,” which begins on page 42.

The Company’s return to stockholders relative to its peers has been strong over the past five years:

The Company (NYSE:SIX) also evaluates its total shareholder return (“TSR”) over the most recent five years against two publicly-held regional theme park companies: Cedar Fair, L.P. (NYSE:FUN) and SeaWorld Entertainment, Inc. (NYSE:SEAS). The Company believes this theme park peer group is an appropriate benchmark since the Company directly competes with these companies for business and investor capital. Compared to these theme park peers, the Company’s TSR (with dividends reinvested) for the five-year period as of December 31, 2018, is as follows:


Strong 2018 operating results support compensation program:

Increased revenue 8% over prior year to $1.5 billion representing the Company’s 9th consecutive record year;
Increased attendance 5% over prior year to 32.0 million;
Increased total revenue per capita spending 2% over prior year to $45.71;

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PROXY SUMMARY

Made significant progress in support of strategic plan:
oInvested $133 million in new capital, representing 9% of revenue;
oIntroduced a new premium-tiered membership program, growing the number of members more than 31% to 2.2 million members;
oAcquired five new parks as part of the Company’s North American expansion strategy;
oSigned agreements to develop five new international parks and grew international agreements revenue 10% to $42 million;
Raised quarterly dividend twice, paying $3.16 per share, representing an increase of 21% and a yield as of December 31, 2018, of nearly 6%; and
Repurchased $111 million of the Company’s common stock (1.8 million shares).

Management and Stockholder Interests Aligned

Compensation
Based on level of achievement of applicable performance metrics, the 2018 annual incentives were awarded at 80.4% of target
Aligned with business strategies and objectives and set relative to each executive’s level of responsibility and potential impact on performance
Pay for performance
Reward named executive officers for meeting Company's growth and strategic objectives
Short-term incentives are tied to Company's and executive's performance
Aspirational performance targets are used to achieve award payout at target level
Emphasis on performance-based compensation
A significant portion of the named executive officers’ equity compensation is in the form of stock options
Stock options have no value unless the Company’s stock price appreciates
Long-term equity
➟      
Despite significant growth in Modified EBITDA since start of Project 600, aspirational target was not achieved; no shares were earned under the program
Aspirational performance target to achieve Project 750; awarded to director-level employees and above

Total Direct Compensation Mix

Set forth below is the target annual total direct compensation mix as of December 31, 2018. For the CEO, approximately 78% of his target total compensation is performance based:


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CORPORATE GOVERNANCE

Board of Directors

The business, property and affairs of the Company 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 ensure 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 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. The Board held 6 meetings during 2018. 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 then-current directors of the Company attended the Company's annual meeting of stockholders in 2018, 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 director of the Company was elected at the Company's annual meeting of stockholders in 2018. 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."

Independence

The Board has affirmatively determined that five of the seven current directors, including all members of the 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 Guidelines. These standards reflect the independence standards adopted by the New York Stock Exchange ("NYSE"). The independent directors are Kurt M. Cellar, 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.

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Corporate Governance Documents

The Company's Corporate Governance Guidelines, 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. Each of these documents is available on the Company's website at investors.sixflags.com.

Corporate Governance Guidelines

The Corporate Governance Guidelines 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, the succession plan for the Chief Executive Officer and other senior executives, and stock ownership guidelines for directors and 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.

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 Guidelines, Code of Business Conduct and Ethics and the Company's Code of Ethics for Senior Management on the Company's website at investors.sixflags.com. 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 Guidelines, 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 investors.sixflags.com. A printed copy of each of these documents is available,

without charge, by sending an email to spurtell@sftp.com or by sending a written request to the Company at the following address: Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050, Attention: Investor Relations.

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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, 2019, and the function of each committee, are described below.

Director
Board of Directors
Audit
Committee
Compensation
Committee
Nominating and
Corporate
Governance
Committee
Kurt M. Cellar


 

Nancy A. Krejsa

 
 
 
Jon L. Luther

 

 
Usman Nabi

 


Stephen D. Owens



 
James Reid-Anderson

 
 
 
Richard W. Roedel


 

Audit Committee Financial Expert
Chairman
Member

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Audit Committee
Primary Responsibilities
Assist the Board in its oversight of:
      the accounting and financial reporting process including the audits of the
        financial statements;
      the accounting and internal control policies and procedures;
      the qualifications, independence and performance of the independent
        registered public accounting firm and the performance of the internal         audit function and the internal auditors;
      risks that may have a significant impact on the financial statements
        including risk assessment and risk management policies;
      legal and regulatory compliance including safety programs; and
      the information technology program including network and data security.
   
Financial Expertise and Independence
All members of the Audit Committee are independent within the meaning of Securities and Exchange Commission (“SEC”) regulations. The Board has determined that all of the members of the Audit Committee are audit committee financial experts in accordance with SEC regulations and that all members of the Audit Committee have the accounting and related financial management expertise required by the NYSE.
   
Other Committee Service
Members of the Audit Committee may not serve on the audit committee of more than four public companies, including the Company. In the event a 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 other public companies.
   
Report
The report of the Audit Committee is set forth on page 22 of this Proxy Statement.
Met 8 times in 2018
   
Members
Kurt M. Cellar (Chair)
Stephen D. Owens
Richard W. Roedel

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Compensation Committee
Primary Responsibilities
      establish and review the overall compensation philosophy;
      review and approve the compensation of the executive officers;
      review and approve the corporate goals and objectives used in
        determining executive officer compensation;
      design and oversee the administration of all equity and incentive
        compensation plans to ensure such arrangements do not encourage
        excessive risk taking;
      evaluate the performance of the Chief Executive Officer in light of the
        corporate goals and objectives and recommend to the Board the
        compensation of the Chief Executive Officer;
      review and approve equity awards and other fixed and performance-
        based compensation, benefits and terms of employment of the executive
        officers and such other senior executives identified by the Compensation
        Committee;
      review and approve employment and severance arrangements for
        executive officers;
      review and assist with succession plans for the Chief Executive Officer
        and other executive officers; and
      oversee engagement and communication with stockholders on
        executive compensation matters, and review and assess the results of
        stockholder votes on executive compensation matters.
   
Independence
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.
   
Delegation
The Compensation Committee may 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 2018. 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 2018, Deloitte affiliates provided tax, international development, 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 such non-compensation services impair Deloitte’s ability to provide independent advice to the Compensation Committee or otherwise present a conflict of interest. The aggregate fees paid to Deloitte for executive compensation services to the Compensation Committee during 2018 were $45,207, and the aggregate fees paid to Deloitte for tax, international development and other consulting services to the Company during 2018 were $1,170,047.
   
Report
The report of the Compensation Committee is set forth on page 41 of this Proxy Statement.
Met 5 times in 2018
   
Members
Stephen D. Owens (Chair)
Jon L. Luther
Usman Nabi

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Nominating and Corporate Governance Committee
Primary Responsibilities
      assist the Board in identifying qualified individuals to become directors
        of the Company;
      review and make  recommendations regarding the overall composition
        of the Board and its committees;
      regularly review the overall corporate governance of the Company and
        make recommendations to the Board on corporate governance matters;
      recommend to the Board a slate of nominees for election or re-election
        to the Board at each annual meeting of stockholders; and
      coordinate and oversee the annual self-evaluation process for the
        Board.
   
Independence
The Board has determined that each member of the Nominating and Corporate Governance Committee are independent within the meaning of the SEC and NYSE requirements.
Met 5 times in 2018
   
Members
Usman Nabi (Chair)
Kurt M. Cellar
Richard W. Roedel

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. The Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee also meet regularly in executive session without management.

Board Leadership Structure

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 and believes it should maintain flexibility to select the Company's Chairman and Board leadership structure from time to time. 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 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. Reid-Anderson has detailed and in-depth knowledge of the issues, opportunities

and challenges facing the Company and its business and thus is best positioned to develop agendas that ensure the Board's time and attention are focused on the most critical matters. His combined role enables decisive leadership, ensures clear accountability, and enhances the Company's ability to communicate its message and strategy clearly and consistently to the Company's stockholders, employees and guests. Each director, other than Mr. Reid-Anderson and Ms. Krejsa, is independent, and the Board believes that the independent directors provide effective oversight of management.

To further strengthen the Company's governance structure, the Company maintains a presiding non-employee director, or Lead Independent Director, position. Mr. Luther serves as the Lead Independent Director and his role helps ensure a strong independent Board. As the Lead Independent

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Director, Mr. Luther provides leadership and direction to the Company’s independent directors and presides at executive sessions of the Board. Mr. Luther also advises on the selection of committee chairs and 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. Therefore, the Board retains the authority to modify this structure to best address the Company's and the Board's then current circumstances as and when appropriate.

Planning

One of the primary responsibilities of the Board is to ensure that the Company has a high-performing management team. The Chief Executive Officer provides an annual review to the Board assessing the members of the senior management team and their potential to succeed him. In addition, the Company’s Human Resources department leads an annual comprehensive review of talent development and succession planning at deeper levels of the Company, emphasizing career development of promising management talent. Pursuant to the Company’s Corporate Governance Guidelines, the Board approves and maintains a succession plan for the Chief Executive Officer and senior executives. As part of its normal succession planning process, on March 7, 2019, the Company announced that it has

commenced a search process, and retained an outside search firm, to locate a successor for Mr. Reid-Anderson, the Company’s Chairman, President and Chief Executive Officer, who has informed the Company of his intention to retire by the end of February 2020. The search process, being led by the Board, will evaluate both internal and external candidates for the position of Chief Executive Officer. While there can be no assurance as to the exact timing or the success of the process, it is the Company’s current intention to be in a position to name a new Chief Executive Officer by February 2020. The Board will also undergo a process to evaluate candidates for Chairman of the Board following Mr. Reid-Anderson’s retirement.

Board Role in Risk Oversight

The Company's management is responsible for identifying, assessing and managing the material risks facing the business; however, the Board oversees management’s identification and management of risks to the Company. The Board does not view risk in isolation; it considers risks in making significant business decisions and as part of the Company’s overall business strategy. The Board uses various means to fulfill this oversight responsibility. The Board, and its committees, as appropriate, regularly receive and discuss updates from the Chief Executive Officer, Chief Financial Officer, General Counsel, Vice President of Internal Audit, and other members of senior management regarding significant risks to the Company. These discussions include financial, reputational, legal, operational, strategic, environmental and cybersecurity risks, as well as the plans to address these risks.

Each of the Board’s committees assists the Board in overseeing the management of the Company’s risks within the areas delegated to that committee, and reports to the full Board as appropriate. In particular:

The Audit Committee assists the Board in its oversight of risks that have a significant

impact on the Company’s financial statements; is responsible for reviewing the Company’s policies and practices with respect to risk assessment and management; and has primary responsibility for overseeing risks related to cybersecurity.

The Compensation Committee monitors risks associated with the design and administration of the Company’s compensation programs and practices, including evaluating equity awards and establishing performance goals.
The Nominating and Corporate Governance Committee oversees risks related to the Company’s corporate governance, including ensuring the Board’s continued ability to provide independent oversight of management.

Each standing committee has full access to management, as well as the ability to engage advisors. Accordingly, with the oversight of the Board, the Company has implemented practices and programs designed to help manage the risks to which the Company is exposed and to align risk-

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taking appropriately with the Company's efforts to increase stockholder value. The Board believes that the leadership structure described above under "Board Leadership Structure" facilitates the Board's oversight of risk management because it allows the

Board, with leadership from the Lead Independent Director and by working through committees, to participate actively in the oversight of management's actions.

Nomination Process

Role of the Nominating and Corporate Governance Committee

The Board has adopted a set of Corporate Governance Guidelines 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 Guidelines, 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 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 re-nominated 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—Suggestions for director candidates nominated by a stockholder

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 Guidelines (available on the Company’s website at investors.sixflags.com) to the Secretary or Lead Independent Director, c/o Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050. The Nominating and Corporate Governance Committee evaluates the qualifications of candidates properly submitted by stockholders in the same manner as it evaluates the qualifications of director candidates identified by itself or the Board.

Stockholder Recommendations and Nominations—Director candidates nominated by a stockholder

The Company's Bylaws permit a stockholder to nominate directors for election at an annual meeting. A nominating stockholder is required to provide written notice of that stockholder's intent to make the nomination 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 2020 annual meeting, notice of the nomination must be received by the Secretary of the Company on or after January 2, 2020, and on or before February 1, 2020. A nominating stockholder must provide the

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CORPORATE GOVERNANCE

information required by the Company's Bylaws and each nominee must meet the qualifications required by the Company's Bylaws.

Stockholder Recommendations and Nominations—Proxy access candidates

In 2017, the Company received a stockholder proposal to adopt a proxy access bylaw. Upon management’s recommendations based on various factors including the positive engagement with the stockholder, the Board amended the Company's Bylaws in February 2018 to implement proxy access. As amended, the Company's Bylaws permit a stockholder or group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy

materials director nominees constituting up to two directors or 20% of the Board, whichever is greater, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the Company's Bylaws. A nominating stockholder is required to provide written notice of that stockholder's intent to make the nomination to the Secretary of the Company not less than 120 days nor earlier than 150 days before the first anniversary of the date that the Company sent its proxy statement for the prior year’s annual meeting of stockholders. In order to be considered timely for the 2020 annual meeting, notice of the nomination must be received by the Secretary of the Company on or after October 21, 2019, and on or before November 20, 2019. Nominating stockholders and nominees must satisfy the requirements set forth in the Company's Bylaws.

Stockholder Engagement

The Company's relationship with its stockholders is an important part of the Company’s success and the Company seeks to engage meaningfully with its stockholders to obtain their perspectives. During early 2019, the Chairman and other members of the Compensation Committee, the Company’s Senior Vice President, Investor Relations and Treasurer, and other members of senior management, met with stockholders on a variety of issues. The Company’s management team believes that this approach to engaging openly with the Company's stockholders on topics such as executive compensation and corporate governance drives increased corporate accountability, improves decision making and ultimately creates long-term value. In 2020, members of the Board and senior management team will again reach out to representatives of the Company’s largest stockholders as part of the Company’s stockholder engagement program, ensuring an ongoing, constructive dialogue with investors. The Company is committed to:

Accountability: Driving and supporting strong corporate governance and Board practices to ensure oversight, accountability, and good decision making.
Transparency: Maintaining high levels of transparency on a range of financial, executive compensation, and governance issues to build trust and sustain two-way dialogue that supports the Company's business success.
Engagement: Proactively engaging with stockholders in conversations on a variety of topics to identify emerging trends and issues to inform the Company's thinking and approach.

The Company holds meetings during the course of each year with many of its stockholders through in-person and teleconference meetings as well as by participating at various conferences. In addition, the Company's senior management team, including the Chairman, President and Chief Executive Officer, and the Chief Financial Officer, regularly engage in meaningful dialogue with the Company's stockholders through the Company's quarterly earnings calls and other channels for communication. Through these activities, management discusses and receives input, provides additional information, and addresses questions about the Company’s business strategy, executive compensation programs, corporate governance and other topics of interest to the Company’s stockholders. These engagement efforts allow the Company to better understand stockholders’ priorities and perspectives, and provide the Company with useful input concerning its compensation and corporate governance practices. For example, last year stockholder feedback influenced the Company's implementation of proxy access and the specific terms adopted through an amendment to the Company's Bylaws.

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Director Education

The Company encourages directors to further their education on topics relevant to the Company. The members of the Board are provided with information to engage in director education programs on an

ongoing basis, covering a variety subjects relevant to the Company. In addition, the Board receives regular updates regarding new developments in corporate governance.

Corporate Responsibility

The Company is committed to good corporate citizenship that benefits the communities in which the Company’s employees live, work, and thrill park guests.

Community Relations

The Company encourages employee volunteerism at all of its locations through organized activities. This is demonstrated by "Project 6," a program that began in 2009, in which park and corporate employees designate a day each year to give back to the communities. From helping to build homes to organizing food pantries and creating reading rooms, the Company supports local charitable organizations and educational efforts year-round.

The Company is passionate about the communities surrounding its parks and corporate offices, and the Company’s employees enjoy working together for the greater good. The Company supports the local communities by:

Promoting science and math and hands on learning for students at in-park science and technology fairs and STEM programs;
Supporting academic achievement and literacy through the Read to Succeed program by encouraging students to engage in recreational reading;
Sponsoring and coordinating donations of toys, books, and food through the parks;
Honoring the service of U.S. military personnel and their families by offering complimentary and/or discounted admission to the parks; and
Hosting special events to support various charities whose mission focuses on improving health and quality of life, and supporting those affected by natural disasters.

Emphasis on Safety and Security

The safety and security of the Company's guests and employees is the Company’s top priority. It is the shared responsibility of every employee to actively participate in ensuring a safe and secure environment and to minimize injuries. The hallmarks of the Company's safety and security programs are:

Resources and education to ensure safe and secure operating environments at the parks as well as to improve total workplace safety and health;
A highly trained workforce that proactively assesses risks, strives to eliminate unsafe conditions, and integrates learning from incidents to prevent future occurrences; and
Dedicated leadership, accountability, and employee empowerment.

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2018 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 2018 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 the non-employee director compensation program. The Compensation Committee retained Deloitte to provide advice in connection with ongoing compensation matters related to the Company. Deloitte provided the Compensation Committee with an analysis of the competitiveness of the Company's non-employee director compensation program based on the Company’s peer group and general industry data. The Nominating and Corporate Governance

Committee and the Compensation Committee considered the market data, the amount and timing of past increases to the non-employee directors’ compensation, and the mix of cash and equity compensation, when determining the changes to non-employee director compensation.

Cash and Equity Compensation

The following table sets forth the annual compensation to non-employee directors in 2018. The cash compensation is paid in equal quarterly installments at the beginning of each fiscal quarter.

 
Amount($)
Cash Retainer
 
70,000
 
Equity Retainer(1)(2)
 
160,000
 
Lead Independent Director Retainer
 
30,000
 
Audit Committee Chairman Retainer
 
25,000
 
Compensation Committee Chairman Retainer(1)
 
25,000
 
Nominating and Corporate Governance Committee Chairman Retainer
 
15,000
 
Audit Committee Member Retainer
 
12,500
 
Compensation Committee Member Retainer
 
10,000
 
Nominating and Corporate Governance Committee Member Retainer
 
7,500
 
(1)Effective as of May 2, 2018, the Board approved an increase in (i) the annual equity retainer to $160,000 and (ii) the annual cash retainer for the Compensation Committee Chairman to $25,000.
(2)Granted in the form of 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 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

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2018 NON-EMPLOYEE DIRECTOR COMPENSATION

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.

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 generally be achieved within three years of the date the person first becomes a director for newly appointed or elected directors. All of the directors are currently in compliance with the Company's stock ownership guidelines.

2018 Non-Employee Director Compensation

Employee directors do not receive any compensation in connection with their director service. During 2018, Mr. Reid-Anderson was the only employee-director and his compensation as an employee is set forth in

the 2018 Summary Compensation Table. The following table sets forth compensation paid to or earned by each non-employee director for the year ending December 31, 2018:

Director
Fees Earned
or Paid
in Cash($)(1)(2)
Stock
Awards($)(3)(4)
Total($)
Kurt M. Cellar
 
102,500
 
 
159,970
 
 
262,470
 
Nancy A. Krejsa
 
70,000
 
 
159,970
 
 
229,970
 
Jon L. Luther
 
111,621
 
 
159,970
 
 
271,591
 
Usman Nabi
 
63,333
 
 
159,970
 
 
223,303
 
Stephen D. Owens
 
102,500
 
 
159,970
 
 
262,470
 
Richard W. Roedel
 
89,955
 
 
159,970
 
 
249,925
 
(1)The following table sets forth the components of annual cash compensation earned by each non-employee director in 2018:
 
 
 
Committees
 
Director
Retainer($)
Lead
Independent
Director($)
Audit
Committee
Chair /
Member($)
Compensation
Committee
Chair /
Member($)
Nominating
Corporate
Governance
Chair /
Member($)
Total Cash
Amount($)
Kurt M. Cellar
 
70,000
 
 
 
 
25,000
 
 
 
 
7,500
 
 
102,500
 
Nancy A. Krejsa
 
70,000
 
 
 
 
 
 
 
 
 
 
70,000
 
Jon L. Luther
 
69,955
 
 
30,000
 
 
 
 
11,666
 
 
 
 
111,621
 
Usman Nabi
 
46,667
 
 
 
 
 
 
6,666
 
 
10,000
 
 
63,333
 
Stephen D. Owens
 
70,000
 
 
 
 
12,500
 
 
20,000
 
 
 
 
102,500
 
Richard W. Roedel
 
69,955
 
 
 
 
12,500
 
 
 
 
7,500
 
 
89,955
 
(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 $69,955, which they each elected to defer pursuant to the director cash retainer deferral program. Accordingly, Messrs. Luther and Roedel were each granted 1,102 deferred stock units in 2018. In addition, Messrs. Luther and Roedel each received 443 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.

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2018 NON-EMPLOYEE DIRECTOR COMPENSATION

(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 2018. 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 Form 10-K.
(4)As of December 31, 2018, each non-employee director had 2,520 shares of restricted stock outstanding, which vest on April 30, 2019. Each non-employee director had only one unvested award outstanding as of December 31, 2018 and therefore, the grant date fair value of such award is reflected in the 2018 Non-Employee Director Compensation Table. There are no outstanding stock option awards for any non-employee director.

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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 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, 2019
Position with the Company
Kurt M. Cellar
49
Director
Nancy A. Krejsa
61
Director
Jon L. Luther
75
Director
Usman Nabi
44
Director
Stephen D. Owens
48
Director
James Reid-Anderson
59
Chairman, President and Chief Executive Officer
Richard W. Roedel
69
Director
Kurt M. Cellar, age 49

Director since: May 2010
Since 1999, Mr. Cellar has served as a corporate director for many companies in a variety of industries. 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 in 2008. During his five year tenure as portfolio manager at Bay Harbour, the fund was recognized by Bloomberg as the top performing hedge fund in its class. Prior to Bay Harbour, Mr. Cellar was with the private equity firm Remy Investors. Before that, he was a strategy consultant at LEK/Alcar. Mr. Cellar is currently a director of American Banknote Corporation where he is Lead Independent Director, Chairman of its Audit Committee and Chairman of its Strategic Committee, and a director of U.S. Concrete Inc., where he is Chairman of its Nominating and Corporate Governance Committee. Mr. Cellar has had significant leadership roles in previous director assignments, including Chairman of the Board and chair roles of each committee. Within the last five years, Mr. Cellar was a member of the Board of Directors of Horizon Lines, Inc., where he was Chairman of its Nominating and Corporate Governance Committee, Angiotech Pharmaceuticals, where he was Co-Chairman of its Board, Hawaiian Telcom Holdco, Inc., where he was Chairman of its Audit Committee and a member of its Nominating and Corporate Governance Committee, Home Buyers Warranty, where he was Chairman of its Audit Committee, and the Edison Mission Energy Trust. He has many times, and, without exception, been asked to serve on board special committees. He has been an invited speaker on various board issues over the years. He has participated in many board related continuing education venues with the National Association of Corporate Directors (NACD) and Harvard University. Mr. Cellar has a Masters in Business Administration from the Wharton School of Business and a BA in Economics/Business from the University of California, Los Angeles. Mr. Cellar is a former Chartered Financial Analyst. 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.

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PROPOSAL 1: ELECTION OF DIRECTORS

Nancy A. Krejsa, age 61

Director since: March 2017
Ms. Krejsa served as Senior Vice President, Investor Relations and Corporate Communications for Six Flags from October 2010 to March 2017. Prior to joining the Company, she served as Senior Vice President, Strategy and Communications for Siemens Healthcare Diagnostics from November 2007 to September 2010 following Siemens’ acquisition of Dade Behring. From 1994 to 2007 Ms. Krejsa held senior roles at Dade Behring as Senior Vice President of Communications and Investor Relations, Vice President of U.S. Operations, Treasurer, and Assistant Controller. Prior to joining Dade Behring, Ms. Krejsa held a number of financial management positions at American Hospital Supply and Baxter International, including Vice President, Controller of the Hospital Supply distribution business. Ms. Krejsa has a B.S. in Finance from Indiana University and an M.B.A. in Accounting from DePaul University. Ms. Krejsa’s six years of experience as a member of the Company’s senior leadership team has provided her a deep understanding of the Company’s business, and her 17 years of senior leadership roles in finance and operations at prior companies make her qualified to serve as a director for the Company.
Jon L. Luther, age 75

Director 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 January 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 is also a director and member of the Nominating and Corporate Governance Committee of Tempur Sealy International Inc., a bedding provider, as well as a director of Inspire Brands, a privately held multi-brand restaurant company whose portfolio includes Arby’s, Buffalo Wild Wings, and SONIC Drive-In. Mr. Luther is also the Chairman Emeritus of the Board of Directors of The Culinary Institute of America. Within the last five years, Mr. Luther served 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 and 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, age 44

Director since: May 2010
Mr. Nabi is Portfolio Manager of Browning West, an investment management firm. Prior to founding Browning West, Mr. Nabi was at H Partners, Perry Capital, the Carlyle Group, and Lazard Freres. Mr. Nabi served as a director and member of the Compensation Committee and the Nominating and Corporate Governance Committee of Tempur Sealy International Inc. from 2015 to 2018. Mr. Nabi brings to the Board a keen business and financial sense and strong investment experience especially in the consumer sector.

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PROPOSAL 1: ELECTION OF DIRECTORS

Stephen D. Owens, age 48

Director 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, age 59

Chairman, President and Chief Executive Officer
Director since: August 2010
James Reid-Anderson was named Chairman, President and Chief Executive Officer of the Company in July 2017. From February 2016 to July 2017 he served as Executive Chairman of the Company, and from August 2010 to February 2016, Mr. Reid-Anderson served as Chairman, President and Chief Executive Officer of the Company. Under his leadership the Company set a new strategic direction and achieved all-time high guest and employee satisfaction ratings, significant operational improvements and an eleven times total stock return. Mr. Reid-Anderson had previously served as Chairman, President and Chief Executive Officer of Dade Behring Inc., a manufacturer and distributor of medical diagnostics equipment and supplies, where he drove a tenfold increase in Dade Behring’s share price along with significant employee morale improvements and customer satisfaction increases, all achieving record levels. Mr. Reid-Anderson negotiated the sale of Dade Behring Inc. to Siemens AG, a worldwide manufacturer and supplier for the industrial, energy and healthcare industries, in 2007 and subsequently assumed various roles including becoming a member of Siemens AG’s managing board and Chief Executive Officer of Siemens’ $20 billion Healthcare Sector. Earlier in his career, Mr. Reid-Anderson held roles of increasing responsibility at PepsiCo, Diageo and Mobil, and as adviser to Apollo Management L.P., a private equity firm. Mr. Reid-Anderson is a fellow of the Association of Chartered Certified Accountants, U.K. and holds a Bachelor of Commerce degree from the Birmingham University, U.K. 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, make him especially qualified to serve as Chairman and lead the Company to operational and financial success.
Richard W. Roedel, age 69

Director since: December 2010
Mr. Roedel is a director and Chairman of the Audit Committee and Nominating and Corporate Governance Committee and a member of the Compensation Committee of LSB Industries, Inc. as well as its Non-Executive Chairman, a director and Chairman of the Risk Committee and a member of the Audit Committee of IHS Markit, Inc., and a director and Chairman of the Audit Committee of BrightView Holdings Inc. Mr. Roedel is Chairman of the Nominating and Corporate Governance Committee, a member of the Compensation Committee and Non-Executive Chairman of Luna Innovations Incorporated. Over the years, Mr. Roedel has been the chairman of several governance, compensation and special committees. Mr. Roedel served on the Board of Directors of Lorillard, Inc. in several capacities, including Lead Independent Director, from 2008 through 2015, when it was acquired by Reynolds American Inc. 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

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PROPOSAL 1: ELECTION OF DIRECTORS

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 Corporate Governance Committee. 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. Mr. Roedel is a member of NACD Risk Oversight Advisory Council. Mr. Roedel recently served a three-year term on the Standing Advisory Group of the Public Company Accounting Oversight Board (PCAOB). 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.

FOR
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL OF THE NOMINEES NAMED ABOVE.

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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 is reviewed 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, 2018.

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. 1301 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, 2018 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)
Stephen D. Owens
Richard W. Roedel

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COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers

The Compensation Discussion and Analysis contains information regarding the Company's compensation programs, policies and objectives and, in particular,

their application to a specific group of individuals that we refer to as the named executive officers.

Name
Title
James Reid-Anderson
Chairman, President and Chief Executive Officer
Marshall Barber
Chief Financial Officer
Lance C. Balk
General Counsel
Brett Petit
Senior Vice President, Marketing
Catherine Aslin
Senior Vice President, Human Resources

Executive Summary

Executive Compensation Philosophy and Objectives Seek to Promote the Alignment of Executives' and Stockholders' Interests

Total direct compensation for the named executive officers in 2018 was a combination of three components:


The primary goal of the Company's executive compensation program is to drive long-term growth and stockholder value through three key objectives:

Attract, Retain and Motivate Leadership Talent
Establish fair and competitive compensation program
Use multi-year vesting schedules for long-term equity grants
Consider comparable market data as appropriate
Align Pay with Stockholder Interests
Tie a significant portion of total compensation opportunity to stock value
Maintain appropriate mix of fixed and performance-based compensation
Avoid encouraging unnecessary and excessive risk-taking
Drive Company Performance
Reward executive officers for meeting Company's growth and strategic objectives
Short-term incentives tie to Company's and executive's performance
Use aspirational performance targets to achieve award payout at target level
Balance short-term and long-term compensation elements to motivate and reward superior performance and execution of business strategy

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COMPENSATION DISCUSSION AND ANALYSIS

Strong 2018 Results Support Company's Compensation Program

The Company believes its focused business strategy, proven management team, and highly customized compensation program for the named executive officers are instrumental in helping the Company achieve its strong financial performance and have helped the Company deliver its ninth consecutive year of record financial results.

The Company’s executive compensation program is designed 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 that is aligned with its stockholders' interests as exemplified by the Company's Project 600 and Project 750 performance-based award programs described below. These unique programs provide long-term aspirational performance goals and are designed to incentivize early achievement of the goals and provide reduced incentives for late achievement.

The Company has engaged meaningfully with certain major stockholders on the Company’s performance-based award programs and, based on such discussions, believes that many large stockholders view these long-term aspirational performance goals favorably and agree that they align Company performance with the interests of stockholders.

Overall, management believes that the Company’s 2018 results demonstrate the effectiveness of the Company’s business model and support the key compensation decisions made by the Compensation Committee with respect to the named executive officers.

The Company’s 2018 financial and strategic highlights include the following (full-year comparisons versus 2017):

Revenue increased 8% to $1.5 billion;
Attendance increased 5% to 32.0 million;
Total revenue per capita spending increased 2% to $45.71;
Made significant progress in support of strategic plan:
Invested $133 million in new capital, representing 9% of revenue;
Introduced a new premium-tiered membership program, growing the number of members more than 31% to 2.2 million members;
Acquired five new parks as part of the Company’s North American expansion strategy;
Signed agreements to develop five new international parks and grew international agreements revenue 10% to $42 million;
Raised quarterly dividend twice, paying $3.16 per share, representing an increase of 21% and a yield as of December 31, 2018, of nearly 6%; and
Repurchased $111 million of the Company’s common stock (1.8 million shares).

The Company’s continued successful execution of its strategy has resulted in increased stockholder value.

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COMPENSATION DISCUSSION AND ANALYSIS


The Company (NYSE: SIX) also evaluates its TSR over the most recent five years against two publicly-held regional theme park companies: Cedar Fair, L.P. (NYSE: FUN) and SeaWorld Entertainment, Inc. (NYSE: SEAS). The Company believes this theme park peer group is an appropriate benchmark since

the Company directly competes with these companies for business and investor capital. Compared to these theme park peers and the S&P 500 Index, the Company’s TSR (with dividends reinvested) for the five-year period as of December 31, 2018, is as follows:


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COMPENSATION DISCUSSION AND ANALYSIS

Company Practices Align with Stockholders' Interests

The Company strives to align its executive compensation program with the interests of the Company and its stockholders, and implements strong corporate governance in the executive

compensation program to achieve this result. The chart below highlights certain pay practices that the Company maintains and those that it avoids:

Practices Maintained by the Company
Practices NOT Maintained by the Company
Majority of compensation “at risk”
High percentage of fixed compensation
Stock ownership requirements
Hedging ownership of Company stock
Double-trigger change in control severance
Excessive perquisites or other benefits
Stock options generally with four-year vesting to promote retention
Tax gross-ups upon change in control
Performance goals that drive long-term stockholder value creation
Dividends on equity paid prior to vesting
Long-Term Incentive Plan contains clawback provisions
Repricing of options without stockholder approval
Compensation program administered by independent committee
Guaranteed minimum payouts or uncapped award opportunities
Independent compensation consultant
Compensation or incentives that encourage unnecessary or excessive risk taking
Annual “Say on Pay” Vote
 
 

Annual Say on Pay Vote and Outreach Initiatives Engage Stockholders

At the 2018 annual meeting, 56% of votes cast supported the advisory proposal on executive compensation, the same as was received at the 2017 annual meeting. This level of support for the Company’s executive compensation program continues to be disappointing. Accordingly, at the direction of the Compensation Committee, the Company continued a formal stockholder outreach initiative to better understand stockholders' key concerns with the Company's executive compensation program. In February 2019, the Company invited 48 of its largest stockholders, representing approximately 76% of the Company's outstanding common stock, to participate in discussions regarding executive compensation, corporate governance or any other topics of interest. The Chairman and other members of the Compensation Committee, together with members of senior management, participated in the discussions.

The goal was to better understand the concerns of the Company's stockholders with respect to executive compensation and corporate governance. The Company discussed how its executive compensation programs directly tie into the history of the Company and the Company's current business strategy, and solicited stockholder views on the program design and other topics of interest to the stockholders. The Company ultimately had

discussions with 17 of those stockholders, representing approximately 34% of its outstanding common stock, to help ensure that the executive compensation program was understood by the Company's stockholders and aligned to their expectations. In addition to these discussions, the Company also received feedback from 6 other of its largest stockholders, representing approximately 12% of the Company's outstanding common stock, that they fully understand and support the Company's executive compensation program and practices and that no discussion on the topic was necessary. Finally, the Company participated in discussions about its stockholder engagement and executive compensation practices with the stockholder advisory firm Institutional Shareholder Services and corresponded with Glass-Lewis.

During the discussions with the Company's stockholders, members of the Compensation Committee described the Compensation Committee’s rationale for the selection of the performance criteria for both the annual incentive program and the long-term equity program. The current annual incentive program has four objective metrics linked to both financial and operating performance, while the Projects component of the long-term performance program is based on Modified EBITDA, as described in more detail below. Several stockholders inquired as to the Compensation Committee's consideration of other performance criteria to measure

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compensation such as the Company’s Total Stockholder Return, Return on Invested Capital, or Net Debt. Instead of incorporating these metrics directly into the long-term incentive program, the Compensation Committee designed the Projects with the goal that each of these metrics would improve if Modified EBITDA increased. These design parameters include the following:

If the Company spends more than the target amount on capital expenditures, or consummates a material M&A transaction, then the target Modified EBITDA would be adjusted upward using a formula based on the Company’s weighted-average cost of capital; and
The aspirational targets have historically required the Company to grow at twice the industry average in order to be achieved, which has directly led to exceptional stock performance.

The Compensation Committee believed that the aspirational targets appropriately motivated management, and the simplicity of having one measure for the Projects made them easily understood and tracked by the broad group of participating employees across all parks. Considering the design parameters of the Projects, this feature outweighed the potential benefits of including additional measures. Additionally, the minimum stock ownership guidelines ensure that the current named executive officers are properly aligned with the Company's stockholders.

Based on stockholder feedback, the Company has enhanced the disclosures in this Proxy Statement to more clearly define the Projects, describe how they are connected to the Company's strategy, and explain the selection of performance criteria. See "—Elements of Compensation—Long-Term Equity" for enhanced disclosures on the Projects, including a table showing historical target values and actual

stock issued under the Projects. Finally, in direct response to the stockholders' feedback, the Company established a peer group as discussed below.

The Company values the insights gained from the discussions with its stockholders and has used their feedback to enhance the Company's disclosures and will carefully consider the feedback when establishing future long-term incentives or Projects. The Compensation Committee will also consider incorporating additional metrics when designing future long-term incentives or Projects. The Company did not announce any new Projects in 2017 or 2018 and does not currently anticipate doing so in 2019. The Company is committed to engaging with its stockholders and will continue to seek opportunities for dialogue with its stockholders on executive compensation and corporate governance matters. Stockholders are invited to express their views to the Board regarding executive compensation as well as other matters at any time as described in this Proxy Statement under the heading "Communications with the Board of Directors."

Peer Group Established in Response to Stockholder Feedback

In 2018, the Company established a peer group as a result of discussions the Company had with its stockholders pursuant to its stockholder outreach initiative and to enable stockholders to assess the Company’s executive compensation relative to its peers. Given the focus of the Company’s business in operations of regional theme parks and waterparks, the Company has few direct business competitors, which makes it difficult to create a peer group based on industry codes, revenue or market capitalization alone. In establishing the peer group, the Company focused on U.S. publicly traded companies with emphasis on companies in leisure, recreation and entertainment, and focused on revenue, market capitalization, and EBITDA. Accordingly, the Compensation Committee approved the following 18 publicly traded companies as the peer group for use in its compensation analysis.

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AMC Entertainment Holdings, Inc.
 
Live Nation Entertainment, Inc.
 
Boyd Gaming Corporation
 
Marriott Vacations Worldwide Corporation
 
Cedar Fair, L.P.
 
Norwegian Cruise Line Holdings Ltd.
 
Choice Hotels International, Inc.
 
Penn National Gaming, Inc.
 
Churchill Downs Incorporated
 
SeaWorld Entertainment, Inc.
 
Cinemark Holdings, Inc.
 
Texas Roadhouse, Inc.
 
Dave & Buster's Entertainment, Inc.
 
The Madison Square Garden Company
 
Eldorado Resorts, Inc.
 
Vail Resorts, Inc.
 
IMAX Corporation
 
World Wrestling Entertainment, Inc.

The Compensation Committee believes this peer group achieves the desired level of balance in terms of revenue, market capitalization and EBITDA, and reflects the types of industries from which the Company competes for talent. The companies in the peer group have annual revenues between

$391 million and $11.2 billion, market capitalization between $1.3 billion and $11.3 billion, and EBITDA between $108 million and $1.7 billion. The following charts show the Company’s ranking within the peer group in terms of revenue, market capitalization and EBITDA (in thousands):


The Compensation Committee engaged Deloitte to assist in developing and evaluating the peer group. For executive compensation comparisons, the Company primarily reviewed data from the most recently reported proxy statements and SEC filings of the peer group companies, as well as supplemental published compensation survey data.

Executive Compensation Program is Administered by the Compensation Committee

The Compensation Committee is responsible for administering the compensation program for executive officers and certain other members of senior management of the Company. 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. Additional responsibilities of the Compensation Committee 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.

The entire Board (other than the Chief Executive Officer) ratified the 2018 compensation for the Chief Executive Officer, and the entire Board ratified the 2018 compensation for the other named executive officers.

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Management Participation

The Company's Human Resources department is responsible for the ongoing management of the executive compensation program. The Senior Vice President, Human Resources and her 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 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.

Compensation Consultants

The Compensation Committee has engaged 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 its peers, and legislation or regulations impacting the Company's executive compensation program.

Compensation Committee Considers Many Factors in 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 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 is 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. The Company considered general historical market information on long-term incentive grants provided by Deloitte, along with past awards and Company and individual performance, when making compensation recommendations to the Compensation Committee about long-term incentive grants in 2018.

During 2018, the Compensation Committee established a peer group. As the 2018 compensation had been determined prior to finalizing the peer group, the Compensation Committee used the peer group data as a reference point to compare the named executive officers’ pay against the peer group. The Compensation Committee intends to use compensation data from the Company’s peer group as general guidance and as one of many factors that inform its judgment of appropriate compensation parameters for target compensation levels but will not set the executive compensation levels with reference to any particular percentile of the peer group and will not seek to match any particular element or mix of elements to that of the peer group.

Peer Group Market Analysis Used as General Reference

In order to examine the competitiveness and appropriateness of the Company’s overall compensation program, the Company reviewed the total direct compensation of the named executive officers (consisting of base salary, target annual incentive and target long-term equity, but not including benefits and perquisites) during 2018 to the peer group companies and to published compensation survey data for companies of a similar financial size, operating in comparable industries. The Compensation Committee believes the analysis confirms that the executive compensation program is appropriately designed to achieve the Company’s general objectives. The Company is closely aligned with the companies in the peer group with respect to the balance of fixed and performance-based compensation, with performance-based compensation being a more significant component of the named executive officers’ compensation to emphasize pay-for-performance.

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Total Direct Compensation Mix Emphasizes PerformanceBased Compensation

The following charts show the relationship between the primary components of the Company’s target annual total direct compensation mix as of December 31, 2018, for each named executive officer. For the Company’s Chief Executive Officer, 78% of his target total compensation is performance-based. For

the other named executive officers, 58% of target total compensation is performance-based. The chart illustrates target total compensation as of December 31, 2018, as described in the Base Salary, Annual Incentives and Long-Term Equity sections below.


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Company Total Direct Compensation Mix is Well-Positioned Compared to Peers

The following chart shows the total direct compensation for all of the Company’s named executive officers compared to its peers:


Components of Executive Compensation are Designed to Reward Performance in a Simple and Straightforward Manner

The individual components of the Company's executive compensation program include:

 
 
 
 
 
 
 
 
 
 
Pay Element
 
Pay Philosophy
 
Component
 
Performance Element
 
 
 
 
 
 
 
 
 
 
 
Long-Term Equity
 
Uphold alignment with stockholders and promote retention by tying a significant portion of pay to stock price appreciation
 
Stock Options
 
4-Year Vesting
 
 
 
 
 
 
 
 
 
 
 
Support long-term business strategy and enhance retention by tying a significant portion of pay to periodic long-term financial performance goals, or "Projects"
 
Stock
 
Aspirational Multi-Year Modified EBITDA Target
 
 
 
 
 
 
 
 
 
 
 
Annual Incentives
 
Motivate and provide recognition for achieving annual financial and operational performance goals with variable, at-risk performance-based pay
 
Cash or Stock
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
Net Debt
 
 
 
 
 
 
 
 
 
 
 
Guest Satisfaction
 
 
 
 
 
 
 
 
 
 
 
Safety
 
 
 
 
 
 
 
 
 
 
 
Base Salary
 
Compensate for executive's responsibilities, experience and performance with fixed pay
 
Cash
 
Annual Review
 
 
 
 
 
 
 
 
 
 

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In setting total compensation, the Compensation Committee applies a consistent approach for all executive officers. Although the Compensation Committee has a compensation philosophy, as described below, the Compensation Committee exercises appropriate business judgment to apply the philosophy to the facts and circumstances associated with each executive.

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 and based on the philosophies and factors described herein, the salaries of named executive officers are reviewed annually, 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 highly qualified executives to drive success based on the individual's responsibilities, performance and experience, internal equity, and business and industry conditions. For 2018, Messrs. Balk, Barber, and Petit, and Ms. Aslin received salary increases ranging from 2% to 5%. Mr. Reid-Anderson’s salary remained the same.

The following table shows the annual base salary rate in 2018 for the named executive officers:

Executive
Base Salary Rate($)
James Reid-Anderson
 
1,800,000
 
Marshall Barber
 
538,000
 
Lance C. Balk
 
597,000
 
Brett Petit
 
502,000
 
Catherine Aslin
 
340,000
 

Annual Incentives

The Company's annual 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, with an emphasis on Adjusted EBITDA. The Company selected these goals because it believes successful performance against these measures promotes the creation of long-term stockholder value. The Company places more weight on Adjusted EBITDA because it believes that Adjusted EBITDA tracks core operating performance more closely, is widely used by analysts and investors to evaluate performance in the Company's industry and is most directly related to stockholder value.

Unless Adjusted EBITDA for 2018 was more than $518.0 million, no annual incentive would have been earned. If more than the target $576.4 million of Adjusted EBITDA was attained, the amount earned for each incentive objective would have increased on a pro rata basis to a maximum of 200% of target as

Adjusted EBITDA increased from $576.4 million to $603.6 million. "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 following: 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.

The following table shows the target annual incentive opportunities as of December 31, 2018, for the named executive officers:

Executive
Target Annual Incentive
Jim Reid-Anderson
100% of base salary(1)
Marshall Barber
75% of base salary  
Lance C. Balk
75% of base salary  
Brett Petit
62.5% of base salary  
Catherine Aslin
62.5% of base salary  

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(1)Even though the Company's results in 2018 were favorable, they did not meet the Company's higher expectations. As a result, the Board and Mr. Reid-Anderson determined, in November 2018, that Mr. Reid-Anderson’s target annual incentive for 2018 would be 100% of his base salary (i.e., 50% of his target annual incentive as set forth in his employment agreement).

No named executive officer may earn more than 200% of such named executive officer's target annual incentive. The named executive officers earn their

respective target annual incentive based on achievement of the following four financial and strategic objectives:

Objective
Weight
Target Goal
Percent of
Prong
Earned
Bonus
Attainment
Adjusted EBITDA
50.0%
$576.4 million
60.8%
30.4%
Net Debt Level
25.0%
Equal to or better than budget ($2,083 million, as adjusted)
100%
25.0%
Guest Satisfaction Scores
12.5%
2018 guest satisfaction score exceeds 2017 guest satisfaction score, or
100%
12.5%
2018 guest satisfaction score is higher than 8.5
Success in fostering and maintaining a safe park environment
12.5%
2018 guest safety perception score exceeds 8.0 and quality assessment review standards met, and
100%
12.5%
2018 actual workers compensation claims lower than 2017 annual workers compensation claim target
 
100%
 
 
80.4%

Since more than the minimum Adjusted EBITDA of $518.0 million for 2018 was achieved, attainment of the weighted target annual incentive components was determined separately for each of the four objectives. With attainment of $553.5 million of Adjusted EBITDA out of the target Adjusted EBITDA of $576.4 million, full achievement of the net debt level, guest satisfaction, safety quality assessment review, and workers compensation claims objectives, the named executive officers received below-target payouts for 2018. The named executive officers earned 80.4% of their target annual incentive under the annual incentive plan.

In February 2019, the Compensation Committee approved the following annual incentive awards for the named executive officers pursuant to the criteria of the annual incentive plan, which were paid upon completion of the Company's audit for 2018. The amounts paid pursuant to the annual incentive plan are set forth in the "Non-Equity Incentive Plan Compensation" column of the 2018 Summary Compensation Table because such amounts were paid pursuant to the pre-established criteria under the annual incentive plan.

Executive
Target Annual
Incentive($)
80.4% of Target
Annual Incentive($)
James Reid-Anderson
 
1,800,000
 
 
1,447,209
 
Marshall Barber
 
403,500
 
 
324,416
 
Lance C. Balk
 
447,750
 
 
359,993
 
Brett Petit
 
313,750
 
 
252,257
 
Catherine Aslin
 
212,500
 
 
170,851
 

Long-Term Equity

While the annual incentives are intended to reward the achievement of short-term financial goals, the executive compensation program emphasizes and rewards results over the long-term through equity incentives that have a substantial performance-based component and multi-year vesting schedules. The Company's long-term equity 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 performance stock units, or a combination thereof, based on its determination of the relative value of each form of

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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 has not granted any time-based restricted stock or restricted stock units to named executive officers since 2011. The Compensation Committee may, from time to time, grant additional equity incentive awards to employees, including named executive officers, based on individual 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. This is because 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 Dividend Equivalent Rights associated with them, which are not paid until the options vest. As an incentive, the Compensation Committee granted stock options to each current named executive officer (other than Mr. Reid-Anderson) in August 2018 as part of a general grant to employees.

Performance Awards—Projects Generally. Prior to the current management team, the Company had a history of severe underperformance. To boost morale and attract, retain and incentivize employees with aspirational performance awards, in 2010, the Compensation Committee designed unique performance awards called "Projects." The Projects are designed to reward participants for achievement of stretch goals based on Modified EBITDA, which is an objective and understandable measurement to evaluate the Company's operational performance and is a key driver of stockholder returns. The Projects are intended to incentivize and retain participants over a multi-year period. The following table sets forth detailed information for each Project in the aggregate:
Project Name
Project 350
Project 500
Project 600
Project 750
Year Commenced
2010
2011
2014
2016
Shares Earned at Full Achievement in Target Achievement Year(1)
2,820,000
2,628,000
2,400,000
1,025,000
Target Achievement Year
2011
2015
2017
2020
Market Value of Target Shares(2)
$24 million
$45 million
$88 million
$57 million
Actual Shares Earned(1)(3)(4)
2,829,580
2,825,100
  —(5)
N/A
Market Value of Earned Shares at Issuance
$87 million
$137 million
N/A
Stockholder Value Created(6)(7)
$1.519 billion
$4.682 billion
$1.721 billion
N/A
Project Period TSR(6)(7)
 
 
 
 
Six Flags
182%
225%
32%
N/A
S&P 500
14%
79%
35%
N/A
Annualized TSR(7)(8)
 
 
 
 
Six Flags
88%
34%
10%
N/A
S&P 500
9%
16%
11%
N/A
(1)All share amounts are adjusted for stock splits. For Project 750, an additional 125,000 shares were approved on August 30, 2018, for newly eligible employees.
(2)Amount calculated based on the closing price of the Company's common stock on the date each employee began participating in the applicable Project.
(3)Amount excludes associated DERs.
(4)Achievement of the Project 750 Target Modified EBITDA requires a 12% compound annual growth rate in Modified EBITDA through 2020 and would result in 100% of the target award being earned in 2020.

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(5)The Company did not achieve Project 600; no shares were earned under the program.
(6)Amount reflects change in the Company's market capitalization plus value of dividends paid and shares repurchased from date Project established to Target Achievement Year.
(7)For purposes of calculating stockholder value created and TSR, assumes a Project period of May 10, 2010 through December 31, 2011 for Project 350, a period of December 31, 2011 through December 31, 2015 for Project 500, and a period of December 31, 2015 through December 31, 2017 for Project 600.
(8)Assumes dividend reinvestment in the Company's common stock.

Project 600. The Compensation Committee determined in 2014 that an aspirational goal called Project 600 would be motivating to the Company’s employees and beneficial to its stockholders. Pursuant to the Project 600 program, the participants (all director-level and above) were entitled to receive a target number of shares of stock if the Company achieved $600 million of Modified EBITDA (the "Project 600 Target Modified EBITDA") by 2017. The Project 600 Target Modified EBITDA was not achieved; no shares were earned under the program.

Aspirational Target

The Compensation Committee believes that Modified EBITDA is the appropriate measurement because it is the most comparable measure to evaluate operational performance against other industry participants, incorporates the full range of the Company's business, and has a direct impact on the Company's stock price. The performance award was widely granted to the Company's employees, and Modified EBITDA is a simple measurement that enables employees to easily understand how they can contribute toward the target. Finally, it generally excludes the impact of extraordinary

or non-routine events that can distort performance such as acquisitions and dispositions, and requires organic and sustainable growth to attain the target.

The Project 600 Target Modified EBITDA was a very difficult target for the Company to achieve. At the time the performance target was established in October 2014, the Company’s 2013 calendar year Modified EBITDA was $444.2 million, thus the Project 600 Target Modified EBITDA represented an increase of 35%. This goal was not reached in 2017. The Project 600 program provided a reduced award for late achievement in 2018 to acknowledge the difficulty in reaching the significant goal. Therefore, if the Project 600 Target Modified EBITDA was achieved in calendar year 2018, participants would have been entitled to receive 50% of their target award, but it was not achieved; no shares were earned under the program.

Number of Shares

The number of shares of stock that each named executive officer was eligible to receive under Project 600 for 2018, which were not earned because the goal was not achieved, is set forth below:

Executive
Number of Shares
James Reid-Anderson
 
217,500
 
Marshall Barber
 
26,250
 
Lance C. Balk
 
22,500
 
Brett Petit
 
20,000
 
Catherine Aslin
 
7,500
 

Determination of Achievement

Modified EBITDA is determined after reviewing the Company's audited financial statements for the applicable year. As a general matter, Modified EBITDA will exclude the impact of extraordinary or infrequently occurring events such as acquisitions and dispositions and costs associated with the evaluation of strategic options. Pursuant to feedback that the Company

received from its stockholders, the Compensation Committee determined that, since the incremental investment in the new waterpark in Mexico and the acquisition of five new leased parks were not planned when the Project 600 Target Modified EBITDA was determined, the Project 600 Target Modified

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EBITDA was increased. Since the Project 600 Target Modified EBITDA was not achieved in calendar year 2018; no shares were earned under Project 600.

Project 750. Largely due to the success of Project 350 and Project 500 in motivating participants, and the Company's substantial progress toward Project 600 by the end of 2016, the Compensation Committee created the aspirational goal called Project 750. Project 750 awards were given to all director-level employees and above.

Aspirational Target

Project 750 provides participants with an equity incentive for the Company to achieve $750.0 million of Modified EBITDA in a calendar year (the "Project 750 Target Modified EBITDA") by December 31, 2020. Pursuant to Project 750, the named executive officers will be issued shares of stock if the Company achieves the Project 750 Target Modified EBITDA. At the time this performance target was established in October 2016, the Company’s September 30, 2016 last twelve month Modified EBITDA was $531.6 million, thus the Project 750 Target Modified EBITDA represented an increase of 41%.

Achievement Time Frames

Achievement of the Project 750 Target Modified EBITDA requires the Company to increase

Modified EBITDA by 26% from $593.5 million Modified EBITDA in 2018, representing a 12% compound annual growth rate. Similar to previous Projects, the number of shares issued pursuant to the performance award is based on a range linked to the year in which the goal is achieved. In order to align stockholders’ interests with employees’ interests to attain the best result as early as possible, Project 750 provides participants with incentive to reach the Project 750 Target Modified EBITDA earlier than 2020 by providing early achievement premiums (i.e., additional shares) if certain Modified EBITDA levels are achieved prior to the target year. In addition, given the difficulty of achieving the Project 750 Target Modified EBITDA by 2020, a reduced amount of shares will be issued if the target is achieved in 2021. While the Company currently believes that achievement of the Project 750 Target Modified EBITDA by 2020 is highly unlikely, the Company believes the participants continue to be motivated as they strive for late achievement of the target by 2021.

Number of Shares

The number of shares of stock that each current named executive officer is eligible to receive in 2019-2021 is set forth below if the Project 750 Target Modified EBITDA is first achieved in the year specified and no partial award (as described below) was previously earned:

Executive
2019
Achievement
2020
Achievement/Target
Award
2021
Achievement
James Reid-Anderson
 
172,500
 
 
150,000
 
 
75,000
 
Marshall Barber
 
43,125
 
 
37,500
 
 
18,750
 
Lance C. Balk
 
20,125
 
 
17,500
 
 
8,750
 
Brett Petit
 
18,400
 
 
16,000
 
 
8,000
 
Catherine Aslin
 
16,100
 
 
14,000
 
 
7,000
 

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Partial Awards

If at least $725.0 million of Modified EBITDA, but less than the Project 750 Target Modified EBITDA, is achieved in calendar year 2019, a partial Project 750 award can be achieved and any over-performance above $725.0 million of Modified EBITDA can be credited to the next calendar year's achievement of $725.0 million of

Modified EBITDA for purposes of determining if the remaining portion of the Project 750 award could be earned. The following table describes the number of shares that may be issued based on the year a partial award is first achieved (and an additional partial award may be available if one is achieved in a subsequent year):

Year Partial Award Achieved
Number of Shares Assuming No Partial Award in Prior Year
2019
75% of 2019 Early Achievement
2020
75% of 2020 Achievement

Determination of Achievement

Modified EBITDA is determined after reviewing the Company's audited financial statements for the applicable year. As a general matter, Modified EBITDA will exclude the impact of extraordinary or infrequently occurring events such as material acquisitions and dispositions and costs associated with the evaluation of strategic options.

If a change in control (as defined under Project 750) occurs, then the Project 750 Target Modified EBITDA would be deemed earned but no early achievement award would be considered earned (unless such Project 750 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.

Eligibility to Receive Shares

To receive shares under Project 750, 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 the executive must be employed by the Company on the date of a change in control (as defined under Project 750), or have had such employment terminated in anticipation of such a change in control.

Dividend Equivalent Rights. In order for stock option holders and Project 750 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 750 awards with Dividend Equivalent Rights ("DERs"). No DERs are paid to any

holders with respect to any unvested awards until such awards vest. The stock option DERs 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 and such shares are only paid once vesting occurs. Similarly, the Project 750 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 750 and such shares are only paid to the extent that the shares pursuant to the underlying award vest. 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.

Minimal Perquisites

The Company provides a limited number of perquisites and other personal benefits to the named executive officers, which the Company believes are reasonable and consistent with market practices. The "All Other Compensation" column of the 2018 Summary Compensation Table sets forth these perquisites in accordance with the requirements of the SEC.

Retirement and Other Benefits

The Company believes retirement plans serve to attract and retain talented personnel generally, but they should not be a significant part of the overall compensation program. 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 the amount of 100% of the first 3% of

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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 2018 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 and 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.

Health Benefits and Disability Insurance

The Company provides its executive officers with the same health and disability insurance plans offered to all employees.

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 or her 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.

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 Considerations

Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1 million limit on the amount that the Company may deduct for compensation paid to certain executive officers. Previously, this limitation did not apply to

compensation that met the requirements under Section 162(m) for qualified performance-based compensation. This exemption from Section 162(m)’s deduction limit for certain performance-based compensation has generally been repealed, effective

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for years beginning after December 31, 2017, and the group of covered executive officers has been expanded to include the chief financial officer and certain former executive officers. Therefore, compensation (including performance-based compensation) paid to covered executive officers in excess of $1 million in calendar year 2018 and subsequent calendar years generally will not be deductible unless it qualifies for transition relief applicable to certain written binding contracts in effect on November 2, 2017, which are not modified in any material respect on or after such date.

Although the Compensation Committee has considered the impact of Section 162(m) as well as

other tax and accounting consequences when developing and implementing the Company’s executive compensation programs, tax-deductibility was not the primary factor used by the Compensation Committee in setting compensation and the Compensation Committee expects that Section 162(m) will become less of a factor with the repeal of the performance-based compensation exemption. The Compensation Committee designs and administers compensation programs that it believes are in the best interests of the Company and its stockholders.

Stock Ownership, Clawback and 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 six times annual base salary for the Company's Chief Executive Officer). The ownership level should generally be achieved within three years of 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 the Company's common 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. 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.

All equity awards and annual incentives (both cash and stock) to executive officers have been made under the Company’s Long-Term Incentive Plan. The Company's Long-Term Incentive Plan contains clawback provisions that provide that the Compensation Committee, may, to the extent permitted by law, require the termination, rescission or repayment of awards and incentives previously awarded under the Company's Long-Term Incentive Plan if the granting, vesting or payment of such awards or incentives was predicated upon the achievement of certain financial results that were subsequently the subject of a material financial restatement, the executive officer (or any other participant in the plan) benefited from a calculation that later proves to be materially inaccurate or engaged in fraud or misconduct that caused or partially caused the need for a material financial restatement and a lower granting, vesting or payment would have occurred based on such

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conduct. In addition, 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, the Chief Executive Officer and the Chief Financial Officer 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.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors of the Company has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and discussed it with the Company's management. Based on the Compensation Committee's review and discussion

with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

THE COMPENSATION COMMITTEE

Stephen D. Owens (Chair)
Jon L. Luther
Usman Nabi

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 did any such interlocking relationship exist during 2018.

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 incentives 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 or any other factors it may determine to be appropriate in the circumstances.

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EXECUTIVE COMPENSATION

2018 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, 2018.

Name and Principal Position
Year
Salary(1)
($)
Bonus
($)
Stock
Awards(2)
($)
Option
Awards(3)
($)
Non-Equity
Incentive
Plan
Compensation(1)
($)
All Other
Compensation(4)
($)
Total
($)
James Reid-Anderson
President and Chief Executive Officer
 
2018
 
 
1,800,000
 
 
 
 
1,519,957
 
 
2,473,569
 
 
1,447,209
 
 
119,937
 
 
7,360,672
 
 
2017
 
 
1,366,154
 
 
 
 
9,152,421
 
 
3,162,453
 
 
868,136
 
 
125,084
 
 
14,674,248
 
 
2016
 
 
1,065,385
 
 
 
 
970,094
 
 
1,500,006
 
 
1,020,940
 
 
201,807
 
 
4,758,232
 
Marshall Barber
Chief Financial Officer
 
2018
 
 
538,000
 
 
 
 
141,972
 
 
198,500
 
 
324,416
 
 
31,530
 
 
1,234,418
 
 
2017
 
 
525,000
 
 
 
 
84,035
 
 
184,317
 
 
250,245
 
 
34,844
 
 
1,078,441
 
 
2016
 
 
473,192
 
 
 
 
38,818
 
 
535,748
 
 
296,524
 
 
33,089
 
 
1,377,371
 
Lance C. Balk
General Counsel
 
2018
 
 
597,000
 
 
 
 
110,876
 
 
198,500
 
 
359,993
 
 
34,977
 
 
1,301,346
 
 
2017
 
 
582,000
 
 
 
 
108,203
 
 
184,317
 
 
277,415
 
 
40,789
 
 
1,192,724
 
 
2016
 
 
565,000
 
 
 
 
127,440
 
 
85,747
 
 
381,727
 
 
58,042
 
 
1,217,956
 
Brett Petit
Senior Vice President, Marketing
 
2018
 
 
502,000
 
 
 
 
99,654
 
 
158,800
 
 
252,257
 
 
27,865
 
 
1,040,576
 
 
2017
 
 
490,000
 
 
 
 
92,278
 
 
154,353
 
 
194,635
 
 
32,181
 
 
963,447
 
 
2016
 
 
475,000
 
 
 
 
99,537
 
 
85,747
 
 
267,434
 
 
42,302
 
 
970,020
 
Catherine Aslin
Senior Vice President, Human Resources
 
2018
 
 
340,000
 
 
 
 
30,301
 
 
158,800
 
 
170,851
 
 
17,731
 
 
717,683
 
 
2017
 
 
325,000