Exhibit 10.15
BONUS AND INCENTIVE COMPENSATION POLICY
FOR OFFICERS OF
CEDAR FAIR MANAGEMENT COMPANY
(Recommended by the Compensation Committee and
Approved by the Board of Directors,
November, 1992
And Amended by the Compensation Committee
October, 1994)
BACKGROUND
The stockholders and share equivalent holders
("Officers") of Cedar Fair Management Company (the "Company") are
employees of Cedar Fair, L.P. (the "Partnership") and hold the
same offices in the Partnership as they do in the Company. As a
result, their base salaries, fringe benefits (including health
insurance, provision of automobile as appropriate, etc.),
employer contributions to the Partnership's 401(k) plan and
existing profit-sharing plan are all paid by and are
responsibilities of the Partnership. The Company, on the other
hand, is responsible for and has full discretion to determine and
set bonus and other incentive compensation payable to such
Officers out of fee income and distributions receivable from
serving as managing general partner of the Partnership. The
Company has an agreement with the Partnership for such payments.
For tax and other reasons, all cash dividends, bonuses and
current incentive compensation will be paid on or before December
31 in each year.
Beginning in 1992, the Board of Directors approved two
new forms of deferred compensation to supplement the cash bonuses
paid to Officers of the Company, using a portion of the Company's
earnings as managing general partner of the Partnership. The
Partnership has agreed to accept responsibility for providing
these deferred benefits and will be reimbursed by the Company for
the amounts granted each year.
FUNDS AVAILABLE
Funds are available for dividends and Officers' bonus,
incentive and deferred compensation from the following sources
(as defined in the Agreement of Limited Partnership):
1) Management fee of .25% of the Partnership's net revenues.
2) .5% of cash distributions declared by the Partnership.
3) Incentive fee of 18.18% of excess distributions declared by
the Partnership.
For purposes of calculating the funds available each
year, the anticipated fourth quarter distribution and any related
incentive fees are included even though the distribution may not
be formally declared until the end of the quarter.
ALLOCATION OF FUNDS AVAILABLE
The total funds available to the Company each year will
be allocated in the following manner:
1) Dividends to stockholders of the Company and cash bonuses to
Officers will be paid prior to December 31 each year in an
aggregate amount not to exceed 150% of the aggregate base
salaries of the stockholders and share equivalent holders of the
Company.
2) If the total funds available exceed 150%, but is equal to or
less than 200% of the aggregate base salaries of this group, this
additional amount will be allocated, in approximately equal
portions, to deferred compensation payable to Officers of the
Company in the following forms (both as hereinafter described:
a) Deferred limited partnership units, and/or
b) Supplemental retirement benefits.
3) If the total funds available exceed 200% of such aggregate
base salaries, this balance will be allocated to Officers of the
Company and/or to other employees of the Partnership, or their
respective estates, in such manner and amounts as may be
recommended by the Compensation Committee, after consultation
with the Chief Executive Officer, and approved by the Board of
Directors.
CASH BONUSES
The declaration of dividends and the award of cash
bonuses will be based on the success of the Partnership's
operations during the year and on the performance of individual
Officers. The Chief Executive Officer will first determine
weighting factors for each Officer, based on his or her position,
responsibilities and other relevant factors, for purposes of
making an initial allocation of available funds up to 150% of the
aggregate base compensation of the group. The weighting factors
will be 20%, 30%, 40%, or 55% of a participant's base salary.
After using these weighting factors to make an initial
allocation, the CEO will recommend to the Compensation Committee
any adjustments he deems appropriate based upon individual
performance and contributions to the success of the Partnership.
To be eligible to receive a cash bonus hereunder, an
Officer must be employed by the Partnership on the date of
payment of cash bonuses. The Board of Directors may, at its
discretion, approve the payment of bonuses to an Officer's estate
or a former Officer in the event of death, disability, or
retirement of an Officer during the year of payment.
DEFERRED LIMITED PARTNERSHIP UNITS
Deferred units represent the right to receive newly
issued Cedar Fair limited partnership units at specified future
dates if an Officer is still employed by the Partnership at that
time. The dollars allocated to each participant will be based on
individual performance, as recommended by the CEO and approved by
the Compensation Committee of the Board, and will be converted to
a number of deferred Partnership units based on the NYSE closing
price on the first Monday in December of the year granted.
Thereafter, the deferred units will accrue additional deferred
units on the date of each cash distribution paid by Cedar Fair,
L.P., calculated at the NYSE closing price on that date, and will
also be adjusted for any unit splits or other similar equity
transactions which may occur.
For each participant still employed by the Partnership
or its successor on the first Monday in December, 3 years after
the grant of deferred units, the Partnership will issue new
limited partnership units to the participant in the amount of one-
third of the units accrued from that year's grant, together with
accrued distributions thereon, rounded to the nearest whole unit.
One year later, half of the remaining deferred units, together
with accrued distributions, will be issued to participants, and
one more year later (5 years from date of grant) the remaining
balance, rounded to the nearest whole unit, will be issued to
participants who remain in the Partnership's employ. In the
event of death, total disability (as defined in the Partnership's
Long Term Disability Income Plan), retirement at age 62 or over,
removal of the Company as managing general partner of the
Partnership (unless resulting from reorganization of the
Partnership into corporate form), or a "change in control" of the
Partnership (as defined below), all accrued units for a
participant will become fully vested and will be issued at the
time of such event. Failure to remain an employee of the
Partnership on any vesting date for any other reason will result
in the forfeiture of all unissued deferred units of a
participant.
A "change in control" of the Partnership shall mean a
change in control of a nature that would be required to be
reported in response to Item 6 (e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934.
Without limiting the inclusiveness of the definition in the
preceding sentence, a change in control of the Partnership shall
be deemed to have occurred if:
(i) any person (other than any employee benefit plan of the
Partnership or any subsidiary of the Partnership or any person
organized, appointed or established pursuant to the terms of any
such benefit plan) is or becomes the beneficial owner of
Partnership units representing at least 51% of the voting power
of the Partnership units.
(ii) there shall be consummated (x) any consolidation or merger
of the Partnership is not the continuing or surviving entity or
pursuant to which Partnership units would be converted into cash,
securities or other property, other than a merger of the
Partnership in which the holders of the Partnership's units
immediately prior to the merger have the same proportionate
ownership of the surviving entity, immediately after the merger,
or (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the Partnership, or
(iii) the holders of the Partnership's units approve any plan
or proposal for the liquidation or dissolution of the
Partnership, except in connection with a reorganization of the
Partnership into corporate form.
With respect to persons subject to Section 16 of the
Securities and Exchange Act of 1934 ("1934 Act"), deferred unit
transactions under this plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the
1934 Act. To the extent any provision of the plan or action by
the Board of Directors fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed
advisable by the Board of Directors.
SUPPLEMENTAL RETIREMENT BENEFITS
Supplemental retirement benefits represent the right to
receive benefits from the Partnership upon retirement at age 62
or over, with a minimum of 20 years' service to the Partnership,
its predecessors and/or successors. Amounts will be allocated
among participants as approved by the Compensation Committee of
the Board, based on a target annual retirement benefit (including
amounts projected to be available from the Partnership's profit
sharing retirement plan) of 57.5% of average base salary
projected for the three years prior to retirement at age 65. The
Compensation Committee may, at its discretion, revise the
assumptions and methodology used in calculating the allocation of
such amounts to participants. Each participant's account will
accrue interest at the prime rate as established from time to
time by the Partnership's lead bank, beginning on December 1 of
the year of grant.
Participants leaving the employ of the Partnership
prior to reaching age 62 or with less than 20 years of service
will forfeit their entire balance. In the event of death, total
disability, retirement at age 62 or over with at least 20 years'
service, or removal of the Company as managing general partner of
the Partnership (unless resulting from reorganization of the
Partnership into corporate form), all amounts accrued will become
immediately and fully vested and payable to participants.
Notwithstanding the foregoing, in the event of a "change in
control" of the Partnership, all amounts accrued will become
fully vested and will be funded in a trust, for the benefit of
the participants when they reach age 62, die, or become totally
disabled, whichever occurs first. At each participant's option,
the accrued balance may be distributed in a lump sum or, if
requested irrevocably in writing at least 12 months prior to
retirement, in a number of future payments over a period not to
exceed 10 years.
Both deferred units and supplemental retirement
benefits, when awarded, together with all subsequent earnings
accrued thereon, will become general unsecured obligations of the
Partnership to the participant, and the Company shall have no
further right to receive such amounts from the Partnership. Each
participant's rights to receive deferred units and supplemental
retirement benefits is not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by the participant's creditors or
beneficiaries.
If a participant dies before receipt of all benefits to
which he or she is entitled under this plan, distribution of the
remaining benefits will be made to such beneficiary as the
participant has designated in writing to the Partnership prior to
death or, in the absence of such designation, to the
participant's estate.
Nothing contained herein shall be construed as a
commitment or agreement on the part of any participant to
continue his or her employment with the Partnership, nor as a
commitment on the part of the Partnership to continue the
employment or rate of compensation of any participant hereunder
for any period.
The Board of Directors reserves the right to modify,
amend or terminate this Policy at any time or from time to time;
provided, however, that no amendment or termination shall
adversely impact the rights of a participant with respect to
amounts previously allocated as provided herein.