Cedar Fair, L.P.
One Cedar Point Drive
Sandusky, Ohio 44870-5259
Press Release
For Immediate Release
Contact: Brian Witherow
June 22, 2000
(419) 627-2173
CEDAR FAIR, L.P. PROPOSES PLAN TO REVISE GENERAL PARTNER FEES
AND EXECUTIVE COMPENSATION
New Plan More Closely Ties Executive Compensation to Unit Performance
and Unitholder Value
SANDUSKY, OHIO, June 22, 2000 -- Cedar Fair, L.P. (NYSE: FUN), a
publicly traded partnership which owns and operates five amusement
parks and four water parks, today announced that it would ask its
unitholders to approve a plan to revise its existing general partner
fee and executive compensation systems. The restructuring is designed
to reduce the cash component of senior management's compensation and
replace it with a stronger equity component, which is expected to make
more funds available for cash distributions to unitholders.
The new plan would amend Cedar Fair's limited partnership agreement to
eliminate the fees paid by Cedar Fair to its general partner,
retroactive to January 1, 2000, and create a new Equity Incentive Plan
allowing the grant or award of options and other forms of equity as an
element of compensation to senior management and other key employees.
In connection with terminating the existing compensation system, one-
time lump sum cash payments and awards of unit options would be made
to Cedar Fair's senior management. The cash payments would total
approximately $8.5 million and options for 2,330,000 units would be
awarded under the plan.
Richard L. Kinzel, president and chief executive officer, explained
that the Board of Directors determined that changes to Cedar Fair's
senior executive compensation system were needed in order to more
closely resemble the compensation systems of other superior-performing
companies. "The new system is designed to tie a larger portion of
senior management's compensation to the market value of Cedar Fair
units, and to more closely align the interests of management with
those of our unitholders," said Kinzel. "The old system worked well
for many years, but is too heavily weighted toward cash compensation
and does not afford the types of incentives that are appropriate in
today's business environment, including incentives that are more
closely tied to the market performance of our units," Kinzel added.
Under the old compensation system, the base salaries of senior
management have been kept relatively low, with substantial yearend
bonuses allocated out of the large and predictable fees paid to the
general partner each year.
Kinzel noted that under the proposed new compensation system,
additional cash is expected to be available for distributions to
unitholders due to a reduction of the aggregate cash expense of base
salaries, bonuses and deferred compensation to senior management as
compared to the old system. "The Board estimates that as a result of
the new plan, in 2001 the Partnership's aggregate expense for
salaries, bonuses and deferred units to senior management would be
reduced by $6.2 million, or $.12 per limited partner unit, which would
be available for further distributions to unitholders. In 2002, the
additional amount available to unitholders is expected to be $7.5
million, or $.14 per unit," Kinzel explained. Cedar Fair's current
annualized distribution rate is $1.50 per unit.
To implement the new compensation system, the Board recommends
amending the limited partnership agreement to terminate the management
and incentive fees that are currently paid to the general partner, to
reduce the general partner's interest in the Partnership from 0.5% to
0.1%, and to increase the aggregate interest of the limited partners
from 99.5% to 99.9%. The Board plans to call a special meeting of the
limited partner unitholders later this summer to approve the new plan.
Cedar Fair's five amusement parks are Cedar Point, located on Lake
Erie between Cleveland and Toledo; Knott's Berry Farm in Buena Park,
California, near Los Angeles; Dorney Park & Wildwater Kingdom near
Allentown, Pennsylvania; Valleyfair near Minneapolis / St. Paul; and
Worlds of Fun and Oceans of Fun, located in Kansas City, Missouri.
The Partnership's water parks are located in Sandusky, Ohio; Kansas
City, Missouri; Chula Vista, California, near San Diego; and Buena
Park, California. Cedar Fair also operates Knott's Camp Snoopy at the
Mall of America in Bloomington, Minnesota under a management contract.
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The information contained in this news release, other than historical
information, consists of forward-looking statements. These statements
may involve risks and uncertainties that could cause actual results to
differ materially from those described in such statements. Although
the Partnership believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to have been correct. Important
factors, including general economic conditions, competition for
consumer spending, adverse weather conditions, unanticipated
construction delays, and other factors could cause actual results to
differ materially from the Partnership's expectations.
Investor Notice
In connection with the restructuring, Cedar Fair today filed a proxy
statement with the Securities and Exchange Commission (SEC) and may
file other documents with the SEC. Cedar Fair will send the proxy
statement to unitholders to seek their approval of the new plan. We
urge unitholders to read the proxy statement carefully when it becomes
available, as the proxy statement will contain important information
about the restructuring and related matters. Unitholders will be able
to obtain free copies of the proxy statement, once available, as well
as other filings made by Cedar Fair with the SEC through the SEC's web
site at www.sec.gov, or by directing a request to Cedar Fair at One
Cedar Point Drive, Sandusky, Ohio 44870-5259, attention: Brian C.
Witherow.
Proxies will be solicited by the Board of Directors of Cedar Fair's
general partner, Cedar Fair Management Company. Each of the directors
may be deemed a participant in soliciting proxies from the unitholders
in favor of the new plan. The members of the Board and the interest
of each of these individuals in Cedar Fair are set forth in the proxy
statement filed by Cedar Fair with the SEC.
This press release and prior press releases are available on the Cedar
Fair, L.P. web site at www.cedarfair.com