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.       )

Filed by the Registrant ☒

Filed by a Party other than the Registrant o

SIX FLAGS ENTERTAINMENT CORPORATION
924 Avenue J East
Grand Prairie, Texas 75050

March 19, 2020

Dear Fellow Stockholders:

We are pleased to invite you to attend the 2020 Annual Meeting of Stockholders of Six Flags Entertainment Corporation to be held on Wednesday, May 6, 2020, at 11:00 a.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.

Even as the world grapples with the implications of the coronavirus (COVID-19) pandemic, we are enthusiastic to lead Six Flags toward a new phase of long-term growth. The Company has a great history, an enduring brand, and a dedicated and talented team of employees. We are committed to providing unique and thrilling experiences that create lifelong memories for our guests.

Recently, the Company has encountered challenges. Core revenue growth has slowed while labor costs have accelerated, and our international licensing projects have not delivered as expected. We will ensure we have the best leadership team with the right skills, critical experiences, and differentiated organizational capability aimed at delivering superior results. We will hold ourselves accountable for executing on our commitments.

We see an opportunity to reaccelerate profitable growth in our core park business, but this will require investments in infrastructure and technology to improve the parks’ appearance, culinary offerings, productivity, and supply chain. Our business transformation will require us to invest in the end-to-end guest experience. Due to the coronavirus (COVID-19) pandemic we temporarily closed our parks beginning in mid-March. This has caused us to delay these investments and scale back spending of expenses and capital until business operations begin to normalize. Rest assured, however, that we are positioning ourselves so that we are ready to aggressively resume our business transformation plans as soon as prudently possible.

Our Board of Directors is committed to adding diversity to our board and formal engagement with investors. Our Board of Directors will continue to focus on the long-term interests of stockholders through active engagement and oversight of the Company’s long-term strategy, execution of business objectives, leadership, and risk management.

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 that you will please cast your vote as soon as possible via the Internet, telephone or mail.

Sincerely,

Mike Spanos
President and Chief Executive Officer

Richard Roedel
Chairman of the Board

SIX FLAGS ENTERTAINMENT CORPORATION

Date and Time

May 6, 2020
11:00 a.m. Eastern Time

Place*

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

Items of Business

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 11, 2020.

By Order of the Board of Directors,

DANIELLE J. BERNTHAL
Secretary

Grand Prairie, Texas
March 19, 2020

TABLE OF CONTENTS

PROXY SUMMARY

The following 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, 2019 (the “Form 10-K”) of Six Flags Entertainment Corporation (the “Company”).

2020 Annual Meeting of Stockholders

Voting Matters

Board Recommendation

Corporate Governance Highlights (page 5)

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

Since January 30, 2020, the Company has appointed three new independent directors to the Board. The addition of B. Ben Baldanza, Selim Bassoul, and Arik Ruchim brings to the Board a diversity of skills and experiences that will help the Company reinvigorate growth and realize its full potential.

Director Nominees (page 19)

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
B. Ben Baldanza	58	M	2020	✔	1
Selim Bassoul	63	M	2020	✔	0
Kurt M. Cellar♦	50	M	2010	✔	1
Nancy A. Krejsa♦	62	F	2017	✔	0
Richard W. Roedel♦ Chairman	70	M	2010	✔	4*
Arik Ruchim	39	M	2020	✔	1
Michael Spanos President and CEO	55	M	2019		0

♦	Audit Committee Financial Expert
	Audit Committee
	Compensation Committee
	Nominating and Corporate Governance Committee
C	Committee Chair
*	As of April 15, 2020, Mr. Roedel will be a member of 3 other public company boards

The Company’s director nominees have a mix of skills and qualifications that provides the Board with the variety and depth of knowledge necessary for effective oversight of the Company:

Executive Compensation Highlights

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

For additional information, see the “Compensation Discussion and Analysis,” which begins on page 25, and the Summary Compensation Table and other related tables and disclosure under “Executive Compensation,” which begins on page 42.

Management and Stockholder Interests Aligned

Total Direct Compensation Mix

Set forth below is the target annual total direct compensation mix as of December 31, 2019. For the CEO, approximately 65% of his target total compensation is performance based:

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 served. The Board is responsible 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 members of management, by reviewing reports, analyses and materials provided to them and by participating in Board and committee meetings.

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 additional meetings when a 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 8 meetings during 2019. Each director of the Company

attended at least 75% of the aggregate of the meetings of the Board and 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 2019, and the Company expects that each director nominee will attend the Annual Meeting.

The Board has only 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.

Five of the current directors of the Company were elected at the Company’s annual meeting of stockholders in 2019. Mr. Spanos was appointed to the Board in October 2019, Mr. Ruchim was appointed to the Board in January 2020, and Messrs. Baldanza and Bassoul were appointed in February 2020. The Board currently has nine directors and 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 eight of the nine 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 B. Ben Baldanza, Selim Bassoul, Kurt M. Cellar, Nancy A. Krejsa, Jon L. Luther, Stephen D. Owens, Richard W. Roedel and Arik Ruchim.

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.

Board Composition Overview

Consistent with the Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee considers, among other factors, character, integrity, ethics, judgment, diversity, independence, areas of expertise relevant to the Company’s business, and other commitments when reviewing and making recommendations to the Board regarding the composition and size of the Board. Although the Board does not maintain a specific policy with respect to Board diversity, the Board believes that the Board should be a diverse body and the Nominating and Corporate Governance Committee considers a broad range of backgrounds

and experiences in making determinations regarding nominations of directors and in overseeing the annual Board and committee evaluations. 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. 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.

Corporate Governance Documents

The following documents are available on the Company’s website at investors.sixflags.com:

Corporate Governance Guidelines

The Corporate Governance Guidelines address, 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 applies to 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 also 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 certify annually 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.

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, 2020, and the function of each committee, are described below.

Communications with the Board of Directors

Stockholders who wish to communicate with the Board may do so by writing to a specific 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 Non-Executive Chairman. At each executive session, the Non-Executive Chairman 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

The Board is currently comprised of the following:

The Board maintains flexibility to determine the appropriate leadership structure for the Company and whether the roles of Chairman of the Board and CEO should be filled by the same or different individuals. This approach allows the Board flexibility to determine whether the two roles should be separate or combined, based upon the Company’s

best interests in light of the dynamic environment in which it operates, and the Board’s assessment of the Board’s leadership and the Company’s needs from time to time.

The succession planning discussions regarding the recent transition in the Chairman and CEO roles included discussions on the Board leadership structure including the value of separating or combining the Chairman and CEO roles and whether the Chairman role should be held by an independent director following the appointment of the new CEO.

The Board considered a number of factors including the Company’s progress and challenges with respect to its key strategic initiatives, the opportunities and challenges the Company is facing, the various roles and capabilities of the directors, the Company’s

stockholders’ interests, and corporate governance practices generally. The Board also focused on its own dynamics and independent oversight function.

In connection with Mr. Reid-Anderson’s retirement, the Board concluded that a separate Chairman and CEO structure creates the right balance between effective independent oversight of the Company’s business and Board activities and provides the best leadership structure for the Company at this time. With the separation of the Chairman and CEO roles, the lead independent director role was eliminated.

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 a quarterly 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 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, in March 2019, the Company announced that it had commenced a search process and retained an outside search firm to locate a successor for Mr. Reid-Anderson, the Company’s former Chairman, President and Chief Executive Officer, who retired on November 18, 2019. The search process was led by the Board and evaluated both internal and external candidates for the position of Chief Executive Officer. Mr. Spanos was appointed as President and Chief Executive Officer effective November 18, 2019.

Board Role in Risk Oversight

The Company’s management is responsible for identifying, assessing and managing the material risks facing the business. The Board oversees management’s identification and management of risks, and the Board and its committees engage with management on risk as part of broad strategic and operational discussions as well as on a risk-by-risk basis. 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 plans to address these risks. The Company believes that the Board’s leadership structure, including its independent chairman, supermajority of independent directors, and allocation of oversight responsibilities to appropriate committees, provides effective board-level risk oversight.

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:

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-taking appropriately with the Company’s efforts to increase stockholder value.

Nomination Process

Role of the Nominating and Corporate
Governance Committee

The Company’s Corporate Governance Guidelines include qualification criteria that the Nominating and Corporate Governance Committee uses to identify individuals it believes are qualified to become directors. See “—Board Composition Overview” for a discussion of the characteristics and qualities that director candidates should possess.

After identifying qualified individuals and conducting interviews, as appropriate, the Nominating and Corporate Governance Committee recommends 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. In 2019, the Company engaged a search firm to assist with recruitment of new director candidates. The search firm provided director candidates and worked with the Nominating and Corporate Governance Committee to contact prospects to assess interest and availability. The search firm also contacts references for the candidate. A background check is completed before a candidate is approved by the Board.

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 to the Secretary or Non-Executive Chairman, c/o Six Flags Entertainment Corporation, 924 Avenue J East, Grand Prairie, Texas 75050.

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 2021 annual meeting, notice of the nomination must be received by the Secretary of the Company on or after January 6, 2021, and on or before February 5, 2021. A nominating stockholder must provide the 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 response to a stockholder proposal, 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 2021 annual meeting, notice of the nomination must be received by the Secretary of the Company on or

after October 21, 2020, and on or before November 20, 2020. Nominating stockholders and

nominees must satisfy the requirements set forth in the Company’s Bylaws.

Stockholder Cooperation Agreement

The Company entered into a Cooperation Agreement (the “Cooperation Agreement”) with H Partners Management, LLC and certain of its affiliates (collectively, “H Partners”), dated as of January 30, 2020, regarding the membership and composition of the Board and related matters. Pursuant to the Cooperation Agreement, the Company appointed Mr. Ruchim to the Board as a director, and Mr. Ruchim was appointed to the Nominating and Corporate Governance Committee and the Compensation Committee.

The Company also committed to (i) appointing three additional independent directors (each, a “New Independent Appointee”) to the Board within a reasonable timeframe and (ii) ensuring that one director serving on the Board as of January 31, 2020, resigns from the Board on or before the appointment of the third New Independent Appointee. H Partners will be permitted to present to the Board a list of up to eight candidates (each, an “Additional Nominee”) who are not affiliates or representatives of H Partners for consideration for appointment to the Board as a New Independent Appointee, and the Board will consider at least one Additional Nominee in good faith alongside any other qualified candidates identified by the Nominating and Corporate Governance Committee as a part of its standard processes for considering new director candidates. In accordance with the Cooperation Agreement, Messrs. Baldanza and Bassoul were Additional Nominees considered by the Board and appointed as directors on February 24, 2020.

During the period ending on the later of (i) the earlier of (x) 30 days prior to director nomination deadline

for the Company’s 2021 annual meeting of stockholders and (y) 100 days prior to the first anniversary of the Company’s 2020 annual meeting, and (ii) 10 days after Mr. Ruchim (or any replacement) is no longer serving on the Board (the “Cooperation Period”), H Partners has agreed to certain standstill provisions, including, among other things, agreeing not to (i) acquire ownership (beneficial or otherwise) of 14.9% or more of the Company’s outstanding shares, (ii) nominate or recommend for nomination any person for election to the Board, (iii) submit any proposal for consideration at, or bring any other business before, any stockholder meeting, or (iv) solicit any proxy, consent, or other authority to vote of stockholders or conduct any other referendum (including any “withhold,” “vote no,” or similar campaign) with respect to, or from the holders of, the Company’s shares.

At any stockholder meeting during the Cooperation Period, H Partners has also agreed to vote its shares of the Company’s common stock (i) in favor of the slate of directors recommended by the Board, (ii) against the election of any nominee for director not approved, recommended, and nominated by the Board for election, and (iii) in accordance with the Board’s recommendation with respect to any other matter or proposal presented at any such meeting, subject to certain exceptions relating to business combination transactions.

The foregoing is a summary of the Cooperation Agreement and the complete Cooperation Agreement is available as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 31, 2020.

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. The Company’s management team believes that this approach to engaging openly with the Company’s stockholders drives increased corporate accountability, improves decision making and ultimately creates long-term value. The Company is committed to:

The Company holds meetings during the course of each year with many of its stockholders through in-person and teleconference meetings to better understand stockholders’ key concerns. 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, stockholder feedback influenced the Company’s implementation of proxy access and the specific terms adopted through an amendment to the Company’s Bylaws in 2018. See also “—Stockholder Cooperation Agreement” for a discussion of additional stockholder engagement activity.

In 2019 and early 2020, the Chief Executive Officer, the Senior Vice President, Investor Relations and Treasurer, other members of senior management, and members of the Compensation Committee, had discussions with 12 stockholders, representing approximately 53% of the Company’s outstanding common stock, about issues of importance to them, including the Company’s executive compensation practices and corporate governance policies. In addition to these discussions, the Company also received feedback from stockholders, representing approximately 6% of the Company’s outstanding common stock, that they understand and support the Company’s executive compensation program and practices and that no discussion on the topic was necessary. The Company’s response to stockholders’ concerns related to executive compensation is discussed in more detail in “Compensation Discussion and Analysis—Executive Compensation—Annual ‘Say on Pay’ Vote and Stockholder Engagement,’ which begins on page 29.

Hedging Policy

The Company’s Insider Trading Policy (the “Policy”) applies to all directors, officers and employees of the Company. The Policy includes the following restrictions with respect to Company securities:

with a limited exception for use of Company securities as collateral for a loan available with prior approval by the General Counsel upon clear demonstration of the financial capacity to repay the loan without resort to the pledged securities.

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 of 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 and work as well as the environment.

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:

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 creating a safe and secure environment and to minimize injuries. The hallmarks of the Company’s safety and security programs are:

Renewable Energy

The Company is committed to renewable energy. Two of the Company’s parks have installled over 30 megawatts of solar power systems.

2019 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 2019 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 in evaluating non-employee director compensation.

Cash and Equity Compensation

The following table sets forth the annual compensation to non-employee directors in 2019. The cash compensation is paid in equal quarterly installments at the beginning of each fiscal quarter.

Cash Retainer Deferral Program

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

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, or on target to achieve compliance, with the Company’s stock ownership guidelines.

2019 Non-Employee Director Compensation

Employee directors do not receive any compensation in connection with their director service. During 2019, Mr. Reid-Anderson and Mr. Spanos were the only employee-directors and their compensation as employees is set forth in the 2019 Summary

Compensation Table. The following table sets forth compensation paid to or earned by each non-employee director for the year ending December 31, 2019:

Long-Term Incentive Plan pursuant to the Company’s director cash retainer deferral program. The amounts for each of Messrs. Nabi and Roedel include $69,977, the value of their deferral under the director cash retainer deferral program, resulting in a grant of 1,299 deferred stock units in 2019. In addition, Messrs. Luther and Roedel each received 696 deferred stock units, representing accumulated dividend equivalents in their deferred stock unit account. See “—Description of Non-Employee Director Compensation” for a discussion of the Company’s director cash retainer deferral program.

PROPOSAL 1:
ELECTION OF DIRECTORS

The Board has nominated and recommends for election as directors the seven nominees named in this Proxy Statement to serve until the next annual meeting of stockholders and until their respective successors are duly elected and qualified. After many years of distinguished service, Messrs. Luther and Owens will retire from the Board as of the Annual Meeting. Accordingly, Messrs. Luther and Owens are not included as nominees for election at the Annual Meeting. In accordance with the Company’s Bylaws, the size of the Board will be reduced from nine to seven members immediately prior to the Annual

Meeting pursuant to a resolution adopted by the Board. Following the Annual Meeting, there will be no vacancies on the Board. 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.

As discussed under “Corporate Governance—Board Composition Overview,” in evaluating director nominees, the Nominating and Corporate Governance Committee considers a variety of factors. The nominees have a wide range of qualifications, skills and experiences that align with the Company’s long-term corporate strategy. The following table summarizes the key qualifications and skills each of the director nominees possess that were most relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather a mark indicates a specific area of focus or expertise on which the Board relies most heavily. Each director’s biography describes these qualifications and relevant experience in more detail.

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.

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 four 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, 2019.

To fulfill its responsibility:

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, 2019 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)
Nancy A. Krejsa
Stephen D. Owens
Richard W. Roedel

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 in their roles at the company in 2019 that we refer to as the named executive officers.

CEO Transition

As part of the Company’s normal succession planning process, in March 2019, the Company announced Mr. Reid-Anderson’s intention to retire as Chairman, President and Chief Executive Officer and that the Company had commenced a search process, and retained an outside search firm, to locate a successor for Mr. Reid-Anderson. The Nominating and Corporate Governance Committee, together with the outside search firm, led the extensive internal and external search and selection efforts on behalf of the Board, with input from Mr. Reid-Anderson throughout the process. Effective November 18, 2019, Mr. Reid-Anderson retired and Mr. Spanos was appointed as President and Chief Executive Officer. Mr. Spanos’ proven leadership capability and experience in business operations across developed, developing and emerging markets, gained through over 25 years of experience at PepsiCo, Inc. in different geographies, made him the best candidate to succeed Mr. Reid-Anderson, with the decision unanimously approved by the Board.

2019 Performance — No Annual Incentive Awarded

2019 was a challenging year for the Company. While revenue increased $24 million, or 2%, from 2018 to approximately $1.5 billion, and attendance increased 2% to 32.8 million guests, the Company has been experiencing slowing growth in its base business. At the same time, operating costs have been increasing, primarily due to higher minimum and market wages, causing costs to rise faster than revenue and compressing margins. As a result, the Company did not meet the performance targets under its annual incentive plan, specifically the Adjusted EBITDA ‘gate’, and no annual incentives were paid to any employees for 2019 (other than sales commissions).

In light of the Company’s disappointing results, the management team is working diligently to develop a new strategic plan to determine how best to improve the Company’s path forward and deliver sustained earnings growth in attendance, revenue and profitability over both the short- and long-term. Furthermore, the Company intends to make incremental investments in the base business that will create innovative experiences to attract new consumers and enhance the guest service while they are in the park. However, due to the coronavirus (COVID-19) outbreak the Company temporarily closed its parks beginning in March. This has caused the Company to delay these investments and scale back spending of expenses and capital until business operations begin to normalize. The Company’s management team is deeply committed to reinvigorating growth and is conducting an outside/in strategic review. The Company expects the resulting strategic initiatives to generate higher revenue growth, productivity, and profitability, and believes it has strong potential to create significant value for its stockholders.

Future Changes to Compensation Structure

With the appointment of a new CEO in November 2019, the Company took the opportunity to conduct a comprehensive review of the annual and long-term incentive plans.

During this process, the Company reviewed feedback from stockholders, who expressed concern over utilizing stock options as the primary performance-based long-term incentives, along with reservations about the effectiveness of the Project awards.

To directly address stockholders’ concerns, the Company has modified its annual incentive plan and long-term equity incentives.

Annual Incentive Plan

The Company has instituted a revenue growth metric (25% weighting) in its annual incentive plan, replacing the net debt metric previously used. The remaining annual incentive metrics, Adjusted EBITDA (50% weighting), guest satisfaction scores (12.5% weighting) and safety scores (12.5% weighting) will continue to be used.

The performance ‘gate’ tied to Adjusted EBITDA will be retained as a condition for a payout on other performance metrics. If Adjusted EBITDA does not meet or exceed the ‘gate,’ no annual incentives will be earned, regardless of achievement of the other metrics.

Annual incentive plan metrics and goals will be disclosed in the Company’s future proxy filings.

Long-Term Equity

Beginning in 2020, the Company’s long-term incentive equity will consist primarily of restricted stock units (“RSUs”) and performance stock units (“PSUs”).

The Compensation Committee believes that a combination of RSUs and PSUs better aligns with current market practice and stockholder interests and will enhance the Company’s ability to drive stockholder value while attracting, retaining and motivating leadership talent.

The 2020 long-term incentives for the named executive officers will consist of 50% RSUs and 50% PSUs. The RSUs will vest 1/3 per year over three years, and the PSUs will vest on the third anniversary of the grant provided the applicable performance criteria are met. Prior to the impact of the coronavirus (COVID-19) outbreak, 2020 performance criteria were expected to be based on an equal weighting of Adjusted EBITDA, revenue growth, and Adjusted EBITDA minus capital expenditures. The Compensation Committee will determine actual 2020 performance criteria in light of the business environment at the time performance criteria are established.

Long-term equity metrics and goals will be disclosed in the Company’s future proxy filings.

The Company does not plan to issue any Project awards in the future.

Executive Compensation

Executive Compensation Philosophy and Objectives

Total direct compensation for the named executive officers in 2019 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:

Total Shareholder Return

The graph below compares the Company’s cumulative 5-year total stockholder return with the cumulative total returns of the S&P 500 Index, the S&P Midcap 400 Index, and the S&P Movies & Entertainment Index. The graph tracks the performance of a $100 investment in the Company’s common stock and in each index (with the reinvestment of all dividends) over the covered periods.

Compensation Practices

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:

Annual “Say on Pay” Vote and Stockholder Engagement

The Company is disappointed with the vote on executive compensation for the year ended 2018, with only 69% stockholder support for the annual Say on Pay vote. While the voting results represent an improvement from the year ended 2017 (56%), these results are still well below the Company’s expectations.

In a rapidly evolving executive compensation and corporate governance landscape, the Company attaches great importance to a continuous dialogue with institutional investors and other major stockholders, and spends considerable time reflecting on feedback received.

In 2019 and early 2020, the Chief Executive Officer, the Senior Vice President, Investor Relations and Treasurer, other members of senior management, and members of the Compensation Committee, had discussions with 12 stockholders, representing approximately 53% of the Company’s outstanding common stock, about issues of importance to them, including the Company’s executive compensation practices and corporate governance policies. In addition to these discussions, the Company also received feedback from stockholders representing approximately 6% of the Company’s outstanding common stock that they understand and support the Company’s executive compensation program and practices and that no discussion on the topic was necessary.

As a direct result of the Company’s engagement initiative this past year, the following changes have been made or are in progress:

The Company is committed to engaging with its stockholders and will continue to seek opportunities for dialogue on executive compensation and corporate governance matters.

The following table summarizes the concerns raised from stockholders and the major proxy advisory firms and the Company’s response to address those concerns.

Administration 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 senior executives 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 its executive compensation programs.

The entire Board (other than the Chief Executive Officer) ratified the 2019 compensation for the Chief Executive Officer, and the entire Board ratified the 2019 compensation for the other named executive officers.

Management Participation

The Company’s Human Resources department is responsible for the ongoing management of the executive compensation program. The Senior Vice President, 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 senior executives as the Compensation Committee deems appropriate when it determines the performance criteria and compensation levels of senior executives. The Chief Executive Officer makes recommendations to the Compensation Committee regarding individual compensation, such as base salary changes and incentive compensation opportunities for senior executives 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.

Factors in Determining Executive Compensation

In making compensation decisions regarding senior executives 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 2019.

The Compensation Committee uses peer group data as a reference point to compare the named executive officers’ pay against the peer group. The Compensation Committee also uses 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 does not set executive compensation levels with reference to any particular percentile of the peer group and does not seek to match any particular element or mix of elements to that of the peer group.

Peer Group Review

In 2018, the Company established a peer group as a result of engagement with its stockholders and to enable stockholders to assess the Company’s executive compensation relative to its peers. Given the unique 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 an emphasis on companies in the leisure, recreation and entertainment industries. As a result of its review, the Compensation Committee approved the following 18 publicly traded companies as the peer group for use in its compensation analysis.

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 companies with whom the Company competes for talent. The companies in the peer group have annual revenues between

$380 million and $11.3 billion, market capitalization between $1.2 billion and $15.2 billion, and EBITDA between $64 million and $1.8 billion. The following charts show the Company’s ranking within the peer group in terms of revenue, market capitalization and EBITDA in 2019 (in millions):

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.

Peer Group Comparison

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 2019 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 and is aligned with the companies in the peer group.

Total Direct Compensation Mix

The following charts show the relationship between the primary components of the Company’s target annual total direct compensation mix as of December 31, 2019, for each named executive officer. For the Company’s Chief Executive Officer, 65% of his target total compensation is performance-based. For

the other named executive officers, 63% of target total compensation is performance-based. The chart illustrates target total compensation as of December 31, 2019, as described in the Base Salary, Annual Incentives and Long-Term Equity sections below.

Elements of Compensation

The individual components of the Company’s executive compensation program in 2019 included:

In setting total compensation, the Compensation Committee applies a consistent approach for all senior executives. The Compensation Committee applies its compensation philosophy, as described below, to the facts and circumstances associated with each executive through the exercise of appropriate business judgment.

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 2019, Messrs. Balk, Barber, and Petit, and Ms. Aslin received salary increases ranging from 1.3% to 2.8%. Mr. Reid-Anderson’s salary remained the same.

The following table shows the annual base salary rate in 2019 for the named executive officers:

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. Other goals for 2019 related to net debt level, guest satisfaction and safety. 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 most 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 2019 was more than $553.5 million, no annual incentive could be earned. If more than the target $577.3 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 $577.3 million to

$604.4 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, 2019, for the named executive officers. Since Mr. Spanos joined the Company in November 2019, in lieu of any bonus for 2019, Mr. Spanos received a signing bonus of $215,000.

No named executive officer may earn more than 200% of such named executive officer’s target annual incentive. For 2019, the Compensation Committee

established target levels of achievement for the four financial and strategic objectives as follows:

Because the threshold Adjusted EBITDA of $553.5 million for 2019 was not achieved, the named

executive officers did not earn an annual incentive for 2019 under the annual incentive plan.

Long-Term Equity

While annual cash 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 has historically awarded stock options or performance stock units, or a combination thereof, based on its determination of the relative value of each form of award at the time of grant and the performance and responsibilities of each named executive officer.

These awards were granted under the Company’s Long-Term Incentive Plan. 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.

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. Spanos) in August 2019 as part of a general grant to employees. In connection with becoming Chief Executive Officer in November 2019, Mr. Spanos was granted options to purchase 305,000 shares of common stock and additional sign-on options to purchase 120,000 shares of common stock.

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 another aspirational goal called Project 750. Project 750 awards were given to all director-level employees and above.

Project 750 is structured similarly to Project 600, which had a $600 million Modified EBITDA target, and achievement was necessary by December 31, 2019 for any payout. Since the

Company did not achieve $600 million Modified EBITDA by December 31, 2019, no executive or any other employee received any payout under Project 600.

Aspirational Target

Project 750 provides participants with an equity incentive for the Company to achieve $750 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.

The Compensation Committee believes that Modified EBITDA is an 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 an objective and understandable 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 750 Target Modified EBITDA is a very difficult target for the Company to achieve. At the time the performance target was established in October 2016, the Company’s September 30, 2016, last twelve months Modified EBITDA was $531.6 million, thus the Project 750 Target Modified EBITDA represented an increase of 41%. Achievement of the Project 750 Target Modified EBITDA requires the Company to increase Modified EBITDA by 32% from $568 million Modified EBITDA in 2019.

The Company currently believes that achievement of the Project 750 Target Modified EBITDA by 2020 is highly unlikely, particularly in light of the temporary cessation of operations as a result of the coronavirus (COVID-19) outbreak.

Number of Shares

The number of shares of stock that each 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:

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 excludes 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 and the target award would be deemed 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.

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 2019 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 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 “Executive Compensation—Fiscal 2019 Non-Qualified Deferred Compensation.”

The Company also 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.

The named executive officers are eligible to participate in these plans on the same basis as other eligible participants.

Health Benefits and Disability Insurance

The Company provides its named 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 the named executive officers with competitive separation payments and benefits because it provides a measure of financial security for the named executive officer and his or her family in the event of certain terminations of employment and also enables the Company to secure their cooperation following

termination. Under their respective employment agreements, the named executive officers are entitled to severance 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 actual or constructive termination of employment in order for the named 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:

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 “Executive Compensation—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 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 further align the senior executives’ interests with those of the Company's stockholders, the Company maintains stock ownership guidelines. The guidelines provide that, within three years of (i) 2012, or, (ii) the year in which the executive first becomes subject to the guidelines, certain senior executives should seek to establish holdings in the Company’s stock equal in value to a multiple of their annual base salary, depending on their position as follows:

All types of equity holdings, with the exception of stock options, are included in determining ownership. All of the named executive officers are in compliance, or on target to achieve 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 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.

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, 2019.

THE COMPENSATION COMMITTEE

Stephen D. Owens (Chair)
Jon L. Luther
Arik Ruchim

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 2019.

COMPENSATION POLICIES AND RISK MANAGEMENT PRACTICES

The Compensation Committee has reviewed the Company’s compensation 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.

EXECUTIVE COMPENSATION

2019 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 former Chief Executive Officer, (iii) the Company’s Chief Financial

Officer and (iv) the Company’s other three most highly compensated executive officers serving as such at the end of the fiscal year ended December 31, 2019.

The amount shown in 2019 for Mr. Reid-Anderson includes $12,000 for an automobile allowance and $15,000 for a tax planning and legal services allowance as provided for in his employment agreement. The amount for Mr. Reid-Anderson also includes $216,058 for severance. See “—Description of Retirement Agreements” for additional information. The amount shown for Mr. Spanos includes $165,000 as a relocation allowance in connection with Mr. Spanos joining the Company as Chief Executive Officer in November 2019. For additional information on contributions that the Company makes for the named executive officers under the 401(k) Plan, Supplemental 401(k) Plan and of perquisites and benefits that the Company provides to the named executive officers, see “Compensation Discussion and Analysis—Elements of Compensation—Minimal Perquisites.”

2019 Grants of Plan-Based Awards

The following table provides information on equity and non-equity awards granted in 2019, except as otherwise noted below, to each of the named executive officers: