What you need to know about Cedar Fair's upcoming special meeting
Dec 19, 2010 at 6:07 AM
Here are questions and answers about Cedar Fair's upcoming special meeting next month.
Q: Why is Cedar Fair having a special meeting of unitholders?
A: The special meeting — set for 9 a.m. Jan. 11 at the Cedar Point Center at BGSU Firelands in Huron — has been called at the request of a group of Texas companies known as Q Investments. Anyone holding 10 percent or more of Cedar Fair's voting units has the right to request a special meeting.
Q: Who is Q Investments and why has it called a special meeting?
A: Q Investments is essentially Geoffrey Raynor, a Fort Worth, Texas, investment banker who owns about 18 percent of Cedar Fair's limited partnership units, as shares in the company are known. Raynor controls the voting rights to those shares through units he ownspersonally, and through units he owns through his companies, such as Q Funding III.
Raynor has called the meeting to vote on two proposals that would change Cedar Fair policies in important ways.
Q: What are the unitholders voting on?
A: Q Investments wants two amendments in the partnership agreement.
One will require the chairman of Cedar Fair's board of directors be an independent director who has not been an officer of Cedar Fair or its affiliates.
The proposal would have the effect of ensuring Dick Kinzel, Cedar Fair's chairman, chief executive officer and president, will not continue to serve as chairman. Kinzel is stepping down as the company's CEO in early 2012, but has said he would be willing to continue as chairman if the board requests it.
The second proposal would be to make distribution of cash dividends a higher priority than paying off Cedar Fair's debt. That would likely include amending the company's agreements with bankers holding the company's debt.
The debt agreement limits Cedar Fair to paying cash distributions of 35 cents per unit each year in 2010 and 2011. Q Investments has stated in its SEC filings that it wants distributions of at least $1 a year.
Q: What is Cedar Fair's stance on the Q Investments proposal?
A: The company's board of directors unanimously opposes both proposals. Two of the directors opposing the proposals, Eric Affeldt and John Scott, were placed on the Cedar Fair board a few months ago by Q Investments, which argued the board has been dominated by Kinzel and needed new ideas.
Q: Who can vote on the proposals?
A: Anyone who owned limited partnership units in Cedar Fair as of Dec. 9 is allowed to vote on the proposals.
Q: What will determine which side wins?
A: To be approved, the two Q Investments proposals must win a majority of the available votes. The number of votes controlled by each investor depends upon how many units he or she owns. Somebody who owns 10 units has 10 votes; a person who owns 1,000 units controls 1,000 votes.
Read more in Sunday's Register.