Kinzel's golden parachute: $20 million

SANDUSKY Money and power will be at stake when Cedar Fair takes the next big step in the proposed sa
Tom Jackson
Mar 7, 2010

 

SANDUSKY

Money and power will be at stake when Cedar Fair takes the next big step in the proposed sale to private equity firm Apollo Global Management.

On Friday, Cedar Fair plans to file its proxy statement with the Securities and Exchange Commission, outlining more details on Apollo's plans to buy the parent company of Cedar Point and turn it into a privately-owned company. A final decision on the $2.4 billion transaction is expected within 50 days.

The deal includes refinancing of $1.6 billion of Cedar Fair's debt.

Last year's proxy statement stated that if Cedar Fair CEO Dick Kinzel lost his job after Cedar Fair was taken over, he'd receive a $20 million golden parachute to cushion his fall from power. The new statement is expected to spell out details of his proposed contract extension under the new ownership.

That proxy statement will include details of the sale and a ballot allowing unitholders to vote on the proposal.Unitholders will be offered $11.50 per unit. That's 28 percent above the closing price on Dec. 15, the day before the proposed deal was announced.

The proposal must be approved by at least two-thirds of the total number of votes. Each outstanding unit represents one vote, and there are about 55.2 million outstanding units.

Unitholders and anyone interested in will be able to view the proxy statement via a link at sandusky.register.com to the SEC's Web site, sec.com, on Friday.

Once the proxy statement is filed, the SEC will have 30 days to review it. After it's approved, the company will mail copies to all unitholders along with a paper ballot.

Unitholders will have a special meeting to finalize the results of the vote within 20 days of when the statements are mailed, said Stacy Frole, director of investor relations for Cedar Fair.

Officials anticipate the sale will be finished by the time Cedar Fair's second quarter begins March 29.

If finalized, there will be no annual meeting of unitholders because Cedar Fair will no longer be a publicly-traded company.

Several unitholders have filed lawsuits in Erie County attempting to block the sale, contending they haven't been offered enough money.

Interest in the new proxy statement is expected to be high.

The 2009 statement stated Kinzel received about $2.96 million in compensation in 2008, including a salary of $1.25 million and a bonus of about $1.27 million. If there is a "change of control," such as a takeover of the company, and Kinzel lost his job as a result, he would receive about $20.1 million in cash and benefits.

By comparison, Kinzel would get about $14 million for disability or if he was fired, $6 million if he retired or $3 million if he was fired for cause.

Cedar Fair has another important deadline later this month. The "go-shop" period, when Cedar Fair can listen to offers from companies another than Apollo, expires Jan. 25. Frole said Cedar Fair won't comment right now on whether there are other offers.

Here's what other top Cedar Fair executives would receive in compensation and benefits if they lost their jobs as the result of another company's takeover, according to the 2009 proxy statement.

* Jacob Falfas, chief operating officer: $4.9 million

* Peter Crage, corporate VP, chief financial officer: $3.3 million

* Robert Decker, corporate VP, planning and design: $1.5 million

* Philip Bender, regional VP: $986,000

Click here for more coverage of the potential Cedar Fair sale

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