<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
Premier Parks Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Not Applicable
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not Applicable
------------------------------------------------------------------------
(5) Total fee paid:
Not Applicable
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
Not Applicable
------------------------------------------------------------------------
(3) Filing Party:
Not Applicable
------------------------------------------------------------------------
(4) Date Filed:
Not Applicable
------------------------------------------------------------------------
<PAGE> 2
PREMIER PARKS INC.
11501 NORTHEAST EXPRESSWAY
OKLAHOMA CITY, OKLAHOMA 73131
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
JUNE 2, 1998
------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Premier
Parks Inc. (the "Company") will be held at the offices of Darien Lake Theme
Park, 9993 Allegheny Road, Darien Center, New York 14040, on Tuesday, June 2,
1998, at 9:00 a.m., E.D.T., for the following purposes, all as more fully
described in the attached Proxy Statement:
1. To elect seven directors to serve for the ensuing year and until
their respective successors are elected and qualified.
2. To approve an amendment to the Company's Certificate of Incorporation
to effect a 2 for 1 stock split of the Company's Common Stock, to
increase the number of authorized shares of the Company's Common
Stock from 90,000,000 "old" shares to 150,000,000 "new" shares and to
increase the number of authorized shares of the Company's Preferred
Stock from 500,000 shares to 5,000,000 shares.
3. To ratify the selection by the Company's Board of Directors of KPMG
Peat Marwick LLP as independent public accountants of the Company for
the year ending December 31, 1998.
4. To approve the adoption of the Company's 1998 Stock Option and
Incentive Plan.
5. To re-approve the Company's 1996 Stock Option and Incentive Plan.
6. To approve the Company's policy of permitting "independent" directors
to elect to receive annual director fees in shares of Common Stock.
7. To transact such other business as may properly come before the
meeting and any and all adjournments thereof.
The Board of Directors has fixed the close of business on April 24, 1998 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting or any adjournment thereof.
A copy of the Company's Annual Report for the year ended December 31, 1997
is enclosed.
YOU ARE EARNESTLY REQUESTED TO DATE, SIGN AND RETURN THE ACCOMPANYING FORM
OF PROXY IN THE ENVELOPE ENCLOSED FOR THAT PURPOSE (TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES) WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING IN PERSON. THE PROXY IS REVOCABLE BY YOU AT ANY TIME PRIOR TO ITS
EXERCISE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU
ATTEND THE MEETING OR ANY ADJOURNMENT THEREOF. THE PROMPT RETURN OF THE PROXY
WILL BE OF ASSISTANCE IN PREPARING FOR THE MEETING AND YOUR COOPERATION IN THIS
RESPECT WILL BE APPRECIATED.
BY ORDER OF THE BOARD OF DIRECTORS
RICHARD A. KIPF
Secretary
Oklahoma City, Oklahoma
April 30, 1998
<PAGE> 3
PREMIER PARKS INC.
11501 NORTHEAST EXPRESSWAY
OKLAHOMA CITY, OKLAHOMA 73131
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 2, 1998
------------------------
This Proxy Statement and the accompanying proxy are being furnished to
stockholders of PREMIER PARKS INC. (the "Company") in connection with the
solicitation of proxies by the Board of Directors for use in voting at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the offices
of Darien Lake Theme Park, 9993 Allegheny Road, Darien Center, New York 14040,
on Tuesday, June 2, 1998, at 9:00 a.m., E.D.T., and at any and all adjournments
thereof.
If the enclosed proxy is properly signed and returned, your shares will be
voted on all matters that properly come before the Annual Meeting for a vote. If
instructions are specified in your signed proxy with respect to the matters
being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are so specified, your shares will be voted FOR
the election of directors named in Proposal 1, FOR the approval of Proposal 2
(approval of an amendment to the Company's Certificate of Incorporation), FOR
the approval of Proposal 3 (ratification of independent public accountants for
the year ending December 31, 1998), FOR the approval of Proposal 4 (approval of
the Company's 1998 Stock Option and Incentive Plan), FOR the approval of
Proposal 5 (re-approval of the Company's 1996 Stock Option and Incentive Plan)
and FOR the approval of Proposal 6 (approval of the Company's policy of
permitting independent director fees to be paid in shares of Common Stock). Your
proxy may be revoked at any time prior to being voted by: (i) filing with the
Secretary of the Company (Richard A. Kipf), at the above address, written notice
of such revocation, (ii) submitting a duly executed proxy bearing a later date
or (iii) attending the Annual Meeting and giving the Secretary notice of your
intention to vote in person.
On or about April 30, 1998, this Proxy Statement and the accompanying
proxy, together with a copy of the Annual Report of the Company for the year
ended December 31, 1997, including financial statements, are to be mailed to
each stockholder of record at the close of business on April 24, 1998 (the
"Record Date").
WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE ASKED TO SIGN AND RETURN THE ACCOMPANYING PROXY REGARDLESS
OF THE NUMBER OF SHARES YOU OWN. Shares can be voted at the Annual Meeting only
if the holder is represented by proxy or is present.
<PAGE> 4
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 24, 1998 as
the Record Date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting. Only stockholders of record at the close of
business on that date will be entitled to vote at the Annual Meeting or any and
all adjournments thereof. As of that date, the Company had issued and
outstanding 37,497,566 shares of Common Stock, the Company's only class of
outstanding securities entitled to vote at the Annual Meeting. Each stockholder
of the Company will be entitled to one vote for each share of Common Stock
registered in its name on the Record Date. A majority of all of the outstanding
shares of Common Stock constitutes a quorum at the Annual Meeting. Except as
otherwise specifically indicated, none of the share information contained herein
gives effect to the proposed stock split. See "Proposal 2 -- Amendment of
Article IV of the Company's Certificate of Incorporation."
Neither abstention votes nor any broker non-votes (i.e., votes withheld by
brokers on non-routine proposals in the absence of instructions from beneficial
owners) will be counted as present or represented at the Annual Meeting for
purposes of determining whether a quorum exists.
STOCK OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL HOLDERS
The following table sets forth certain information as of March 1, 1998
(except as noted below) as to Common Stock owned by (a) each of the Company's
current directors and nominees to serve as directors, (b) all current directors
and officers of the Company as a group, and (c) each person who, to the best of
the Company's knowledge, beneficially owned on that date more than 5% of the
outstanding Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(1)
------------------------------------ ------------------ -----------
<S> <C> <C>
Kieran E. Burke(2).......................................... 314,877 *
Paul A. Biddelman(3)........................................ 2,657,071 7.1
James F. Dannhauser(4)...................................... 76,665 *
Michael E. Gellert(5)....................................... 1,368,961 3.7
Gary Story(6)............................................... 143,000 *
Jack Tyrrell(7)............................................. 695,253 1.9
Sandy Gurtler............................................... -- --
Charles R. Wood............................................. 9,091(8) *
Robert J. Gellert(9)........................................ 1,254,553 3.3
122 East 42nd Street
New York, New York 10168
Windcrest Partners(10)...................................... 1,136,025 3.0
122 East 42nd Street
New York, New York 10168
Hanseatic Corporation(11)................................... 2,657,071 7.1
Wolfgang Traber
450 Park Avenue
New York, New York 10152
FMR Corp.(12)............................................... 1,897,900 5.1
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(1)
------------------------------------ ------------------ -----------
<S> <C> <C>
Baron Capital Group(13)..................................... 1,184,700 3.2
767 Fifth Avenue
New York, NY 10153
Warburg Pincus Asset Management(14)......................... 968,145 2.6
466 Lexington Avenue
New York, NY 10017
All directors and officers as a group (15 persons)(15)...... 5,310,419 14.2
</TABLE>
- ---------------
* Less than one percent.
(1) Percentage amounts are based on the number of outstanding shares of Common
Stock as of the Record Date.
(2) Includes 75,637 shares of Common Stock and warrants and options to purchase
239,238 shares of Common Stock as to which Mr. Burke has sole voting and
investment power.
(3) Represents shares of Common Stock beneficially owned by Hanseatic
Corporation ("Hanseatic"), of which Mr. Biddelman is President. See
footnote (11) below.
(4) Includes 32,665 shares of Common Stock and options to purchase 44,000
shares of Common Stock as to which Mr. Dannhauser has sole voting and
investment power.
(5) Includes 232,936 shares of Common Stock, as to which Mr. Gellert has sole
voting and investment power. Also includes 1,136,025 shares of Common Stock
beneficially owned by Windcrest Partners ("Windcrest") which shares voting
and investment power with its general partners, Michael E. Gellert and
Robert J. Gellert.
(6) Includes 25,000 shares of Common Stock and options to purchase 118,000
shares of Common Stock as to which Mr. Story has sole voting and investment
power.
(7) Includes 9,794 shares of Common Stock for his own account; 4,396 shares of
Common Stock held in a trust for the benefit of his son; 311,940 shares of
Common Stock beneficially owned by Lawrence, Tyrrell, Ortale & Smith II,
L.P. ("LTOS II"); and an aggregate of 369,123 shares of Common Stock
beneficially owned by Richland Ventures, L.P. ("Richland") and Richland
Ventures II, L.P. ("Richland II"). Mr. Tyrrell, who is a general partner of
the general partner of LTOS II and a general partner of Richland and
Richland II, disclaims beneficial ownership of all shares held by such
entities.
(8) Represents shares held by Double "H" Hole in the Woods Ranch, Inc., a
charitable organization of which Mr. Wood is Chairman of the Board.
(9) Includes 2,514 shares of Common Stock for his own account, as to which he
has sole voting and investment power; 40,351 shares of Common Stock as
agent for 26 other persons and entities with whom he shares voting and
investment power; 2,168 shares of Common Stock as trustee for Michael E.
Gellert's sister with respect to which he shares voting and investment
power with Peter J. Gellert (who holds these shares as agent); 5,558 shares
of Common Stock as trustee of irrevocable trusts for the benefit of Michael
E. Gellert's children as to which he has sole voting and investment power;
1,083 shares of Common Stock as trustee of an irrevocable trust for the
benefit of his brother as to which he has sole voting and investment power;
1,854 shares of Common Stock as trustee of a trust for the benefit of a
second cousin as to which he has sole voting and investment power;
1,136,025 shares of Common Stock owned by Windcrest, which shares voting
and investment power with its general partners, Michael E. Gellert and
Robert J. Gellert; and 65,000 shares of Common Stock beneficially owned by
Lexfor Corporation of which he is President and a director, as to which he
shares voting and investment
3
<PAGE> 6
power with the other officers and directors. Michael E. Gellert disclaims
beneficial ownership of the shares of Common Stock owned by the trusts for
the benefit of his children.
(10) Windcrest shares voting and investment power with its general partners,
Michael E. Gellert and Robert J. Gellert.
(11) Represents shares of Common Stock beneficially owned by Hanseatic. Mr.
Traber holds a majority of the shares of capital stock of Hanseatic and
thus may be deemed to beneficially own such Common Stock. Of such shares,
2,588,695 shares of Common Stock are held by Hanseatic Americas LDC, a
Bahamian limited duration company in which the sole managing member is
Hansabel Partners LLC, a Delaware limited liability company in which the
sole managing member is Hanseatic. The remaining shares of Common Stock are
held by Hanseatic for discretionary customer accounts. Information has been
derived from Amendment No. 7 to Schedule 13D, dated December 5, 1997.
(12) Includes 1,665,000 shares of Common Stock beneficially owned by Fidelity
Management & Research Company ("Fidelity"), a wholly-owned subsidiary of
FMR Corp. and a registered investment adviser (including 7,500 shares of
Common Stock owned by Fidelity American Special Situations Trust ("FASST"),
an English unit trust as to which Fidelity acts as a sub-adviser); 222,800
shares of Common Stock beneficially owned by Fidelity Management Trust
Company, a wholly-owned subsidiary of FMR Corp. and a bank; and 17,100
shares beneficially owned by Fidelity International Limited ("FIL"), a
Bermudan investment adviser and former majority-owned subsidiary of
Fidelity (including 7,500 shares of Common Stock owned by FASST, as to
which a subsidiary of FIL acts as an investment adviser). Edward C. Johnson
3d, Chairman of FMR Corp. and FIL, Abigail P. Johnson, a director of FMR
Corp., and members of the Johnson family may be deemed to form a
controlling group with respect to FMR Corp. Information has been derived
from Amendment No. 1 to Schedule 13G, dated March 10, 1998.
(13) Includes 1,136,700 shares of Common Stock beneficially owned by BAMCO,
Inc., a registered investment adviser as to which Baron Capital Group
("BCG") and Ronald Baron ("Baron"), President of BCG, may be deemed parent
holding companies; and 48,000 shares of Common Stock beneficially owned by
Baron Capital Management, Inc., a registered investment adviser as to which
BCG and Baron may be deemed parent holding companies. Information has been
derived from Schedule 13G, dated February 17, 1998.
(14) Represents shares beneficially owned by Warburg Pincus Asset Management,
Inc., a registered investment adviser. Information has been derived from
Amendment No. 1 to Schedule 13G, dated January 12, 1998.
(15) The share amounts listed include shares of Common Stock that the following
persons have the right to acquire within 60 days from March 1, 1998 (Kieran
E. Burke, 239,238 shares (see footnote (2)); James F. Dannhauser, 44,000
shares (see footnote (4)); Gary Story, 118,000 shares (see footnote (6));
and all directors and officers as a group, 446,839 shares.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
officers and directors of the Company and persons who own more than ten-percent
of the Common Stock, to file initial statements of beneficial ownership (Form 3)
and statements of changes in beneficial ownership (Forms 4 or 5) of Common Stock
with the Securities and Exchange Commission (the "SEC"). Officers, directors and
greater than ten-percent stockholders are required by SEC regulations to furnish
the Company with copies of all such forms they file.
During 1997, the following officers of the Company inadvertently failed to
make all required filings on a timely basis: Hue Eichelberger, Richard Kipf,
David Thomas, Traci Blanks, John Gannon, Russell Kuteman
4
<PAGE> 7
and Lesley Hudson. All such required filings by such persons were subsequently
made. To the Company's knowledge, based solely on its review of the copies of
such forms received by it and written representations from certain reporting
persons that no additional forms were required for those persons, during 1997
all filing requirements applicable to all other officers, directors, and greater
than ten-percent beneficial owners were complied with.
------------------------
PROPOSAL 1: ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of eight members and,
from and after the Annual Meeting, will consist of seven members. At the Annual
Meeting seven directors are to be elected to serve for the ensuing year and
until their respective successors are elected and qualified. The persons named
in the enclosed proxy intend to vote for the election of the persons listed
below, unless the proxy is marked to indicate that such authorization is
expressly withheld. Should any of the listed persons be unable to accept
nomination or election (which the Board of Directors does not expect), it is the
intention of the persons named in the enclosed proxy to vote for the election of
such persons as the Board of Directors may recommend. Proxies cannot be voted
for a greater number of persons than the number of nominees named. The election
of directors requires a plurality vote of the shares of Common Stock represented
at the Annual Meeting.
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
AS OF YEAR
MARCH 1, ELECTED
NAME 1998 DIRECTOR POSITION WITH THE COMPANY
---- -------- -------- -------------------------
<S> <C> <C> <C>
Kieran E. Burke(1)........... 40 1989 Director, Chairman of the Board and Chief
Executive Officer
Gary Story(2)................ 42 1994 Director, President and Chief Operating Officer
James F. Dannhauser(3)....... 45 1992 Director and Chief Financial Officer
Paul A. Biddelman(4)......... 52 1992 Director
Michael E. Gellert(5)........ 66 1989 Director
Charles R. Wood(6)........... 83 1997 Director
Sandy Gurtler(7)............. 48 1997 Director
</TABLE>
- ---------------
(1) Mr. Burke has served as Chief Executive Officer and a Director of the
Company since October 1989 and Chairman of the Board since June 1994. From
1989 through June 1994, he was President of the Company. Mr. Burke also
serves as a director of Blue Ridge Real Estate Company and Big Boulder
Corporation. Mr. Burke is a member of the board of directors of the
International Association of Amusement Parks & Attractions.
(2) Mr. Story has served as President and a Director of the Company since June
1994 and as Chief Operating Officer since January 1992. From January 1992
through June 1994, he also served as the Company's Executive Vice President.
(3) Mr. Dannhauser became Chief Financial Officer of the Company in October 1995
and has served as a Director of the Company since December 1992. From 1990
through June 1996, Mr. Dannhauser was a managing director of Lepercq de
Neuflize & Co. Incorporated, an investment banking firm ("Lepercq"). Mr.
Dannhauser is a member of the board of directors of Lepercq.
(4) Mr. Biddelman has served as a Director of the Company since December 1992.
Since December 1997, Mr. Biddelman has been president of Hanseatic
Corporation ("Hanseatic"), a private investment
5
<PAGE> 8
company. Prior to that date, he was treasurer of Hanseatic for more than
five years. Mr. Biddelman also serves as a director of Electronic Retailing
Systems International, Inc., Insituform Technologies, Inc., Celadon Group,
Inc., Petroleum Heat and Power Co., Inc. and Star Gas Corporation (general
partner of Star Gas Partners, L.P.).
(5) Mr. Gellert has served as a Director of the Company since March 1989. He
previously served as a Director of the Company and as a Trustee of Tierco, a
Massachusetts business trust and predecessor of the Company, from 1979 until
1986. From June 1989 through June 1994, he also served as the Chairman of
the Board of the Company. Mr. Gellert is a general partner of Windcrest, a
private investment partnership. Mr. Gellert also serves as a director of
Devon Energy Corp., Humana Inc., Seacor Holdings, Inc., Regal Cinemas, Inc.
and The Putnam Trust Company of Greenwich Advisory Board of
The Bank of New York.
(6) Mr. Wood has served as a Director of the Company since June 1997. Mr. Wood
is the President and sole shareholder of Storytown USA, Inc. and Fantasy
Rides Corporation, which collectively owned The Great Escape and Splash
Water Kingdom in Lake George, New York prior to the acquisition of the park
by the Company in December 1996. Mr. Wood serves as a consultant to the
Company and owns, directly or through wholly-owned corporations, a variety
of businesses in the Lake George area, including real estate, motels,
restaurants and an action park.
(7) Mr. Gurtler has served as a Director of the Company since June 1997. Mr.
Gurtler is the chief executive officer, a director and shareholder of
Chilcott Entertainment Corp., which was the general partner of the owner of
Elitch Gardens Amusement Park in Denver, Colorado prior to the acquisition
of the park by the Company in October 1996. Mr. Gurtler also serves as a
consultant to the Company.
------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1997, the Company's Board of Directors
held eight meetings. During 1997, each of the directors of the Company attended
all of the meetings of the Board of Directors and all meetings of committees of
the Board of which such director was a member.
The Board has designated an Executive Committee, a Compensation Committee
and an Audit Committee. The members of the Executive Committee at March 1, 1998
were Messrs. Burke, Biddelman and Gellert. The Executive Committee, which was
established in June 1997, meets informally on a regular basis and met formally
during 1997 on four occasions. Subject to applicable law, the Executive
Committee is authorized to take any action that can be taken by the entire
Board.
The members of the Compensation Committee at March 1, 1998 were Messrs.
Biddelman and Tyrrell. The Compensation Committee, which met twice during 1997,
reviews management's recommendations with respect to executive compensation and
employee benefits and makes recommendations to the Board as to such matters.
Additionally, the Compensation Committee approved the 1997 employment agreements
between the Company and its senior executive officers described under "Executive
Compensation," administers the Company's 1996 Stock Option and Incentive Plan
(the "1996 Stock Incentive Plan") and will administer the Company's 1998 Stock
Option and Incentive Plan (the "1998 Stock Incentive Plan") if such plan is
approved at the Annual Meeting. The 1996 Stock Incentive Plan and the 1998 Stock
Incentive Plan are hereinafter collectively sometimes referred to as the "Stock
Incentive Plans." See "Executive Compensation," "Proposal 4 -- 1998 Stock
Incentive Plan" and "Proposal 5 -- 1996 Stock Incentive Plan."
The members of the Audit Committee at March 1, 1998 were Messrs. Gellert
and Tyrrell. The Audit Committee, which met once during 1997, recommends to the
Board the accounting firm to be selected by the Board as independent public
accountants of the Company, and acts on behalf of the Board in reviewing with
6
<PAGE> 9
the independent public accountants, the chief financial officer of the Company
and other appropriate corporate officers, matters relating to corporate
financial reporting and accounting procedures and policies, and the adequacy of
financial, accounting and operating controls. The Audit Committee reviews the
results of audits with the Company's independent public accountants and reports
thereon to the Board. The Audit Committee also submits to the Board
recommendations it may have from time to time with respect to financial
reporting and accounting practices and policies and financial, accounting and
operating controls and safeguards.
COMPENSATION OF DIRECTORS
Each of the Company's directors who are not employees or consultants of the
Company receives $15,000 annually for serving on the Board, payable in cash or
shares of Common Stock. During 1997, the Company paid an aggregate of $45,000 in
such fees to its three outside directors. See "Proposal 6 -- Independent
Director Fees." Directors are also reimbursed for expenses attendant to Board
and Committee membership.
EXECUTIVE COMPENSATION
The following table discloses compensation received by the Company's Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer and
Executive Vice President for the three years (two years, in the case of the
Executive Vice President) ended December 31, 1997. Such officers were the only
executive officers of the Company during 1997 whose annual salary and bonus
exceeded $100,000 in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
RESTRICTED SECURITIES
STOCK UNDERLYING
SALARY BONUS OTHER ANNUAL AWARD(S) OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) COMPENSATION ($) (#) COMPENSATION
- --------------------------- ---- -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kieran E. Burke............ 1997 $400,000 $529,692 $5,482,823(1) -- (2)
Chairman of the Board, 1996 350,000 300,000 -- -- 125,000 (2)
Chief Executive Officer 1995 307,500 150,000 -- -- 100,000 (2)
and Director
Gary Story................. 1997 $300,000 $453,438 -- $4,837,500(3) -- (2)
President, Chief
Operating 1996 254,304 250,000 -- -- 80,000 (2)
Officer and Director 1995 214,583 100,000 -- -- 50,000 (2)
James F. Dannhauser(4)..... 1997 $250,000 $378,546 -- $4,192,178(5) -- (2)
Chief Financial Officer 1996 162,500 200,000 -- -- 50,000 (2)
and Director 1995 31,250 -- -- -- 40,000 (2)
Hue W. Eichelberger(6)..... 1997 $145,000 $140,000 -- -- -- (2)
Executive Vice President 1996 110,000 15,000 -- -- 10,000 (2)
</TABLE>
- ---------------
(1) As of December 31, 1997, Mr. Burke had been granted 170,010 restricted
shares of Common Stock, all of which were granted to Mr. Burke on July 31,
1997 pursuant to an employment agreement described below. The restrictions
on 28,335 restricted shares lapsed on January 1, 1998, and will lapse on
January 1 of each of 1999, 2000, 2001, 2002 and 2003. Dividends will be paid
on the restricted shares whether or not the restrictions thereon have lapsed
if and when such dividends are declared on the Company's Common Stock. Based
on the closing price of the Common Stock (as reported on the New York Stock
Exchange (the "NYSE")) on December 31, 1997, the aggregate market value of
all such restricted shares on that date totaled $6,885,405.
(2) The Company has concluded that, as to each named executive officer for each
year shown, all personal benefits paid or provided did not exceed the lesser
of $50,000 or 10% of the salary and bonus reported for
7
<PAGE> 10
such officer above. During 1997, the Company did not have any defined
contribution plans or pension or other defined benefit or retirement plans,
other than a qualified, contributory 401(k) plan. After specified periods of
employment, all regular employees are eligible to participate in the 401(k)
plan. Commencing in 1996, the Company matched 100% of the first 2% of and
25% of the next 6% of contributions by employees to the plan. The accounts
of all participating employees are fully vested. Amounts shown as salary
for 1996 and 1997 for each named executive officer (other than Messrs Burke
and Dannhauser who did not participate in the plan) include the Company's
matching contribution for such officer.
(3) As of December 31, 1997, Mr. Story had been granted 150,000 restricted
shares of Common Stock, all of which were granted to Mr. Story on July 31,
1997 pursuant to an employment agreement described below. The restrictions
on 25,000 restricted shares lapsed on January 1, 1998, and will lapse on
January 1 of each of 1999, 2000, 2001, 2002 and 2003. Dividends will be paid
on the restricted shares whether or not the restrictions thereon have lapsed
if and when such dividends are declared on the Company's Common Stock. Based
on the closing price of the Common Stock (as reported on the NYSE) on
December 31, 1997, the aggregate market value of all such restricted shares
on that date totaled $6,075,000.
(4) James F. Dannhauser became Chief Financial Officer of the Company on October
1, 1995. Prior to that date, he was not employed by the Company.
(5) As of December 31, 1997, Mr. Dannhauser had been granted 129,990 restricted
shares of Common Stock, all of which were granted to Mr. Dannhauser on July
31, 1997 pursuant to an employment agreement described below. The
restrictions on 21,665 restricted shares lapsed on January 1, 1998, and will
lapse on January 1 of each of 1999, 2000, 2001, 2002 and 2003. Dividends
will be paid on the restricted shares whether or not the restrictions
thereon have lapsed if and when such dividends are declared on the Company's
Common Stock. Based on the closing price of the Common Stock (as reported on
the NYSE) on December 31, 1997, the aggregate market value of all such
restricted shares on that date totaled $5,264,595.
(6) Mr. Eichelberger became Executive Vice President of the Company in October
1996.
AGGREGATE OPTION EXERCISES AND OPTION VALUES
The following table provides information on stock options and warrants
("Options") exercised in 1997 by each of the named executive officers and the
value of such officers' unexercised Options at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997(#) DECEMBER 31, 1997($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kieran E. Burke....... -- -- 239,238 117,000 $7,608,101 $2,743,500
Gary Story............ -- -- 118,000 72,000 $3,507,500 $1,665,000
James F. Dannhauser... -- -- 44,000 46,000 $1,144,000 $1,071,000
Hue W. Eichelberger... -- -- 21,200 10,800 $ 657,100 $ 266,400
</TABLE>
- ---------------
(1) Amount shown is based on $40.50 per share, the closing price of the Common
Stock (as reported on the NYSE) on December 31, 1997.
8
<PAGE> 11
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Messrs
Burke, Story and Dannhauser, dated as of July 31, 1997, for the three-year
period ending December 31, 1999. The agreement provides that such executive
officers will receive base salaries for 1997, in the amounts listed in the
Summary Compensation Table above, increasing each succeeding year during the
term of the agreement. Such executive officers will also be entitled to annual
bonuses to be based on the amount by which the Company's earnings before
interest, taxes, depreciation and amortization ("EBITDA") exceed budgeted
amounts. In addition, the agreements provide for the grant to each such
executive officer of the restricted shares of Common Stock listed in the Summary
Compensation Table above, on the terms and conditions referred to therein. The
agreements contemplate the grant of up to an equal number of additional shares
of restricted stock to each executive officer in the discretion of the
Compensation Committee. In the event of a "Change of Control" of the Company (as
defined), the executives are entitled to receive, subject to certain conditions,
all shares of restricted stock contemplated by the employment agreements
(whether or not previously granted) and all restrictions with respect thereto
immediately lapse. In addition, if the executives' employments are terminated
under certain circumstances (including certain circumstances following such a
Change of Control), the Company is required to pay each executive a lump sum
amount equal to three times his prior year's cash compensation. The agreements
subject the executive officers to standard non-disclosure and non-compete
requirements.
As more fully described in the accompanying Annual Report, in 1998, the
Company entered into a series of transactions, including its acquisition of Six
Flags Entertainment Corporation, that dramatically increased the size of the
Company's operations and capital base. These transactions, as of the date of
this Proxy Statement, also resulted in a substantial increase in the market
price of the Common Stock. Following the Annual Meeting, the Board of Directors
intends to consider amending the employment agreements with each of the
Company's Chief Executive Officer, Chief Operating Officer and Chief Financial
Officer in light of the efforts of these individuals in connection with such
transactions. These amendments may include the payment of substantial cash
bonuses in 1998 to such individuals (in addition to the bonuses described above)
and the grant to them of the additional restricted shares of Common Stock
contemplated by the employment agreements described above.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors administers the
Company's executive compensation program.
The goals of the Company's executive compensation program are to:
- Provide compensation levels that enable the Company to attract, retain
and motivate its executives;
- Tie individual compensation to individual performance and the success
of the Company; and
- Align executives' financial interests with those of the Company's
stockholders through equity participation.
Employment Agreements
In June 1997, each of the Compensation Committee and the Board of Directors
approved the terms of the employment agreements entered into with the Company's
three senior executive officers. In each case, the Compensation Committee
decided that it was in the Company's best interest to assure the Company the
continued services of these executives on a long-term basis. In approving the
terms of these agreements, the
9
<PAGE> 12
Compensation Committee considered not only the Company's compensation goals
referred to above, but also levels and methods of compensation provided by
certain companies comparable in size and lines of business to the Company.
Additionally, the Compensation Committee considered each executive's historical
performance, length of tenure, prior experience and level of responsibility. All
compensation paid to these executives with respect to 1997 was based on the
contractual provisions. Based on his employment agreement, the Chief Executive
Officer received a base salary of $400,000 and a bonus of $529,692 with respect
to 1997, as compared to $350,000 and $300,000, respectively, with respect to
1996.
Salaries
The base salary of each executive officer who does not have an employment
agreement is reviewed annually based on management recommendations, and data
regarding the salaries of executives with similar responsibilities in certain
companies comparable in size or in lines of business. In addition, the
Compensation Committee considers individual performance, length of tenure, prior
experience and level of responsibility. None of these factors is assigned a
specific weight.
Incentive Compensation
The Company does not have a formal cash incentive compensation program for
executives who do not have employment agreements, but does award annual cash
bonuses to selected employees. Annual bonuses for such executives are
recommended to the Compensation Committee by the Chairman at the end of each
year. Individual bonus awards are based on Company-wide and individual
performance for the previous fiscal year, taking into account both qualitative
and quantitative factors. Quantitative factors include revenues and EBITDA.
Qualitative factors include initiative, business judgment, level of
responsibility and management skills.
Long-Term Incentive
In 1997, the Company's Compensation Committee did not authorize the
granting of Options to purchase any shares of Common Stock, but did approve the
grants of restricted stock to the Company's senior executive officers under the
employment agreements described above. In determining the number of shares or
Options granted, the Compensation Committee considers the level of each
recipient's responsibility, the recipient's actual and potential impact on the
Company's performance, as well as the number of shares or Options granted in
prior years. The Company does not have a target ownership level for equity
holdings in the Company by senior management and other key employees.
Paul A. Biddelman
Jack Tyrrell
CERTAIN TRANSACTIONS INVOLVING MEMBERS OF THE COMPENSATION COMMITTEE
As more fully disclosed under "Certain Transactions," in 1997, the Company
paid a commitment fee of $100,000 to Hanseatic and issued 1,586 shares of Common
Stock to Richland II in satisfaction of the commitment fee owned to it. Paul A.
Biddelman, a director and member of the Compensation Committee, is the President
of Hanseatic, and Jack Tyrrell, a director and member of the Compensation
Committee, is a general partner of Richland II.
10
<PAGE> 13
PERFORMANCE GRAPH
The following table shows a comparison of the five year cumulative total
return to stockholders (assuming all dividends were reinvested) for the Company,
the Standard & Poor's ("S&P") 500 Stock Index and the Standard & Poor's
Entertainment -- 500 Index. During the period October 1990 through June 1994, no
trading market existed for the Common Stock and the Company was unable to obtain
any price quotations for its Common Stock. Subsequent to June 1994, the Pink
Sheets(R) and the OTC Bulletin Board commenced reporting of bid and asked
quotations for the Company's Common Stock under the symbol PARKD. These
quotations reflect inter-dealer prices, without mark-up, mark-down or commission
and do not necessarily represent actual transactions. On May 30, 1996, the
Company commenced a public offering of shares of Common Stock at a public
offering price of $18.00 per share. From that date until December 19, 1997, the
Common Stock was traded on the Nasdaq National Market under the symbol "PARK."
Since December 22, 1997, the Common Stock has been traded on the NYSE under the
symbol "PKS."
<TABLE>
<CAPTION>
Measurement Period Premier Parks S&P 500 Stock S&P Entertainment
(Fiscal Year Covered) Inc.* Index -500 Index
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 110.08 115.58
1994 163.64 111.53 110.24
1995 381.82 153.45 132.44
1996 1090.31 188.68 134.48
1997 1374.56 251.63 196.22
</TABLE>
<TABLE>
<CAPTION>
BASE
PERIOD RETURN RETURN RETURN RETURN RETURN
COMPANY/INDEX NAME 1992 1993 1994 1995 1996 1997
------------------ ------ ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Premier Parks Inc.*........................... 100 NA 163.64 381.82 1,090.31 1,374.56
S&P 500 Stock Index........................... 100 110.08 111.53 153.45 188.68 251.63
S&P Entertainment--500 Index.................. 100 115.58 110.24 132.44 134.48 196.22
</TABLE>
- ---------------
* The Common Stock was not publicly traded between October 15, 1990 and June
1994. The return for 1994 was calculated using a beginning point of the
October 15, 1990 price.
11
<PAGE> 14
CERTAIN TRANSACTIONS
In November 1990, the Company entered into an office lease. A portion of
the office space is used by Windcrest. The Company and Windcrest have agreed to
allocate 50% of the monthly rental payments to Windcrest. During 1997, Windcrest
paid the Company approximately $64,000 with respect to such office space.
On October 31, 1996, the Company acquired substantially all of the assets
used in the operation of Elitch Gardens Amusement Park ("Elitch Gardens"). Sandy
Gurtler, a director of the Company, was the president, a director and a
shareholder of the general partner of the partnership that owned these assets
prior to the transaction. In connection with the acquisition of Elitch Gardens,
the Company entered into a five-year consulting agreement with Mr. Gurtler under
which $100,000 of consulting fees were paid to Mr. Gurtler in 1997.
On December 4, 1996, the Company acquired substantially all of the assets
used in the operation of The Great Escape and Splashwater Kingdom ("The Great
Escape"). Charles R. Wood, a director of the Company, was the sole shareholder
of the entities that owned these assets prior to the transaction. In connection
with the acquisition of The Great Escape, the Company entered into a five-year
consulting agreement with Mr. Wood under which $250,000 of consulting fees were
paid to Mr. Wood in 1997.
During 1996, certain of the Company's principal stockholders agreed that,
if required by the Company, they would purchase shares of preferred stock of the
Company to fund the purchase price of the Company's acquisition in February 1997
of Riverside Park. Although the preferred stock issuance was not consummated,
each participating stockholder was entitled to a fee, payable in cash or shares
of Common Stock, equal to 1% of the dollar amount of such stockholder's
commitment. Pursuant to this arrangement, in 1997 the Company paid a $100,000
fee to Hanseatic and issued 1,586 shares of Common Stock to Richland II and 634
shares to Michael E. Gellert. Paul A. Biddelman is the President of Hanseatic
and Jack Tyrrell is a general partner of Richland II. Messrs. Biddelman, Tyrrell
and Gellert are directors of the Company.
PROPOSAL 2: AMENDMENT OF ARTICLE IV OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
GENERAL
The Company presently is authorized to issue 90,000,000 shares of Common
Stock, par value $.05 per share and 500,000 shares of Preferred Stock, par value
$1.00 per share. As of April 24, 1998, there were issued and outstanding
37,497,566 shares of Common Stock and 11,500 shares of Preferred Stock. The
Board of Directors of the Company has adopted resolutions authorizing an
amendment (the "Amendment") to the Company's Certificate of Incorporation
approving (i) a split of the Company's outstanding Common Stock on the basis of
two (2) new shares of Common Stock of the Company for each one (1) share of
presently outstanding Common Stock and (ii) an increase in the number of
authorized shares of Common Stock from 90,000,000 "old" shares to 150,000,000
"new" shares and in the number of authorized shares of the Company's Preferred
Stock from 500,000 shares to 5,000,000. For the reasons stated below, the Board
of Directors of the Company has unanimously approved the proposed Amendment and
recommends it to stockholders for adoption. The form of the Amendment is
attached hereto as Exhibit A. The post-split common stock is referred to
hereinafter as the "New Common Stock" and the pre-split common stock is referred
to hereinafter as the "Common Stock."
12
<PAGE> 15
PURPOSE FOR PROPOSED AMENDMENT
Reasons for the Stock Split
The Board of Directors believes that the proposed two-for-one stock split
will enhance the liquidity of the trading market for the Company's Common Stock
by doubling the number of outstanding shares, thus proportionately increasing
the public "float" and decreasing the potential market impact of any particular
transaction involving the Common Stock. Moreover, the Board believes that, since
the market price per share of the New Common Stock immediately following the
effective date of the Amendment is expected to be approximately one-half of the
market price per share of Common Stock immediately prior thereto, the New Common
Stock will be more attractive to a larger number of noninstitutional investors,
thus potentially expanding the Company's stockholder base. Moreover, the
expected reduced market price per share could enhance the Company's ability to
issue New Common Stock as discussed below.
Reasons for the Change in Authorized Shares
As shown in the first table presented under "Principal Effects" below, the
stock split (without the related increase in authorized shares of New Common
Stock) would substantially reduce the number of shares of New Common Stock
available for future issuance. The proposed increase in authorized shares of New
Common Stock will offset this reduction and provide an approximate 15.4 million
additional available shares. As demonstrated in the second table presented under
"Principal Effects" below, the Amendment will result in an increased number of
authorized but unissued and unreserved shares of Preferred Stock from 467,860
shares to 4,967,860 shares. The increased number of authorized, but unissued and
unreserved shares, will permit the Company to issue additional shares of New
Common Stock and Preferred Stock as the need may arise without the delay and
expense associated with the holding of a special meeting of stockholders at the
time such additional shares are needed. The Board believes that the availability
of such additional shares will provide the Company with the flexibility to issue
New Common Stock and/or Preferred Stock for a variety of proper corporate
purposes, including the sale of shares to raise additional capital, shares
issued in acquisitions of property or businesses (including mergers), the use of
New Common Stock and/or Preferred Stock as incentive compensation and the making
of stock dividends or other distributions or recapitalizations. The Company has
no present intention to issue any shares of New Common Stock or Preferred Stock,
except pursuant to existing rights to acquire such shares. Unless required by
law, by the terms of the Company's then outstanding Preferred Stock, by
regulatory authorities, or by rules of any stock exchange on which the Company's
securities may then be listed, no further vote of stockholders will be required
for any such share issuance. Subject to limitations established by the terms of
the Company's outstanding Preferred Stock, the Company's Board of Directors will
determine the dividend rate, conversion price, voting rights and redemption
provisions relating to any such issuance of Preferred Stock. The issuance of
additional shares may have a dilutive effect on earnings per share and on the
equity of present holders of Common Stock and their voting rights. Holders of
Common Stock are not entitled to any preemptive rights.
PRINCIPAL EFFECTS
The Company is presently authorized to issue 90,000,000 shares of Common
Stock, $.05 par value per share. The Amendment will change the number of
authorized shares to 150,000,000 shares of New Common Stock. The par value of
the New Common Stock will be $0.025 per share upon effectiveness of the
Amendment. At the close of business on April 24, 1998, there were 37,497,566
shares of Common Stock outstanding. The stock split will increase the
outstanding shares of Common Stock by 100%, to 74,995,132 shares of New Common
Stock. The Amendment will not affect any stockholder's proportionate equity
interest in the Company. Upon effectiveness of the Amendment, all outstanding
options, rights and warrants to acquire
13
<PAGE> 16
Common Stock (including conversion rights of the outstanding Preferred Stock)
will be adjusted automatically to entitle the holders thereof to purchase
proportionately more shares of New Common Stock at a proportionately lower
exercise or purchase price.
The following table illustrates the principal effects of the proposed
Amendment on the Company's Common Stock.
<TABLE>
<CAPTION>
AFTER STOCK SPLIT,
CURRENT BEFORE INCREASE IN AFTER
NUMBER OF SHARES OF COMMON STOCK STRUCTURE AUTHORIZED SHARES AMENDMENT
-------------------------------- ---------- ------------------ -----------
<S> <C> <C> <C>
Authorized.......................................... 90,000,000 90,000,000 150,000,000
Outstanding......................................... 37,497,566 74,995,132 74,995,132
Reserved for future issuance(1)..................... 7,065,032 14,130,076 14,130,076
---------- ---------- -----------
Available for future issuance by action of the Board
of Directors (after giving effect to the above
reservations)..................................... 45,437,396 874,792 60,874,792
========== ========== ===========
</TABLE>
- ---------------
(1) Includes: (i) 6,559,738 shares (13,119,476 shares after the stock split)
reserved for future issuance upon conversion of outstanding Preferred Stock
and exercise of outstanding warrants and options, and (ii) 505,300 shares
(1,100,600 shares after the stock split) reserved for future issuance in
connection with future grants under the 1996 Stock Incentive Plan. Excludes:
(i) shares issuable in the future as dividends on outstanding Preferred
Stock, which are payable in cash or by delivery of shares, (ii) up to
approximately 224,500 shares (449,000 shares after the stock split)
initially issuable in the Company's tender offer for all shares of Walibi
S.A. not owned by the Company, and (iii) shares issuable to sellers of
certain previously acquired parks based on future performance thereof.
The Company is presently authorized to issue 500,000 shares of Preferred
Stock, par value $1.00 per share. The Amendment will increase the number of
authorized shares to 5,000,000 shares, par value $1.00 per share. At the close
of business on April 24, 1998 there were 11,500 shares of Preferred Stock
outstanding. At such date, the Company had reserved 20,640 shares of Preferred
Stock for issuance upon exercise of rights pursuant to the Company's Rights
Agreement (as defined below). As demonstrated by the following chart, the
Amendment will result in a substantial increase in the availability of unissued,
unreserved shares of Preferred Stock.
<TABLE>
<CAPTION>
CURRENT AFTER
NUMBER OF SHARES OF PREFERRED STOCK STRUCTURE AMENDMENT
----------------------------------- --------- ---------
<S> <C> <C>
Authorized.................................................. 500,000 5,000,000
Outstanding................................................. 11,500 11,500
Reserved for future issuance upon exercise of rights
pursuant to Rights Agreement.............................. 20,640 20,640
------- ---------
Available for future issue by action of the Board of
Directors (after giving effect to the above
reservations)............................................. 467,860 4,967,860
======= =========
</TABLE>
The ability of the Board of Directors to issue additional shares of stock
could enhance the Board's ability to negotiate on behalf of the stockholders in
a takeover situation. Although it is not the purpose of the proposed Amendment,
the authorized but unissued shares of New Common Stock (as well as the
authorized but unissued shares of Preferred Stock) also could be used by the
Board of Directors to discourage, delay or make more difficult a change in the
control of the Company. The issuance of additional shares might serve to dilute
the stock ownership of persons seeking to obtain control and thereby increase
the cost of acquiring a given percentage of the outstanding stock. The Company
has previously adopted certain measures that may have the effect of delaying,
hindering or discouraging an unsolicited takeover attempt, including a dividend
14
<PAGE> 17
distributed to the holders of the Company's Common Stock consisting of rights to
purchase the Company's Series A Junior Preferred Stock upon the terms and
conditions set forth in the Rights Agreement. The Board of Directors is not
aware of any pending or proposed effort to acquire control of the Company.
In accordance with the terms of the Company's outstanding Preferred Stock,
its Stock Incentive Plans and other outstanding obligations to issue shares of
Common Stock, upon the effectiveness of the Amendment, appropriate adjustments
will be made to the number of shares of New Common Stock reserved for issuance
pursuant to such plans or obligations and the exercise or purchase price
thereof. The stock split will also have the effect of adjusting the outstanding
rights granted to the holders of Common Stock under the terms of the Rights
Agreement between the Company and Bank One Trust Company, N.A. (the "Rights
Agreement"). Such rights are currently represented by the stock certificates
representing the Common Stock. Upon effectiveness of the Amendment, each share
of Common Stock, which prior thereto represented the right to purchase one
one-thousandth of a share of Series A Junior Preferred Stock, will thereafter
represent the right to purchase one two-thousandth of a share of such stock.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the effective date of the Amendment, Common
Stockholders will be notified and requested to surrender their present Common
Stock certificates for new certificates representing shares of New Common Stock.
Until so surrendered, each current certificate representing shares of Common
Stock will be deemed for all purposes after the effective date to evidence
ownership of shares of the New Common Stock in the appropriately increased
number. Bank One Trust Company N.A., located in Oklahoma City, Oklahoma, has
been appointed to act as exchange agent for the Common Stockholders in effecting
the exchange of their certificates.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of the stock split component of the
Amendment are as follows: (i) the stock split will not result in the recognition
of gain or loss by the Company or any of its stockholders; (ii) a Common
Stockholder's total basis in shares of New Common Stock received from the
Company will be the same as the existing basis in the shares of Common Stock
previously held; and (iii) a Common Stockholder's holding period or periods for
shares of New Common Stock will include the holding period or periods of a
proportionate number of shares of the stockholder's Common Stock.
The foregoing information is based upon existing law, which is subject to
change by legislation, administrative action and judicial decision and is
necessarily general. The preceding paragraph is a general description of the
federal income tax consequences of the stock split. It does not take into
account state, local or foreign tax consequences and does not take into account
special rules that may apply to a stockholder's individual tax circumstances.
Therefore, Common Stockholders are advised to consult with their own tax advisor
for more detailed information relating to their individual tax circumstances.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL 2.
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF THE
COMPANY'S COMMON STOCK IS REQUIRED FOR APPROVAL OF THE AMENDMENT.
------------------------
15
<PAGE> 18
PROPOSAL 3: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP ("KPMG"), certified public accountants, audited the
Company's consolidated financial statements for the fiscal year ended December
31, 1997. The Board of Directors has appointed KPMG to audit the Company's
consolidated financial statements for the fiscal year ending December 31, 1998,
and recommends that the stockholders vote for ratification of such appointment.
The ratification requires the affirmative vote of a majority of the shares of
Common Stock represented at the Annual Meeting. In the event the ratification is
not approved, the Board of Directors will reconsider its selection.
Representatives of KPMG are expected to attend the Annual Meeting and will make
a statement and/or respond to appropriate questions from shareholders present at
such meeting.
------------------------
PROPOSAL 4: 1998 STOCK INCENTIVE PLAN
GENERAL
The Board of Directors has adopted resolutions authorizing the Company's
1998 Stock Option and Incentive Plan (the "Plan"), a copy of which is annexed
hereto as Exhibit B. The Plan is intended to help the Company to attract, retain
and motivate key employees (including officers) of the Company.
The Plan provides for the grant of options ("Options") to purchase Common
Stock that are intended to qualify as incentive stock options ("Incentive
Options") under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), as well as options that do not so qualify ("Non-Qualified
Options"). The Plan also provides for the grant of stock appreciation rights
("SARs") in tandem with Options. An SAR granted in tandem with an Option (a
"tandem SAR") permits an optionee to surrender his Option to the Company for
cancellation and receive an amount (in cash or shares of Common Stock) equal to
the excess, if any, of (i) the fair market value at the time of surrender of the
shares of Common Stock subject to the Option over (ii) the exercise price of the
Option.
GRANTS PURSUANT TO THE PLAN
Under the Plan, the Company will reserve 4,000,000 shares of New Common
Stock (or 2,000,000 shares of Common Stock if the Amendment is not approved) for
issuance of Options from time to time to key employees of the Company and its
subsidiaries. Options granted thereunder will generally have a term of seven
years and an exercise price equal to the fair market value of the Common Stock
on the date of grant of the Options, as determined by the Compensation
Committee. The Options will generally become exercisable 20% upon grant and 20%
per year after each of the next four years. If individual Option agreements so
provide, Options will become fully exercisable following a "change of control"
of the Company.
BACKGROUND OF SHAREHOLDER APPROVAL REQUIREMENT
Stockholder approval of the Plan is required for options granted under the
Plan to qualify as Incentive Options under Section 422 of the Code. For this
purpose, stockholders must approve a plan that designates the aggregate number
of shares which may be issued under the plan and the class of employees eligible
to receive options under the plan. Stockholder approval must be obtained within
12 months after adoption of the plan by the Board of Directors. In addition,
stockholder approval of the Plan is required in order for transactions by
optionees with respect to the Options and underlying shares to be exempt from
certain requirements under Section 16(b) of the Exchange Act.
16
<PAGE> 19
Section 162(m) of the Code disallows a tax deduction for compensation in
excess of $1 million that is paid to certain employees of a corporation whose
common stock is subject to the registration requirement of Section 12 of the
Exchange Act. However, this limitation does not apply to "qualified
performance-based compensation." Pursuant to Treasury Regulation Section
1.162-27 promulgated under Section 162(m) of the Code, in order for grants under
the Plan to satisfy the requirements to be "qualified performance-based
compensation," it is necessary to obtain stockholder approval of the class of
employees eligible to receive grants under the Plan, the business criteria to be
used in making such grants (except in the case of options or SARs for which the
exercise price is equal to the fair market value of the underlying stock on the
grant date), the maximum number of shares with respect to which grants can be
made to any one employee under the Plan and the exercise price of any Options or
SARs or stock purchase price of any incentive stock awards. Another requirement
for "qualified performance-based compensation" is that grants under the plan be
made by a compensation committee consisting solely of two or more "outside
directors," within the meaning of Treasury Regulation Section 1.162-27(e)(3).
The Company does not presently intend either to grant Options or SARs with
an exercise price that is less than the fair market value of the Common Stock on
the date of grant or to make incentive stock awards to purchase Common Stock at
below market prices. Any such Options or SARs that are granted or incentive
stock awards that are made will not satisfy the "qualified performance-based
compensation" exception to Section 162(m) absent stockholder approval of the
business criteria on which are based the performance goals that are the basis
for such grants or awards.
DESCRIPTION OF THE PLAN
The following is a summary of the principal features of the Plan. This
summary is qualified in its entirety by reference to the specific provisions of
the Plan, the full text of which is set forth in Exhibit B to this Proxy
Statement.
ADMINISTRATION OF THE PLAN
The Plan will be administered by the Compensation Committee which is
appointed by the Board of Directors. The Compensation Committee will at all
times consist of at least two members of the Board, neither of whom is or has
been eligible at any time for the grant of Options or SARs under the Plan and
each of whom is an "outside director" within the meaning of Treasury Regulation
Section 1.162-27(e)(3). The Compensation Committee is authorized to interpret
the Plan, adopt and amend rules and regulations relating to the Plan, and
determine the recipients, form, and terms of Options and SARs granted under the
Plan. All Options and SARs must be evidenced by a written agreement.
SHARES AVAILABLE
Under the Plan, the maximum number of shares of New Common Stock that may
be subject to Options or SARs may not exceed an aggregate of 4,000,000 shares
(or 2,000,000 shares if the Amendment is not approved). The maximum number of
shares will be adjusted in certain events, such as a stock split, reorganization
or recapitalization. If a tandem SAR is exercised, the Option that is
surrendered in connection with exercise of the SAR will terminate and the shares
subject to that Option will not be available for further issuance under the
Plan. If any Option or SAR granted under the Plan terminates for any reason or
expires before it is exercised in full, or if any shares sold under the Plan are
reacquired by the Company under a right established when the shares were sold,
the shares that had been reserved for such Option or SAR or the shares so
reacquired count toward the maximum number of shares issuable and cannot again
be issued under the
17
<PAGE> 20
Plan. A reduction of the exercise price of an Option is treated as the
expiration of the Option and issuance of a new Option.
No participant may be granted Options or other rights, including SARs and
incentive stock awards, to purchase more than 66 2/3% in the aggregate of the
number of shares of Common Stock authorized to be issued under the Plan, as
adjusted on account of certain events, such as a stock split, reorganization or
recapitalization. If stockholders approve an increase in the number of shares
authorized under the Plan, the 66 2/3% limitation will apply to the increased
number of shares so authorized.
ELIGIBILITY
Key employees (including officers and directors who are employees) of the
Company or its subsidiaries are eligible for the grant of Options and SARs under
the Plan. Directors who are not employees are not eligible to participate. In
the event of Incentive Options, the aggregate fair market value (determined at
the time the Option is granted) of the stock with respect to which Incentive
Options become exercisable for the first time by the Option holder (i.e., vest)
during any calendar year cannot exceed $100,000. This limit does not apply to
Non-Qualified Options and SARs. To the extent an Option that otherwise would be
an Incentive Option exceeds this $100,000 threshold, it will be treated as a
Non-Qualified Option.
EXERCISE PRICE OF OPTIONS
The Company will receive no monetary consideration for the grant of Options
under the Plan. In case of an Incentive Option, the exercise price cannot be
less than the fair market value of the shares on the date the Option is granted
(if an optionee is a beneficial holder of 10% or more of the Company's
outstanding Common Stock (a "10% Holder"), the exercise price of Incentive
Option cannot be less than 110% of such fair market value). The exercise price
of Non-Qualified Options shall be determined by the Compensation Committee, but
shall not be less than 50% of the fair market value of the Common Stock on the
date of grant. The exercise price of Options will be adjusted in certain events,
such as a stock split, reorganization or recapitalization. The Company does not
presently intend to issue any Options which have an exercise price that is less
than the fair market value of the underlying Common Stock on the date of grant.
PAYMENT UPON EXERCISE OF OPTIONS
Payment for shares purchased by exercising an Option is to be made in cash
or, if the individual Option agreement so provides, by the delivery of
promissory notes or the surrender of all or part of the Option to the Company in
exchange for a number of shares of Common Stock having a total fair market value
on the date of surrender equal to (i) the number of shares that could be
acquired by exercising the portion of the Option that is surrendered over (ii)
the aggregate exercise price that would otherwise be paid to the Company on a
cash exercise of the Option as to the number of shares surrendered. If
individual Option agreements so provide, payment of the exercise price also may
be made by delivery of shares of Common Stock valued at their fair market value
on the date of delivery.
TERM OF OPTIONS
The term of an Option cannot exceed ten years, and in the case of an
optionee who is a 10% Holder, cannot exceed five years.
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TERMINATION OF EMPLOYMENT
Individual option agreements generally will provide that the Options will
expire upon termination of employment except that (i) in the case of involuntary
termination that is not for cause, the Option will be exercisable for three
months after termination to the same extent that it was exercisable prior to
termination, (ii) in the case of termination due to disability, the Option will
be exercisable for one year after termination to the same extent that it was
exercisable prior to termination and (iii) in the case of death (including
during either the three month period referred to in (i) or the one year period
referred to in (ii)), the Option will be exercisable for one year after death to
the same extent exercisable on the date of death. After the death of an
optionee, the Option is exercisable by the legal representative of the optionee
or by the person that acquired the Option by reason of the death of the
optionee. Individual option agreements may provide that all Options will vest in
the event of a termination due to disability or death.
NON-TRANSFERABILITY OF OPTIONS
Options are not transferable by the optionee except to immediate family
members, trustees for their exclusive benefit, by will or by the laws of descent
and distribution. The disposition of shares acquired pursuant to the exercise of
an Option will be subject to any applicable restrictions on transferability
imposed by SEC regulations.
STOCK APPRECIATION RIGHTS
A tandem SAR cannot be exercised before the related Option is first
exercisable or after the related Option expires or is terminated. In addition,
an SAR can be exercised for cash only during the period beginning on the third
business day following the date of release for publication by the Company of
quarterly or annual summary statements of earnings and ending on the twelfth
business day following such day. Upon exercise of an SAR, payment to the holder
may be made in cash or shares of Common Stock, as the Compensation Committee
designates. SARs are not transferable except by will or the laws of descent and
distribution. The exercise of an SAR is subject to such further conditions and
limitations as the Compensation Committee may determine, including such
conditions on exercise as may be required to comply with Rule 16b-3 under the
Exchange Act.
DURATION OF THE PLAN
The Plan will terminate automatically and no Options or SARs may be granted
after ten years have elapsed from the earlier of the date the Plan was approved
by the Company's Board of Directors or the effective date of the Plan. The Plan
may be terminated at any prior time by the Board of Directors. Termination of
the Plan will not affect Options or SARs that were granted prior to the
termination date.
AMENDMENTS
The Plan may be amended from time to time by the Board of Directors.
However, no action of the Board may, without the approval of the Company's
stockholders, (i) materially increase the benefits accruing to participants
under the Plan, (ii) increase the number of shares that may be issued under the
Plan (except for certain adjustments that would not further dilute the interest
of any stockholder), or (iii) change the eligibility requirements for
participation in the Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary outlines certain federal income tax consequences of
the Plan to the Company and participants under present law.
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<PAGE> 22
INCENTIVE OPTIONS
A participant will not recognize income for federal income tax purposes
upon the grant of an Incentive Option. A participant also will not be taxed on
the exercise of an Incentive Option, provided that the Common Stock acquired
upon exercise of the Incentive Option is not sold by the participant within two
years after the Option was granted and one year after the Option is exercised
(the "required holding period").
However, for alternative minimum tax ("AMT") purposes, the difference
between the exercise price of the Incentive Option and the fair market value of
the Common Stock acquired upon exercise is an item of tax preference in the year
the Incentive Option is exercised. The participant is required to include such
amount in AMT income in such year and to compute the tax basis of the shares so
acquired in the same manner as if a Non-Qualified Stock Option had been
exercised, including the availability of a Section 83 election (discussed
below). Whether a participant will be liable for AMT in the year the Incentive
Option is exercised will depend on the participant's particular tax
circumstances. AMT paid in such year will be allowed as a credit to the extent
regular tax exceeds AMT in subsequent years.
On a sale, after the required holding period, of Common Stock that was
acquired by exercising an Incentive Option, the difference between the
participant's tax basis in the Common Stock and the amount received in the sale
is taxed as long-term capital gain or loss.
If Common Stock acquired upon the exercise of an Incentive Option is
disposed of by the participant during the required holding period (a
"disqualifying disposition"), the excess, if any, of (i) the amount realized on
such disposition (up to the fair market value of the Common Stock on the
exercise date) over (ii) the exercise price, will be taxed to the participant as
ordinary income. If a participant pays the exercise price of an Incentive Option
by delivering Common Stock that was previously acquired by exercising an
Incentive Option and such delivery occurs before the end of the required holding
period of such Common Stock, the participant is treated as making a disqualified
disposition of the Common Stock so delivered.
The Code puts a $100,000 limit on the value of stock subject to Incentive
Options that first become exercisable in any one year, based on the fair market
value of the underlying Common Stock on the date of grant. To the extent Options
exceed this limit, they are taxed as Non-Qualified Stock Options.
NON-QUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
A participant who receives a Non-Qualified Stock Option or SAR does not
recognize taxable income on the grant of the Option or SAR. Upon exercise of a
Non-Qualified Stock Option, a participant generally has ordinary income in an
amount equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price paid for the shares. Upon receipt of cash or
shares when an SAR is exercised, a participant generally has ordinary income in
an amount equal to the sum of the amount of cash and the fair market value of
the shares received.
However, if the participant (i) is an officer or director of the Company or
the beneficial owner of more than 10% of the Company's equity securities (in
each case, within the meaning of Section 16 of the Exchange Act -- as so
defined, an "Insider"), (ii) does not make a Section 83 election and (iii)
receives shares upon the exercise of a Non-Qualified Stock Option or SAR, the
recognition of income (and the determination of the amount of income) is
deferred until the earlier of (a) six months after the shares are acquired or
(b) the earliest date on which the Insider could sell the shares at a profit
without being subject to liability under Section 16(b) of the Exchange Act (six
months after the Non-Qualified Stock Option or SAR is granted, in the case of an
"in-the-money" Option or SAR). If the participant makes a Section 83 election,
income is not deferred. Rather, income is recognized on the date of exercise of
the Non-Qualified Stock Option or SAR in
20
<PAGE> 23
an amount equal to the excess of the fair market value of the shares acquired
upon exercise over the exercise price. A Section 83 election must be filed with
the Internal Revenue Service (the "IRS") within thirty (30) days after an Option
is exercised.
A participant's tax basis in shares received upon exercise of a
Non-Qualified Stock Option or SAR is equal to the amount of ordinary income
recognized on the receipt of the shares plus the amount of cash, if any, paid
upon exercise. The holding period for the shares begins on the day after the
shares are received or, in the case of an Insider that has not made a Section 83
election, on the day after the date on which income is recognized by the Insider
on account of the receipt of the shares.
If a participant exercises a Non-Qualified Stock Option by delivering
previously held shares in payment of the exercise price, the participant does
not recognize gain or loss on the delivered shares, even if their fair market
value is different from the participant's tax basis in the shares. The exercise
of the Non-Qualified Stock Option is taxed however, and the Company generally is
entitled to a deduction, in the same amount and at the same time as if the
participant had paid the exercise price in cash. Provided the participant
receives a separate identifiable stock certificate therefor, his tax basis in
the number of shares received that is equal to the number of shares surrendered
on exercise will be the same as his tax basis in the shares surrendered. His
holding period for such number of shares will include his holding period for the
shares surrendered. The participant's tax basis and holding period for the
additional shares received upon exercise will be the same as it would have been
if the participant had paid the exercise price in cash.
If a participant receives shares upon the exercise of a Non-Qualified Stock
Option or SAR and thereafter disposes of the shares in a taxable transaction,
the difference between the amount realized on the disposition and the
participant's tax basis in the shares is taxed as capital gain or loss (provided
the shares are held as a capital asset on the date of disposition), which is
long-term or short-term depending on the participant's holding period for the
shares.
DEDUCTION BY THE COMPANY
The Company is not allowed a federal income tax deduction on the grant or
exercise of an Incentive Option or the disposition, after the required holding
period, of shares acquired by exercising an Incentive Option. On a disqualifying
disposition of such shares, the Company is allowed a federal income tax
deduction in an amount equal to the ordinary income recognized by the
participant as a result of the disqualifying disposition, provided that such
amount constitutes an ordinary and necessary business expense of the Company, is
reasonable in amount and is not disallowed by Section 162(m) of the Code
(discussed above).
The ordinary income recognized by an employee of the Company on account of
the exercise of a Non-Qualified Stock Option or SAR is subject to both wage
withholding and employment taxes. A deduction for federal income tax purposes is
allowed to the Company in an amount equal to the amount of ordinary income
taxable to the participant, provided that such amount constitutes an ordinary
and necessary business expense of the Company, that such amount is reasonable,
and that the Company satisfies any tax reporting obligation that it has with
respect to such income.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL 4.
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE SHARES OF THE COMPANY'S
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
------------------------
21
<PAGE> 24
PROPOSAL 5: 1996 STOCK INCENTIVE PLAN
Following the merger on March 25, 1998 of the company then named Premier
Parks Inc. ("Old Premier"), the Company's predecessor, with Premier Parks Merger
Corporation (the "P-Merger"), and pursuant to the terms of the P-Merger, the
Company assumed all obligations of Old Premier under all stock options which
were outstanding immediately prior to the P-Merger, as well as all plans and
agreements relating to such options. Following the assumption of the 1996 Stock
Incentive Plan by the Company in the P-Merger and in order to permit the Company
to continue to grant Incentive Options under such Plan, the Code requires that
the Company's stockholders re-approve the 1996 Stock Incentive Plan. The 1996
Stock Incentive Plan was originally approved by the stockholders of Old Premier
on December 12, 1996. The terms and provisions of such Plan are substantially
identical to the terms and provisions of the proposed 1998 Stock Incentive Plan,
a copy of which is annexed hereto as Exhibit B, except that the total number of
shares that may be subject to Options or SARs under the 1996 Stock Incentive
Plan may not exceed 750,000 shares (1,500,000 shares if the Amendment is
approved). See "Proposal 4 -- 1998 Stock Incentive Plan." Currently, Options to
purchase 505,300 shares of Common Stock (1,010,600 shares of New Common Stock if
the Amendment is approved) are available for issuance under the 1996 Stock
Incentive Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL 5.
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE SHARES OF THE COMPANY'S
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
------------------------
PROPOSAL 6: INDEPENDENT DIRECTOR FEES
Historically, the Company has offered its directors who are not employees
or consultants of the Company the opportunity to receive their annual director
fees by delivery of shares of Common Stock (valued at the then current market
price), in lieu of cash payment. The Company believes that this policy increases
the potential equity interests in the Company of such directors (due in part to
the absence of brokerage or comparable commissions on these transactions). The
Company encourages its "outside" directors to have equity interests in the
Company, which the Company believes will generally result in such directors
having a more direct interest in and appreciation of concerns of stockholders
and, thus, will enhance their ability to fulfill their fiduciary duties to
stockholders. Pursuant to the rules of the NYSE, stockholder approval is
required for any arrangement (such as this policy) pursuant to which shares of
the Company's capital stock are offered to any officer or director of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL 6.
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE SHARES OF THE COMPANY'S
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING IS REQUIRED FOR APPROVAL OF THIS
PROPOSAL.
------------------------
1999 STOCKHOLDER PROPOSALS
In order for stockholder proposals for the 1999 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's 1999 Proxy Statement,
they must be received by the Company at its principal offices, 11501 Northeast
Expressway, Oklahoma City, Oklahoma 73131 (Attn: Secretary), prior to Decem-
22
<PAGE> 25
ber , 1998. The Company's Board of Directors will review any stockholder
proposals that are filed as required and will determine whether such proposals
meet applicable criteria for inclusion in its 1999 Proxy Statement.
OTHER MATTERS
The Board of Directors does not know of any other matters that are likely
to be presented for consideration at the Annual Meeting. Should any other
matters properly come before the Annual Meeting or any adjournments thereof, it
is the intention of the persons named in the accompanying proxy to vote such
proxy in accordance with their best judgment.
SOLICITATION OF PROXIES
All costs in connection with the solicitation of the enclosed proxy will be
borne by the Company. In addition to solicitations of proxies by use of the
mail, certain officers or employees of the Company, without additional
remuneration, may solicit proxies personally or by telephone, telegraph and
mail. The Company will also request brokers, dealers, banks and their nominees
to solicit proxies from their clients, where appropriate, and will reimburse
them for reasonable expenses related thereto.
RICHARD A. KIPF
Secretary
Oklahoma City, Oklahoma
April 30, 1998
23
<PAGE> 26
EXHIBIT A
CERTIFICATE OF AMENDMENT OF CERTIFICATE
OF INCORPORATION OF PREMIER PARKS INC.
PREMIER PARKS INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of the Corporation by a unanimous
written consent adopted a resolution proposing and declaring the advisability of
the following amendment to the Certificate of Incorporation.
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended so that Article IV shall read in its entirety as follows:
"The total number of shares of stock which the Corporation shall have
authority to issue is 155,000,000 shares, of which 5,000,000 shares shall
be Preferred Stock with a par value of $1.00 per share and 150,000,000
shares shall be Common Stock with a par value of $.025 per share.
The Preferred Stock is to be issued in one or more series, with each
series to have such designations, preferences, and relative participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue of each series adopted by the Board of
Directors of the Corporation, subject to the limitations prescribed by law
and in accordance with the provisions hereof, the Board of Directors being
hereby expressly vested with authority to adopt any such resolution or
resolutions.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, the determination or fixing of the
following:
(1) the number of shares to constitute the series and the
distinctive designation thereof;
(2) The amount or rate of dividends on the shares of the series,
whether dividends shall be cumulative and, if so, from what date or
dates;
(3) Whether the shares of the series shall be redeemable and, if
redeemable, the terms and provisions upon which the shares of the series
may be redeemed and the premium, if any, and any dividends accrued
thereon which the shares of the series shall be entitled to receive upon
the redemption thereof;
(4) Whether the shares of the series shall be subject to the
operations of a retirement or sinking fund to be applied to the purchase
or redemption of the shares for retirement and, if such retirement or
sinking fund be established, the annual amount thereof and the terms and
provisions relative to the operation thereof;
(5) Whether the shares of the series shall be convertible into
shares of any class or classes, with or without par value, or of any
other series of the same class, and if convertible, the conversion price
or prices or the rate at which the conversion may be made and the
method, if any, of adjusting the same;
(6) The rights of the shares of the series in the event of the
voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation;
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<PAGE> 27
(7) The restrictions, if any, on the payment of the dividends upon,
and the making of distributions to, any class of stock ranking junior to
the shares of the series, and the restrictions, if any, on the purchase
or redemption of the shares of any such junior class;
(8) Whether the series shall have voting rights in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights; and
(9) Any other relative rights, preferences, and limitations of that
series.
The holders of the Common Stock shall be entitled to one vote for each
share of Common Stock held.
The amount of the authorized stock of any class may be increased or
decreased by the affirmative vote of the holders of a majority of the total
number of outstanding shares of any series of Preferred Stock entitled to
vote, and of Common Stock, voting as a single class."
RESOLVED, that at the effective time of the foregoing Amendment each share
of Common Stock of the Corporation authorized and outstanding immediately prior
to such effective time shall be split and exchanged into two fully paid and
non-assessable shares of Common Stock.
SECOND: that such Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware by the holders of a majority of the outstanding shares of Common Stock
of the Corporation entitled to vote thereon at a meeting of the stockholders of
the Corporation called and held upon notice in accordance with Section 222 of
the Delaware General Corporation Law.
IN WITNESS WHEREOF, Premier Parks Inc. has caused this Certificate to be
signed by its duly authorized officer this day of June, 1998.
PREMIER PARKS INC.
By:
------------------------------------
Kieran E. Burke
Chairman and Chief Executive Officer
A-2
<PAGE> 28
EXHIBIT B
PREMIER PARKS INC.
1998 STOCK OPTION AND INCENTIVE PLAN
I. THE PLAN
There is hereby established the 1998 Stock Option and Incentive Plan (the
"Plan") for Premier Parks Inc. (the "Company"), under which options may be
granted to purchase shares of the common stock, $.05 par value, of the Company,
under which shares of such common stock may be sold at incentive prices below
the market price at the time of sale, and under which stock appreciation rights
may be granted.
II. AMOUNT OF STOCK
A maximum of two million (2,000,000) shares of the Company's common stock
(four million (4,000,000) after giving effect to the stock split) may be issued
upon exercises of options or stock appreciation rights or upon purchases at
incentive prices. Such shares may be authorized but unissued shares, shares held
in the treasury or outstanding shares purchased from their owners on the market
or otherwise. If any option or stock appreciation right granted under the Plan
terminates for any reason or expires before the option or stock appreciation
right is exercised in full or if any shares sold under the Plan are reacquired
by the Company by reason of any right to reacquire such shares established at
the time the shares were initially sold, the shares previously reserved for
issuance upon exercise of such option or stock appreciation right or the shares
so reacquired shall count toward the maximum number of shares that may be issued
under the plan, as adjusted pursuant to the next paragraph, and such shares
shall not again be available to be issued under the Plan. A reduction of the
exercise price of an option shall be treated for purposes of the preceding
sentence as the expiration of the option and the issuance of a new option.
If the outstanding shares of the Company's common stock are from time to
time increased, decreased, changed into or exchanged for a different number or
kind of shares of the Company through merger, consolidation, reorganization,
split-up, split-off, spin-off, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the number and kind of shares which may be issued
upon purchases made under the Plan and an appropriate and proportionate
adjustment shall be made in the number and kind of shares and/or other property
which may be issued upon exercise of options or stock appreciation rights
granted under the Plan such that each such option or stock appreciation right
shall thereafter be exercisable for such securities, cash and/or other property
as would have been received in respect of the shares subject to the option or
stock appreciation right had such option or right been exercised in full
immediately prior to such increase, decrease or change. Such adjustment shall be
made successively each time that any such increase, decrease or change is made.
In addition, in the event of any such increase, decrease or change, the Board of
Directors or the Committee shall make such further adjustments as are
appropriate to the maximum number of shares subject to the Plan or to the other
provisions of the Plan or of incentive stock issued or options or stock
appreciation rights granted thereunder. Notwithstanding the foregoing, each such
increase, decrease, change or other adjustment with respect to an incentive
stock option, within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") (hereafter, an "Incentive Stock Option") (i) shall
comply with the requirements to be an issuance or assumption of a stock option
in a transaction to which Section 424(a) of the Code applies and (ii) shall not
be made if, as a result, an Incentive Stock Option granted hereunder would not
be an Incentive Stock Option.
B-1
<PAGE> 29
To the extent that the aggregate fair market value of stock subject to one
or more Incentive Stock Options first exercisable by any individual in any
calendar year under this Plan (or under all such plans of the
B-1.1
<PAGE> 30
Company and its subsidiary corporations) exceeds $100,000, determined as of the
time the option is granted, such options shall be treated as options that are
not Incentive Stock Options. This limitation will be applied by taking into
account options in the order in which they were granted and without taking into
account Incentive Stock Options granted before 1987.
III. ADMINISTRATION
(a) The Plan shall be administered by a Committee of Directors of the
Company appointed by the Board of Directors which shall include not less than
two Directors of the Company, each of whom shall be a disinterested person'
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended, and which shall consist of Directors that are "outside
directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3)
promulgated under Section 162(m) of the Code. The Board of Directors may from
time to time remove members from or add members to the Committee. Vacancies on
the Committee, however caused, shall be filled by the Board of Directors. Acts
of the Committee may be authorized by a vote of the members if (i) at a meeting,
held at a time and place and in accordance with rules adopted by the Committee,
at which a majority of the members of the Committee are present and acting, or
(ii) reduced to and approved in writing by a majority of the members of the
Committee.
(b) Subject to the express terms and conditions of the Plan, the Committee
shall have full power to construe the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan and to make all other determinations
necessary or advisable for the administration of the Plan. The exercise of these
powers by the Committee shall be conclusive and binding upon all present, past
and future participants in the Plan.
(c) The Committee may from time to time determine to which officers or
other employees eligible for selection as participants in the Plan, if any,
options or stock appreciation rights shall be granted or shares shall be sold
under the Plan, the number of shares which may be issued upon exercise of any
such option or which may be sold to any such participant, the restrictions and
forfeiture provisions related to any such grant or sale, the period during which
any option or stock appreciation right may be exercised, the circumstance under
which the period of exercise may be accelerated, the exercise price of any
option or right and the purchase price of any shares, and the means of payment
upon exercise of any option or for any shares, determined in each case in
accordance with the provisions of the Plan. In addition, with respect to awards
that are intended to qualify under the applicable provisions of Section 162(m)
of the Code, the Committee shall have full power and discretion to establish and
administer performance goals, establish performance periods, and certify that
performance goals have been attained to the extent required to comply with
Section 162(m) and the regulations thereunder.
(d) The Board of Directors or the Committee may from time to time, with the
consent of the participant, adjust or reduce the option prices of options held
by such participant by cancelling such options and granting options to purchase
the same or a lesser number of shares at lower option prices or by modifying,
extending or renewing such options, as those terms are defined in Section 424(h)
of the Code, and the applicable regulations thereunder. The Board of Directors
or the Committee may, from time to time, conditionally or unconditionally
accelerate, in whole or in part, rights to exercise any option granted under the
Plan.
(e) The Board of Directors or the Committee shall report in writing to the
Secretary of the Company the names of the officers or other employees selected
as participants in the Plan, and the terms and conditions of the options to be
granted or the shares to be sold to each of them.
B-2
<PAGE> 31
IV. ELIGIBILITY FOR PARTICIPATION
All officers and key employees of the Company and its subsidiary
corporations (including officers or employees who are members of the Company's
Board of Directors, but excluding directors who are not officers or employees)
shall be eligible for selection as participants in the Plan. For this purpose a
"subsidiary corporation" is a corporation so defined under Section 424(f) of the
Code.
V. TERMS AND CONDITIONS OF OPTIONS AND STOCK APPRECIATION RIGHTS
The terms and conditions of each option granted under the Plan shall be
evidenced by a Stock Option Agreement executed by the Company and the
participant, which shall contain the following provisions, if applicable:
(a) The number of shares which may be issued upon exercise of the
option, the period during which the option may be exercised, the purchase
price or prices per share to exercise the option, and the means of payment
for the shares; provided, however, that notwithstanding any other provision
of the Plan to the contrary, an Incentive Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is
granted, and, provided, further, that in the case of an Incentive Stock
Option granted to a person who, at the time such Incentive Stock Option is
granted, owns shares of the Company or any of its subsidiary corporations
which possess more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any of such subsidiary
corporations, such Incentive Stock Option shall not be exercisable after
the expiration of five (5) years from the date such option is granted, and,
provided, further, that the purchase price or prices of each share of the
Company's common stock subject to any option under the Plan shall be
determined as follows:
(i) The price of each share subject to an Incentive Stock Option
under the Plan shall be not less than one hundred percent (100%) of the
fair market value of such share on the date the option is granted;
provided, however, that in the case of an Incentive Stock Option granted
to a person who, at the time such Incentive Stock Option is granted,
owns shares of the Company or any of its subsidiary corporations which
possess more then ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any of such subsidiary
corporations, the price of each share subject to such Incentive Stock
Option shall be not less than one hundred and ten percent (110%) of the
fair market value of such share on the date the option is granted. In
determining stock ownership of an employee for any purposes under the
Plan, the rules of Section 424(d) of the Code shall apply, and the Board
of Directors or the Committee may rely on the representations of fact
made to it by the employee and believed by it to be true.
(ii) The purchase price of each share subject to a nonqualified
stock option under the Plan shall be determined by the Board of
Directors or the Committee prior to granting the option. The Board of
Directors or the Committee shall set the purchase price for each share
subject to a nonqualified stock option at either the fair market value
of such share on the date the option is granted, or at such other price
as the Board of Directors or the Committee in its sole discretion shall
determine; provided, however, that in no event shall the purchase price
of a share subject to a nonqualified stock option under the Plan be less
than 50% of the fair market value of such share on the date the option
is granted.
(iii) The fair market value of a share on a particular date shall
be deemed to be the average (mean) of the reported "high" and "low"
sales prices on the largest national securities exchange (based on the
aggregate dollar value of securities listed) on which such shares are
then listed or traded. If such shares are not listed or traded on any
national securities exchange, then, in each case,
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<PAGE> 32
to the extent the Board of Directors or the Committee determines in good
faith that the following prices arise out of a bona fide, established
trading market for the shares, (i) the average of the reported "high"
and "low" sales prices for such shares in the over-the-counter market,
as reported on the National Association of Securities Dealers Automated
Quotations System, or, if such prices shall not be reported thereon, the
average between the closing bid and asked prices reported, or (ii) if
such prices shall not be reported, then the average closing bid and
asked prices reported by the National Quotation Bureau Incorporated. In
all other cases, the fair market value of a share shall be established
by the Board of Directors or the Committee in good faith.
(b) Such terms and conditions of exercise as may be set by the Board
of Directors or the Committee and specified in the Stock Option Agreement.
(c) That the option is not transferable other than by will or the laws
of descent and distribution and that the option is exercisable during the
grantee's lifetime only by the grantee or, if the grantee is disabled, by
his guardian or legal representative.
(d) In addition to the restrictions set forth in (c) above, such
restrictions on transfer of the option, and such restrictions on transfer
of the shares acquired upon exercise of the option, as may be set by the
Board of Directors or the Committee.
(e) Such other terms and conditions not inconsistent with the Plan as
may be set by the Board of Directors or the Committee, including provisions
allowing acceleration of options upon a change of control of the Company or
otherwise.
(f) In the discretion of the Board of Directors or the Committee, any
option granted hereunder may provide that such option may be exercised by
the holder's surrender of all or part of such option to the Company in
exchange for a number of shares of the Company's common stock having a
total market value, as of the date of surrender, equal to the excess of (i)
the market value, as of the date of surrender, of the number of shares that
could be acquired by the exercise of that portion of the option which is
surrendered, over (ii) the aggregate exercise price which would otherwise
be paid to the Company upon a normal exercise of the option as to the
number of shares surrendered. In the event the foregoing calculation would
require the issuance of a fractional share, the Company shall, in lieu
thereof, pay cash in an amount equal to the fair market value of such
fraction as of the date of surrender.
(g) The Board of Directors or the Committee may, in its discretion,
grant stock appreciation rights to participants who are concurrently being
granted, or previously have been granted, options under the Plan. A stock
appreciation right shall be related to a particular option (either an
option previously granted to a participant or an option granted
concurrently with the stock appreciation right) and shall entitle the
participant, at such time or times as the related option is exercisable,
and upon surrender of the then exercisable option, or part thereof, and
exercise of the stock appreciation right, to receive payment of an amount
determined pursuant to paragraph (ii) below.
Stock appreciation rights shall be subject to the following terms and
conditions, to the terms of subsection (c) above regarding transferability,
and to such other terms and conditions not inconsistent with this Plan as
the Board of Directors or Committee may approve and direct:
(i) A stock appreciation right shall be exercisable by a
participant at such time or times, and to such extent, as the option to
which it relates shall be then exercisable; provided, however, that a
stock appreciation right may be exercised for cash only during the
period beginning on the third business day following the date of release
for publication by the Company of quarterly or annual summary statements
of earnings and ending on the twelfth business day following such date
and that
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<PAGE> 33
the Board of Directors or Committee may impose such other conditions on
exercise as may be required to satisfy the requirements of Rule 16b-3
under the Exchange Act (or and successor provision in effect at that
time).
(ii) Upon exercise of the stock appreciation right and surrender of
an exercisable portion of the related option, a participant shall be
entitled to receive payment of an amount determined by multiplying:
A. the difference obtained by subtracting the option exercise
price per share of common stock subject to the related option from
the fair market value of a share of common stock of the Company on
the date of exercise of the stock appreciation right, by
B. the number of shares subject to the related option with
respect to which the stock appreciation right shall have been
exercised.
(iii) Unless otherwise provided, payment of the amount determined
under paragraph (ii) above shall be made one-half in cash and one-half
in shares of common stock of the Company valued at their fair market
value on the date of exercise of the stock appreciation right, provided,
however, that the Board of Directors or the Committee, in its sole
discretion, may either require or allow the holder of the stock
appreciation right to elect for such stock appreciation right to be
settled solely in such shares, solely in cash, or in some other
proportion of shares and cash, and provided, further, that cash shall,
in any event, be paid in lieu of fractional shares.
(iv) A stock appreciation right shall in no event be exercisable
unless and until six months have elapsed from the date of grant of such
stock appreciation right.
(v) The shares and/or cash delivered or paid to a participant upon
exercise of the stock appreciation right shall be issued or paid in
consideration of services performed for the Company or for its benefit
by the participant.
(h) Notwithstanding anything herein to the contrary, during the term
of the Plan, no participant may be granted options or other rights to
purchase, including stock appreciation rights with respect to, more than
66 2/3% in the aggregate of the number of shares of common stock authorized
to be issued under the Plan, counted as provided in and as adjusted
pursuant to, Section 2 above.
VI. LIMITATION ON PRICE FOR SHARES
No option shall be granted under the Plan, and no stock shall be sold under
the Plan, at an exercise price in the case of options or a purchase price in the
case of direct sales of stock that is less than the par value of the shares
optioned or sold.
VII. PROCEEDS FROM SALES OF SHARES
The proceeds from the sale of shares under the Plan, upon the exercise of
options or directly, shall be added to the general funds of the Company and may
thereafter be used from time to time for such corporate purposes as the Board of
Directors may determine and direct.
VIII. AMENDMENT SUSPENSION OR TERMINATION OF PLAN
The Board of Directors may at any time amend, suspend or terminate the
Plan. However, no such action by the Board of Directors may be taken without the
approval of the stockholders of the Company if such action would increase the
aggregate number of shares subject to the Plan (other than pursuant to Section
II of
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<PAGE> 34
the Plan), change the provisions regarding eligibility for participation in the
Plan, reduce the exercise price of an Incentive Stock Option to below the price
required by Section V(a)(i) of the Plan or materially increase the benefit
accruing to participants under the Plan. No amendment, suspension or termination
of the Plan shall alter or impair any rights or obligations under any
outstanding Stock Option Agreement without the consent of the holder.
IX. PROVISIONS FOR EMPLOYEES OF SUBSIDIARIES
In connection with the granting of an option or the sale of any shares to a
participant who is an employee of a subsidiary corporation, as defined in
Section IV of the Plan, the Company may sell the shares to be optioned or sold
to such employee to the subsidiary corporation which is his employer, at a price
which shall be not less than the option exercise price or the purchase price of
the shares to such participant, but which may be more, in order that the shares
sold to the participant, or issued to the participant upon exercise of an option
may be issued or sold to him directly by his employer corporation.
X. EFFECTIVE DATE AND TERMINATION OF THE PLAN
(a) The Plan shall be submitted for a vote at a meeting of the stockholders
of the Company or shall be approved by written consent of the stockholders, in
either case in accordance with and only to the extent permitted by the
requirements of Rule 16b-3 of the Exchange Act, by the Company's charter and
by-laws and by applicable state laws prescribing the method and degree of
stockholder approval required for the issuance of corporate stock or options;
provided, that if applicable state law does not provide a method and degree of
required approval, the Plan must be approved by a majority of the votes cast at
a duly held stockholders' meeting at which a quorum representing a majority of
all outstanding voting stock is, either in person or by proxy, present and
voting on the Plan.
(b) If approved by the stockholders of the Company within 12 months before
or after adoption of the Plan by the Board, the Plan shall become effective on
the date of such stockholder approval (the "Effective Date"). Unless sooner
terminated by the Board, the Plan shall terminate on the date ten (10) years
after the earlier of (i) the date the Plan is adopted by the Board or (ii) the
Effective Date. After termination of the Plan, no further options may be granted
or shares sold under the Plan (other than upon the exercise of options
previously granted under the Plan); provided, however, that such termination
will not affect any options granted or shares sold prior to termination of the
Plan.
XI. MISCELLANEOUS
(a) The invalidity or illegality of any provision of the Plan shall not
affect the validity or legality of any other provision of the Plan.
(b) The Plan, any options or stock appreciation rights granted or shares
sold thereunder and all related matters shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware from time to time
obtaining.
B-6
<PAGE> 35
PROXY
PREMIER PARKS INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints KIERAN E. BURKE, JAMES F. DANNHAUSER, GARY
STORY and RICHARD KIPF with full power to act without the others and with power
to appoint his substitute as the undersigned's proxies to vote all shares of
Common Stock of the undersigned in PREMIER PARKS INC. (the "Company"), a
Delaware corporation, which the undersigned would be entitled to vote at the
Annual Meeting of Stockholders of the Company to be held at the offices of
Darien Lake Theme Park, 9993 Allegheny Road, Darien Center, New York 14040, on
Tuesday, June 2, 1998 at 9:00 a.m., E.D.T., and at any and all adjournments
thereof as follows:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
KIERAN E. BURKE, MICHAEL E. GELLERT, PAUL A. BIDDELMAN, JAMES F. DANNHAUSER,
GARY STORY, CHARLES R. WOOD,
SANDY GURTLER
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the Company's Certificate of
Incorporation to effect a 2 for 1 stock split of the Company's Common Stock
and to increase the authorized shares of the Company's Common Stock to
150,000,000 and the Company's Preferred Stock to 5,000,000. The Board of
Directors recommends a vote FOR this proposal.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the year ending December 31, 1998. The Board of
Directors recommends a vote FOR this proposal.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Proposal to approve the Company's 1998 Stock Option and Incentive Plan. The
Board of Directors recommends a vote FOR this proposal.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please sign on the reverse side and return promptly in the enclosed envelope.
(over)
<PAGE> 36
5. Proposal to reapprove the Company's 1996 Stock Option and Incentive Plan. The
Board of Directors recommends a vote FOR this proposal.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Proposal to approve payment of annual independent director fees in shares of
Common Stock. The Board of Directors recommends a vote FOR this proposal.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. In their discretion such other business as may properly come before the
meeting and any and all adjournments thereof.
The shares of Common Stock represented by this proxy will be voted in
accordance with the foregoing instructions. In the absence of any instructions,
such shares will be voted for the election of the nominees listed in item 1 and
for the proposals in items 2, 3, 4, 5 and 6.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders to be held on June 2, 1998 and the Proxy Statement furnished
therewith.
The undersigned hereby revokes any proxy to vote shares of Common Stock of
the Company heretofore given by the undersigned.
---------------------------------
, 1998
(Date)
Signature
---------------------------------
Please date, sign exactly as name
appears on this proxy, and
promptly return in the enclosed
envelope. When signing as
guardian, executor,
administrator, attorney, trustee,
custodian, or in any other
similar capacity, please give
full title. If a corporation,
sign in full corporate name by
president or other authorized
officer, giving title, and affix
corporate seal. If a partnership,
sign in partnership name by
authorized person. In the case of
joint ownership, each joint owner
must sign.
