Document:

seas-ex104_233.htm

Exhibit 10.4

 

SeaWorld Entertainment, Inc.

Outside Director Compensation Policy

Effective March 4, 2014

Amended and Restated April 3, 2014

Amended and Restated as of March 3, 2015

Amended and Restated as of April 13, 2016

Amended and Restated as of April 12, 2017

Amended and Restated as of October 11, 2017

Amended and Restated as of April 11, 2018

 

SeaWorld Entertainment, Inc. (the “Company”) believes that the granting of equity and cash compensation to its members of the Board of Directors (the “Board,” and members of the Board, “Directors”) represents a powerful tool to attract, retain and reward Directors who are not employees of the Company (“Outside Directors”).  This Outside Director Compensation Policy (this “Policy”) is intended to formalize the Company’s policy regarding cash compensation and grants of equity to its Outside Directors.  The cash compensation and equity grants described in this Policy will be paid or made, as applicable, automatically and without further action of the Board, to each Outside Director.  Unless otherwise defined herein, capitalized terms used in this Policy will have the meaning given such terms in the Company’s 2017 Omnibus Incentive Plan (the “Plan”). Outside Directors will be solely responsible for any tax obligations they incur as a result of the equity and cash payments received under this Policy.  

 

	
I.
	
Cash Compensation. 

 

A.Annual Fee.  Subject to Section I.B. below, the Company will pay each Outside Director an annual fee of $60,000 for serving on the Board (the “Annual Fee”). At the election of the Outside Director, the Annual Fee will be paid, in arrears, either (a) in twelve equal installments on a monthly basis with each monthly payment paid on the last day of the applicable month or (b) in four equal installments on a quarterly basis with each quarterly payment paid on the last day of the applicable quarter.

 

B.Annual Board Chairperson Fee.  In lieu of the Annual Fee, the Company will pay the Outside Director who serves as the Chairperson of the Board an annual fee of $180,000 for such service (the “Annual Board Chairperson Fee”). At the election of the Outside Director, the Annual Board Chairperson Fee will be paid, in arrears, either (a) in twelve equal installments on a monthly basis with each monthly payment paid on the last day of the applicable month or (b) in four equal installments on a quarterly basis with each quarterly payment paid on the last day of the applicable quarter.

 

C.Annual Lead Director Fee.  In addition to the Annual Fee, the Company will pay any Outside Director who serves as the Lead Director (as defined in the Company’s Corporate Governance Guidelines) an annual fee of $25,000 for such service (the “Annual Lead Director Fee”). At the election of the Outside Director, the Lead Director Fee will be paid, in arrears, either (a) in twelve equal installments on a monthly basis with each monthly payment paid on the last day of the applicable month or (b) in four equal installments on a quarterly basis with each quarterly payment paid on the last day of the applicable quarter. 

 

D.Annual Committee Chairperson Fee.  In addition to the Annual Fee, the Annual Board Chairperson Fee and the Annual Lead Director Fee, as applicable, the Company will pay each Outside Director who serves as the Chairperson of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Regulatory & Governmental Affairs Committee, Revenue Committee or Special/Ad Hoc Committee of the Board the applicable annual fee set forth in the table below for such service (the “Annual Committee Chairperson Fee”). At the election of the Outside Director, the Annual Committee Chairperson Fee will be paid, in arrears, either (a) in twelve equal installments on a monthly basis with each monthly payment paid on the last day of the applicable month or (b) in four equal installments on a quarterly basis with each quarterly payment paid on the last day of the applicable quarter.

 

	
Committee
	
Annual Committee Chairperson Fee

	
Audit Committee
	
  
	
$20,000

	
Compensation Committee
	
  
	
$15,000

	
Nominating and Corporate Governance 
	
  
	
$15,000

	
Regulatory & Governmental Affairs 
	
  
	
$15,000

	
Revenue Committee 
	
  
	
$15,000

	
Special/Ad Hoc Committee 
	
  
	
$20,000

 

E.Committee Members.  In addition to the Annual Fee, the Annual Board Chairperson Fee and the Annual Lead Director Fee, as applicable, the Company will pay each Outside Director who serves as a non-Chairperson member of Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Regulatory & Governmental Affairs Committee, Revenue Committee or Special/Ad Hoc Committee of the Board (collectively, the “Committees”) the applicable annual fee set forth in the table below for such service (the “Annual Committee Member Fee”). At the election of the Outside Director, the Annual Committee Member Fee will be paid, in arrears, either (a) in twelve equal installments on a monthly basis with each monthly payment paid on the last day of the applicable month or (b) in four equal installments on a quarterly basis with each quarterly payment paid on the last day of the applicable quarter.     

 

	
Committee
	
Annual Committee Member Fee

	
Audit Committee
	
  
	
$15,000

	
Compensation Committee
	
  
	
$10,000

	
Nominating and Corporate Governance 
	
  
	
$10,000

	
Regulatory & Governmental Affairs 
	
  
	
$10,000

	
Revenue Committee 
	
  
	
*$10,000

	
Special/Ad Hoc Committee 
	
 
	
$15,000

*The members of the Revenue Committee will receive an Annual Committee Member Fee of $10,000 that will be paid retroactive to January 1, 2017. 

 

F.Meetings of the Board or Committees.  There are no per meeting attendance fees for attending Board meetings or meetings of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Regulatory & Governmental Affairs Committee, Revenue Committee or Special/Ad Hoc Committee of the Board.

 

 

G.Newly Elected or Appointed Outside Director; Ceasing Board Service.  The Company will pay each individual who is first elected or appointed as an Outside Director after the effective date of this Policy a prorated portion of the applicable annual fees set forth in this Section I based on the number of days that the Outside Director provided partial service during the year of election or appointment.  If any Outside Director ceases to serve on the Board for any reason, the Company will pay such Outside Director a prorated portion of the monthly or quarterly installment due to such Outside Director under this Section I based on the number of days that such Outside Director provided partial service during the applicable month or quarter.  Subject to Section I.I. below, after payment of the aforementioned prorated monthly or quarterly installment to any Outside Director that ceases to serve on the Board, the Company will have no further obligations to such Outside Director under this Section I.        

 

H.Reimbursement of Expenses.  The Company will reimburse each Outside Director for (i) all reasonable and documented travel and lodging expenses associated with attendance at Board and committee meetings and (ii) subject to approval by the Nominating and Corporate Governance Committee, all reasonable and documented registration, travel and lodging expenses associated with attendance at director continuing education programs in accordance with the Company’s then current policies.  The Company will provide 

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complimentary and discount tickets and passes for Outside Directors and guests to visit the Company’s parks in accordance with the Company’s then current policies.   

 

I.Special Compensation.  The Board may provide additional compensation to members of the Board from time to time for “Extraordinary Board Service” (such fees, “Special Compensation”).  “Extraordinary Board Service” shall mean services provided outside of the services typically required and/or expected of members of the Board or the Committees related to events or circumstances that are unusual or infrequent in nature.  The Special Compensation payable with respect to such Extraordinary Board Service shall be determined and paid retroactively after the applicable Extraordinary Board Services are completed (intermittently or in a lump sum) but shall be determined based on a variety of factors, including, but not limited to, (i) length of special services, (ii) number of meetings attended outside general Board or Committee meetings, (iii) time demands in between meetings, (iv) travel commitments and (v) anything else the Board determines to be relevant. The Special Compensation shall be determined by the Board based on the Board’s internal comparisons to the various time commitment and obligations of the other Committees.  Consistent with Section F of the Policy, per meeting fees will generally not be paid; provided, that, in some instances, fixed per diem rates may be appropriate based on the nature of the Extraordinary Board Service.

 

J.Stock Election with respect to Cash Compensation.  Notwithstanding anything to the contrary in this Section I, an Outside Director may elect (an “Election”) to receive shares of Common Stock in lieu of all or a portion of the Annual Fee, the Annual Board Chairperson Fee, the Annual Lead Director Fee, the Annual Committee Chairperson Fee, the Annual Committee Member Fee, and/or the fees payable in respect of service on a special committee (if any) and/or Special Compensation (if any), in each case, to the extent applicable (the “Election Amount”).  An Outside Director must make any such Election in writing to the Company at least 15 days prior to the applicable payment date of the cash fee(s).  If a timely Election is made, the Outside Director will receive a number of shares of Common Stock (rounded down to the nearest whole number) with a Fair Market Value equal to the Election Amount, measured as of the date such fee(s) would normally be paid to the Outside Director.  Any remaining portion of the Election Amount which would have resulted in the delivery of fractional shares of Common Stock to the Outside Director will be paid to the Outside Director in cash on the normal payment date of such fee(s).

 

	
II.
	
equity Compensation. 

 

Outside Directors will be entitled to receive all types of Awards (except Incentive Stock Options) under the Plan, including discretionary Awards not covered under this Policy.  All grants of Awards to Outside Directors pursuant to this Section II will be automatic and will be made in accordance with the following provisions:

 

	
 
	
A.
	
Initial Award.  Each individual who is first elected or appointed as an Outside Director after the effective date of this Policy, will automatically be granted, on the date of such initial election or appointment, an Award (“Initial Award”) of deferred stock units payable in shares of Common Stock of the Company upon settlement (i.e. the earliest to occur of a Change in Control or one year following an Outside Director’s termination of services from the Board) (each such deferred stock unit, a “Deferred Stock Unit”) with an aggregate Fair Market Value of $120,000 on the Date of Grant.

 

B.Annual Award.  On the date of each Annual Stockholders Meeting of the Company, beginning with the 2014 Annual Stockholders Meeting of the Company, but after any stockholder votes are taken on such date, each Outside Director who is to continue to serve as such will automatically be granted an Award (“Annual Award”) of Deferred Stock Units with an aggregate Fair Market Value of $120,000 on the Date of Grant, provided that such Outside Director has served on the Board for at least the preceding six (6) months.

 

C.Vesting.  Each Initial Award and each Annual Award granted prior to the 2016 Annual Stockholders Meeting of the Company will vest in three equal installments, with one-third vesting on each of the first, second and third anniversaries of the date of grant, subject to the Outside Director’s continued service on the Board through each such vesting date.  Each Annual Award granted on or after the 2016 Annual Stockholders Meeting of the Company will vest 100% on the day before the next Annual Stockholders Meeting 

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of the Company occurring after the date of grant, subject to the Outside Director’s continued service on the Board through each such vesting date.  For clarification purposes, each Initial Award granted on or after the 2016 Annual Stockholders Meeting of the Company will continue to vest in three equal installments consistent with the Company’s past practices.  In addition, each Initial Award and Annual Award will become fully vested upon the occurrence of a Change in Control (as defined in the Plan) provided that the Outside Director serves on the Board through the date of such Change in Control.

 

D.Award Agreement. Each Initial Award and Annual Award granted pursuant to this Policy will be made solely by and subject to the terms set forth in a written agreement in a form, consistent with the terms of the Plan, approved by the Board (or the Compensation Committee of the Board) and duly executed by an executive officer of the Company.

 

	
III.
	

4

 

		
AMENDMENT, MODIFICATION AND TERMINATION. 

 

This Policy may be amended, modified or terminated by the Board in the future at its sole discretion.

 

 

 

 

 

 

 

 

5seas-ex105_230.htm

Exhibit 10.5

 

FORM OF

DEFERRED STOCK UNIT GRANT NOTICE
UNDER THE
SeaWorld Entertainment, Inc.
2017 OMNIBUS INCENTIVE PLAN
(Non-Employee Directors)

SeaWorld Entertainment, Inc., a Delaware corporation (the “Company”), pursuant to its 2017 Omnibus Incentive Plan, as it may be amended and restated from time to time (the “Plan”), hereby grants to the Participant set forth below, the number of Deferred Stock Units set forth below.  The Deferred Stock Units are subject to all of the terms and conditions as set forth herein, in the Deferred Stock Unit Agreement (attached hereto or previously provided to the Participant in connection with a prior grant), and in the Plan, all of which are incorporated herein in their entirety.  Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.

	
Participant:
	
[Insert Participant Name]

	
Date of Grant: 
	
[Insert Grant Date]

	
Vesting Commencement Date:
	
[Insert Vesting Commencement Date]

Number of 

	
Deferred Stock Units: 
	
[Insert No. of Deferred Stock Units Granted]

 

	
Vesting Schedule:
	
Provided the Participant has not undergone a Termination at the time of the applicable vesting date (or event)[, 100% of the Deferred Stock Units will vest on the day before the next regularly scheduled annual meeting of the stockholders of the Company following the Vesting Commencement Date][1/3rd of the Deferred Stock Units will vest on each of the first, second and third anniversaries of the Date of Grant]. 

In addition, in the event of a Change in Control prior to the applicable vesting date (or event) and provided Participant has not undergone a Termination prior to such Change in Control, such Participant shall fully vest in such Participant’s Deferred Stock Units to the extent not then vested or previously forfeited or cancelled.

All unvested Deferred Stock Units shall be forfeited upon a Termination for any reason or no reason. 

***

 

 

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS DEFERRED STOCK UNIT GRANT NOTICE, THE DEFERRED STOCK UNIT AGREEMENT AND THE PLAN, AND, AS AN EXPRESS CONDITION TO THE GRANT OF DEFERRED STOCK UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS DEFERRED STOCK UNIT GRANT NOTICE, THE DEFERRED STOCK UNIT AGREEMENT AND THE PLAN.
 

SeaWorld Entertainment, Inc.Participant1

________________________________________________________________
By: Jack Roddy[Insert Participant Name]
Title: Chief Human Resources & Culture Officer

	
	 

	
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To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute the Participant’s signature hereof.

[Signature Page to Deferred Stock Unit Award]

 

 

FORM OF

DEFERRED STOCK UNIT AGREEMENT
UNDER THE
SeaWorld Entertainment, Inc.
2017 OMNIBUS INCENTIVE PLAN
(Non-Employee Directors)

Pursuant to the Deferred Stock Unit Grant Notice (the “Grant Notice”) delivered to the Participant (as defined in the Grant Notice), and subject to the terms of this Deferred Stock Unit Agreement (this “Deferred Stock Unit Agreement”) and the SeaWorld Entertainment, Inc. 2017 Omnibus Incentive Plan, as it may be amended and restated from time to time, (the “Plan”), SeaWorld Entertainment, Inc., a Delaware corporation, (the “Company”) and the Participant agree as follows.  Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Plan. 

1. Grant of Deferred Stock Units; DSU Account.  

(a) Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Participant the number of Deferred Stock Units provided in the Grant Notice (with each Deferred Stock Unit representing an unfunded, unsecured right to receive one share of Common Stock).  The Company may make one or more additional grants of Deferred Stock Units to the Participant under this Deferred Stock Unit Agreement by providing the Participant with a new Grant Notice, which may also include any terms and conditions differing from this Deferred Stock Unit Agreement to the extent provided therein.  The Company reserves all rights with respect to the granting of additional Deferred Stock Units hereunder and makes no implied promise to grant additional Deferred Stock Units. 

(b) The Company shall cause an account (the “Unit Account”) to be established and maintained on the books of the Company to record the number of Deferred Stock Units credited to the Participant under the terms of the Grant Notice and this Deferred Stock Unit Agreement.  

2. Vesting.  Subject to the conditions contained herein and in the Plan, the Deferred Stock Units shall vest as provided in the Grant Notice.  

3. Settlement of Deferred Stock Units.  The Company will deliver to the Participant, without charge, as soon as reasonably practicable (and, in any event, within 30 days) following the earliest to occur of (a) the one year anniversary of the date the Participant undergoes a “separation from service” from the Company and its Subsidiaries (as defined in Section 409A of the Code) for any reason and (b) a Change in Control; provided, that such Change in Control also constitutes a “change in ownership or effective control” for purposes of Section 409A of the Code, one share of Common Stock for each Deferred Stock Unit (as adjusted under the Plan, as applicable) which becomes vested hereunder and such vested Deferred Stock Unit shall be cancelled upon such delivery.  Upon the issuance of the shares of Common Stock to the Participant, such Participant’s Unit Account shall be eliminated.  Notwithstanding anything in this Deferred Stock Unit Agreement to the contrary, the Company shall have no obligation to issue or transfer any shares of Common Stock as contemplated by this Deferred Stock Unit Agreement unless and until such issuance or transfer complies with all relevant provisions of law and the requirements of any stock exchange on which the Company’s shares of Common Stock are listed for trading. 

4. Company; Participant. 

(a) The term “Company” as used in this Deferred Stock Unit Agreement with reference to service shall include the Company and its Subsidiaries. 

(b) Whenever the word “Participant” is used in any provision of this Deferred Stock Unit 

 

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Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Deferred Stock Units may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons. 

5. Non-Transferability.  The Deferred Stock Units are not transferable by the Participant (unless such transfer is specifically required pursuant to a domestic relations order or by applicable law) except to Permitted Transferees in accordance with Section 15(b) of the Plan.  Except as otherwise provided herein, no assignment or transfer of the Deferred Stock Units, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Deferred Stock Units shall terminate and become of no further effect.

6. Rights as Stockholder; Dividend Equivalents.  The Participant or a permitted transferee of the Deferred Stock Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a Deferred Stock Unit (including no rights with respect to voting or to receive dividends or dividend equivalents) unless and until the Participant shall have become the holder of record or the beneficial owner of such Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof.  The Deferred Stock Units shall be entitled to be credited with dividend equivalent payments upon the payment by the Company of dividends on shares of Common Stock.  Such dividend equivalents will be provided in additional Deferred Stock Units having a Fair Market Value on the date that the underlying Deferred Stock Units are settled in accordance with Section 3 above equal to the amount of such applicable dividends as of the date such dividends were made, and shall be payable at the same time as the underlying Deferred Stock Units to which such dividends relate are settled in accordance with Section 3 above.  In the event that any Deferred Stock Unit is forfeited by its terms, the Participant shall have no right to dividend equivalent payments in respect of such forfeited Deferred Stock Units.

7. Tax Withholding.  The provisions of Section 15(d) of the Plan are incorporated herein by reference and made a part hereof.  The Participant shall satisfy such Participant’s withholding liability, if any, referred to in Section 15(d) of the Plan by having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the settlement of the Award a number of shares of Common Stock with a Fair Market Value, on the date that the Deferred Stock Units are settled, equal to such withholding liability; provided, that the number of such shares of Common Stock may not have a Fair Market Value greater than the minimum required statutory withholding liability unless determined by the Committee not to result in adverse accounting consequences.  Notwithstanding the foregoing, the Participant acknowledges and agrees that to the extent consistent with applicable law and the Participant’s status as an independent consultant for U.S. federal income tax purposes, the Company does not intend to withhold any amounts as federal income tax withholdings under any other state or federal laws, and the Participant hereby agrees to make adequate provision for any sums required to satisfy all applicable federal, state, local and foreign tax withholding obligations of the Company which may arise in connection with the grant of Deferred Stock Units.

8. Notice.  Every notice or other communication relating to this Deferred Stock Unit Agreement between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Corporate Secretary, and all notices or communications by the Company to the Participant may be given to the 

 

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Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records.  Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time. 

9. No Right to Continued Service.  This Deferred Stock Unit Agreement does not confer upon the Participant any right to continue as an employee or service provider to the Service Recipient or any other member of the Company Group. 

10. Binding Effect.  This Deferred Stock Unit Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 

11. Waiver and Amendments.  Except as otherwise set forth in Section 14 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Deferred Stock Unit Agreement shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee.  No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 

12. Clawback/Repayment.  This Deferred Stock Unit Agreement shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (i) any clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time and (ii) applicable law.  In addition, if the Participant receives any amount in excess of what the Participant should have received under the terms of this Deferred Stock Unit Agreement for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), then the Participant shall be required to repay any such excess amount to the Company. 

13. Right to Offset.  The provisions of Section 15(x) of the Plan are incorporated herein by reference and made a part hereof.

13. Governing Law.  This Deferred Stock Unit Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.  Notwithstanding anything contained in this Deferred Stock Unit Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Deferred Stock Unit Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware. THE PARTICIPANT IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF THE PARTICIPANT’S RIGHTS OR OBLIGATIONS HEREUNDER.

14. Plan.  The terms and provisions of the Plan are incorporated herein by reference.  In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Deferred Stock Unit Agreement (including the Grant Notice), the Plan shall govern and control. 

15. Section 409A.  

(a) It is intended that the Deferred Stock Units granted hereunder shall be compliant with Section 409A of the Code and the regulations promulgated thereunder and shall be interpreted as such, including, without limitation, by delaying the issuance of shares of Common Stock contemplated hereunder.

 

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(b) Notwithstanding anything in this Deferred Stock Unit Agreement to the contrary, if a Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments in respect of any Deferred Stock Unit that is “deferred compensation” subject to Section 409A of the Code and which would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six months after the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death.  Following any applicable six month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day.

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