[Ed. note: The following is an excerpt of a press release. -J]
The Board of Directors of Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced the findings of the proxy advisory paper prepared by Glass Lewis & Co., a leading independent governance and proxy voting firm, regarding the proposals submitted by Q Funding III, L.P. and Q4 Funding, L.P. (“Q Investments”) to be considered at a Special Meeting of Unitholders on January 11, 2011.
Glass Lewis has recommended that unitholders vote against Proposal #2 “using the Company’s WHITE proxy card” as it found Q Investments’ rationale for this proposal “relatively unconvincing” and concluded “… we fail to see how implementing a rigid cash allocation policy of ‘distributions before debt,’ coupled with a vague mandate to increase dividends to close to historical distributions levels based on earnings, will afford Cedar Fair any measure of improved stability.” Glass Lewis also stated in its conclusion, “…we note the current board includes two new directors designated by the Dissident, each of whom recommend that unitholders reject this proposal.”
Commenting on Glass Lewis’ recommendation to vote against Proposal #2, Michael D. Kwiatkowski, Cedar Fair’s lead independent director said, “We appreciate Glass Lewis’ recognition of our commitment to providing our unitholders with a strong and sustainable distribution. In order to do so, we believe it is critical that we adhere to a prudent fiscal policy that responsibly maintains an appropriate balance between growing distributions and a strong balance sheet – as well as an investment policy – that provides maximum long-term returns.”
As expected, Glass Lewis followed its long-standing policy of supporting the separation of the roles of corporate officers and the Chairman of the Board by recommending unitholders vote for Proposal #1. “While we certainly respect Glass Lewis’ staunch position on this topic, we do not believe the particular route being proposed by the hedge fund in this case is in the best interest of all unitholders, especially since it would put unnecessary restrictions on the pool of qualified succession candidates as we move forward with our ongoing succession process” said Kwiatkowski.
Kwiatowski noted that the employment contract with current chairman and chief executive officer, Dick Kinzel, expires on January 2, 2012. With the assistance of the leading executive search firm Korn/Ferry International and a special committee of independent directors, the Company expects to identify a new CEO to succeed Kinzel in this role by the end of the second quarter of 2011.
Glass Lewis has recommended that unitholders follow its voting recommendation by voting the Cedar Fair WHITE proxy card and not Q Investment’s green proxy card.
Read the entire press release from Cedar Fair.