SeaWorld Entertainment, Inc. (NYSE:SEAS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02

As previously announced on March 24, 2017, funds affiliated with
The Blackstone Group L.P. (Seller) have agreed to sell an
approximately 21% interest in SeaWorld Entertainment, Inc. (the
Company) to Sun Wise (UK) Co., Ltd (Buyer), an affiliate of
Zhonghong Zhuoye Group Co., Ltd. (the Sale) to a Stock Purchase
Agreement between Buyer and Seller (the Stock Purchase
Agreement).In connection with the Sale, the Board of Directors of
the Company (the Board) has determined that in order to
compensate existing management for substantially delivering on
the performance targets required under the terms of the 2.75x
performance-vesting restricted shares, the Company will partially
vest 60% of the outstanding 2.75x performance-vesting restricted
shares held by certain of the Companys equity plan participants
upon the closing of the Sale, subject to continued service
through such date. As of March 31, 2017, approximately 1.3
million 2.75x performance-vesting restricted shares were
outstanding.

The Board considered that while these performance-vesting
restricted shares are not otherwise expected to vest because the
Sale proceeds to be paid at closing are not expected to satisfy
the cumulative 2.75x return multiple on Sellers invested capital
required under the terms of the performance-vesting restricted
shares, the Sale is expected to result in a cumulative return
multiple on Sellers invested capital of 2.67x, or 97% of targeted
return. In addition, the required internal rate of return vesting
condition of 15% will be significantly exceeded as a result of
the Sale.

Under the terms of the Stock Purchase Agreement, if in certain
circumstances the Buyer acquires a majority of the Companys then
outstanding common shares prior to the one-year anniversary of
the closing of the Sale, then the Buyer is required as a
condition to the closing of the acquisition that results in such
majority ownership, to pay to the Seller, in respect of each
share of common stock sold to the Buyer at the closing of the
Sale, the excess, if any, of the highest price per share paid by
the Buyer for shares of the Companys common stock over $23.00
(the Additional Payment). As such, any outstanding unvested 2.75x
performance-vesting restricted shares will not forfeit until the
end of such one-year period.

Additionally, the Board considered that in accordance with the
relevant accounting guidance, the Company would be required to
recognize non-cash equity compensation expense of approximately
$9.6 million related to any outstanding 2.75x performance-vesting
restricted shares upon closing of the Sale, regardless of whether
or not the shares vest in accordance with their terms. As a
result of the modifications to the 2.75x performance-vesting
restricted shares described herein, the Company expects to
recognize a non-cash equity compensation expense of approximately
$8.4 million, which is a reduction of $1.2 million from the
expected charge had the modification not taken place. The Company
also expects to pay cash accumulated dividends of approximately
$1.3 million related to the modification.

In exchange for the Company modifying the 2.75x
performance-vesting restricted shares to vest 60%, eight of the
Companys senior executives and David DAlessandro, the Companys
Chairman of the Board, have individually agreed to forfeit the
remaining 40% of their outstanding 2.75x performance-vesting
restricted shares upon the closing of the Sale. In addition, in
accordance with his Separation and Consulting Agreement which
contractually obligates the Company to apply any modifications to
his outstanding 2.75x performance-vesting restricted shares, Jim
Atchison, the Companys former President and Chief Executive
Officer, will also vest in 60% of his 2.75x performance-vesting
restricted shares and has agreed to forfeit the other 40% on the
closing of the Sale.For all other current employees, the
remaining 40% of their unvested 2.75x performance-vesting
restricted shares will continue to be eligible to vest in
accordance with their terms if Seller receives an Additional
Payment from the Buyer sufficient to satisfy the 2.75x cumulative
return multiple following the closing of the Sale.

Based on the modification described above, approximately 455,000
of the outstanding 2.75x performance-vesting restricted shares
are expected to vest upon closing of the Sale.The number of 2.75x
performance-vesting restricted shares held by the Companys fiscal
2015 named executive officers that will fully vest in connection
with the modification and consummation of the Sale is as follows:
63,771 shares for David DAlessandro, 154,621 shares for Jim
Atchison, 20,616 shares for G. Anthony (Tony) Taylor and 9,307
shares for Marc G. Swanson.

About SeaWorld Entertainment, Inc. (NYSE:SEAS)

SeaWorld Entertainment, Inc. is a theme park and entertainment company. It owns or licenses a portfolio of brands, including SeaWorld, Sea Rescue and Busch Gardens. It has a diversified portfolio of approximately 10 destination and regional theme parks that are located across the United States. Its theme parks feature a range of rides, shows and other attractions. The Company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas, and San Diego, California, and Busch Gardens theme parks in Tampa, Florida, and Williamsburg, Virginia. The Company operates water park attractions in Orlando, Florida (Aquatica); San Diego, California (Aquatica); Tampa, Florida (Adventure Island), and Williamsburg, Virginia (Water Country USA). The Company also operates a reservations-only attraction offering interaction with marine animals (Discovery Cove) and a seasonal park in Langhorne, Pennsylvania (Sesame Place).

SeaWorld Entertainment, Inc. (NYSE:SEAS) Recent Trading Information

SeaWorld Entertainment, Inc. (NYSE:SEAS) closed its last trading session up +0.18 at 16.19 with 1,736,277 shares trading hands.