UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2020
 
SeaWorld Entertainment, Inc.
(Exact name of Registrant as Specified in Its Charter)

Delaware	001-35883	27-1220297	
(State or Other Jurisdiction
of Incorporation)	(Commission
File Number)	(IRS Employer
Identification No.)	
 	 	 	
6240 Sea Harbor Drive Orlando, Florida 	32821	
(Address of Principal Executive Offices)
 	(Zip Code)	
Registrant’s Telephone Number, Including Area Code: (407) 226-5011
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:
			
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Common Stock, par value $0.01 per share	SEAS	New York Stock Exchange	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Item 7.01	Regulation FD.	
 
As previously disclosed on February 11, 2020, SeaWorld Entertainment, Inc. (the “Company”) entered into a binding agreement for the settlement of a previously disclosed putative derivative lawsuit commenced in 2014, captioned Kistenmacher v. Atchison, et al., Civil Action No. 10437 (“Kistenmacher”), filed in the Court of Chancery of the State of Delaware.  Pursuant to the settlement agreement, which was memorialized in a Stipulation of Compromise and Settlement filed with the Court on February 28, 2020, the Company received $12.5 million of insurance proceeds from the Company’s insurers to be used for general corporate purposes and will adopt certain corporate governance modifications. 
 
The settlement agreement is subject to final approval by the Court, and the Court has scheduled a hearing for May 21, 2020 at 9:15 a.m., Eastern Time, at the Court of Chancery of the State of Delaware, Kent County, 414 Federal Street, Dover, Delaware 19901, to consider approval of the settlement agreement.  Stockholders have the right to object to the settlement agreement.  The deadline for the submission by stockholders of an objection to the settlement agreement is May 7, 2020, fourteen calendar days prior to the hearing.
 
Additional information regarding the proposed terms of settlement can be found in the Notice of Pendency and Proposed Settlement of Derivative Action, a copy of which is included as Exhibit 99.1 to this report and incorporated herein by reference, and on the Investor Relations page of our website, http://www.seaworldentertainment.com.
 
The Company’s press release announcing the entry into the settlement agreement is included as Exhibit 99.2 to this report.
 
The information in this Current Report on Form 8-K is being furnished pursuant to Item 7.01 and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise be subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, and regardless of any incorporation language in such filing.
 
Item 9.01	Financial Statements and Exhibits.	
 
(d)Exhibits
 
Exhibit No.	 	Description	
 
99.1	 	Notice of Pendency and Proposed Settlement of Derivative Action	
99.2	 	Press Released dated March 27, 2020	
104	 	Cover page interactive data filed (embedded within the Inline XBRL document).	

 

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	 	 	 	SEAWORLD ENTERTAINMENT, INC.	
 	 	 	 	 	
Date: March 27, 2020	 	By:	 	/s/ G. Anthony (Tony) Taylor	
 	 	Name:	 	G. Anthony (Tony) Taylor	
 	 	Title:	 	Chief Legal Officer, General Counsel and Corporate Secretary  	

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MARK KISTENMACHER, DERIVATIVELY AND ON BEHALF OF SEAWORLD ENTERTAINMENT, INC.,
 
Plaintiff, v.
JIM ATCHISON, JAMES M. HEANEY, DANIEL B. BROWN, MARC SWANSON, DAVID F. D’ALESSANDRO, JOSEPH P. BARATTA, BRUCE MCEVOY, JUDITH
A.MCHALE, PETER F. WALLACE, DEBORAH THOMAS, STEPHEN A. SCHWARZMAN, SW DELAWARE L.P., SW DELAWARE A L.P., SW DELAWARE B L.P., SW DELAWARE C L.P., SW DELAWARE D L.P., SW DELAWARE E L.P., SW DELAWARE F L.P., SW DELAWARE CO-INVEST L.P., SW DELAWARE (GS) L.P., SW DELAWARE (GSO) L.P., SW CAYMAN LIMITED, AND THE BLACKSTONE GROUP L.P.,
 
Defendants, And
SEAWORLD ENTERTAINMENT, INC.,
 
Nominal Defendant.
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NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF DERIVATIVE ACTION

 
TO: ALL OWNERS OF SEAWORLD ENTERTAINMENT, INC., (“SEAWORLD,” OR THE “COMPANY”) COMMON STOCK (TICKER SYMBOL: SEAS) AS OF FEBRUARY 26, 2020, WHO CONTINUE TO OWN SUCH SHARES THROUGH MAY 21, 2020 (“CURRENT SEAWORLD STOCKHOLDERS”).
 
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS.
 
IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE DERIVATIVE ACTION, SEAWORLD STOCKHOLDERS WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING RELEASED CLAIMS.
 
THIS ACTION IS NOT A “CLASS ACTION.” THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT.
 
PLEASE TAKE NOTICE that this action is being settled on the terms set forth in a Stipulation of Compromise and Settlement, dated February 26, 2020 (the “Stipulation”).  The purpose of this Notice is to inform you of:
•the existence of the above-captioned derivative action (“Derivative Action”);
•the proposed settlement between the Plaintiff1 and Defendants reached in the Derivative Action (the “Settlement”);
•the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement;
 	•	Plaintiff’s Counsel’s application for fees and expenses; and	
 	•	Plaintiff’s Service Award.	
 
This Notice describes what steps you may take in relation to the Settlement. This Notice is not an expression of any opinion by the Court about the truth or merits of Plaintiff’s claims or Defendants’ defenses. This Notice is solely to advise you of the proposed Settlement of the Derivative Action and of your rights in connection with the proposed Settlement.

1 All capitalized terms used in this notice, unless otherwise defined herein, are defined as set forth in the Stipulation.

 
 
Summary
 
On February 26, 2020, Plaintiff, SeaWorld, in its capacity as a nominal defendant, defendants Jim Atchison, James M. Heaney, Daniel B. Brown, Marc Swanson, David F. D’Alessandro, Joseph P. Baratta, Bruce McEvoy, Judith A. McHale, Peter F. Wallace, Deborah Thomas, Stephen A. Schwarzman (“Individual Defendants”), SW Delaware L.P., SW Delaware A L.P., SW Delaware B L.P., SW Delaware C L.P., SW Delaware D L.P., SW Delaware E L.P., SW Delaware F L.P., SW Delaware Co-Invest L.P., SW Delaware (GS) L.P., SW Delaware (GSO) L.P., SW Cayman Limited (“Selling Shareholders”), and The Blackstone Group L.P., now known as The Blackstone Group Inc. (“Blackstone” and collectively with SeaWorld, the Individual Defendants, and the Selling Shareholders, “Defendants”) entered into the Stipulation in the Derivative Action filed derivatively on behalf of SeaWorld, in the Court of Chancery of the State of Delaware (the “Court”). The Settlement, as documented in the Stipulation, subject to the approval of the Court, is intended by the Parties to fully, finally, and forever compromise, resolve, discharge, and settle the Released Claims and to result in the dismissal of the Derivative Action with prejudice, upon the terms and subject to the conditions set forth in the Stipulation. The proposed Settlement requires: (i) SeaWorld to adopt certain corporate governance modifications, as outlined in Exhibit A to the Stipulation (“Reforms”);
(ii) certain of Defendants’ insurer(s) to pay twelve million five hundred thousand dollars ($12,500,000) to SeaWorld to be used by the Company for general corporate purposes (“Cash Payment”); and (iii) the Individual Defendants’ insurer(s) to pay to Plaintiff’s Counsel three million one hundred twenty-five thousand dollars ($3,125,000) from Side A-DIC insurance policies, to the extent approved by the Court, or in the event the Court approves a lesser amount, such lesser amount (“Fee and Expense Amount”) and a Service Award to Plaintiff of up to seven thousand five hundred dollars ($7,500), to be paid from the Fee and Expense Amount.
 
This notice is a summary only and does not describe all of the details of the Stipulation. For full details of the matters discussed in this summary, please see the full Stipulation posted on the Company’s Investor Relations page at its website, http://www.seaworldentertainment.com, contact Plaintiff’s Counsel at the addresses listed below, or inspect the full Stipulation filed with the Register in Chancery Court.
 
What is the Lawsuit About?
 
The Derivative Action is brought derivatively on behalf of nominal defendant SeaWorld and alleges, among other things, that the Defendants breached their

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fiduciary duties, or aided and abetted breaches of fiduciary duties, by making and/or causing SeaWorld to make false and misleading statements of material fact to the investing public that failed to disclose the negative effect of the documentary Blackfish and related publicity on attendance at SeaWorld locations and the Company’s revenue, which allegedly damaged SeaWorld due to its being named as a defendant in other litigation, as well as by causing SeaWorld to repurchase Company stock at allegedly artificially inflated prices.
 
Why is there a Settlement?
The Court has not decided in favor of Defendants or Plaintiff. Instead, both sides agreed to the Settlement to avoid the distraction, costs, and risks of further litigation, and because the Settlement, including the Reforms to be adopted by SeaWorld and the Cash Payment to SeaWorld, provides substantial benefits to, and is in the best interests of, SeaWorld and its stockholders.
 
The members of SeaWorld’s Board of Directors, none of whom is a Defendant in the Derivative Action, in exercising their business judgment, approved the Settlement and each of its terms, including the Cash Payment, the Reforms, and the Fee and Expense Amount, as in the best interest of SeaWorld and its stockholders.
 
Defendants deny each and every allegation of wrongdoing or liability arising out of or relating in any way to the events, conduct, statements, acts, or omissions alleged in the Derivative Action. Defendants further assert that, at all times, they acted in good faith, and in a manner they reasonably believed to be and that was in the best interests of SeaWorld and SeaWorld’s stockholders. Defendants assert that they have meritorious defenses to the claims in the Derivative Action. Nonetheless, Defendants have entered into the Stipulation, without admitting or conceding any fault, liability, wrongdoing, or damage whatsoever, in order to avoid the risks inherent in any lawsuit and the burden and expense of further litigation.
 
The Settlement Hearing and Your Right to Object to the Settlement
On March 12, 2020, the Court  entered  a  scheduling  order, which permitted  the  dissemination  of  this  Notice  regarding  the  Settlement   to Current SeaWorld Stockholders  (the  “Scheduling  Order”).  The Scheduling Order further provides that the Court will hold a hearing (the “Settlement Hearing”) on May 21, 2020 at 9:15 a.m. before  Vice  Chancellor  Joseph R. Slights III, Court of Chancery, Kent County,  located  at  414  Federal Street, Dover, Delaware 19901, to, among other things: (i) determine whether the proposed Settlement, including the Reforms and the Cash Payment to SeaWorld to
be used by the Company for general

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corporate purposes, is fair, reasonable and adequate and in the best interests of the Company and Current SeaWorld Stockholders; (ii) consider objections, if any, to the Settlement submitted in accordance with this Notice; (iii) determine whether a judgment should be entered dismissing all claims in the Derivative Action with prejudice, and releasing the Released Claims against the Released Persons; (iv) determine whether the agreed-to Fee and Expense Amount for Plaintiff’s Counsel to be paid by the Individual Defendants’ insurer(s) from Side A-DIC insurance policies and the Service Award for Plaintiff should be approved; and (v) consider any other matters that may properly be brought before the Court in connection with the Settlement.
 
Any Current SeaWorld Stockholder who wishes to object to the fairness, reasonableness, or adequacy of the Settlement as set forth in the Stipulation, or to the Fee and Expense Amount and Service Award, may file a written objection with the Court. An objector must at least fourteen (14) calendar days prior to the Settlement Hearing: (1) file with the Register in Chancery and serve upon the below listed counsel a written objection to the Settlement setting forth (a) the nature of the objection, (b) proof of ownership of SeaWorld common stock as of the date of filing the objection, including the number of shares of SeaWorld common stock held and the date of purchase, (c) any and all documentation or evidence in support of such objection, and (d) the identities of any cases, by name, court, and docket number, in which the stockholder or his, her, or its attorney has objected to a settlement in the last three (3) years; and (2) if intending to appear, and requesting to be heard, at the Settlement Hearing, he, she, or it must, in addition to the requirements of (1) above, file with the Register in Chancery and serve on the below listed counsel (a) a written notice of his, her, or its intention to appear at the Settlement Hearing, (b) a statement that indicates the basis for such appearance, (c) the identities of any witnesses he, she, or it intends to call at the Settlement Hearing and a statement as to the subjects of their testimony, and (d) any and all evidence that would be presented at the Settlement Hearing. Any objector who does not timely file and serve a notice of intention to appear in accordance with this paragraph shall be foreclosed from raising any objection to the Settlement and shall not be permitted to appear at the Settlement Hearing, except for good cause shown.
IF YOU MAKE A WRITTEN OBJECTION, IT MUST BE ON FILE WITH THE REGISTER  IN  CHANCERY  NO  LATER  THAN  MAY  7,  2020. THE REGISTER IN CHANCERY’S ADDRESS IS:
 
Register in Chancery:
Court of Chancery of Delaware, Kent County

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414 Federal Street
Dover, Delaware 19901
 
YOU ALSO MUST DELIVER COPIES OF THE MATERIALS TO PLAINTIFF’S   COUNSEL   AND   DEFENDANTS’   COUNSEL   SO   THEY ARE  RECEIVED  NO  LATER  THAN  MAY  7,  2020.   COUNSEL’S ADDRESSES ARE:

Timothy Brown
Counsel for Plaintiff:
Phillip Kim
 
THE BROWN LAW FIRM, P.C.
240 Townsend Square Oyster Bay, NY 11771
THE ROSEN LAW FIRM, P.A.
275 Madison Avenue, 40th Floor New York, NY 10016

 
Counsel for Defendants:

Jonathan K. Youngwood SIMPSON THACHER & BARTLETT
LLP
425 Lexington Avenue New York, NY 10017
Raymond J. DiCamillo  RICHARDS, LAYTON & FINGER, P.A.
920 North King Street Wilmington, Delaware 19801

An objector may file an objection on his, her or its own or through an attorney hired at his, her or its own expense. If an objector hires an attorney to represent him, her or it for the purposes of making such objection, the attorney must serve a notice of appearance on the counsel listed above and file such notice with the Court no later than fourteen (14) calendar days before the Settlement Hearing. Any SeaWorld stockholder who does not timely file and serve a written objection complying with the above terms shall be deemed to have waived, and shall be foreclosed from raising, any objection to the Settlement, and any untimely objection shall be barred.
Any objector who files and serves a timely, written objection in accordance with the instructions above, may appear at the Settlement Hearing either in person or through counsel retained at the objector’s expense. Objectors need not attend the Settlement Hearing, however, in order to have their objections considered by the Court.
 
If you are a Current SeaWorld Stockholder and do not take steps to appear in this action and object to the proposed Settlement, you will be bound by the Judgment

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of the Court and will forever be barred from raising an objection to such settlement in this Derivative Action, and from pursuing any of the Released Claims.
 
You may obtain further information by contacting counsel for Plaintiff at: Phillip Kim, The Rosen Law Firm, P.A., 275 Madison Avenue, 40th Floor, NY 10016, Telephone: (212) 686-1060, Email: pkim@rosenlegal.com; or Timothy Brown, The Brown Law Firm, P.C., 240 Townsend Square, Oyster Bay, NY 11771, Telephone: (516) 922-5427, Email: tbrown@thebrownlawfirm.net. Please Do Not Call the Court with Questions About the Settlement.

 

BY ORDER OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE:

 
Dated:  March 25, 2020
Signed: /s/ Joseph R. Slights III
Vice Chancellor Joseph R. Slights III

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Exhibit 99.2
SeaWorld Entertainment, Inc. Announces the Notice of Pendency and Proposed Settlement of Derivative Action
ORLANDO, Fla., Mar. 27, 2020 /PRNewswire/ -- SeaWorld Entertainment, Inc. (NYSE: SEAS), a leading theme park and entertainment company, today announced the Notice of Pendency and Proposed Settlement of Derivative Action.
As previously disclosed on February 11, 2020, SeaWorld Entertainment, Inc. (the “Company”) entered into a binding agreement for the settlement of a previously disclosed putative derivative lawsuit commenced in 2014, captioned Kistenmacher v. Atchison, et al., Civil Action No. 10437 (“Kistenmacher”), filed in the Court of Chancery of the State of Delaware.  Pursuant to the settlement agreement, which was memorialized in a Stipulation of Compromise and Settlement filed with the Court on February 28, 2020, the Company received $12.5 million of insurance proceeds from the Company’s insurers to be used for general corporate purposes and will adopt certain corporate governance modifications. 
 
The settlement agreement is subject to final approval by the Court, and the Court has scheduled a hearing for May 21, 2020 at 9:15 a.m., Eastern Time, at the Court of Chancery of the State of Delaware, Kent County, 414 Federal Street, Dover, Delaware 19901, to consider approval of the settlement agreement.  Stockholders have the right to object to the settlement agreement.  The deadline for the submission by stockholders of an objection to the settlement agreement is May 7, 2020, fourteen calendar days prior to the hearing.
 
Additional information regarding the proposed terms of settlement can be found in the Notice of Pendency and Proposed Settlement of Derivative Action, a copy of which can be accessed on the Investor Relations page of the Company’s website, http://www.seaworldentertainment.com.
 
About SeaWorld Entertainment, Inc.
SeaWorld Entertainment, Inc. (NYSE: SEAS) is a leading theme park and entertainment company providing experiences that matter, and inspiring guests to protect animals and the wild wonders of our world. The Company is one of the world's foremost zoological organizations and a global leader in animal welfare, training, husbandry and veterinary care. The Company collectively cares for what it believes is one of the largest zoological collections in the world and has helped lead advances in the care of animals. The Company also rescues and rehabilitates marine and terrestrial animals that are ill, injured, orphaned or abandoned, with the goal of returning them to the wild. The SeaWorld® rescue team has helped more than 36,000 animals in need over the Company's history.  SeaWorld Entertainment, Inc. owns or licenses a portfolio of recognized brands including SeaWorld®, Busch Gardens®, Aquatica®, Sesame Place® and Sea Rescue®. Over its more than 60-year history, the Company has built a diversified portfolio of 12 destination and regional theme parks that are grouped in key markets across the United States, many of which showcase its one-of-a-kind zoological collection. The Company's theme parks feature a diverse array of rides, shows and other attractions with broad demographic appeal which deliver memorable experiences and a strong value proposition for its guests.
Copies of this and other news releases as well as additional information about SeaWorld Entertainment, Inc. can be obtained online at www.seaworldentertainment.com. Shareholders and prospective investors can also register to automatically receive the Company's press releases, SEC filings and other notices by e-mail by registering at that website.
CONTACT:
Investor Relations:
Matthew Stroud
Vice President, Investor Relations
855-797-8625
 Investors@SeaWorld.com
Media:
Suzanne Pelisson Beasley
Manager, Corporate Communications
 Suzanne.Pelisson-Beasley@SeaWorld.com