<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CLEVELAND INDIANS BASEBALL COMPANY, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(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)(1) 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: Cleveland Indians Baseball Company, Inc.
(4) Date Filed: Not Applicable
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<PAGE> 2
[INDIANS LOGO]
CLEVELAND INDIANS BASEBALL COMPANY, INC.
------------------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
------------------------
Notice is hereby given that the Annual Meeting of Shareholders of Cleveland
Indians Baseball Company, Inc., an Ohio corporation, will be held at Jacobs
Field, 2401 Ontario Street, Cleveland, Ohio 44115 on Wednesday, June 2, 1999, at
12:00 noon, local time, for the following purposes:
1. To elect six directors;
2. To consider a proposal to amend our Amended and Restated Articles of
Incorporation as described in the accompanying Proxy Statement; and
3. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on April 5, 1999 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
SHAREHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING.
IF YOU PLAN TO ATTEND:
ATTENDANCE AT THE MEETING IS LIMITED TO SHAREHOLDERS OF THE COMPANY. YOU
WILL NEED AN ADMISSION TICKET TO ENTER THE MEETING. AN ADMISSION TICKET IS
INCLUDED WITH THIS PROXY STATEMENT. IF YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE RETAIN THE ADMISSION TICKET AND BRING IT WITH YOU TO THE MEETING.
REGISTRATION AND SEATING WILL BEGIN AT 11:00 A.M. SHAREHOLDERS MAY BE ASKED TO
PRESENT VALID PICTURE IDENTIFICATION, SUCH AS A DRIVER'S LICENSE OR PASSPORT.
SHAREHOLDERS HOLDING SHARES IN BROKERAGE ACCOUNTS ("STREET NAME" HOLDERS) WILL
NEED TO BRING A COPY OF A BROKERAGE STATEMENT REFLECTING SHARE OWNERSHIP AS OF
THE RECORD DATE. PARKING IS AVAILABLE AT LOCAL GARAGES; FEES FOR PARKING
TYPICALLY RANGE FROM $5.00 TO $10.00. CAMERAS, RECORDING DEVICES AND OTHER
ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE MEETING.
By Order of the Board of Directors,
David W. Pancoast sig.
DAVID W. PANCOAST
Secretary
April 19, 1999
<PAGE> 3
[INDIANS LOGO]
CLEVELAND INDIANS BASEBALL COMPANY, INC.
JACOBS FIELD
2401 ONTARIO STREET
CLEVELAND, OHIO
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, JUNE 2, 1999
------------------------
These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Cleveland Indians Baseball Company, Inc. of proxies to
be voted at our 1999 Annual Meeting of Shareholders. Our annual meeting will be
held on Wednesday, June 2, 1999, beginning at 12:00 noon, local time, at Jacobs
Field, 2401 Ontario Street (on the corner of Carnegie Avenue and Ontario
Street), Cleveland, Ohio 44115 and at any postponements or adjournments thereof.
If you plan to attend the meeting in person, please enter Jacobs Field through
Gate A. This proxy statement and the accompanying notice and proxy, together
with our 1998 Annual Report, are first being sent to shareholders by mail on or
about April 19, 1999.
- --------------------------------------------------------------------------------
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At our annual meeting, shareholders will act upon the matters outlined in the
accompanying notice of meeting, including the election of directors and a
proposed amendment to our Amended and Restated Articles of Incorporation (the
"Articles"). Following the formal business portion of the meeting, our
management will report on our performance during 1998 and respond to questions
from shareholders.
WHO IS ENTITLED TO VOTE?
If you owned shares as of the close of business on April 5, 1999 (the record
date), you are entitled to notice of the meeting and to vote. You will be
entitled to one vote per share for each Class A Common Share that you owned on
the record date on each matter to be voted upon.
DO I NEED TO ATTEND THE ANNUAL MEETING IN ORDER TO VOTE?
No. You can vote either (i) by completing and mailing the enclosed proxy card or
(ii) in person by ballot at the annual meeting.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed proxies, may
attend the meeting. You will need an admission ticket to enter the meeting. An
admission ticket is included with this proxy statement. If you plan to attend
the meeting in person, please retain the admission ticket and bring it with you
to the meeting. Registration and seating will begin at 11:00 a.m. Shareholders
may be asked to present valid picture identification, such as a driver's license
or passport. Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting
<PAGE> 4
your share ownership as of the record date and present it upon registration at
the meeting. Cameras, recording devices and other electronic devices will not be
permitted at the meeting.
Parking is available at local garages; fees for parking typically range from
$5.00 to $10.00.
HOW MANY SHARES OF CLEVELAND INDIANS BASEBALL COMPANY'S STOCK ARE ENTITLED TO
VOTE?
As of the record date, there were 4,139,376 Class A Common Shares and 2,283,957
Class B Common Shares outstanding and entitled to vote at the annual meeting.
Class B Common Shares are entitled to 10,000 votes per share, and Class A Common
Shares are entitled to one vote per share. Accordingly, there were a total of
22,843,709,376 votes represented by shares entitled to vote as of the record
date. As a general rule, the Class A Common Shares and Class B Common Shares
vote together as a group. However, Proposal One to amend our Articles also
requires the separate affirmative vote of the holders of Class A Common Shares
entitling them to exercise a majority of the voting power of the Class A Common
Shares, excluding the vote of any holder of Class A Common Shares who is also a
holder of Class B Common Shares, or an affiliate of any holder of Class B Common
Shares. As of the record date, Richard E. Jacobs, as trustee of certain family
trusts, and Martin J. Cleary were the only record holders of Class B Common
Shares.
WHAT IS A QUORUM?
"Quorum" refers to the number of shares that must be in attendance at the
meeting to lawfully conduct business. The presence at the meeting, in person or
by proxy, of the holders of a number of shares representing a majority of the
outstanding voting power on the record date will represent a quorum. As a
result, shares representing 11,421,854,689 votes must be present at the annual
meeting to constitute a quorum. Proxies received but marked as abstentions or
broker non-votes will be included in the calculation of the number of shares
considered to be present at the meeting.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return it to
us in the accompanying envelope, it will be voted as you direct. If you are a
registered shareholder and attend the meeting, you may deliver your completed
proxy card in person.
WHAT HAPPENS IF I SIGN AND RETURN MY PROXY CARD BUT DO NOT MARK MY VOTE?
The appointed proxies will vote your shares to elect the six nominees for
director and to adopt the amendment to our Articles.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy card, you may change your vote at
any time before the proxy is exercised either by filing with our Secretary, Mr.
Pancoast, a notice of revocation or a duly executed proxy bearing a later date
or by giving us notice in open meeting.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
The Board's recommendations are explained in the description of each item in
this proxy statement. In summary, the Board recommends that shareholders vote:
- for election of the nominated slate of directors (see page 3); and
- for the amendment to our Articles (see page 11).
If any other matter is presented at the meeting, the proxy holders will vote as
recommended by the Board of Directors or, if no recommendation is given, in
accordance with his or her best judgment.
2
<PAGE> 5
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. Those director nominees who receive the greatest number
of votes will be elected directors. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to the election of one or more directors will not be
voted either for or against the director or directors indicated, although it
will be counted for purposes of determining whether there is a quorum.
AMENDMENT TO THE ARTICLES. The amendment to our Articles to eliminate the
one-time exception to the so-called "tag-along rights" requires both of the
following votes to be adopted:
(i) the affirmative vote of a majority of the votes represented by Class
A and Class B Common Shares cast at the meeting; and
(ii) the affirmative vote of the holders of Class A Common Shares
entitling them to exercise a majority of the voting power of the
Class A Common Shares, excluding from such vote any Class A Common
Shares held by a holder of Class B Common Shares or an affiliate of
any holder of Class B Common Shares.
Broker non-votes and abstaining votes have the same effect as votes against the
amendment to our Articles.
YOUR VOTE, AS A HOLDER OF CLASS A COMMON SHARES, IS EXTREMELY IMPORTANT FOR THIS
AMENDMENT TO BE ADOPTED. Your vote is important because Richard Jacobs (our
President, Chief Executive Officer and Chairman of the Board) controls
approximately 99.9% of our voting power largely through his ownership, as
trustee of certain family trusts, of high-vote Class B Common Shares.
Consequently, Mr. Jacobs' Class A Common Shares and the Class A Common Shares
held by Mr. Cleary, the only other holder of Class B Common Shares, will NOT be
counted for or against this proposal for purposes of the vote required under
(ii) above. In other words, the vote of Mr. Jacobs and Mr. Cleary will be
counted in calculating the vote required by subsection (i) above, and Mr. Jacobs
and Mr. Cleary have both indicated that they intend to vote all of their Class A
and Class B Common Shares in favor of the amendment to the Articles. However, in
calculating the vote required by subsection (ii) above, Mr. Jacobs' and Mr.
Cleary's Class A Common Shares will not be counted either for or against the
amendment. Therefore, this proposal will only pass if the holders of Class A
Common Shares entitling them to exercise a majority of the voting power of the
Class A Common Shares, excluding Mr. Jacobs' and Mr. Cleary's shares, vote FOR
the amendment. For more details on the amendment and why our Board of Directors
recommends that you vote in favor of the amendment, please refer to "Proposal
One: Proposed Amendment to our Articles to Eliminate the One-Time Exception to
the So-Called 'Tag-Along Rights"' on page 11 of this Proxy Statement.
WHO IS MAKING SOLICITATIONS PURSUANT TO THIS PROXY STATEMENT?
This solicitation of proxies is made by and on behalf of our Board of Directors.
We will bear the cost of the solicitation of proxies. We have retained Corporate
Investor Communications, Inc. at an estimated cost of $4,250, plus reimbursement
of expenses, to assist in the solicitation of proxies from brokers, nominees,
institutions and individuals. In addition to the solicitation of proxies by
mail, Corporate Investor Communications, Inc. and some of our regular employees
may solicit proxies by telephone or facsimile.
- --------------------------------------------------------------------------------
ELECTION OF DIRECTORS
DIRECTOR NOMINEES
The size of our Board of Directors is fixed at six members. At the annual
meeting, six directors will be elected to hold office until our next annual
meeting and until their successors are elected. The persons named as proxies
intend to vote for the election of the Board's six nominees. If any nominee
becomes unable to serve as a director before the annual meeting, the persons
named as proxies will vote for the substitute nominee designated by the Board.
All nominees currently serve as Board members.
If any shareholder gives written notice to our Secretary not less than 48
hours before the time fixed for holding the annual meeting, that the shareholder
desires that the voting for the election of directors be cumulative, and if an
announcement of the giving of the notice is made upon the convening of the
annual meeting by our
3
<PAGE> 6
Secretary or by or on behalf of the shareholder giving the notice, each
shareholder will have the right to cumulate the voting power that shareholder
possesses at the election and to give one candidate an amount of votes equal to
the number of directors to be elected multiplied by the number of the
shareholder's Class A Common Shares, or to distribute the shareholder's votes on
the same principle among two or more candidates, as the shareholder sees fit. If
voting for the election of directors is cumulative, the persons named in the
enclosed proxy will vote the shares represented by proxies given to them in a
fashion so as to elect as many of the nominees as possible.
We have set forth below the Board's nominees to serve as our directors and
have also indicated certain information regarding each nominee.
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
------------ ----------------------------------------------- --------------------
<S> <C> <C>
Richard E. Jacobs, 73 Chairman of the Board and Chief Executive April 1998
Officer of The Richard E. Jacobs Group Inc.
(real estate management and development
company)
Martin J. Cleary, 63 President and Chief Operating Officer of The April 1998
Richard E. Jacobs Group Inc. (real estate
management and development company)
Robert W. Brown, M.D., 74 Retired; former President of The American June 1998
League of Professional Baseball Clubs
Edward G. Ptaszek, Jr., 48 Partner, Baker & Hostetler LLP (law firm) June 1998
William B. Summers, Jr., 48 Chairman and Chief Executive Officer of June 1998
McDonald Investments Inc., a KeyCorp Company
(investment banking firm)
Raymond P. Park, 73 Chairman and Chief Executive Officer of Park July 1998
Corporation (diversified private holding
company)
</TABLE>
Mr. Jacobs has been Chairman of the Board, President and Chief Executive
Officer of the Company since its inception last year. From 1986 to 1998, Mr.
Jacobs was Chairman of the Board, President and Chief Executive Officer of
Cleveland Baseball Corporation, which previously served as the general partner
of the partnership which now owns the Cleveland Indians Baseball team. Mr.
Jacobs is also Chairman of the Board and Chief Executive Officer of The Richard
E. Jacobs Group Inc., a real estate management and development company ("The
Jacobs Group").
Mr. Cleary has been President and Chief Operating Officer of The Jacobs
Group since 1981. Mr. Cleary also serves as a director of Lamson & Sessions Co.
Dr. Brown has been retired since 1994. From 1984 to 1994, he served as
President of The American League of Professional Baseball Clubs.
Mr. Ptaszek has been a partner with the law firm of Baker & Hostetler LLP,
Cleveland, Ohio, since 1985. Baker & Hostetler LLP is our regular outside
counsel.
Mr. Summers has been Chairman and Chief Executive Officer of McDonald
Investments Inc., a KeyCorp Company, since the beginning of 1999. He was
President of McDonald & Company Investments, Inc. from 1989 through 1998 and
Chief Executive Officer from 1994 through 1998. From 1994 through 1998 he was
Chairman and Chief Executive Officer of McDonald & Company Securities Inc. He
served as President of McDonald & Company Securities, Inc. from 1989 to 1995.
Mr. Park has been Chairman and Chief Executive Officer of Park Corporation
since 1998. From 1961 to 1998 he was President and Chief Executive Officer of
Park Corporation.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1998, our Board of Directors held
two meetings. Each of our directors attended all of our Board meetings, either
in person or by telephone.
4
<PAGE> 7
Our Board's Audit Committee consists of Messrs. Cleary, Ptaszek and
Summers. The Audit Committee's principal functions include: (i) recommending a
firm of independent public accountants to serve as our independent auditors for
the next fiscal year; (ii) reviewing with the independent public accountants the
plans and results of the audit engagement, the letter of comments and
management's responses; (iii) approving professional services provided by the
independent public accountants and considering the range of audit and nonaudit
fees; (iv) reviewing the independence of the independent public accountants; (v)
reviewing the adequacy of our internal accounting controls; and (vi) reviewing
major accounting or reporting changes contemplated or made on our behalf. The
Audit Committee held two meetings in 1998.
Our Board does not have a nominating committee or a compensation committee.
Our Board as a whole performs the functions that such committees would otherwise
perform. If you would like to propose director nominees for consideration at an
annual meeting, you can do so under our code of regulations only by giving our
Secretary written notice of your intent to make a nomination not less than 60
nor more than 90 days before that annual meeting. You must tell us in your
notice, among other things, the nominee's name, biographical data and
qualifications.
- --------------------------------------------------------------------------------
SHARE OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth certain information regarding the beneficial
ownership of Class A Common Shares and Class B Common Shares as of the record
date (except as otherwise disclosed in the notes below), by (a) each of our
directors, (b) each other person who is known by us to own beneficially more
than 5% of the Class A Common Shares or Class B Common Shares, (c) our Chief
Executive Officer and the other executive officers named in the Summary
Compensation Table, and (d) our executive officers and directors as a group.
Except as otherwise described in the notes below, the following beneficial
owners have sole voting power and sole investment power with respect to all
shares set forth opposite their names.
<TABLE>
<CAPTION>
CLASS A COMMON CLASS B COMMON
SHARES SHARES
--------------------- ----------------------- TOTAL
NUMBER OF PERCENT NUMBER OF PERCENT PERCENTAGE
SHARES(1) OF CLASS SHARES OF CLASS VOTING CONTROL
--------- -------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Richard E. Jacobs (2).............. 133,200 3.2% 2,281,667 99.9% 99.9%
2401 Ontario Street
Cleveland, Ohio 44115
McDonald Investments Inc........... 574,517(3) 13.8% -0- * *
800 Superior Avenue
Cleveland, Ohio 44114
Martin J. Cleary................... 11,176(4) * 2,290 * *
Robert W. Brown, M.D............... 5,000(4) * -0- * *
Edward G. Ptaszek, Jr.............. 6,100(4) * -0- * *
William B. Summers, Jr............. 25,000(4) * -0- * *
Raymond P. Park(5)................. 344,334 8.3% -0- * *
6200 Riverside Drive
Cleveland, Ohio 44135
John H. Hart....................... 5,000(4) * -0- * *
Dennis Lehman...................... 5,500(4) * -0- * *
Kenneth E. Stefanov................ 3,100(6) * -0- * *
Jeffry L. Overton.................. 2,500(6) * -0- * *
Daniel J. O'Dowd................... 2,600(6) * -0- * *
All directors and executive
officers as a Group (fourteen
persons)......................... 550,910 13.3% 2,283,957 100% 99.9%
</TABLE>
- ---------------
* Less than one percent
5
<PAGE> 8
(1) Class B Common Shares can be converted on a share-for-share basis into Class
A Common Shares at any time. As a result, a holder of Class B Common Shares
is deemed to beneficially own an equal number of Class A Common Shares.
However, so that we do not overstate aggregate beneficial ownership, the
listed Class A Common Shares do not include Class A Common Shares which the
holder can acquire by converting Class B Common Shares into Class A Common
Shares. Similarly, the percentages of listed outstanding Class A Common
Shares have been determined with respect to the total number of Class A
Common Shares outstanding on the record date, not including Class A Common
Shares which the holder can acquire by converting Class B Common Shares into
Class A Common Shares.
(2) Consists of shares held by Richard E. Jacobs as sole trustee under
Declaration of Trust dated April 23, 1987 (the "Richard Jacobs Trust"), and
as sole trustee of the David H. Jacobs Marital Trust (the "David Jacobs
Trust"). Of the shares listed, 75% are held by the Richard Jacobs Trust, of
which Mr. Jacobs is currently the sole beneficiary, and 25% are held by the
David Jacobs Trust, of which the heirs of David H. Jacobs are the
beneficiaries. Does not include 6,043,334 Class A Common Shares issuable to
Cleveland Baseball Corporation (of which the Jacobs family trusts are the
sole shareholders) upon exchange of limited partnership interests in the
Cleveland Indians Baseball Company Limited Partnership, of which the Company
is sole general partner.
(3) According to a report on Schedule 13G dated March 8, 1999, filed with the
Securities and Exchange Commission, McDonald Investments Inc., an investment
banking firm, beneficially owned 574,517 of the outstanding Class A Common
Shares as of December 31, 1998. McDonald Investments Inc. disclosed in such
Schedule 13G that it has sole dispositive and voting power with respect to
all of such Class A Common Shares.
(4) Includes 5,000 Class A Common Shares subject to options exercisable within
60 days.
(5) Consists of shares held by Park Corporation, a corporation controlled by Mr.
Park and his children.
(6) Includes 2,500 Class A Common Shares subject to options exercisable within
60 days.
6
<PAGE> 9
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to our chief executive officer and our other most highly compensated
executive officers who served in such capacities as of December 31, 1998 (the
"named executive officers") for services rendered to us.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
AWARDS PAYOUTS
------------------------ -------
ANNUAL COMPENSATION RESTRICTED SECURITIES
----------------------------------------- STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS OTHER ANNUAL AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) COMPENSATION ($) SARS (#) ($) ($)
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard E. Jacobs...... 1998 $467,424 -0- -0- -0- -0- -0- -0-
Chairman of the Board
and Chief Executive
Officer
John H. Hart........... 1998 $600,000 $195,692(1) -0- -0- 15,000 -0- 15$,961(2)
Executive Vice
President and General
Manager
Dennis Lehman.......... 1998 $300,000 $ 95,692 -0- -0- 15,000 -0- $ 2,091(2)
Executive Vice
President, Business
Jeffry L. Overton...... 1998 $225,000 $ 47,846 -0- -0- 7,500 -0- $ 1,145(2)
Vice President,
Marketing and
Communications
Kenneth E. Stefanov.... 1998 $138,333 $ 23,923 -0- -0- 7,500 -0- -0-
Vice President, Finance
Daniel J. O'Dowd (3)... 1998 $300,000 $ 47,846 -0- -0- 7,500 -0- -0-
Former Vice President,
Baseball Operations,
Assistant General
Manager
</TABLE>
- ---------------
(1) Includes a $100,000 signing bonus earned by Mr. Hart for entering into his
employment agreement in 1998.
(2) Represents amounts paid by us for term life insurance pursuant to employment
agreements.
(3) Mr. O'Dowd served as Vice President, Baseball Operations and Assistant
General Manager until September 1998, at which time he was succeeded by Mark
A. Shapiro who now serves in that position. From September 1998 until the
present, Mr. O'Dowd has served as a Vice President of the baseball club.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- ------------ ------------ -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Jacobs..... -0- -- >-- -- -- >--
John H. Hart.......... 15,000 6.8% $15.00 6/3/08 $141,450 $358,650
Dennis Lehman......... 15,000 6.8% $15.00 6/3/08 $141,450 $358,650
Jeffry L. Overton..... 7,500 3.4% $15.00 6/3/08 $ 70,725 $179,325
Kenneth E. Stefanov... 7,500 3.4% $15.00 6/3/08 $ 70,725 $179,325
Daniel J. O'Dowd...... 7,500 3.4% $15.00 6/3/08 $ 70,725 $179,325
</TABLE>
- ---------------
(1) "Potential realizable value" is based on the assumed growth rates from the
$15.00 exercise price for the ten-year option term. An annual growth rate of
5% would result in a stock price per Class A Common Share of $24.43 and an
annual growth rate of 10% would result in a stock price per Class A Common
Share of
7
<PAGE> 10
$38.91. Actual realized value, if any, will depend on the market value of
the Class A Common Shares at the time of exercise, and no gain to the
optionee is possible without an increase in the Class A Common Share price.
AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND 1998 YEAR-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
1998 YEAR-END AT 1998 YEAR-END
(#) ($)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ------------------ ------------------ -------------------- -----------------
<S> <C> <C> <C> <C>
Richard E. Jacobs....... -0- -0- -0-/-0- -0-
John H. Hart............ -0- -0- 5,000/10,000 -0-
Dennis Lehman........... -0- -0- 5,000/10,000 -0-
Jeffry L. Overton....... -0- -0- 2,500/5,000 -0-
Kenneth E. Stefanov..... -0- -0- 2,500/5,000 -0-
Daniel J. O'Dowd........ -0- -0- 2,500/5,000 -0-
</TABLE>
EMPLOYMENT AGREEMENTS
Cleveland Indians Baseball Company Limited Partnership (the "Partnership"),
of which the Company is sole general partner, has entered into employment
agreements with Messrs. Hart, Lehman, Overton and Stefanov. Pursuant to their
respective agreements, the executives agree to devote their full time and
efforts exclusively to the Partnership, agree not to engage in conduct which is
detrimental to the Partnership or us and agree to abide by and be subject to the
discipline of the Office of the Commissioner of Major League Baseball. The
Partnership has the right to terminate an executive prior to the expiration of
that executive's agreement if the executive fails to comply with the employment
agreement or is fraudulent or dishonest in the performance of his duties. If an
executive is terminated without cause, the agreement requires the executive to
seek and accept other comparable employment, either from another club or another
baseball or non-baseball employer, and the amount received by the executive from
such other employment, if obtained, reduces the amount we owe the executive. By
their terms, the agreements are subject to and are governed by all applicable
rules and regulations of Major League Baseball and the American League.
Each agreement establishes an annual salary for each year of the term of
the agreement, including any option years. The salaries received by each of the
executives for 1998 are set forth in the Summary Compensation Table above. The
agreements provide for specified salary increases over the terms of the
agreements. In addition, the agreements provide for varying bonuses based on the
achievement of specified Company objectives. The agreements permit the
executives to elect to defer the payment of a portion of their salaries.
Pursuant to their respective employment agreements, Mr. Hart serves as
Executive Vice President and General Manager and is under contract through 2003
and for four additional years at the option of the Partnership; Mr. Lehman
serves as Executive Vice President, Business and is under contract through 2002
and for four additional years at the option of the Partnership; Mr. Overton
serves as Vice President, Marketing and Communications and is under contract
through 2002, with a limited right by Mr. Overton to terminate his contract in
2000; Mr. Stefanov serves as Vice President, Finance and is under contract
through 1999 and for two additional years at the option of the Partnership.
In addition, the Partnership has an employment agreement with Mr. O'Dowd.
Originally, Mr. O'Dowd served as Vice President, Baseball Operations and
Assistant General Manager. However, in September 1998, the Partnership and Mr.
O'Dowd entered into an amended employment agreement which changed Mr. O'Dowd's
position to a Vice President of the baseball club. Mr. O'Dowd's employment
agreement runs through 1999 and
8
<PAGE> 11
for three additional years at the option of the Partnership. The Partnership
does not expect to exercise its option to extend the terms of the agreement
beyond December 31, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Richard E. Jacobs is our Chairman of the Board, President and Chief
Executive Officer. As a member of our Board of Directors, Mr. Jacobs also serves
on the Board in its consideration of compensation matters, but does not act upon
his own compensation. For a discussion of certain transactions between the
Company and Mr. Ptaszek, Mr. Summers and Mr. Jacobs, see "Certain Transactions."
COMPENSATION OF DIRECTORS
Each member of our Board of Directors who is not also one of our employees
receives an annual fee of $15,000 for serving as a director and a fee of $1,000
for each Board meeting and committee meeting attended. We have established a
Directors' Deferred Compensation Plan pursuant to which our non-employee
directors may elect to defer up to 100% of the annual and meeting fees we pay
them. Amounts deferred are converted into units equivalent to our Class A Common
Shares such that the value of a participant's account will fluctuate based on
the market price of the Class A Common Shares. Directors who are also employed
by us do not receive any additional compensation for their services as
directors. We reimburse out-of-pocket expenses incurred by all directors in
connection with attending Board and committee meetings.
In connection with our initial public offering, we granted our non-employee
directors options to purchase 15,000 Class A Common Shares at an exercise price
of $15.00, which was the initial public offering price. These options, which
were granted to Messrs. Cleary, Brown, Ptaszek and Summers, will vest in three
equal annual increments beginning on June 9, 1999 and will expire on June 9,
2008. The options granted to Mr. Park will vest in three equal annual increments
beginning on July 14, 1999 and will expire on July 14, 2008.
BOARD OF DIRECTORS COMPENSATION REPORT
We do not have a compensation committee. Following completion of our
initial public offering in June 1998, our entire Board of Directors has had
responsibility for reviewing the annual compensation of our executive officers,
including the Chief Executive Officer. The Board has not, however, made any
significant changes to our compensation program since the time of our initial
public offering. Prior to our initial public offering, our executive
compensation program was established by the Partnership. Our Board of Directors
has provided the following Compensation Report:
Executive Compensation Policy. The Board's overall compensation philosophy
is to attract and retain qualified executives, which is critical to both our
short-term and long-term success, and to create a mutuality of interest between
executive officers and shareholders through compensation structures that share
the rewards and risks of strategic decision-making.
To this end, the Board plans to determine executive compensation consistent
with a philosophy of compensating executive officers based on their
responsibilities, our performance as a company and the achievement of
established annual goals. One of the most significant factors contributing to
our financial performance is the on-field success of the Cleveland Indians
baseball club. Consequently, bonuses and stock options are closely tied to the
performance of the baseball club in post-season play. The primary components of
our executive compensation program are (i) base salaries and certain other
annual compensation, (ii) bonuses for certain executive officers and (iii) stock
options. Each of these elements is discussed below.
Base Compensation. The base salaries and certain other annual compensation
for our executive officers in 1998 were determined by the Partnership according
to the experience of the executives in the sport of professional baseball,
together with comparisons of compensation paid by other major league baseball
teams and other comparable sports teams. The base salary of Richard E. Jacobs
was determined at the time of our initial public offering after consulting with
our investment advisors and the managing underwriters of our initial public
offering. The base salary for Mr. Jacobs is $700,000.
9
<PAGE> 12
The base salaries for Messrs. Hart, Lehman, Overton, Stefanov, and O'Dowd
were established prior to our initial public offering pursuant to employment
agreements entered into between each of them and the Partnership, of which the
Company is sole general partner. See "Employment Agreements." These agreements
currently provide for the following base salaries for the 1999 fiscal year:
<TABLE>
<S> <C>
Mr. Hart $625,000
Mr. Lehman $325,000
Mr. Overton $250,000
Mr. Stefanov $162,000
</TABLE>
In addition, Mr. O'Dowd's employment agreement provides for a base salary
of $240,000 through 1999.
In addition to their base salaries, our executive officers generally
receive the use of an automobile, the use of suites at Jacobs Field and four
tickets per game for business use at all home games, and reimbursement for meals
while traveling with the team.
Bonuses. The employment agreements for Messrs. Hart, Lehman and Stefanov
provide for bonuses based solely upon the on-field performance of the Cleveland
Indians baseball club as reflected by the club's participation in post-season
games. Generally, Messrs. Hart, Lehman and Stefanov earn a greater bonus for
each level of post-season play.
The employment agreement for Mr. Overton, our Vice President, Marketing and
Communications, entitles Mr. Overton to receive a bonus dependent upon whether
the baseball club attains specific financial performance goals based upon the
amount of adjusted gross revenue from various sources. If the club reaches
previously established financial performance targets, Mr. Overton is entitled to
receive a bonus calculated either (i) on the performance of the baseball club in
post-season play or (ii) on the financial performance of the baseball club,
whichever calculation is greater.
Mr. Jacobs is not entitled to receive any bonus.
In 1998, the named executive officers received the following bonuses:
<TABLE>
<S> <C>
Mr. Hart $95,692
Mr. Lehman $95,692
Mr. Overton $47,846
Mr. Stefanov $23,923
Mr. O'Dowd $47,846
</TABLE>
Stock Options. All of our executive officers are eligible to receive
options to purchase Class A Common Shares pursuant to our equity-based award
plan. We believe that stock option grants are a valuable motivating tool and
provide a long-term incentive to management. Stock option grants reinforce
long-term goals by providing the proper nexus between the interests of
management and the interests of you, as our shareholders.
Members of the Board of Directors:
Richard E. Jacobs
Martin J. Cleary
Robert W. Brown, M.D.
Edward G. Ptaszek, Jr.
William B. Summers, Jr.
Raymond P. Park
10
<PAGE> 13
- --------------------------------------------------------------------------------
PROPOSAL ONE: PROPOSED AMENDMENT TO OUR ARTICLES
TO ELIMINATE THE ONE-TIME EXCEPTION TO
THE SO-CALLED "TAG-ALONG RIGHTS."
GENERAL
Our Board of Directors has approved an amendment to our Articles that would
eliminate a one-time exception to the so-called "tag-along rights" contained in
our Articles. Our Board recommends that our shareholders adopt the amendment.
Currently, our Articles contain a provision, sometimes referred to as
"tag-along rights," that prohibits a holder of Class B Common Shares (currently
only Mr. Jacobs and Mr. Cleary) from transferring Class B Common Shares or any
interest therein, except to certain permitted transferees, unless all holders of
Class A Common Shares receive or are entitled to receive for their Class A
Common Shares the same kind and amount of consideration per share to be received
by any holder of Class B Common Shares in connection with that transfer. In
other words, in any transaction in which Mr. Jacobs or Mr. Cleary were to
transfer their Class B Common Shares, other than to a permitted transferee, Mr.
Jacobs or Mr. Cleary would be required under the terms of the Articles to
arrange for the holders of the Class A Common Shares to receive or have the
right to receive for their Class A Common Shares the same kind and amount of
consideration per share as Mr. Jacobs or Mr. Cleary would receive. Generally, a
"permitted transferee," for purposes of these provisions, is a family member of
a holder of Class B Common Shares, the trustee of a trust for the benefit of a
holder or certain family members of such holder, a corporation, partnership or
other entity controlled exclusively by a holder or certain family members of
such holder, a tax-exempt public charity or the executor or guardian of the
estate of a holder. If a holder of Class B Common Shares is a corporation,
partnership or other entity, a "permitted transferee" may also be a person who
owns 10% or more of the equity of such entity. You should read our Articles for
a complete description of the tag-along rights and for a complete definition of
"permitted transferee."
The tag-along rights provision was included in the Articles in order to
make the Class A Common Shares and the Class B Common Shares as equal as
possible from an economic point of view, even though the Class B Common Shares
have 10,000 votes per share and the Class A Common Shares have one vote per
share. These restrictions on transfer of the Class B Common Shares, sometimes
called tag-along rights, have one very important exception. A holder of Class B
Common Shares (again, currently only Mr. Jacobs and Mr. Cleary are such holders)
is entitled, for a period of three years following the date of Mr. Jacobs'
death, to transfer Class B Common Shares without regard to the so-called
tag-along rights. This is a one-time exception and would not apply to any
subsequent sale or transfer by someone who acquired shares from the Class B
holder pursuant to the exception. This exception was included in the Articles
primarily in order to provide Mr. Jacobs' estate with some flexibility following
Mr. Jacobs' death.
Mr. Jacobs and our Board believe that this exception to the tag-along
rights has complicated investors' understanding of our capital structure and
that it has been viewed negatively by some investors. As a result, in July 1998,
Mr. Jacobs announced that he would seek Board approval to place a proposal on
the ballot for our 1999 annual meeting of shareholders to amend the Articles to
eliminate the one-time exception. Accordingly, our Board has approved an
amendment to the Articles that would eliminate the one-time exception. If the
amendment is adopted by our shareholders, neither Mr. Jacobs nor Mr. Cleary
would have the ability to transfer their Class B Common Shares, other than to
permitted transferees, without providing the opportunity for holders of Class A
Common Shares to be included in the transaction on the same terms and
conditions.
If the amendment is not approved, then, following Mr. Jacobs' death, any
holder of Class B Common Shares would be free to transfer his shares to a third
party without including the holders of Class A Common Shares in the transaction.
As a result, Mr. Jacobs' estate could effectively sell control of the Company
without giving the holders of Class A Common Shares the benefit of such sale.
If the amendment is adopted, our Articles will be amended as reflected in
Appendix A attached to this proxy statement.
11
<PAGE> 14
VOTE REQUIRED FOR APPROVAL
This amendment to the Articles will not be adopted without both of the
following votes:
(i) the affirmative vote of a majority of the votes represented by
Class A and Class B Common Shares cast at the meeting; and
(ii) the affirmative vote of the holders of Class A Common Shares
entitling them to exercise a majority of the voting power of the
Class A Common Shares, excluding from such vote any Class A Common
Shares held by a holder of Class B Common Shares or an affiliate of
any holder of Class B Common Shares.
Consequently, Mr. Jacobs' Class A Common Shares and the Class A Common
Shares held by Mr. Cleary, will NOT be counted for or against this proposal for
purposes of the vote required under (ii) above.
In other words, the vote of Mr. Jacobs and Mr. Cleary will be counted in
calculating the vote required by subsection (i) above, and Mr. Jacobs and Mr.
Cleary have both indicated that they intend to vote all of their Class A and
Class B Common Shares in favor of the amendment to the Articles. However, in
calculating the vote required by subsection (ii) above, Mr. Jacobs' and Mr.
Cleary's Class A Common Shares will not be counted either for or against the
amendment. FOR THESE REASONS, YOUR VOTE IS EXTREMELY IMPORTANT AND NECESSARY TO
ADOPT THIS AMENDMENT TO OUR ARTICLES AND WE STRONGLY URGE YOU TO MARK YOUR
SELECTION ON THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING ENVELOPE.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE HOLDERS OF CLASS A COMMON SHARES
VOTE FOR THE PROPOSAL TO ADOPT THE AMENDMENT TO THE ARTICLES.
- --------------------------------------------------------------------------------
SHARE PERFORMANCE INFORMATION
The following graph compares the value of $100 invested in our Class A
Common Shares with a similar investment in the Nasdaq 100 Index and a peer group
comprised of Boston Celtics Limited Partnership II (BOS -- NYSE) and Orlando
Predators Entertainment Inc. (PRED -- Nasdaq) for the period June 4, 1998
through December 31, 1998. Dividends are assumed to be reinvested when received.
We did not select a published industry or line-of-business index for the peer
group because such an index does not exist for public companies whose only
business is professional sports franchises. We have selected the Boston Celtics
and Orlando Predators for the peer group because they are the only other
actively traded public companies of which we are aware whose only business is
professional sports franchises.
[GRAPH]
<TABLE>
<CAPTION>
CLEVELAND INDIANS NASDAQ 100 PEER GROUP
----------------- ---------- ----------
<S> <C> <C> <C>
6/4/98 100 100 100
6/30/98 71.67 114.86 88.4
9/30/98 41.25 115.55 49.74
12/31/98 47.5 155.5 56.45
</TABLE>
12
<PAGE> 15
- --------------------------------------------------------------------------------
CERTAIN TRANSACTIONS
In connection with our formation in March 1998, the Jacobs family trusts,
of which Richard E. Jacobs is the sole trustee, acquired 100 common shares of
the Company for a price of $1,500. Upon the amendment and restatement of our
articles of incorporation to provide for two classes of common shares, the 100
shares became 100 Class A Common Shares.
In connection with our formation, the Jacobs family trusts received
2,281,667 Class B Common Shares, 133,100 Class A Common Shares (in addition to
those described in the preceding paragraph) and $55.7 million in cash, and
Martin J. Cleary received 2,290 Class B Common Shares, 6,176 Class A Common
Shares and $55,800 in cash. Mr. Jacobs, the sole trustee of the Jacobs family
trusts, is our Chairman of the Board, President and Chief Executive Officer, and
Mr. Cleary is one of our directors.
Mr. Jacobs is Chairman of the Board and Chief Executive Officer of The
Jacobs Group, a real estate development and management company, and Mr. Cleary,
a director of the Company, is President and Chief Operating Officer of The
Jacobs Group. We have paid The Jacobs Group for certain legal, accounting and
administrative services it provided us. For the year ended December 31, 1998,
the aggregate amount paid for these services was $267,000. We anticipate that
The Jacobs Group will continue to provide certain administrative services,
including cash management during 1999. We operate four Cleveland Indians Team
Shops in shopping malls owned and managed by The Jacobs Group. Pursuant to
leases between us and affiliates of The Jacobs Group, we paid $506,000 in 1998.
We believe the terms of our administrative services arrangements and leases with
The Jacobs Group are at least as favorable as those that we could obtain from an
unrelated third party in an arm's-length transaction.
Mr. Jacobs, individually and as trustee of the David H. Jacobs Marital
Trust, was the guarantor of any outstanding amounts under our line of credit
with KeyCorp. There were no borrowings outstanding during 1998 under this line
of credit. As of February 28, 1999, we permitted this line of credit to expire.
Edward G. Ptaszek, Jr., one of our directors, is a partner in the law firm
Baker & Hostetler LLP in Cleveland, Ohio. That firm provided various legal
services to us during 1998. We expect that Baker & Hostetler LLP will continue
to provide such services during 1999.
William B. Summers, Jr., one of our directors is Chairman and Chief
Executive Officer of McDonald Investments Inc., a KeyCorp Company, in Cleveland,
Ohio. That firm provided investment services to us during 1998. We expect that
McDonald Investments Inc. will continue to provide such services during 1999.
- --------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and owners of more than 10% of a registered class of our
equity securities, to file with the Securities and Exchange Commission and the
Nasdaq National Market initial reports of ownership and reports of changes in
ownership of our Class A Common Shares and other equity securities. Executive
officers, directors and owners of more than 10% of our Class A Common Shares are
required by the Securities and Exchange Commission regulations to furnish us
with copies of all forms they file pursuant to Section 16(a).
To our knowledge, based solely on review of the copies of such reports
furnished to us and written representations that no other reports were required,
during the fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
10% beneficial owners were complied with, with one exception: Mr. Summers filed
one late report on Form 4 to report two transactions.
- --------------------------------------------------------------------------------
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as our independent auditors in 1998 and is
expected to do so in 1999. We expect that representatives of Deloitte & Touche
LLP will be at the annual meeting and will have a chance to make a statement if
they would like to do so. They will also be available to respond to your
questions.
13
<PAGE> 16
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS FOR THE 2000 MEETING
If you wish to include a proposal in our proxy statement for our 2000
Annual Meeting of Shareholders, you should forward the proposal to our Secretary
at 2401 Ontario Street, Cleveland, Ohio 44115. Any shareholder proposals meeting
the requirements of Rule 14a-8 under the Securities and Exchange Act of 1934
which are intended to be presented at our 2000 Annual Meeting of Shareholders
must be received by us at the address in the preceding sentence on or before
December 19, 1999, to be included in our proxy statement and form of proxy
relating to the 2000 Annual Meeting of Shareholders. For those shareholder
proposals which are not submitted in accordance with Rule 14a-8 (such as a
proposal to be submitted at the next Annual Meeting of Shareholders but not
submitted for inclusion in our proxy statement), our designated proxies may
exercise their discretionary voting authority, without any discussion of the
proposal in our proxy materials, for any proposal which is received by us after
March 5, 2000.
If you would like to receive a copy of our fiscal 1998 annual report on
Form 10-K (without exhibits), please write to Mr. Ronald S. McQuate, Director,
Corporate Planning and Development, at 2401 Ontario Street, Cleveland, Ohio
44115, and we will provide you with a copy free of charge.
- --------------------------------------------------------------------------------
OTHER MATTERS
Under the rules of the Nasdaq Stock Market, if your broker holds your
shares in its name, the broker may not be entitled to vote your shares if it
does not receive instructions from you. Under Ohio law and our Articles, such
"broker non-votes" and abstaining votes will not be counted in favor of or
against any nominee in the election of directors and will in effect be votes
against Proposal One. If you properly mark your choices in the proxy, the shares
you own will be voted in accordance with the choices you mark. If you do not
mark your choices, your shares will be voted at the meeting to elect the Board's
six nominees for director as set forth under "Election of Directors" above and
FOR Proposal ONE above.
If any other matters shall properly come before the meeting, the persons
named in the proxy will vote on those matters in accordance with their judgment.
We do not know of any other matters that will be presented for action at the
meeting.
By Order of the Board of Directors,
David W. Pancoast sig.
DAVID W. PANCOAST
Secretary
April 19, 1999
14
<PAGE> 17
APPENDIX A
RESOLVED, that the Amended and Restated Articles of Incorporation of Cleveland
Indians Baseball Company, Inc. be amended by deleting, in its entirety,
subsection (h) of Article Fourth, Division C, Section 2.
<PAGE> 18
DETACH CARD
-------------------------------------------------------------------------------
CLEVELAND INDIANS BASEBALL COMPANY, INC.
(FOR CLASS A COMMON SHARES)
The undersigned hereby appoints DAVID W. PANCOAST and ANTHONY W. WEIGAND and
each of them, attorneys and proxies of the undersigned, with full power of
substitution, to attend the annual meeting of shareholders of Cleveland Indians
Baseball Company, Inc. to be held at Jacobs Field, 2401 Ontario Street (on the
corner of Carnegie Avenue and Ontario Street), Cleveland, Ohio, on Wednesday,
June 2, 1999, at 12:00 noon, local time, or any adjournment thereof, and to vote
the number of shares of the Company which the undersigned would be entitled to
vote, and with all the power the undersigned would possess if personally
present, as follows:
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as noted below)
</TABLE>
RICHARD E. JACOBS, MARTIN J. CLEARY, ROBERT W. BROWN, M.D.,
EDWARD G. PTASZEK, JR., WILLIAM B. SUMMERS, JR., RAYMOND P. PARK
INSTRUCTION: (TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(Continued, and to be signed, on the other side)
<PAGE> 19
DETACH CARD
-------------------------------------------------------------------------------
(Continued from the other side.)
<TABLE>
<S> <C> <C>
2. Proposal to amend the Company's Amended and Restated Articles of Incorporation as described in the accompanying Proxy
Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED, THEY WILL VOTE FOR THE NOMINEES LISTED IN
ITEM 1 AND FOR THE PROPOSAL IN ITEM 2.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
I PLAN TO ATTEND THE ANNUAL MEETING. [ ]
I DO NOT PLAN TO ATTEND THE ANNUAL MEETING. [ ]
</TABLE>
Receipt of the Notice of
Annual Meeting of Shareholders
and Proxy Statement dated
April 19, 1999, is hereby
acknowledged.
Dated , 1999
------------------------------
------------------------------
------------------------------
Signature(s)
(Please sign exactly as your
name or names appear hereon,
indicating, where proper,
official position or
representative capacity.)
<PAGE> 20
DETACH CARD
-------------------------------------------------------------------------------
CLEVELAND INDIANS BASEBALL COMPANY, INC.
(FOR CLASS B COMMON SHARES)
The undersigned hereby appoints DAVID W. PANCOAST and ANTHONY W. WEIGAND and
each of them, attorneys and proxies of the undersigned, with full power of
substitution, to attend the annual meeting of shareholders of Cleveland Indians
Baseball Company, Inc. to be held at Jacobs Field, 2401 Ontario Street (on the
corner of Carnegie Avenue and Ontario Street), Cleveland, Ohio, on Wednesday,
June 2, 1999, at 12:00 noon, local time, or any adjournment thereof, and to vote
the number of shares of the Company which the undersigned would be entitled to
vote, and with all the power the undersigned would possess if personally
present, as follows:
<TABLE>
<S> <C>
2. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as noted below)
</TABLE>
RICHARD E. JACOBS, MARTIN J. CLEARY, ROBERT W. BROWN, M.D.,
EDWARD G. PTASZEK, JR., WILLIAM B. SUMMERS, JR., RAYMOND P. PARK
INSTRUCTION: (TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(Continued, and to be signed, on the other side)
<PAGE> 21
DETACH CARD
-------------------------------------------------------------------------------
(Continued from the other side.)
<TABLE>
<S> <C> <C>
4. Proposal to amend the Company's Amended and Restated Articles of Incorporation as described in the accompanying Proxy
Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. On such other business as may properly come before the meeting.
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED, THEY WILL VOTE FOR THE NOMINEES LISTED IN
ITEM 1 AND FOR THE PROPOSAL IN ITEM 2.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
I PLAN TO ATTEND THE ANNUAL MEETING. [ ]
I DO NOT PLAN TO ATTEND THE ANNUAL MEETING. [ ]
</TABLE>
Receipt of the Notice of
Annual Meeting of Shareholders
and Proxy Statement dated
April 19, 1999, is hereby
acknowledged.
Dated , 1999
------------------------------
------------------------------
------------------------------
Signature(s)
(Please sign exactly as your
name or names appear hereon,
indicating, where proper,
official position or
representative capacity.)
<PAGE> 22
[JACOBS FIELD ERA CHAMPS LETTERHEAD]
April 19, 1999
Dear Shareholder:
Enclosed are materials relating to the first Annual Meeting of Shareholders of
Cleveland Indians Baseball Company,Inc. which is being held on Wednesday,June
2,1999,at Jacobs Field,2401 Ontario Street (on the corner of Carnegie Avenue and
Ontario Street),Cleveland,Ohio 44115. These materials include:
- The Notice of Meeting and Proxy Statement;
- The Company's 1998 Annual Report;
- A proxy card where you can mark your vote on the election of directors
and on the Proposal to amend our Amended and Restated Articles of
Incorporation; and
- A ticket for your admittance to the Annual Meeting.
You are urged to read the enclosed proxy statement and to complete,date and sign
the enclosed proxy card and return it in the enclosed envelope,whether or not
you plan to attend the Annual Meeting. As you will read in the proxy
statement,your vote,as a holder of Class A Common Shares,is extremely important
for Proposal One,to amend our Articles,to be adopted.
Because only shareholders of the Company as of the record date,or their duly
appointed proxies,may attend the meeting,your ticket to the meeting is
nontransferable. If you plan to attend the Annual Meeting in person,you will
need to present the enclosed ticket for admittance. You may also be asked to
present valid picture identification,such as a driver's license or passport.
Shareholders holding shares in brokerage accounts ("street name" holders) will
need to bring a copy of a brokerage statement reflecting share ownership as of
the record date.
The meeting will begin at 12:00 noon,local time. Admittance will be through Gate
A next to the bleacher entrance to Jacobs Field. The gate will open at 11:00
a.m. The meeting will be held rain or shine,so we suggest that if you plan to
attend the meeting,you come prepared for rain if appropriate. Please keep in
mind that the meeting will take place on a normal business day,so many parking
locations,including the Gateway garages,may already be at or near capacity.
TO ASSIST US IN PLANNING,PLEASE CHECK THE APPROPRIATE BOX ON THE ENCLOSED PROXY
CARD TO INDICATE WHETHER YOU EXPECT TO ATTEND THE MEETING.
If you have any questions about the Annual Meeting,please contact our investor
relations department,at (216) 420-5000.
Sincerely,
CLEVELAND INDIANS BASEBALL COMPANY,INC.
<PAGE> 23
FRONT OF TICKET:
SEC ROW SEAT
SHAREHOLDER TICKET
LOCATION PRICE
CLEVELAND INDIANS
BASEBALL COMPANY
[JACOBS FIELD ERA LOGO]
TICKET
REQUIRED
37014 VS. GAME
1998 ANNUAL
SHAREHOLDERS MEETING
JUNE 2, 1999
12:00 P.M. NOON
SEC ROW SEAT
PLEASE ENTER AT GATE A
NON-TRANSFERABLE
LOCATION PRICE
GATE OPENS AT 11:00 AM RAIN OR SHINE
[BAR CODE]
GAME NO REFUND OR EXCHANGE
JACOBS FIELD
<PAGE> 24
BACK OF TICKET:
NOTICE
All pyrotechnic displays are subject to cancellation in the event of adverse
weather/wind conditions, and no part of the ticket purchase price will be
refunded as a result of such cancellation.
This ticket is good only for the particular game indicated and no part of the
purchase price will be refunded by reason of the failure of the holder to use
this ticket for that game.
Should the game numbered hereon not progress to or beyond a point of play
constituting a regulation game under official baseball rule 4:10(c), and in the
event that the cancelled game is not rescheduled as a single game, the season
ticket holder of record will receive an automatic credit and the ticket stub
will have no value. If this game is rescheduled, please retain the ticket stub.
Instructions for redemption will follow.
If this ticket is issued as complimentary, it is good only for the day and date
indicated on the ticket, has no cash value and is neither refundable or
exchangeable.
CONDITIONS
IMPORTANT
The holder is admitted on condition and by use of this ticket agrees: The holder
will not transmit or aid in transmitting any description, account, picture or
reproduction of the Baseball Game (including pre- and post-game activities) to
which this ticket admits him. Breach of the foregoing will automatically
terminate this license. The holder grants permission to the Participating Clubs
and their agents to utilize holder's image or likeness incidental to any live or
recorded video display or other transmission or reproduction in whole or in part
of the event to which this admits him. The license granted by this ticket may
also be terminated by tendering to the holder the purchase price of this ticket.
This ticket may not be used for advertising, promotion (including contests and
sweepstakes) or other trade purposes without the express written consent of
Cleveland Indians.
WARNING
The holder assumes all risk and danger incidental to the game of Baseball,
whether occurring prior to, during or subsequent to, the actual playing of the
game including specifically (but not exclusively), the danger of being injured
by thrown bats and thrown or batted balls, and agrees that Major League
Baseball, the American League, the Participating Clubs, their Agents and
Players and other individuals are not liable for injuries resulting from such
causes. This ticket must not be resold or offered for resale in a manner or at
a price in violation of any Federal, State or Local Law or regulation.
GAME TIMES ARE SUBJECT TO CHANGE.
NO IN AND OUT PRIVILEGES.
Weldon, Williams & Lick
THE HOLDER ASSUMES ALL RISK INCIDENTAL TO THE GAME OF BASEBALL, INCLUDING
SPECIFICALLY (BUT NOT EXCLUSIVELY) THE RISK OF BEING INJURED BY THROWN BATS
AND/OR THROWN OR BATTED BALLS AND AGREES THAT THE MANAGEMENT IS NOT LIABLE FOR
INJURIES RESULTING FROM SUCH CASES.
[DAIRY QUEEN COUPON]
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