<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT
OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CALIFORNIA JOCKEY CLUB
.................................................................
(Name of Registrant as Specified In Its Charter
CALIFORNIA JOCKEY CLUB SHAREHOLDERS COMMITTEE
.................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[X] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.............................................................
2) Aggregate number of securities to which transaction applies:
.............................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
4) Proposed maximum aggregate value of transaction:
.............................................................
5) Total fee paid:
[X] 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:
.............................................................
(2) Form, schedule or registration statement no.:
.............................................................
(3) Filing party:
.............................................................
(4) Date filed:
.............................................................
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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CALIFORNIA JOCKEY CLUB SHAREHOLDERS COMMITTEE
August 20, 1996
Dear Fellow Shareholder:
As we have previously written you, our Committee of concerned Cal Jockey
shareholders is seeking the election of a slate of Directors committed to
returning control of our company to its owners, the shareholders, and to
continuing profitable live racing at Bay Meadows Racecourse. We are grateful
for the many expressions of support we have received for our efforts.
You should know, however, that management continues to spend your money in
its high- handed efforts to intimidate the Committee and muzzle criticism of
management's real estate sales strategy. They recently sued the Committee,
its members and Bay Meadows Operating Company. That lawsuit, which alleges
various securities law violations, is entirely without merit, in the opinion
of our counsel. Further, rather than simply obey the recent court order
directing management to hold the Annual Meeting on August 30, 1996, Cal
Jockey's high-priced lawyers are desperately seeking to postpone the Meeting.
You should also know that Property Resources Inc., which agreed to buy the
parcel comprising the current stable area, recently sued the Committee to
prevent us from criticizing their sweetheart deal with management. Tellingly,
Property Resource's counsel advised the court at a recent hearing that his
client needed such a gag order because the election of the Committee's slate
could jeopardize the deal. The Court has so far rejected such request on the
grounds that no good cause has been shown.
THE LAST MINUTE DEAL WITH HUDSON BAY DEMONSTRATES THAT THE SHAREHOLDERS MUST
RESUME CONTROL
OVER CAL JOCKEY AND ITS FUTURE
The Committee notes with alarm the last minute deal announced, we believe in
desperation, by Cal Jockey with Hudson Bay Partners. The terms of that deal
and the consequent transfer of control over our company to Hudson Bay
demonstrate that the current Board must be replaced with directors committed
to serving the best long-term interests of all the shareholders. The deal
envisions the creation of two new limited partnership to which our combined
companies would distribute all of their assets and Hudson Bay would contribute
$300 million. HUDSON BAY WOULD OWN 72% OF THE PARTNERSHIP AND HAVE THE RIGHT
TO NOMINATE A MAJORITY OF THE DIRECTORS AT BOTH CAL JOCKEY AND BMOC.
ACCORDINGLY, IF CONSUMMATED, THE TRANSACTION WILL FORECLOSE OUR SHAREHOLDERS
FROM EVER OBTAINING A TRUE PREMIUM FOR SURRENDERING CONTROL OF OUR COMPANY.
FOR THIS REASON ALONE, THE DEAL MUST BE REJECTED. BUT, IF THAT WERE NOT
ENOUGH, CAL JOCKEY HAS AGREED TO PAY HUDSON BAY A $2.9 MILLION "BREAKUP FEE"
IF A BETTER DEAL IS PRESENTED BEFORE THIS TRANSACTION IS CONSUMMATED. We do
not believe
<PAGE>
such a break-up fee is enforceable. The holdover CJC directors
have rushed into an imprudent agreement in a desperate attempt to remain in
office. Hudson Bay should not and cannot be rewarded for encouraging the
holdover directors to violate their clear duties to CJC shareholders.
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PLEASE SUPPORT THE COMMITTEE'S EFFORTS TO ELECT NEW DIRECTORS COMMITTED TO
SERVING THE SHAREHOLDERS. PLEASE SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY
CARD TODAY IN THE ENVELOPE PROVIDED.
EVEN IF YOU HAVE ALREADY VOTED FOR MANAGEMENT, YOU CAN STILL CHANGE YOUR MIND
BY SIGNING, DATING AND RETURNING THE ENCLOSED BLUE PROXY CARD. ONLY THE LATEST
DATED, VALIDLY EXECUTED PROXY CARD COUNTS.
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MANAGEMENT'S PREVIOUSLY ANNOUNCED SALES STRATEGY
IS ILL-CONCEIVED AND BADLY EXECUTED
While the Committee believes that the proposed sales announced prior to the
Hudson Bay deal are injurious to the long-term best interests of the
shareholders by threatening live racing at Bay Meadows, our nominees are
committed to reviewing the issue thoroughly. As the following discussion
shows, however, the sales strategy appears to be ill-conceived and badly
executed. Management apparently did not prepare an economic feasibility
study. The properties were not publicly offered. Management has no plan to
deal with the critical need for stabling horses, despite the possibility that
the current stables will be demolished as early as next Spring. Management
has not identified any properties to purchase in exchange for the parcels to
be sold so that taxes can be deferred.
THESE FLAWS DEMONSTRATE THAT CAL JOCKEY BADLY NEEDS A BOARD OF DIRECTORS
COMMITTED TO ENSURING THAT MANAGEMENT ACTS IN ACCORDANCE WITH THE BEST
LONG-TERM INTERESTS OF THE SHAREHOLDERS, PURSUANT TO WELL THOUGHT OUT AND
EXECUTED PLANS. TO ELECT SUCH A BOARD, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED BLUE PROXY CARD TODAY.
MANAGEMENT'S SALES STRATEGY HAS BEEN ROUNDLY CRITICIZED BY DIRECTORS AND OUR
SISTER COMPANY
In addition to criticism by members of the Committee and other shareholders,
management's sales strategy has been sharply criticized by its own Directors
and by Bay Meadows Operating Company ("BMOC"), which trades in tandem with our
stock. The Committee believes that management should be responsive to
criticisms raised by members of its own Board of Directors and by its partner
in running the Bay Meadows Racecourse.
<PAGE>
Marylin K. Gunderson and Richard E. Perazzo, two of the current six Directors,
strongly oppose the sales strategy and have refused to stand for reelection.
They criticize the procedures followed by management in reaching the sales
agreements, particularly the failure to offer the parcels on the open market
and the failure to obtain an economic feasibility analysis. Copies of Ms.
Gunderson's and Mr. Perazzo's letters declining renomination, which Cal Jockey
was required to file with the Securities and Exchange Commission, are enclosed
with this letter. The letters detail their criticisms of the sales strategy.
BMOC management, in turn, is concerned that the proposed sales jeopardize the
continuance of live racing by disposing of the stables area. BMOC recently
distributed to shareholders a proxy statement for a Special Meeting, also on
August 30, 1996, to consider a proposal to continue racing in a way
substantially similar to current operations and to pursue on-site stabling.
If the stable area is sold, arrangements will have to be made to stable horses
either at the track or off-site. As described in the BMOC proxy statement,
Cal Jockey and BMOC have been unsuccessful in reaching an agreement on the
issue. BMOC believes that on-site stabling is the preferred course to
maintain prosperous racing operations. Under the sales agreement, however,
the current stables could be sold and torn down as early as Spring 1997. Cal
Jockey's failure to formulate a plan or to reach an agreement with BMOC
threatens our ability to hold the 1997 San Mateo County Fair and to conduct
the 1997 Racing Season.
THE INABILITY TO DEAL WITH ITS OWN DIRECTORS AND ITS BUSINESS PARTNER
DEMONSTRATES THAT CAL JOCKEY BADLY NEEDS A BOARD OF DIRECTORS WHICH CAN WORK
CONSTRUCTIVELY WITH ALL INTERESTED PARTIES TO FURTHER THE BEST LONG-TERM
INTERESTS OF THE SHAREHOLDERS. TO ELECT SUCH A BOARD, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED BLUE PROXY CARD TODAY.
MANAGEMENT'S SALES STRATEGY HAS PRODUCED
INADEQUATE SALES PRICES AND DEPRESSED THE VALUE
OF THE REMAINING REAL ESTATE
Our analysis shows that even if the proposed sales are appropriate, the
projected net cash consideration of $49 million from the proposed sales is at
least $8 million less than the land's fair value. An MAI appraisal in October
1995 projected the then-current value of the land at approximately $600,000
per acre, with estimated appreciation of up to 25% in two to three years.
Furthermore, the cash received from the proposed sales will be reduced by the
costs of required environmental remediation and of off-site improvements
management has agreed or may agree in the future to pay. The current
agreements also serve to reduce the value of the remaining land by requiring
Cal Jockey to construct and permanently maintain a retention pond.
<PAGE>
In addition, current management has failed so far to identify appropriate
exchange property in order to defer the tax consequences of the proposed
sales. The cash proceeds from the proposed sales would be substantially
reduced if taxes are not deferred.
CURRENT MANAGEMENT'S INABILITY TO OBTAIN FAIR VALUE IN THE PROPOSED SALES AND
THE CONSEQUENT REDUCTION IN THE VALUE OF OUR REMAINING REAL ESTATE, EVEN IN AN
OTHERWISE DEEPLY FLAWED PLAN, CLEARLY DEMONSTRATE THAT CAL JOCKEY BADLY NEEDS
A BOARD OF DIRECTORS COMMITTED TO THE BEST LONG-TERM INTERESTS OF THE
SHAREHOLDERS. TO ELECT SUCH A BOARD, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED BLUE PROXY CARD TODAY.
Thank you for your support. The Meeting is now less than two weeks away.
Please return your BLUE proxy card today to ensure that it is received in time
to be counted at the Meeting. Remember, only your latest dated, validly
executed proxy card counts!
If you have any questions, or require any assistance in voting your shares,
please call the company assisting us in communicating with shareholders,
Georgeson & Company Inc., toll free at 1-800-223-2064.
Very truly yours,
CALIFORNIA JOCKEY CLUB SHAREHOLDERS COMMITTEE
Ashton Cloninger David Gjerdrum F. Scott Gross John C. Harris
Barton D. Heller Doris Johnson Noble Threewitt Jerrylee Vanderhurst
Frank Wipfli Ronald J. Volkman
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IMPORTANT
If your shares are held in "Street Name" only your bank or broker can vote
your shares, and only upon receipt of your specific instructions. Please
contact the person responsible for your account and give instructions to
execute a BLUE proxy as soon as possible.
If you have any questions or need further assistance, please call the company
assisting us in communicating with shareholders:
GEORGESON & COMPANY INC.
TOLL FREE -- 1-800-223-2064
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<PAGE>
August 1, 1996
Mr. Kjell Qvale
Chairman of the Board
California Jockey Club
P.O. Box 1117
San Mateo, CA 94403
Dear Mr. Qvale,
This letter is submitted to inform the California Jockey Club Board of
Directors that I, herewith, decline to stand for reelection to this board for
the ensuing year, for the following reasons:
1.) I believe that the C.J.C. Board's action of entering into a
contract for the sale of the Bay Meadows stable area without, first, having
made provisions for suitable stabling for horses to race at Bay Meadows, has
jeapordized [sic] the future racing licenses for the Bay Meadows Operating
Company, which provides the Company's principal source of income and
dividends for its shareholders.
2.) I do not agree that C.J.C. is getting full value for its real
estate in the negotiated sale of the stable area or training track acreage.
The land was never offered for sale on the open market to other possible
interested buyers, and thus, can't be definitely determined to be in the
best interest of its shareholders.
3.) I do not wish to run for reelection on a slate with James P. Conn,
under whose influence and leadership the C.J.C. Board had taken the above
action besides the previous disasterous [sic] real estate development
contract with Prometheus (Bay Meadows Partners). In that litigation, C.J.C.
was sued for fraud, and then, settled out of court, paying $2,100,000 (plus
substantial legal fees) of shareholders' money to the joint venture partner,
Prometheus.
4.) These issues constitute disagreements with the California Jockey Club
on matters pertaining to it operations, policies and practices. I request
that this letter be disclosed to the public and be filed with the
Securities and Exchange Commission in a Current Report on Form 8-K as provided
for in Item 6(a) of the instructions thereto, and also be entered into the
minutes of this meeting.
Very truly yours,
/s/ Marylin K. Gunderson
Marylin K. Gunderson
Director
California Jockey Club
<PAGE>
August 2, 1996
Mr. Kjell Qvale, Chairman
California Jockey Club
c/o British Motors
901 Van Ness Avenue
San Francisco, CA 94109
Dear Mr. Chairman:
Pursuant to my telephone conversation with Jim Harris this morning, this
letter will confirm our discussion and serve as formal notification of my
decision to not stand for re-election to the C.J.C. board of directors.
During my six year tenure as a director of California Jockey Club I have
always acted in good faith and in the honest belief that actions taken by me
were in the best interest of the company. I have attempted to act on an
informed basis, however I have consistently expressed the feeling that neither
I, nor the shareholders were being adequately informed on important issues.
During the initial phases of the agreements with Franklin Fund affiliates
concerning the Bay Meadows barn area, I asked that the board of directors be
presented with a written financial analysis of the proposed transaction
supporting the economic feasibility of the transaction and the proposed sale
price. To my knowledge no analysis has ever been prepared. It was my
understanding that the transaction was to be structured as a tax deferred
exchange. When it appeared that a suitable exchange site could not be
located, I proposed that the agreements be terminated under provisions of the
contract. A majority of the board felt otherwise.. If this transaction
results in a sale, rather than an exchange, significant income taxes will
either be paid by the company, or if distributed to shareholders, by the
shareholders. California Jockey Club will be left with significantly less
assets and consequently less market value. Any attempt to then relocate the
barns either on or off Bay Meadows property would result in either significant
debt or the usage of after-tax dollars. Further, it is my belief that these
actions may complicate Bay Meadows Operating Company's attempts at obtaining
future racing licenses, and consequently may have a negative effect on
C.J.C.'s principal source of income.
The proposed sale/exchange of the 40-acre training track is also troubling.
Again, the board of directors has never been presented with a feasibility
study indicating that the transaction is in the best interest of shareholders.
On numerous occasions during 1995 and early 1996, as a member of the company's
audit committee, I requested an audit committee meeting. There were no
meetings held during 1995 and none in 1996, until well after the 1996 Form
10-K had been filed. The board was certainly aware that S.E.C. filings were
not being timely filed and possible accounting problems existed, but chose to
ignore the situation.
In addition, I believe that my standing for re-election in light of recent
actions by a dissident shareholder group may be construed as my condoning this
board's actions.
These issues constitute disagreements with California Jockey Club on matters
pertaining to its operations, policies and practices. I respectfully decline
to stand for re-election to the board of directors at the upcoming 1996
California Jockey Club annual meeting and request that this letter be
disclosed to the public and be filed with the Securities and Exchange
Commission in a Current Report on Form 8-K, as provided for in Item 6 (a) of
the instructions thereto.
Sincerely,
/s/ Richard E. Perazzo
Richard E. Perazzo
