<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
California Jockey Club
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
<PAGE> 2
[LOGO]
PRELIMINARY COPIES
CALIFORNIA JOCKEY CLUB
2600 SOUTH DELAWARE STREET
P.O. BOX 1117
SAN MATEO, CALIFORNIA 94403
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, AUGUST 30, 1996
To the Stockholders of California Jockey Club:
Notice is hereby given that the Annual Stockholders Meeting of California
Jockey Club will be held on Friday, August 30, 1996, at 10:00 a.m. Pacific
Daylight Time, at the Clubhouse of Bay Meadows Racecourse, 2600 South Delaware
Street, San Mateo, California, for the following purposes:
1. To elect five directors to serve until the 1997 Annual Meeting, or until
a successor has been elected and qualified.
2. To consider and vote upon a stockholder proposal to establish a
mandatory retirement age for directors.
3. To ratify the Board of Directors' selection of Deloitte & Touche LLP as
independent public accountants for the year 1996.
4. To transact such other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on August 7, 1996, are the
only stockholders entitled to notice of and to vote at the Annual Stockholders
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
KJELL H. QVALE
Chairman of the Board and Secretary
Dated August __, 1996
Proxies are being solicited by the Board of Directors of California Jockey Club.
To ensure representation of your stock at the Annual Meeting of California
Jockey Club, you must mark and return the YELLOW (California Jockey Club) proxy
card.
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE VOTE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE AS PROMPTLY AS
POSSIBLE. If you attend the meeting, you may vote your shares in person, even
though you have previously signed and returned your proxy.
<PAGE> 3
[LOGO]
PRELIMINARY COPIES
CALIFORNIA JOCKEY CLUB
2600 SOUTH DELAWARE STREET
P.O. BOX 1117
SAN MATEO, CALIFORNIA 94403
PROXY STATEMENT
SOLICITATION OF PROXY, CUMULATIVE VOTING AND REVOCABILITY
This Proxy Statement is furnished in connection with the solicitation of
proxies to be used at the Annual Stockholders Meeting (the "Annual Meeting") of
California Jockey Club (the "Company"), a Delaware corporation, to be held on
Friday, August 30, 1996, at 10:00 a.m. Pacific Daylight Time, at the Clubhouse
of Bay Meadows Racecourse, 2600 South Delaware Street, San Mateo, California,
and at any adjournment or postponements thereof. The stockholders of the Company
will consider (i) the election of five (5) directors to serve until the 1997
Annual Meeting or until their successors have been elected and qualified, (ii) a
stockholder proposal to establish a mandatory retirement age for directors (iii)
the ratification of the appointment of Deloitte & Touche LLP as independent
public accountants for the year 1996 and (iv) such other business as may
properly be brought before the meeting.
On May 7, 1996 the Company received notice of the nomination of certain
other individuals to stand for election to the Board of Directors.
The solicitation of proxies in the enclosed YELLOW proxy card is made on
behalf of the Board of Directors of the Company.
The entire expense of soliciting proxies, including, without limitation,
the cost of preparing, assembling, and mailing the proxy material and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical
expenses of transmitting copies of the proxy material to the beneficial owners
of shares held of record by such persons, will be borne by the Company. The
solicitation of proxies will be made by use of the mails and may also be made by
telephone, telegraph, or personally, by certain directors, officers and regular
employees of the Company who will receive no extra compensation for such
services. In addition, the Company has retained D.F. King & Co., a proxy
distribution and solicitation firm, to assist in the distribution and
solicitation of proxies for shares and to perform other related services.
Approximately 50 employees of D.F. King & Co. will be utilized in connection
with the solicitation. Although no precise estimate can be given at this time,
the Company anticipates that approximately $30,000 will be paid to D.F. King &
Co. in connection with the solicitation and anticipates that approximately
$350,000 will be spent on general costs incidental to the solicitation,
including expenditures for printing, postage, legal, accounting, public
relations, advertising and related expenses. Approximately $ of the
expenses have been incurred as of the date of this statement. The proxy
materials are being mailed to stockholders of record at the close of business on
August 7, 1996.
This Proxy Statement and the form of YELLOW proxy card were first sent or
given to stockholders on or about August
- --, 1996.
A stockholder signing and returning a proxy on the enclosed YELLOW proxy
card has the power to revoke it at any time before the shares represented
thereby are voted by notifying the Secretary of the Company in writing,
executing a subsequent later dated proxy or by attending and voting such shares
at the Annual Meeting. If a stockholder specifies how the proxy is to be voted
with respect to any of the proposals for which a choice is provided, the proxy
will be voted in accordance with such specifications and, in the event that
cumulative voting is properly invoked, the proxy will be voted cumulatively as
provided in the following paragraph. The proxy on the enclosed YELLOW proxy card
cannot be voted for more persons than the four (4) nominees named.
1
<PAGE> 4
Holders of the Company's Common Stock ("CJC Common Stock") are entitled to
one vote for each share held. The Company's Certificate of Incorporation
provides that a stockholder, or his proxy, may cumulate votes in the election of
directors. That is, each stockholder is entitled to the number of votes that is
equal to the number of shares owned by him multiplied by the number of directors
to be elected (five (5) for the Annual Meeting), and he may cumulate such votes
for a single candidate or distribute such votes among as many candidates as he
deems appropriate. Certain affirmative steps must be taken by stockholders of
the Company in order to be entitled to vote their shares cumulatively in the
election of directors. At a stockholders' meeting at which directors are to be
elected, such as the Annual Meeting, no stockholder shall be entitled to
cumulate votes for any candidate or candidates unless the candidate's or
candidates' names have been placed in nomination prior to the commencement of
the voting and a stockholder who appears in person at the meeting has given
notice thereat prior to the commencement of the voting of the stockholder's
intention to cumulate votes. If any stockholder has given such notice at the
Annual Meeting, then every stockholder entitled to vote may cumulate votes for
candidates in nomination. The Board of Directors will take those steps necessary
to properly place each of the names of the nominees of the Board of Directors in
nomination for director of the Company and to entitle stockholders to vote their
shares cumulatively in the election in accordance with the rules set forth in
the Company's Certificate of Incorporation and Bylaws. Subject to any
withholding of authority to vote for any nominee, in which case such a proxy
will be voted as described in the following sentences, the Board of Directors is
soliciting, and the proxy holders will have, full discretion and authority to
vote cumulatively, to allocate votes among any or all of the nominees of the
Board of Directors and to vote for the election of less than all of the nominees
of the Board of Directors (and in such order as they may determine) if
candidates other than those named herein for directors are proposed at the
Annual Meeting by others than the Board of Directors and the requirements for
cumulative voting are satisfied. If a stockholder withholds authority to vote
for any individual nominee by checking the box marked "FOR all nominees listed
at the right (except as marked to the contrary)" and writing the name of such
nominee for whom authority to vote is withheld in the space provided on the
YELLOW proxy card, then the Board of Directors is soliciting, and the proxy
holders will have, full discretion and authority to vote cumulatively, to
allocate votes among any or all of the nominees of the Board of Directors (other
than those nominees for whom authority to vote has been withheld) and to vote
for less than all of the nominees of the Board of Directors (and in such order
as they may determine). Alternatively, all discretionary authority of the proxy
holders to cumulate votes among the Board's nominees may be withheld by checking
the box marked "withhold authority to vote for all nominees listed at right." If
this latter alternative is selected by a stockholder, none of the stockholder's
shares will be voted (cumulatively or otherwise) for any of the nominees of the
Board of Directors unless such stockholder appears and votes in person at the
Annual Meeting. Ballots will be available at the Annual Meeting for persons
desiring to vote in person.
If voting on the election of directors at the Annual Meeting is not
conducted by cumulative voting, each stockholder will be entitled to cast one
vote per share for each of up to five (5) candidates. Whether or not there is
cumulative voting on the election of directors, the five (5) candidates
receiving the highest number of votes will be elected as directors. Accordingly,
broker non-votes and abstentions will not be counted, except for quorum
purposes, and will have no effect on the election of the directors. Voting on
all other matters to be submitted at the Annual Meeting is noncumulative and a
majority of the shares present in person or represented by proxy at the Annual
Meeting is required to approve such other matters. In determining whether the
requisite majority has been received on any such matter, broker non-votes will
not be counted, while abstentions will be counted and will therefore have the
same effect as a vote against the matter.
CERTAIN LEGAL PROCEEDINGS
Certain stockholders of the Company commenced legal proceedings against the
Company and the Board of Directors on July 3, 1996, in the Superior Court for
the County of San Mateo to compel the Company to notice, convene and conduct the
Annual Meeting. At a hearing held on July 29, 1996 on such stockholders'
application for a peremptory writ of mandate, the Court ordered the Company's
Board of Directors to convene the Annual Meeting on August 30, 1996 to elect
directors of the Company and issued a judgment to such effect on August 5, 1996.
2
<PAGE> 5
OUTSTANDING VOTING SECURITIES
Only stockholders of record at the close of business on August 7, 1996 (the
"Record Date") are entitled to vote at the Annual Meeting. On that day, there
were issued and outstanding 5,763,257 shares of CJC Common Stock.
The outstanding shares of CJC Common Stock are "paired" with the
outstanding shares of the common stock, $.01 par value per share ("BMOC Common
Stock"), of Bay Meadows Operating Company ("BMOC"), a Delaware corporation, so
that they are transferable and tradable only in combination as units, each unit
consisting of one share of CJC Common Stock and one share of BMOC Common Stock
(a unit of "Paired Common Stock"). These restrictions on transfer are imposed by
the Bylaws of the Company and BMOC. The pairing is evidenced by "back-to-back"
certificates and the certificates bear a legend referring to the restrictions on
transfer imposed by the Bylaws of the Company and BMOC.
The following table sets forth, as of July 1, 1996, the number of shares of
CJC Common Stock owned (i) by each director and nominee for director, (ii) by
the Named Executive Officers (identified below), (iii) by all directors and
executive officers of the Company as a group, and (iv) by all those known by the
Company to be beneficial owners as a group of more than five percent (5%) of the
CJC Common Stock, together with the percentage of stock so owned.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAMES OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENTAGE OF TOTAL(12)
- ---------------------------------------------------- ----------------------- -----------------------
<S> <C> <C>
James P. Conn....................................... 95,160(2)(3)(4) 1.7
James M. Harris..................................... 17,012(5) *
Brian M. Herrera.................................... 180,000(6)(7) 3.1
Marylin Kyne Gunderson.............................. 220,200 3.8
Richard E. Perazzo.................................. 8,248(8) *
Kjell H. Qvale...................................... 85,000 1.5
"Gabelli Group"..................................... 420,100(9) 7.3
David H. Lesser/Hudson Bay Partners, L.P............ 288,300(10) 5.0
Directors and executive officers, as a group........ 605,620(11) 10.5
</TABLE>
- ---------------
* Less than one percent (1%) of the outstanding CJC Common Stock.
(1) Unless otherwise indicated in the footnotes, and subject to community
property laws where applicable, each named stockholder has sole voting and
investment power with respect to the shares of CJC Common Stock
beneficially owned by such stockholder.
(2) Includes 22,080 shares held by Mr. Conn as trustee, and an additional
18,080 shares held in trust for the benefit of Mr. Conn's children. Mr.
Conn is not a trustee of his children's trust and does not have voting or
investment power over such shares, but does hold a reversionary interest in
the trust.
(3) Includes 20,000 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days of July 1, 1996.
(4) Mr. Conn is a Director of Gabelli Equity Trust and Gabelli Asset Fund,
which are affiliates of the "Gabelli Group" (see Note 9 below). Mr. Conn
disclaims beneficial ownership of the 420,100 shares owned by the Gabelli
Group.
(5) Includes 4,000 shares owned by Mr. Harris' mother for which Mr. Harris
holds a power of attorney.
(6) Includes 90,000 shares held by Mr. Herrera in the testamentary trust of Mr.
Herrera's late father, of which he is the trustee and a beneficiary.
(7) Includes 90,000 shares held in Mr. Herrera's mother's living trust, of
which he is a co-trustee and a beneficiary.
(8) Includes a total of 48 shares registered in Mr. Perazzo's name as custodian
for his sons, 24 shares each.
(9) A "Schedule 13D" (Amendment No. 2) filing dated July 27, 1994, was made by
the Gabelli Group. The Gabelli Group is comprised of Gabelli Funds, Inc.,
GAMCO Investors, Inc., Gabelli & Company, Inc., Gabelli International
Limited II, Gabelli Performance Partnership, Gabelli International Limited,
and Mario Gabelli. The Schedule 13D filing indicates that the aggregate
number of shares owned by the
3
<PAGE> 6
group is 420,100 shares. The address of the Gabelli Group is One Corporate
Center, Rye, N.Y. 10580-1435.
(10) A "Schedule 13D" dated July 18, 1996, was filed jointly by David H. Lesser
and Hudson Bay Partners, L.P. ("Hudson"). The Schedule 13D filing indicates
that Mr. Lesser has sole voting and dispositive power with respect to
12,800 shares owned of record by him, and Hudson owns of record 275,500
shares. Mr. Lesser is the President, sole director and sole shareholder of
Hudson Bay Partners, Inc., the general partner of Hudson, and, as a result
of such affiliation may be deemed to have shared voting and dispositive
power over the 275,500 shares owned by Hudson; however, Mr. Lesser
expressly disclaims beneficial ownership of any shares not directly owned
by him. The principal executive offices of Mr. Lesser and Hudson are
located at 2 West 45th Street, Suite 908, New York, New York 10036.
(11) Includes 20,000 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days of July 1, 1996.
(12) Percentages shown indicate what the total percentage beneficial ownership
of CJC Common Stock would be for each named stockholder if such holder, but
no other stockholder, whether or not named, exercised those of his stock
options that were exercisable on July 1, 1996, or that will become
exercisable 60 days thereafter.
4
<PAGE> 7
ELECTION OF DIRECTORS
(PROPOSAL 1)
Five (5) directors will be elected at the Annual Meeting to serve until the
Annual Meeting in 1997, or until a successor has been elected and qualified. On
August 3, 1996, the Board of Directors set the number of directors at five (5).
If any nominee is unable to serve or declines to serve, which the Board of
Directors has no reason to expect, the persons named in the accompanying Proxy
intend to vote for the balance of those named and, if they deem advisable, for a
substitute nominee. Set forth below is certain information about the nominees of
the Board of Directors. Except as set forth in this Proxy Statement, no nominee
or associate of any nominee (i) owns beneficially, directly or indirectly, any
stock of the Company, (ii) owns any stock of the Company of record, but not
beneficially, (iii) within the past two (2) years has purchased or sold any
stock of the Company, (iv) has current indebtedness incurred for the purpose of
acquiring or holding the stock of the Company referred to in (iii) above, (v) is
or has been within the past year a party to any contract, arrangement or
understanding with respect to any stock of the Company, (vi) has had since the
beginning of the Company's last fiscal year, or is to have, a direct or indirect
material interest in any transaction or any proposed transaction, to which the
Company or any of its affiliates was or is a party, (vii) has any substantial
interest in any matter anticipated at this time to be acted upon at the Annual
Meeting, (viii) has any arrangement or understanding with respect to future
employment with the Company or any of its affiliates or (ix) has any arrangement
or understanding with respect to future transactions to which the Company or any
of its affiliates will or may be a party.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL DIRECTOR PRINCIPAL OCCUPATION AND
BUSINESS ADDRESS AGE SINCE BUSINESS EXPERIENCE
- -------------------------- --- -------- --------------------------------------------------
<S> <C> <C> <C>
James P. Conn............. 58 1983 Managing Director and Chief Investment Officer of
1 Market Street Financial Security Assurance (an insurance
Steuart Tower, 22nd Floor company) since 1993. Director of Santa Anita
San Francisco, CA 94105 Operating Company and Santa Anita Realty
Enterprises, Inc. Former President and Chief
Executive Officer of BMOC (Thoroughbred horse
racing) from March 1988 to November 1992. Director
of Gabelli Equity Trust (publicly-held investment
company) and Gabelli Asset Fund since 1988.
Director of Gabelli Global Multi-Media Trust and
Gabelli Growth Fund. Director of the former
California Jockey Club from 1969 until its
reorganization in March 1983.
James M. Harris*.......... 63 1983 President and Treasurer of the Company since 1983.
2600 South Delaware Street Vice President of Cazenove, Inc., International
San Mateo, CA 94403 Stockbrokers, for more than five years (until
retirement in 1992).
Brian M. Herrera.......... 43 1992 President, Herrera Cadillac (auto dealership)
4350 Rosewood Drive since October 1991. Real Estate Developer, Morweg
Pleasanton, CA 94588 Development (land acquisitions and sales company),
from May 1988 to October 1991.
Kjell H. Qvale*........... 77 1991 Chairman of the Board and Secretary of the Company
901 Van Ness Avenue since 1991. Chairman of the Board of British Motor Car
San Francisco, CA 94109 Distributors, Ltd. (an automotive sales company)
since 1948. Chairman of the Board of KJB
Development Corp. (an automobile and investment
company) for over 35 years. Chairman of the Board
of First National Bank of Marin. Prior to 1991,
President and Director of Pacific Racing
Association d.b.a. Golden Gate Fields
(Thoroughbred horse racing), for over 25 years.
</TABLE>
- ---------------
* Executive Officers of the Company.
There is no family relationship among any of the Company's executive
officers, directors or nominees for director.
5
<PAGE> 8
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE ABOVE
NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY.
COMPENSATION OF DIRECTORS
For 1995, members of the Board of Directors received an annual fee of
$14,000 each. The directors who are appointed to various committees serve in
such capacities without compensation for their services. During 1995, each
director was also provided a food and beverage allowance of $1,000 for use by
the director and his or her guests in the Directors Room and Turf Club at Bay
Meadows Race Track.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors of the Company held a total of nine (9) meetings
during the year ended December 31, 1995. During 1995, none of the directors
attended fewer than 75% of the combined total number of meetings of the Board of
Directors and the total number of meetings held by all committees of the Board
of Directors on which they served.
The Board of Directors has appointed an Audit Committee, but has not
appointed a Nominating Committee.
The members of the Audit Committee are Kjell Qvale, James Harris and
Richard Perazzo. The functions of the Audit Committee are to review the annual
financial statements with the Company's independent public accountants prior to
publication, to review their work, approve any non-audit services performed by
them, and to make annual recommendations to the Board of Directors for the
appointment of independent public accountants for the ensuing year. The Audit
Committee did not have any meetings in 1995.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of its equity securities, file with the
Securities and Exchange Commission and the American Stock Exchange initial
reports of ownership, and reports of changes in ownership, of Common Stock and
other equity securities of the Company. Officers, directors and "greater than
ten percent" stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they have filed.
To the Company's knowledge, based solely on the review of copies of such
reports furnished to the Company during the fiscal year ended December 31, 1995,
and written representations that no other reports were required, all Section
16(a) filing requirements applicable to its officers, directors and "greater
than ten percent" beneficial owners were complied with.
EXECUTIVE COMPENSATION
The Company does not compensate its executive officers for their services.
Accordingly, there is no Compensation Committee and no report by the
Compensation Committee on executive compensation included herein.
RESIGNATIONS OF CERTAIN DIRECTORS
On August 2, 1996, the Company filed preliminary proxy materials with
respect to a possibly contested election of directors. In connection with such
materials, the Company indicated that James P. Conn, James M. Harris, Brian M.
Herrera and Kjell H. Qvale were nominated for re-election to the Board of
Directors.
By letter dated August 1, 1996 and received by the Company on August 2,
1996, Marylin K. Gunderson informed the Company that she declines to stand for
re-election to the Board for the next election year because of her disagreements
with certain actions of the Board of Directors. In such letter, Ms. Gunderson
indicates her belief that the action of the Board of Directors of entering into
a contract for the sale of the Bay
6
<PAGE> 9
Meadows stable area without first providing for stabling for horses to race at
Bay Meadows has jeopardized the future racing licenses for the BMOC. She states
her belief that the Company did not receive full value for its real estate in
the negotiated sale of the stable area or training track acreage. Ms. Gunderson
indicates her wish not to run for re-election on a slate with current Board
director James P. Conn.
By letter dated August 2, 1996 and received by the Company on August 6,
1996, Richard E. Perazzo informed the Company that he declines to stand for
re-election to the Board for the next election year because of his disagreements
with certain actions of the Board of Directors. In such letter, Mr. Perazzo
indicates his disapproval of the Company's barn area transaction due to the lack
of a written financial analysis supporting its economic feasibility and proposed
price. Mr. Perazzo expresses concerns that the transaction may be treated as a
sale rather than a tax deferred exchange and that the consequences of such
treatment will include, among other things, adverse income tax consequences to
the Company or its stockholders, leaving the Company with significantly less
assets and market value and complicating BMOC's attempts at obtaining future
racing licenses. Mr. Perazzo states his concern with respect to the proposed
sale/exchange of the training track and the fact that the Board of Directors has
never been presented with a feasibility study thereof. Mr. Perazzo asserts that
no meetings of the Board of Directors' Audit Committee were held during 1995 and
that none were held during 1996 until after the filing of the 1996 Form 10-K.
Mr. Perazzo asserts that the Board of Directors was aware that filings with the
Securities and Exchange Commission were not being timely filed and possible
accounting problems existed, but chose to ignore the situation.
The Board of Directors has not nominated either Ms. Gunderson or Mr.
Perazzo for re-election, and disagrees with the viewpoints relating to the
transactions and other matters expressed in each of the foregoing letters. As a
result of these land sales, the Board of Directors expects to diversify the
Company's real estate portfolio to significantly increase revenues, profits and
stockholder value, as well as to generate the additional funds for the barns and
training facilities that Bay Meadows needs.
In recent years, race track operators across the country have been
confronted with decreasing revenues resulting from a steady decline in daily
attendance. The Board of Directors believes, and BMOC management has confirmed,
that the barn and training facilities at Bay Meadows are in need of extensive
and costly replacement or repair. F. "Jack" Liebau, the President and Chief
Executive Officer of BMOC, estimated during BMOC's 1995 annual meeting of
stockholders that the cost of the replacement of these facilities would be $12
million to $15 million. As BMOC does not possess the funds necessary to replace
these facilities, the Company has entered into two separate agreements for the
sale of an aggregate of 73 acres of the 178 acres of land at Bay Meadows
(including a 33-acre parcel where the barns are now situated). Gross proceeds to
the Company will be approximately $52 million. The Board of Directors believes
that this amount represents a fair price and that the transactions are in the
best interests of stockholders. Moreover, the Company has been advised by its
legal counsel that it would be a breach of the Company's obligations to
terminate the agreement for the sale of the parcel where the barns are situated.
In addition, that agreement allows the Company to effect the transaction as a
tax deferred exchange and, while there can be no assurance that a suitable
exchange site allowing for such treatment will be located, the Board of
Directors presently intends to seek tax-deferred treatment of the transaction.
With respect to the other matters raised in the foregoing letters, Mr.
Perazzo's assertion that no meetings of the Audit Committee were held until
after the most recent filing on Form 10-K is incorrect. The Audit Committee held
a meeting at which Mr. Perazzo was present immediately prior to the filing of
the Annual Report on Form 10-K for fiscal year ended December 31, 1995.
Mr. Perazzo's letter fails to specifically identify any untimely filings
with the Securities and Exchange Commission or possible accounting problems. The
Board of Directors is not aware of any untimely filings made by the Company or
of any ongoing accounting problems.
The Board of Directors believes that Ms. Gunderson's statements concerning
Mr. Conn arise from a personal dispute resulting from the previous termination
of her son's employment with BMOC by Mr. Conn.
7
<PAGE> 10
STOCK PERFORMANCE GRAPH
The following Stock Performance Graph is not to be deemed to be "soliciting
material" or to be "filed" with the SEC or subject to Regulation 14A or 14C or
to the liabilities of Section 18 of the Exchange Act except to the extent the
Company specifically requests that such information be treated as soliciting
material or specifically incorporates it by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended. The
following graph shows a comparison of cumulative returns during the five year
period ended December 31, 1995, of the Paired Common Stock, Standard and Poor's
500 Composite Index ("S&P 500 Index") and the National Association of Real
Estate Investment Trust's All REIT Index:
<TABLE>
<CAPTION>
Measurement Period S & P 500 All REIT In-
(Fiscal Year Covered) BMOC/CJC Index dex
<S> <C> <C> <C>
1990 100 100 100
1991 106 131 136
1992 100 141 152
1993 116 155 180
1994 139 157 182
1995 148 215 215
</TABLE>
The stock performance graph assumes that the original investment in the
Companies' Paired Common Stock and the amount invested in the two indexes was
$100 on December 31, 1990, and that all dividends during the period were
reinvested.
STOCKHOLDER PROPOSAL: ESTABLISHMENT OF A
MANDATORY RETIREMENT AGE FOR DIRECTORS
(PROPOSAL 2)
Mr. Sylvester Giacchero, the owner of 9,000 shares of the Company's stock,
whose address is 949 Bristol Avenue, Stockton, California 95402, and Mr. David
M. Gjerdrum, the owner of 24,010 shares of the Company's stock, whose address is
559 Barron Avenue, Palo Alto, CA 94306, have given notice that they intend to
present for action at the Annual Meeting, either in person or through an
authorized representative, the following resolution:
"Resolved, that effective with the election of Directors at the 1996 Annual
meeting [sic], the mandatory retirement age for members of the Board of
Directors be set at age 72, this to be accomplished by providing that a nominee
must be of an age that would not place the nominee at or above the age of 72
prior to the end
8
<PAGE> 11
of his or her term. The foregoing shall only apply to nominees for directors at
meetings of shareholders subsequent to the 1996 annual meeting of shareholders."
Mr. Giacchero's and Mr. Gjerdrum's statement in support of their resolution
is as follows:
"This proposal seeks from the shareholders of California Jockey Club approval to
establish rules for senior management retirement largely symmetrical with those
overwhelmingly approved for the Bay Meadows Operating Company at the 1995
meeting. It is reasonably accepted that this change is in the best interest of
the California Jockey Club as it provides a vehicle for orderly succession in
the stewardship of this public service company. Many public companies have
chosen mandatory retirement as a means for assuring the continued pursuit and
qualification of candidates for senior positions, and with them the innovation
and vigor essential for success in the long term. Just such a change is now due
for California Jockey Club."
RECOMMENDATION AND COMMENTS ON THE ABOVE STOCKHOLDER PROPOSAL
Your Board of Directors, after consideration of this proposal, recommends
that the stockholders vote AGAINST it.
On March 28, 1996, the Board of Directors adopted an amendment to the
Company's Bylaws that is substantially similar to the stockholders' proposal.
That amendment provides as follows:
"No individual who has reached the age of 72 as of the annual meeting of the
stockholders at which the Directors are elected, commencing with the 1997 annual
meeting, shall be eligible thereafter to serve on the Board of Directors;
provided however, that the Board of Directors, in its discretion and with
respect to any particular individual, may waive the foregoing requirement for a
period of one year with respect to that individual."
The principal difference between the stockholders' proposal and the
Company's current Bylaws is that the proposal would mandate retirement at the
next annual meeting after a director reaches age 71, while the Bylaws mandate
retirement at the next annual meeting after a director reaches age 72 but allow
the Board, on a-case basis, to waive the age limitation for a single year. The
Bylaws, therefore, afford the Board a small degree of flexibility not afforded
by the proposal.
The current Bylaw provision provides the Board with additional time to
select well-qualified nominees to replace retiring directors and ensures an
orderly transition. Further, the Bylaw provision allows the Company the
opportunity to benefit from additional years of service of experienced
directors.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "AGAINST" THE STOCKHOLDER
PROPOSAL TO ESTABLISH A MANDATORY RETIREMENT AGE FOR DIRECTORS.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 3)
The firm of Deloitte & Touche LLP, which served the Company as independent
public accountants for the 1995 fiscal year, has been selected by the Board of
Directors of the Company as the Company's independent public accountants for the
1996 fiscal year. Deloitte & Touche LLP has no interest, financial or otherwise,
in the Company. All proxies will be voted for ratification of the appointment of
Deloitte & Touche LLP, unless authority to vote for the ratification of such
selection is withheld or an abstention is noted.
Representatives from Deloitte & Touche LLP will be present at the Annual
Meeting. They will have the opportunity to make a statement, if they desire to
do so, and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
1996.
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<PAGE> 12
OTHER MATTERS
STOCKHOLDERS' PROPOSAL FOR NEXT ANNUAL MEETING
Subject to the regulations promulgated under the Securities Exchange Act of
1934, proposals of stockholders intended to be presented at the 1997 Annual
Meeting must be received by the Company no later than April 14, 1997, for
inclusion in the Company's Proxy Statement and form of proxy for that meeting.
ANNUAL REPORT AND ANNUAL REPORT ON FORM 10-K
In lieu of the Company's Annual Report to Stockholders, the Company is
enclosing with this Proxy Statement the Company's 1995 Annual Report on Form
10-K, filed jointly with the Securities and Exchange Commission by the Company
and Bay Meadows Operating Company.
OTHER MATTERS
The Company's Bylaws provide that stockholders intending to nominate
candidates for election as directors or to bring business before a stockholders'
meeting must give the prescribed notice and information to the Company at least
60 days prior to the meeting of stockholders. However, the Bylaws also provide
that, where less than 70 days' notice or prior public disclosure of the date of
a stockholders' meeting is given, advance notice of stockholder nominations for
the election of directors or business to be brought before any stockholders'
meeting must be delivered or mailed to and received at the principal executive
offices of the Company not later than the close of business on the tenth day
following the day on which the notice of the meeting of stockholders was mailed,
or such public disclosure was made.
As of the date of this Proxy Statement, the Board of Directors does not
know of any other business to be presented for consideration at the Annual
Meeting. If any such stockholder proposal or other business should properly come
before the Annual Meeting, the persons named in the enclosed form of proxy, or
their substitutes, will vote the shares represented by the proxies with respect
to any such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
KJELL H. QVALE
Chairman of the Board and Secretary
Dated August , 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
RETURN THE ACCOMPANYING YELLOW PROXY CARD IN THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE.
10
<PAGE> 13
PRELIMINARY COPIES
APPENDIX A
[FRONT OF PROXY CARD]
PROXY
CALIFORNIA JOCKEY CLUB
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders of California Jockey Club, a Delaware corporation (the "Company"),
and the accompanying Proxy Statement dated August __, 1996, and revoking any
proxy heretofore given, hereby appoints James P. Conn, James M. Harris and Kjell
H. Qvale, or any of them, each with full power of substitution, as proxies of
the undersigned, to attend the Annual Meeting of Stockholders of the Company to
be held at the Clubhouse of Bay Meadows Race Course, 2600 South Delaware Street,
San Mateo, California on Friday, August 30, 1996, at 10:00 a.m. and any
adjournment or postponement thereof, and to vote the number of shares the
undersigned would be entitled to vote if personally present at the meeting.
AS SET DESCRIBED MORE FULLY IN THE PROXY STATEMENT, THIS PROXY WILL BE VOTED AS
SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE VOTED "FOR" THE NOMINEES OF THE
BOARD FOR ELECTION AS DIRECTORS (PROPOSAL 1), "AGAINST" THE STOCKHOLDER PROPOSAL
FOR A MANDATORY RETIREMENT AGE FOR DIRECTORS (PROPOSAL 2) AND "FOR" RATIFICATION
OF THE APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL 3). AS ALSO DESCRIBED MORE
FULLY IN THE PROXY STATEMENT, IF CANDIDATES FOR DIRECTORS OTHER THAN THOSE NAMED
HEREIN ARE PROPOSED AT THE ANNUAL MEETING BY OTHERS THAN THE BOARD OF DIRECTORS
AND THE REQUIREMENTS FOR CUMULATIVE VOTING ARE SATISFIED, THE PROXY HOLDERS
NAMED ABOVE SHALL HAVE FULL DISCRETION AND AUTHORITY TO VOTE CUMULATIVELY THE
SHARES OF THE UNDERSIGNED, ALLOCATE VOTES AMONG ANY OR ALL OF SUCH NOMINEES, AND
VOTE FOR THE ELECTION OF LESS THAN ALL OF THE NOMINEES OF THE BOARD OF DIRECTORS
(AND IN SUCH ORDER AS THEY MAY DETERMINE), SUBJECT TO ANY WITHHOLDING OF
AUTHORITY TO VOTE FOR ANY NOMINEE, IN WHICH CASE THIS PROXY WILL BE VOTED
CUMULATIVELY AS PROVIDED IN THE FOLLOWING SENTENCE. IN THE EVENT THIS PROXY
WITHHOLDS AUTHORITY TO VOTE FOR ANY NOMINEE, THEN, AS DESCRIBED MORE FULLY IN
THE PROXY STATEMENT, THE PROXY HOLDERS SHALL HAVE THE SAME DISCRETION AND
AUTHORITY AS SET FORTH IN THE PRECEDING SENTENCE EXCEPT THAT NO VOTES SHALL BE
ALLOCATED TO ANY NOMINEE FOR WHOM THIS PROXY WITHHOLDS AUTHORITY TO VOTE.
(To be completed and signed on reverse side)
<PAGE> 14
[REVERSE OF PROXY CARD]
X Please mark your
vote this way
COMMON SHARES
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed at the right AUTHORITY
(except as marked to vote for all
to the contrary) nominees listed at right
/ / / /
James P. Conn, James M. Harris, Brian M. Herrera and Kjell H. Qvale
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
________________________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING NOMINEES.
2. Adopt a resolution establishing a mandatory retirement age of 72 for
directors.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ESTABLISHMENT OF A
MANDATORY RETIREMENT AGE FOR DIRECTORS.
3. Ratify the appointment of Deloitte & Touche as independent auditors for the
year ended December 31, 1996.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS.
4. The proxies are authorized to vote in their discretion, upon any and all
other matters as may properly come before the meeting or any adjournment or
postponement thereof. (Please sign exactly as name appears. When shares are held
by joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in full partnership name by authorized
person.)
Dated: , 1996
Signature
Signature, if held jointly
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY IN THE ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
