SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary information statement [ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14c-5(d)(2))
[X] Definitive information statement
INTERNATIONAL SPEEDWAY CORPORATION
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(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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INTERNATIONAL SPEEDWAY CORPORATION
1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD
DAYTONA BEACH, FLORIDA 32114
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NOTICE OF ACTION BY SHAREHOLDERS WITHOUT A MEETING
PURSUANT TO SECTION 607.0704
OF THE FLORIDA BUSINESS CORPORATION ACT
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To the Shareholders of
International Speedway Corporation:
Notice is hereby given that the Board of Directors and the holders of a
majority of the outstanding shares of common stock of International Speedway
Corporation, a Florida corporation (the "Company"), have adopted Amended and
Restated Articles of Incorporation ("Restated Articles") for the Company. Among
other things, the Restated Articles (i) modify the Company's authorized capital
stock to include (x) 80 million shares of Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), having 1/5th vote per share, (y) 40
million shares of Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"), having 1 vote per share, and (z) 1 million shares of "blank
check" Preferred Stock, $.01 per share (the "Preferred Stock"), (ii) effect a
recapitalization (the "Recapitalization") pursuant to which all of the Company's
currently outstanding shares of common stock, par value $.10 per share (the
"Existing Common Stock"), will automatically be converted, on a 15-for-one
basis, into the newly authorized shares of Class B Common Stock, (iii) divide
the Company's Board of Directors into three classes, each of which serves for
different three-year periods, (iv) provide that special meetings of the
shareholders may be called only by the Board of Directors or upon the written
demand of the holders of not less than 50% of the votes entitled to be cast at a
special meeting, and (v) establish certain advance notice procedures for
nomination of candidates for election as directors and for shareholder proposals
to be considered at annual shareholders' meetings.
The Board of Directors of the Company approved the Restated Articles on
September 5, 1996 by unanimous written consent. Holders of over a majority of
the outstanding shares of the Company's common stock approved the Restated
Articles on September 26, 1996 by written consent in lieu of a meeting in
accordance with the provisions of Section 607.0704 of the Florida Business
Corporation Act. Accordingly, your consent is not required and is not being
solicited in connection with the adoption of the Restated Articles. You are
being provided with this notice of such action pursuant to Section 607.0704 of
the Florida Business Corporation Act.
The record date for determining shareholders entitled to receipt of this
notice is September 24, 1996. This notice is first being mailed to such
shareholders on or about October 1, 1996. The Restated Articles will not be
filed with the Secretary of State of the State of Florida or become effective
until at least 20 calendar days after such mailing.
By Order of the Board of Directors
/s/ W. Garret Crotty
---------------------------------
W. Garrett Crotty
Secretary
September 26, 1996
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INTERNATIONAL SPEEDWAY CORPORATION
1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD
DAYTONA BEACH, FLORIDA 32114
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INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND A PROXY
This Information Statement has been filed with the Securities and Exchange
Commission (the "SEC") and is first being mailed to the holders of record on
September 24, 1996 (the "Record Date") of shares of the common stock, par value
$0.10 per share (the "Existing Common Stock"), of International Speedway
Corporation, a Florida corporation (the "Company"). This Information Statement
relates to the adoption of Amended and Restated Articles of Incorporation for
the Company ("Restated Articles") by written consent of the holders of a
majority of the outstanding shares of the Company's Existing Common Stock. Among
other things, the Restated Articles (i) modify the Company's authorized capital
stock to include (x) 80 million shares of Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), having 1/5th vote per share, (y) 40
million shares of Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"), having 1 vote per share, and (z) 1 million shares of "blank
check" Preferred Stock, $.01 per share (the "Preferred Stock"), (ii) effect a
recapitalization (the "Recapitalization") pursuant to which all of the Company's
currently outstanding shares of common stock, par value $.10 per share (the
"Existing Common Stock"), will automatically be converted, on a 15-for-one
basis, into the newly authorized shares of Class B Common Stock, (iii) divide
the Company's Board of Directors into three classes, each of which serves for
different three-year periods, (iv) provide that special meetings of the
shareholders may be called only by the Board of Directors or upon the written
demand of the holders of not less than 50% of the votes entitled to be cast at a
special meeting, and (v) establish certain advance notice procedures for
nomination of candidates for election as directors and for shareholder proposals
to be considered at annual shareholders' meetings.
The Board of Directors of the Company approved the Restated Articles,
subject to shareholder approval, on September 5, 1996 by unanimous written
consent. Holders of over a majority of the outstanding shares of the Company's
Existing Common Stock approved the Restated Articles effective September 26,
1996 by written consent in lieu of a meeting in accordance with the provisions
of Section 607.0704 of the Florida Business Corporation Act. Accordingly, your
consent is not required and is not being solicited in connection with the
adoption of the Restated Articles. You are being provided with this Information
Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Regulation 14C and Schedule 14C thereunder,
and, in accordance therewith, the Restated Articles will not be filed with the
Secretary of State of the State of Florida or become effective until at least 20
calendar days after mailing of this Information Statement. The approximate date
this Information Statement is first being sent to shareholders is October 1,
1996.
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TABLE OF CONTENTS
PAGE
VOTING SECURITIES............................................................1
SECURITY OWNERSHIP...........................................................1
THE RESTATED ARTICLES........................................................3
General...................................................................3
Summary of Recapitalization and Newly Authorized Common Stock.............3
Anticipated Effective Date of Public Offering and Recapitalization........3
Antitakover Effects of Dual Class Stock Structure and Other Provisions
of Restated Articles......................................................4
Background of the Restated Articles and Recapitalization..................5
Reasons for the Dual Class Structure......................................5
Certain Potential Disadvantages of the Dual Class Stock Structure.........7
Description of the Common Stock...........................................7
Certain Effects of the Recapitalization..................................10
Increased Number of Authorized Shares....................................11
Description of Preferred Stock...........................................12
Directors................................................................13
Shareholder Meetings.....................................................13
Indemnification..........................................................14
INTERESTS OF CERTAIN PERSONS................................................15
AVAILABLE INFORMATION.......................................................15
EXHIBIT A - Amended and Restated Articles of Incorporation................A-1
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VOTING SECURITIES
This Information Statement is being mailed on or about October 1, 1996
to all shareholders of record as of the Record Date.
As of the Record Date, the Company had 2,294,926 shares of Existing Common
Stock issued and outstanding. Each share of Existing Common Stock is generally
entitled to one vote on matters submitted for shareholder approval.
As indicated above, the Restated Articles have been approved by the
holders of over 50% of the outstanding shares of Existing Common Stock.
Accordingly, no other vote of the Company's shareholders is required in
connection with the adoption of the Restated Articles. Florida law does not
provide rights of appraisal or similar rights of dissenters with respect to the
Company's adoption of the Restated Articles.
SECURITY OWNERSHIP
The following table sets forth certain information as of the Record Date
with respect to the beneficial ownership of the Company's Existing Common Stock
by: (i) each person known by the Company to be the beneficial owner of more than
5% of the outstanding shares of Existing Common Stock, (ii) each director of the
Company who beneficially owns any such shares, (iii) each of the Company's
executive officers who beneficially owns any such shares, and (iv) all directors
and executive officers of the Company as a group.
NAME OF NUMBER
BENEFICIAL OWNER (1) OF SHARES (2) PERCENT
---------------------------- --------------------- -------------
France Family Group(3).... 1,408,779 61.4%
James C. France(4)........ 989,085 43.1
William C. France(5)...... 969,461 42.3
Lesa D. Kennedy(6)........ 24,331 1.1
Raymond K. Mason, Jr.(7).. 23,116 1.0
Brian Z. France........... 19,116 *
James H. Foster(8)........ 14,721 *
Thomas W. Staed........... 3,000 *
H. Lee Combs(9)........... 2,537 *
James H. Hunter........... 1,717 *
John E. Graham, Jr........ 1,250 *
W. Grant Lynch, Jr........ 1,147 *
Robert W. Emerick..... 1,000 *
Chapman J. Root, II....... 900 *
Robert E. Smith........... 729 *
J. Hyatt Brown(10).... 600 *
Susan G. Schandel......... 444 *
John R. Cooper............ 100 *
Christy F. Harris......... 10 *
All directors and executive
officers as a group
(20 persons)(11)............. 1,421,818 62.0%
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* Less than 1%.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is c/o the Company, 1801 West International Speedway Boulevard,
Daytona Beach, Florida 32114.
(2) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares.
(3) Reflects the aggregate of 1,370,547 shares indicated in the table as
beneficially owned by James C. France, William C. France, Lesa D.
Kennedy and Brian Z. France, as well as 38,232 shares held of record by
the adult children of James C. France (such persons collectively, the
"France Family Group"). See footnotes (4), (5) and (6).
(4) Reflects (i) 17,848 shares held of record by Mr. France, (ii) 20,315
shares held of record by Sharon M. France, his spouse, (iii) 19,116 shares
held of record by Mr. France as custodian for his minor daughter, Amy Lea,
(iv) 507,675 shares held of record by Western Opportunity Limited
Partnership ("Western Opportunity"), (v) 300,000 shares held of record by
Carl Investment Limited Partnership ("Carl"), and (vi) 124,131 shares held
of record by White River Investment Limited Partnership ("White River").
James C. France is the sole shareholder and director of (x) Principal
Investment Company, one of the two general partners of Western
Opportunity, (y) Quaternary Investment Company, the general partner of
Carl, and (z) Secondary Investment Company, one of the two general
partners of White River. Also see footnote (5). Does not include an
aggregate of 38,232 shares held of record by the adult children of James
C. France.
(5) Reflects (i) 17,700 shares held of record by Mr. France, (ii) 20,315
shares held of record by Betty Jane France, his spouse, (iii) 507,675
shares held of record by Western Opportunity, (iv) 300,000 shares held of
record by Polk City Limited Partnership ("Polk City"), and (v) 124,131
shares held of record by White River. William C. France is the sole
shareholder and director of each of (x) Sierra Central Corp., one of the
two general partners of Western Opportunity, (y) Boone County Corporation,
the general partner of Polk City, and (z) Cen Rock Corp., one of the two
general partners of White River. Also see footnote (4). Does not include
the aggregate of 43,447 shares shown in the table as beneficially owned by
Lesa D. Kennedy and Brian Z. France, adult children of William C. France.
(6) Reflects (i) 22,216 shares held of record by Ms. Kennedy, (ii) 1,065
shares held of record by Ms. Kennedy as custodian for her minor son,
Benjamin, and (iii) 1,050 shares held of record as joint tenants with
Bruce S. Kennedy, her spouse.
(7) Includes 10,000 shares owned by American Banks of Florida, Inc. (Mr.
Mason serves as President and a director of, and has an 18% interest
in, this entity), as to which Mr. Mason disclaims beneficial ownership.
(8) Reflects (i) 4,721 shares held of record by Mr. Foster, (ii) 5,000 shares
held of record by Mr. Foster as trustee, and (iii) 5,000 shares held of
record by Barbara S. Foster, his spouse, as trustee.
(9) Reflects 2,487 shares held of record by Mr. Combs and 50 shares held of
record as joint tenants with Karen Combs, his spouse.
(10) Reflects shares held of record as joint tenants with Cynthia R. Brown,
his spouse.
(11) See footnotes (4) through (10).
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THE RESTATED ARTICLES
GENERAL
Effective September 5, 1996, the Company's Board of Directors unanimously
approved and adopted the Restated Articles and recommended that such Restated
Articles be submitted to the Company's shareholders for approval. As described
in further detail in "-Reasons for the Dual Class Structure," one of the
principal purposes of the Restated Articles is to provide flexibility in
considering, proposing, and structuring acquisition and financing transactions
to potentially augment the Company's growth. Effective September 26, 1996,
members of the France Family Group (see "Security Ownership"), holding in the
aggregate over 50% of the outstanding shares of Existing Common Stock, approved
the Restated Articles.
The following is a summary of the material terms of the Restated Articles.
This summary is qualified in its entirety by reference to the complete text of
the Restated Articles, which is attached to this Information Statement as
Exhibit A. Shareholders are urged to read the actual text of the Restated
Articles in its entirety.
SUMMARY OF RECAPITALIZATION AND NEWLY AUTHORIZED COMMON STOCK
The Company's authorized capital stock currently consists of 5,000,000
shares of Existing Common Stock, of which 2,294,926 shares are outstanding. The
Restated Articles modify the Company's capitalization such that, upon filing,
the Company's authorized capital stock will also include 80 million shares of
Class A Common Stock, 40 million shares of Class B Common Stock and one million
shares of Preferred Stock.
The Company has previously announced that it has filed a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC"), with respect to a proposed underwritten public offering
of approximately 4.0 million shares of Class A Common Stock (the "Public
Offering").
The Restated Articles will become effective upon filing with the Secretary
of State of the State of Florida. However, the Restated Articles expressly
provide that the Recapitalization will not become effective until the effective
date (the "Effective Date") of the Registration Statement (i.e., the
commencement of the Public Offering). Pursuant to the Recapitalization, each
share of Existing Common Stock will be automatically converted into 15 shares of
Class B Common Stock on the Effective Date.
As further described in "-Description of Common Stock," the economic
rights of the Class A Common Stock and the Class B Common Stock (collectively
the "Common Stock") will be identical, except that each share of Class A Common
Stock will entitle the holder thereof to one-fifth (1/5) vote in respect of
matters submitted for the vote of holders of Common Stock, whereas each share of
Class B Common Stock will entitle the holder thereof to one (1) vote on such
matters. Commencing on the 91st day after the Effective Date of the Public
Offering, each share of Class B Common Stock will be convertible on a
one-for-one basis at any time at the election of the holder into one fully paid
and nonassessable share of Class A Common Stock.
ANTICIPATED EFFECTIVE DATE OF PUBLIC OFFERING AND RECAPITALIZATION
The Company's present intent is to file the Restated Articles only if
management believes that the proposed Public Offering is reasonably likely to be
consummated. Management currently anticipates that the Public Offering will
commence on or about the last week of October 1996. However, there currently are
no firm commitments from any person to purchase any Class A Common Stock.
ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE REGISTRATION STATEMENT WILL BE
DECLARED EFFECTIVE OR THAT THE PUBLIC OFFERING WILL BE CONSUMMATED.
If the Restated Articles are filed with the Secretary of the State of
Florida, but the Registration Statement is not declared effective, all of the
provisions of the Restated Articles except the Recapitalization will become
effective. In such case, there will be no conversion of the Existing Common
Stock to Class B Common Stock pursuant to the Recapitalization or distribution
of Class A Common Stock pursuant to the Public Offering.
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Assuming the Registration Statement is declared effective by the SEC, each
issued share of Existing Common Stock will automatically be converted upon the
Effective Date into 15 shares of Class B Common Stock. Outstanding certificates
representing shares of Existing Common Stock will be deemed to represent shares
of Class B Common Stock following the Effective Date; provided, however, that
each person holding of record a certificate or certificates that formerly
represented shares of Existing Common Stock will receive, upon surrender of each
such certificate or certificates, together with a properly executed letter of
transmittal to the Company's transfer agent (the "Transfer Agent"), a new
certificate or certificates evidencing and representing the number of shares of
Class B Common Stock to which such person is entitled. SHAREHOLDERS SHOULD NOT
SUBMIT ANY CERTIFICATES REPRESENTING SHARES OF EXISTING COMMON STOCK PRIOR TO
THE EFFECTIVE DATE AND INSTEAD SHOULD RETAIN SUCH CERTIFICATES PENDING RECEIPT
OF A FORM OF SUCH LETTER OF TRANSMITTAL FROM THE TRANSFER AGENT.
ANTITAKEOVER EFFECTS OF DUAL CLASS STOCK STRUCTURE AND OTHER PROVISIONS OF
RESTATED ARTICLES
Certain provisions of the Restated Articles may deter or frustrate a
takeover attempt of the Company that a holder of Existing Common Stock might
consider in its best interest, including those attempts that might result in a
premium over the market price for the capital stock held by the shareholder. Set
forth below is a brief summary of the principal anti-takeover effects of the
Restated Articles.
DUAL CLASS STOCK STRUCTURE. Holders of Class A Common Stock will have per
share voting rights that are one-fifth of the voting rights of holders of Class
B Common Stock. One of the principal purposes of having two classes of common
stock with different voting rights is to maintain existing shareholders' control
of the Company. See "Certain Potential Disadvantages of the Dual Class Stock
Structure-Control by France Family."
PREFERRED STOCK. Upon filing of the Restated Articles, the Board of
Directors of the Company will be authorized, without further shareholder action,
to divide any or all shares of the authorized Preferred Stock into series and
fix and determine the designations, preferences and relative rights and
qualifications, limitations, or restrictions thereon of any series so
established, including voting powers, dividend rights, liquidation, preferences,
redemption rights and conversion privileges. The issuance of Preferred Stock
with voting rights or conversion rights may adversely affect the voting power of
the Common Stock, including the loss of voting control to others.
CLASSIFIED BOARD OF DIRECTORS. The Restated Articles (like the Company's
existing bylaws) provide for the Board of Directors to be divided into three
classes of directors serving staggered three-year terms. As a result,
approximately one-third of the Board of Directors will be elected each year.
These provisions, when coupled with the provision of the Articles authorizing
only the Board of Directors to fill vacancies in the Board, may deter a
shareholder from removing incumbent directors and simultaneously gaining control
of the Board of Directors by filling the vacancies created by such removal with
its own nominees.
SPECIAL MEETING OF SHAREHOLDERS. The Restated Articles further provide
that special meetings of shareholders of the Company may be called only by the
Board of Directors, the Chairman of the Board or holders of not less than 50% of
the votes entitled to be cast at the special meeting.
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. The Restated Articles provide that shareholders seeking to
bring business before an annual meeting of shareholders, or to nominate
candidates for election as directors at an annual or special meeting of
shareholders, must provide timely notice thereof in writing. To be timely, with
respect to an annual meeting, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company not less
than 120 days nor more than 180 days prior to the first anniversary of the date
of the Company's notice of annual meeting with respect to the previous year's
meeting. The Restated Articles also specify certain requirements for a
shareholder's notice to be in proper written form. These provisions may preclude
shareholders from bringing matters before the shareholders at an annual or
special meeting or from making nominations for directors at an annual or special
meeting.
AUTHORIZED BUT UNISSUED SHARES. The Restated Articles provide for a
significant number of authorized but unissued shares of Common Stock and
Preferred Stock that will be available for future issuance without shareholder
approval. These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. The existence of authorized
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but unissued and unreserved Common Stock and Preferred Stock may enable the
Board of Directors to issue shares to persons friendly to current management
which could render more difficult or discourage an attempt to obtain control of
the Company by means of a proxy contest, tender offer, merger or otherwise, and
thereby protect the continuity of the Company's management.
BACKGROUND OF THE RESTATED ARTICLES AND RECAPITALIZATION
In recent years, a number of publicly held companies have adopted capital
structures utilizing two classes of common stock. As part of its consideration
of a potential public offering of equity securities, management of the Company
became interested in effecting such a "dual class" structure in order to provide
flexibility in considering, proposing and structuring acquisition and financing
transactions to potentially augment the Company's growth.
As indicated in "Security Ownership," the France Family Group beneficially
owns approximately 62% of the issued and outstanding shares of Existing Common
Stock. In light of the possible effects of a dual class stock structure on the
shareholders of the Company (including the France Family Group), on July 3,
1996, the Board of Directors appointed a special committee (the "Special
Committee") of four independent directors. The four members were Christy F.
Harris, who served as chairman of the Special Committee, J. Hyatt Brown, Raymond
K. Mason, Jr. and Lloyd E. Reuss. The Special Committee was asked to review the
proposed recapitalization and recommend to the Board of Directors whether or not
to proceed. The Special Committee formally met two times relating to a
recapitalization (such number does not include informal meetings or discussions
that members of the Special Committee had with the Company's legal counsel
or representatives of Smith Barney Inc. ("Smith Barney"), one of the
representatives of the underwriters in the proposed Public Offering).
On September 3, 1996, the Special Committee held a conference call meeting
with legal counsel and representatives of Smith Barney. The objectives sought to
be achieved by, and the various proposed terms of, the Restated Articles and
Recapitalization were reviewed. The anticipated benefits and possible
disadvantages of the dual class stock structure of the Recapitalization to be
effected by the Restated Articles were also discussed. See "- Reasons for the
Dual Class Structure" and "- Certain Potential Disadvantages of the Dual Class
Structure." At that meeting, they also discussed the potential market price
differential between voting and non-voting or lesser-voting shares, the
potential impact on market liquidity, the potential reaction of institutional
investors to non-voting or lesser-voting stock structures and the potential
impact on the Company's ability to raise capital. Smith Barney did not receive
any fee for its participation in the Special Committee's analysis of the
Restated Articles; however, Smith Barney is expected to receive certain
underwriter compensation in connection with the proposed Public Offering. In
addition, the Company has indemnified Smith Barney against certain liabilities
and expenses it may incur in connection with its services.
At a meeting on September 5, 1996, at which all members were present, the
Special Committee formulated its recommendation to the Board of Directors that
the Company adopt the Restated Articles. All of the members of the Special
Committee voted to recommend to the Board of Directors the adoption of the
Restated Articles.
At its meeting on September 5, 1996, the Board of Directors considered the
Special Committee's recommendation. The Board discussed the Company's market
liquidity, shareholder positions, growth objectives, capital structure and
recommendations of the Special Committee. Following such discussions, the Board
of Directors concluded that the advantages of the Restated Articles outweighed
the potential disadvantages, and unanimously voted to approve the recommendation
of the Special Committee to adopt the Restated Articles and to recommend their
adoption to the Company's shareholders. The Company's Board of Directors then
directed that the proposed terms of the Restated Articles be finalized, that the
Restated Articles be submitted to the France Family Group for approval and that
this Information Statement be filed with the SEC.
REASONS FOR THE DUAL CLASS STRUCTURE
The Board of Directors believes that the adoption of the Restated
Articles, including the dual class stock structure created thereby, is in the
best interests of the Company. The material advantages and disadvantages of the
dual class stock structure considered by the Special Committee and the Board of
Directors are set forth herein. The Board of Directors believes that the
creation of a capital structure with both full-voting Class B Common Stock and
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lesser-voting Class A Common Stock will offer a number of potential benefits to
the Company and its shareholders as set forth below:
FINANCING FLEXIBILITY AND THE PUBLIC OFFERING. By authorizing the Company
to issue either full-voting or lesser-voting shares, the Restated Articles will
provide the Company with increased flexibility to issue Class A Common Stock (i)
in order to raise equity capital (either through direct issuances of stock or
through issuances of convertible securities) to finance future capital
expenditures and to finance the future growth of the Company, (ii) as
consideration for future acquisitions, and (iii) in connection with employee
stock benefit plans as a means of attracting, compensating and retaining key
employees, without materially diluting the voting power of the Company's
existing shareholders, even though their relative equity interests would
decrease. Management believes that by providing the Company with the ability to
issue lesser-voting equity securities, the Restated Articles also help mitigate
any reluctance that the France Family Group, which controls the Company (see
"Security Ownership" and "Interests of Certain Persons"), might otherwise have
to support the issuance of significant amounts of additional common stock
because of the accompanying voting dilution. Avoiding such voting dilution also
reduces the risk of disruption in the continuity of the Company's management,
current policy and long-term strategy, as discussed below under "--Continuity."
The Company intends initially to take advantage of such financing
flexibility through the proposed Public Offering.
SHAREHOLDER FLEXIBILITY AND LIQUIDITY. Assuming that the proposed Public
Offering is consummated, the Company's existing shareholders will collectively
hold approximately 97.7% of the combined voting power of both the Class A Common
Stock and the Class B Common Stock. The Restated Articles would therefore
provide all shareholders, including the France Family Group, increased
flexibility to dispose of a portion of their equity interest in the Company
without significantly affecting their relative voting power.
Because shareholders who are interested in maintaining their voting
interest in the Company may be more willing to sell shares of the Company if
such sale does not result in a corresponding decrease in their relative voting
power, the Restated Articles may also result in increased trading of the equity
securities of the Company, thereby increasing liquidity.
CONTINUITY. The Restated Articles will provide the Company with the
flexibility to issue Class A Common Stock for financing, acquisition and
compensation purposes without materially diluting the voting power of the
Company's existing shareholders, including the France Family Group. As a
practical matter, the Restated Articles will permit the France Family Group to
retain a majority of the voting power of the Company even if it substantially
reduces its equity interest in the Company. Accordingly, the Recapitalization is
expected to reduce the risk of disruption in the continuity of the Company's
management and its current operating policies and long-term strategy that might
otherwise result if members of the France Family Group were to sell a
substantial percentage of their shares of Existing Common Stock.
KEY EMPLOYEES. The Restated Articles are intended to permit all employees
of the Company to continue to concentrate on their employment responsibilities
by reducing concerns, if any, that the future of the company could be affected
by real or perceived succession issues or by an unsolicited takeover attempt
that might otherwise be triggered by significant sales of shares of Existing
Common Stock by the France Family Group in the future. By reducing these
uncertainties, the Restated Articles may enhance the ability of the Company to
attract and retain highly qualified key employees. In addition, the Company's
ability to issue Class A Common Stock will increase the Company's flexibility in
structuring compensation plans and arrangements so those employees may continue
to participate in the growth of the Company without materially diluting the
voting power of existing shareholders.
KEY SPONSORS AND SANCTIONING BODIES. The Restated Articles are also
intended to provide reassurance to long-time sponsors, sanctioning bodies and
other entities that have significant business relationships with the Company,
each of which may have concerns about potential changes in control, thereby
increasing their willingness to enter into long-term commitments with the
Company.
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CERTAIN POTENTIAL DISADVANTAGES OF THE DUAL CLASS STOCK STRUCTURE
While the Board of Directors has determined that the implementation of the
dual class stock structure reflected in the Restated Articles is in the best
interest of the Company, such structure may also be considered to have certain
disadvantages, including, but not limited to, those set forth below and those
set forth under "--Certain Effects of the Recapitalization."
CONTROL BY FRANCE FAMILY. Upon the issuance of the approximately 4.0 million
shares of Class A Common Stock currently anticipated to be offered in the Public
Offering, the France Family Group will own approximately 55% of the Company's
outstanding capital stock and retain approximately 60% of the combined voting
power of all outstanding Class A Common Stock and Class B Common Stock. If the
members of the France Family Group vote their shares of common stock in the same
manner, the France Family Group will have sufficient voting power (without the
consent of the Company's other shareholders) to elect the entire Board of
Directors of the Company and, in general, to determine the outcome of various
matters submitted to shareholders for approval, including fundamental corporate
transactions. Members of the France Family Group have advised the Company that
they do not presently intend to convert the Class B Common Stock to be
beneficially owned by them after the Recapitalization into Class A Common Stock.
To the extent that other holders of Class B Common Stock elect to convert, the
relative voting power of the France Family Group will increase. Voting control
by the France Family Group may discourage certain types of transactions
involving an actual or potential change in control of the Company, including
transactions in which the holders of Common Stock might receive a premium for
such shares over prevailing market prices. Consequently, the Restated Articles
may deprive the Company's shareholders of an opportunity to sell their shares at
a premium over the prevailing market prices in a change of control transaction
and may also make it more difficult to replace the current members of the Board
of Directors and management of the Company.
INVESTMENT BY INSTITUTIONS. The dual class stock structure effected by the
Restated Articles may affect the decision of certain institutional investors
that would otherwise consider investing in or retaining the Existing Common
Stock. The holding of lesser-voting shares may not be permitted by the
investment policies of certain institutional investors. The Company is not aware
of the effect, if any, that the adoption of the Restated Articles will have on
the continued holdings of those institutional investors who currently own
Existing Common Stock
ACQUISITION ACCOUNTING. In order for the Company to effect a business
combination to be accounted for using the "pooling of interests" method, the
Company would be required to issue Class B Common Stock in order to effect any
such combination. Class A Common Stock may not be used, either alone or in
combination with Class B Common Stock, to effect a business combination
utilizing such method of accounting.
STATE STATUTES. Some state securities law statutes contain provisions
which, following the issuance of Class A Common Stock, may restrict certain
offerings of equity securities by the Company or the secondary trading of such
equity securities in those states. However, due to exemptions or for other
reasons, the Company does not believe that such provisions will have a material
adverse effect on the amount of equity securities that the Company will be able
to offer, the price obtainable for such equity securities in such an offering,
or the secondary trading market for the Company's equity securities.
SECURITY FOR CREDIT. While there can be no assurance, the Company does not
expect that the implementation of the dual class stock structure reflected in
the Restated Articles will affect the ability of shareholders to use shares of
either Class A Common Stock or Class B Common Stock as security for the
extension of credit by financial institutions, securities brokers or dealers.
DESCRIPTION OF THE COMMON STOCK
The terms of the Class A Common Stock and the Class B Common Stock are set
forth in full in Article III of the Company's Restated Articles (attached hereto
as Exhibit A). The rights of the two classes will be identical except as
otherwise described below.
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VOTING. Under the Company's current Articles of Incorporation, each share
of Existing Common Stock is entitled to one vote per share. By contrast, (i)
each share of Class B Common Stock will be entitled to one vote per share, and
(ii) each share of Class A Common Stock will be entitled to one-fifth vote per
share. Except as required by applicable law, holders of Class A Common Stock and
Class B Common Stock will vote together, with each other, and not as separate
classes, on all matters submitted to a vote of the shareholders. Neither the
Class A Common Stock nor the Class B Common Stock will have cumulative voting
rights. The Restated Articles do not themselves affect the relative voting power
of holders of Existing Common Stock.
DIVIDENDS AND DISTRIBUTIONS. The Restated Articles provide that, subject
to the rights of the holders of the Company's Preferred Stock, the holders of
Class A Common Stock and Class B Common Stock will be entitled to receive when,
as and if declared by the Board, out of funds legally available therefor,
dividends and other distributions payable in cash, property, stock (including
shares of any class or series of the Company, whether or not shares of such
class or series are already outstanding) or otherwise. Each share of Class A
Common Stock and each share of Class B Common Stock will have identical rights
with respect to dividends and distributions, subject to the following: (i) a
stock dividend of the Company's Common Stock on Class B Common Stock may be paid
in Class A Common Stock or Class B Common Stock or a combination of both; (ii) a
stock dividend of the Company's Common Stock on Class A Common Stock may be paid
only in shares of Class A Common Stock; (iii) a dividend or distribution with
respect to Class A Common Stock or Class B Common Stock payable in shares of the
Company's capital stock may be paid or made only in shares of Class A Common
Stock and/or Class B Common Stock; (iv) whenever a dividend or distribution is
payable in shares of Class A Common Stock and/or Class B Common Stock, the
number of shares of Common Stock payable per each share of Common Stock shall be
equal in number; and (v) a stock dividend on Class B Common Stock that is paid
in shares of Class B Common Stock will be considered to be identical to a stock
dividend on Class A Common Stock that is paid in a proportionate number of
shares of Class A Common Stock. The dividend provisions of the Restated Articles
provide the Board of Directors with the flexibility to determine appropriate
dividend levels, if any, under the circumstances from time to time.
CONVERTIBILITY. Except as described below, neither the Class A Common
Stock nor the Class B Common Stock will be convertible into another class of
securities of the Company.
OPTIONAL CONVERSION. Commencing on the 91st day after the Effective Date
of the proposed Public Offering, each share of Class B Common Stock will be
convertible (each an "Optional Conversion") at any time and from time to time at
the election of the holder thereof into one fully paid and nonassessable share
of Class A Common Stock. Any holder of Class B Common Stock may effect an
Optional Conversion by surrendering the certificate or certificates representing
the shares of Class B Common Stock to be converted, duly endorsed, to the
Transfer Agent, together with a written notice that the holder elects to convert
all or a specified whole number of shares of Class B Common Stock to Class A
Common Stock. Such holder or its nominee or nominees will receive a new
certificate or certificates representing the shares of Class A Common Stock
issued upon such conversion and, if any shares of Class B Common Stock of such
holder are not converted, a new certificate or certificates representing such
shares of Class B Common Stock. Optional Conversions will be deemed to occur
immediately prior to the close of business on the date the Transfer Agent
receives such certificate or certificates and the related written notice.
Optional Conversion will be possible only after 90 full days elapse after
the Effective Date of the Public Offering. Delaying the convertibility of Class
B Common Stock for this limited period is intended to facilitate an orderly
offering and distribution of the Class A Common Stock. SHAREHOLDERS SHOULD NOT
DELIVER ANY NOTICE OF CONVERSION PRIOR TO THAT TIME.
MANDATORY CONVERSION. If, on the record date for any meeting of
shareholders of the Company, the number of shares of Class B Common Stock then
outstanding constitutes less than 10% of the aggregate number of shares of Class
A Common Stock and Class B Common Stock outstanding, then each outstanding share
of Class B Common Stock will thereupon be converted automatically into one fully
paid and nonassessable share of Class A Common Stock (a "Mandatory Conversion").
Upon such Mandatory Conversion, notice will be given by the Company as soon as
practicable, but no later than the next meeting of shareholders of the Company,
by means of a press release and written notice to all holders of Class B Common
Stock. Upon such Mandatory Conversion, the holders of Class B Common Stock will
be required to deliver promptly the certificate or certificates representing
such shares of Class B
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Common Stock to the Transfer Agent. Each such holder or its nominee or nominees
will receive a new certificate or certificates representing the shares of
Class A Common Stock issued upon conversion.
The Mandatory Conversion feature included in the Restated Articles is
required by the National Association of Securities Dealers (the "NASD") for the
Class A Common Stock to be quoted on the Nasdaq National Market System.
Nevertheless, in view of the absence of a present intention by the Company to
repurchase any such shares and the substantial number of shares of Class A
Common Stock that would be required to be issued to reach the 10% threshold for
a Mandatory Conversion, the Board of Directors believes it unlikely that this
provision will be triggered in the foreseeable future. However, in the event of
any such Mandatory Conversion, to the extent that the market price of the Class
A Common Stock is higher or lower than the market price of the Class B Common
Stock immediately prior to such Mandatory Conversion, the market price of the
Class A Common Stock held by particular holders may be adversely affected by the
Mandatory Conversion.
GENERAL. Shares of Class B Common Stock that are converted into Class A
Common Stock as provided herein shall continue to be authorized and available
for reissue by the Company in certain circumstances. The Restated Articles
require the Company to reserve and keep available sufficient shares of Class A
Common Stock, in addition to any shares of Class A Common Stock then
outstanding, to allow conversion of Class B Common Stock into Class A Common
Stock.
The Restated Articles also require that if any shares of Class A Common
Stock require registration with or approval of any governmental authority under
any federal or state law before such shares of Class A Common Stock may be
issued upon conversion, the Company will cause such shares of Class A Common
Stock to be duly registered or approved, as the case may be. The Company is also
required to endeavor to use its best efforts to list the shares of Class A
Common Stock to be delivered upon conversion prior to such delivery upon each
national securities exchange, upon which the outstanding shares of Class A
Common Stock are listed at the time of such delivery.
No adjustments in respect of dividends shall be made upon an Optional
Conversion or Mandatory Conversion of any Class B Common Stock; provided,
however, that if a share of Class B Common Stock is converted subsequent to the
record date for the payment of a dividend or other distribution on Class B
Common Stock but prior to such payment, then the registered holder of such share
of Class B Common Stock at the close of business on such record date will be
entitled to receive the dividend or other distribution payable on such share of
Class B Common Stock on such date notwithstanding the Optional Conversion or
Mandatory Conversion thereof or the Company's default in payment of the dividend
due on such date.
SPLITS OR COMBINATIONS. The Restated Articles provide that, if the Company
shall in any manner split, subdivide or combine the shares of outstanding Class
A Common Stock or Class B Common Stock, then the outstanding shares of the other
such class shall be proportionately split, subdivided or combined in the same
manner and on the same basis as the outstanding shares of the class that has
been split, subdivided or combined.
MERGERS AND CONSOLIDATIONS. In the event of a merger, consolidation or
combination of the Company with another entity (whether or not the Company is
the surviving entity), the holders of Class A Common Stock and Class B Common
Stock will be entitled to receive the same per share consideration in that
transaction, except that any common stock that holders of Class A Common Stock
and Class B Common Stock are entitled to receive in any such event may differ as
to voting rights and otherwise to the extent and only the extent that the Class
A Common Stock and the Class B Common Stock differ as set forth in Article III
of the Restated Articles.
LIQUIDATION. In the event of liquidation, after payment of the debts and
other liabilities of the Company and after making provision for the holders of
Preferred Stock, if any, the remaining assets of the Company will be
distributable ratably among the holders of the Class A Common Stock and Class B
Common Stock treated as a single class.
PREEMPTIVE RIGHTS. Neither the Class A Common Stock nor the Class B Common
Stock will carry any preemptive rights enabling a holder to subscribe for or
receive shares of the Company of any class or any other securities convertible
into any class of the Company's stock.
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SALES AND REPURCHASES. The Restated Articles specifically provide that the
Board of Directors is permitted to authorize the sale of shares of either class
of Common Stock even though a higher price could be obtained by selling shares
of the other class due to differing values and market prices for such classes.
The Restated Articles also provide that the Board of Directors is permitted to
authorize the repurchase of shares of either class of Common Stock without
regard to whether a lesser price could be paid for the same number of shares of
the other class.
SHAREHOLDER INFORMATION. The Company will deliver to the holders of Class
A Common Stock and Class B Common Stock the same proxy statements, annual
reports and other information and reports as it currently delivers to holders of
the Existing Common Stock.
CERTAIN EFFECTS OF THE RECAPITALIZATION
EFFECTS ON RELATIVE OWNERSHIP INTEREST AND VOTING POWER. On the Effective
Date of the Public Offering, each outstanding share of Existing Common Stock
will automatically be converted into 15 shares of Class B Common Stock. The
Recapitalization will not itself affect the relative voting power or equity
interests of the holders of Existing Common Stock. Such shareholders' relative
voting power will change only upon and to the extent impacted by (i) the sale of
Class A Common Stock in the proposed Public Offering, (ii) the conversion of
Class B Common Stock into Class A Common Stock, and (iii) future issuances of
voting stock. The relative equity interests of holders of Existing Common Stock
will also be diluted by future issuances of capital stock, including pursuant to
the proposed Public Offering.
EFFECT ON MARKET VALUE AND PRICE. The Company believes that the market
value of the Class B Common Stock immediately after the Recapitalization will
not be materially less than the market value of the Existing Common Stock
immediately prior to the announcement of the Recapitalization, but there can be
no assurance as to the trading prices of either the Class A Common Stock or the
Class B Common Stock. The Existing Common Stock is currently traded in the
over-the-counter market. On the Record Date, the average of the bid and the ask
price per share of the Existing Common Stock was $317.50. If the market
price of the Class A Common Stock were to drop significantly below the market
price of the Class B Common Stock, the potential benefits of the Restated
Articles' dual class stock structure with respect to flexibility for financings
by the Company or resales by the shareholders may be limited.
EFFECT ON TRADING MARKET. The Company anticipates that upon the closing of
the proposed Public Offering, the trading market for Class A Common Stock will
be more active than that for the Class B Common Stock as a result of the both
the distribution of Class A Common Stock in the Public Offering and its listing
on the Nasdaq National Market. Any issuance of additional shares of Class A
Common Stock by the Company after the proposed Public Offering or any Optional
Conversion of Class B Common Stock into Class A Common Stock may serve to
further increase market activity in the Class A Common Stock relative to the
Class B Common Stock. Greater market activity may result in increased volatility
in pricing and could enlarge any price differential, either higher or lower,
between the Class A Common Stock and the Class B Common Stock. Although there
can be no assurance as to the number of shares of Class B Common Stock that will
be converted into Class A Common Stock pursuant to an Optional Conversion, the
members of the France Family Group have advised the Company that they do not
intend to convert the Class B Common Stock to be beneficially owned by them into
Class A Common Stock.
EFFECT ON INCENTIVE PLAN. Holders of shares of Existing Common Stock
issued under the Company's 1994 Long-Term Incentive Plan will be treated the
same as all other holders of Existing Common Stock. Pursuant to the
Recapitalization, such holders will receive 15 shares of Class B Common Stock
for each share of Existing Common Stock. All such shares of Class B Common Stock
will be subject to all restrictions that currently apply to the Existing Common
Stock issued under the Company's 1994 Long-Term Incentive Plan.
SUBSEQUENT AMENDMENTS. The Restated Articles will not prevent the Company
from taking any action, or otherwise affect the Company's ability, with the
requisite approval of its shareholders, to adopt any future amendments to the
Company's Restated Articles for the purpose of further changing the Company's
capital structure or for any other lawful purpose. The issuance of Preferred
Stock with voting rights or conversion rights may adversely affect the voting
power of the Class A Common Stock and the Class B Common Stock.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following
discussion sets forth the principal U.S. federal income tax consequences of an
exchange of Existing Common Stock for Class B Common Stock pursuant to the
Recapitalization. This discussion is based on the advice of Greenberg, Traurig,
Hoffman, Lipoff, Rosen & Quentel, P.A. to the Company. The discussion is based
on existing law, which is subject to change, possibly with retroactive effect.
The discussion does not deal with all tax consequences that may be relevant to a
particular shareholder in light of the shareholder's individual circumstances or
to a shareholder (for example, a dealer in securities, an insurance company, a
tax-exempt organization or a foreign person) that may be subject to special
rules. Each shareholder is urged to consult his own tax adviser with respect to
the application of the U.S. federal income tax laws to the shareholder's
particular situation as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
A shareholder will recognize no gain or loss on the exchange of a share of
Existing Common Stock for shares of Class B Common Stock pursuant to the
Recapitalization. The tax basis of a share of Class B Common Stock received
pursuant to the Recapitalization will equal 1/15th of the tax basis of the share
of Existing Common Stock exchanged (in part) therefor. The holding period of a
share of Class B Common Stock received pursuant to the Recapitalization will
include the holding period of the share of Existing Common Stock exchanged (in
part) therefor.
SECURITIES ACT OF 1933. The conversion of each share of Existing Common
Stock into shares of Class B Common Stock pursuant to the Recapitalization is
not subject to the registration requirements of the Securities Act. Class B
Common Stock held immediately upon the Effective Date, other than any such
shares held by affiliates of the Company within the meaning of the Securities
Act, may be offered for sale and sold in the same manner as the Existing Common
Stock without registration under the Securities Act. Affiliates of the Company,
including members of the France Family Group, will continue to be subject to,
among others, the restrictions specified in Rule 144 under the Securities Act
with respect to sales of Class B Common Stock
NASD CRITERIA. The Existing Common Stock is traded in the over-the-counter
market. The Company has filed an application with the NASD for the Class A
Common Stock to be quoted on the Nasdaq National Market. The Class B Common
Stock will not be listed on the Nasdaq National Market, and will be traded only
in the over-the-counter market.
The dual class stock structure effected by the Restated Articles is
intended to comply with the requirements of Rule 19c-4 (the "Rule") adopted in
July 1988 by the SEC under the Exchange Act. Although a Federal appellate court
has vacated such Rule as a rule of the SEC, the Rule has been adopted as a
standard for quotation on the Nasdaq National Market System by the NASD. The
effect of the Rule is to prohibit the quotation on the Nasdaq National Market
System of any securities of an issuer if such issuer "issues any class of
security, or takes other corporate action, with the effect of nullifying,
restricting, or disparately reducing the per share voting rights of holders of
an outstanding class or classes of common stock of such issuer...." The purpose
of the Rule is to prohibit stock issuances and other corporate actions that have
a "disenfranchising effect" on existing shareholders. Future issuances of Class
B Common Stock may be subject to the Rule, and the Company may be required to
seek and obtain NASD approval in connection with such issuances.
POTENTIAL CHANGES IN LAWS OR REGULATIONS. In the past, bills have been
introduced in Congress that, if enacted, would have prohibited the registration
of common stock on a national securities exchange or the quoting of such common
stock on the Nasdaq National Market if such common stock were part of a class of
securities which has no voting rights or carried disproportionate voting rights.
While these bills have not been acted upon by Congress, there can be no
assurance that such a bill (or a modified version thereof) will not be
introduced in Congress in the future. Legislation or other regulatory
developments could make the Company's Class A Common Stock and Class B Common
Stock ineligible for trading on national securities exchanges or for quotation
on the Nasdaq National Market. The Company is unable to predict whether any such
regulatory proposals will be adopted or whether they will have such effect.
Increased Number of Authorized Shares.
The Company's authorized capital currently consists of 5,000,000 shares of
Existing Common Stock, 2,294,926 of which are presently outstanding and
2,705,074 of which are available for future issuance. Upon filing
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of the Restated Articles, the Company's authorized capital stock will also
include 80 million shares of Class A Common Stock, 40 million shares of
Class B Common Stock and one million shares of Preferred Stock. See
"Description of Preferred Stock." Approximately 4.0 million shares of Class
A Common Stock are expected to be issued in the Public Offering, leaving
approximately 76 million shares available for future issuance (including by
conversion) without any requirement of further shareholder approval, except as
may be required by the rules of the Nasdaq National Market or by Florida law.
Additionally, approximately 34.4 million shares of Class B Common Stock will be
outstanding following the effectiveness of the Recapitalization, and
approximately 5.6 million shares will be available for future issuance without
any requirement of further shareholder approval, except as may be required by
Florida law. The Board of Directors believes it desirable that the Company have
the flexibility of being able to issue additional Class A Common Stock, Class B
Common Stock and/or Preferred Stock without shareholder approval. Shareholders
have no preemptive rights to purchase any stock of the Company, and may not
cumulate votes in the election of directors. The additional shares of Class A
Common Stock, Class B Common Stock, and/or Preferred Stock might be issued at
such times and under such circumstances as to have a dilutive effect on earnings
per share and on the equity ownership or voting power of the present holders of
the Existing Common Stock.
While the Restated Articles were not approved for this reason, the
availability of additional shares of capital stock could enhance the Board of
Directors' bargaining capability on behalf of the Company's shareholders in a
takeover situation. The additional shares could also be used, either alone or in
combination, to render more difficult or discourage a merger, tender offer or
proxy contest, the assumption of control by a holder of a large block of the
Company's securities or the removal of incumbent management, even if such a
transaction were favored by the holders of the requisite number of shares of the
Company's common stock, by increasing the aggregate number of outstanding shares
of stock and thus the number of shares required to accomplish such a
transaction.
DESCRIPTION OF PREFERRED STOCK
The Company's existing Articles of Incorporation contain no provision for
the issuance of Preferred Stock. The Restated Articles authorize 1,000,000
shares of a new class of "blank check" Preferred Stock, which may be issued by
the Board of Directors without further shareholder action. The Board of
Directors is permitted under the Restated Articles, without further shareholder
action, to divide any or all shares of the authorized Preferred Stock into
series and fix and determine the designations, preferences and relative rights
and qualifications, limitations, or restrictions thereon of any series so
established, including voting powers, dividend or interest rights, liquidation
preferences, redemption prices, conversion privileges and prices, maturity dates
and similar matters.
The authorization of Preferred Stock provides the Company with additional
financing flexibility. The Preferred Stock will be available for issuance for
cash in public or private sales as a means of obtaining capital for use in the
Company's business and operations, for issuance as part or all of the
consideration required to be paid by the Company for acquisitions of other
businesses or properties, and for issuance under employee benefit or incentive
compensation plans. The Company does not presently have any plans, agreements,
understandings or arrangements that will or could result in the issuance of any
Preferred Stock.
It is not possible to state the actual effect of the authorization of
Preferred Stock upon the rights of holders of Common Stock until the Board of
Directors determines the respective rights of the holders of one or more series
of Preferred Stock. The effects of such issuance could include, however, (i)
reduction of the amount otherwise available for payments of dividends on Common
Stock if dividends are payable on the Preferred Stock, (ii) restrictions on
dividends on Common Stock if dividends on the Preferred Stock are in arrears,
(ii) dilution of the voting power of Common Stock if the Preferred Stock has
voting rights, (iv) dilution of the equity interests of the holders of Common
Stock, (v) restriction of the rights of holders of Common Stock to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the holders of Preferred Stock, and (vi) as a result of
any or all of the foregoing, adverse effects on the market price or prices of
the Common Stock.
In addition, shares of voting or convertible Preferred Stock could be
issued by private placement or public offering, or rights to purchase such
shares could be issued, to create voting impediments to, or to frustrate persons
seeking to effect, a takeover or otherwise gain control of the Company. In
addition, the issuance of shares of Preferred Stock could increase the absolute
cost of a merger or other takeover transaction if the price to be paid in such
transaction for such additional shares pursuant to their terms or otherwise
exceeds the consideration received by the Company upon issuance of such shares.
Since the authorization of Preferred Stock could discourage an attempt by a
person to acquire control of the Company by a tender
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offer or other means, it could therefore deprive shareholders of benefits that
could result from such an attempt, such as the realization of a premium over the
market price of their shares in a tender offer or the temporary increase in
market price that such an attempt could cause. Moreover, the issuance of voting
Preferred Stock to persons friendly to the Board of Directors could make it more
difficult to remove incumbent management and directors from office even if such
a change would be favorable to shareholders generally.
DIRECTORS
The Company's existing Articles of Incorporation provide for three
directors, which number may be altered from time to time as provided in the
Company's bylaws. The Restated Articles provide for a minimum of five and a
maximum of fifteen directors, with the exact number of directors to be fixed
within those limits by the Board of Directors.
The Company currently operates with a classified Board of Directors
pursuant to the provisions of its existing bylaws. The Restated Articles contain
corresponding provisions, according to which the Board of Directors is to be
divided into three classes of directors serving staggered three-year terms, with
approximately one-third of the Board of Directors being elected each year. These
provisions, when coupled with the provision of the Restated Articles authorizing
only the Board of Directors to increase the size of the Board within the minimum
and maximum limits, will have the effect of preventing a shareholder from
removing incumbent directors and simultaneously gaining control of the Board of
Directors by filling the vacancies created by such removal with its own
nominees.
The Restated Articles also include certain new provisions concerning
directors. The Restated Articles (i) provide that directors may be removed with
or without cause by an affirmative vote of a majority of all votes entitled to
be cast for the election of directors, (ii) provide that only persons nominated
in accordance with certain procedures shall be eligible for election as
directors, (iii) provide that nominations of persons for election to the Board
of Directors may be made by the Board of Directors or by any shareholder
entitled to vote for the election of directors at the relevant meeting who
complies with the nominating procedures, (iv) set forth such nominating
procedures, which include, among other things, the requirement that nominations
be made by timely notice, and (v) define what constitutes "timely notice" in
such context. These provisions may have the effect of precluding shareholders
from making nominations for directors at an annual or special meeting.
There has been a recent trend toward the accumulation of substantial stock
positions in public companies by third parties with a view toward using a
control block of stock to force a restructuring, merger or consolidation or
forcing a corporation to repurchase a control block of stock at a premium. The
foregoing amendments to the existing Articles of Incorporation, individually or
in the aggregate, may discourage certain types of activity that in the future
might involve an actual or threatened change in control. Such amendments will
make it more difficult and time consuming to change majority control of the
Board of Directors and thus reduce the vulnerability of the Company to an
unsolicited proposal for the takeover of the Company that does not contemplate
the acquisition of all of the Company's outstanding shares at a fair price, or
an unsolicited proposal for the restructuring or sale of all or part of the
Company. In addition, by stabilizing the composition of the Board of Directors,
the foregoing amendments may have the effect of encouraging persons seeking to
acquire control of the Company to consult first with the Company's Board of
Directors and to negotiate the terms of any proposed business combination or
tender offer.
However, takeovers or changes in the directors of the Company that are
proposed and effected without prior consultation and negotiation with the
Company's Board of Directors may not necessarily be detrimental to the Company
and its stockholders, and the adoption of the nominating procedures described
above could discourage or frustrate future attempts to acquire control of the
Company that are not approved by the incumbent Board of Directors, but which a
majority of the shareholders might deem to be in their best interests. One of
the effects of such amendments may be to discourage prospective acquirors from
making tender offers for, or open market purchases of, shares of the Company's
common stock without the approval of the Company's Board of Directors. Such
amendments could also delay or frustrate the removal of incumbent directors,
even if shareholders considered such events to be beneficial.
SHAREHOLDER MEETINGS
The Company's existing Articles of Incorporation do not contain any
provisions relating to shareholder meetings. The Restated Articles (i) require
that special meetings of shareholders may be called only by (A) the Board
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of Directors pursuant to a resolution approved by a majority of the entire
Board of Directors, (B) the Chairman of the Board of Directors or (C) the
holders of notless than fifty percent of all votes entitled to be cast on any
issue proposed to be considered at the proposed special meeting, (ii) provide
that only business within the purposes described in the special meeting notice
may be conducted at a special meeting, (iii) set forth certain procedures by
which shareholders may propose matters to be brought before annual shareholder
meetings, which include, among other things, the requirement that shareholders
must give timely notice of such proposals and (iv) define what constitutes
"timely notice" in such context. These provisions may have the effect of
precluding shareholders from bringing matters before the shareholders at an
annual or special meeting.
In addition, the foregoing amendments to the Company's Articles of
Incorporation will have the effect of strengthening the position of the Board of
Directors in dealing with potential acquirors. For example, where a board has
determined that a takeover bid is unfair or inadequate, some potential acquirors
have used the power to call special shareholder meetings to remove directors or
replace them with nominees of the acquiror. The foregoing amendments will make
it more difficult for a potential acquiror opposed to the position taken by the
Board of Directors with respect to a bid to initiate the process of removing the
directors and replacing them with nominees disposed to accept the potential
acquiror's offer. Only when the acquiror has acquired shares representing at
least fifty percent of the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting, will the acquiror be able to call a
special meeting without the consent of the Board of Directors or the Chairman.
Moreover, certain potential acquirors may also be discouraged from making
unsolicited offers for control of the Company if they anticipate that their
offer will be viewed negatively by the Board of Directors. See "-Directors"
above.
INDEMNIFICATION
The existing Articles of Incorporation do not contain any provisions
relating to indemnification. The Restated Articles provide that the Company will
indemnify and may advance expenses to its officers and directors to the fullest
extent permitted by law. The Company's existing bylaws include comparable
provisions.
Under the Florida Business Corporation Act, a corporation may generally
indemnify its officers, directors, employees and agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement of
any proceedings (other than derivative actions), if they acted in good faith and
in a manner they reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in derivative actions, except that
indemnification may be made only for (i) expenses (including attorneys' fees)
and certain amounts paid in settlement, and (ii) in the event that the person
seeking indemnification has been adjudicated liable, amounts deemed proper, fair
and reasonable by the appropriate court upon application thereto.
In recent years, investigations, claims, actions, suits or proceedings
(including derivative actions) seeking to impose liability on directors and
officers of publicly held corporations have become increasingly common. As a
result, an individual may conclude that potential exposure to the costs and
risks of such proceedings in which he or she may become involved may exceed any
benefit to him or her from serving as a director or officer of a public
corporation. This is particularly true for directors who are not employees of
the corporation concerned. The Company believes that the above-mentioned
indemnification provision of the Restated Articles is desirable in order for the
Company to be able to continue to attract and retain responsible individuals to
serve as its directors and officers, in light of the present difficult
environment in which such persons, particularly directors, must serve. The
Company also intends to enter into indemnification agreements with its directors
and certain officers.
14
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INTERESTS OF CERTAIN PERSONS OF CERTAIN PERSONS
The members of the France Family Group may be deemed to have an interest
in the Company's adoption of the Restated Articles as a result of their
substantial holdings of Existing Common Stock and the likelihood that the dual
class stock structure will permit the France Family Group to continue to control
the Company even if they dispose of a significant portion of their holdings. See
"Security Ownership" and "The Restated Articles Certain Potential Disadvantages
of the Dual Class Stock Structure - France Family Control."
Additionally, the Company's officers (including members of the France
Family Group) may be deemed to have an interest in the Company's adoption of the
Restated Articles as a result of its potential antitakeover effects.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements, information
statements and other information with the SEC. Such reports, proxy statements,
information statements and other information filed by the Company can be
inspected and copied at the Public Reference Section of the SEC at 7 World Trade
Center, New York, New York 10048 and at Northwest Atrium Center, 500 W. Madison
street, Suite 1400, Chicago, Illinois 60661-2511.
By Order of the Board of Directors,
/s/ W. Garret Crotty
-----------------------------------
W. Garrett Crotty,
Secretary and General Counsel
Daytona Beach, Florida
September 26, 1996
15
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EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
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<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
INTERNATIONAL SPEEDWAY CORPORATION
Pursuant to Sections 607.0704, 607.1003 and 607.1007 of the Florida
Business Corporation Act, the Articles of Incorporation of International
Speedway Corporation are hereby amended and restated in their entirety as
follows:
ARTICLE I
The name of the corporation is International Speedway Corporation
(hereinafter called the "Corporation").
ARTICLE II
The purpose for which the Corporation is organized is to engage in the
transaction of any lawful business for which corporations may be incorporated
under the laws of the State of Florida.
ARTICLE III
A. AUTHORIZED CAPITAL STOCK. The aggregate number of shares of all
classes of stock which the Corporation shall have authority to issue is one
hundred twenty-six million (126,000,000) shares, consisting of:
(i) one hundred twenty million (120,000,000) shares of common stock, par
value $0.01 per share (the "Common Stock"), of which
(A) eighty million (80,000,000) shares are designated as Class A
Common Stock (the "Class A Common Stock") and
(B) forty million (40,000,000) shares are designated as Class B
Common Stock (the "Class B Common Stock"), and
(ii) one million (1,000,000) shares of preferred stock, par value
$0.01 per share (the "Preferred Stock"); and
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(iii) five million (5,000,000) shares of common stock, par value $0.10 per
share (the "Existing Common Stock").
B. PROVISIONS RELATING TO PREFERRED STOCK.
1. GENERAL. The Preferred Stock may be issued from time to time in
one or more classes or series, the shares of each class or series to have such
designations and powers, preferences and rights, and qualifications, limitations
and restrictions thereof as are stated and expressed herein and in the
resolution or resolutions providing for the issue of such class or series
adopted by the Board of Directors (the "Board") as hereinafter prescribed.
2. PREFERENCES. Authority is hereby expressly granted to and vested
in the Board to authorize the issuance of the Preferred Stock from time to time
in one or more classes or series, to determine and take necessary proceedings
fully to effect the issuance and redemption of any such Preferred Stock and,
with respect to each class or series of the Preferred Stock, to fix and state,
by resolution or resolutions from time to time adopted providing for the
issuance thereof, the following:
(a) whether or not the class or series is to have voting
rights, full or limited, or is to be without voting rights;
(b) the number of shares to constitute the class or
series and the designations thereof;
(c) the preferences and relative, participating, optional or
other special rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to any class or series;
(d) whether or not the shares of any class or series shall be
redeemable and if redeemable the redemption price or prices, and the time or
times at which and the terms and conditions upon which, such shares shall be
redeemable and the manner of redemption;
(e) whether or not the shares of a class or series shall be
subject to the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares for retirement, and if such retirement or
sinking fund or funds be established, the annual amount thereof and the terms
and provisions relative to the operation thereof;
(f) the dividend rate, whether dividends are payable in cash,
stock of the Corporation or other property, the conditions upon which and the
times when such dividends are payable, the preference to or the relation to the
payment of the dividends payable on any other class or classes or series of
stock, whether or not such dividend shall be cumulative or noncumulative, and,
if cumulative, the date or dates from which such dividends shall accumulate;
(g) the preferences, if any, and the amounts thereof that the
holders of any class or series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any distribution of the assets
of, the Corporation;
(h) whether or not the shares of any class or series shall be
convertible into, or exchangeable for, the shares of any other class or classes
or of any other series of the same or any other class or classes of the
Corporation and the conversion price or prices or ratio or ratios or the rate or
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rates at which such conversion or exchange may be made, with such adjustments,
if any, as shall be stated and expressed or provided for in such resolution or
resolutions; and
(i) such other special rights and protective provisions with
respect to any class or series as the Board may deem advisable.
The shares of each class or series of the Preferred Stock may vary from
the shares of any other class or series thereof in any or all of the foregoing
respects. The Board may increase the number of shares of Preferred Stock
designated for any existing class or series by a resolution adding to such class
or series authorized and unissued shares of the Preferred Stock not designated
for any other class or series. The Board may decrease the number of shares of
the Preferred Stock designated for any existing class or series by a resolution,
subtracting from such series unissued shares of the Preferred Stock designated
for such class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.
C. PROVISIONS RELATING TO THE COMMON STOCK. The Common Stock shall be
subject to the express terms of the Preferred Stock and any class or series
thereof. The powers, preferences and rights of the Class A Common Stock and the
Class B Common Stock and the qualifications, limitations and restrictions
thereof, shall in all respects be identical, except as otherwise required by law
or as expressly provided in this Section C.
1. VOTING RIGHTS. Except as otherwise required by law or as may be
provided by the resolutions of the Board authorizing the issuance of any class
or series of the Preferred Stock, as hereinabove provided, all rights to vote
and all voting power shall be vested exclusively in the holders of the Common
Stock. The holders of shares of Class A Common Stock and Class B Common Stock
shall have the following voting rights:
(a) the holders of Class A Common Stock shall be entitled to
one-fifth (1/5th) vote for each share of Class A Common Stock held
on all matters voted upon by the shareholders of the Corporation and
shall vote together with the holders of Class B Common Stock and
together with the holders of any other classes or series of stock
who are entitled to vote in such manner and not as a separate class;
and
(b) the holders of Class B Common Stock shall be entitled to
one (1) vote for each share of Class B Common Stock held on all
matters voted upon by the shareholders of the Corporation and shall
vote together with the holders of Class A Common Stock and together
with the holders of any other classes or series of stock who are
entitled to vote in such manner and not as a separate class.
2. DIVIDENDS. Subject to the rights of the holders of the Preferred
Stock, the holders of the Common Stock shall be entitled to receive when, as and
if declared by the Board, out of funds legally available therefor, dividends and
other distributions payable in cash, property, stock (including shares of any
class or series of the Corporation, whether or not shares of such class or
series are already outstanding) or otherwise. Each share of Class A Common Stock
and each share of Class B Common Stock shall have identical rights with respect
to dividends and distributions, subject to the following:
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(a) a dividend or distribution in Common Stock on Class B
Common Stock may be paid or made in shares of Class A Common Stock
or shares of Class B Common Stock or a combination of both;
(b) a dividend or distribution in Common Stock on Class A
Common Stock may be paid only in shares of Class A Common Stock;
(c) a dividend or distribution with respect to Common Stock
payable in shares of the Corporation's capital stock may be paid or
made only in shares of Common Stock;
(d) whenever a dividend or distribution is payable in shares
of Class B Common Stock and/or Class A Common Stock, the number of
shares of Common Stock payable as a dividend or distribution per
each share of Common Stock shall be equal in number; and
(e) a dividend or distribution on Class B Common Stock which
is paid or made in shares of Class B Common Stock shall be
considered identical to a dividend or distribution on Class A Common
Stock which is paid or made in a proportionate number of shares of
Class A Common Stock.
3. CONVERSION.
(a) OPTIONAL CONVERSION. Each share of Class B Common Stock
may from time to time, at the option of the holder of record thereof and without
payment of any consideration, be converted into one fully paid and nonassessable
share of Class A Common Stock (an "Optional Conversion")(i) upon the Effective
Date (as hereinafter defined) if the shares of Class A Common Stock to be issued
upon such conversion are to be offered pursuant to the Registration Statement
(as hereinafter defined), and (ii) otherwise commencing on the 91st day after
the Effective Date. Any holder of any share of Class B Common Stock may effect a
conversion by surrendering such holder's certificate or certificates
representing the shares of Class B Common Stock to be converted, duly endorsed,
during normal business hours at the office of the Corporation or any transfer
agent for the Common Stock (the "Transfer Agent"), together with a written
notice that the holder elects to convert all or a specified whole number of
shares of Class B Common Stock and stating the name or names in which such
holder desires the certificate or certificates representing the shares of Class
A Common Stock to be issued. If so required by the Corporation or the Transfer
Agent, any certificate for shares surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation
or the Transfer Agent, duly executed by the holder of such shares or the duly
authorized representative of such holder, together with funds for the payment of
any transfer tax required pursuant to paragraph (f) of this Subsection 3. In the
event that any shares of Class B Common Stock tendered for conversion are
subject to restrictions upon transfer noted in a legend on the certificates
representing such shares, the Corporation and the Transfer Agent shall require
the holder of such shares to submit, as a condition to the conversion of such
Class B Common Stock into Class A Common Stock, satisfactory evidence that the
proposed conversion will not violate any of the noted restrictions upon transfer
of such shares.
(b) MANDATORY CONVERSION. If, on the record date for any
meeting of shareholders of the Corporation, the number of shares of Class A
Common Stock then outstanding constitutes less than 10% of the aggregate number
of shares of Class A Common Stock and Class B Common Stock outstanding, as
determined by the Board, then each share of Class B Common Stock then issued or
outstanding shall thereupon be converted automatically as of such record date
into one fully paid and nonassessable share of Class A Common Stock and will
have one-fifth vote per share at
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<PAGE>
such meeting (a "Mandatory Conversion"). Upon making such determination, notice
of such automatic conversion shall be given by the Corporation as soon as
practicable, but no later than the next meeting of shareholders of the
Corporation, by means of a press release and written notice to all holders of
Class B Common Stock, and the Secretary of the Corporation shall be instructed
to and shall promptly request that each holder of Class B Common Stock promptly
deliver, and each such holder shall promptly deliver, the certificate or
certificates representing each share of such Class B Common Stock to the
Corporation or the Transfer Agent. If so required by the Corporation or
the Transfer Agent, any certificate for shares surrendered for conversion shall
be accompanied by instruments of transfer, in form satisfactory to the
Corporation or the Transfer Agent, duly executed by the holder of such shares or
the duly authorized representative of such holder, together with funds for the
payment of any transfer tax required pursuant to paragraph (f) of this
Subsection 3.
(c) ISSUANCE OF CERTIFICATES REPRESENTING CLASS A COMMON
STOCK; EFFECTIVENESS OF CONVERSION. As promptly as practicable following the
surrender for conversion of a certificate representing shares of Class B Common
Stock in the manner provided in paragraph (a) or (b) of this Subsection 3, as
applicable, any required instruments of transfer and the payment in cash of any
amount required by the provisions of paragraph (f) of this Subsection 3, the
Corporation shall issue and deliver or cause to be issued and delivered to such
holder or such holder's nominee or nominees, a certificate or certificates
representing the number of shares of Class A Common Stock issued upon such
conversion in such name or names as such holder may direct. In the case of an
Optional Conversion, if any shares of Class B Common Stock of such holder
represented by a certificate surrendered for conversion are not converted, a new
certificate or certificates representing such shares of Class B Common Stock
shall be issued and delivered to such holder or its nominee or nominees with the
certificate or certificates representing shares of Class A Common Stock.
Optional Conversions shall be deemed to have been effected immediately prior to
the close of business on the date of receipt by the Corporation or the Transfer
Agent of the certificate or certificates representing the relevant shares of
Class B Common Stock and the related written notice. Mandatory Conversions shall
be deemed to have been effected on record date for the relevant shareholders
meeting on which the condition set forth in paragraph (b) of this Subsection 3
is determined by the Board to have occurred. Upon the date any conversion is
deemed effected, all rights of the holder of such shares of Class B Common Stock
so converted, as the holder of such shares, shall cease, and the person or
persons in whose name or names the certificate or certificates representing the
shares of Class A Common Stock are issued shall be treated for all purposes as
having become the record holder or holders of such shares of Class A Common
Stock on that date; provided, however, that if any surrender and payment
pursuant to a Mandatory Conversion occurs on any date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name or
names the certificate or certificates representing shares of Class A Common
Stock are issued shall be deemed the record holder or holders thereof for all
purposes on the next succeeding day on which the stock transfer books are open.
(d) ADJUSTMENTS. No adjustments in respect of dividends shall
be made upon the Optional Conversion or Mandatory Conversion of any shares of
Class B Common Stock; provided, however, that if a share of Class B Common Stock
shall be converted subsequent to the record date for the payment of a dividend
or other distribution on Class B Common Stock but prior to such payment, then
the registered holder of such share of Class B Common Stock at the close of
business on such record date shall be entitled to receive the dividend or other
distribution payable on such share of Class B Common Stock on such date
notwithstanding the Optional Conversion or Mandatory Conversion thereof or the
Corporation's default in payment of the dividend due on such date.
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<PAGE>
(e) AVAILABILITY OF CLASS A COMMON STOCK FOR CONVERSION;
REGISTRATION. The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Class A Common Stock, solely for the
purpose of issuance upon conversion of the outstanding shares of Class B Common
Stock, such number of shares of Class A Common Stock that shall be issuable upon
the conversion of all such shares of Class B Common Stock then outstanding, in
addition to the number of shares of Class A Common Stock then outstanding. If
any shares of Class A Common Stock require registration with or approval of any
governmental authority under any federal or state law before such shares may be
issued upon conversion, the Corporation shall cause such shares to be duly
registered or approved, as the case may be. The Corporation shall endeavor to
use its best efforts to list the shares of Class A Common Stock to be delivered
upon conversion prior to such delivery upon each national securities exchange
upon which the outstanding shares of Class A Common Stock are listed at the time
of such delivery. All shares of Class A Common Stock that shall be issued upon
conversion of the fully paid and nonassessable shares of Class B Common Stock
shall, upon issue, be fully paid and nonassessable.
(f) CHARGES, PAYMENT OF TAXES UPON CONVERSION. The issuance of
certificates for shares of Class A Common Stock issuable upon the conversion of
Class B Common Stock shall be made without charge to the converting holder;
provided, however, that if any certificate is to be issued in a name other than
that of the record holder of the shares being converted, the Corporation shall
not be required to issue or deliver any such certificate unless and until the
person requesting the issuance thereof shall have paid to the Corporation the
amount of any tax that may be payable with respect to any transfer involved in
the issuance and delivery of such certificate or has established to the
satisfaction of the Corporation that such tax has been paid.
(g) REISSUANCE OF CLASS B COMMON STOCK. Shares of Class B
Common Stock that are converted into Class A Common Stock as provided herein
shall continue to be part of the authorized Class B Common Stock and shall be
available for reissue by the Corporation.
4. SPLITS OR COMBINATIONS. If the Corporation shall in any manner
split, subdivide or combine the outstanding shares of Class A Common Stock or
Class B Common Stock, then the outstanding shares of the other such class of
Common Stock shall be proportionately split, subdivided or combined in the same
manner and on the same basis as the outstanding shares of the class that has
been split, subdivided or combined.
5. MERGERS AND CONSOLIDATIONS. In the event of a merger,
consolidation or combination of the Corporation with another entity (whether or
not the Corporation is the surviving entity), the holders of Class A Common
Stock and Class B Common Stock shall be entitled to receive the same per share
consideration in that transaction, except that any common stock that holders of
Class A Common Stock are entitled to receive in any such event may differ as to
voting rights and otherwise to the extent and only the extent that the Class A
Common Stock and the Class B Common Stock differ as set forth in this Section C.
6. LIQUIDATING DISTRIBUTIONS. Upon any liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, and after the
holders of the Preferred Stock shall have been paid in full the amounts to which
they shall be entitled, if any, or a sum sufficient for such payment in full
shall have been set aside, the remaining net assets of the Corporation, if any,
shall be divided among and paid ratably to the holders of Class A Common Stock
and Class B Common Stock treated as a single class.
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<PAGE>
7. SALES AND REPURCHASES. The Board shall have the power to cause
the Corporation to issue and sell shares of either class of Common Stock to such
individuals, partnerships, joint ventures, limited liability companies,
associations, corporations, trusts or other legal entities (collectively,
"persons") and for such consideration as the Board shall from time to time in
its discretion determine, whether or not greater consideration could be received
upon the issue or sale of the same number of shares of the other class of Common
Stock, and as otherwise permitted by law. The Board shall have the power to
cause the Corporation to purchase, out of funds legally available therefor,
shares of either class of Common Stock from such persons and for such
consideration as the Board shall from time to time in its discretion determine,
whether or not less consideration could be paid upon the purchase of the same
number of shares of the other class of Common Stock, and as otherwise permitted
by law.
D. SHARE RECLASSIFICATION. Immediately prior to the effective date (the
"Effective Date") of the Corporation's Registration Statement on Form S-3 (File
No. 333-11541), relating to a proposed underwritten public offering of Class A
Common Stock and initially filed with the Securities and Exchange Commission on
September 6, 1996 (the "Registration Statement"), each outstanding share of the
Corporation's Existing Common Stock shall thereby and thereupon, automatically
and without any action by the holder, be reclassified and converted into 15
validly issued, fully paid and nonassessable shares of Class B Common Stock.
Each certificate that theretofore represented shares of Existing Common Stock
shall thereafter represent the number of shares of Class B Common Stock into
which the shares of Existing Common Stock represented by such certificate were
reclassified and converted hereby; provided, however, that each person holding
of record a stock certificate or certificates that represented shares of
Existing Common Stock shall receive, upon surrender of each such certificate or
certificates, a new certificate or certificates evidencing and representing the
number of shares of Class B Common Stock to which such person is entitled. Upon
consummation of the reclassification of the Existing Common Stock of the
Corporation provided for in this Section D (the "Reclassification"), the holders
of the Class B Common Stock of the Corporation shall have all rights accorded
them by law and these Amended and Restated Articles of Incorporation. The
issuance of certificates representing shares of Class B Common Stock issuable
upon the Reclassification shall be made without charge to the holders of
Existing Common Stock; provided, however, that if any certificate is to be
issued in a name other than that of the record holder of the shares of Existing
Common Stock being reclassified pursuant to the Reclassification, the
Corporation shall not be required to issue or deliver any such certificate
unless and until the person requesting the issuance thereof shall have paid to
the Corporation the amount of any tax that may be payable with respect to any
transfer involved in the issuance and delivery of such certificate or has
established to the satisfaction of the Corporation that such tax has been paid.
If so required by the Corporation or the Transfer Agent, any certificate for
shares of Existing Common Stock surrendered in connection with the
Reclassification shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation or the Transfer Agent, duly executed by the
holder of such shares or the duly authorized representative of such holder,
together with funds for the payment of any transfer tax required as set forth
above. As promptly as practicable following the surrender of a certificate
representing shares of Class B Common Stock in the foregoing manner, any
required instruments of transfer and the payment in cash of any amount for the
payment of any transfer tax, the Corporation shall issue and deliver or cause to
be issued and delivered to such holder or such holder's nominee or nominees, a
certificate or certificates representing the number of shares of Class B Common
Stock issued upon the Reclassification to which such holder is entitled, in such
name or names as such holder may direct.
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ARTICLE IV
The Corporation shall exist perpetually unless sooner dissolved according
to law.
ARTICLE V
The Corporation's mailing address and the address of the Corporation's
principal office is 1801 West International Speedway Boulevard, Daytona Beach,
Florida 32114. The address of the Corporation's registered office is 150-A South
Palmetto Avenue, Daytona Beach, Florida 32114, and the Corporation's registered
agent at such office is Doyle Tumbleson.
ARTICLE VI
A. NUMBER AND TERM OF DIRECTORS. The Corporation's Board shall consist of
not less than five (5) nor more than fifteen (15) members, with the exact number
to be fixed from time to time by resolution of the Board. No decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director. The Board shall be divided into three classes, Class I,
Class II and Class III with the directors of each class to be elected for a
staggered term of three years and to serve until their successors are duly
elected and qualified or until their earlier resignation, death or removal from
office. The number of directors elected to each class shall be as nearly equal
in number as possible. The Board shall apportion any increase or decrease in the
number of directorships among the classes so as to make the number of directors
in each class as nearly equal as possible.
B. DIRECTOR VACANCIES; REMOVAL. Whenever any vacancy on the Board shall
occur due to death, resignation, retirement, disqualification, removal, increase
in the number of directors or otherwise, a majority of directors in office,
although less than a quorum of the entire Board, may fill the vacancy or
vacancies for the balance of the unexpired term or terms, at which time a
successor or successors shall be duly elected by the shareholders and qualified.
Notwithstanding the provisions of any other Article herein, only the remaining
directors of the Corporation shall have the authority, in accordance with the
procedure stated above, to fill any vacancy that exists on the Board for the
balance of the unexpired term or terms. The Company's shareholders shall not,
and shall have no power to, fill any vacancy on the Board. Shareholders may
remove a director from office prior to the expiration of his or her term, with
or without "cause," by an affirmative vote of a majority of all votes entitled
to be case for the election of directors.
C. SHAREHOLDER NOMINATIONS OF DIRECTOR CANDIDATES. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation. Nominations of persons for election to
the Board at an annual or special meeting of shareholders may be made by or at
the direction of the Board by any nominating committee or person appointed by
the Board or by any shareholder of the Corporation entitled to vote for the
election of directors at such meeting who complies with the procedures set forth
in this Section C; provided, however, that nominations of persons for election
to the Board at a special meeting may be made only if the election of directors
is one of the purposes described in the special meeting notice required by
Section 607.0705 of the Florida Business Corporation Act. Nominations of persons
for election at a special meeting, other than nominations made by or at the
direction of the Board, shall be made pursuant to notice in writing delivered to
or mailed and received at the principal executive offices of the Corporation not
later than the close of business on the fifth (5th) day following the date on
which notice of such meeting is given to shareholders or made public, whichever
first occurs. Nominations of persons for election at an annual meeting, other
than nominations made by or at the direction of the Board, shall be made
pursuant to timely notice in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and
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received at the principal executive offices of the Corporation not less than
one hundred twenty (120) days nor more than one hundred eighty (180) days prior
to the first anniversary of the date of the Corporation's notice of annual
meeting provided with respect to the previous year's annual meeting; provided,
however, that if no annual meeting was held in the previous year or the date of
the annual meeting has been changed to be more than thirty (30) calendar days
earlier than the date contemplated by the previous year's notice of annual
meeting, such notice by the shareholder to be timely must be so delivered or
received not later than the close of business on the fifth (5th) day following
the date on which notice of the date of the annual meeting is given to
shareholders or made public, whichever first occurs. Such shareholder's notice
to the Secretary shall set forth the following information: (a) as to each
person whom the shareholder proposes to nominate for election or re-election as
a director at the annual meeting, (i) the name, age, business address and
residence address of the proposed nominee, (ii) the principal occupation or
employment of the proposed nominee, (iii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the proposed
nominee, and (iv) any other information relating to the proposed nominee that
is required to be disclosed in solicitations for proxies for election of
directors pursuant to Rule 14a under the Securities Exchange Act of 1934, as
amended; and (b) as to the shareholder giving the notice of nominees for
election at the annual meeting, (i) the name and record address of the
shareholder, and (ii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the shareholder. The Corporation
may require any proposed nominee for election at an annual or special meeting of
shareholders to furnish such other information as may reasonably be required by
the Corporation to determine the eligibility of such proposed nominee to serve
as a director of the Corporation. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth herein. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the requirements of this Section C, and if he should so
determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.
ARTICLE VII
The Corporation shall indemnify and may advance expenses to its officers
and directors to the fullest extent permitted by law in existence either now or
hereafter.
ARTICLE VIII
A. CALL OF SPECIAL SHAREHOLDERS MEETING. Except as otherwise required by
law, the Corporation shall not be required to hold a special meeting of
shareholders of the Corporation unless (in addition to any other requirements of
law) (i) the holders of not less than fifty (50) percent of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the Corporation's Secretary one or
more written demands for the meeting describing the purpose or purposes for
which it is to be held; (ii) the meeting is called by the Board pursuant to a
resolution approved by a majority of the entire Board; or (iii) the meeting is
called by the Chairman of the
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Board of Directors. Only business within the purpose or purposes described in
the special meeting notice required by Section 607.0705 of the Florida Business
Corporation Act may be conducted at a special shareholders' meeting.
B. ADVANCE NOTICE OF SHAREHOLDER-PROPOSED BUSINESS FOR ANNUAL MEETING. At
an annual meeting of the shareholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought
before an annual meeting, business must be either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board,
(b) otherwise properly brought before the meeting by or at the direction of the
Board, or (c) otherwise properly brought before the meeting by a shareholder. In
addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation, not less than one hundred
twenty (120) days nor more than one hundred eighty (180) days prior to the first
anniversary of the date of the Corporation's notice of annual meeting provided
with respect to the previous year's annual meeting; provided, however, that if
no annual meeting was held in the previous year or the date of the annual
meeting has been changed to be more than thirty (30) calendar days earlier than
the date contemplated by the previous year's notice of annual meeting, such
notice by the shareholder to be timely must be so delivered or received not
later than the close of business on the fifth (5th) day following the date on
which notice of the date of the annual meeting is given to shareholders or made
public, whichever first occurs. Such shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the shareholder proposing such
business, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the shareholder, and (iv) any
material interest of the shareholder in such business. The Chairman of an annual
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
requirements of this Section B, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
IN WITNESS WHEREOF, the undersigned, for the purpose of amending and
restating the Corporation's Articles of Incorporation pursuant to the laws of
the State of Florida, has executed these Amended and Restated Articles of
Incorporation as of September 26, 1996.
INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ W. Garret Crotty
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W. Garrett Crotty, Secretary and General Counsel
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