AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 1996
REGISTRATION NO. 333-11541
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
INTERNATIONAL SPEEDWAY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-0709342
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
-----------------------
W. GARRETT CROTTY
SECRETARY AND GENERAL COUNSEL
1801 WEST INTERNATIONAL INTERNATIONAL SPEEDWAY CORPORATION
SPEEDWAY BOULEVARD 1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD
DAYTONA BEACH, FLORIDA 32114 DAYTONA BEACH, FLORIDA 32114
(904) 254-2700 (904) 254-2700
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OF AGENT FOR SERVICE)
OFFICE)
-------------------------
COPIES OF COMMUNICATIONS TO:
<TABLE>
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<S> <C> <C>
Bruce E. Macdonough
Greenberg, Traurig, Hoffman, Glenn R. Padgett Donn A. Beloff
Lipoff, Rosen & Quentel, P.A. 555 West Granada Blvd. Holland & Knight
1221 Brickell Avenue Suite D-11 One East Broward Blvd.
Miami, Florida 33131 Ormond Beach, Florida 32173 Ft. Lauderdale, Florida 33301
Phone: (305) 579-0500 Phone: (904) 676-9099 Phone: (954) 525-1000
Fax: (305) 579-0717 Fax: (904) 676-1151 Fax (954) 463-2030
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
-------------------------
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
TITLE OF EACH CLASS Aggregate Amount of
OF SECURITIES TO BE REGISTERED Offering Price(1)(2) Registration Fee
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Class A Common Stock, $.01 par value per share $78,200,000 $23,697(3)
</TABLE>
(1) Includes shares of Class A Common Stock which may be purchased by the
Underwriters pursuant to an over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
(3) The registrant has previously paid a fee of $25,379.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 11, 1996
P R O S P E C T U S
[ISC LOGO]
INTERNATIONAL SPEEDWAY CORPORATION
4,000,000 Shares Class A Common Stock
--------------------------
All of the shares of Class A Common Stock offered hereby are being sold by
International Speedway Corporation (the "Company"). Prior to this Offering,
there has not been a public market for the Class A Common Stock of the
Company. It is currently anticipated that the initial public offering price
will be between $15.00 and $17.00 per share. See "Underwriting" for
information relating to the factors to be considered in determining the
initial public offering price. The Class A Common Stock has been approved for
listing on the Nasdaq National Market under the symbol "ISCA."
Upon consummation of this Offering, the Company's authorized capital stock
will include the Class A Common Stock and shares of Class B 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. Immediately after this Offering, the Class A
Common Stock offered hereby will represent approximately 2.3% of the combined
voting power of both classes of Common Stock. William C. France (the
Company's Chairman of the Board and Chief Executive Officer), James C. France
(the Company's President and Chief Operating Officer), members of their
families and affiliates (collectively the "France Family Group") will in the
aggregate beneficially own shares of Class B Common Stock representing
approximately 55.0% of the Company's outstanding Common Stock and
approximately 60.0% of the combined voting power of both classes of Common
Stock. Commencing on the 91st day after this 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. The Class A Common Stock is not convertible into Class B Common
Stock. See "Description of Capital Stock."
-------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A COMMON
STOCK OFFERED HEREBY.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Share $ $ $
Total(3) $ $ $
<FN>
(1) For information regarding indemnification of the Underwriters, see
"Underwriting."
(2) Before deducting expenses of the Offering, estimated at $ .
(3) The Company and a Selling Shareholder have granted the Underwriters a
30-day option to purchase up to 600,000 additional shares of Class A
Common Stock solely to cover over-allotments, if any. See "Underwriting."
If such option is exercised, the total Price to Public, Underwriting
Discounts and Commissions, Proceeds to Company and Proceeds to Selling
Shareholder will be $ , $ , $ and $ ,
respectively.
</FN>
</TABLE>
-------------------------
The shares of Class A Common Stock are being offered by the several
Underwriters named herein, subject to prior sale, when, as and if accepted by
them, subject to certain conditions. It is expected that certificates for the
shares of Class A Common Stock offered hereby will be available for delivery
on or about , 1996, at the office of Smith Barney Inc., 333 West
34th Street, New York, New York 10001.
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Smith Barney Inc. Raymond James &
Associates, Inc.
, 1996
<PAGE>
Inside Flap:
Description of photographs:
Top photograph: Aerial photograph of
Daytona International Speedway
Bottom photograph: Aerial photograph of
Talladega Superspeedway
<PAGE>
Inside Front Cover
Description of photographs:
(Left to Right)
1. Pit row at Daytona International Speedway
2. Pack of stock cars around curve at Daytona International Speedway
3. Kodak car in pit stop at Daytona International Speedway
4. Blurred photo of pack of cars at Daytona International Speedway
5. Cars on Talladega Raceway
6. Victory Lane at Daytona International Speedway
7. Motorcycles in turn at Daytona International Speedway
8. Motorcycles at start line of Supercross at Daytona International Speedway
9. DAYTONA USA Complex, front entrance
10. Sports cars at Rolex 24 Race at Daytona International Speedway
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS
A COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ
NATIONAL MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP
MEMBERS) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMPANY'S
COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES
EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, (I) THE INFORMATION IN THIS PROSPECTUS ASSUMES NO
EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION, (II) ALL SHARE AND PER
SHARE DATA HAS BEEN RETROACTIVELY ADJUSTED TO GIVE EFFECT TO A RECAPITALIZATION
AND RELATED STOCK SPLIT TO BECOME EFFECTIVE CONCURRENTLY WITH THIS OFFERING AS
DESCRIBED IN "THE COMPANY--THE RECAPITALIZATION," AND (III) A REFERENCE TO A
"FISCAL" YEAR MEANS THE TWELVE MONTHS ENDED AUGUST 31 OF SUCH YEAR. THE COMPANY
WILL CHANGE ITS FISCAL YEAR-END TO NOVEMBER 30 EFFECTIVE DECEMBER 1, 1996.
THE COMPANY
International Speedway Corporation is a leading promoter of motorsports
activities in the United States. The Company owns and operates three of the
nation's premier superspeedways--Daytona International Speedway in Florida,
home of the Daytona 500, widely recognized as the most prestigious stock car
race in the world; Talladega Superspeedway in Alabama, the fastest stock car
track; and Darlington Raceway in South Carolina, the first stock car
superspeedway. The Company also operates Tucson Raceway Park in Arizona, owns
a 50% interest in the Watkins Glen International road course in New York, and
holds a 12% interest in Penske Motorsports, Inc., which owns and operates
Michigan International Speedway and Pennsylvania's Nazareth Speedway and is
constructing The California Speedway near Los Angeles. In July 1996, the
Company opened DAYTONA USA--The Ultimate Motorsports Attraction, a
motorsports-themed entertainment complex that includes interactive media,
theaters, historical memorabilia and exhibits.
The Company, including Watkins Glen, currently promotes over 70 stock car,
sports car, truck, motorcycle and other racing events annually, including seven
Winston Cup races, five Busch Grand National races, the premier sports car
endurance event in the United States (the Rolex 24 at Daytona) and a number of
prestigious motorcycle races. In fiscal 1996, NASCAR-sanctioned races at the
Company's facilities accounted for approximately 78.3% of the Company's total
revenues. Based on statistics developed by The Goodyear Tire and Rubber Co.
("Goodyear"), spectator attendance at NASCAR's Winston Cup and Busch Grand
National events increased at compound annual growth rates of 15.1% and 17.3%,
respectively, from 1993 to 1995. Moreover, each of CBS, ABC, ESPN, TBS and TNN
has recently experienced increased ratings for its televised NASCAR Winston Cup
events. Attracted by these increases in spectators and ratings, leading consumer
product and manufacturing companies have expanded their participation in the
motorsports industry. The Company's major sponsors include Pepsi, Anheuser
Busch, Sears, Winston, Gatorade, Pontiac, Ford, Chevrolet, Goodyear, Dupont and
Rolex.
The Company attributes its historical increases in revenues and profits to
the increasing popularity of Winston Cup, Busch Grand National and other
motorsports events in the United States, as well as an operating strategy that
emphasizes (i) senior management's long-standing involvement with the
development and growth of the motorsports industry, (ii) capital improvements
and other efforts designed to maximize race spectators' total entertainment
experience, (iii) marketing programs targeting both corporate customers and
consumers, (iv) the development of long-term relationships with sponsors, and
(v) the use of media to increase awareness of the Company's major racing events
and the motorsports industry.
The Company expects to continue to increase its revenues and profitability by
focusing on the key elements of its growth strategy, including (i) expanding the
Company's existing track facilities to satisfy spectator demand, (ii)
capitalizing on the prestige and brand name recognition of the Daytona
International Speedway through projects such as DAYTONA USA and licenses for
video and computer games, publications, toys and apparel, (iii) increasing the
Company's television broadcast revenues, (iv) acquiring and/or developing
additional motorsports facilities in new markets, and (v) expanding the use of
existing resources and facilities.
3
<PAGE>
THE OFFERING
Class A Common Stock Offered ..... 4,000,000 SHARES
Common Stock to be outstanding 4,000,000 shares of Class A Common Stock
after the Offering .............. 34,423,890 shares of Class B Common Stock
38,423,890 total shares of Common Stock
Use of proceeds ................... Additions and improvements to track
facilities, working capital and other
general corporate purposes.
Nasdaq National Market symbol .... "ISCA"
SUMMARY FINANCIAL INFORMATION
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YEAR ENDED AUGUST 31, (1)
---------------------------------------------------------------------
1992 1993 1994 1995 1996
------------ ------------- ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE, SELECTED OPERATING AND INDUSTRY DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Admissions, net ........................ $29,423 $32,078 $36,935 $43,274 $50,140
Motorsports related income ............. 15,341 16,557 18,764 24,033 27,433
Food, beverage and souvenir income .... 6,048 9,515 12,291 14,442 17,505
Other income ........................... 1,476 1,003 943 423 964
Total revenues ........................ 52,288 59,153 68,933 82,172 96,042
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR
sanction fees ....................... 7,370 8,251 9,412 11,765 13,865
Motorsports related expenses .......... 10,127 10,470 11,470 11,604 15,336
Food, beverage and souvenir expenses . 2,759 4,775 7,867 8,107 10,278
General and administrative expenses ... 11,816 13,046 14,307 18,202 20,930
Depreciation ........................... 2,612 3,006 3,828 4,798 6,302
Total expenses ........................ 34,684 39,548 46,884 54,476 66,711
Operating income ........................ 17,604 19,605 22,049 27,696 29,331
Net income .............................. 11,694 12,763(2) 14,566 18,363 19,681
Earnings per share ...................... $ .34 $ .37 $ .42 $ .53 $ .57
SELECTED OPERATING DATA:
Operating margin ........................ 33.7% 33.1% 32.0% 33.7% 30.5%
Total admissions ........................ 733,600 767,717 848,134 985,739 1,028,970
Number of seats(3):
Daytona International Speedway ........ 98,447 99,204 103,600 109,779 113,149
Talladega Superspeedway ................ 64,352 67,435 74,793 82,671 95,256
Darlington Raceway ..................... 32,455 32,455 37,281 39,917 42,553
Watkins Glen ........................... 26,033 26,061 26,061 28,095 33,221
INDUSTRY DATA:
Attendance at Winston Cup events(4) .... 3,700,000 4,020,000 4,896,000 5,327,000 N/A
Attendance at Busch Grand
National events(4) .................... 1,054,000 1,165,000 1,302,000 1,604,000 N/A
</TABLE>
AUGUST 31, 1996
-----------------------------
ACTUAL AS ADJUSTED(5)
------------ ---------------
BALANCE SHEET DATA:
Working capital (deficit) $ (6,751) $ 17,949
Total assets .............. 152,791 212,291
Long-term debt ............ -- --
Total shareholders' equity 106,667 166,167
4
<PAGE>
- -----------------------
(1) The Company will change its fiscal year-end to November 30 effective
December 1, 1996. This will result in a three-month transition period
commencing September 1, 1996 and ending November 30, 1996. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Seasonality and Quarterly Results."
(2) Reflects income of $288,000 attributable to the cumulative effect of a
change in accounting principle.
(3) Consists of seating in grandstands and luxury suites. Excludes infield
admission.
(4) This information relates to the year ended December 31 of the specified
fiscal year and was obtained from public information provided by
Goodyear.
(5) Adjusted to reflect the sale of 4,000,000 shares of Class A Common Stock
by the Company (at an assumed initial public offering price of $16.00 per
share) and the application of the net proceeds therefrom as set forth in
"Use of Proceeds."
----------------------
Unless the context otherwise requires, references herein to the "Company"
mean International Speedway Corporation and its wholly owned subsidiaries
considered as one enterprise. "DAYTONA USA/registered trademark/," the "Daytona
500/registered trademark/," "Talladega Superspeedway/registered trademark/,"
"Darlington/registered trademark/" and "World Center of Racing/registered
trademark/" are registered trademarks and service marks of International
Speedway Corporation. "NASCAR/registered trademark/" and "Grand
National/registered trademark/" are registered trademarks and service marks of
the National Association for Stock Car Auto Racing, Inc. ("NASCAR").
5
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW,
AS WELL AS THE OTHER INFORMATION PROVIDED ELSEWHERE IN THIS PROSPECTUS, IN
EVALUATING AN INVESTMENT IN THE COMPANY.
DEPENDENCY UPON NASCAR
The Company's success has been and will remain dependent upon maintaining a
good working relationship with NASCAR, the sanctioning body for Winston Cup,
NASCAR's Busch Series, Grand National Division ("Busch Grand National") and
certain other races promoted by the Company. The Company and Watkins Glen
International, Inc., its 50%-owned subsidiary ("Watkins Glen"), have sanctioning
agreements to promote and market seven Winston Cup races, five Busch Grand
National races and a number of other NASCAR races for the 1997 racing season.
Each NASCAR event sanctioning agreement is awarded on an annual basis. In fiscal
1995 and fiscal 1996, NASCAR-sanctioned races at the Company's facilities
accounted for approximately 79.5% and 78.3%, respectively, of the Company's
total revenues. Although William C. France and James C. France presently control
both the Company and NASCAR and management believes that the Company will
continue to maintain an excellent relationship with NASCAR for the foreseeable
future, NASCAR is under no obligation to continue to enter into sanctioning
agreements with the Company to promote any event. Failure to obtain a
sanctioning agreement for a major NASCAR event would have a material adverse
effect on the Company's financial condition and results of operations. Moreover,
although the Company's general growth strategy includes the possible development
and/or acquisition of additional motorsports facilities, there can be no
assurance that NASCAR will enter into sanctioning agreements with the Company to
promote races at such facilities. See "NASCAR."
DEPENDENCE ON KEY PERSONNEL
The Company's continued success will depend upon the availability and
performance of its senior management team, particularly William C. France, the
Company's Chairman of the Board and Chief Executive Officer, James C. France,
its President and Chief Operating Officer, and Lesa D. Kennedy, its Executive
Vice President (collectively the "France Family Executives"), each of whom
possesses unique and extensive industry knowledge and experience. While the
Company believes that its senior management team has significant depth, the loss
of any of the Company's key personnel or its inability to attract and retain key
employees in the future could have a material adverse effect on the Company's
operations and business plans. See "NASCAR," "Business--Growth Strategy" and
"Management."
POTENTIAL CONFLICTS OF INTEREST
William C. France and James C. France beneficially own all of NASCAR's
capital stock, and each of the France Family Executives, the Company's Vice
President-Administration, the Company's General Counsel and certain other
non-officer employees devote portions of their time to NASCAR's affairs. Each of
the France Family Executives devotes substantial time to the Company's affairs
and all of the Company's other executive officers are available to the Company
on a full-time basis. In addition, the Company strives to ensure, and management
believes, that the terms of the Company's transactions with NASCAR are no less
favorable to the Company than those which could be obtained in arms'-length
negotiations. Nevertheless, certain potential conflicts of interest between the
Company and NASCAR exist with respect to, among other things, (i) the terms of
any sanctioning agreements that may be awarded to the Company by NASCAR, (ii)
the amount of time devoted by the France Family Executives and certain other
Company employees to NASCAR's affairs, and (iii) the amounts charged or paid to
NASCAR for office rental, transportation costs, shared executives,
administrative expenses and similar items. Regardless of any potential conflicts
of interest, the Company's officers and directors owe fiduciary duties to the
Company. The Company does not currently have any specific conflict resolution
procedures. See "NASCAR," "Management" and "Certain Transactions."
6
<PAGE>
INDUSTRY SPONSORSHIPS AND GOVERNMENT REGULATION
The motorsports industry and the Company generate significant recurring
revenue from the promotion, sponsorship and advertising of various companies and
their products. Government regulation can adversely impact the availability to
motorsports of this promotion, sponsorship and advertising revenue. Advertising
by the tobacco and alcoholic beverage industries is generally subject to greater
governmental regulation than advertising by other sponsors of the Company's
events. In August 1996, the U.S. Food and Drug Administration (the "FDA") issued
regulations concerning advertising and sales of cigarettes and smokeless tobacco
to minors which would, in part, restrict tobacco industry sponsorship of all
sporting events, including motorsports, effective August 1998. The FDA
regulations prohibit the present practice of tobacco product brand name
sponsorship of, or identification with, motorsports events, entries and teams.
If these rules become effective, no assurance can be given that suitable
alternative sponsors for the events, entries and teams could be located.
Management is aware of pending legal challenges, as well as legislative
initiatives, which could change or prevent the scheduled implementation of these
regulations. However, the final outcome of the challenges to the regulations is
uncertain, and the ultimate impact on the motorsports industry and the Company,
if any, is unclear. The Company is not aware of any proposed governmental
regulation which would materially limit the availability to motorsports of
promotion, sponsorship or advertising revenue from the alcoholic beverage
industry. Advertising and sponsorship revenue from the tobacco and alcoholic
beverage industries accounted for approximately 1.6% and 1.5% of the Company's
total revenues in fiscal 1995 and fiscal 1996, respectively. In addition, the
tobacco and alcoholic beverage industries provide financial support to the
motorsports industry through, among other things, their purchase of advertising
time, their sponsorship of racing teams and their sponsorship of racing series
such as NASCAR's Winston Cup and Busch Grand National series.
COMPETITION
The Company's racing events face competition from other spectator-oriented
sporting events and other leisure and recreational activities. As a result, the
Company's revenues will be affected by the general popularity of motorsports,
the availability of alternative forms of recreation and changing consumer
preferences. The Company's racing events also compete with other racing events
sanctioned by various racing bodies such as NASCAR, Championship Auto Racing
Teams, Inc. ("CART"), the United States Auto Club ("USAC"), the National Hot Rod
Association ("NHRA"), the Sports Car Club of America ("SCCA"), the International
Motor Sports Association ("IMSA"), the Automobile Racing Club of America
("ARCA") and others. Management believes that the primary elements of
competition in attracting motorsports spectators and corporate sponsors to a
racing event and facility are the type and caliber of promoted racing events,
facility location, sight lines, pricing and customer conveniences that
contribute to a total entertainment experience. Many sports and entertainment
businesses have resources that exceed those of the Company. See
"Business--Competition."
IMPACT OF CONSUMER SPENDING ON RESULTS
The success of the Company's operations depends to a significant extent upon
a number of factors relating to discretionary consumer spending, including
economic conditions affecting disposable consumer income such as employment,
business conditions, interest rates and taxation. These factors can impact both
attendance at the Company's events and the financial results of the motorsports
industry's principal sponsors. There can be no assurance that consumer spending
will not be adversely affected by economic conditions, thereby impacting the
Company's growth, revenue and profitability.
UNCERTAIN PROSPECTS OF NEW MOTORSPORTS FACILITIES
The Company's growth strategy includes the potential acquisition and/or
development of new motorsport facilities. The Company's ability to implement
successfully this element of its growth strategy will depend on a number of
factors, including (i) the Company's ability to obtain one or more additional
sanctioning agreements to promote Winston Cup, Busch Grand National or other
major events at these new facilities, (ii) the cooperation of local government
officials, (iii) the Company's
7
<PAGE>
capital resources, (iv) the Company's ability to control construction and
operating costs, and (v) the Company's ability to hire and retain qualified
personnel. The Company's inability to implement its expansion plans for any
reason would adversely affect its business prospects. In addition, expenses
associated with developing, constructing and opening a new facility may have a
negative effect on the Company's financial condition and results of operations
in one or more future reporting periods. At the present time, the Company does
not have any arrangement or understanding with respect to any new facility
acquisition or development project. The cost of any such transaction will depend
on a number of factors, including the facility's location, the extent of the
Company's ownership interest and the degree of any municipal or other public
support. Moreover, although management believes that it will be able to obtain
financing to fund the acquisition, development and/or construction of additional
motorsport facilities should the Company implement this element of its growth
strategy, there can be no assurance that adequate debt or equity financing will
be available on satisfactory terms. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
and "Business--Growth Strategy."
FINANCIAL IMPACT OF BAD WEATHER
The Company promotes outdoor motorsports events. Weather conditions affect
sales of, among other things, tickets, concessions and souvenirs at these
events. Although the Company sells tickets well in advance of its most popular
events, poor weather conditions could have a material adverse effect on the
Company's results of operations, particularly any interruption of the Company's
February "Speedweeks" events. For example, bad weather required the rescheduling
of certain racing events during the Company's 1996 Camel Motorcycle Week,
resulting in reduced revenues and increased expenses.
LIABILITY FOR PERSONAL INJURIES
Motorsports can be dangerous to participants and to spectators. The Company
maintains insurance policies that provide coverage within limits that management
believes should generally be sufficient to protect the Company from material
financial loss due to liability for personal injuries sustained by persons on
the Company's premises in the ordinary course of Company business. Nevertheless,
there can be no assurance that such insurance will be adequate or available at
all times and in all circumstances. The Company's financial condition and
results of operations would be adversely affected to the extent claims and
associated expenses exceed insurance recoveries.
ENVIRONMENTAL AND ZONING MATTERS
Management believes that the Company's operations are in substantial
compliance with all applicable federal, state and local environmental laws and
regulations. Nonetheless, if damage to persons or property or contamination of
the environment is determined to have been caused or exacerbated by the conduct
of the Company's business or by pollutants, substances, contaminants or wastes
used, generated or disposed of by the Company, or which may be found on the
property of the Company, the Company may be held liable for such damage and may
be required to pay the cost of investigation and/or remediation of such
contamination or any related damage. The amount of such liability as to which
the Company is self-insured could be material. State and local laws relating to
the protection of the environment also include noise abatement laws that may be
applicable to the Company's racing events. Changes in the provisions or
application of federal, state or local environmental laws, regulations or
requirements, or the discovery of theretofore unknown conditions, could also
require additional material expenditures by the Company.
In addition, the development of new motorsports facilities (and, to a lesser
extent, the expansion of existing facilities) requires compliance with
applicable federal, state and local land use planning, zoning and environmental
regulations. Regulations governing the use and development of real estate may
prevent the Company from acquiring or developing prime locations for motorsports
facilities, substantially delay or complicate the process of improving existing
facilities, and/or materially increase the costs of any of such activities.
8
<PAGE>
SEASONALITY AND VARIABILITY OF QUARTERLY RESULTS
The Company derives most of its income from event admissions and related
revenue from a limited number of NASCAR-sanctioned races. As a result, the
Company's business has been, and is expected to remain, highly seasonal based on
the timing of major race events. Historically, the Company has incurred net
losses in the fiscal quarter ending November 30, and achieved its highest net
income in the fiscal quarter ending February 28. Partly in response to this
seasonality and the desire to better conform to the traditional racing season,
the Company will change its fiscal year-end from August 31 to November 30
effective December 1, 1996. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Seasonality and Quarterly
Results."
BROAD DISCRETION REGARDING PROCEEDS OF THE OFFERING
A substantial portion of the net proceeds of this Offering has been allocated
to working capital and general corporate purposes. Accordingly, management will
have broad discretion as to the application of the Offering proceeds. Pending
the Company's use of such proceeds for general corporate purposes, including
improvements to existing facilities and the possible acquisition and/or
development of new facilities, such proceeds will be placed in interest-bearing
investments. It is possible that the return on such investments will be less
than that which would be realized were the Company immediately to use such funds
for other purposes.
EFFECTIVE VOTING CONTROL BY FRANCE FAMILY GROUP AND ANTI-TAKEOVER EFFECT OF
DUAL CLASSES OF STOCK
Holders of Class A Common Stock have per share voting rights that are
one-fifth (1/5th) 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.
Immediately after this Offering, the Class A Common Stock offered hereby will
represent approximately 2.3% of the combined voting power of both classes of the
Company's Common Stock. Members of the France Family Group will in the aggregate
beneficially own shares of Class B Common Stock representing approximately 55.0%
of the Company's outstanding capital stock and approximately 60.0% of the
combined voting power of both classes of Common Stock. Accordingly, if such
members of the France Family Group vote their shares of Common Stock in the same
manner, they will have sufficient voting power (without the approval 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.
The members of the France Family Group have advised the Company that they do
not presently intend to convert the shares of Class B Common Stock beneficially
owned by them into shares of Class A Common Stock. To the extent that holders of
Class B Common Stock other than the France Family Group elect to convert such
shares, 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 holder of Class A Common Stock might receive
a premium for their shares over prevailing market prices. See "Principal
Shareholders" and "Description of Capital Stock."
POSSIBLE ANTI-TAKEOVER EFFECTS OF FLORIDA LAW, CHARTER PROVISIONS AND
PREFERRED STOCK
Certain provisions of Florida law and the Company's Amended and Restated
Articles of Incorporation ("Articles") may deter or frustrate a takeover attempt
of the Company that a shareholder might consider in its best interest. Among
other things, the Company's Articles (i) divide the Company's Board of Directors
into three classes, each of which serves for different three-year periods, (ii)
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 (iii) establish
certain advance notice procedures for nomination of candidates for election as
directors and for shareholder proposals to be considered at annual shareholders'
9
<PAGE>
meetings. In addition, upon consummation of this Offering, the Company will be
authorized to issue one million shares of preferred stock in one or more series,
having terms fixed by the Board of Directors without shareholder approval,
including voting, dividend or liquidation rights that could be greater than or
senior to the rights of holders of Common Stock. Issuance of shares of Preferred
Stock could also be used as an anti-takeover device. The Company has no current
intentions or plans to issue any such Preferred Stock. See "Description of
Capital Stock."
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering, all of the shares of Class A Common Stock
offered hereby will be eligible for public sale without restriction.
Approximately 13.1 million additional shares of Class A Common Stock issuable
upon conversion of currently outstanding shares of Class B Common Stock will
become eligible for public sale commencing 90 days after the effective date of
this Offering. The holders of the approximately 21.3 million remaining
outstanding shares of Class B Common Stock have agreed not to sell or otherwise
dispose of such shares, without the consent of Smith Barney Inc., until 180 days
after this Offering. After such date, all such shares may be sold subject to the
limitations of Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"). Future sales of substantial amounts of Common Stock, or the
potential for such sales, could adversely affect prevailing market prices. See
"Shares Eligible for Future Sale."
LACK OF PRIOR PUBLIC MARKET AND VOLATILITY OF STOCK PRICE
Prior to this Offering, there has been no public market for the Company's
Class A Common Stock. Moreover, there can be no assurance that an active trading
market in either class of the Company's Common Stock will develop subsequent to
this Offering or, if developed, that it will be sustained. The initial public
offering price of the Class A Common Stock will be determined by negotiation
among the Company and the Representatives of the Underwriters. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public offering price. Upon commencement of this Offering, the Class
A Common Stock will be quoted on the Nasdaq National Market, which has
experienced and may continue to experience significant price and volume
fluctuations which could adversely affect the market price of the Class A Common
Stock without regard to the operating performance of the Company. In addition,
the Company believes that factors such as quarterly fluctuations in the
financial results of the Company, earnings below analyst estimates, and the
financial performance and other activities of the Company's principal sponsors
and other publicly traded motorsports companies could cause the price of the
Class A Common Stock to fluctuate substantially.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK
Management believes that this Prospectus contains forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, including statements regarding, among other
items, (i) the Company's growth strategies, (ii) anticipated trends in the
motorsports industry and demographics, and (iii) the Company's ability to enter
into contracts with television networks and sponsors. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of the factors described in "Risk Factors," including,
among others, general economic conditions, governmental regulation and
competitive factors. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this Prospectus will
in fact transpire.
10
<PAGE>
THE COMPANY
THE RECAPITALIZATION
Concurrently with the effectiveness of this Offering, the Company will modify
its authorized capital (the "Recapitalization") to include one million shares of
Preferred Stock, 80 million shares of Class A Common Stock and 40 million shares
of Class B Common Stock. See "Description of Capital Stock." Pursuant to the
Recapitalization, all of the Company's currently outstanding shares of common
stock will automatically be converted, on a 15-for-one basis, into the newly
authorized shares of Class B Common Stock. As a result, after the
Recapitalization and this Offering are effected, the Company will have
outstanding 4,000,000 shares of Class A Common Stock and 34,423,890 shares of
Class B Common Stock. In addition, as part of the Recapitalization the Company
retired its then existing treasury stock effective August 31, 1996.
GENERAL
The Company was incorporated in 1953 under the laws of the State of Florida
under the name "Bill France Racing, Inc." and changed its name to "International
Speedway Corporation" in 1968. The Company's principal executive offices are
located at 1801 West International Speedway Boulevard, Daytona Beach, Florida
32114, and its telephone number is (904) 254-2700.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 4,000,000 shares of
Class A Common Stock offered by the Company hereby, assuming an initial public
offering price of $16.00 per share, are estimated to be approximately $59.5
million, after deduction of underwriting discounts and commissions and estimated
expenses of the Offering. The Company intends to use approximately $26.8 million
of such net proceeds to fund the completion of certain additions and
improvements to the Company's motorsports facilities, including additional
suites and grandstand seating at Daytona International Speedway, Talladega
Superspeedway and Darlington Raceway. Approximately $8.0 million of the net
proceeds of this Offering will be used to repay borrowings incurred under one of
the Company's lines of credit in September 1996 to fund the Company's
acquisition of properties in close proximity to Daytona International Speedway.
Such borrowings bear interest at a variable rate equal to the one-year LIBOR
rate plus .75% (6.9% at September 16, 1996) and mature 30 days after demand by
the lender. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources," "Business--Growth
Strategy" and "Business--Motorsports Facilities."
The approximately $24.7 million of remaining net proceeds will be used for
working capital and other general corporate purposes, including potential
acquisitions and continued improvements to and expansion of the Company's
operations. However, the Company does not currently have any understanding or
arrangement regarding any potential acquisition. Pending such uses, the Company
intends to invest the net proceeds of this Offering in money market funds or
other interest-bearing obligations.
DIVIDEND POLICY
The Company has historically paid annual cash dividends on its common stock.
See "Selected Financial Data." However, the Company does not have a formal
dividend policy nor any current intention to declare and pay dividends in the
future. Future dividends, if any, will depend upon the Company's future
earnings, capital requirements and financial condition, as well as such other
factors as the Company's Board of Directors may deem relevant. Accordingly,
there can be no assurance that dividends will be paid.
11
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of August
31, 1996, after giving retroactive effect to the Recapitalization (see "The
Company--The Recapitalization"), and as adjusted to give effect to the sale of
the 4,000,000 shares of Class A Common Stock offered by the Company hereby
(assuming an initial public offering price of $16.00 per share) and the
application of the estimated net proceeds therefrom as described under "Use of
Proceeds."
<TABLE>
<CAPTION>
AUGUST 31, 1996
---------------------------
ACTUAL AS ADJUSTED
----------- --------------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt ......................................................... $ -- $ --
Shareholders' equity:
Preferred Stock, $.01 par value, 1,000,000 shares authorized, no
shares issued and outstanding ....................................... -- --
Class A Common Stock, $.01 par value, 80,000,000 shares authorized, no
shares issued and outstanding, 4,000,000 as adjusted ................ -- 40
Class B Common Stock, $.01 par value, 40,000,000 shares authorized,
34,423,890 shares issued and outstanding ............................ 344 344
Common Stock, $.10 par value, 5,000,000 shares authorized, no shares
issued and outstanding .............................................. -- --
Additional paid-in capital ............................................ 8,127 67,587
Retained earnings ..................................................... 99,986 99,986
Unearned compensation--restricted stock(1) ............................ (1,790) (1,790)
----------- --------------
Total shareholders' equity ........................................... 106,667 166,167
----------- --------------
Total capitalization ............................................... $106,667 $166,167
=========== ==============
</TABLE>
- -------------------------
(1) See Note 11 of Notes to the Company's Consolidated Financial Statements.
12
<PAGE>
SELECTED FINANCIAL DATA
The following selected historical financial data as of and for each of the
fiscal years ended August 31, 1992 through 1996 have been derived from the
Company's Consolidated Financial Statements which have been audited by Ernst &
Young LLP, independent certified public accountants. For comparability, certain
prior period results have been reclassified to conform to the presentation
adopted in fiscal 1996. The following selected financial data should be read in
conjunction with the Company's Consolidated Financial Statements, including the
notes thereto, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,(1)
--------------------------------------------------------------
1992 1993 1994 1995 1996
----------- ----------- ----------- ---------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Admissions, net .................................... $ 29,423 $ 32,078 $ 36,935 $ 43,274 $ 50,140
Motorsports related income ......................... 15,341 16,557 18,764 24,033 27,433
Food, beverage and souvenir income ................. 6,048 9,515 12,291 14,442 17,505
Other income ....................................... 1,476 1,003 943 423 964
-------- -------- -------- -------- --------
Total revenues .................................... 52,288 59,153 68,933 82,172 96,042
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR sanction
fees ......................................... 7,370 8,251 9,412 11,765 13,865
Motorsports related expenses ...................... 10,127 10,470 11,470 11,604 15,336
Food, beverage and souvenir expenses .............. 2,759 4,775 7,867 8,107 10,278
General and administrative expenses ................ 11,816 13,046 14,307 18,202 20,930
Depreciation ....................................... 2,612 3,006 3,828 4,798 6,302
-------- -------- ------- ------- -------
Total expenses .................................... 34,684 39,548 46,884 54,476 66,711
-------- ------- ------- ------- -------
Operating income .................................... 17,604 19,605 22,049 27,696 29,331
Interest income, net ................................ 502 724 972 1,436 872
Equity in net income (loss) from equity investments 300 (27) 207 285 1,441
-------- ------- ------- ------- -------
Income before income taxes .......................... 18,406 20,302 23,228 29,417 31,644
Income taxes ........................................ 6,712 7,827 8,662 11,054 11,963
-------- ------- ------- ------- -------
Income before cumulative effect of change in
accounting principle .............................. 11,694 12,475 14,566 18,363 19,681
Cumulative effect of change in accounting principle -- 288 -- -- --
-------- -------- ------- ------- -------
Net income .......................................... $11,694 $12,763 $14,566 $ 18,363 $ 19,681
======= ======== ======= ======== ========
Earnings per share:
Before cumulative effect of change in
accounting principle ........................... $ .34 $ .36 $ .42 $ .53 $ .57
Cumulative effect of change in accounting principle -- .01 -- -- --
------- ------- ------- -------- --------
Earnings per share .................................. $ .34 $ .37 $ .42 $ .53 $ .57
======= ======= ======= ======== ========
Dividends per share ................................. $ .03 $ .03 $ .04 $ .05 $ .05
BALANCE SHEET DATA (END OF PERIOD):
Working capital (deficit) ......................... $13,301 $16,356 $11,839 $ 20,821 $ (6,751)
Total assets ........................................ 67,540 78,487 96,401 119,571 152,791
Long-term debt ...................................... 2,300 -- -- -- --
Total shareholders' equity .......................... 43,638 55,236 68,277 85,247 106,667
</TABLE>
- ----------------------
(1) The Company will change its fiscal year-end to November 30 effective
December 1, 1996. This will result in a three-month transition period
commencing September 1, 1996 and ending November 30, 1996. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Seasonality and Quarterly Results."
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company derives revenues primarily from (i) admissions to racing events
held at its motorsports facilities, (ii) revenue generated in conjunction with
or as a result of motorsports events conducted at the Company's facilities, and
(iii) catering, concession and souvenir sales made during such events.
"Admissions" revenue includes ticket sales for all of the Company's events,
track tours and, since July 1996, DAYTONA USA. Admissions revenue for racing
events is recorded upon completion of the related motorsports event.
"Motorsports related income" includes television and radio broadcast rights
fees, hospitality rentals (including luxury suites and chalets), promotion and
sponsorship fees, track rentals, advertising revenues and royalties from
licenses of the Company's trademarks. The Company negotiates directly with
television and cable networks for coverage of substantially all of its televised
motorsports events. The Company's revenues from corporate sponsorships are paid
in accordance with negotiated contracts, with the identities of sponsors and the
terms of sponsorship changing from time to time.
"Food, beverage and souvenir income" includes revenues from concession
stands, hospitality catering and direct sales of souvenirs, programs and other
merchandise, as well as fees paid by third party vendors for the right to sell
souvenir and concessions at the Company's facilities.
Expenses include (i) prize and point fund monies and NASCAR sanction fees,
(ii) motorsports related expenses, which include costs of competition paid to
sanctioning bodies other than NASCAR, labor, advertising and other expenses
associated with the Company's promotion of its racing events, and (iii) food,
beverage and souvenir expenses, consisting primarily of labor and costs of goods
sold.
14
<PAGE>
The following table sets forth, for each of the indicated periods, certain
selected income statement data as a percentage of total revenues:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-------------------------------
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Admissions, net ...................................... 53.6% 52.7% 52.2%
Motorsports related income ........................... 27.2 29.2 28.6
Food, beverage and souvenir income ................... 17.8 17.6 18.2
Other income ......................................... 1.4 0.5 1.0
--------- --------- ---------
Total revenues ...................................... 100.0% 100.0% 100.0%
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR sanction fees 13.7 14.3 14.4
Motorsports related expenses ........................ 16.6 14.1 16.0
Food, beverage and souvenir expenses ................ 11.4 9.9 10.7
General and administrative expenses .................. 20.8 22.2 21.8
Depreciation ......................................... 5.5 5.8 6.6
--------- --------- ---------
Total expenses ...................................... 68.0 66.3 69.5
--------- --------- ---------
Operating income ...................................... 32.0 33.7 30.5
Interest income, net .................................. 1.4 1.7 0.9
Equity in net income from equity investments ......... .3 .3 1.5
--------- --------- ---------
Income before income taxes ............................ 33.7 35.7 32.9
Income taxes .......................................... 12.6 13.4 12.5
--------- --------- ---------
Net income ............................................ 21.1% 22.3% 20.5%
========= ========= =========
</TABLE>
COMPARISON OF FISCAL 1996 TO FISCAL 1995
Admissions revenue increased approximately $6.9 million, or 15.9%, from
fiscal 1995 to fiscal 1996. Approximately 75% of this increase was attributable
to an increase in the Company's weighted average price of tickets sold. This
increase was the result of general price increases and additional sales of
premium seats. Increased attendance at the Company's racing events accounted for
approximately 13% of the increase in admissions revenue. The remaining increase
was attributable to DAYTONA USA. Management believes that the increases in
weighted average price of tickets sold and admissions reflect the increasing
popularity of motorsports and the Company's continued expansion in seating
capacity at its facilities.
Motorsports related income increased approximately $3.4 million, or 14.1%,
from fiscal 1995 to fiscal 1996. This increase reflected an approximately $1.4
million increase in broadcast rights fees, an approximately $900,000 increase in
promotion and sponsorship fees and an approximately $900,000 increase in
hospitality rentals. This increase was partially offset by an approximately
$800,000 decrease in royalties from the Company's trademark license to a single
licensee.
Food, beverage and souvenir income increased approximately $3.1 million, or
21.2%, from fiscal 1995 to fiscal 1996. Approximately $1.8 million of this
increase was attributable to the expanded activities of Americrown Service
Corporation ("Americrown") in providing food and beverage services at outdoor
sporting events unrelated to the motorsports events promoted by the Company. The
remainder of the increase was primarily attributable to increased attendance at
the Company's racing events and, to a lesser extent, price increases.
Prize and point fund monies and NASCAR sanction fees increased approximately
$2.1 million, or 17.8%, from fiscal 1995 to fiscal 1996. Approximately 75% of
this increase was due to increases in the prize and point fund monies paid by
NASCAR to participants in the Company's motorsports events.
15
<PAGE>
This increase was primarily attributable to increases in the Company's broadcast
revenues as standard NASCAR sanctioning agreements require that a specified
percentage of broadcast revenues be paid as prize money.
Motorsports related expenses increased approximately $3.7 million, or 32.2%,
from fiscal 1995 to fiscal 1996, reflecting increased labor, advertising and
other costs associated with the promotion of the Company's racing events.
Motorsports related expenses as a percentage of combined admissions and
motorsports related income increased from approximately 17.2% in fiscal 1995 to
approximately 19.8% in fiscal 1996, which management attributes primarily to
pre-opening expenses associated with DAYTONA USA, which was open for only two
months in fiscal 1996, as well as the impact of inclement weather on the results
from the Company's 1996 Camel Motorcycle Week events.
Food, beverage and souvenir expenses increased approximately $2.7 million, or
26.8%, from fiscal 1995 to 1996, reflecting increases in labor, product costs
and other expense items attributable to the Company's expanded concessions and
catering operations. Food, beverage and souvenir expenses as a percentage of
food, beverage and souvenir income increased from approximately 56.1% in fiscal
1995 to 58.7% in fiscal 1996, reflecting the lower margins associated with the
expansion of Americrown's concessions and catering operations to third party
events.
General and administrative expenses increased approximately $2.7 million, or
15.0%, from fiscal 1995 to fiscal 1996. The increase was primarily due to
increases in life insurance, travel expenses, wages and other compensation,
professional fees, as well as a wide variety of other expense items. General and
administrative expenses as a percentage of total revenues decreased from
approximately 22.2% in fiscal 1995 to 21.8% in fiscal 1996.
The Company's depreciation expense increased approximately $1.5 million, or
31.3%, primarily as a result of the ongoing expansion of the Company's
motorsports facilities and the opening of DAYTONA USA in July 1996.
The approximately $550,000 decrease in the Company's net interest income was
primarily attributable to lower average investment balances resulting from the
funding of construction of DAYTONA USA, the Company's indirect investment in
Penske Motorsports and a variety of facility expansion and improvement projects.
The approximately $1.2 million increase in net income from equity investments
was attributable to the Company's indirect investment in Penske Motorsports and,
to a lesser extent, an increase in Watkins Glen net income.
As a result of the foregoing, the Company's net income increased $1.3
million, or 7.2%, from $18.4 million in fiscal 1995 to $19.7 million in fiscal
1996.
COMPARISON OF FISCAL 1995 TO FISCAL 1994
The Company's admissions revenue increased approximately $6.3 million, or
17.3%, from fiscal 1994 to fiscal 1995. Approximately half of this increase was
attributable to increased attendance at the Company's racing events, with the
balance due to an increase in the Company's weighted average price of tickets
sold. Management believes that these increases in turn reflected the increased
popularity of motorsports and the Company's expansion in seating capacity at its
facilities.
Motorsports related income increased approximately $5.3 million, or 28.1%,
from fiscal 1994 to fiscal 1995. This increase was primarily due to an
approximately $1.8 million increase in broadcast rights fees, an approximately
$1.2 million increase in royalties from the Company's trademark licenses, an
approximately $900,000 increase in advertising revenues and an approximately
$700,000 increase in promotion and sponsorship fees.
Food, beverage and souvenir income increased approximately $2.2 million, or
17.5%, from fiscal 1995 to fiscal 1996. Approximately $650,000 of this increase
was attributable to the expanded activities
16
<PAGE>
of Americrown in providing catering services at the Company's Daytona and
Talladega facilities and food and beverage services at outdoor sporting events
unrelated to the motorsports events promoted by the Company. The remainder of
the increase was primarily attributable to increased attendance at the Company's
racing events and, to a lesser extent, price increases.
Prize and point fund monies and NASCAR sanction fees increased approximately
$2.4 million, or 25.0%, from fiscal 1994 to fiscal 1995. Approximately 82% of
this increase was due to increases in the prize and point fund monies paid to
participants in the Company's motorsports events. This increase was primarily
attributable to increases in the Company's broadcast revenues.
Motorsports related expenses remained relatively constant, increasing
approximately $134,000, or 1.2%, from fiscal 1994 to fiscal 1995. Motorsports
related expenses as a percentage of combined admissions and motorsports related
income decreased from approximately 20.5% in fiscal 1994 to approximately 17.2%
in fiscal 1995, reflecting the increase in the Company's revenues and the
resulting economies of scale.
Food, beverage and souvenir expenses increased approximately $240,000, or
3.0%, from fiscal 1994 to 1995, reflecting increases in labor, product costs and
other expense items attributable to the Company's expanded concessions and
catering operations. Food, beverage and souvenir expenses as a percentage of
food, beverage and souvenir income decreased from approximately 64.0% in fiscal
1994 to 56.1% in fiscal 1995, reflecting the elimination of promotional costs
associated with a discontinued mail order catalog developed and distributed in
fiscal 1994, a reduction of product costs, and economies of scale attributable
to the increase in food, beverage and souvenir income.
General and administrative expenses increased approximately $3.9 million, or
27.2%, from fiscal 1994 to fiscal 1995. The increase was primarily due to
increases in wages and compensation, professional fees and other administrative
expenses. General and administrative expenses as a percentage of total revenues
increased from approximately 20.8% in fiscal 1994 to 22.2% in fiscal 1995.
The Company's depreciation expense increased approximately $970,000, or
25.3%, from fiscal 1994 to fiscal 1995, primarily as a result of the ongoing
expansion of the Company's motorsports facilities.
The approximately $450,000 increase in the Company's net interest income was
primarily attributable to an increase in average investment balances from fiscal
1994 to fiscal 1995.
As a result of the foregoing, the Company's net income increased $3.8
million, or 26.1%, from $14.6 million in fiscal 1994 to $18.4 million in fiscal
1995.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
The Company has historically generated sufficient cash flow from operations
to fund its capital expenditures, investments and working capital needs, as well
as to pay annual cash dividends. At August 31, 1996, the Company had a working
capital deficit of $6.7 million, compared to working capital of $20.8 million at
August 31, 1995, which was primarily attributable to the funding of DAYTONA
USA's construction, the Company's indirect investment in Penske Motorsports and
various expansion and improvement projects as described under "--Cash Flows" and
"--Capital Expenditures."
The Company also has two lines of credit with financial institutions
totalling $16.0 million. One of the $8.0 million lines of credit expires in
December 1996, and the other expires in September 1997. Borrowings under the
credit facilities bear interest at the one-year LIBOR rate plus .75%. See Note
13 of Notes to the Company's Consolidated Financial Statements.
CASH FLOWS
Net cash provided by operating activities was approximately $32.7 million in
fiscal 1996, compared to $27.7 million in fiscal 1995. The difference between
the Company's fiscal 1996 net income of $19.7
17
<PAGE>
million and the $32.7 million of operating cash flow was primarily attributable
to $6.3 million of depreciation, a $6.1 million increase in deferred income, a
$1.4 million increase in deferred income taxes and a $1.2 million increase in
accounts payable, partially offset by a $1.7 million increase in receivables and
$1.4 million in undistributed income from equity investments.
Net cash used in investing activities was $28.0 million in fiscal 1996,
compared to $23.4 million in fiscal 1995. The Company's fiscal 1996 cash flow
reflects $34.8 million in capital expenditures and the Company's $15.3 million
indirect investment in Penske Motorsports, as well as $22.8 million of net
proceeds from investments. See "--Capital Expenditures,"
"Business--Operations--Penske Motorsports" and Note 2 of Notes to the Company's
Consolidated Financial Statements.
Net cash used in financing activities was approximately $3.5 million in
fiscal 1996, compared to $1.7 million in fiscal 1995. The Company's fiscal 1996
cash flow reflects $1.8 million of cash dividends and $1.7 million attributable
to the repurchase of previously outstanding common stock.
CAPITAL EXPENDITURES
Capital expenditures totalled approximately $34.8 million in fiscal 1996,
compared to $16.8 million in fiscal 1995 and $19.7 million in fiscal 1994. The
Company's fiscal 1996 capital expenditures related primarily to DAYTONA USA, the
Company's addition to Daytona International Speedway's Winston Tower and other
additions and improvements to the Company's motorsports facilities.
The Company currently expects to make approximately $35.4 million of capital
expenditures during the 15 months ending November 30, 1997 to complete the
Winston Tower addition, to increase seating capacity as described in
"Business--Growth Strategy--Expand Existing Facilities," and for a number of
other improvements to the Company's motorsports facilities. The estimated amount
of capital expenditures also includes $5.4 million attributable to the current
renovation of the Company's new corporate headquarters facility and $8.0 million
attributable to the Company's September 1996 purchase of real property in close
proximity to Daytona International Speedway. See "Business--Motorsports
Facilities."
FUTURE LIQUIDITY
The Company believes that the proceeds of this Offering together with funds
generated from operations will be sufficient to satisfy the Company's working
capital requirements through at least fiscal 1997, as well as the Company's
planned capital expenditures described in the preceding paragraph.
The Company also believes that it will be able to obtain financing to fund
the acquisition, development and/or construction of additional motorsports
facilities should the Company implement this element of its growth strategy.
However, there can be no assurance that adequate debt or equity financing will
be available on satisfactory terms. See "Risk Factors--Uncertain Prospects of
New Motorsports Facilities."
SEASONALITY AND QUARTERLY RESULTS
The Company derives most of its income from event admissions and related
revenue from a limited number of NASCAR-sanctioned races. As a result, the
Company's business has been, and is expected to remain, highly seasonal based on
the timing of major race events. For example, the Mountain Dew Southern 500 is
traditionally held on the Sunday preceding Labor Day. Accordingly, the admission
revenue and expenses for that race and/or certain of its supporting events may
be recognized in either the fiscal quarter ending August 31 or the fiscal
quarter ending November 30.
Historically, the Company has incurred net losses in the fiscal quarter
ending November 30, and achieved its highest net income in the fiscal quarter
ending February 28. Partly in response to this seasonality and the desire to
better conform to the traditional racing season, the Company will change
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its fiscal year-end from August 31 to November 30 effective December 1, 1996.
This will result in a three-month transition period commencing September 1, 1996
and ending November 30, 1996. In addition, the date for the Company's Diehard
500 race will be moved from the fiscal quarter ending August 31 to the fiscal
quarter ending November 30 in 1997. The following table presents certain
unaudited financial data for each fiscal quarter of fiscal 1995 and fiscal 1996
(in thousands, except per share amounts):
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
-----------------------------------------------------------
NOVEMBER 30, FEBRUARY 28, MAY 31, AUGUST 31,
1994 1995 1995 1995
--------------- --------------- ---------- -------------
<S> <C> <C> <C> <C>
Total revenues ............ $ 6,694 $35,022 $21,621 $18,835
Operating income (loss) .. (1,607) 18,942 6,091 4,270
Net income (loss) ......... (871) 11,672 3,653 3,909
Earnings (loss) per share.. (.03) .34 .11 .11
FISCAL QUARTER ENDED
-----------------------------------------------------------
NOVEMBER 30, FEBRUARY 28, MAY 31, AUGUST 31,
1995 1996 1996 1996
--------------- --------------- ---------- -------------
<S> <C> <C> <C> <C>
Total revenues ............ $ 8,542 $40,277 $24,176 $23,047
Operating income (loss) .. (1,474) 20,338 6,230 4,237
Net income (loss) ......... (1,020) 12,089 3,817 4,795
Earnings (loss) per share.. (.03) .35 .11 .14
</TABLE>
INFLATION
Management does not believe that inflation has had a material impact on
operating costs and earnings of the Company.
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NASCAR
The National Association for Stock Car Auto Racing, Inc. ("NASCAR") has been
influential in the growth and development of both the Company's operations and
professional stock car racing generally. NASCAR, all of whose capital stock is
beneficially owned by William C. France and James C. France, the Company's
principal shareholders, is widely recognized as the premier official sanctioning
body of professional stock car racing in the United States. See "Principal
Shareholders" and "Certain Transactions." NASCAR conducts all races that
constitute the Winston Cup and Busch Grand National stock car series, as well as
the Craftsman Truck series and a number of other racing series and events. The
Company derived approximately 78.3% of its total revenues from NASCAR-sanctioned
racing events at the Company's facilities in fiscal 1996.
OVERVIEW OF STOCK CAR RACING
Professional stock car racing developed in the Southeastern United States in
the 1930's. It began to mature in 1947, when William H.G. France (the father of
the Company's Chairman and President) organized NASCAR. The first
NASCAR-sanctioned race was held in 1948 in Daytona Beach, Florida. In 1959, the
Company completed construction of the Daytona International Speedway and
promoted the first "Daytona 500." The motorsports industry began to gather
momentum in the mid-1960's, when major North American automobile and tire
manufacturers first offered engineering and financial support. In the early
1970's, NASCAR created a more elite circuit focused on the best drivers.
Accordingly, it reduced the number of races in its premier series, now known as
the Winston Cup series, from approximately 50 to approximately 30.
NASCAR events, particularly Winston Cup races, enjoy a large and growing base
of spectator support. Based on information developed independently by Goodyear,
spectator attendance at Winston Cup and Busch Grand National events has
increased at compound annual growth rates of 15.1% and 17.3%, respectively, from
1993 to 1995. Moreover, the entire 1996 Winston Cup series is currently
broadcast to national television audiences by five networks: CBS, ABC, ESPN, TBS
and TNN. In addition, Winston Cup, Busch Grand National and other major
NASCAR-sanctioned races receive extensive national radio coverage, including on
programs produced and syndicated by the Company's MRN Radio network. Management
believes that increased media coverage has led to national recognition of NASCAR
drivers, which has further increased the popularity of the sport, thereby
resulting in (i) record NASCAR race attendance, (ii) increasing payments to
track owners for broadcast rights and sponsorship fees, and (iii) increased
sales of motorsports-related souvenirs. Management believes that the increasing
payments for broadcast rights and sponsorship fees are also the result of the
demographic appeal of the motorsports spectator base to advertisers. See
"--Economics of Stock Car Racing-Spectators." Corporate sponsors of
NASCAR-sanctioned events now include a large number of leading manufacturing and
consumer products companies.
GOVERNANCE OF STOCK CAR RACING
NASCAR regulates its membership (including drivers, their crews, team owners
and track owners), the composition of race cars and the sanctioning of races. It
sanctions events by means of one-year agreements executed with track owners,
each of which specifies the race date, the sanctioning fee and the purse. NASCAR
officials control qualifying procedures, the line-up of the cars, the start of
the race, the control of cars throughout the race, the election to stop or delay
a race, "pit" activity, "flagging," the positioning of cars, the assessment of
lap and time penalties and the completion of the race.
By sanctioning an event, NASCAR does not warrant, either expressly or by
implication, nor is it responsible for, the financial or other success of the
sanctioned event or the number or identity of vehicles or competitors
participating in the event. Similarly, no existing NASCAR sanction agreement,
nor anything in the course of dealing between NASCAR and the Company, should be
construed to require NASCAR to enter into a sanction agreement or to issue a
sanction for any other event in the future.
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<PAGE>
ECONOMICS OF STOCK CAR RACING
The primary participants in the business of stock car racing are spectators,
sponsors, track owners, drivers and team owners.
SPECTATORS.--Total attendance at all 1995 Winston Cup, Busch Grand National
and Craftsman Truck Series events exceeded 7.4 million spectators. Moreover,
according to Nielsen Media Research ("Nielsen"), approximately 58 million
households watched televised Winston Cup events in 1995, reflecting an average
of approximately 1.9 million households per event. The Company believes that the
demographic profile of the growing base of spectators has considerable appeal to
track owners, sponsors and advertisers. According to Simmons Market Research
Bureau, Inc. and Performance Research, approximately 38% of NASCAR spectators
are women and 69% are between the ages of 18 and 44. The Company believes that
motorsports spectators are loyal to both the sport of motor racing and to the
sponsors of the sport.
SPONSORS.--Drawn to the sport by its attractive demographics, sponsors are
active in all phases of professional stock car racing. In addition to directly
supporting racing teams through the funding of certain costs of their
operations, sponsors support track owners by paying fees associated with
specific name events such as the "Pepsi 400", the "Diehard 500" or the "Busch
Clash of '96." In return, sponsors receive advertising exposure through
television and radio coverage, newspapers, race programs, brochures and
advertising at the track on race day.
TRACK OWNERS.--Track owners such as the Company market and promote events at
their facilities. Their principal revenue sources generally include (i)
admissions, (ii) television and radio broadcast fees, (iii) sponsorship fees,
(iv) food and beverage concessions, (v) the sale of merchandise such as
souvenirs, collectibles and apparel, (vi) hospitality fees paid for catering
receptions and private parties, (vii) parking, (viii) luxury suite rentals, and
(ix) advertising on track signage and in souvenir racing programs. Sanction
agreements require race track operators to pay fees to the relevant sanctioning
body for each sanctioned event conducted, including sanction fees and prize
money. With the exception of NASCAR's Craftsman Truck Series, track owners
negotiate directly with television and radio networks for coverage of
NASCAR-sanctioned events.
DRIVERS.--Although a majority of drivers contract independently with team
owners, certain drivers own their own teams. Drivers receive income from
contracts with team owners, sponsorship fees and prize money. Successful drivers
may also receive income from personal endorsement fees and souvenir sales. The
success and personality of a driver can be an important marketing advantage for
team owners because it can help attract corporate sponsorships and generate
sales for officially licensed merchandise vendors such as the Company.
TEAM OWNERS.--In most instances, team owners bear the financial risk of
placing their teams in competition. They (i) contract with drivers, (ii) acquire
racing vehicles and support equipment, (iii) hire pit crews and mechanics, and
(iv) syndicate sponsorship of their teams.
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<PAGE>
THE WINSTON CUP
The most prominent and well-attended NASCAR-sanctioned events are the Winston
Cup events. According to statistics compiled by Goodyear, total attendance at
Winston Cup events increased from approximately 3.3 million in 1990 to
approximately 5.3 million in 1995.
The Winston Cup Series begins in February with "Speedweeks" (consisting of
the annual "Busch Clash" all star event, the Gatorade 125's and a number of
other premier racing events culminating in the Daytona 500) and concludes with
the "NAPA 500" in November. Including two all star races, 33 races are
sanctioned annually to 18 tracks operating in 15 states. The following table
shows the 1996 Winston Cup schedule (events held at facilities operated by the
Company and Watkins Glen are noted in bold).
DATE TRACK LOCATION RACE
- ------------------------------------------------------------------------
FEBRUARY 11 Daytona Beach, FL Busch Clash of '96*
FEBRUARY 18 Daytona Beach, FL Daytona 500
February 25 Rockingham, NC Goodwrench 400
March 3 Richmond, VA Pontiac Excitement 400
March 10 Hampton, GA Purolator 500
MARCH 24 Darlington, SC TranSouth Financial 400
March 31 Bristol, TN Food City 500
April 14 N. Wilkesboro, NC First Union 400
April 21 Martinsville, VA Goody's Headache Powders 500
APRIL 28 Talladega, AL Winston Select 500
May 5 Sonoma, CA Save Mart Supermarkets 300
May 18 Concord, NC The Winston Select*
May 26 Concord, NC Coca-Cola 600
June 2 Dover, DE Miller 500
June 16 Long Pond, PA Pocono 500
June 23 Brooklyn, MI Miller 400
JULY 6 Daytona Beach, FL Pepsi 400
July 14 Loudon, NH Slick 50 300
July 21 Long Pond, PA Miller 500
JULY 28 Talladega, AL Diehard 500
August 3 Indianapolis, IN The Brickyard 400
AUGUST 11 Watkins Glen, NY The Bud at the Glen
August 18 Brooklyn, MI GM Goodwrench Service 400
August 24 Bristol, TN Goody's Headache Powders 500
SEPTEMBER 1 Darlington, SC Mountain Dew Southern 500
September 7 Richmond, VA Miller 400
September 15 Dover, DE MBNA 500
September 22 Martinsville, VA Goody's 500
September 29 N. Wilkesboro, NC Tyson Holly Farms 400
October 6 Concord, NC UAW-GM Quality 500
October 20 Rockingham, NC AC-Delco 400
October 27 Phoenix, AZ Dura-Lube 500
November 10 Hampton, GA NAPA 500
- -----------------------
* Non-point event.
As the table indicates, no track currently promotes more than two Winston Cup
point events. The Company had sanctioning agreements for two such point events
at each of its three superspeedways, as well as a sanctioning agreement for the
non-point "Busch Clash of '96" all star race at Daytona International Speedway.
In addition, the Company owns 50% of Watkins Glen, which had a sanctioning
agreement for "The Bud at the Glen" Winston Cup race.
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<PAGE>
THE BUSCH GRAND NATIONAL SERIES AND OTHER NASCAR EVENTS
The NASCAR circuit generally perceived as second in prominence to the Winston
Cup is the Busch Grand National Series. In 1996, 26 Busch Grand National events
will be promoted at over 20 tracks in 16 states. Many track owners, including
the Company, host Busch Grand National events in conjunction with a Winston Cup
event in order to boost overall attendance for a race weekend. The Company and
Watkins Glen had sanctioning agreements for five Busch Grand National races in
1996: the Goody's Headache Powders 300, the Lysol 200, the Humminbird Fishfinder
500K and two Dura-Lube 200s, all of which were televised.
In addition to Winston Cup and Busch Grand National events, NASCAR sanctions
various other stock car racing events and series, including the NASCAR Winston
Racing Series, Craftsman Truck Series, Goody's Dash Series and Winston West
Series.
OTHER MOTORSPORTS
Other motorsports include stock car racing not sanctioned by NASCAR, as well
as "Indy car," "Formula One," sports car, motorcycle and go-kart racing.
STOCK CAR RACING.--In addition to NASCAR, the Automobile Racing Club of
America ("ARCA") sanctions a stock car racing circuit. In 1996, the Company
promoted two ARCA races, including the Daytona ARCA 200, the annual
season-opener for the ARCA Bondo/Mar-Hyde Supercar series. The Company also
promoted two of the four races in the International Race of Champions ("IROC")
series, in which a selected field of 12 drivers from different motorsports
disciplines compete in equally prepared Pontiac Firebird Trans-Ams.
INDY CAR RACING.--"Indy cars" take their name from cars which race at the
Indianapolis Motor Speedway, which holds the "Indianapolis 500" on the Sunday
before Memorial Day every year. Indy car racing is sanctioned by two
associations: United States Auto Club ("USAC"), which governs the conduct of the
Indianapolis 500 and races comprising the newly formed Indy Racing League; and
Championship Auto Racing Teams, Inc. ("CART"), which was formed by Indy car
owners in 1979. The Company does not currently promote or have plans to promote
Indy car races.
FORMULA ONE AND SPORTS CAR RACING.--Formula One car races are typically held
outside the United States and are sanctioned by the Federation Internationale de
l'Automobile ("FIA"). Although FIA also serves as an umbrella organization for
other sanctioning bodies for Company-promoted races, the Company does not
currently promote Formula One races. Sports car racing is sanctioned in the
United States by the Sports Car Club of America ("SCCA") and by the
International Motor Sports Association ("IMSA"), which sanction races held on
road courses throughout the country. The Company promotes a number of sports car
racing events sanctioned by SCCA and IMSA, including the Rolex 24 at Daytona,
the premier sports car endurance event held in the United States.
MOTORCYCLE AND GO-KART RACING.--The American Motorcyclists Association
("AMA") sanctions motorcycle races and the World Karting Association ("WKA")
sanctions go-kart races. The Company promotes numerous motorcycle and go-kart
racing events at its facilities, including the Daytona 200 by Arai (part of the
AMA Superbike National Championship Series) and the BMW Battle of the Legends,
each of which is conducted in connection with the Company's Camel Motorcycle
Week held each Spring in Daytona Beach.
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BUSINESS
The Company is a leading promoter of motorsports activities in the United
States. The Company owns and operates three of the nation's premier
superspeedways--Daytona International Speedway in Florida, home of the Daytona
500, widely recognized as the most prestigious stock car race in the world;
Talladega Superspeedway in Alabama, the fastest stock car track; and Darlington
Raceway in South Carolina, the first stock car superspeedway. The Company also
operates Tucson Raceway Park in Arizona, owns a 50% interest in the Watkins Glen
International road course in New York, and holds a 12% interest in Penske
Motorsports, Inc., which owns and operates Michigan International Speedway and
Pennsylvania's Nazareth Speedway and is constructing The California Speedway
near Los Angeles. In July 1996, the Company opened DAYTONA USA--The Ultimate
Motorsports Attraction, a motorsports themed-entertainment complex that includes
interactive media, theaters, historical memorabilia and exhibits.
The Company, including Watkins Glen, currently promotes over 70 stock car,
sports car, truck, motorcycle and other racing events annually, including seven
Winston Cup races, five Busch Grand National races, the premier sports car
endurance event in the United States (the Rolex 24 at Daytona) and a number of
prestigious motorcycle races. In fiscal 1996, NASCAR-sanctioned races at the
Company's facilities accounted for approximately 78.3% of the Company's total
revenues. Based on statistics developed by Goodyear, spectator attendance at
NASCAR's Winston Cup and Busch Grand National events increased at compound
annual growth rates of 15.1% and 17.3%, respectively, from 1993 to 1995.
Moreover, each of CBS, ABC, ESPN, TBS and TNN has recently experienced increased
ratings for its televised NASCAR Winston Cup events. Attracted by these
increases in spectators and ratings, leading consumer product and manufacturing
companies have expanded their participation in the motorsports industry. The
Company's major sponsors include Pepsi, Anheuser Busch, Sears, Winston,
Gatorade, Pontiac, Ford, Chevrolet, Goodyear, Dupont and Rolex.
OPERATING STRATEGY
Key elements of the Company's general operating strategy emphasize (i) senior
management's long-standing involvement with the development and growth of the
motorsports industry, (ii) ongoing capital improvements and other efforts
designed to maximize race spectators' total entertainment experience, (iii)
marketing programs targeting both corporate customers and consumers, (iv) the
development of long-term relationships with sponsors, and (v) the use of media
to increase awareness of the Company's major racing events and the motorsports
industry.
LONG-TERM PERSPECTIVE OF MOTORSPORTS INDUSTRY. Members of the France family
have been involved in senior management positions with the Company since its
formation in 1953. In addition, the France family has been instrumental in the
development of the nation's motorsports industry through their organization and
control of NASCAR. See "NASCAR." The Company believes that senior management's
extensive network of contacts in the motorsports industry, as well as the
Company's reputation as a long-term steward for the sport, frequently enhance
the Company's ability to learn of and pursue new market and other growth
opportunities. The Company also believes that the France family's long-standing
involvement with the Company has provided a number of other significant
competitive advantages, including a reduced risk of disruption in the Company's
operating policies and long-range strategies, which in turn provides an
assurance of continuity to employees, sponsors, sanctioning bodies and other
entities that enter into commitments or relationships with the Company.
Moreover, the experience and expertise of the Company and its senior management
team extend beyond stock car racing to a wide variety of other motorsports
disciplines, including sports cars and motorcycles.
COMMITMENT TO CUSTOMER SATISFACTION. The Company believes that its growth has
to a significant degree resulted from its emphasis on enhancing race spectators'
total entertainment experience. The Company continually strives to increase the
comfort, view and amenities offered to race spectators, which management
believes serves to maximize customer loyalty. To that end, the Company has in
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recent years engaged in a series of capital improvements, including the
construction of additional permanent grandstand seating, new luxury suites,
innovative corporate entertainment facilities and a number of improvements to
food and beverage concession, restroom and other customer convenience
facilities. The fiscal 1996 capital expenditures attributable to such
improvement projects totalled approximately $12.7 million. The Company's efforts
to improve customer satisfaction have also included the hiring of an event
coordinator responsible for upgrading the performance of the Company's temporary
event personnel, as well as the establishment of Americrown, the Company's
concessions and catering subsidiary.
EMPHASIS ON MARKETING. Management believes that it is important to market the
Company's scheduled racing events to both corporate customers and consumers. The
Company's marketing and promotional activities include the direct solicitation
of prospective event sponsors and other corporate sponsors by the Company's Vice
President-Marketing, other executive officers, members of the Company's
seven-person marketing staff and marketing personnel at each of the Company's
superspeedways. Sponsorship-related marketing opportunities for a typical race
event include luxury suite rentals, block ticket sales, Company-catered
hospitality, and souvenir race program and track signage advertising. The
Company also markets its events by offering tours of its facilities, advertising
on television and radio, conducting direct mail campaigns and staging a wide
variety of pre-race promotional activities. Moreover, the DAYTONA USA
entertainment complex and the Company's computer and video game, apparel and
other merchandise licenses are intended in part to increase the awareness and
popularity of motorsports with younger spectators and thereby ensure a
foundation for future growth.
DEVELOPMENT OF STRATEGIC ALLIANCES WITH SPONSORS. Management believes that
the promotional and advertising expenditures of major sponsors provide the
Company with a wide variety of indirect marketing and other benefits.
Accordingly, the Company devotes significant resources to developing long-term
relationships with leading consumer products and manufacturing companies.
Although the identities of sponsors and the terms of sponsorships change from
time to time, principal Company sponsors currently include Pepsi, Anheuser
Busch, Winston, Sears and Rolex. Some contracts allow the sponsor to name a
particular racing event, as in the "Diehard 500" and the "Pepsi 400." Other
consideration ranges from official car designation to advertising and
promotional rights in the sponsor's product category. Management believes that
the commitments of Ford, Dupont, Gatorade, Goodyear, STP, Pontiac, Chevrolet,
Circuit City and others as founding sponsors for the Company's DAYTONA USA
entertainment complex demonstrate the opportunities for strategic alliances
available to the Company in today's competitive marketing environment.
UTILIZATION OF MEDIA TO MAXIMIZE EXPOSURE. The Company negotiates directly
with network and cable television companies for live coverage on all of its
races except NASCAR's Craftsman Truck Series. All of the Company's Winston Cup
and Busch Grand National races are televised on CBS, ESPN, TBS and TNN, and
management intends to seek similar arrangements for other racing events when
opportunities arise. The Company also produces and syndicates its Winston Cup,
Busch Grand National and Craftsman Truck series races, as well as other races
promoted by the Company or third parties, over MRN Radio, its proprietary motor
racing network. MRN Radio programs are currently carried by more than 400 radio
stations. See "--Operations--MRN Radio." Management also seeks to increase the
visibility of its racing events and facilities through local and regional media
interaction.
GROWTH STRATEGY
The Company intends to increase its revenues and profitability by
capitalizing on both its existing competitive strengths and the growth and
popularity of motorsports generally. Key components of this growth strategy are
as follows:
EXPAND EXISTING FACILITIES. Management believes that the spectator demand for
its largest events continues to exceed existing seating capacity. Accordingly,
the Company plans to continue its expansion by adding permanent grandstand
seating and luxury suites at each of its superspeedways. During fiscal
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1997, the Company expects to (i) complete its pending addition to Daytona
International Speedway's Winston Tower, which will add 15 new luxury suites
seating approximately 360 spectators and approximately 1,350 premium-level
grandstand seats, (ii) complete construction of approximately 12,500
additional grandstand seats on Daytona International Speedway's backstretch,
(iii) add 10 additional suites and approximately 6,500 grandstand seats at
Talladega Superspeedway, and (iv) add approximately 7,900 grandstand seats at
Darlington Raceway. These expansion projects are expected to require an
aggregate of approximately $22.0 million of capital expenditures during the
15 months ending November 30, 1997. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." In the long term, the Company
intends to continue to expand each of its superspeedways based upon customer
demand and available capital.
CAPITALIZE ON "DAYTONA" FRANCHISE. Management believes that the Daytona
International Speedway enjoys international brand name recognition as a result
of its association with the sport's history and development, the prestige and
caliber of the Daytona 500 and other racing events held at the track, as well as
the generally greater speeds resulting from its length and unique, high banked
tri-oval configuration, all of which provide a significant competitive
advantage. In addition, Daytona International Speedway's landmark position as
the "World Center of Racing" is supported by serving as venue for racing events
in a wide variety of motorsports races held on nine different weekends,
including (i) the supercross, vintage, road race and other motorcycle events
held in conjunction with Daytona's annual Camel Motorcycle Week, (ii) the IMSA
sports car endurance races hosted by the Company, including the Rolex 24 at
Daytona, and (iii) the season opener for the IROC series, in which a selected
field of 12 drivers from different motorsports disciplines compete in equally
prepared Pontiac Firebird Trans-Ams.
The Company has recently initiated a number of projects to capitalize on
Daytona's prestige and brand name recognition. In July 1996, the Company opened
DAYTONA USA--The Ultimate Motorsports Attraction. This approximately $20.0
million entertainment complex includes interactive media, theaters, historical
memorabilia and exhibits. See "--Operations--DAYTONA USA." Management believes
that this complex will be able to capitalize on the year-round tourism generated
by Disney World and other Central Florida attractions, thereby (i) increasing
the usage of the Company's Daytona facility, (ii) expanding the Company's
concessions, track tour and souvenir sales, and (iii) providing greater
visibility for the Company's business and motorsports generally, which in turn
is expected to increase spectator interest. Management also believes that the
Company's relationships with DAYTONA USA's founding sponsors will provide a
springboard to expanded strategic alliances in the future. Other examples of the
Company's ability to take advantage of its brand recognition include Sega
Corp.'s popular DAYTONA USA video arcade and CD ROM computer race games, which
have generated both royalty fees and increased consumer awareness of the
Company's motorsports activities, particularly among the youth market.
INCREASE TELEVISION REVENUES. Motorsports are experiencing significant growth
in television viewership. According to USA Today, the 1995 Winston Cup races
televised by CBS, ABC, ESPN, TBS, and TNN reflected ratings increases of 15%,
16%, 22%, 25% and 28%, respectively. Moreover, according to Nielsen, the
Company's Daytona 500 and Winston Select 500 racing events had the highest
Winston Cup network and cable television ratings, respectively, in 1995 with the
Daytona 500 reaching almost 7.5 million households. This significant growth in
viewership, together with unique market conditions that favor prestigious
"content" providers, is expected to result in higher broadcast rights fees from
television networks in the near future. The Company recently signed an agreement
with CBS with respect to the television broadcast rights for the 1997 Diehard
500, as well as the Busch Clash of '97, Gatorade 125's, Daytona 500 and Busch
Grand National race to be held in the 1997 Speedweeks. In addition, the Company
has an agreement with ESPN to televise each of the Company's other 1997 Winston
Cup events, as well as the February 1997 Speedweeks events not being televised
by CBS, including the season openers for the NASCAR Goody's Dash and ARCA
Bondo/Mar-Hyde Supercar series. Moreover, although a definitive contract has not
been executed, the Company has an agreement in principle with CBS to broadcast
the Daytona 500, the 300 mile Busch Grand National race held
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during Speedweeks, the Pepsi 400, the Busch Clash and the Gatorade 125's from
1998 through 2001. The Company also has an agreement in principle with ESPN
to broadcast five Winston Cup races, four Busch Grand National races and one
ARCA race to be promoted by the Company from 1998 through 2001.
ACQUIRE OR DEVELOP ADDITIONAL MOTORSPORTS FACILITIES. The Company also
intends to pursue growth through the acquisition and/or development of
motorsports facilities as appropriate opportunities arise. Management believes
that the Company's November 1995 investment in Penske Motorsports exemplifies
the Company's commitment to increasing its motorsports presence. In addition,
the Company recently engaged an independent sports facility consultant to assist
the Company with feasibility analyses and management's contemplated exploration
of public/ private partnerships, all of which activities are intended to lead to
the development of one or more motorsports facilities in new markets. Moreover,
senior management personnel regularly review acquisition prospects that would
augment or complement the Company's existing operations or otherwise offer
significant growth opportunities. However, there can be no assurance that
suitable candidates will be available or, because of competition from other
potential purchasers or other business reasons, that the Company will be able to
consummate acquisitions of additional motorsports facilities on satisfactory
terms. At the present time, the Company does not have any arrangement or
understanding with respect to any acquisition transactions or the financing
thereof. See "Risk Factors--Uncertain Prospects of New Motorsports Facilities."
EXPAND USE OF EXISTING RESOURCES AND FACILITIES. The Company believes that it
will be able to expand the use of its facilities and resources by providing
outsourcing services to other promoters of large sports and entertainment
events. For example, the Company has been able to capitalize on Americrown's
large fleet of mobile food service equipment by providing concessions and
catering for a number of unaffiliated, outdoor sporting events in the
southeastern United States, including several LPGA golf tournaments and the Indy
200 held at Disney World. Management intends to take similar advantage of its
extensive network of event personnel, including supervisory, security, gate
admission and other employees, by offering turnkey temporary employee services
to third party promoters. In addition, the Company will continue to seek
revenue-producing uses for the Company's track facilities on days not committed
to racing events. Such other uses may include car shows, auto fairs, driving
schools, vehicle testing and settings for television commercials, print
advertisements and motion pictures.
OPERATIONS
The Company's operations consist principally of racing events at its four
tracks. The Company also owns a 50% interest in Watkins Glen and a 12% interest
in Penske Motorsports. In addition, the Company owns and operates the DAYTONA
USA entertainment complex, provides catering and concession services to third
parties and operates the MRN Radio network.
Approximately $75 million, or 78.3%, of the Company's fiscal 1996 revenues
were attributable to NASCAR-sanctioned races at the Company's facilities,
including applicable admissions, luxury suite rental, sponsorship, television
and MRN Radio broadcast, food and beverage concession and catering, souvenir,
advertising and other revenues. Winston Cup and Busch Grand National races
accounted for approximately 84.5% and 11.7%, respectively, of such fiscal 1996
NASCAR-sanctioned race event revenues, with the approximately 3.8% balance
attributable to Craftsman Truck, Goody's Dash and other NASCAR racing series.
The Company's fiscal 1996 revenues that were not attributable to
NASCAR-sanctioned races at the Company's facilities were derived from a number
of various sources, including (i) admission and luxury suite rental revenue from
racing events sanctioned by bodies other than NASCAR, (ii) broadcast and
sponsorship fees for such non-NASCAR racing events, (iii) MRN Radio's revenues
from the sale of advertising and rights fees paid by broadcast affiliates with
respect to events other than NASCAR-sanctioned races at the Company's
facilities, (iv) Americrown's catering and concession revenues for the Company's
non-NASCAR racing events, as well as unaffiliated sporting events, (v)
admissions and sponsorship fees attributable to DAYTONA USA, and (vi) other
revenues unrelated to racing events such as hangar rentals and gas sales at the
Talladega Municipal Airport. None of foregoing non-NASCAR revenue sources
accounted for over 5% of the Company's fiscal 1996 revenues.
27
<PAGE>
RACING EVENTS
The 1996 race schedule for the Company and Watkins Glen, its 50%-owned
subsidiary, includes eight Winston Cup races (including the Busch Clash of '96
all star event), five Busch Grand National races and various other NASCAR races
and events. In addition, the Company promotes a number of other stock car,
sports car, motorcycle and go-kart racing events, including events sanctioned by
IMSA, ARCA, USAC, SCCA, AMA, WKA, the Championship Cup Series ("CCS"), the
American Historic Racing Motorcycle Association ("AHRMA") and the Sportscar
Vintage Racing Association ("SVRA"). The 1996 racing schedule for events
promoted by the Company and Watkins Glen is as follows:
<TABLE>
<CAPTION>
SANCTIONING
DATE EVENT BODY TRACK
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
February 2 90-Minute Endurance IMSA Daytona
Championship
February 3-4 Rolex 24 at Daytona IMSA Daytona
February 10 Busch Pole Day (Daytona 500) NASCAR Daytona
February 11 Busch Clash of '96 NASCAR Daytona
Daytona ARCA 200 ARCA Daytona
February 15 Gatorade 125's NASCAR Daytona
February 16 Daytona USA 200 NASCAR Daytona
True Value Firebird IROC XX NASCAR Daytona
February 17 Goody's Headache Powder 300 NASCAR Daytona
February 18 Daytona 500 NASCAR Daytona
March 1-3 CCS/NASB Weekend CCS Daytona
March 4-5 Classics Days AHRMA Daytona
March 8 750 Supersport Final AMA Daytona
BMW Battle of the Legends AHRMA Daytona
International Lightweight 100K AMA Daytona
March 9 Daytona Supercross by Honda AMA Daytona
March 10 600 Supersport International AMA Daytona
Challenge 100K
Harley-Davidson Supertwin Final AMA Daytona
Daytona 200 By Arai AMA Daytona
March 22 Busch Pole Day (TranSouth 400) NASCAR Darlington
March 23 Dura-Lube 200 NASCAR Darlington
March 24 TranSouth Financial 400 NASCAR Darlington
April 6 Opening Night NASCAR Tucson
April 13 NASCAR Super Late Models NASCAR Tucson
April 20 NASCAR Super Late Models NASCAR Tucson
April 26 Toro Pole Day (Winston Select 500) NASCAR Talladega
April 27 NASCAR Super Late Models NASCAR Tucson
Mountain Dew 500K ARCA Talladega
True Value Firebird IROC XX NASCAR Talladega
April 28 Winston Select 500 NASCAR Talladega
May 4 NASCAR Super Late Models NASCAR Tucson
SCCA National/Regional SCCA Daytona
May 5 SCCA National/Regional SCCA Daytona
May 11 NASCAR Super Late Models NASCAR Tucson
May 18 NASCAR Super Late Models NASCAR Tucson
May 24-26 SCCA Glen Regional SCCA Watkins Glen
May 25 NAPA 200 NASCAR Tucson
June 1 NASCAR Super Late Models NASCAR Tucson
June 8 NASCAR Super Late Models NASCAR Tucson
3-Hour Endurance Championship IMSA Watkins Glen
28
<PAGE>
SANCTIONING
DATE EVENT BODY TRACK
- -------------------------------------------------------------------------------------------
June 9 Auto Palace Challenge at the Glen IMSA Watkins Glen
First Union of the Glen IMSA Watkins Glen
Presented by Acxiom
June 15 Valvoline 200 NASCAR Tucson
June 22 NASCAR Super Late Models NASCAR Tucson
June 28-30 Formula Ford 2000 SCCA/USAC Watkins Glen
Barber-Dodge SCCA Watkins Glen
Lysol 200 NASCAR Watkins Glen
June 29 4th of July Fireworks NASCAR Tucson
July 4 Busch Pole Day (Pepsi 400) NASCAR Daytona
July 6 Pepsi 400 NASCAR Daytona
NASCAR Limited Late Models NASCAR Tucson
July 13 Larry Branden Memorial NASCAR Tucson
July 13-14 Glen U.S. Nationals SCCA Watkins Glen
July 20 NASCAR Super Late Models NASCAR Tucson
July 26 Dixie Cups & Plates Pole Day NASCAR Talladega
(DieHard 500)
July 27 Humminbird Fishfinder 500K NASCAR Talladega
NASCAR Super Late Models NASCAR Tucson
July 28 DieHard 500 NASCAR Talladega
August 3 NASCAR Super Late Models NASCAR Tucson
August 9 RCA Qualifying Day NASCAR Watkins Glen
(Bud at the Glen)
August 10 Winston 100 NASCAR Tucson
Serengeti Eyewear Trans-Am SCCA Watkins Glen
Burnham Boilers 150 NASCAR Watkins Glen
August 11 Bud at the Glen NASCAR Watkins Glen
August 17 SCCA Regional SCCA Daytona
NASCAR Super Late Models NASCAR Tucson
August 18 SCCA Regional SCCA Daytona
August 23-25 SCCA World Challenge SCCA Watkins Glen
Watkins Glen 100 NASCAR Watkins Glen
Parts America 150 NASCAR Watkins Glen
August 24 Troy Rouse Memorial NASCAR Tucson
August 30 Busch Pole Day (Mountain Dew NASCAR Darlington
Southern 500)
August 31 Dura-Lube 200 Presented by NASCAR Darlington
AutoZone
NASCAR Super Late Models NASCAR Tucson
September 1 Mountain Dew Southern 500 NASCAR Darlington
September 6-8 Zippo U.S. Vintage Grand Prix SVRA Watkins Glen
September 7 NASCAR Super Late Models NASCAR Tucson
September 14 NASCAR Super Late Models NASCAR Tucson
September 21 Tucson 125 NASCAR Tucson
September 28 NASCAR Super Late Models NASCAR Tucson
October 5 3-Hour Endurance Championship IMSA Daytona
Bud Shootout NASCAR Tucson
October 6 3-Hour IMSA Finale at Daytona IMSA Daytona
October 17-20 Fall Cycle Scene CCS Daytona
December 26-30 WKA Enduro World Championship WKA Daytona
</TABLE>
29
<PAGE>
PENSKE MOTORSPORTS
The Company indirectly holds an approximately 12% equity interest in Penske
Motorsports, Inc., a publicly traded promoter and marketer of motorsports
events. Penske Motorsports owns and operates Michigan International Speedway in
Brooklyn, Michigan and Nazareth Speedway in Nazareth, Pennsylvania. Penske
Motorsports is also constructing The California Speedway near Los Angeles,
California, which is expected to be completed in the 1997 racing season. Major
racing events promoted by Penske Motorsports in 1996 include two Winston Cup
races, two Busch Grand National races, two Indy car races sanctioned by CART,
two ARCA races, one Craftsman Truck race and one IROC race. Although two of the
Company's directors also serve on the board of directors of Penske Motorsports,
the Company does not control Penske Motorsports. The Company's ownership
interest in Penske Motorsports derives from its 20% interest in PSH Corp., the
record holder of approximately 60% of the outstanding common stock of Penske
Motorsports and an 80%-owned subsidiary of the privately held Penske
Corporation. See Note 2 of Notes to the Company's Consolidated Financial
Statements for additional information with respect to this equity investment.
DAYTONA USA
On July 5, 1996, the Company opened DAYTONA USA--The Ultimate Motorsports
Attraction. This motorsports-themed entertainment complex is located in an
approximately 50,000-square foot facility adjacent to the existing "World Center
of Racing" Visitors Center at Daytona International Speedway. DAYTONA USA
includes (i) a walk-through replica of Daytona International Speedway's famed
twin tunnels, (ii) the Goodyear Heritage of Daytona historical exhibits and
memorabilia, including Malcom Campbell's original Bluebird V (the car which set
the world land speed record on the hard-packed sand of Daytona Beach in 1935), a
replica of the Daytona Beach gas station which "Big Bill" France once owned, and
a display featuring the Daytona Speedway's role in the 1989 filming of "Days of
Thunder" with Tom Cruise, (iii) the Goodyear Great Moments Theater, which
includes a CBS television presentation of highlights from past Daytona 500
races, (iv) a Heroes of the Track video presentation that features the biggest
names in racing, including Richard Petty, Dale Earnhardt, Bill Elliott, Rusty
Wallace and Darrell Waltrip, (v) interactive displays such as the General Motors
Trilon Trivia Tower computer trivia game and "You Broadcast the Race," where
visitors can obtain tapes of their own broadcasting of an exciting race finish,
(vi) Dupont's Technology of Speed, featuring a race car that comes apart
vertically, revealing first the fiberglass skin, then the steel frame and
finally the chassis and motor, (vii) Ford's 16-Second Pit Stop Challenge, in
which audience members participate in a simulated pit stop that tests how fast
they can change tires, pump gas and clean windshields on a real race car, and
(viii) Pepsi Theatre's "The Daytona 500," a film that utilizes a screen 55 feet
wide and 26 feet tall and unique video and sound technologies designed to
provide viewers with a virtual racing experience.
Adjoining DAYTONA USA are (i) Sega Speedway, a high tech arcade using state
of the art video technology and computerized, "virtual" racing simulators, (ii)
Pit Shop, which sells DAYTONA USA, Daytona International Speedway, NASCAR and
race team clothing, books, collectibles and souvenirs, (iii) the Fourth Turn
Grill concessions facility, and (iv) Western Auto's Speedway Tours, a tram tour
of the Speedway's garage area, pit road and high banked track. Management
believes that DAYTONA USA and these adjoining attractions appeal to individual
tourists, tour groups, conventions and the Company's corporate sponsors.
AMERICROWN
The Company's Americrown subsidiary has conducted the food, beverage and
souvenir concession operations at Daytona International Speedway and Talladega
Superspeedway since September 1992 and at Darlington Raceway since 1989.
Americrown is also responsible for providing catering services to corporate
customers both in suites and entertainment chalets at the Company's
superspeedway facilities. Americrown was initially formed to conduct concessions
operations as part of the Company's ongoing efforts to enhance race spectators'
total entertainment experience. See "--Operating Strategy--
30
<PAGE>
Commitment to Enhancement of Customer Satisfaction." Beginning in 1995, the
Company expanded Americrown's operations to include food, beverage and other
services at unaffiliated sporting events and thereby capitalize on
Americrown's expertise and mobile concessions equipment. Americrown has
provided catering and concession services for the Indy 200 held at Disney
World, catering and concessions for LPGA golf tournaments held in Atlanta and
Daytona Beach, and catering for events held at the Metro-Dade Homestead
Motorsports Facility south of Miami.
MRN RADIO
The Company's proprietary MRN Radio network produces and syndicates Winston
Cup, Busch Grand National and other races promoted by the Company and others.
MRN Radio also produces daily and weekly NASCAR racing programs, as well as Ned
Jarrett's "World of Racing" program. MRN Radio programs are currently carried by
over 400 radio stations. The Company derives revenue from the sale of
advertising on MRN Radio and rights fees paid by broadcast affiliates. In
addition, management believes that MRN Radio enhances the Company through
increased media exposure to an expanding radio audience.
OTHER ACTIVITIES
The Company from time to time uses its track facilities for car shows, auto
fairs, vehicle testing and settings for television commercials, print
advertisements and motion pictures. For example, Harley Davidson uses Talladega
Superspeedway as a test facility for its motorcycles. See "-Growth
Strategy--Expand Use of Existing Facilities and Resources." The Company also
operates Talladega Municipal Airport, which is located adjacent to the Talladega
Superspeedway.
MOTORSPORTS FACILITIES
The following table sets forth the track name, location, approximate acreage
and approximate track length of each of the Company's speedway facilities. The
Company's superspeedways host three of the four events included in NASCAR's
"Winston Select Million," a special promotion began in 1985 that pays $1,000,000
to any driver that wins three of the four specified races. The three events
hosted by the Company are (i) the Daytona 500 at Daytona International Speedway,
the most prestigious stock car racing facility, (ii) the Winston Select 500 at
Talladega Superspeedway, the fastest stock car track, and (iii) the Mountain Dew
Southern 500 at Darlington Raceway, the first stock car superspeedway.
<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
TRACK NAME LOCATION ACREAGE TRACK LENGTH
- -------------------------------- --------------------------- -------------- ---------------
<S> <C> <C> <C>
Daytona International Speedway Daytona Beach, Florida 440 2.5 miles
Talladega Superspeedway ........ Talladega, Alabama 1,365 2.6 miles
Darlington Raceway ............. Darlington, South Carolina 230 1.3 miles
Tucson Raceway Park ............ Tucson, Arizona 58 .4 miles
Watkins Glen International* ... Watkins Glen, New York 1,100 3.4 miles
- -------------------
* Operated by the Company's 50%-owned subsidiary.
</TABLE>
DAYTONA INTERNATIONAL SPEEDWAY. Daytona International Speedway, together with
the Company's current executive offices, are located on approximately 440 acres
of leased land in Daytona Beach, Florida. The Company's lease with the Daytona
Beach Racing and Recreational Authority expires in 2032, including renewal
options. The Company also owns approximately 15 acres of property adjacent to
the Daytona International Speedway. The Daytona International Speedway is a high
banked, asphalt superspeedway which also includes a 3.6 mile road course.
Management believes that this superspeedway, completed in 1959, includes a
number of unique features that provide a significant competitive advantage,
including (i) a tri-oval design which provides optimum viewing for race fans,
(ii) a twin tunnel underground entry system which offers easy access before and
during events, and (iii) 31-degree banking which, when combined with the track's
2.5 mile length, permits exceptionally high lap speeds.
31
<PAGE>
At August 31, 1996, Daytona International Speedway had 109,688 grandstand
seats, 23 suites (including air conditioned luxury sky boxes and Winston Tower
suites that include access to hospitality areas) that include a total of 1,961
additional seats, and 30 "Paddock Club" suites that provide seating for 1,500 in
Daytona's infield. During major events, the Company also uses a chalet village
containing up to 73 hospitality tents that seat up to 9,600. As part of its
ongoing expansion and improvement efforts, in July 1995 the Company began
construction on an addition to its Winston Tower that will add 15 suites seating
approximately 360 spectators, approximately 1,350 premium-level grandstand seats
and catering and concession facilities. This project is expected to be completed
by February 1997. In addition, the Company is currently engaged in constructing
approximately 12,500 additional grandstand seats on Daytona's existing
"backstretch," adding a sports club, expanding Daytona International's
hospitality facilities and improving the track's "victory lane," pit and
recreational vehicle areas.
TALLADEGA SUPERSPEEDWAY. Talladega Superspeedway, which holds the record for
the fastest lap speed attained in stock car racing, is a high banked, tri-oval
track with an infield road course. The facility is located about 1 1/2 hours
from Atlanta, Georgia and 45 minutes from Birmingham, Alabama. The track and
related parking areas are located on approximately 1,365 acres owned by the
Company, most of which is reserved for agricultural uses. The Company also owns
an additional 115 acres of undeveloped property located immediately north of the
entrance to the Talladega track. At August 31, 1996, the facility included
94,056 grandstand seats, 12 luxury suites containing an additional 960 seats, a
Paddock Club Suite for up to 240 spectators, and 65 hospitality chalets
providing seating for approximately 8,600. The facility also includes a 400-acre
campground facility, the International Motorsports Hall of Fame, hospitality and
souvenir villages, as well as ticket and administrative offices. Pending capital
improvement projects at the Talladega Superspeedway include the construction of
10 suites, approximately 6,500 additional grandstand seats and certain other
infrastructure improvements.
DARLINGTON RACEWAY. Darlington Raceway, the first superspeedway to host a
NASCAR-sanctioned race, is a high banked track located on approximately 230
acres owned by the Company. The Darlington facility includes the 1.3 mile track
commonly known as "too tough to tame/registered trademark/," grandstands that
seat 42,038 spectators, four luxury suites containing an additional 515 seats
and 18 hospitality chalets providing seating for 3,800. Pending capital projects
include the construction of approximately 7,900 additional grandstand seats and
the reconfiguration of the track to "flip" the existing start/finish line and
backstretch.
TUCSON RACEWAY PARK. Tucson Raceway Park includes a progressively banked, 3/8
mile paved oval track, grandstands providing seating for approximately 5,400
spectators, a luxury suite and other spectator facilities located on part of the
Pima County Fairgrounds. The Company's sublease with the fairground manager
expires in 2013, including renewals. The Company has no current plans to expand
this facility.
WATKINS GLEN INTERNATIONAL. Watkins Glen International is a 3.4 mile road
course track located on approximately 1,100 acres owned by Watkins Glen, which
is 50%-owned by the Company. The grandstands at Watkins Glen International seat
33,221 spectators.
OTHER FACILITIES. In addition to its motorsports facilities, the Company (i)
owns concession facilities in Daytona Beach and in Talladega, (ii) leases real
estate and office space in Talladega, and (iii) leases the property and premises
at the Talladega Municipal Airport. The lease for the Company's Talladega
business offices, located within the International Motorsports Hall of Fame,
expires in 1997, including renewals. The Company's lease for the Talladega
Municipal Airport expires in 2022, including renewals.
The Company also owns a 67,000 square foot building located on approximately
nine acres across International Speedway Boulevard from Daytona International
Speedway. The Company is currently renovating this building, which will serve as
its new corporate headquarters upon its expected Spring 1997 completion. At that
time, the Company intends to consolidate the operating personnel of Daytona
International Speedway, DAYTONA USA, MRN Radio and the Company's publications
division in its existing headquarters building.
32
<PAGE>
In September 1996, the Company purchased approximately 14 acres of real
property, including three buildings containing an aggregate of approximately
180,000 square feet, located in close proximity to Daytona International
Speedway and the Company's new corporate headquarters facility. The purchase
price was $8.0 million. Such buildings are currently leased to unaffiliated
third parties.
COMPETITION
Racing events compete not only with other sports and other recreational
events scheduled at the same dates, but with other racing events sanctioned by
various racing bodies such as NASCAR, CART, USAC, SCCA, IMSA, ARCA and others.
Racing events sanctioned by different organizations are often held on the same
dates at separate tracks. Management believes that the type and caliber of
promoted racing events, facility location, sight lines, pricing and level of
customer conveniences are the principal factors that distinguish competing
motorsports facilities. See "Risk Factors--Competition."
EMPLOYEES
As of August 31, 1996, the Company had approximately 315 full-time employees.
The Company also engages a significant number of temporary personnel to assist
during periods of peak attendance at its events. For example, the Daytona
International Speedway engages approximately 1,500 persons during Speedweeks,
some of whom are volunteers. None of the Company's employees are represented by
a labor union. Management believes that the Company enjoys a good relationship
with its employees.
LEGAL PROCEEDINGS
The Company is from time to time a party to routine litigation incidental to
its business. Management does not believe that the resolution of any or all of
such litigation is likely to have a material adverse effect on the Company's
financial condition or results of operations.
ENVIRONMENTAL MATTERS
The Company believes that the facilities operated by it and its subsidiaries
are in material compliance with applicable environmental statutes and
regulations. Nevertheless, if damage to persons or property or contamination of
the environment is determined to have been caused or exacerbated by the conduct
of the Company's business or by pollutants, substances, contaminants or wastes
used, generated or disposed of by the Company, or which may be found on the
property of the Company, the Company may be held liable for such damage and may
be required to pay the cost of investigation and/or remediation of such
contamination or any related damage. The amount of such liability as to which
the Company is self-insured could be material. Changes in federal, state or
local laws, regulations or requirements or the discovery of theretofore unknown
conditions, could also require material expenditures by the Company.
TRADEMARKS
The Company has various registered and common law trademark rights to
"DAYTONA USA," the "Daytona 500," "Daytona International Speedway," "Talladega
Superspeedway," "Darlington," "World Center of Racing" and related logos. The
Company also has licenses from NASCAR, various drivers and other businesses to
use names and logos for merchandising programs and product sales. Management's
policy is to protect its intellectual property rights vigorously, through
litigation if necessary, chiefly because of their proprietary value in
merchandise and promotional sales.
33
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---------------------------------------------------------------------------------------
<S> <C> <C>
William C. France 63 Chairman of the Board, Chief Executive Officer and Direc-
tor
James C. France 51 President, Chief Operating Officer and Director
Lesa D. Kennedy 35 Executive Vice President and Director
H. Lee Combs 43 Senior Vice President--Operations and Director
James H. Foster 69 Senior Vice President--Special Projects and Director
Robert E. Smith 64 Vice President--Administration and Director
Susan G. Schandel 32 Treasurer and Chief Financial Officer
Gregory J. Sullivan 41 Vice President-Marketing
John E. Graham, Jr. 48 Vice President
W. Grant Lynch, Jr. 42 Vice President
James H. Hunter 56 Vice President
J. Hyatt Brown 59 Director
John R. Cooper 64 Director
Robert W. Emerick 84 Director
Brian Z. France 32 Director
Christy F. Harris 50 Director
Raymond K. Mason, Jr. 41 Director
Lloyd E. Reuss 60 Director
Chapman Root, II 45 Director
Thomas W. Staed 65 Director
</TABLE>
The Company's Articles provide that the Board of Directors be divided into
three classes, with regular three year staggered terms. Ms. Kennedy and Messrs.
Smith, Brown, Emerick and Staed will hold office until the annual meeting of
shareholders to be held in 1997, Messrs. William C. France, Combs, Foster,
Harris and Root will hold office until the annual meeting of shareholders to be
held in 1998, and Messrs. James C. France, Cooper, Brian Z. France, Mason and
Reuss will hold office until the annual meeting of shareholders to be held in
1999.
William C. France and James C. France are brothers. Lesa D. Kennedy and Brian
Z. France are the children of William C. France. There are no other family
relationships among the Company's executive officers and directors.
Mr. William C. France, a director since 1958, has served as Chairman of the
Board of the Company since 1987 and as Chief Executive Officer since 1981. From
1981 to 1987, Mr. France served as the Company's President. Mr. France also
serves as a director of Penske Motorsports and Outboard Marine Corporation.
Mr. James C. France, a director since 1970, has served as President and Chief
Operating Officer of the Company since 1987.
Ms. Lesa D. Kennedy, a director since 1984, was appointed an Executive Vice
President of the Company in January 1996. Ms. Kennedy served as the Company's
Secretary from 1987 until January 1996 and served as its Treasurer from 1989
until January 1996.
Mr. H. Lee Combs, a director since 1987, was appointed the Company's Senior
Vice President-Operations in January 1996. Mr. Combs served as a Vice President
and the Company's Chief Financial Officer from 1987 until such time. He also
serves as a director of Penske Motorsports.
Mr. James H. Foster, a director since 1968, was appointed the Company's
Senior Vice President -Special Projects in January 1994 upon his retirement as a
full-time employee. Mr. Foster served as
34
<PAGE>
President of Daytona International Speedway from 1988 until 1994 and as
Executive Vice President--Corporate Communications of the Company from 1984
until 1988. From 1970 to 1988, Mr. Foster served as the Company's Vice President
in Charge of Corporate Communications.
Mr. Robert E. Smith, a director since January 1996, has served as Vice
President--Corporate Administration of the Company for more than five years.
Ms. Susan G. Schandel was appointed the Company's Treasurer and Chief
Financial Officer in January 1996. From November 1992 until such time, Ms.
Schandel served as the Company's Controller. From 1988 until 1992, Ms. Schandel
was employed by Ernst & Young LLP, where she most recently served as an audit
manager.
Mr. Gregory G. Sullivan, appointed the Company's Vice-President-Marketing in
November 1994, joined the Company in September 1994. Prior to joining the
Company, Mr. Sullivan was employed by Kraft Foods (a division of Phillip Morris)
for more than five years, where he most recently served as Director of Marketing
Services for Kraft's Maxwell House division.
Mr. John E. Graham, Jr., appointed as a Vice President in November 1994,
joined the Company as President of Daytona International Speedway in September
1994. Prior to joining the Company, Mr. Graham was employed by First Union
National Bank of Florida for more than five years, where he most recently served
as President of First Union National Bank of Volusia and Flagler Counties.
Mr. W. Grant Lynch, Jr. has served as a Vice President and as President of
Talladega Superspeedway since joining the Company in November 1993. Prior to
such time, Mr. Lynch was employed by R.J. Reynolds Tobacco Company, Sports
Marketing Division, where from 1990 until 1993 he served as Senior Operations
and Public Relations Manager for the Winston Cup Racing Program.
Mr. James H. Hunter has served as a Vice President and as President of
Darlington Raceway since joining the Company in November 1993. Prior to joining
the Company, Mr. Hunter served as NASCAR's Vice President of Administration and
Marketing for more than five years.
Mr. J. Hyatt Brown, a director since 1987, serves as the President and Chief
Executive Officer of Poe & Brown, Inc. and has been in the insurance business
with Brown & Brown, Inc., its predecessor, since 1959. Mr. Brown also serves as
a director of Rock Tenn Co, Suntrust Banks, Inc., BellSouth Corporation, and FPL
Group, Inc.
Mr. John R. Cooper, a director since 1987, served as Vice
President--Corporate Development of the Company from December 1987 until July
1994. Since January 1996, Mr. Cooper has served as a special project facilitator
for the Company.
Mr. Robert W. Emerick, a director since 1975, served as General Motors
Corporation's Director of Public Relations, Pontiac Motor Division, prior to his
retirement in 1974.
Mr. Brian Z. France, a director since 1994, has served as NASCAR's Vice
President of Marketing and Corporate Communications since December 1992 and as
the Company's Manager--Group Projects since February 1994. From 1983 until such
time, Mr. France served in a number of other capacities with NASCAR, including
Winston Racing Series Administrative Assistant and National Tour Director. From
1989 to 1991, Mr. France also served as General Manager of Tucson Raceway Park.
Mr. Christy F. Harris, a director since 1984, has been engaged in the private
practice of business and commercial law with Harris, Midyette & Geary, P.A. for
more than twenty years.
Mr. Raymond K. Mason, Jr., a director since 1981, has served as Chairman and
President of American Banks of Florida, Inc., Jacksonville, Florida, since 1978.
Mr. Lloyd E. Reuss, a director since January 1996, served as President of
General Motors Corporation from 1990 until his retirement in January 1993. Mr.
Reuss also serves as a director of Handleman Co., Detroit Mortgage and Realty,
Co. and United States Sugar Company.
35
<PAGE>
Mr. Chapman Root, II, a director since 1992, has served as President of the
Root Company, a private investment company, since 1989. Mr. Root also serves as
a director of First Financial Corp. and Terre Haute First National Bank.
Mr. Thomas W. Staed, a director since 1987, has served as President of Oceans
Eleven Resorts, Inc., a hotel/motel business, for more than five years.
DIRECTOR COMMITTEES
The Company's Board of Directors has an Audit Committee, a Compensation
Committee and a Growth Strategy Committee.
The functions of the Audit Committee (which presently consists of Messrs.
Brown, Emerick and Mason) include (i) meeting with auditors to discuss the
scope, fees, timing and results of the annual audit, (ii) reviewing the
Company's consolidated financial statements, and (iii) performing other duties
deemed appropriate by the Board. The Audit Committee met once during fiscal
1996.
The functions of the Compensation Committee (which presently consists of
Messrs. Reuss, Root and Staed) include (i) reviewing existing compensation
levels of executive officers, (ii) making compensation recommendations to
management and the Board, and (iii) performing other duties deemed appropriate
by the Board. The Compensation Committee met five times during fiscal 1996.
In July 1996, the Board appointed Messrs. Harris, Brown, Mason and Reuss to
serve as members of the Growth Strategy Committee. Such committee was asked to
review the Recapitalization and recommend to the Board whether or not to
proceed. The Growth Strategy Committee did not first meet until September 1996.
DIRECTOR COMPENSATION
The Company pays each non-employee director a monthly retainer of $500, a
$1,000 fee for each meeting of the Board of Directors attended and a $500 fee
for each Board committee meeting attended. The aggregate retainers and fees paid
to directors with respect to fiscal 1996 services totalled $99,000. The Company
also reimburses directors for all expenses incurred in connection with their
activities as directors.
36
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid by the Company,
for services rendered during the last three fiscal years, to the Company's Chief
Executive Officer and the Company's other four most highly compensated executive
officers during fiscal 1996 (collectively the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ----------------
NAME AND FISCAL RESTRICTED ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS(1) COMPENSATION(2)
- ------------------------- --------- ----------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
William C. France 1996 $278,707 (3) $ 0 $754,972
Chairman and Chief 1995 $241,981 $126,860 $ 0 $ 6,015
Executive Officer 1994 $205,947 $ 86,800 $ 0 $ 3,511
James C. France 1996 $224,778 (3) $ 0 $464,378
President and Chief 1995 $200,121 $ 83,140 $ 0 $ 12,406
Operating Officer 1994 $173,845 $ 58,640 $ 0 $ 13,009
John E. Graham 1996 $190,922 $ 65,806 $293,750 $ 7,724
Vice President 1995 $180,462 $110,228 $ 0 $ 1,607
1994 $ 0 $ 0 $ 0 $ 0
H. Lee Combs 1996 $172,226 $ 72,179 $172,020 $ 11,102
Senior Vice President-- 1995 $116,972 $ 35,218 $ 60,986 $ 9,581
Operations 1994 $104,575 $ 27,634 $113,490 $ 11,112
Lesa D. Kennedy 1996 $173,553 $ 69,223 $149,695 $ 8,648
Executive Vice President 1995 $109,608 $ 32,573 $ 53,168 $ 8,482
1994 $ 92,976 $ 24,486 $ 98,746 $ 6,618
</TABLE>
- ---------------------
(1) Reflects the aggregate market value of shares awarded under the Company's
1994 Long Term Incentive Plan (calculated by multiplying the average of the
bid and asked prices for the Company's existing common stock by the number
of shares awarded). The indicated awards were made in January with respect
to services rendered in the prior fiscal year. See Note 9 of Notes to the
Company's Consolidated Financial Statements.
(2) The compensation reported in this column consists of (i) payments for
insurance, including premium payments and related expense for
split-dollar and other life insurance, accidental death and dismemberment
insurance and group health insurance, (ii) medical expense
reimbursements, and (iii) contributions to the Company's 401(k) plan. The
amounts applicable to each Named Officer for each category for fiscal
1996 are as follows: William C. France ($751,724, $3,248 and $0,
respectively); James C. France ($456,724, $1,219 and $6,435,
respectively); John E. Graham ($1,724, $0 and $6,000, respectively); Lesa
D. Kennedy ($1,724, $0 and $6,924, respectively); and H. Lee Combs
($1,724, $2,667 and $6,711, respectively). Pursuant to the Company's
split-dollar life insurance arrangements, the premiums will be repaid to
the Company in future periods. See Note 9 of Notes to the Company's
Consolidated Financial Statements.
(3) Bonuses for services rendered in fiscal 1996 have not been determined as
of the date of this Prospectus.
1996 LONG-TERM INCENTIVE PLAN
The Company's 1996 Long-Term Incentive Plan (the "1996 Plan") was adopted by
the Board of Directors in September 1996. The purpose of the 1996 Plan is to
attract and retain key employees and consultants of the Company, to provide an
incentive for them to achieve long-range performance goals, and to enable them
to participate in the long-term growth of the Company.
The 1996 Plan authorizes the grant of stock options (incentive and
nonstatutory), stock appreciation rights ("SARs") and restricted stock to
employees and consultants of the Company capable of contributing to the
Company's performance. The Company has reserved an aggregate of 1,000,000 shares
(subject to adjustment for stock splits and similar capital changes) of Class A
Common Stock for grants under the 1996 Plan. Incentive Stock Options may be
granted only to employees eligible to receive them under the Internal Revenue
Code of 1996, as amended.
The Board of Directors has appointed the Compensation Committee (the
"Committee") to administer the 1996 Plan. Awards under the 1996 Plan will
contain such terms and conditions not
37
<PAGE>
inconsistent with the 1996 Plan as the Committee in its discretion approves.
The Committee has discretion to administer the 1996 Plan in the manner which
it determines, from time to time, is in the best interest of the Company. For
example, the Committee will fix the terms of stock options, SARs and
restricted stock grants and determine whether, in the case of options and
SARs, they may be exercised immediately or at a later date or dates. Awards
may also be granted subject to conditions relating to continued employment
and restrictions on transfer. In addition, the Committee may provide, at the
time an award is made or at any time thereafter, for the acceleration of a
participant's rights or cash settlement upon a change in control of the
Company. The terms and conditions of awards need not be the same for each
participant. The foregoing examples illustrate, but do not limit, the manner
in which the Committee may exercise its authority in administering the 1996
Plan. In addition, all questions of interpretation of the 1996 Plan will be
determined by the Committee.
CERTAIN TRANSACTIONS
NASCAR, which sanctions most of the Company's major racing events, is
controlled by William C. France and James C. France. See "NASCAR," "Management"
and "Principal Shareholders." Standard NASCAR sanction agreements require
racetrack operators to pay various monies to NASCAR for each sanction event
conducted. Included are sanction fees and prize and point fund monies. The prize
and point fund monies are distributed by NASCAR to participants in the events.
The aggregate NASCAR sanction fees and prize and point fund monies paid by the
Company with respect to fiscal 1994, fiscal 1995 and fiscal 1996 were $9.4
million, $11.8 million and $13.8 million, respectively.
In addition, NASCAR and the Company share a variety of expenses in the
ordinary course of business. NASCAR pays rent to the Company for office space
based upon estimated fair market lease rates for comparable facilities. NASCAR
also reimburses the Company for 50% of the compensation paid to personnel
working in the Company's legal and risk management departments, as well as 50%
of the compensation expense associated with receptionists and the Company's
archive departments. The Company's payments to NASCAR for MRN Radio's broadcast
rights to Craftsman Truck Series races represents an agreed-upon percentage of
the Company's advertising revenues attributable to such race broadcasts.
NASCAR's reimbursement for use of the Company's mail room, graphics and
publications departments, and the Company's reimbursement of NASCAR for use of
corporate aircraft, is based on actual usage. The aggregate amount paid by the
Company to NASCAR for shared expenses, net of the amounts received from NASCAR
for shared expenses, totalled approximately $62,000, $71,000 and $359,000 during
fiscal 1994, 1995 and fiscal 1996, respectively. The Company strives to ensure,
and management believes that, the terms of the Company's transactions with
NASCAR are no less favorable to the Company than could be obtained in
arms'-length negotiations.
J. Hyatt Brown, a director of the Company, serves as President and Chief
Executive Officer of Poe & Brown, Inc. ("Poe"). Poe has received commissions for
serving as the Company's insurance broker for several of the Company's insurance
policies, including its property and casualty policy, certain employee benefit
programs and the split-dollar arrangements established for the benefit of
William C. France, James C. France and their respective spouses. The aggregate
commissions received by Poe in connection with Company policies were
approximately $70,000, $80,000 and $294,000 during fiscal 1994, fiscal 1995 and
fiscal 1996, respectively.
38
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to the beneficial
ownership of the Company's outstanding Class B Common Stock by (i) each person
known by the Company to be the beneficial owner of more than 5% of the Class B
Common Stock, (ii) each director or Named Officer of the Company who
beneficially owns any Class B Common Stock, and (iii) all directors and
executive officers of the Company as a group. As described in the notes to the
table, voting and/or investment power with respect to certain shares of Common
Stock is shared by the named individuals. Consequently, such shares may be shown
as beneficially owned by more than one person.
<TABLE>
<CAPTION>
CLASS B COMMON STOCK
BENEFICIALLY OWNED (2)(3)
----------------------------------------------------
PERCENTAGE OF
TOTAL COMMON STOCK
---------------------------------
COMBINED VOTING POWER
OF COMMON STOCK
NAME OF BENEFICIAL OWNER(1) NUMBER OF SHARES BEFORE OFFERING AFTER OFFERING AFTER THE OFFERING
- ---------------------------- ----------------- ---------------- --------------- ----------------------
<S> <C> <C> <C> <C>
France Family Group(4) .... 21,131,685 61.4% 55.0% 60.0%
James C. France(5) ......... 14,836,275 43.1 38.6 42.1
William C. France(6) ....... 14,541,915 42.2 37.8 41.3
Lesa D. Kennedy(7) ......... 364,965 1.1 * 1.0
Raymond K. Mason, Jr.(8) .. 346,740 1.0 * *
Brian Z. France(9) ......... 286,740 * * *
James H. Foster(10) ........ 220,815 * * *
Thomas W. Staed ............ 45,000 * * *
H. Lee Combs(11) ........... 38,055 * * *
John E. Graham, Jr. ........ 18,750 * * *
Robert W. Emerick .......... 15,000 * * *
Chapman J. Root, II ........ 13,500 * * *
Robert E. Smith(12) ........ 10,230 * * *
J. Hyatt Brown(13) ......... 9,000 * * *
John R. Cooper ............. 1,500 * * *
Christy F. Harris .......... 150 * * *
All directors and executive
officers as a group
(20 persons)(14) ......... 21,327,270 62.0% 55.5% 60.5%
</TABLE>
- ---------------------
* Less than 1%.
(1) 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) Prior to this Offering, there were no outstanding shares of Class A
Common Stock. Commencing 90 days after this Offering, each share of
Class B Common Stock will be convertible at the option of the holder
into one share of Class A Common Stock.
(4) Reflects the aggregate of 20,558,205 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 573,480 shares held of record by
the adult children of James C. France. See footnotes (5), (6) and (7).
(5) Reflects (i) 267,720 shares held of record by James C. France, (ii)
304,725 shares held of record by Sharon M. France, his spouse, (iii)
286,740 shares held of record by James C. France as custodian for his
minor daughter, Amy Lea, (iv) 7,615,125 shares held of record by Western
Opportunity Limited Partnership ("Western Opportunity"), (v) 4,500,000
shares held of record by Carl Investment Limited Partnership ("Carl"),
and (vi) 1,861,965 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 (6). Does not include an aggregate of 573,480 shares held of
record by the adult children of James C. France.
(6) Reflects (i) 265,500 shares held of record by William C. France, (ii)
304,725 shares held of record by Betty Jane France, his spouse, (iii)
7,615,125 shares held of record by Western Opportunity, (iv) 4,500,000
shares held of record by Polk City Limited Partnership ("Polk City"),
and (v) 1,861,965 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
39
<PAGE>
of White River. Also see footnote (5). Does not include the aggregate of
651,705 shares shown in the table as beneficially owned by Lesa D.
Kennedy and Brian Z. France, adult children of William C. France.
(7) Reflects (i) 333,240 shares held of record by Ms. Kennedy, (ii) 15,975
shares held of record by Ms. Kennedy as custodian for her minor son,
Benjamin, and (iii) 15,750 shares held of record as joint tenants with
Bruce S. Kennedy, her spouse.
(8) Includes 150,000 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.
(9) Does not reflect the possible sale of up to 50,000 shares pursuant to
the Underwriters' over-allotment option. See "Underwriting."
(10) Reflects (i) 70,815 shares held of record by Mr. Foster, (ii) 75,000
shares held of record by Mr. Foster as trustee, and (iii) 75,000 shares
held of record by Barbara S. Foster, his spouse, as trustee.
(11) Reflects 37,305 shares held of record by Mr. Combs and 750 shares held
of record as joint tenants with Karen Combs, his spouse.
(12) Reflects 9,435 shares held of record by Mr. Smith and 795 shares held of
record as joint tenants with his spouse.
(13) Reflects shares held of record as joint tenants with Cynthia R. Brown,
his spouse.
(14) See footnotes (5) through (13).
40
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital includes 80 million shares of Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), 40 million
shares of Class B Common Stock, par value $.01 per share ("Class B Common
Stock"), and one million shares of preferred stock, par value $.01 per share
(the "Preferred Stock"). As of the date of this Prospectus (assuming
consummation of the Recapitalization), there are 34,423,890 shares of Class B
Common Stock outstanding (which may be converted into Class A Common Stock at
any time commencing 90 days after this Offering). See "The Recapitalization"
and "Principal Shareholders." No shares of Class A Common Stock or Preferred
Stock are outstanding as of the date of this Prospectus.
The Company's Board of Directors and shareholders have approved Articles
and Amended and Restated Bylaws ("Bylaws") to become effective upon this
Offering, and the following discussions describe the provisions of the
Company's capital stock, Articles and Bylaws that will be in effect after
this Offering. The following descriptions of the Company's capital stock
accurately describe all material provisions of the Company's Articles and
Bylaws. However, such descriptions are not necessarily complete and, in each
instance, reference is made to the copies of the Company's Articles and
Bylaws which are included as exhibits to the Registration Statement of which
this Prospectus is a part.
COMMON STOCK
The shares of Class A Common Stock and Class B Common Stock are identical
in all respects, except for voting rights and certain dividend and conversion
rights, as described below.
VOTING RIGHTS. Each share of Class A Common Stock entitles the holder to
one-fifth (1/5) vote on each matter submitted to a vote of the Company's
shareholders and each share of Class B Common Stock entitles the holder to
one (1) vote on each such matter, in each case including the election of
directors. Except as required by applicable law, holders of the Class A
Common Stock and Class B Common Stock will vote together on all matters
submitted to a vote of the shareholders. See "Risk Factors--Effective Voting
Control by France Family Group and Anti-Takeover Effect of Dual Classes of
Stock." Neither the Class A Common Stock nor the Class B Common Stock have
cumulative voting rights.
Any action that can be taken at a meeting of the shareholders may be taken
by written consent in lieu of the meeting if the Company receives consents
signed by shareholders having the minimum number of votes that would be
necessary to approve the action at a meeting at which all shares entitled to
vote on the matter were present. This could permit the holders of Class B
Common Stock to take all actions required to be taken by the shareholders
without providing the other shareholders the opportunity to make nominations
or raise other matters at a meeting.
DIVIDENDS. Holders of Class A Common Stock and Class B Common Stock are
entitled to receive dividends at the same rate if and when declared by the
Board of Directors out of funds legally available therefrom, subject to the
dividend and liquidation rights of any Preferred Stock that may be issued and
outstanding. No dividend or other distribution (including redemptions or
repurchases of shares of capital stock) may be made if after giving effect to
such distribution, the Company would not be able to pay its debts as they
become due in the usual course of business, or if the Company's total assets
would be less than the sum of its total liabilities plus the amount that
would be needed at the time of a liquidation to satisfy the preferential
rights of any holders of Preferred Stock. See "Dividend Policy."
If a dividend or distribution payable in Class A Common Stock is made on
the Class A Common Stock, the Company must also make a pro rata and
simultaneous dividend or distribution on the Class B Common Stock payable in
shares of either Class A Common Stock or Class B Common Stock. Conversely, if
a dividend or distribution payable in Class B Common Stock is made on the
Class B Common Stock, the Company must also make a pro rata and simultaneous
dividend or distribution on the Class A Common Stock payable solely in shares
of Class A Common Stock.
41
<PAGE>
CONVERSION. Class A Common Stock has no conversion rights. Class B Common
Stock will be convertible into Class A Common Stock, in whole or in part, at
any time and from time to time at the option of the holder commencing 90 days
after this Offering, on the basis of one share of Class A Common Stock for
each share of Class B Common Stock converted. Each share of Class B Common
Stock will also automatically convert into one share of Class A Common Stock
if, on the record date for any meeting of the shareholders, the number of
shares of Class B Common Stock then outstanding is less than 10% of the
aggregate number of shares of Class A Common Stock and Class B Common Stock
then outstanding.
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.
MERGERS AND OTHER BUSINESS COMBINATIONS. Upon the merger or consolidation
of the Company, holders of each class of Common Stock are entitled to receive
equal per share payments or distributions, except that in any transaction in
which shares of capital stock are distributed, such shares may differ as to
voting rights and otherwise to the extent and only to the extent that the
Class A Common Stock and Class B Common Stock differ.
OTHER PROVISIONS. The holders of the Class A Common Stock and Class B
Common Stock are not entitled to preemptive rights. Neither the Class A
Common Stock nor the Class B Common Stock may be subdivided or combined in
any manner unless the other class is subdivided or combined in the same
proportion.
TRANSFER AGENT AND REGISTRAR. The Transfer Agent and Registrar for the
Class A Common Stock is SunTrust Bank, Central Florida, N.A.
LISTING. The Class A Common Stock has been approved for listing on the
Nasdaq National Market under the trading symbol "ISCA."
PREFERRED STOCK
The Board of Directors of the Company is 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. As of
the date of this Prospectus, the Board of Directors has not authorized any
series of Preferred Stock, and there are no plans, agreements or
understandings for the authorization or issuance of any shares of Preferred
Stock. 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.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF FLORIDA LAW AND
OTHER PROVISIONS OF THE COMPANY'S ARTICLES
The Company is subject to certain anti-takeover provisions under Florida
law, including the "affiliated transactions" and "control-share acquisition"
provisions of the Florida Business Corporation Act. These provisions require,
subject to certain exceptions, that an "affiliated transaction" be approved
by the holders of two-thirds of the voting shares other than those
beneficially owned by an "interested shareholder" or by a majority of
disinterested directors, and that voting rights be conferred on "control
shares" acquired in specified "control share acquisitions" generally only to
the extent conferred through approval by the holders of a majority of all
shares, excluding holders of "interested shares." In addition, certain
provisions of the Company's Articles summarized in the following paragraphs
may be deemed to have an anti-takeover effect and may delay, defer or prevent
a tender offer or takeover attempt that a
42
<PAGE>
shareholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by
shareholders.
CLASSIFIED BOARD OF DIRECTORS. The Articles 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 increase
the size of the Board, prevent 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 Articles further provide that
special meetings of shareholders of the Company be called only by the Board
of Directors 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 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 provided with respect to the previous
year's meeting. The 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 authorized but unissued shares of
Common Stock and Preferred Stock are 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 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.
43
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offering, the Company will have outstanding
38,423,890 shares of Common Stock. Of these shares, the 4,000,000 shares of
Class A Common Stock sold in the Offering (or a maximum of 4,600,000 shares
if the Underwriters' over-allotment option is exercised in full) will be
freely tradeable by persons other than "affiliates" of the Company without
restriction or further registration under the Securities Act. In addition,
all of the 34,423,890 currently outstanding shares of Class B Common Stock
are eligible for resale in the public market, subject to Rule 144 limitations
applicable to affiliates and to the lock-up agreements described below. Such
shares of Class B Common Stock are currently traded over the counter;
commencing 90 days after this Offering, the Class B Common Stock will be
convertible into Class A Common Stock and, subject to such affiliate and
lock-up restrictions, freely tradeable on the Nasdaq National Market.
Persons who are deemed affiliates of the Company are generally entitled
under Rule 144 as currently in effect to sell within any three-month period a
number of shares that does not exceed 1% of the number of shares of the
applicable class of Common Stock then outstanding or the average weekly
trading volume of such class of Common Stock during the four calendar weeks
preceding the making of a filing with the Securities and Exchange Commission
(the "Commission") with respect to such sale. Such sales under Rule 144 are
also subject to certain manner of sale provisions and notice requirements and
to the availability of current public information about the Company. The
Company is unable to estimate accurately the number of shares of Common Stock
that ultimately will be sold under Rule 144 because the number of shares will
depend in part on the market price for the Common Stock, the personal
circumstances of the sellers and other factors. The Company and each of the
Company's executive officers and directors have agreed, subject to certain
limitations, not to sell any shares of Common Stock, or securities
convertible into or exchangeable for Common Stock, for a period of 180
calendar days after the date of this Prospectus without the prior consent of
Smith Barney Inc. See "Underwriting."
Prior to this Offering, there has been no market for the Class A Common
Stock. The Company can make no prediction as to the effect, if any, that
sales of shares of Common Stock, or the availability of such shares for sale,
will have on the market price of Class A Common Stock prevailing from time to
time. Nevertheless, sales of substantial amounts of Common Stock in the
public market could adversely affect prevailing market prices.
44
<PAGE>
UNDERWRITING
Upon the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof, each Underwriter named below has severally
agreed to purchase, and the Company has agreed to sell to such Underwriter,
the number of shares of Class A Common Stock set forth opposite the name of
such Underwriter.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Smith Barney Inc. ....................
Raymond James & Associates, Inc. ....
----------------
Total .............................. 4,000,000
================
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Class A Common
Stock offered hereby are subject to approval of certain legal matters by
counsel and to certain other conditions. The Underwriters are obligated to
take and pay for all shares of Class A Common Stock offered hereby (other
than those covered by the over-allotment option described below) if any such
shares of Class A Common Stock are taken.
The Underwriters, for whom Smith Barney Inc. and Raymond James &
Associates, Inc. are acting as the Representatives, propose to offer part of
the shares of Class A Common Stock directly to the public at the public
offering price set forth on the cover page of this Prospectus and part of the
shares of Class A Common Stock to certain dealers at a price which represents
a concession not in excess of $ per share below the public offering
price. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to certain other dealers. After the initial
offering of the shares of Class A Common Stock to the public, the public
offering price and such concessions may be changed by the Representatives.
The Representatives of the Underwriters have advised the Company that the
Underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.
The Company and the Selling Shareholder have granted to the Underwriters
an option, exercisable for thirty days from the date of this Prospectus, to
purchase in the aggregate up to 600,000 additional shares of Class A Common
Stock at the price to public set forth on the cover page of this Prospectus
minus underwriting discounts and commissions. Of the shares subject to this
option, 550,000 shares will be sold by the Company and 50,000 shares will be
sold by the Selling Shareholder, Brian Z. France. The Underwriters may
exercise such option solely for the purpose of covering over-allotments, if
any, in connection with the offering of the shares of Class A Common Stock.
To the extent such option is exercised, each Underwriter will be obligated,
subject to certain conditions, to purchase approximately the same percentage
of such additional shares as the number of shares of Class A Common Stock set
forth opposite each Underwriter's name in the preceding table bears to the
total number of shares of Class A Common Stock listed in such table.
The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.
The rules of the Commission generally prohibit the Underwriters from
making a market in the existing common stock of the Company during the two
business days prior to commencement of sales in this Offering (the "Cooling
Off Period"). The Commission has, however, adopted Rule 10b-6A under the
Securities Exchange Act of 1934 ("Rule 10b-6A") which provides an exemption
from such
45
<PAGE>
prohibition for certain passive market making transactions. Such passive
market making transctions must comply with applicable price and volume limits
and must be identified as passive market making transactions. In general,
pursuant to Rule 10b-6A, a passive market maker must display its bid for a
security at a price not in excess of the highest independent bid for the
security. If all independent bids are lowered below the passive maker's bid,
however, such bid must be then lowered when certain purchase limits are
exceeded. Further, net purchases by a passive market maker on each day are
generally limited to a specified percentage of the passive market maker's
average daily trading volume in a security during a specified prior period
and must be discontinued when such limit is reached. Pursuant to the
exemption provided by Rule 10b-6A, certain of the Underwriters and selling
group members may engage in passive market making in the existing common
stock of the Company during the Cooling Off Period. Passive market making may
stabilize the market price of the Class A Common Stock at a level above that
which might otherwise prevail, and, if commenced, may be discontinued at any
time.
The Company and each of the Company's executive officers and directors,
who beneficially hold an aggregate of approximately 21.3 million shares of
Common Stock, have agreed that, for a period of 180 days following the date
of this Prospectus, they will not, without the prior written consent of Smith
Barney Inc. and subject to certain limited exceptions, offer, sell, contract
to sell, or otherwise dispose of any shares of Class A Common Stock (other
than shares offered pursuant to this Prospectus) or any securities
convertible into, or exercisable or exchangeable for shares of Class A Common
Stock.
Prior to this Offering, there has not been any public market for the Class
A Common Stock of the Company. Consequently, the initial public offering
price for the shares of Class A Common Stock included in this Offering will
be determined through negotiations among the Company and the Representatives.
Among the factors to be considered in determining such price are the history
of and prospects for the Company's business and the industry in which it
competes, an assessment of the Company's management and the present state of
the Company's development, the past and present revenues and earnings of the
Company, the prospects for the growth of the Company's revenues and earnings,
the current state of the economy in the United States, the current level of
economic activity in the industry in which the Company competes and in
related or comparable industries, and currently prevailing conditions in the
securities markets, including current market valuations of publicly traded
companies that are comparable to the Company.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida. Certain legal matters will be passed upon for the
Underwriters by Holland & Knight, Ft. Lauderdale, Florida.
EXPERTS
The consolidated financial statements (including the schedule incorporated
by reference) of International Speedway Corporation as of August 31, 1995 and
1996, and for each of the three years in the period ended August 31, 1996,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent certified public accountants, as set forth in
their reports thereon appearing and incorporated by reference elsewhere
herein, and are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information for the nine-month periods ended May 31, 1995 and 1996, the
six-month periods ended February 28, 1995 and February 29, 1996, and the
three-month periods ended November 30, 1994 and 1995, incorporated by
reference in this Prospectus and Amendment No. 1 to the Registration
Statement, Ernst & Young LLP
46
<PAGE>
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports, included in the Company's Quarterly Reports on Form 10-Q
for the quarters ended May 31, 1996, February 29, 1996, and November 30,
1995, incorporated by reference herein, state that they did not audit and
they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information
should be restricted considering the limited nature of the review procedures
applied. The independent auditors are not subject to the liability provisions
of Section 11 of the Securities Act for their report on the unaudited interim
financial information because that report is not a "report" or a "part" of
the Registration Statement prepared or certified by the auditors within the
meaning of Sections 7 and 11 of the Securities Act.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company may be inspected and copied (at prescribed rates) at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the Commission's regional office
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
The Company has also filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act with respect to the Class
A Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement. For further information
with respect to the Company and the Class A Common Stock offered hereby,
reference is hereby made to such Registration Statement. Statements contained
in this Prospectus as to the contents of any contract or other document filed
as an exhibit to the Registration Statement accurately describe the material
terms of such contracts and documents. However, such statements are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies
of the Registration Statement may be obtained from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the
fees prescribed by the Commission, or may be examined, without charge, at the
public reference facilities maintained by the Commission. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
filed electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference: (1) the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1995; (2) the Company's Quarterly
Reports on Form 10-Q for the quarters ended November 30, 1995, February 28,
1996, and May 31, 1996; (3) the Company's Current Reports on Form 8-K dated
November 22, 1995 and September 5, 1996; and (4) the Company's Registration
Statement, registering the Company's common stock under Section 12(g) of the
Exchange Act. All documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the
date hereof and prior to the termination of this Offering shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing such documents. Any statements contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that the statement contained herein or in any other subsequently filed
document which also is, or
47
<PAGE>
is deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon a written or oral request of such person, a
copy of any or all of the foregoing documents incorporated by reference into
this Prospectus (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into such documents). Request for
such copies should be delivered to W. Garrett Crotty, Esq., 1801 West
International Speedway Boulevard, Daytona Beach, Florida 32114, telephone
(904) 254-2700.
48
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Certified Public Accountants .................... F-2
Consolidated Balance Sheets as of August 31, 1995 and 1996 ........... F-3
Consolidated Statements of Income for the years ended
August 31, 1994, 1995 and 1996 ....................................... F-4
Consolidated Statements of Shareholders' Equity for the years ended
August 31, 1994, 1995 and 1996 ....................................... F-5
Consolidated Statements of Cash Flows for the years ended
August 31, 1994, 1995 and 1996 ....................................... F-6
Notes to Consolidated Financial Statements ............................ F-7
</TABLE>
1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholders
International Speedway Corporation
We have audited the accompanying consolidated balance sheets of
International Speedway Corporation and subsidiaries as of August 31, 1995 and
1996, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended August 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of International Speedway Corporation and subsidiaries at August 31, 1995 and
1996, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended August 31, 1996, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Jacksonville, Florida
September 27, 1996,
except as to the fifth paragraph
of Note 1, as to which the
date is October , 1996
- -----------------------------------------------------------------------------
The foregoing report is in the form that will be signed upon the
completion of the recapitalization of the Company as described in the fifth
paragraph of Note 1 to the financial statements.
Ernst & Young LLP
Jacksonville, Florida
October 10, 1996
2
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AUGUST 31,
--------------------------
1995 1996
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................... $ 7,871 $ 9,042
Short-term investments (Note 3) ............................. 30,950 8,369
Receivables, less allowances of $35 ......................... 1,794 3,455
Inventories ................................................. 1,158 1,409
Prepaid expenses and other current assets ................... 3,122 2,410
------------ ------------
Total Current Assets ......................................... 44,895 24,685
Property and Equipment: ......................................
Land and leasehold improvements ............................. 3,444 3,588
Buildings, grandstands and tracks ........................... 73,216 95,873
Furniture and equipment ..................................... 13,110 26,980
Construction in progress .................................... 11,221 9,306
------------ ------------
100,991 135,747
Less: accumulated depreciation .............................. 30,692 36,912
------------ ------------
70,299 98,835
Other Assets:
Cash surrender value of life insurance ...................... 489 1,214
Equity investments (Note 2) ................................. 2,913 27,256
Long-term investments (Note 3) .............................. 747 500
Other ....................................................... 228 301
------------ ------------
4,377 29,271
------------ ------------
Total Assets ................................................. $119,571 $152,791
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ............................................ $ 2,619 $ 3,820
Income taxes payable (Note 4) ............................... 324 57
Deferred income ............................................. 19,852 25,963
Other current liabilities ................................... 1,279 1,596
------------ ------------
Total Current Liabilities .................................... 24,074 31,436
Deferred income taxes (Note 4) ............................... 10,250 14,688
Commitments and Contingencies (Note 8)
Shareholders' Equity (Notes 1, 6 and 7):
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 34,395,975 and 34,423,890 issued in 1995 and
1996, respectively ........................................ 344 344
Additional paid-in capital .................................. 1,853 8,127
Retained earnings ........................................... 83,846 99,986
------------ ------------
86,043 108,457
Less unearned compensation--restricted stock (Note 11) ...... 796 1,790
------------ ------------
Total Shareholders' Equity ................................... 85,247 106,667
------------ ------------
Total Liabilities and Shareholders' Equity ................... $ 119,571 $152,791
============ ============
</TABLE>
See accompanying notes.
F-3
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------
1994 1995 1996
------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Revenues:
Admissions, net ............................ $ 36,935 $ 43,274 $ 50,140
Motorsports related income ................. 18,764 24,033 27,433
Food, beverage and souvenir income ........ 12,291 14,442 17,505
Other income ............................... 943 423 964
------------ ------------ ------------
68,933 82,172 96,042
Expenses:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees ................ 9,412 11,765 13,865
Motorsports related expenses .............. 11,470 11,604 15,336
Food, beverage and souvenir expenses ..... 7,867 8,107 10,278
General and administrative expenses ....... 14,307 18,202 20,930
Depreciation ............................... 3,828 4,798 6,302
------------ ------------ ------------
46,884 54,476 66,711
------------ ------------ ------------
Operating income ............................ 22,049 27,696 29,331
Interest income, net ........................ 972 1,436 872
Equity in net income from equity investments 207 285 1,441
------------ ------------ ------------
Income before income taxes. ................. 23,228 29,417 31,644
Income taxes (Note 4) ....................... 8,662 11,054 11,963
------------ ------------ ------------
Net income .................................. $ 14,566 $ 18,363 $ 19,681
============ ============ ============
Earnings per share (Note 1) ................. $ .42 $ .53 $ .57
============ ============ ============
Dividends per share (Note 1) ................ 4.0/cent/ 4.7/cent/ 5.3/cent/
============ ============ ============
</TABLE>
See accompanying notes.
F-4
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
CLASS B
COMMON UNEARNED
STOCK ADDITIONAL COMPENSATION- TOTAL
$.01 PAR PAID-IN RETAINED RESTRICTED SHAREHOLDERS'
VALUE CAPITAL EARNINGS STOCK EQUITY
----------- ------------- ----------- ---------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE AT AUGUST 31, 1993 ............ $343 $ 606 $54,287 $ -- $ 55,236
Net income ........................... -- -- 14,566 -- 14,566
Cash dividends (4.0/cent/ per share) -- -- (1,374) -- (1,374)
Reacquisition of previously issued
common stock (Note 7) .............. -- (1) (285) -- (286)
Restricted stock granted
(Note 11) .......................... 1 759 -- (760) --
Amortization of unearned compensation
(Note 11) .......................... -- -- -- 135 135
----------- ------------- ----------- ---------------- ----------------
BALANCE AT AUGUST 31, 1994 ............ 344 1,364 67,194 (625) 68,277
Net income ........................... -- -- 18,363 -- 18,363
Cash dividends (4.7/cent/ per share) -- -- (1,605) -- (1,605)
Reacquisition of previously issued
common stock (Note 7) .............. -- -- (106) -- (106)
Restricted stock granted
(Note 11) .......................... -- 489 -- (489) --
Amortization of unearned compensation
(Note 11) .......................... -- -- -- 318 318
----------- ------------- ----------- ---------------- ----------------
BALANCE AT AUGUST 31, 1995 ............ 344 1,853 83,846 (796) 85,247
Net income ........................... -- -- 19,681 -- 19,681
Cash dividends (5.3/cent/ per share) -- -- (1,836) -- (1,836)
Reacquisition of previously issued
common stock (Note 7) .............. (1) (2) (1,705) -- (1,708)
Restricted stock granted
(Note 11) .......................... 1 1,599 -- (1,600) --
Amortization of unearned compensation
(Note 11) .......................... -- -- -- 606 606
Recapitalization of equity investment
(Note 2) ........................... -- 4,677 -- -- 4,677
----------- ------------- ----------- ---------------- ----------------
BALANCE AT AUGUST 31, 1996 ............ $344 $8,127 $99,986 $(1,790) $106,667
=========== ============= =========== ================ ================
</TABLE>
See accompanying notes.
F-5
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
--------------------------------------
1994 1995 1996
----------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income .......................................... $ 14,566 $ 18,363 $ 19,681
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ....................................... 3,828 4,798 6,302
Amortization of unearned compensation .............. 135 318 606
Deferred income taxes .............................. 1,710 1,650 1,500
Undistributed income from equity investments ...... (207) (285) (1,441)
Gain (loss) on disposition of property and
equipment ............................................ (1) 251 (13)
Changes in Operating Assets and Liabilities:
Receivables ....................................... (232) (447) (1,661)
Inventories ....................................... 83 (89) (251)
Prepaid expenses and other current assets ........ (402) (1,322) 712
Other assets ...................................... 49 (61) (127)
Accounts payable .................................. 546 1,167 1,201
Deferred income ................................... 2,764 2,702 6,111
Income taxes payable .............................. (139) 272 (267)
Other current liabilities ......................... (8) 409 317
----------- ------------ ------------
Net Cash Provided by Operating Activities ............ 22,692 27,726 32,670
INVESTING ACTIVITIES
Acquisition of investments .......................... (54,370) (125,982) (83,502)
Proceeds from maturities of investments ............. 52,192 119,392 106,330
Capital expenditures ................................ (19,729) (16,831) (34,792)
Investment in PSH Corp .............................. -- -- (15,287)
Cash surrender value of life insurance .............. (33) (30) (725)
Proceeds from sales of property and equipment ...... 12 80 21
----------- ------------ ------------
Net Cash Used in Investing Activities ................ (21,928) (23,371) (27,955)
FINANCING ACTIVITIES
Reacquisition of previously issued common stock .... (286) (106) (1,708)
Cash dividends paid ................................. (1,374) (1,605) (1,836)
----------- ------------ ------------
Net Cash Used in Financing Activities ................ (1,660) (1,711) (3,544)
----------- ------------ ------------
Net (Decrease) Increase in Cash
and Cash Equivalents ............................... (896) 2,644 1,171
Cash and Cash Equivalents at
Beginning of Year .................................. 6,123 5,227 7,871
----------- ------------ ------------
Cash and Cash Equivalents at
End of year ........................................ $ 6,227 $ 7,871 $ 9,042
=========== ============ =============
</TABLE>
See accompanying notes.
F-6
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996
NOTE 1--DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS: International Speedway Corporation and its
wholly-owned subsidiaries (the "Company") is a leading promoter of
motorsports activities in the United States. The Company owns and operates
three of the nation's premier superspeedways--Daytona International Speedway,
a 2.5 mile, tri-oval track located in Daytona Beach, Florida; Talladega
Superspeedway, a 2.6 mile, tri-oval track located in Talladega, Alabama; and
Darlington Raceway, a 1.3 mile track located in Darlington, South Carolina.
The Company also operates Tucson Raceway Park in Pima County Arizona, owns a
50% interest in the Watkins Glen International road course in New York, and
holds a 12% indirect interest in Penske Motorsports, Inc., which owns and
operates Michigan International Speedway and Pennsylvania's Nazareth Speedway
and is constructing The California Speedway near Los Angeles. In July 1996,
the Company opened DAYTONA USA--The Ultimate Motorsports Attraction, a
motorsports theme-entertainment complex that includes interactive media,
theaters, historical memorabilia and exhibits.
The Company, including Watkins Glen, currently promotes over 70 stock car,
sports car, truck, motorcycle and other racing events annually, including
seven Winston Cup races, five Busch Grand National races and a number of
prestigious sports car and motorcycle races.
Americrown Service Corporation ("Americrown"), one of the Company's
wholly-owned subsidiaries, conducts the food, beverage and souvenir
concession operations at the Daytona, Talladega and Darlington facilities.
Americrown is also responsible for providing catering services to corporate
customers both in suites and entertainment chalets at these facilities.
Beginning in 1995, the Company expanded Americrown's operations to include
food, beverage and other services at unaffiliated sporting events.
The Company's proprietary MRN radio network produces and syndicates
Winston Cup, Busch Grand National and other races promoted by the Company and
others. MRN Radio also produces daily and weekly NASCAR racing programs.
BASIS OF PRESENTATION: On September 5, 1996 the Company's Board of
Directors approved a recapitalization of the Company to become effective
concurrently with the effectiveness of the Registration Statement filed on
September 6, 1996 with the Securities and Exchange Commission in connection
with the offering of 4,000,000 shares of the Company's newly authorized Class
A Common Stock (discussed below). The recapitalization modifies the Company's
authorized capital to include one million shares of Preferred Stock, eighty
million shares of Class A Common Stock and forty million shares of Class B
Common Stock. Pursuant to the recapitalization, all of the Company's existing
outstanding shares of Common Stock were automatically converted, on a
15-for-one basis, into the newly authorized shares of Class B Common Stock
and the shares of Common Stock previously held as treasury stock were
retired. Shareholders' equity and all share information and per share data
have been retroactively adjusted to give effect to the recapitalization and
related stock split.
Effective December 1, 1996, the Company will change its fiscal year-end
from August 31 to November 30. This will result in a three-month transition
period commencing September 1, 1996 and ending November 30, 1996.
F-7
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 1--DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES-(CONTINUED)
SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of International Speedway Corporation and its
wholly owned subsidiaries. All material intercompany accounts and
transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS: For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, bank demand deposit accounts and money
market accounts at investment firms. Cash and cash equivalents exclude
certificates of deposit, U.S. Treasury Notes and U.S. Treasury Bills,
regardless of original maturity.
INVESTMENTS (NOTE 3): The Company accounts for investments in accordance
with Statement of Financial Accounting Standard (SFAS) No. 115, "Accounting
for Certain Investments in Debt and Equity Securities".
The Company determines the appropriate classification of investments at
the time of purchase and reevaluates such designation as of each balance
sheet date. Debt securities are classified as held-to-maturity based on the
Company's positive intent and ability to hold the securities to maturity.
These securities are stated at cost. Interest and dividends are included in
interest income.
Short-term investments consist of certificates of deposit and securities
held-to-maturity which are due in one year or less. Certificates of deposit
are readily convertible to cash and are stated at cost.
Long-term investments consist of securities held-to-maturity which are due
after one year and are stated at cost.
INVENTORIES: Inventories of items for resale are stated at the lower of
cost, determined on the first-in, first-out basis, or market.
PROPERTY AND EQUIPMENT: Property and equipment, including improvements to
existing facilities, are stated at cost. Depreciation is provided for
financial reporting purposes using either the straight-line or accelerated
methods over estimated useful lives as follows:
Buildings, grandstands and tracks .... 5-34 years
Furniture and equipment ............... 3-20 years
EQUITY INVESTMENTS (NOTE 2): Equity investments represent a 50% ownership
interest in Watkins Glen International, Inc., (WGI) and a 20% ownership
interest in PSH Corp. These investments are accounted for using the equity
method of accounting. The Company's equity in the net income from the equity
investments is recorded as income with a corresponding increase in the
investment. Dividends received and amortization of the Company's investment
in excess of its prorata share of the underlying assets reduce the
investment. The Company recognizes the effects of transactions involving the
sale by an equity investee of its common stock as capital transactions (Note
2).
FAIR VALUE OF FINANCIAL INSTRUMENTS: The Company's financial instruments
consist of cash, short-and long-term investments, accounts receivable and
accounts payable. The carrying value of these financial instruments
approximates their fair value at August 31, 1996.
F-8
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 1--DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES-(CONTINUED)
INCOME TAXES (NOTE 4): Income taxes have been provided using the liability
method in accordance with SFAS No. 109, "Accounting for Income Taxes". Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will
be in effect when the differences are expected to reverse.
ADMISSION INCOME: Admission income and all race-related revenue is earned
upon completion of an event and is stated net of admission and sales taxes
collected. Refundable advance ticket sales and all race-related revenue on
future events are deferred until earned.
EARNINGS PER SHARE: Earnings per share have been computed on the weighted
average total number of common shares outstanding during the respective
years. Weighted average shares outstanding for the years ended August 31,
1994, 1995 and 1996, were 34,318,170; 34,378,830 and 34,440,525 shares,
respectively.
USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS: In 1995, the Financial
Accounting Standards Board released SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
which requires recognition of impairment of long-lived assets in the event
the net book value of such assets exceeds the future undiscounted cash flows
attributable to such assets. SFAS No. 121 is effective for fiscal years
beginning after December 15, 1995. Adoption of SFAS No. 121 is not expected
to have a material impact on the Company's financial position or results of
operations.
The Company accounts for its long-term incentive restricted stock plan in
accordance with provisions of Accounting Principles Board Opinion No. 25 (APB
25), "Accounting for Stock Issued to Employees". In October 1995, the
Financial Accounting Standards Board released SFAS No. 123, "Accounting for
Stock Based Compensation". SFAS No. 123 provides an alternative to APB 25 and
is effective for fiscal years beginning after December 15, 1995. The Company
has not made a final determination as to adoption of SFAS No. 123.
COMPARABILITY: For comparability, certain 1994 and 1995 amounts have been
reclassified where appropriate to conform with the presentation adopted in
1996.
NOTE 2--EQUITY INVESTMENTS
On November 22, 1995, Facility Investments, Inc., a newly formed
wholly-owned subsidiary of the Company, purchased 200 shares of the common
stock, representing 20% of the outstanding shares, of PSH Corp., a newly
formed Delaware corporation, for $14,975,000 in cash. Penske Corporation
F-9
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 2--EQUITY INVESTMENTS-(CONTINUED)
contributed 100% of the outstanding shares of Penske Speedway, Inc. and its
subsidiaries and the sum of $5,000,000 in cash for an indirect beneficial
interest in the remaining 80% of the outstanding shares of PSH Corp. The
Company's investment in PSH Corp. exceeded its share of the underlying net
assets by approximately $7.6 million. The excess is being amortized into
expense by decreasing the equity in income of equity investments using the
straight-line method over twenty years. The amount amortized was
approximately $288,000 for the year ended August 31, 1996.
Prior to March 22, 1996, PSH Corp. owned 85% of the outstanding shares of
Penske Motorsports, Inc.("PMI"). The remaining 15% of PMI represented by
convertible preferred stock, was owned by Kaiser Ventures Inc. ("Kaiser"),
for which Kaiser contributed all of the issued and outstanding stock of
Speedway Development Corporation, its wholly-owned subsidiary, which owned
approximately 460 acres of real property near Ontario, California.
Prior to March 22, 1996, PMI owned 100% of the outstanding shares of
Penske Speedway, Inc., which owned and operated Michigan International
Speedway, owned approximately 85% of Nazareth Speedway in Pennsylvania, 2% of
North Carolina Motor Speedway (Rockingham), 100% of a racing souvenir
retailer called Motorsports International Corp. and 100% of The California
Speedway Corporation, which is constructing The California Speedway on the
land formerly owned by Kaiser.
On March 22, 1996, PMI effected a recapitalization resulting in PMI
ownership of 100% of the outstanding shares of Michigan International
Speedway, Inc. (MIS) (f/k/a Penske Speedway, Inc.), Pennsylvania
International Raceway, Inc., The California Speedway Corporation, Motorsports
International Corp., Competition Tire West, Inc. and Competition Tire South,
Inc. MIS owns 2% of North Carolina Motor Speedway. Also pursuant to the
recapitalization, Kaiser's preferred stock was automatically converted into
shares of PMI common stock. After giving effect to the foregoing
transactions, but prior to the commencement of the offering described below,
the effective beneficial ownership of the common stock of PMI by PSH Corp.
was 84.1%.
Subsequent to the recapitalization, PMI completed an initial public
offering (IPO) by issuing 3,737,500 shares of common stock at a price to the
public of $24 per share. The proceeds to PMI, after underwriting discounts
and commissions, were approximately $83.1 million. After PMI's IPO, PSH Corp.
owns approximately 59.9% of PMI. As a result of the IPO, the Company recorded
an increase in its equity investment in PSH Corp. of approximately $7.6
million, and recorded corresponding increases in deferred income taxes and
additional paid-in capital of approximately $2.9 million and $4.7 million,
respectively.
The Company's 20% interest in PSH Corp. is accounted for using the equity
method of accounting and is included in equity investments on the
consolidated balance sheet, along with the Company's equity investment in
Watkins Glen International, Inc.("WGI"). The acquisition of the 20% interest
in PSH Corp. does not result in the direct or indirect acquisition of control
of the underlying assets, including businesses, indirectly controlled by PSH
Corp.
The Company's share of undistributed equity in the earnings from equity
investments included in retained earnings at August 31, 1995 and 1996 was
approximately $1,481,000 and $3,210,000, respectively.
F-10
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 2--EQUITY INVESTMENTS-(CONTINUED)
Summarized financial information for 1996 for the Company's affiliated
companies accounted for by the equity method (PSH Corp. and WGI) is as
follows (in thousands):
Current assets ........ $79,900
Noncurrent assets .... 97,100
Current liabilities .. 26,000
Noncurrent liabilities 12,500
Minority interests ... 52,900
Net revenues .......... 58,900
Operating income ...... 20,500
Net income ............ 7,500
In addition to the net income reflected above, PSH Corp. recorded its
share of the increased equity from the PMI initial public offering. As
described above, the Company has accounted for its pro rata share of the
increased equity from the PMI initial public offering, net of deferred taxes,
as additional paid-in capital.
NOTE 3--INVESTMENTS
The following is a summary of Investments:
<TABLE>
<CAPTION>
AUGUST 31, 1995
------------------------------------------------------
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ------------- ------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
HELD-TO-MATURITY SECURITIES
U.S. Treasury Bills ....... $ 9,457 $14 $-- $ 9,471
Municipal Securities ..... 10,974 3 57 10,920
---------- ------------- ------------- ------------
20,431 17 57 20,391
CERTIFICATES OF DEPOSIT ... 11,266 -- -- 11,266
---------- ------------- ------------- ------------
$31,697 $17 $57 $ 31,657
========== ============= ============= ============
</TABLE>
<TABLE>
<CAPTION>
AUGUST 31, 1996
-----------------------------------------------------
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ------------- ------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
HELD-TO-MATURITY SECURITIES
Municipal Securities ..... $6,983 $ 3 $ 3 $6,983
CERTIFICATES OF DEPOSIT ... 1,886 -- -- 1,886
--------- ------------- ------------- -------------
$8,869 $ 3 $ 3 $8,869
========= ============= ============= =============
</TABLE>
The cost and market values of municipal securities include accrued
investment income of approximately $91,000 and $27,000 at August 31, 1995 and
1996, respectively.
F-11
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 3--INVESTMENTS-(CONTINUED)
The cost and estimated market value of the held-to-maturity securities at
August 31, 1996, by contractual maturity, are shown below. Expected
maturities may differ from contractual maturities because the issuers of
certain securities have the right to prepay obligations.
AUGUST 31, 1996
--------------------------
ESTIMATED
COST MARKET VALUE
--------- ---------------
(IN THOUSANDS)
HELD-TO-MATURITY SECURITIES
Due in one year or less ................ $6,483 $6,486
Due after one year through three years -- --
Due after three years .................. 500 497
--------- ---------------
$6,983 $6,983
========= ===============
NOTE 4--FEDERAL AND STATE INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Substantially all of the deferred tax liability results from the excess of
tax accelerated depreciation over depreciation for financial reporting
purposes and from different bases in the equity investments for tax and
financial reporting purposes.
Significant components of the provision for income taxes for the years
ended August 31 are as follows:
1994 1995 1996
--------- ---------- ---------
(IN THOUSANDS)
Current tax expense:
Federal ................... $6,190 $ 8,274 $ 9,117
State ..................... 816 1,150 1,310
Deferred tax expense:
Federal ................... 1,438 1,369 1,341
State ..................... 218 261 195
--------- ---------- ---------
PROVISION FOR INCOME TAXES $8,662 $11,054 $11,963
========= ========== =========
The reconciliation of income tax computed at the federal statutory tax
rates to income tax expense is as follows:
F-12
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 4--FEDERAL AND STATE INCOME TAXES-(CONTINUED)
1994 1995 1996
--------------------- ---------------------- -----------------------
% OF % OF % OF
PRE-TAX PRE-TAX PRE-TAX
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
--------- ----------- ---------- ----------- ---------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income tax computed at federal
statutory rates ................ $8,129 35.0% $10,296 35.0% $11,075 35.0%
State income taxes, net of
federal
tax benefit .................... 670 2.9 884 3.0 977 3.1
Non-taxable share of income from
unconsolidated affiliates ...... (58) (.3) (100) (.3) (504) (1.6)
Officers' life insurance expense (4) .0 (2) .0 162 .5
Other, net ....................... (75) (.3) (24) (.1) 253 .8
--------- ---------- ---------- ---------- ---------- ----------
$8,662 37.3% $11,054 37.6% $11,963 37.8%
========= ========== ========== ========== ========== ==========
</TABLE>
NOTE 5--LINES OF CREDIT
The Company has two lines of credit with financial institutions totaling
$16 million expiring in December 1996. Subsequent to year-end, one of the
Company's $8 million lines of credit was renewed and will expire in September
1997.
NOTE 6--CAPITAL STOCK
The Company's authorized capital includes 80 million shares of Class A
Common Stock, par value $.01 ("Class A Common Stock"), 40 million shares of
Class B Common Stock, par value $.01 ("Class B Common Stock"), and one million
shares of Preferred Stock, par value $.01 (the "Preferred Stock"). The shares of
Class A Common Stock and Class B Common Stock are identical in all respects,
except for voting rights and certain dividend and conversion rights as described
below. Each share of Class A Common Stock entitles the holder to one-fifth (1/5)
vote on each matter submitted to a vote of the Company's shareholders and each
share of Class B Common Stock entitles the holder to one (1) vote on each such
matter, in each case including the election of directors. Holders of Class A
Common Stock and Class B Common Stock are entitled to receive dividends at the
same rate if and when declared by the Board of Directors out of funds legally
available therefrom, subject to the dividend and liquidation rights of any
Preferred Stock that may be issued and outstanding. Class A Common Stock has no
conversion rights. Class B Common Stock is convertible into Class A Common
Stock, in whole or in part, at any time and from time to time at the option of
the holder on the basis of one share of Class A Common Stock for each share of
Class B Common Stock converted. Each share of Class B Common Stock will also
automatically convert into one share of Class A Common Stock if, on the record
date for any meeting of the shareholders, the number of shares of Class B Common
Stock then outstanding is less than 10% of the aggregate number of shares of
Class A Common Stock and Class B Common Stock then outstanding.
The Board of Directors of the Company is authorized, without further
shareholder action, to divide any or all shares of the authorized Preferred
Stock into series and fix and determine the designations,
F-13
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 6--CAPITAL STOCK-(CONTINUED)
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 Board of Directors has not authorized any series of Preferred
Stock, and there are no plans, agreements or understandings for the
authorization or issuance of any shares of Preferred Stock.
No shares of Class A Common Stock or Preferred Stock are outstanding. See
also Note 1--Basis of Presentation.
NOTE 7--REACQUISITION OF PREVIOUSLY ISSUED COMMON STOCK
Shares of previously issued Class B Common Stock which have been
reacquired are classified as authorized but unissued and are reflected as a
reduction in the number of shares issued. Accordingly, at August 31, 1994,
1995, and 1996 Class B Common Stock outstanding has been reduced by the par
value of 43,260; 13,155 and 74,160 shares, respectively, reacquired by the
Company during each of those years. In addition, the prorated portion of
additional paid-in capital attributable to these shares was charged as a
reduction of that account, with the remaining excess of the cost over par
value of the shares reacquired charged as a reduction of retained earnings.
NOTE 8--COMMITMENTS AND CONTINGENCIES
A. In 1985, the Company established a salary incentive plan designed to
qualify under Section 401(k) of the Internal Revenue Code. All employees who
have completed 1,000 hours and 12 months continuous service are eligible to
participate in the plan. The Company makes monthly contributions (subject to
certain limits) to a savings trust to match employee contributions. The level
of the Company matching contribution depends upon the amount of the employee
contribution. Employees become 100% vested upon entrance to the plan.
The Company's contribution expense for the plan was approximately
$211,000, $228,000, and $307,000 for the years ended August 31, 1994, 1995
and 1996, respectively.
B. The Company is self-insured for its group health plan. The Plan
provides medical benefits for all eligible full-time employees who have
completed 30 days of service, and their eligible dependents. A reserve has
been established to accrue estimated claims on a monthly basis.
In order to limit the Company's liability under the Plan, a reinsurance
policy, purchased jointly with NASCAR, has been provided for specific excess
losses and aggregate excess losses. The Company's maximum liability is
limited to approximately $638,000 for the twelve month period ending December
31, 1996.
The total expense charged against operations for the years ended August
31, 1994, 1995 and 1996 for actual and estimated claims was approximately
$396,000, $469,000 and $419,000, respectively.
C. The estimated cost to complete construction in progress at August 31,
1996 is approximately $23.5 million.
F-14
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 9--RELATED PARTY DISCLOSURES AND TRANSACTIONS
All of the racing events that take place during the Company's fiscal year
are sanctioned by various racing organizations such as the Sports Car Club of
America (SCCA), Automobile Racing Club of America (ARCA), American
Motorcyclist Association (AMA), the Championship Cup Series (CCS),
International Motor Sports Association (IMSA), World Karting Association
(WKA), Federation Internationale de l'Automobile (FIA), Federation
Internationale Motocycliste (FIM), and the National Association for Stock Car
Auto Racing, Inc. (NASCAR). NASCAR, which sanctions some of the Company's
principal racing events, is a member of the France Family Group which
controls in excess of 60% of the outstanding stock of the Company and some
members of which serve as directors and officers. Standard NASCAR sanction
agreements require racetrack operators to pay sanction fees and prize and
point fund monies for each sanctioned event conducted. The prize and point
fund monies are distributed by NASCAR to participants in the events. Prize
and point fund monies paid by the Company to NASCAR for disbursement to
competitors totaled approximately $8.2, $10.1 and $11.6 million for the years
ended August 31, 1994, 1995 and 1996, respectively.
In October 1995 the Company entered into collateral assignment
split-dollar insurance agreements covering the lives of William C. France and
James C. France and their respective spouses. Pursuant to the agreements, the
Company will advance the annual premiums of approximately $1,205,000 each
year for a period of eight years. Upon surrender of the policies or payment
of the death benefits thereunder, the Company is entitled to repayment of an
amount equal to the cumulative premiums previously paid by the Company. The
Company may cause the agreements to be terminated and the policies
surrendered at any time after the cash surrender value of the policies equals
the cumulative premiums advanced under the agreements. The Company recorded a
net insurance expense of approximately $450,000 representing the excess of
the premiums paid over the increase in cash surrender value of the policies
associated with these agreements for the year ended August 31, 1996.
Poe & Brown, Inc., the servicing agent for the split-dollar insurance
agreements, received a commission from an insurance company for its
participation in the transactions. J. Hyatt Brown, President and Chief
Executive Officer of Poe & Brown, Inc., is a Director of the Company.
NOTE 10--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes for fiscal years ended August 31, 1994, 1995
and 1996 is as follows:
1994 1995 1996
--------- --------- ---------
(IN THOUSANDS)
INCOME TAXES PAID $7,132 $9,806 $10,763
========= ========= =========
See Note 2 for discussion of a non-cash equity investment transaction.
NOTE 11--LONG-TERM INCENTIVE RESTRICTED STOCK PLAN
In November 1993, the Company's Board of Directors and a majority of the
Company shareholders approved a long-term incentive restricted stock plan for
certain officers and managers of the Company. Under the Plan, up to 750,000
shares of the Company's Class B Common Stock were authorized to be granted as
restricted stock at no cost to Plan participants. Shares awarded under the
Plan vest at the rate of 50% of each award on the third anniversary of the
award date and the remaining 50% on the
F-15
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 11--LONG-TERM INCENTIVE RESTRICTED STOCK PLAN-(CONTINUED)
fifth anniversary of the award date. Shares awarded under the Plan generally
are subject to forfeiture in the event of termination of employment prior to
the vesting dates. The Plan participants own the shares and may vote and
receive dividends, but are subject to restrictions under the plan.
Restrictions include the prohibition of the sale or transfer of the shares
during the period prior to vesting of the shares. The Company also has a
right of first refusal to purchase any shares of stock issued under the Plan
which are offered for sale.
On January 1, 1994, 1995 and 1996, a total of 117,615, 70,410 and 102,075
restricted shares of the Company's Class B Common Stock, respectively, were
awarded to certain officers and managers. The market value of shares on
January 1, 1994, 1995 and 1996 amounted to approximately $760,000, $489,000
and $1,600,000, respectively, and has been recorded as "Unearned
compensation--restricted stock", which is shown as a separate component of
shareholders' equity in the accompanying consolidated balance sheets. The
unearned compensation is being amortized over the vesting period of the
shares. The total expense charged against operations during the years ended
August 31, 1994, 1995 and 1996 was approximately $135,000, $318,000 and
$606,000, respectively.
In September 1996, the Company and the Board of Directors adopted a new
Long-Term Incentive Plan (the "1996 Plan") for certain employees and
consultants of the Company. Under the 1996 Plan up to 1,000,000 shares of
Class A Common Stock may be granted as stock options (incentive and
nonstatutory), stock appreciation rights (SARS) and restricted stock. No
grants have been made under the 1996 Plan.
NOTE 12--QUARTERLY DATA (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
-----------------------------------------------------------
NOVEMBER 30, FEBRUARY 28, MAY 31, AUGUST 31,
1994 1995 1995 1995
--------------- --------------- ---------- ---------------
<S> <C> <C> <C> <C>
Total revenues ........... $ 6,694 $35,022 $21,621 $18,835
Operating Income (loss) . (1,607) 18,942 6,091 4,270
Net income (loss) ........ (871) 11,672 3,653 3,909
Earnings (loss) per share (.03) .34 .11 .11
</TABLE>
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
-----------------------------------------------------------
NOVEMBER 30, FEBRUARY 29, MAY 31, AUGUST 31,
1995 1996 1996 1996
--------------- --------------- ---------- ---------------
<S> <C> <C> <C> <C>
Total revenues ........... $ 8,542 $40,277 $24,176 $23,047
Operating Income (loss) . (1,474) 20,338 6,230 4,237
Net income (loss) ........ (1,020) 12,089 3,817 4,795
Earnings (loss) per share (.03) .35 .11 .14
</TABLE>
The Company derives most of its income from event admissions and related
revenue from a limited number of NASCAR-sanctioned races. As a result, the
Company's business has been, and is expected to remain, highly seasonal based
on the timing of major race events. Historically, the Company has incurred
net losses in the fiscal quarter ending in November, and achieved its highest
net income in the fiscal quarter ending in February.
F-16
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1994, 1995 AND 1996-(CONTINUED)
NOTE 13--SUBSEQUENT EVENT:
On September 16, 1996, the Company purchased land and buildings in close
proximity to its Daytona facility for approximately $8 million. The purchase
was financed with an existing line of credit at an interest rate based on the
one year LIBOR rate plus .75% (6.9% at September 16, 1996) with interest
payable monthly commencing October 1996. Principal is payable 30 days after
demand.
F-17
<PAGE>
Inside Back Cover Photographs:
Top Photograph: Aerial photograph of
Darlington Raceway
Bottom Photograph: Aerial photograph of
Watkins Glen International Road course
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY BY ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THOSE SECURITIES TO WHICH IT RELATES OR AN OFFER TO
SELL THOSE TO WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFERS IN SUCH STATE, OR SOLICITATION OF, ANY PERSON IN
ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
- -----------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
---------
Prospectus Summary .................... 3
Risk Factors .......................... 6
The Company ........................... 11
Use of Proceeds ....................... 11
Dividend Policy ....................... 11
Capitalization ........................ 12
Selected Financial Data ............... 13
Management's Discussion and
Analysis of Financial Condition
and Results of Operations ............. 14
NASCAR ................................ 20
Business .............................. 24
Management ............................ 34
Certain Transactions .................. 38
Principal Shareholders ................ 39
Description of Capital Stock .......... 41
Shares Eligible for Future Sale ...... 44
Underwriting .......................... 45
Legal Matters ......................... 46
Experts ............................... 46
Available Information ................. 47
Incorporation of Certain Documents
by Reference .......................... 47
Index to Financial Statements ......... F-1
4,000,000 Shares
[ISC LOGO]
INTERNATIONAL
SPEEDWAY
CORPORATION
CLASS A COMMON STOCK
- -----------------------------------------------------------------------------
P R O S P E C T U S
, 1996
- -----------------------------------------------------------------------------
SMITH BARNEY INC.
RAYMOND JAMES &
ASSOCIATES, INC.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses payable by it in connection with the
offering described in this registration statement (other than underwriting
discounts and commissions) will be as follows:
Securities and Exchange Commission Registration Fee $ 25,379
NASD filing fee .................................... 7,860
Nasdaq National Market listing fee ................. 32,500
Printing expenses .................................. 90,000
Accounting fees and expenses ....................... 90,000
Legal fees and expenses ............................ 200,000
Fees and expenses (including legal fees) for
qualifications under state securities laws ....... 10,000
Registrar and Transfer Agent's fees and expenses .. 2,500
Miscellaneous ...................................... 41,761
----------
Total ............................................. $500,000
==========
--------
All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and the Nasdaq National Market listing fee are estimated.
The Company intends to pay all expenses of registration with respect to
shares being offered hereby, with the exception of underwriting discounts and
commissions.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Florida law to indemnify its directors and
officers and officers to the extent provided in such statute. The Articles
provide that the Company shall indemnify its directors to the fullest extent
permitted by law either now or hereafter. The Company has also entered into
an agreement with each of its directors and certain of its officers wherein
it has agreed to indemnify each of them to the fullest extent permitted by
law.
At present, there is no pending litigation or proceeding involving a
director or officer of the Company as to which indemnification is being
sought, nor is the Company aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement, the Underwriters have agreed to indemnify the
directors, officers and controlling persons of the Company against certain
civil liabilities that may be incurred in connection with this offering,
including certain liabilities under the Securities Act.
Section 607.0850 of the Florida Business Corporation Act permits a Florida
corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the
corporation in related capacities) for liabilities, including legal expenses,
arising by reason of service in such capacity if such person shall have acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and in any criminal proceeding if
such person had no reasonable cause to believe his conduct was unlawful.
However, in the case of actions brought by or in the right of the
corporation, no indemnification may be made with respect to any matter as to
which such director or officer shall have been adjudged liable, except in
certain limited circumstances.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Articles of Incorporation*
3.2 Amended and Restated Bylaws*
4.1 Specimen Class A Common Stock Certificate*
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as to the validity of the Class
A Common Stock to be registered*
15.1 Letter of Ernst & Young LLP re unaudited interim financial information*
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (included in its opinion filed
as Exhibit 5.1)*
23.2 Consent of Ernst & Young LLP*
24.1 Reference is made to the Signatures section of this Registration Statement as initially filed for the
Power of Attorney contained therein.
24.2 Secretary's Certificate as to resolutions of Board of Directors*
27 Financial Data Schedule*
- --------
<FN>
* Filed herewith.
</FN>
</TABLE>
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) For the purpose of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Daytona Beach, State
of Florida, on October 10, 1996.
INTERNATIONAL SPEEDWAY CORPORATION
By: /s/ LESA D. KENNEDY
----------------------------------
Lesa D. Kennedy
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM C. FRANCE* Chairman of the Board, Chief October 10, 1996
- ---------------------- Executive Officer and Director
William C. France (principal executive officer)
/s/ SUSAN G. SCHANDEL Treasurer and Chief Financial October 10, 1996
- ---------------------- Officer (principal financial officer)
Susan G. Schandel
/s/ DANIEL W. HOUSER Controller (principal accounting October 10, 1996
- ---------------------- officer)
Daniel W. Houser
/s/ JAMES C. FRANCE President, Chief Operating Officer October 10, 1996
- ---------------------- and Director
James C. France
/s/ LESA D. KENNEDY Executive Vice President October 10, 1996
- ---------------------- and Director
Lesa D. Kennedy
/s/ H. LEE COMBS Senior Vice President-- October 10, 1996
- ---------------------- Operations and Director
H. Lee Combs
/s/ JAMES H. FOSTER Senior Vice President-- October 10, 1996
- ---------------------- Special Projects and Director
James H. Foster
/s/ ROBERT E. SMITH Vice President-- October 10, 1996
- ---------------------- Administration and Director
Robert E. Smith
/s/ J. HYATT BROWN* Director October 10, 1996
- ----------------------
J. Hyatt Brown
/s/ JOHN R. COOPER* Director October 10, 1996
- ----------------------
John R. Cooper
/s/ ROBERT W. EMERICK* Director October 10, 1996
- ----------------------
Robert W. Emerick
II-3
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ BRIAN Z. FRANCE* Director October 10, 1996
- ----------------------
Brian Z. France
/s/ CHRISTY F. HARRIS* Director October 10, 1996
- ----------------------
Christy F. Harris
/s/ RAYMOND K. MASON, JR.* Director October 10, 1996
- -------------------------
Raymond K. Mason, Jr.
/s/ LLOYD E. REUSS* Director October 10, 1996
- -------------------------
Lloyd E. Reuss
/s/ CHAPMAN ROOT, II* Director October 10, 1996
- -------------------------
Chapman Root, II
/s/ THOMAS W. STAED* Director October 10, 1996
- -------------------------
Thomas W. Staed
</TABLE>
- -------------
*BY: /S/ GLENN R. PADGETT
- --------------------------
Glenn R. Padgett,
Attorney-in-fact
II-4
4,000,000 Shares
INTERNATIONAL SPEEDWAY CORPORATION
Common Stock
UNDERWRITING AGREEMENT
November , 1996
SMITH BARNEY INC.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the Several Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
International Speedway Corporation, a Florida corporation (the
"Company"), proposes to issue and sell an aggregate of 4,000,000 shares (the
"Firm Shares") of its Class A common stock, $0.01 par value per share (the
"Common Stock"), to the several Underwriters named in Schedule I hereto (the
"Underwriters"). The Company and the person named in Schedule II hereto (the
"Selling Shareholder") also propose to sell to the Underwriters, upon the terms
and conditions set forth in Section 2 hereof, up to an additional 600,000 shares
(the "Additional Shares") of Common Stock. The Company and the Selling
Shareholder are hereinafter sometimes referred to as the "Sellers". The Firm
Shares and the Additional Shares are hereinafter collectively referred to as the
"Shares".
The Company and the Selling Shareholder wish to confirm as follows
their respective agreement with you (the "Representatives") and the other
several Underwriters on whose behalf you are acting, in connection with the
several purchases of the Shares by the Underwriters. (As used herein, the term
"you" shall mean the Representatives of the several Underwriters.)
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (File No. 333-11541) under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the
1
<PAGE>
registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the registration statement as amended by said
post-effective amendment. If an abbreviated registration statement is prepared
and filed with the Commission in accordance with Rule 462(b) under the Act (an
"Abbreviated Registration Statement"), the term "Registration Statement" as used
in this Agreement includes the Abbreviated Registration Statement. The term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the registration statement at the time of
the initial filing of the registration statement with the Commission, and as
such prospectus shall have been amended from time to time prior to the date of
the Prospectus. Any reference in this Agreement to the registration statement,
the Registration Statement, any Prepricing Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus, or any amendment or
supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $_____ per Share (the
"purchase price per share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof).
The Company and the Selling Shareholder also agree, subject to all the
terms and conditions set forth herein, to sell to the Underwriters, and, upon
the basis of the
2
<PAGE>
representations, warranties and agreements of the Company and the Selling
Shareholder herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the Company
and the Selling Shareholder, at the purchase price per share, pursuant to an
option (the "over-allotment option") which may be exercised at any time and from
time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 550,000 Additional Shares from the
Company and up to an aggregate of 50,000 shares from the Selling Shareholder
listed in Schedule II hereto. Additional Shares may be purchased only for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The number of Additional Shares which the Underwriters elect to
purchase upon any exercise of the over-allotment option shall be provided, in
the first instance, by the Selling Shareholder and, in the event that the total
number of Additional Shares exceeds 50,000, by the Company. Upon any exercise of
the over-allotment option, each Underwriter, severally and not jointly, agrees
to purchase from the Company and the Selling Shareholder the number of
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be sold by the Company and the Selling Shareholder as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares.
Certificates in transferable form for any Additional Shares which the
Selling Shareholder agrees to sell pursuant to this Agreement have been placed
in custody with (the "Custodian") for delivery under this Agreement pursuant to
a Custody Agreement and Power of Attorney (the "Custody Agreement") executed by
the Selling Shareholder. The Selling Shareholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters and the Company, (ii)
the arrangements made by the Selling Shareholder for such custody are, except as
specifically provided in the Custody Agreement, irrevocable, and (iii) the
obligations of the Selling Shareholder hereunder and under the Custody Agreement
shall not be terminated by any act of such Selling Shareholder or by operation
of law, whether by the death or incapacity of the Selling Shareholder or the
occurrence of any other event. If the Selling Shareholder shall die or be
incapacitated, or if any other event shall occur before the delivery of the
Shares hereunder, certificates for the Shares of the Selling Shareholder shall
be delivered to the Underwriters in accordance with the terms and conditions of
this Agreement and the Custody Agreement as if such death or incapacity or other
event had not occurred, regardless of whether or not any Underwriter shall have
received notice of such death, incapacity or other event.
3. TERMS OF PUBLIC OFFERING. The Sellers have been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective, as in your judgment is advisable, and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of, and payment for, the Firm Shares shall be made at the office
of Smith Barney Inc., 388
3
<PAGE>
Greenwich Street, New York, NY 10013, at 10:00 A.M., New York City time, on
___________, 1996 (the "Closing Date"). The place of closing for the Firm Shares
and the Closing Date may be varied by agreement between you and the Company.
Delivery to the Underwriters of, and payment for, any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the Option
Closing Date for such Additional Shares may be varied by agreement among you,
the Selling Shareholder and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to accounts
specified in writing by the Company and the Selling Shareholder.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto or any Abbreviated Registration Statement to be declared effective
before the offering of the Shares may commence, the Company will endeavor to
cause the Registration Statement or such post-effective amendment to become
effective as soon as possible and will advise you promptly and, if requested by
you, will confirm such advice in writing, when the Registration Statement or
such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of, or a supplement to, the Registration Statement, any Prepricing
Prospectus or the Prospectus, or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact
4
<PAGE>
made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue, or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge (i) three
signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits to the registration statement, (ii) such number of conformed copies of
the registration statement as originally filed and of each amendment thereto,
but without exhibits, as you may request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may request, and (iv) three
copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
registration statement or make any amendment or supplement to the prospectus or,
prior to the end of the period of time referred to in the first sentence in
subsection (f) below, file any document which, upon filing becomes an
Incorporated Document, of which you shall not previously have been advised or to
which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Company
consents to the use of each Prepricing Prospectus so furnished by the Company,
in accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the several
Underwriters and by dealers to whom Shares may be sold, prior to the date of the
Prospectus.
(f) As soon after the execution and delivery of this Agreement
as possible, and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales of Shares by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that, in the judgment of the
Company, or in the reasonable opinion of counsel for the Underwriters, is
required to be set
5
<PAGE>
forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of the
several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may designate, and
will file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(i) During the period of three years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 12 hereof or by notice given by you terminating
this Agreement pursuant to Section 12 or Section 13 hereof), or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or the Selling Shareholder to comply with the
terms or fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Representatives for all out-of-pocket expenses (including all fees
and expenses of counsel for the Underwriters) incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
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<PAGE>
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
you of the time and manner of such filing.
(m) Except as provided in this Agreement, and except for the
issuance of shares and options pursuant to the Company's 1994 Long Term
Incentive Plan and/or 1996 Long-Term Incentive Plan, the Company will not sell,
contract to sell or otherwise dispose of any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or grant any
options or warrants to purchase Common Stock, for a period of 180 days after the
date of the Prospectus, without the prior written consent of Smith Barney Inc.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of the
Company's current officers and directors and each of its stockholders designated
by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the Common
Stock registered under the Exchange Act and the Shares listed, subject to notice
of issuance, on the Nasdaq National Market on or before the Closing Date.
6. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder agrees with the several Underwriters as follows:
(a) Such Selling Shareholder will cooperate to the extent
necessary to cause the registration statement or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Such Selling Shareholder will pay all Federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the Selling
Shareholder to the Underwriters.
(c) Such Selling Shareholder will do or perform all things
required to be done or performed by the Selling Shareholder prior to the Closing
Date or any Option Closing Date, as the case may be, to satisfy all conditions
precedent to the Selling Shareholder's delivery of the Shares pursuant to this
Agreement.
(d) Such Selling Shareholder has executed or will execute a
"lock-up" letter as provided in Section 5(n) above and will not sell, contract
to sell or otherwise dispose of any Common Stock, except for the sale of Shares
to the Underwriters pursuant to this Agreement, prior to the expiration of 180
days after the date of the Prospectus, without the prior written consent of
Smith Barney Inc.
7
<PAGE>
(e) Except as stated in this Agreement and in the Prepricing
Prospectus and the Prospectus, such Selling Shareholder will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(f) Such Selling Shareholder will advise you promptly, and if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any change in information relating to such Selling Shareholder
or the Company, or any new information relating to the Company or relating to
any matter stated in the Prospectus or any amendment or supplement thereto,
which comes to the attention of such Selling Shareholder that suggests that any
statement made in the Registration Statement or the Prospectus (as then amended
or supplemented, if amended or supplemented) is or may be untrue in any material
respect or that the Registration Statement or Prospectus (as then amended or
supplemented, if amended or supplemented) omits or may omit to state a material
fact or a fact necessary to be stated therein in order to make the statements
therein not misleading in any material respect, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented, if amended or
supplemented) in order to comply with the Act or any other law.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The Commission
has not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes effective and
also in such form as it may be when any post-effective amendment thereto shall
become effective and the Prospectus and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Act, complied or will
comply in all material respects with the provisions of the Act and will not at
any such times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon, and in conformity with, information relating
to any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the
8
<PAGE>
rules and regulations thereunder, and any further Incorporated Documents so
filed will, when they are filed, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder; no
such Incorporated Document when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed), contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and no such further Incorporated Document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) All the outstanding shares of Common Stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; the Shares to be issued and
sold by the Company have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any preemptive
or similar rights; and the capital stock of the Company conforms in all material
respects to the description thereof in the Registration Statement and the
Prospectus.
(e) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Florida with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
(f) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report on Form
10-K which is incorporated by reference into the Registration Statement. Each
Subsidiary is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not, singly or in the aggregate, have a Material
Adverse Effect; all the outstanding shares of capital stock of each of the
Subsidiaries (other than Watkins Glen International, Inc. ("Watkins Glen"), have
been duly authorized and validly issued, are fully paid and nonassessable, and
are owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance. The Company directly owns fifty percent (50%) of
the outstanding shares of capital stock of Watkins Glen (the "Watkins Glen
Shares"). The Watkins Glen Shares have been duly authorized and validly issued,
are fully paid and nonassessable, and are free and clear of any lien, adverse
claim, security interest, equity or other encumbrance, except for the sale
9
<PAGE>
restrictions set forth in the Shareholders' Agreement by and between Corning
Enterprises Inc., Watkins Glen and the Company dated as of September 30, 1983,
as amended and restated August 12, 1988.
(g) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be described
in the Registration Statement or the Prospectus but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required by the Act or
the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries, or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries, other than
violations that, singly or in the aggregate, would not have a Material Adverse
Effect, or (iii) in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound, other
than defaults that, singly or in the aggregate, would not have a Material
Adverse Effect.
(i) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby: (i)
requires any consent, approval, authorization or other order of, or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act and the Exchange Act and compliance
with the securities or Blue Sky laws of various jurisdictions, and except for
the Nasdaq Stock Market's approval of the listing of the Shares on the Nasdaq
National Market and the clearance of the underwriting terms as required by the
NASD's Conduct Rules), or (ii) conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries; or (iii) conflicts or will conflict with, or
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, other than conflicts that, singly or in the aggregate,
will not have a Material Adverse Effect, or (iv) violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, other than violations that, singly or in the aggregate, would not
have a Material Adverse Effect, or (v) will result in the creation or imposition
of any lien, charge or
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encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound, or to which any of the
property or assets of any of them is subject.
(j) Ernst & Young LLP, the accountants who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants as required by the Act.
(k) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement thereto), present fairly, in
all material respects, the consolidated financial position, results of
operations and changes in financial position of the Company and the Subsidiaries
on the basis stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such financial statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are, in
all material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company and the
Subsidiaries.
(l) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except to the extent enforceability may be limited by laws relating to
creditors' rights generally or by general equitable principles, and except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws.
(m) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, (ii) there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or (iii) there has not been any other change
or any development involving or which may reasonably be expected to have, singly
or in the aggregate, a Material Adverse Effect.
(n) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the Prospectus
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Registration Statement
and the Prospectus or in a document filed as an exhibit to the
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Registration Statement, and all the property described in the Prospectus as
being held under lease by each of the Company and the Subsidiaries is held by it
under valid, subsisting and enforceable leases.
(o) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute, any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(p) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its business in the manner described in the Prospectus, except where the
failure to have such Permits, singly or in the aggregate, would not have a
Material Adverse Effect; and the Company and each of the Subsidiaries has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject in each case
to such qualification as may be set forth in the Prospectus and except to the
extent that revocation or termination would not, singly or in the aggregate,
have a Material Adverse Effect.
(q) (i) All policies of insurance and fidelity or surety bonds
insuring the Company or any of the Subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect; (ii) the
Company and the Subsidiaries are in compliance with the terms of such policies
and instruments in all material respects; and (iii) there are no material claims
by the Company or any of the Subsidiaries under any such policy or instrument as
to which any insurance company is denying liability or defending under a
reservation of rights clause.
(r) To the best knowledge of the Company, no labor problem
exists with its employees or with employees of the Subsidiaries or is imminent
that could reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or the Subsidiaries'
principal suppliers, contractors or customers that could reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect.
(s) The Company and the Subsidiaries are (i) in compliance
with any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
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licenses or other approvals would not, singly or in the aggregate, have a
Material Adverse Effect. Except as set forth in the Prospectus, neither the
Company nor any of the Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended ("CERCLA").
(t) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) Neither the Company, nor any of its Subsidiaries, nor, to
the Company's knowledge, any employee or agent of the Company or any Subsidiary
has made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
(v) The Company and each of the Subsidiaries have filed all
tax returns required to be filed (other than certain state or local tax returns,
as to which the failure to file, singly or in the aggregate, would not have a
Material Adverse Effect), which returns are complete and correct, and neither
the Company nor any Subsidiary is in default in the payment of any taxes which
were payable pursuant to said returns or any assessments with respect thereto,
other than defaults that, singly or in the aggregate, would not have a Material
Adverse Effect.
(w) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company as a result of the filing of the registration statement or consummation
of the transactions contemplated by this Agreement.
(x) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectus as being owned by them, or any of them, or
necessary for the conduct of their respective businesses, and the Company is not
aware of any claim to the contrary or any challenge by any other person to the
rights of the Company and the Subsidiaries with respect to the foregoing.
(y) The Company has complied with all provisions of Florida
Statutes 517.075, relating to issuers doing business with Cuba.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
Each Selling Shareholder represents and warrants to each Underwriter that:
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(a) Such Selling Shareholder now has, and on any Option
Closing Date will have, valid and marketable title to the Shares to be sold by
such Selling Shareholder, free and clear of any lien, claim, security interest
or other encumbrance, including, without limitation, any restriction on
transfer.
(b) Such Selling Shareholder now has, and on any Option
Closing Date will have, full legal right, power and authorization, and any
approval required by law, to sell, assign transfer and deliver such Shares in
the manner provided in this Agreement, and upon delivery of and payment for such
Shares hereunder, the several Underwriters will acquire valid and marketable
title to such Shares free and clear of any lien, claim, security interest, or
other encumbrance.
(c) This Agreement and the Custody Agreement have been duly
authorized, executed and delivered by or on behalf of such Selling Shareholder
and are the valid and binding agreements of such Selling Shareholder enforceable
against such Selling Shareholder in accordance with their terms, except to the
extent enforceability may be limited by laws relating to creditors' rights
generally or by general equitable principles, and except as rights to indemnity
and contribution hereunder may be limited by federal or state securities laws.
(d) Neither the execution and delivery of this Agreement or
the Custody Agreement by or on behalf of such Selling Shareholder, nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Shareholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Shares), or conflicts or will conflict with or constitutes
or will constitute a breach of, or default under, or violates or will violate,
any agreement, indenture or other instrument to which such Selling Shareholder
is a party or by which such Selling Shareholder is or may be bound, or to which
any of such Selling Shareholder's property or assets is subject, or any statute,
law, rule, regulation, ruling, judgment, injunction, order or decree applicable
to such Selling Shareholder or to any property or assets of such Selling
Shareholder.
(e) The Registration Statement and the Prospectus, insofar as
they relate to such Selling Shareholder, do not and will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(f) Such Selling Shareholder does not have any knowledge or
any reason to believe that the Registration Statement or the Prospectus (or any
amendment or supplement thereto) contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
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(g) The representations and warranties of such Selling
Shareholder in the Custody Agreement are, and on the Closing Date and any Option
Closing Date will be, true and correct.
(h) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares, except for the lock-up arrangements
described in the Prospectus.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition to
any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have failed
to assume the defense and employ
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counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying parties and such Underwriter or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with any
one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Smith Barney Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify and
hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any controlling person of any Underwriter from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholder, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through you
expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against the Company, any of its directors or
officers, any such person who controls the Company, or any Selling Shareholder
based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof, such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, the Selling Shareholder, and any such
controlling person shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which any Underwriter may otherwise have.
(d) If the indemnification provided for in this
Section 9 is unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages,
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liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholder, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Shares, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholder, on the one hand, and the Underwriters,
on the other, in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Shareholder, on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Shareholder bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus; provided, however, that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company, the Selling
Shareholder or the Underwriters from the offering of the Shares shall include
the net proceeds (before deducting expenses) received by the Company and the
Selling Shareholder, and the underwriting discounts and commissions received by
the Underwriters, from the sale of such Additional Shares, in each case computed
on the basis of the respective amounts set forth in the notes to the table on
the cover page of the Prospectus. The relative fault of the Company and the
Selling Shareholder, on the one hand, and the Underwriters, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Shareholder, on the one hand, or by the Underwriters, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company, the Selling Shareholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the Underwriters
were treated as one entity for such purpose), or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to the
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respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 12
hereof) and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 9 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholder set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers,
the Selling Shareholder or any person controlling the Company, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto (or an Abbreviated Registration Statement) to be declared effective
before the offering of the Shares may commence, the Registration Statement or
such post-effective amendment or Abbreviated Registration Statement shall have
become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act shall
have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the registration statement, the
prospectus or otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred: (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your reasonable
opinion, as Representatives of the several Underwriters, would materially
adversely affect the
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market for the Shares, or (ii) any event or development relating to or involving
the Company, or any officer or director of the Company, or any Selling
Shareholder which makes any statement made in the Prospectus untrue or which, in
the reasonable opinion of the Company and its counsel or the Underwriters and
their counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the Act or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your reasonable opinion, as Representatives of
the several Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., counsel for the
Company and the Selling Shareholder, dated the Closing Date and addressed to
you, as Representatives of the several Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws of the State
of Florida with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and, to
the knowledge of such counsel, is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have,
singly or in the aggregate, have a Material Adverse Effect;
(ii) Each of the Subsidiaries is a corporation
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization, with full corporate power and authority to
own, lease, and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto); and all the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable, and, to the knowledge of such counsel, except as disclosed in
the Prospectus, are owned by the Company directly, or indirectly through one of
the other Subsidiaries, free and clear of any security interest, lien, adverse
claim, equity or other encumbrance;
(iii) To the knowledge of such counsel, the
Company and each of the Subsidiaries has all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental regulatory officials and bodies to own
their respective properties and to conduct their respective businesses as now
being conducted, as described in the Prospectus, except where the failure so to
have any such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not have a
Material Adverse Effect;
(iv) The authorized capital stock of the Company
consists of 5 million shares of Common Stock, par value $.10 per share, 80
million shares of Class A Common Stock, par value $.01 per share, 40 million
shares of Class B Common Stock, par value $.01
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per share, and one million shares of Preferred Stock, par value $.01 per share;
and the authorized Class A Common Stock, Class B Common Stock and Preferred
Stock of the Company conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(v) Such counsel does not know of any
commitment, plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company;
(vi) To the knowledge of such counsel, there is
no holder of any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, the Shares or the right to
have any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
registration statement, to require registration under the Act of any shares of
Common Stock or other securities of the Company.
(vii) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any statutory preemptive, or to the knowledge of such counsel, similar rights
that entitle or will entitle any person to acquire any Shares upon the issuance
thereof by the Company;
(viii) The form of certificates for the Shares
conforms to the requirements of the Florida Business Corporation Act;
(ix) Based solely on telephonic, verbal
confirmation provided to such counsel by the staff of the Commission, the
Registration Statement and all post-effective amendments, if any, have become
effective under the Act and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);
(x) The Company has corporate power and
authority to enter into this Agreement and to issue, sell and deliver the Shares
to be sold by it to the Underwriters as provided herein, and this Agreement has
been duly authorized, executed and delivered by the Company and is a valid,
legal and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by general
equitable principles;
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(xi) Neither the Company nor any of the
Subsidiaries is in violation of its respective certificate or articles of
incorporation or bylaws, or other organizational documents, or to the knowledge
of such counsel, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness, except as may be disclosed in the Prospectus;
(xii) Neither the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement, compliance by
the Company with the provisions hereof, nor consummation by the Company of the
transactions contemplated hereby (i) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, or other organizational documents, of
the Company or any of the Subsidiaries or, to the knowledge of such counsel and
except to the extent that any conflict, breach or default, singly or in the
aggregate, would not have a Material Adverse Effect, any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties is bound
that is an exhibit to the Registration Statement or to any Incorporated
Document, or is known to such counsel after reasonable inquiry, or (ii) to the
knowledge of such counsel, will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
the Subsidiaries, nor (iii) will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree known to
such counsel after reasonable inquiry, applicable to the Company, the
Subsidiaries or any of their respective properties, the violation of which,
singly or in the aggregate, would have a Material Adverse Effect;
(xiii) No consent, approval, authorization or
other order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the Act
and the Exchange Act or such as may be required under state securities or Blue
Sky laws governing the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as contemplated by this
Agreement, and such counsel need not express any opinion regarding such state
securities or Blue Sky laws;
(xiv) The Company and the Subsidiaries have
various registered and common law trademark rights for the trademarks and
service marks described in the Prospectus and counsel is not aware of any claim
to the contrary or any challenge by any other person to the rights of the
Company and the Subsidiaries with respect to the foregoing;
(xv) This Agreement and the Custody Agreement
have each been duly executed and delivered by or on behalf of the Selling
Shareholder and are valid and binding agreements of the Selling Shareholder
enforceable against the Selling Shareholder in accordance with their terms,
except to the extent enforceability may be limited by laws relating to
creditors' rights generally or by general equitable principles, and except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws;
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(xvi) To the knowledge of such counsel, each
Selling Shareholder has full legal right, power and authorization, and any
approval required by law, to sell, assign, transfer and deliver good and
marketable title to the Shares which such Selling Shareholder has agreed to sell
pursuant to this Agreement;
(xvii) The execution and delivery of this
Agreement and the Custody Agreement by the Selling Shareholder and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, violate, result in a breach of or constitute a default under the
terms or provisions of any agreement, indenture, mortgage or other instrument
known to such counsel to which the Selling Shareholder is a party or by which
the Selling Shareholder or any of his assets or property is bound, or any court
order or decree or any law, rule, or regulation, known to such counsel after
reasonable inquiry, applicable to the Selling Shareholder or to any of the
property or assets of the Selling Shareholder;
(xviii) The Registration Statement and the
Prospectus and any supplements or amendments thereto (except for the financial
statements and the notes thereto and the schedules and other financial and
statistical data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements of the
Act;
(xix) To the knowledge of such counsel, there
are no legal or governmental proceedings pending or threatened against the
Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries, or any of their property, is subject, which are required to be
described in the Registration Statement or Prospectus (or any amendment or
supplement thereto);
(xx) To the knowledge of such counsel, there
are no agreements, contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not described or
filed as required, as the case may be;
(xxi) To the knowledge of such counsel, neither
the Company nor any of the Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries, the
violation of which, singly or in the aggregate, would have a Material Adverse
Effect;
(xxii) The statements in the Registration
Statement and Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents, or refer to statements of law or legal
conclusions, insofar as such statements constitute a summary of documents
referred to therein or a summary of matters of law, fairly present the
information required to be disclosed with due regard to the fact that they are
summaries;
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(xxiii) Upon delivery of the Shares pursuant to
this Agreement and payment therefor as contemplated herein, the Underwriters
will acquire good and marketable title to the Shares free and clear of any lien,
claim, security interest, or other encumbrance, restriction on transfer or other
defect in title; and
(xxiv) Although counsel has not undertaken,
except as otherwise indicated in their opinion, to determine independently, and
does not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and discussion of the
contents of all Incorporated Documents), and nothing has come to the attention
of such counsel that has caused them to believe that the Registration Statement
(including the Incorporated Documents) at the time the Registration Statement
became effective, or the Prospectus, as of its date and as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
the Closing Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus or any
Incorporated Document).
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of Florida, provided that: (1) each such local counsel is
acceptable to the Representatives, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance satisfactory to them and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
Holland & Knight, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (vii), (ix), (x), (xviii) and (xxiv) of
the foregoing paragraph (c) and such other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Ernst & Young LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or,
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to the knowledge of the Company, shall be contemplated by the Commission at or
prior to the Closing Date; (ii) there shall not have been any change in the
capital stock of the Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary course of business)
from that set forth or contemplated in the Registration Statement or the
Prospectus (or any amendment or Supplement thereto); (iii) there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries taken as a
whole; (iv) the Company and the Subsidiaries shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and you
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you), to the effect set forth in this
Section 10(f) and in Section 10(g) hereof.
(g) The Company shall not have failed at or prior to the
Closing Date to have performed or complied in all material respects with any of
its agreements herein contained and required to be performed or complied with by
it hereunder at or prior to the Closing Date.
(h) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by or on behalf of the Selling
Shareholder to the effect set forth in this Section 10(h) and in Section 10(i)
hereof.
(i) The Selling Shareholder shall not have failed at or prior
to the Closing Date to have performed or complied in all material respects with
any of their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
(j) Prior to the Closing Date the shares of Common Stock which
the Company agrees to sell pursuant to this Agreement shall have been listed,
subject to notice of issuance, on the Nasdaq National Market.
(k) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
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<PAGE>
Any certificate or document signed by any officer of the
Company or any Attorney-in-Fact or any Selling Shareholder and delivered to you
in connection with the closing of the sale of the Shares hereunder, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Company, the Selling Shareholder
or the particular Selling Shareholder,as the case may be, to each Underwriter as
to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (i) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(c), (d) and (e) shall be revised to reflect the sale of Additional Shares.
11. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by Sellers
of their obligations hereunder: (i) the preparation, printing or reproduction,
and filing with the Commission of the registration statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each Prepricing Prospectus, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with the
original issuance and sale of the Shares; (iv) the printing (or reproduction)
and delivery of this Agreement, the preliminary and supplemental Blue Sky
Memoranda and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Shares; (v) the registration of
the Common Stock under the Exchange Act and the listing of the Shares on the
Nasdaq National Market; (vi) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification); (vii) the filing fees
and the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc.; (viii) the transportation and other expenses incurred by or on behalf of
Company representatives (which shall not include representatives of the
Underwriters) in connection with presentations to prospective purchasers of the
Shares; and (ix) the fees and expenses of the Company's accountants and the fees
and expenses of counsel (including local and special counsel) for the Company
and the Selling Shareholder.
12. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence,
25
<PAGE>
when notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company and the Selling Shareholder.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters, or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of Smith Barney Inc., to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase on the Closing
Date and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date, and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case described in the preceding sentence which does not
result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Company, purchases Shares which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter, the Company or the Selling Shareholder, by notice to the Company,
if prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York or Florida shall have been declared by either federal or state
authorities, or (iii) there shall have
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occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
14. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the cover page, the stabilization and passive market
making legends on the inside cover page, and the statements in the first and
third paragraphs under the caption "Underwriting" in any Prepricing Prospectus
and in the Prospectus, constitute the only information furnished by or on behalf
of the Underwriters through you as such information is referred to in Sections
7(b) and 9 hereof.
15. MISCELLANEOUS. Except as otherwise provided in Sections 5, 12 and
13 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 1801 W. International Speedway Boulevard, Daytona Beach, Florida
32114-1243, Attention: William C. France, Chairman of the Board and Chief
Executive Officer, with a copy to Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., 1221 Brickell Avenue, Miami, Florida 33131, Att: Bruce E.
Macdonough; or (ii) if to the Selling Shareholder, at 1801 West International
Speedway Boulevard, Daytona Beach, Florida 32114-1243, with a copy to Glenn R.
Padgett, Esq., 555 West Grenada Boulevard, Suite D-11, Ormand Beach, Florida
32173-0177 or (iii) if to you, as Representatives of the several Underwriters,
care of Smith Barney Inc., 388 Greenwich Street, New York, New York 10013,
Attention: Manager, Investment Banking Division, with a copy to Holland &
Knight, One East Broward Boulevard, Ft. Lauderdale, Florida 33301, Att: Donn
Beloff.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 9 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
16. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
applicable to contracts made and to be performed within the State of Florida.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
INTERNATIONAL SPEEDWAY CORPORATION
By .................................
William C. France
Chairman of the Board
SELLING SHAREHOLDER
.................................
Brian Z. France
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
SMITH BARNEY INC.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the Several Underwriters
By SMITH BARNEY INC.
By ...........................................
Managing Director
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SCHEDULE I
INTERNATIONAL SPEEDWAY CORPORATION
NUMBER OF
UNDERWRITER FIRM SHARES
- ----------- -----------
Smith Barney Inc. ....
Raymond James & Associates, Inc. ....
-----------
Total.....
<PAGE>
SCHEDULE II
INTERNATIONAL SPEEDWAY CORPORATION
NUMBER OF
SELLING SHAREHOLDER ADDITIONAL SHARES
- ------------------- -----------------
Brian Z. France 50,000
------
Total 50,000
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 a 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
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<PAGE>
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 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.
5
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(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.
6
<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.
7
<PAGE>
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 cast 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
8
<PAGE>
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 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 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.
9
<PAGE>
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
------------------------------------------------
W. Garrett Crotty, Secretary and General Counsel
10
<PAGE>
CERTIFICATE OF THE
PRESIDENT
OF
INTERNATIONAL SPEEDWAY CORPORATION
Pursuant to the provisions of ss.607.1007(4) of the Florida Business
Corporation Act, the undersigned hereby certifies as follows:
(a) The Amended and Restated Articles of Incorporation of International
Speedway Corporation (the "Corporation") attached hereto contain an amendment to
the Corporation's Articles of Incorporation that requires shareholder approval.
(b) The Corporation has one class of capital stock outstanding and the
amendment set forth in the Corporation's Amended and Restated Articles of
Incorporation was duly adopted by the holders of more than a majority of the
Corporation's outstanding capital stock by written consent on the 26th day of
September, 1996, pursuant to ss.607.0704 of the Florida Business Corporation
Act.
IN WITNESS WHEREOF, the undersigned has executed this certificate
as of September 26, 1996.
INTERNATIONAL SPEEDWAY CORPORATION,
a Florida corporation
By: /S/ JAMES C. FRANCE
-------------------------------
James C. France, President
AMENDED AND RESTATED BYLAWS
OF
INTERNATIONAL SPEEDWAY CORPORATION
(A FLORIDA CORPORATION)
<PAGE>
INDEX
PAGE
NUMBER
------
ARTICLE ONE - OFFICES.....................................................1
1. Registered Office.............................................1
2. Other Offices.................................................1
ARTICLE TWO - MEETINGS OF SHAREHOLDERS....................................1
1. Place.........................................................1
2. Time of Annual Meeting........................................1
3. Call of Special Meetings......................................1
4. Conduct of Meetings...........................................1
5. Notice and Waiver of Notice...................................1
6. Business and Nominations for Annual and Special Meetings......2
7. Quorum........................................................2
8. Voting Rights Per Share.......................................2
9. Voting of Shares..............................................3
10. Proxies.......................................................3
11. Shareholder List..............................................3
12. Action Without Meeting........................................4
13. Fixing Record Date............................................4
14. Inspectors and Judges.........................................4
15. Voting for Directors..........................................5
ARTICLE THREE - DIRECTORS.................................................5
1. Number; Term; Election; Qualification.........................5
2. Resignation; Vacancies; Removal...............................5
3. Powers........................................................5
4. Place of Meetings.............................................5
5. Annual Meetings...............................................5
6. Regular Meetings..............................................6
7. Special Meetings and Notice...................................6
8. Quorum and Required Vote......................................6
9. Action Without Meeting........................................6
10. Conference Telephone or Similar Communications
Equipment Meetings..........................................6
11. Committees....................................................7
12. Compensation of Directors.....................................7
ARTICLE FOUR - OFFICERS...................................................7
1. Positions.....................................................7
2. Election of Specified Officers by Board.......................7
3. Election or Appointment of Other Officers.....................7
4. Compensation..................................................8
<PAGE>
5. Term; Resignation; Removal; Vacancies.........................8
6. Chairman of the Board.........................................8
7. President.....................................................8
8. Vice Presidents...............................................8
9. Secretary.....................................................8
10. Chief Financial Officer.......................................9
11. Treasurer.....................................................9
12. Other Officers; Employees and Agents..........................9
ARTICLE FIVE - CERTIFICATES FOR SHARES....................................9
1. Issue of Certificates.........................................9
2. Legends for Preferences and Restrictions on Transfer..........9
3. Facsimile Signatures.........................................10
4. Lost Certificates............................................10
5. Transfer of Shares...........................................10
6. Registered Shareholders......................................10
7. Redemption of Control Shares.................................11
ARTICLE SIX - GENERAL PROVISIONS.........................................11
1. Dividends....................................................11
2. Reserves.....................................................11
3. Checks.......................................................11
4. Fiscal Year..................................................11
5. Seal.........................................................11
6. Gender.......................................................11
ARTICLE SEVEN - AMENDMENT OF BYLAWS......................................12
(ii)
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
AMENDED AND RESTATED BYLAWS
ARTICLE ONE
OFFICES
Section 1. REGISTERED OFFICE. The registered office of INTERNATIONAL
SPEEDWAY CORPORATION, a Florida corporation (the "Corporation"), shall be
located at 1801 West International Speedway Boulevard, Daytona Beach, Florida
32114, unless otherwise determined by the Board of Directors of the Corporation
(the "Board of Directors") in accordance with applicable law.
Section 2. OTHER OFFICES. The Corporation may also have offices at such
other places, either within or without the State of Florida, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE TWO
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All annual meetings of shareholders shall be held at
such place, within or without the State of Florida, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. TIME OF ANNUAL MEETING. Annual meetings of shareholders
shall be held on such date and at such time fixed, from time to time, by the
Board of Directors, provided, that there shall be an annual meeting held every
calendar year at which the shareholders shall elect a board of directors and
transact such other business as may properly be brought before the meeting.
Section 3. CALL OF SPECIAL MEETINGS. Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Corporation's Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") for the call of a special meeting of shareholders.
Section 4. CONDUCT OF MEETINGS. The Chairman of the Board (or in his
absence, the President or such other designee of the Chairman of the Board)
shall preside at the annual and special meetings of shareholders and shall be
given full discretion in establishing the rules and procedures to be followed in
conducting the meetings, except as otherwise provided by law or in these Bylaws.
Section 5. NOTICE AND WAIVER OF NOTICE. Except as otherwise provided by
law, written or printed notice stating the place, date and time of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by first-class
mail or other legally sufficient means, by or at the direction of the Chairman
of the Board, President, the Secretary, or the officer or person calling the
meeting, to each shareholder of record entitled to vote at such meeting. If the
notice is mailed at least thirty (30) days before the date of the meeting, it
may be done by a class of
<PAGE>
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid. If a meeting is adjourned to another
time and/or place, and if an announcement of the adjourned time and/or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting unless the Board of Directors, after adjournment, fixes a new record
date for the adjourned meeting. Whenever any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether signed before, during or after the time of the
meeting stated therein, and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records, shall constitute an effective
waiver of such notice. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the shareholders need be specified in any
written waiver of notice. Attendance of a person at a meeting shall constitute a
waiver of (a) lack of or defective notice of such meeting, unless the person
objects at the beginning to the holding of the meeting or the transacting of any
business at the meeting, or (b) lack of or defective notice of a particular
matter at a meeting that is not within the purpose or purposes described in the
meeting notice, unless the person objects to considering such matter when it is
presented.
Section 6. BUSINESS AND NOMINATIONS FOR ANNUAL AND SPECIAL MEETINGS.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice thereof. At any annual meeting of shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting in accordance with the requirements and procedures set forth in the
Articles of Incorporation. Only such persons who are nominated for election as
directors of the Corporation in accordance with the requirements and procedures
set forth in the Articles of Incorporation shall be eligible for election as
directors of the Corporation.
Section 7. QUORUM. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, shares representing a majority of the votes
pertaining to outstanding shares which are entitled to be cast on the matter by
the voting group constitute a quorum of that voting group for action on that
matter. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time. After a quorum has been established at any shareholders' meeting,
the subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
Section 8. VOTING RIGHTS PER SHARE. Each outstanding share, regardless
of class, shall be entitled to vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of the
shares of any class are limited or denied by or pursuant to the Articles of
Incorporation or the Florida Business Corporation Act.
Section 9. VOTING OF SHARES. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy. Shares standing
in the name of another corporation, domestic or foreign, may be voted by the
officer, agent or proxy designated by the bylaws of such corporate shareholder
or, in the absence of any applicable bylaw, by such person or persons as the
board of directors of the corporate shareholder may designate. In the absence of
any such designation, or, in
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case of conflicting designation by the corporate shareholder, the chairman of
the board, the president, any vice president, the secretary and the treasurer of
the corporate shareholder, in that order, shall be presumed to be fully
authorized to vote such shares. Shares held by an administrator, executor,
guardian, personal representative, or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name or the name of his nominee. Shares held by
or under the control of a receiver, a trustee in bankruptcy proceedings, or an
assignee for the benefit of creditors may be voted by such person without the
transfer thereof into his name. If shares stand of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or more
persons have the same fiduciary relationship respecting the same shares, unless
the Secretary of the Corporation is given notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, then acts with respect to voting shall
have the following effect: (a) if only one votes, in person or by proxy, his act
binds all; (b) if more than one vote, in person or by proxy, the act of the
majority so voting binds all; (c) if more than one vote, in person or by proxy,
but the vote is evenly split on any particular matter, each faction is entitled
to vote the share or shares in question proportionally; or (d) if the instrument
or order so filed shows that any such tenancy is held in unequal interest, a
majority or a vote evenly split for purposes hereof shall be a majority or a
vote evenly split in interest. The principles of this paragraph shall apply,
insofar as possible, to execution of proxies, waivers, consents, or objections
and for the purpose of ascertaining the presence of a quorum.
Section 10. PROXIES. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholder's shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
him by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation (the "Secretary") or such other officer or agent which is
authorized to tabulate votes, and shall be valid for up to 11 months, unless a
longer period is expressly provided in the appointment form. The death or
incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy exercises his authority under the appointment.
An appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 11. SHAREHOLDER LIST. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of the names
of all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or his agent or attorney is entitled on written demand to inspect
the shareholders' list (subject to the requirements of law), during regular
business hours and at his expense, during the period it is available for
inspection. The Corporation shall make the shareholders' list available at the
meeting of shareholders, and any
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shareholder or his agent or attorney is entitled to inspect the list at any time
during the meeting or any adjournment. The shareholders' list is prima facie
evidence of the identity of shareholders entitled to examine the shareholders'
list or to vote at a meeting of shareholders.
Section 12. ACTION WITHOUT MEETING. Any action required or permitted by
law to be taken at a meeting of shareholders may be taken without a meeting or
notice if a consent, or consents, in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted with respect to the subject matter thereof, and
such consent shall be delivered to the Corporation, within the period required
by Section 607.0704 of the Florida Business Corporation Act, by delivery to its
principal office in the State of Florida, its principal place of business, the
Secretary or another officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. Within ten
(10) days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action, in accordance with the requirements of Section
607.0704 of the Florida Business Corporation Act.
Section 13. FIXING RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purposes, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, before the meeting or action requiring such determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders or the determination of
shareholders entitled to receive payment of a dividend, the date before the day
on which the first notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof, except where the Board of Directors fixes a
new record date for the adjourned meeting.
Section 14. INSPECTORS AND JUDGES. The Board of Directors in advance of
any meeting may, but need not, appoint one or more inspectors of election or
judges of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If any inspector or inspectors, or judge or judges, are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
thereat. The inspectors or judges, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate votes, ballots and consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all shareholders.
On request of the person presiding at the meeting, the inspector or inspectors
or judge or judges, if any, shall make a report in writing of any challenge,
question or matter determined by him or them, and execute a certificate of any
fact found by him or them.
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Section 15. VOTING FOR DIRECTORS. Unless otherwise provided in the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present.
ARTICLE THREE
DIRECTORS
Section 1. NUMBER; TERM; ELECTION; QUALIFICATION. The number of
directors of the Corporation shall be fixed from time to time, within the limits
specified by the Articles of Incorporation, by resolution of the Board of
Directors. Directors shall be elected in the manner and hold office for the term
as prescribed in the Articles of Incorporation. Directors must be natural
persons who are 18 years of age or older but need not be residents of the State
of Florida, shareholders of the Corporation or citizens of the United States;
provided, however, that at all times at least one (1) director shall be a
resident of the State of Florida and a citizen of the United States.
Section 2. RESIGNATION; VACANCIES; REMOVAL. A director may resign at
any time by giving written notice to the Board of Directors or the Chairman of
the Board. Such resignation shall take effect at the date of receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. In the event the notice of resignation specifies a later effective
date, the Board of Directors may fill the pending vacancy (subject to the
provisions of the Corporation's Articles of Incorporation) before the effective
date if they provide that the successor does not take office until the effective
date. Director vacancies shall be filled, and directors may be removed, in the
manner prescribed in the Corporation's Articles of Incorporation.
Section 3. POWERS. The business and affairs of the Corporation shall be
managed by its Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised and done by the shareholders.
Section 4. PLACE OF MEETINGS. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Florida.
Section 5. ANNUAL MEETINGS. Unless scheduled for another time by the
Board of Directors, the first meeting of each newly elected Board of Directors
shall be held, without call or notice, immediately following each annual meeting
of shareholders.
Section 6. REGULAR MEETINGS. Regular meetings of the Board of Directors
may also be held without notice at such time and at such place as shall from
time to time be determined by the Board of Directors.
Section 7. SPECIAL MEETINGS AND NOTICE. Special meetings of the Board
of Directors may be called by the President or Chairman of the Board and shall
be called by the Secretary on the written request of any two directors. At least
forty-eight (48) hours' prior written notice of the date, time and place of
special meetings of the Board of Directors shall be given to each director.
Except as required by law, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. Notices to
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directors shall be in writing and delivered to the directors at their addresses
appearing on the books of the Corporation by personal delivery, mail or other
legally sufficient means. Notice by mail shall be deemed to be given at the time
when the same shall be received. Notice to directors may also be given by
telegram, teletype or other form of electronic communication. Whenever any
notice is required to be given to any director, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before, during
or after the meeting, shall constitute an effective waiver of such notice.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and all objections to the place of the meeting,
the time of the meeting and the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting or promptly upon
arrival at the meeting, any objection to the transaction of business because the
meeting is not lawfully called or convened.
Section 8. QUORUM AND REQUIRED VOTE. A majority of the prescribed
number of directors determined as provided in the Articles of Incorporation
shall constitute a quorum for the transaction of business and the act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless a greater number is required
by the Articles of Incorporation. Whenever, for any reason, a vacancy occurs in
the Board of Directors, a quorum shall consist of a majority of the remaining
directors until the vacancy has been filled. If a quorum shall not be present at
any meeting of the Board of Directors, a majority of the directors present
thereat may adjourn the meeting to another time and place, without notice other
than announcement at the time of adjournment. At such adjourned meeting at which
a quorum shall be present, any business may be transacted that might have been
transacted at the meeting as originally notified and called.
Section 9. ACTION WITHOUT MEETING. Any action required or permitted to
be taken at a meeting of the Board of Directors or committee thereof may be
taken without a meeting if a consent in writing, setting forth the action taken,
is signed by all of the members of the Board of Directors or the committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting. Action taken under this Section 9 is effective when
the last director signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section 9 shall have the effect of a
meeting vote and may be described as such in any document.
Section 10. CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT
MEETINGS. Directors and committee members may participate in and hold a meeting
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground the
meeting is not lawfully called or convened.
Section 11. COMMITTEES. The Board of Directors, by resolution adopted
by a majority of the whole Board of Directors, may designate from among its
members an executive committee and one or more other committees, each of which,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation except where the action of the full Board of Directors is required
by statute. Each committee must have two or more members who serve at the
pleasure of the Board of Directors. The Board of Directors, by resolution
adopted in accordance with this Article Three, may designate one or more
directors as alternate members of any committee, who may act in the place and
stead of any absent member or members at any meeting of such committee.
Vacancies in the membership of a committee may be filled only by the Board of
Directors at a regular or special meeting of the Board of Directors. The
executive
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committee shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required. The designation of any such committee and
the delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law.
Section 12. COMPENSATION OF DIRECTORS. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings. Directors may receive such other
compensation as may be approved by the Board of Directors.
ARTICLE FOUR
OFFICERS
Section 1. POSITIONS. The officers of the Corporation shall consist of
a Chairman of the Board, a President, one or more Vice Presidents (any one or
more of whom may be given the additional designation of rank of Executive Vice
President or Senior Vice President), a Secretary, a Chief Financial Officer and
a Treasurer. Any two or more offices may be held by the same person. Officers
other than the Chairman of the Board need not be members of the Board of
Directors. The Chairman of the Board must be a member of the Board of Directors.
Section 2. ELECTION OF SPECIFIED OFFICERS BY BOARD. The Board of
Directors at its first meeting after each annual meeting of shareholders shall
elect a Chairman of the Board, President, one or more Vice Presidents (including
any Senior or Executive Vice Presidents), a Secretary, a Chief Financial Officer
and a Treasurer.
Section 3. ELECTION OR APPOINTMENT OF OTHER OFFICERS. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors, or, unless otherwise specified
herein, appointed by the Chairman of the Board. The Board of Directors shall be
advised of appointments by the Chairman of the Board at or before the next
scheduled Board of Directors meeting.
Section 4. COMPENSATION. The salaries, bonuses and other compensation
of the Chairman of the Board and all officers of the Corporation to be elected
by the Board of Directors pursuant to Section 2 of this Article Four shall be
fixed from time to time by the Board of Directors or pursuant to its direction.
The salaries of all other elected or appointed officers of the Corporation shall
be fixed from time to time by the Chairman of the Board or pursuant to his
direction.
Section 5. TERM; RESIGNATION; REMOVAL; VACANCIES. The officers of the
Corporation shall hold office until their successors are chosen and qualified.
Any officer or agent elected or appointed by the Board of Directors or the
Chairman of the Board may be removed, with or without cause, by the Board of
Directors, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Any officer or agent appointed by the Chairman
of the Board pursuant to Section 3 of this Article Four may also be removed from
such office or position by the Board of Directors or the
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Chairman of the Board, with or without cause. Any vacancy occurring in any
office of the Corporation by death, resignation, removal or otherwise shall be
filled by the Board of Directors, or, in the case of an officer appointed by the
Chairman of the Board, by the Chairman of the Board or the Board of Directors.
Any officer of the Corporation may resign from his respective office or position
by delivering notice to the Corporation. Such resignation shall be effective
when delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor does not take
office until such effective date.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
the Chief Executive Officer of the Corporation. Subject to the control of the
Board of Directors, the Chairman of the Board shall have general and active
management of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The Chairman of
the Board shall preside at all meetings of the shareholders and the Board of
Directors. The Chairman of the Board shall also serve as the chairman of any
executive committee.
Section 7. PRESIDENT. The President shall be the Chief Operating
Officer of the Corporation. In the absence of the Chairman of the Board or in
the event the Board of Directors shall not have designated a Chairman of the
Board, the President shall preside at meetings of the shareholders and the Board
of Directors. The President shall have such powers and perform such duties as
may be prescribed by the Board of Directors or the Chairman of the Board. The
President shall also serve as the vice-chairman of any executive committee.
Section 8. VICE PRESIDENTS. The Vice Presidents, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and exercise the
powers of the President. They shall perform such other duties and have such
other powers as the Board of Directors or Chairman of the Board shall prescribe
or as the President may from time to time delegate. Executive Vice Presidents
shall be senior to Senior Vice Presidents, and Senior Vice Presidents shall be
senior to all other Vice Presidents.
Section 9. SECRETARY. The Secretary shall attend all meetings of the
shareholders and all meetings of the Board of Directors and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the shareholders and special meetings of the Board of
Directors and shall keep in safe custody the seal of the Corporation and, when
authorized by the Board of Directors, affix the same to any instrument requiring
it. He shall perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board or the President.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
be responsible for maintaining the financial integrity of the Corporation, shall
prepare the financial plans for the Corporation and shall monitor the financial
performance of the Corporation and its subsidiaries, as well as performing such
other duties as may be prescribed by the Board of Directors, the Chairman of the
Board or the President.
Section 11. TREASURER. The Treasurer shall have the custody of
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
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the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Chairman of the Board and the Board of Directors at its regular
meetings or when the Board of Directors so requires an account of all his
transactions as Treasurer and of the financial condition of the Corporation. The
Treasurer shall perform such other duties as may be prescribed by the Board of
Directors, the Chairman of the Board or the President.
Section 12. OTHER OFFICERS; EMPLOYEES AND AGENTS. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to him by the Board of Directors, the officer so appointing him
or such officer or officers who may from time to time be designated by the Board
of Directors to exercise such supervisory authority.
ARTICLE FIVE
CERTIFICATES FOR SHARES
Section 1. ISSUE OF CERTIFICATES. The shares of the Corporation shall
be represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates (and upon request every holder of uncertificated shares) shall
be entitled to have a certificate signed by or in the name of the Corporation by
the Chairman of the Board or a Vice Chairman of the Board, or the President or
Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form.
Section 2. LEGENDS FOR PREFERENCES AND RESTRICTIONS ON TRANSFER. The
designations, relative rights, preferences and limitations applicable to each
class of shares and the variations in rights, preferences and limitations
determined for each series within a class (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder a full statement of this information on request and without charge.
Every certificate representing shares that are restricted as to the sale,
disposition, or transfer of such shares shall also indicate that such shares are
restricted as to transfer, and there shall be set forth or fairly summarized
upon the certificate, or the certificate shall indicate that the Corporation
will furnish to any shareholder upon request and without charge, a full
statement of such restrictions. If the Corporation issues any shares that are
not registered under the Securities Act of 1933, as amended, or not registered
or qualified under the applicable state securities laws, the transfer of any
such shares shall be restricted substantially in accordance with the following
legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED WITHOUT (1)
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION
(SATISFACTORY TO THE
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CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION) THAT
REGISTRATION IS NOT REQUIRED"
Section 3. FACSIMILE SIGNATURES. Any and all signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Corporation may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed.
Section 5. TRANSFER OF SHARES. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. REGISTERED SHAREHOLDERS. The Corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Florida.
Section 7. REDEMPTION OF CONTROL SHARES. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.
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ARTICLE SIX
GENERAL PROVISIONS
Section 1. DIVIDENDS. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
cash, property, stock (including its own shares) or otherwise pursuant to law
and subject to the provisions of the Articles of Incorporation.
Section 2. RESERVES. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. FISCAL YEAR. The fiscal year of the Corporation shall end on
August 31 of each year, provided that effective November 1996, the fiscal year
of the Corporation shall end on November 30 of each year, in each case unless
otherwise fixed by resolution of the Board of Directors.
Section 5. SEAL. The corporate seal shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
Section 6. GENDER. All words used in these Bylaws in the masculine
gender shall extend to and shall include the feminine and neuter genders.
ARTICLE SEVEN
AMENDMENT OF BYLAWS
These Bylaws may be altered, amended or repealed or new Bylaws may be
adopted at any meeting of the Board of Directors at which a quorum is present,
by the affirmative vote of a majority of the directors present at such meeting.
* * *
-11-
Exhibit 4.1
INTERNATIONAL SPEEDWAY CORPORATION
CLASS A COMMON STOCK
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
NUMBER SHARES
CUSIP 460335 20 1
THIS CERTIFIES THAT_____________________________________________________
IS THE OWNER OF ________________________________________________________
FULLY-PAID AND NONASSESSABLE SHARES OF CLASS A COMMON STOCK, $.01 PAR VALUE, OF
INTERNATIONAL SPEEDWAY CORPORATION
Transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be held subject to all the provisions of the Articles of Incorporation, as
amended, and the Bye-Laws of the Corporation, as amended (copies of which are on
file at the office of the Transfer Agent), to all of which the holder of this
Certificate by acceptance hereof assents. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar. WITNESS the
facsimile seal of the Corporation and the facsimile signatures of its duly
authorized officers.
Dated:
W. Garrett Crotty
Secretary
James C. France
President
Countersigned and registered
SUNTRUST BANK, ORLANDO
TRANSFER AGENT AND REGISTRAR
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE
A FULL STATEMENT OF (A) THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS APPLICABLE TO EACH CLASS OF CAPITAL STOCK AUTHORIZED TO BE ISSUED;
(B) THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH
SERIES AUTHORIZED TO BE ISSUED WITHIN EACH SUCH CLASS AND (C) THE AUTHORITY
OF THE BOARD OF DIRECTORS TO DETERMINE SUCH VARIATIONS FOR SUBSEQUENT SERIES.
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT MIN ACT_____Custodian_____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act______________________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received,______________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Shares of the common stock evidenced by this Certificate, and do hereby
irrovocably constitute and appoint
_______________________________________________________________________Attorney,
to transfer the said shares on the books of the Corporation with full power
of substitution.
Dated________________________
NOTICE ________________________________________________________________________
THE SIGNATURE TO THIS AGREEMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Signature Guaranteed:
_______________________________________________________________________________
THE SIGNATURES(S) SHOULD BE GUARANTEED BY AN ELIGBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
[GREENBERG TRAURIG LETTERHEAD]
Attorneys at Law
October 11, 1996
William C. France
Chief Executive Officer
International Speedway Corporation
1801 West International Speedway Boulevard
Daytona Beach, FL 32114
RE: PUBLIC OFFERING
Gentlemen:
On September 6, 1996, International Speedway Corporation., a Florida
corporation (the "Company"), filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 (No. 333-11541) (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"). The
Registration Statement relates to: (i) the sale by the Company of up to
4,000,000 shares (the "Public Shares") of the Company's Class A Common Stock,
par value $.01 per share (the "Class A Common Stock") and the sale of up to
550,000 shares of Class A Common Stock which may be purchased by the
Underwriters' pursuant to an over-allotment option (the "Over-Allotment Shares"
and together with the Public Shares, the "Offering Shares"); and (ii) the sale
by a certain shareholder of the Company of up to 50,000 shares (the "Selling
Shareholder Shares") of Class A Common Stock pursuant to the Underwriters'
over-allotment option. We have acted as counsel to the Company in connection
with the preparation and filing of the Registration Statement.
In connection therewith, we have examined and relied upon copies of (i)
the Company's Amended and Restated Articles of Incorporation and Amended and
Restated Bylaws; (ii) resolutions of the Company's Board of Directors
authorizing the offering and the issuance of the Offering Shares, (iii) the
Registration Statement and exhibits thereto; (iv) such other documents and
instruments as we have deemed necessary for the expression of opinions herein
contained. In making the foregoing examinations, we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. As to various questions of fact
material to this opinion, we have relied, to the extent we deemed reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independently verifying the accuracy of such documents, records
and instruments.
Based upon the foregoing examination, we are of the opinion that:
<PAGE>
William C. France
October 11, 1996
Page 2
1. The Offering Shares have been duly and validly authorized and, when
issued and delivered in accordance with the terms of the Underwriting Agreement
filed as Exhibit 1.1 to the Registration Statement, will be validly issued,
fully paid and nonassessable.
2. The Selling Shareholder Shares have been duly and validly issued,
and are fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the prospectus comprising a part of the Registration Statement. In
giving such consent, we do not thereby admit that we are included within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Sincerely,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
By: /S/ BRUCE E. MACDONOUGH
----------------------------
Bruce E. Macdonough
Enclosure
EXHIBIT 15.1
The Board of Directors
International Speedway Corporation
We are aware of the incorporation by reference in Amendment No. 1 to the
Registration Statement (Form S-3) of International Speedway Corporation for
the registration of 4,000,000 shares of its Class A Common Stock of our
reports dated January 10, 1996, April 5, 1996 and July 5, 1996, relating to
the unaudited condensed consolidated interim financial statements of
International Speedway Corporation that are included in its Forms 10-Q for
the quarters ended November 30, 1995, February 29, 1996, and May 31, 1996.
Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not
a part of the registration statement prepared or certified by accountants
within the meaning of Sections 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
Jacksonville, Florida
October 10, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the captions "Experts" and
"Selected Financial Data" and to the use of our report dated September 27,
1996, except as to the fifth paragraph of Note 1, as to which the date is
October , 1996, in Amendment No. 1 to the Registration Statement (Form S-3)
and the related Prospectus of International Speedway Corporation for the
registration of 4,000,000 shares of its Class A Common Stock.
We also consent to the incorporation by reference therein of our report
dated October 20, 1995 with respect to the consolidated financial statements
and schedule of International Speedway Corporation included in the Annual
Report (Form 10-K) for the years ended August 31, 1995, 1994, and 1993, filed
with the Securities and Exchange Commission.
Ernst & Young LLP
Jacksonville, Florida
October 10, 1996
- -----------------------------------------------------------------------------
The foregoing consent is in the form that will be signed upon the
completion of the recapitalization of the Company as described in the fifth
paragraph of Note 1 to the financial statements.
Ernst & Young LLP
Jacksonville, Florida
October 10, 1996
SECRETARY'S CERTIFICATE
The undersigned, W. Garrett Crotty, Secretary of International Speedway
Corporation, a Florida corporation (the "Company"), does hereby certify on
behalf of the Company, and in connection with the filing by the Company of a
Registration Statement with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, that the following resolution was duly
adopted by the Board of Directors of the Company on September 5, 1996, and that
said resolution has not been altered, amended, modified or rescinded and remains
in full force and effect on the date hereof:
FURTHER RESOLVED, that the execution and delivery by the
officers and directors of the Company who are required by the SEC to
execute the Registration Statement and a power-of-attorney severally
appointing W. Garrett Crotty and Glenn R. Padgett and each of them to
be Attorney-in-Fact and agent with full power of substitution for each
of such directors and officers and in their name, place and stead, in
any and all capacities to sign any amendment(s) to the Registration
Statement, including any post-effective amendment(s), to file the same
with the SEC and to perform all other acts necessary in connection with
any matter relating to the Registration Statement and any amendment(s),
or post-effective amendment(s) thereto be, and it hereby is, ratified,
confirmed and approved.
IN WITNESS WHEREOF, the undersigned has executed this Certificate the
10th day of October 1996.
INTERNATIONAL SPEEDWAY CORPORATION
By: /S/ W. GARRETT CROTTY
-------------------------------
W. Garrett Crotty, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS OF INTERNATIONAL SPEEDWAY CORPORATION AS OF AUGUST 31, 1996 AND
1995 AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS' EQUITY AND
CASH FLOWS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 31, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<CASH> 9,042
<SECURITIES> 8,369
<RECEIVABLES> 3,490
<ALLOWANCES> 35
<INVENTORY> 1,409
<CURRENT-ASSETS> 24,685
<PP&E> 135,747
<DEPRECIATION> 36,912
<TOTAL-ASSETS> 152,791
<CURRENT-LIABILITIES> 31,436
<BONDS> 0
0
0
<COMMON> 344
<OTHER-SE> 106,323
<TOTAL-LIABILITY-AND-EQUITY> 152,791
<SALES> 67,645
<TOTAL-REVENUES> 98,355
<CGS> 39,479
<TOTAL-COSTS> 39,479
<OTHER-EXPENSES> 27,232
<LOSS-PROVISION> 52
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 31,644
<INCOME-TAX> 11,963
<INCOME-CONTINUING> 19,681
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,681
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
