FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-2384
INTERNATIONAL SPEEDWAY CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-0709342
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD, DAYTONA BEACH, FLORIDA 32114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 904-254-2700
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
Class A Common Stock - $.01 par value NASDAQ/National Market System
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock - $.10 par value
Class B Common Stock - $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. [x] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of January 13, 1999 was $844,051,914 based upon the last
reported sale price of the Class A Common Stock on the NASDAQ National Market
System that date and the assumption that all directors and executive officers
of the Company, and their families, are affiliates. At January 1, 1999, there
were no shares of Common Stock, $.10 par value per share, 11,783,598 shares of
Class A Common Stock, $.01 par value per share, and 31,291,621 shares of Class
B Common Stock, $.01 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE. - NONE -
<PAGE>
UNLESS OTHERWISE INDICATED, (I) ALL SHARE AND PER SHARE DATA FOR PERIODS PRIOR
TO NOVEMBER 4, 1996 HAS BEEN RETROACTIVELY ADJUSTED TO GIVE EFFECT TO A
RECAPITALIZATION AND RELATED 15-1 STOCK SPLIT WHICH BECAME EFFECTIVE ON
NOVEMBER 4, 1996, AND (II) A REFERENCE TO A "FISCAL" YEAR FOR PERIODS PRIOR TO
AND INCLUDING AUGUST 31, 1996 MEANS THE TWELVE MONTHS ENDED AUGUST 31 OF SUCH
YEAR AND FOR PERIODS SUBSEQUENT TO AUGUST 31, 1996 MEANS THE TWELVE MONTHS
ENDED NOVEMBER 30 OF SUCH YEAR. THE COMPANY CHANGED ITS FISCAL YEAR EFFECTIVE
DECEMBER 1, 1996.
PART I
ITEM 1. BUSINESS
GENERAL
International Speedway Corporation (together with its wholly-owned
subsidiaries, "ISC" or the "Company" unless otherwise required by the
context), a leading promoter of motorsports activities in the United
States, owns and/or operates five of the nation's premier motorsports
facilities--Daytona International Speedway in Florida; Talladega Superspeedway
in Alabama; Phoenix International Raceway in Arizona; Darlington Raceway in
South Carolina; and the Watkins Glen International road course facility in
upstate New York. Other motorsports interests include the operation of Tucson
Raceway Park in Arizona, a 45% indirect interest in the operations of the
Miami Homestead Speedway in Miami, Florida and an approximately 12% indirect
interest in Penske Motorsports, Inc. The Company currently promotes over 80
stock car, sports car, truck, motorcycle and other racing events annually,
including eight NASCAR Winston Cup Series championship point races, two
Winston Cup Series non-championship point events, five Busch Grand National
Series races, the premier sports car endurance event in the United States (the
Rolex 24 at Daytona) and a number of prestigious motorcycle races. The Company
also owns and operates MRN Radio, the nation's largest independent sports
radio network, and DAYTONA USA--The Ultimate Motorsports Attraction, a
motorsports-themed entertainment complex that includes interactive media,
theaters, historical memorabilia, exhibits and tours of Daytona International
Speedway. In fiscal 1998, NASCAR-sanctioned races at the Company's facilities
accounted for approximately 79% of the Company's total revenues.
DEVELOPMENTS DURING FISCAL 1998
During fiscal 1998, the Company continued to expand and enhance its
existing facilities. The Company added approximately 41,800 grandstand seats,
growing the Company's seating capacity by approximately 11%. In addition to
grandstand seating, 43 luxury suites were added at the Company's
superspeedways. This 43 percent increase in luxury suites includes 28
"Superstretch" additions at Daytona, marking the first time that suites have
been added on the famed backstretch of the historic facility. The Company
also completed the $5.8 million track lighting project at Daytona that permits
night racing events.
In March 1998, the Company sold its entire equity interest in Grand Prix
Association of Long Beach, Inc., for approximately $5.3 million. The Company
recorded a gain of approximately $1.2 million from the sale. The after tax
impact of this transaction was a gain of approximately $850,000.
In May 1998, the Company entered into a five-year unsecured, $100 million
revolving line of credit facility (the "Credit Facility"). The Credit
Facility is intended to be used for short-term working capital and to finance
the development and/or acquisition of additional motorsports facilities.
There were no borrowings under the Credit Facility at November 30, 1998.
<PAGE>
In July 1998, the Company announced the postponement of the NASCAR
Winston Cup Series Pepsi 400 at Daytona from July 4, 1998 to October 17, 1998
as a result of the nationally publicized forest fire emergency throughout the
state of Florida. This resulted in event-related revenues and expenses being
recognized in the fourth quarter of fiscal 1998, compared to the third quarter
of fiscal 1997. Despite the postponement and rescheduling of the 1998 Pepsi
400 at Daytona, the event marked the first ever NASCAR Winston Cup Series
event run under the new lights at Daytona and the first sellout of that event
since its inception.
During July of 1998, the Company sold an additional 4,600,000 shares of
Class A Common Stock in a primary offering, including the Underwriters' over-
allotment, at a price to the public of $27.00. The net proceeds to the
Company were approximately $117.7 million, after deduction of underwriting
discounts and commissions and expenses of the offering. As of November 30,
1998, the Company had used approximately $24.4 million of the net proceeds for
the acquisition of land and preliminary construction related to Kansas
International Speedway and designated an additional $53.5 million for the
further funding of its investment in that facility. The Company intends to
use the remaining net proceeds to partially fund completion of additions and
improvements to the Company's existing motorsports facilities, and for working
capital and other corporate purposes, including the pursuit of further
expansion opportunities.
As noted above, the Company continued to pursue the development of Kansas
International Speedway during fiscal 1998. An agreement was formed between
the Company and the Unified Government of Wyandotte County/Kansas City, Kansas
("Unified Government") for the construction of a 1.5-mile oval motor speedway
near Kansas City, Kansas. The aggregate cost of acquiring and developing the
first phase of Kansas International Speedway (which will accommodate
approximately 75,000 spectators) is estimated to be approximately $224
million, which will be financed through a variety of mechanisms and government
incentives. See "Managements' Discussion and Analysis - Future Liquidity".
During the year the Company continued to explore potential locations for
development of a motorsports facility in the Chicago area through the
Motorsports Alliance (owned 50% by the Company and 50% by Indianapolis Motor
Speedway). Subsequent to year end, the Motorsports Alliance announced that
the City Council of Joliet, Illinois had approved plans to build a 1.5-mile
oval superspeedway on land contiguous to the existing Route 66 Raceway. The
aggregate cost of acquiring the approximately 930 acres and developing the
facility (which will accommodate approximately 75,000 spectators) is estimated
to be $100 million.
OPERATIONS
The Company's operations consist principally of racing events at its six
tracks. The Company also owns a 45% indirect interest in the operations of the
Miami Homestead Speedway in Florida and an approximately 12% indirect interest
in Penske Motorsports, Inc. In addition, the Company owns and operates the
DAYTONA USA motorsports-themed entertainment complex, provides catering,
merchandising and concession services at certain of its facilities through its
wholly-owned subsidiary, Americrown Service Corporation ("Americrown"), and
operates two radio networks--MRN Radio and the NASCAR Truck Network
(collectively "MRN Radio").
Approximately $149 million, or 79%, of the Company's fiscal 1998 revenues
were attributable to NASCAR-sanctioned races at the Company's facilities,
including applicable admissions, luxury suite rentals, sponsorship, television
and MRN Radio broadcast rights fees, food and beverage concession and
catering, souvenir, advertising and other revenues.
<PAGE>
The Company's fiscal 1998 revenues that were not attributable to
NASCAR-sanctioned races at the Company's facilities were derived from a number
of sources, including (i) admission and luxury suite rental revenue from
racing events sanctioned by bodies other than NASCAR, (ii) admissions and
sponsorship fees attributable to DAYTONA USA, (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) merchandising, food and beverage revenues from the gift shop
and snackbar adjacent to DAYTONA USA, (v) Americrown's catering, merchandising
and concession revenues for the Company's non-NASCAR racing events, (vi)
broadcast and sponsorship fees for such non-NASCAR racing events, and (vii)
other revenues unrelated to racing events such as hangar rentals and gas sales
at the Talladega Municipal Airport. None of the foregoing non-NASCAR revenue
sources accounted for over 5% of the Company's fiscal 1998 revenues.
RACING EVENTS
The 1998 race schedule for the Company included eight NASCAR Winston Cup
Series races (not including the Bud Shootout at Daytona all star event or the
Gatorade 125s qualifying races for the Daytona 500), five NASCAR Busch Series
- - Grand National Division races and approximately 50 other NASCAR races and
events. In addition, in fiscal 1998 the Company promoted over 20 other stock
car, sports car, motorcycle and go-kart racing events, including events
sanctioned by the United States Road Racing Championship ("USRRC"), the
Automobile Racing Club of America ("ARCA"), the Indy Racing League ("IRL"),
the United States Auto Club ("USAC"), the Sports Car Club of America ("SCCA"),
the American Motorcyclist Association ("AMA"), the World Karting Association
("WKA"), the Championship Cup Series ("CCS"), the American Historic Racing
Motorcycle Association ("AHRMA"), Historic Sportscar Racing ("HSR"), and the
Sportscar Vintage Racing Association ("SVRA").
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, IRL, Championship Auto Racing Teams,
Inc. ("CART"), USAC, SCCA, USRRC, 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.
OTHER OPERATIONS
MIAMI HOMESTEAD SPEEDWAY. In July 1997, the Company acquired a 40%
indirect interest in the operations of the Miami Homestead Speedway located
south of Miami, Florida. The Company increased its stake to 45% in March 1998.
The Miami facility has a 1.5 mile oval racing track on 320 acres of leased
property. The state-of-the-art facility has grandstands that seat
approximately 36,000 spectators, 50 suites containing an additional 2,260
seats, and temporary seating for approximately 5,700 additional persons. The
Miami facility was the site of a number of significant racing events in 1998,
including the Grand Prix of Miami (a CART event) and a NASCAR Busch Series -
Grand National Division event. In addition, the facility was recently awarded
a NASCAR Winston Cup Series event to be held in November 1999.
PENSKE MOTORSPORTS. The Company beneficially owns an approximately 12%
indirect interest in Penske Motorsports, Inc. ("PMI"), a publicly traded
promoter and marketer of motorsports events. PMI owns and operates The
California Speedway near Los Angeles, California, Michigan International
Speedway in Brooklyn, Michigan, North Carolina Motor Speedway in Rockingham,
North Carolina and Nazareth Speedway in Nazareth, Pennsylvania. Major racing
events promoted by Penske Motorsports in 1998 included five NASCAR Winston Cup
<PAGE>
Series races, five NASCAR Busch Series - Grand National Division races and
three Champ Car races sanctioned by CART. Two of the Company's directors
serve on the Board of Directors of Penske Motorsports.
DAYTONA USA. The Company's DAYTONA USA--The Ultimate Motorsports
Attraction motorsports-themed entertainment complex is located adjacent to the
Daytona International Speedway. DAYTONA USA includes (i) the Velocitorium,
which covers approximately 50,000 square feet, stands nearly four stories high
and contains numerous highly interactive motorsports exhibits, many of which
are sponsored by leading consumer brands; (ii) Speedway Tours, a tram tour of
the Daytona International Speedway's garage area, pit road and high banked
track; (iii) the Richard Petty Riding Experience at Daytona; and (iv) for
groups of fifteen or more, the VIP Tour, which includes a tour of the Winston
Tower. Adjoining DAYTONA USA are (a) the Daytona Beach Area Convention and
Visitors Official Welcome Center; (b) the Daytona ticket office; (c) a high
tech arcade using state of the art video technology and computerized,
"virtual" racing simulators; (d) the Pit Shop, which sells DAYTONA USA,
Daytona International Speedway, NASCAR and race team clothing, books,
collectibles and other officially licensed merchandise; and (e) the Fourth
Turn Grill concessions facility. Management believes that DAYTONA USA and
these adjoining facilities appeal to individual tourists, tour groups,
conventions and the Company's corporate sponsors, thereby (i) increasing the
use of the Company's Daytona facility, (ii) expanding the Company's
concessions 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.
MRN RADIO. MRN Radio, which includes the NASCAR Truck Network, produces
and syndicates NASCAR Winston Cup Series, NASCAR Busch Series - Grand National
Division, Craftsman Truck Series and other races promoted by the Company and
others. These networks also produce daily and weekly NASCAR racing programs.
Network radio programs are currently carried by over 600 radio stations. The
Company derives revenue from the sale of advertising on the networks and
rights fees paid by broadcast affiliates. In addition, management believes
that MRN Radio and the NASCAR Truck Network enhance the Company through
increased media exposure to an expanding radio audience.
AMERICROWN. The Company's Americrown subsidiary conducts the food,
beverage and souvenir concession operations at Daytona, Talladega and
Darlington. Americrown also provides catering services to corporate customers
both in suites and entertainment chalets at these facilities and at Miami.
Americrown was formed in 1989 to conduct concessions operations as part
of the Company's ongoing efforts to enhance race spectators' total
entertainment experience.
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. The Company
also operates Talladega Municipal Airport, which is located adjacent to the
Talladega Superspeedway.
As of November 30, 1998, the Company had approximately 440 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 2,500
persons during Speedweeks, some of whom are volunteers. None of the Company's
<PAGE>
employees are represented by a labor union. Management believes that the
Company enjoys a good relationship with its employees.
ITEM 2. PROPERTIES
MOTORSPORTS FACILITIES
The following table sets forth certain information relating to each of
the Company's speedway facilities.
<TABLE>
<CAPTION>
NUMBER OF APPROXIMATE
TRACK NAME LOCATION SEATS* ACREAGE TRACK LENGTH
- - -------------------------------- ---------------------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Daytona International Speedway Daytona Beach, Florida 147,823 440 2.5 miles
Talladega Superspeedway Talladega, Alabama 121,306 1,365 2.6 miles
Phoenix International Raceway Phoenix, Arizona 72,542 440 1.0 miles
Darlington Raceway Darlington, South Carolina 55,381 230 1.3 miles
Watkins Glen International Watkins Glen, New York 38,884 1,377 3.4 miles
Tucson Raceway Park Tucson, Arizona 5,372 58 .4 miles
</TABLE>
- - ----------------
*At November 30, 1998 and consisting of seating in grandstands and luxury
suites (excludes infield admission).
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 to the
infield 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. Daytona International Speedway is 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 Company has recently completed a $5.8
million track lighting project that will permit night racing events, which
included The Pepsi 400 at Daytona in October 1998.
At November 30, 1998, Daytona International Speedway had 142,295
grandstand seats, 66 suites (including air conditioned luxury sky boxes and
Winston Tower suites that include access to hospitality areas) that include a
total of 3,528 additional seats, and 40 "Paddock Club" suites that provide
seating for 2,000 along "Pit Road" in Daytona's infield. During major events,
The Company also uses chalet villages and other pre-race hospitality
facilities that service approximately 15,000. Pending capital improvement
projects include (i) approximately 6,000 premium grandstand seats in the
Winston Tower, and (ii) approximately 7,400 seats on the "superstretch",
including approximately 3,100 premium seats.
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 90 minutes 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 November
<PAGE>
30, 1998, the facility included 119,022 grandstand seats, 30 luxury suites
containing an additional 2,040 seats, a Paddock Club Suite for up to 244
spectators, and pre-race hospitality chalets providing service for
approximately 10,000. The facility also includes a 400-acre campground
facility, the International Motorsports Hall of Fame owned by the State of
Alabama and hospitality and souvenir villages. Pending capital improvement
projects include (i) additional grandstand seating for approximately 10,000
spectators, (ii) renovation of the facility's hospitality village and garage
area, and (iii) the purchase of an additional 630 acres of land.
PHOENIX INTERNATIONAL RACEWAY. The Phoenix International Raceway
motorsports complex is located near Phoenix, Arizona on 440 acres owned by The
Company. The complex, which was acquired by The Company in July 1997, has a 1-
mile oval racing surface and a 1.5 mile road course. At November 30, 1998, the
facility included 70,770 grandstand seats and 31 suites that provide seating
for an additional 1,772 spectators. Pending capital improvement projects
include (i) additional grandstand seating for approximately 6,000 spectators,
(ii) the purchase of an additional 320 acres of land, and (iii) a variety of
other facility 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,
"egg shaped" oval track commonly known as "too tough to tame," grandstands
that seat 54,419 spectators, ten luxury suites containing an additional 962
seats and pre-race hospitality chalets providing service for approximately
4,700. Pending capital improvement projects include additional grandstand
seating for approximately 4,500 spectators.
WATKINS GLEN INTERNATIONAL. Watkins Glen International includes 3.4
mile and 2.4 mile road course tracks located on approximately 1,377 acres
owned by The Company. The Watkins Glen International facility includes
grandstands that seat 35,244 spectators, five suites containing an additional
640 seats and pre-race hospitality chalets providing service for approximately
8,900. Additional temporary seating for approximately 3,000 spectators was
added for the NASCAR Winston Cup Series event held in August 1998. Pending
capital improvement projects include (i) extensive track paving, and (ii) a
variety of other facility improvements.
TUCSON RACEWAY PARK. Tucson Raceway Park includes a progressively
banked, 3/8 mile paved oval track, grandstands providing seating for 5,372
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.
OTHER FACILITIES. The Company's 67,000 square foot corporate
headquarters, acquired and renovated in fiscal 1997, is located on
approximately nine acres across International Speedway Boulevard from Daytona
International Speedway. The Company also owns 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 corporate headquarters, as well as concession
facilities in Daytona Beach and in Talladega. In addition, The Company leases
real estate and office space in Talladega, and 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 2002, including renewals. The Company's lease for the Talladega
Municipal Airport expires in 2022, including renewals. The Company's wholly-
owned subsidiaries ISC Properties and Kansas International Speedway
<PAGE>
Corporation lease administrative office space in Charlotte, North Carolina and
Kansas City, Kansas, respectively.
TRADEMARKS. The Company has various registered and common law trademark
rights, including "DAYTONA USA," the "Daytona 500," "Daytona International
Speedway," "Talladega Superspeedway," "Darlington," "World Center of Racing,"
"Watkins Glen International," "Phoenix International Raceway" 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.
ITEM 3. 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. In addition to such
routine litigation incident to its business the Company faces exposure from
other legal proceedings as described below.
The Company's indirect corporate subsidiary, Americrown Service Corporation
("Americrown"), is the sole defendant in a class action proceeding in the
Circuit Court of Talladega County, Alabama which was filed in October 1996.
The plaintiffs allege, among other things, that Americrown engaged in
price-fixing activities in connection with the sale of racing souvenirs and
merchandise at the Talladega Superspeedway. The suit seeks to recover at
least $500 for each member of the class but does not otherwise seek to recover
compensatory or punitive damages or statutory attorneys' fees. A class
consisting of persons who purchased racing souvenirs at Talladega
Superspeedway since September 1992 was certified on July 30, 1998 by the
court. Americrown has moved for reconsideration and intends to appeal the
ruling to the Alabama Supreme Court. Americrown disputes the allegations and
intends to defend the action fully and vigorously.
In March 1997, two purported class action companion lawsuits were filed in the
United States District Court, Northern District of Georgia, against the
Company, Americrown, and a number of other persons alleging, in substance,
that the defendants unlawfully conspired to fix prices of souvenirs and
merchandise sold to consumers in violation of federal antitrust laws. One
suit was filed by Florida residents and the other suit was filed by Georgia
residents. Both suits seek damages and injunctive relief on behalf of all
persons who purchased souvenirs or merchandise from certain vendors at any
NASCAR Winston Cup race or supporting event in the United States during the
period 1991 to present. The two suits have been consolidated and the court is
considering class certification. Discovery has been concluded. The Company
and Americrown dispute the allegations and intend to defend the actions fully
and vigorously.
Management is presently unable to predict or quantify the outcome of these
matters
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the fiscal year
covered by this report to vote of security holders.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At November 30, 1998 International Speedway Corporation had two issued
classes of capital stock: Class A Common Stock, $.01 par value per share and
Class B Common Stock, $.01 par value per share. The Class A Common Stock is
traded on the NASDAQ National Market System under the symbol "ISCA". The Class
B Common Stock is traded on NASDAQ's Over-The-Counter Bulletin Board under the
symbol "ISCB" and, at the option of the holder, is convertible to Class A
Common Stock at any time. As of November 30, 1998 there were approximately
2,800 record holders of both classes of stock.
The reported high and low sales prices or high and low bid information as
applicable for each quarter indicated are as follows:
<TABLE>
<CAPTION>
ISCA ISCB(1)
------------------------- -------------------------
QUARTER ENDING: HIGH LOW HIGH LOW
- ---------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
February 1997 ......... 24.75 19.38 24.00 16.50
May 1997 .............. 22.50 17.25 21.75 17.00
August 1997 ........... 22.00 18.63 21.88 18.75
November 1997 ......... 22.50 17.00 22.63 19.75
February 1998 ......... 29.75 21.25 29.13 21.50
May 1998 .............. 37.75 27.13 37.50 27.38
August 1998 ........... 36.63 27.00 36.38 27.50
November 1998 ......... 36.00 23.94 35.50 23.75
</TABLE>
- - ----------------
(1) ISCB quotations were obtained from the OTC Bulletin Board and represent
prices between dealers and do not include mark-up, mark-down or
commission. Such quotations do not necessarily represent actual
transactions.
DIVIDENDS
Annual dividends of 6 cents per share were declared in the quarter
ending in May and paid in June in fiscal years 1997 and 1998 on all classes of
common stock which existed at the time.
ITEM 6. SELECTED FINANCIAL DATA
For comparability, certain prior period results have been reclassified
to conform to the presentation adopted in fiscal 1998. 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 Report.
<PAGE>
<TABLE>
<CAPTION>
Three Months Twelve Months Year Ended
YEAR ENDED AUGUST 31,(1) Ended Nov. 30, Ended Nov. 30, (1) Nov. 30,
(Unaudited)
----------------------------- ------------- ------------- --------------------
1994 1995 1996 1996 1996 1997 1998
---- ---- ---- ----- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Admissions, net .................... $ 36,935 $ 43,274 $ 50,140 $ 4,191 $ 50,705 $ 69,487 $ 86,946
Motorsports related income ......... 18,764 24,033 27,433 3,972 28,376 46,650 71,793
Food, beverage and souvenir income . 12,291 14,442 17,505 1,943 17,723 23,408 28,597
Other income ....................... 943 423 964 390 1,192 1,829 1,632
--------- --------- -------- -------- --------- --------- --------
Total revenues .................... 68,933 82,172 96,042 10,496 97,996 141,374 188,968
Expenses:
Direct expenses:
Prize and point fund monies and
NASCAR sanction fees .......... 9,412 11,765 13,865 1,301 13,724 20,567 28,767
Motorsports related expenses ...... 11,470 11,604 15,336 2,814 16,384 23,075 33,283
Food, beverage and souvenir expenses 7,867 8,107 10,278 1,536 10,559 13,435 15,025
General and administrative expenses . 14,307 18,202 20,930 5,057 21,721 29,486 37,842
Depreciation and amortization ....... 3,828 4,798 6,302 2,353 7,368 9,910 13,137
--------- --------- -------- -------- --------- --------- --------
Total expenses ..................... 46,884 54,476 66,711 13,061 69,756 96,473 128,054
--------- --------- -------- -------- --------- --------- --------
Operating income (loss)............... 22,049 27,696 29,331 (2,565) 28,240 44,901 60,914
Interest income, net ................. 972 1,436 872 261 843 2,687 3,832
Equity in net income (loss) from
equity investments ............... 207 285 1,441 (304) 1,291 366 (905)
Gain on sale of equity investment ... - - - - - - 1,245
--------- --------- -------- -------- --------- --------- --------
Income (loss) before income taxes .... 23,228 29,417 31,644 (2,608) 30,374 47,954 65,086
Income taxes (benefit) ............... 8,662 11,054 11,963 (741) 11,540 18,158 24,894
--------- --------- -------- -------- --------- --------- --------
Net income (loss) .................... $ 14,566 $ 18,363 $ 19,681 $ (1,867) $ 18,834 $ 29,796 $ 40,192
========= ========= ======== ======== ========= ========= ========
Basic earnings (loss) per share (2)... $ .43 $ .54 $ .58 $ (.05) $ .55 $ .78 $ 1.00
========= ========= ======== ======== ========= ========= ========
Diluted earnings (loss) per share (2). $ .43 $ .54 $ .57 $ (.05) $ .54 $ .78 $ 1.00
========= ======== ======== ======== ========= ======== ========
Dividends per share .................. $ .04 $ .05 $ .05 $ -- $ .05 $ .06 $ .06
========= ========= ======== ======== ========= ========= ========
BALANCE SHEET DATA (END OF PERIOD):
Working capital (deficit) ............ $ 11,839 $ 20,821 $ (6,751) $ 52,922 $ 52,922 $ (24,976) $ 27,490
Total assets ......................... 96,401 119,571 152,791 234,069 234,069 302,823 476,818
Long-term debt ....................... -- -- -- -- 1,007 2,775
Total shareholders' equity ........... 68,277 85,247 106,667 179,289 179,289 209,907 366,855
</TABLE>
- ----------------------
(1) The Company changed its fiscal year end to November 30 effective
December 1, 1996. This resulted in a three-month transition period
commencing September 1, 1996 and ending November 30, 1996. The unaudited
results of the 12-month period November 30, 1996 are presented for the purpose
of comparison to the fiscal year ended November 30, 1997.
(2) Earnings per share amounts prior to 1998 have been restated as required
to comply with Statement of Financial Accounting Standards No. 128. See Note
1 of Notes to the Company's audited financial statements.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company derives revenues primarily from (i) admissions to racing events
and motorsports activities held at its 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 or as a result of such events and activities.
"Admissions" revenue includes ticket sales from all of the Company's events
and DAYTONA USA's Track Tour and Velocitorium. Admissions revenue for racing
events is recorded upon completion of the related motorsports event.
"Motorsports related income" primarily includes television and radio broadcast
rights fees, promotion and sponsorship fees, hospitality rentals (including
luxury suites and chalets), advertising revenues, royalties from licenses of
the Company's trademarks and track rentals. 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
souvenirs 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.
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 Three Months Twelve Months Year Ended Year Ended
August 31, Ended Nov. 30, Ended Nov. 30, Nov. 30, Nov. 30.
(Unaudited)
---------- ------------- -------------- ----------- -----------
1996 1996 1996 1997 1998
---- ---- ---- ----- ----
<S> <C> <C> <C> <C> <C>
Revenues:
Admissions, net ...................................... 52.2% 39.9% 51.7% 49.1% 46.0%
Motorsports related income ........................... 28.6 37.9 29.0 33.0 38.0
Food, beverage and souvenir income ................... 18.2 18.5 18.1 16.6 15.1
Other income ......................................... 1.0 3.7 1.2 1.3 0.9
-------- ------ ------ ------ ------
Total revenues ...................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR sanction fees 14.4 12.4 14.0 14.5 15.2
Motorsports related expenses ........................ 16.0 26.8 16.7 16.3 17.6
Food, beverage and souvenir expenses ................ 10.7 14.6 10.8 9.5 8.0
General and administrative expenses .................. 21.8 48.2 22.2 20.9 20.0
Depreciation and amortization ........................ 6.6 22.4 7.5 7.0 7.0
-------- ------ -------- ------ ------
Total expenses ...................................... 69.5 124.4 71.2 68.2 67.8
-------- ------ -------- ------ ------
Operating income (loss) ............................... 30.5 (24.4) 28.8 31.8 32.2
Interest income, net .................................. 0.9 2.5 0.9 1.9 2.0
Equity in net income (loss)from equity investments ... 1.5 (2.9) 1.3 0.2 (0.5)
Gain on sale of equity investment ..................... - -- -- - 0.7
-------- ------- -------- ------ ------
Income (loss) before income taxes ..................... 32.9 (24.8) 31.0 33.9 34.4
Income taxes (benefit)................................. 12.4 (7.0) 11.8 12.8 13.1
-------- ------- -------- ------ ------
Net income (loss)...................................... 20.5% (17.8%) 19.2% 21.1% 21.3%
======== ======== ======== ======== ======
<?TABLE>
<PAGE>
During the year ended November 30, 1997, the Company acquired the 50% interest
it did not already own in Watkins Glen International ("Watkins Glen") and
purchased Phoenix International Raceway ("Phoenix"). The consolidation of
Watkins Glen, effective April 1, 1997, and the July 14, 1997 purchase of
Phoenix resulted in increases in both revenues and expenses when comparing
fiscal 1998 with fiscal 1997, as well as when comparing fiscal 1997 with the
same period of the prior year. Accordingly, the Company's results of
operations are not necessarily comparable on a period to period basis.
COMPARISON OF FISCAL 1998 TO FISCAL 1997
Admissions revenue increased approximately $17.5 million, or 25.1%, for fiscal
1998 as compared to fiscal 1997. This increase was primarily attributable to
increased seating capacity and attendance, and an increase in the weighted
average price of tickets sold for the events conducted at Daytona
International Speedway ("Daytona"), Talladega Superspeedway ("Talladega"),
Phoenix, Darlington Raceway ("Darlington") and Watkins Glen.
Motorsports related income increased approximately $25.1 million, or 53.9%,
during fiscal 1998 as compared to fiscal 1997. Approximately one-half of this
increase was a result of increases in television broadcast rights fees. The
remaining increase was primarily attributable to promotion and sponsorship
fees, luxury suite and hospitality rentals, and to a lesser extent, events
conducted at Phoenix for which there were no comparable events in fiscal 1997.
Food, Beverage and Souvenir income increased approximately $5.2 million, or
22.2%, during fiscal 1998 as compared to fiscal 1997. This increase was
primarily attributable to increased attendance and hospitality at the
Company's racing events, as well as strong sales of souvenirs at the gift shop
adjacent to DAYTONA USA
Prize and point fund monies and NASCAR sanction fees increased by
approximately $8.2 million, or 39.9%, during fiscal 1998 as compared to fiscal
1997. Approximately three-quarters of this increase was the result of
increases in the prize and point fund monies paid by NASCAR to participants in
the Company's events. This increase was primarily related to increased
television broadcast rights fees because standard NASCAR sanctioning
agreements require that a specified percentage of television broadcast rights
fees be paid as part of the prize money.
Motorsports related expenses increased approximately $10.2 million, or 44.2%,
during fiscal 1998 as compared to fiscal 1997. Approximately two-thirds of
the increase was primarily attributable to increases in personnel costs,
advertising, hospitality and other operating costs. The remaining increase
was attributable to expenses for Phoenix and Watkins Glen for which there were
no comparable expenses in fiscal 1997 due to the timing of the acquisitions.
Motorsports related expenses as a percentage of combined admissions and
motorsports related income increased from approximately 19.9% to 21.0%, when
comparing fiscal 1997 with fiscal 1998. This increase was primarily due to
lower margin events conducted at Phoenix for which there were no comparable
events in fiscal 1997.
Food, beverage and souvenir expense increased approximately $1.6 million, or
11.8%, during fiscal 1998, as compared to fiscal 1997. These increased
expenses were primarily related to increased product and personnel costs.
Food, beverage and souvenir expenses as a percentage of food, beverage and
souvenir income decreased from 57.4% to 52.5% for fiscal 1998 as compared to
fiscal 1997. This decrease was due to economies of scale and cost
containment, fees from third party vendors at Phoenix for which there are no
associated costs, discontinuation of lower margin events conducted at
facilities not operated by the Company and the impact of additional expense
<PAGE>
associated with the rain out and rescheduling of a NASCAR Winston Cup Series
event at Talladega in the prior year.
General and administrative expenses increased $8.4 million, or 28.3%, for
fiscal 1998 as compared to fiscal 1997. The increase was primarily
attributable to personnel costs and professional fees, with over one-quarter
of the increase related to the timing of the acquisitions of Phoenix and
Watkins Glen in the prior year. General and administrative expenses as a
percentage of total revenues remained relatively constant for fiscal 1998 as
compared to fiscal 1997.
Depreciation and amortization expense increased approximately $3.2 million, or
32.6%, for fiscal 1998 as compared to fiscal 1997. Approximately 45% of this
increase was attributable to Phoenix, including the amortization of goodwill,
and to Watkins Glen for which there was no comparable expense in fiscal 1997.
The remaining increase was attributable to ongoing improvements at the
Company's other facilities.
The approximately $1.1 million increase in the Company's net interest income
for fiscal 1998 as compared to fiscal 1997, is attributable primarily to the
investment of the proceeds of the Class A Common Stock Offering in July 1998.
Equity in net income (loss) from equity investments represents the Company's
pro rata share of the current income and losses from its equity investments
and the amortization of the Company's investment in excess of its share of the
investee's underlying net assets. During fiscal 1998 this included the
Company's approximately 12% indirect investment in Penske Motorsports, Inc.
("PMI"), its 40% investment in Homestead-Miami Speedway, LLC ("Miami") the
operators of the Miami Homestead Speedway, which was increased to 45% in March
1998, and its approximately 7% investment in Grand Prix Association of Long
Beach ("Long Beach"), which was sold in March 1998. Fiscal 1997 included the
Company's approximately 11% indirect investment in PMI, its 40% investment in
Miami acquired in July of 1997, its approximately 7% investment in Long Beach
acquired in August of 1997, and the Company's 50% investment in Watkins Glen
through March 31, 1997.
The gain on sale of equity investments of approximately $1.2 million was a
result of the sale of the Company's equity investment in Long Beach in March
of 1998. The Company sold its investment in conjunction with Dover Downs
Entertainment, Inc.'s announced plans to merge with Long Beach. The after tax
impact of this transaction was a gain of approximately $850,000.
As a result of the foregoing, the Company's net income increased approximately
$10.4 million, or 34.9%, for fiscal 1998 as compared to fiscal 1997.
COMPARISON OF FISCAL 1997 TO THE TWELVE MONTHS ENDED NOVEMBER 30, 1996
The Company changed its fiscal year end to November 30 effective December 1,
1996. Management believes that, due to the expansion of the Company's
business during the period, a comparison of the year ended November 30, 1997
to the twelve months ended November 30, 1996 is more meaningful than a
comparison of the year ended November 30, 1997 to the year ended August 31,
1996. Therefore, the discussion and analysis of results of operations for
fiscal 1997 is compared to the unaudited twelve months ended November 30,
1996.
Admissions revenue increased approximately $18.8 million, or 37%, during
fiscal 1997 as compared to the same period of the prior year. Approximately
one-third of this increase is a result of increased seating capacity and
attendance at Daytona, Talladega and Darlington. Approximately one-quarter of
the increase is attributable to an increase in the weighted average price of
<PAGE>
tickets sold at Daytona, Talladega and Darlington. The remainder of the
increase is primarily attributable to the impact of admissions to events
conducted at Watkins Glen and Phoenix.
Motorsports related income increased approximately $18.3 million, or 64.4%,
during fiscal 1997 as compared to the same period of the prior year.
Approximately one-half of this increase is a result of an increase in
broadcast rights fees, the rentals of hospitality facilities and promotion and
sponsorship fees related to events conducted at Daytona, Talladega and
Darlington. The remaining increase is attributable to the events conducted at
Watkins Glen and Phoenix, advertising revenue, other promotion and sponsorship
fees and royalties.
Food, beverage and souvenir income increased approximately $5.7 million, or
32.1%, for fiscal 1997 as compared to the same period of the prior year.
Increased attendance at events conducted at Daytona, Talladega and Darlington,
and, to a lesser extent, increases in certain prices accounted for
approximately one-half of the increase. The remaining increase is a result of
events conducted at Watkins Glen and Phoenix and direct sales of souvenirs at
the gift shop adjacent to DAYTONA USA.
Prize and point fund monies and NASCAR sanction fees increased by
approximately $6.8 million, or 49.9%, during fiscal 1997 as compared to the
same period of the prior year. Over one-half of this increase is due to
events conducted at Watkins Glen and Phoenix. The remaining increase is
primarily the result of increases in the prize and point fund monies paid by
NASCAR to participants in the Company's events. This increase is primarily
attributable to increases in the Company's TV broadcast rights as standard
NASCAR sanction agreements require that a specified percentage of TV broadcast
rights be paid as part of the prize money.
Motorsports related expenses increased approximately $6.7 million, or 40.8%,
for fiscal 1997 as compared to the same period of the prior year. This
increase is primarily attributable to operating costs related to the events
held at Watkins Glen and Phoenix, increases in direct race expenses related to
events conducted at Daytona, Talladega and Darlington, including increases in
operating costs related to the rain out and rescheduling of Talladega's second
quarter NASCAR Winston Cup event and, to a lesser extent, the operation of
DAYTONA USA. Motorsports related expenses remained relatively constant as a
percentage of combined admissions and motorsports related income during both
periods.
Food, beverage and souvenir expenses increased approximately $2.9 million, or
27.2%, in fiscal 1997 as compared to the same period of the prior year,
primarily due to increases in personnel and product costs. Food, beverage and
souvenir expenses as a percentage of food, beverage and souvenir income
decreased from approximately 59.6% for the twelve months ended November 30,
1996 to 57.4% in fiscal 1997 primarily due to the use of third party vendors
at the Company's Phoenix facility.
General and administrative expenses increased approximately $7.8 million, or
35.7%, during fiscal 1997 as compared to the same period of the prior year.
The increases are due to the acquisition of Phoenix, the consolidation of
Watkins Glen, and expenses related to the ongoing expansion of the Company's
business. General and administrative expenses as a percentage of total
revenue decreased from approximately 22.2% for the twelve months ended
November 30, 1997 to 20.9% in fiscal 1997.
The Company's depreciation and amortization expense increased approximately
$2.5 million, or 34.5%, during fiscal 1997 as compared to the same period of
the prior year, primarily as a result of DAYTONA USA, the ongoing expansion of
<PAGE>
the Company's motorsports facilities and amortization of goodwill related to
the acquisition of Phoenix. This increase was partially mitigated by an
approximately $1 million decrease in depreciation associated with the
lengthening of the estimated service lives of grandstands and other
significant assets as a result of Management's review of actual service lives
of these types of assets conducted at the beginning of the current fiscal
year.
The approximately $1.8 million increase in the Company's net interest income
during fiscal 1997 as compared to the same period of the prior year, is
attributable primarily to the investment of proceeds, pending their usage,
from the November 1996 Class A Common Stock offering.
Equity in net income from equity investments represents the Company's prorata
share of the current income and losses from its equity investments and the
amortization of the Company's investment in excess of its share of the
investee's underlying net assets. In fiscal 1997 this included the Company's
11% indirect interest in PMI, its 40% investment in Miami from July of 1997,
its approximately 7% investment Long Beach from August of 1997, and its 50%
investment in Watkins Glen through March 31, 1997. The approximately
$900,000, or 71.6% decrease in equity in net income from equity investments
during fiscal 1997, as compared to the same period of the prior year, is due
to the changes in the Company's equity investments and the timing of those
changes.
As a result of the foregoing, the Company's net income increased approximately
$11 million, or 58.2%, during fiscal 1997 as compared to the same period of
the prior year.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
The Company has historically generated sufficient cash flow from operations to
fund its working capital needs and capital expenditures at existing
facilities, as well as to pay an annual cash dividend. At November 30, 1998,
the Company had working capital of $27.5 million, as well as $53.5 million of
investments designated for investment in Kansas International Speedway, as
discussed below under "Future Liquidity", compared to a working capital
deficit of $25.0 million at November 30, 1997. This was primarily
attributable to the Class A Common Stock Offering discussed below under "Cash
Flows". There were no borrowings under the Company's credit facility at
November 30, 1998.
CASH FLOWS
Net cash provided by operating activities was approximately $79.5 million for
fiscal 1998. The difference between the Company's net income of $40.2 million
and the $79.5 million of operating cash flow was primarily attributable to
$13.1 million of depreciation and amortization, a $12.9 million increase in
deferred income, a $5.5 million increase in deferred income taxes, a $5.3
million increase in income taxes payable and a $5.2 million combined increase
in accounts payable and other current liabilities, partially offset by a $3.2
million combined increase in accounts receivable and prepaid expenses and
other current assets.
Net cash used in investing activities for fiscal 1998 was approximately $152.3
million. Investing activities included the net acquisition of $84.0 million
of short-term investments, capital expenditures of $71.9 million and
approximately $5.3 million in proceeds from the sale of the Company's
investment in Long Beach.
<PAGE>
Net cash provided by financing activities for fiscal 1998 was approximately
$101.5 million. Net cash provided by financing activities included the net
proceeds from the July 1998 Class A Common Stock Offering of approximately
$117.7 million, partially offset by payments totaling approximately $13.7
million on the note payable related to the Phoenix acquisition and dividends
paid of $2.3 million.
CAPITAL EXPENDITURES
Capital expenditures totaled approximately $71.9 million for fiscal 1998
compared to $38.6 million for fiscal 1997. Approximately three-quarters of
the capital expenditures during 1998 were for existing facilities. These
expenditures were related primarily to increased seating capacity at the
Company's superspeedways, additional luxury suites at Daytona, Talladega and
Phoenix and track lighting at Daytona. The remaining capital expenditures
were primarily related to the acquisition of land for Kansas International
Speedway.
The Company expects to make approximately $34.3 million of additional capital
expenditures for approved projects at existing facilities within the next 24
months to increase grandstand seating capacity, to construct luxury suite and
hospitality areas, and for a number of other improvements to the Company's
motorsports facilities. In addition, the Company expects to make additional
capital expenditures related to Kansas International Speedway as discussed
below.
FUTURE LIQUIDITY
In May of 1998, the Company entered into a five-year, unsecured, $100 million
revolving line of credit facility with First Union National Bank, N.A. (the
"Credit Facility"). Borrowings under the Credit Facility will bear interest
at the applicable LIBOR rate plus 40-80 basis points depending on certain
financial criteria. The Credit Facility includes customary representations
and warranties, covenants, defaults and conditions. The Credit Facility is
intended to be used for short-term working capital and to finance the
development and/or acquisition of additional motorsports facilities. There
were no borrowings under the Credit Facility at November 30, 1998.
In December 1997, the Company entered into an agreement with the Unified
Government of Wyandotte County/Kansas City, Kansas ("Unified Government") for
the development of a 1.5-mile oval motor speedway near Kansas City, Kansas.
The aggregate cost of acquiring and developing the first phase of Kansas
International Speedway (which will accommodate approximately 75,000
spectators) is estimated to be approximately $224 million, which will be
financed by i) approximately $77.9 million invested by the Company funded from
the proceeds of the July 1998 Class A Common Stock offering, ii) approximately
$69.6 million of proceeds, net of accrued interest and original issue
discount, from the sale of taxable special obligation ("TIF") bonds that will
be serviced through payments by the Company escalating from an annual rate of
approximately $4.8 million to $7.7 million, including interest at 6.15% to
6.75%, iii) approximately $24.1 million of proceeds, net of accrued interest
and original issue discount, from the sale of tax-exempt sales tax special
obligation ("STAR") bonds that will be retired with state and local taxes
generated within the project's boundaries, and iv) a variety of other
mechanisms and governmental incentives. The Company has invested
approximately $26.9 million in the project primarily for land, approximately
$24.4 million of which was invested during fiscal 1998. During January 1999,
the Company deposited the remaining $51 million of its portion of the project
funding into a trust account concurrent with the Unified Government's issuance
of the TIF and STAR bonds described above. TIF and STAR bond
<PAGE>
proceeds are awaiting disbursement subject to certain conditions of the bond
insurer.
The Motorsports Alliance, LLC (owned 50% by the Company and 50% by
Indianapolis Motor Speedway) and Route 66, LLC are currently pursuing the
development of a motorsports facility in the Chicago area. In January 1999,
the Motorsports Alliance announced that the City Council of Joliet, Illinois
had approved its plans to build a 1.5-mile oval motor speedway on land
contiguous to the existing Route 66 Raceway. The aggregate cost of acquiring
the approximately 930 acres and developing the facility (which will
accommodate approximately 75,000 spectators) is estimated to be $100 million.
The Company believes that cash flow from operations, along with the remaining
net proceeds of the July 1998 Class A Common Stock Offering and available
borrowings under the Credit Facility, will be sufficient to fund i) the
Company's operations and approved capital projects at existing facilities for
the foreseeable future, ii) debt service requirements of the TIF bonds
described above prior to the commencement of racing at Kansas International
Speedway, and iii) the Company's expected funding requirements for the
proposed Chicago project. In addition, the Company intends to pursue further
development and/or acquisition opportunities, the timing, size and success as
well as associated potential capital commitments of which are unpredictable.
Accordingly, a material acceleration in the company's growth strategy could
require the Company to obtain additional capital through debt and/or equity
financings. Although there can be no assurance, management believes that
adequate debt or equity financing would be available on satisfactory terms.
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 events. For example, one of Darlington Raceway's
Winston Cup Series events is traditionally held on the Sunday preceding Labor
Day. Accordingly, the timing of the Labor Day holiday in 1997 and 1998
resulted in the revenue and expenses for that race and the related supporting
events being recognized in the quarter ended August 31 in fiscal 1997, while
not being recognized until the quarter ending November 30 in fiscal 1998.
Further, in July 1998 the Company announced the postponement of the NASCAR
Winston Cup Series Pepsi 400 at Daytona from July 4, 1998 to October 17, 1998
as a result of the nationally publicized forest fire emergency throughout the
state of Florida. The rescheduling of the Pepsi 400 at Daytona resulted in
event-related revenues and expenses being recognized in the quarter ending
November 30, 1998 while corresponding revenues and expenses were recognized in
the quarter ended August 31 in fiscal 1997. Accordingly, the Company's
results of operations are not necessarily comparable on a period-to-period
basis.
The following table presents certain unaudited financial data for each
fiscal quarter of fiscal 1997 and fiscal 1998 (in thousands, except per share
amounts):
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
------------------------------------------------------------
FEBRUARY 28, MAY 31, AUGUST 31, NOVEMBER 30,
1997 1997 1997 1997
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Total Revenues ................. $ 51,866 $ 29,630 $ 33,106 $ 26,772
Operating Income ............... 27,103 7,075 8,762 1,961
Net Income ..................... 17,475 4,486 5,985 1,850
Basic earnings per share ....... 0.46 0.12 0.16 0.05
Diluted earnings per share ..... 0.46 0.12 0.16 0.05
</TABLE>
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
------------------------------------------------------------
FEBRUARY 28, MAY 31, AUGUST 31, NOVEMBER 30,
1998 1998 1998 1998
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Total Revenues ................. $ 68,284 $ 38,191 $ 17,822 $ 64,671
Operating Income (loss) ........ 33,000 7,784 (4,687) 24,817
Net Income (loss) .............. 20,149 6,046 (1,944) 15,941
Basic earnings (loss) per share 0.53 0.16 (.05) 0.37
Diluted earnings (loss) per share 0.53 0.16 (.05) 0.37
</TABLE>
IMPACT OF THE YEAR 2000
The Year 2000 issue is the result of computer programs and other business
systems being written using two digits rather than four to represent the year.
Many of the time sensitive applications and business systems of the Company
and its business partners may recognize a date using "00" as the year 1900
rather than the year 2000, which could result in system failure or disruption
of operations. The Year 2000 problem will impact the Company and its business
partners.
An assessment of the Year 2000 exposure related to information technology
systems has been made and the plans to resolve the related issues are being
implemented. Most major information technology systems have already been
updated or replaced with applications that are Year 2000 compliant in the
normal course of business. The Company believes it will be able to achieve
Year 2000 readiness with regard to information technology systems during
fiscal 1999.
The Company suspects that some of its non-information technology systems, such
as exhibit controllers, elevators, heating and air-conditioning systems, etc.,
with date sensitive software and embedded microprocessors may be affected, and
evaluation is underway. Preliminary estimates of the costs of correcting or
replacing critical non-information technology systems indicate that these
costs will not be material.
The Company has also developed a plan of communication with significant
business partners to identify and minimize disruptions to the Company's
operations resulting from the Year 2000 issue. There can be no certainty that
the computer programs and business systems of third parties on which the
Company relies will not have an adverse effect on the Company's operations.
However, because of the nature of its business, the Company believes at this
time that a failure of the Company's vendors, sponsors or customers to resolve
issues involving the Year 2000 problem will not be material.
The Company anticipates completing substantially all of its Year 2000
preparation during fiscal 1999. In the event the Company falls behind on its
timetable for achieving Year 2000 compliance, additional internal resources
will be focused on completing critical projects and developing contingency
plans. The Company at this time believes that it will satisfactorily resolve
all significant Year 2000 problems. Preliminary estimates of costs to correct
the identified potential problems related to the Year 2000 indicate that these
costs will not exceed $500,000. Estimates of Year 2000 related costs are
<PAGE>
based on numerous assumptions, including the continued availability of certain
resources, the ability to correct all relevant information and non-information
technology systems and third party modification plans. There is no guarantee
that the estimates will be achieved and actual costs could differ materially
from those anticipated.
FACTORS THAT MAY AFFECT OPERATING RESULTS
Statements contained in this document that state the Company's or Management's
anticipations, beliefs, expectations, hopes, intentions, predictions and/or
strategies which are not purely historical fact or which apply prospectively
are "forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934.
All forward-looking statements contained in this document are based on
information available to the Company on the date hereof, and the Company
assumes no obligation to update any such forward-looking statements. It is
important to note that the Company's actual results could differ materially
from those contained or projected in, or even implied by, such forward-looking
statements. Some of the factors that could cause the actual results to differ
materially are set forth below. Additional information concerning these, or
other, factors which could cause actual results to differ materially from
those in the forward-looking statements is contained from time to time in the
Company's other SEC filings. Copies of those filings are available from the
Company and/or the SEC.
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 NASCAR's
Winston Cup Series, the Busch Series - Grand National Division and certain
other races promoted by the Company. The Company has sanctioning agreements to
promote and market eight NASCAR Winston Cup Series championship point races,
two NASCAR Winston Cup Series non-championship point races, five NASCAR Busch
Series - Grand National Division races and a number of other NASCAR races for
the 1998 racing season. Each NASCAR event sanctioning agreement is awarded on
an annual basis. In fiscal 1998, NASCAR-sanctioned races at the Company's
facilities accounted for approximately 79% 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.
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.
<PAGE>
UNCERTAIN PROSPECTS OF NEW MOTORSPORTS FACILITIES
The Company's growth strategy includes the potential acquisition and/or
development of new motorsports facilities, including the proposed Kansas
International Speedway and the possible development of a motorsports facility
near Chicago, Illinois. 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 NASCAR Winston Cup, NASCAR Busch Series - Grand National
Division or other major events at these new facilities, (ii) the cooperation
of local government officials, (iii) the Company's capital resources, (iv) the
Company's ability to control construction and operating costs, (v) the
Company's ability to hire and retain qualified personnel and (vi) with respect
to the proposed Kansas International Speedway, the resolution of certain
pending litigation. The Company's inability to implement its expansion plans
for any reason could 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. 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 motorsports 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.
INDUSTRY SPONSORSHIPS AND GOVERNMENT REGULATION
The motorsports industry generates significant recurring revenue from the
promotion, sponsorship and advertising of various companies and their
products. Actual or proposed 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 Corporations's events. Since August of 1996 there have been
several thus far unsuccessful governmental attempts to impose restrictions on
the advertising and promotion of cigarettes and smokeless tobacco, including
sponsorship of motorsports activities. These regulatory efforts if
successfully implemented would have prohibited the present practice of tobacco
brand name sponsorship of, or identification with, motorsports events, entries
and teams. At this point the ultimate outcome of these or future government
regulatory and legislative efforts to regulate the advertising and promotion
of cigarettes and smokeless tobacco is uncertain and the impact, if any, on
the motorsports industry is unclear. Recently major United States
companies engaged in the manufacture of cigarettes and smokeless tobacco
(collectively the "tobacco industry") entered into various agreements with the
Attorneys General of all 50 states to settle certain state initiated
litigation against the tobacco industry. These settlement agreements will,
among other things, place limits upon the sponsorship of motorsports
activities by the tobacco industry. The actual impact of these settlement
agreements upon the Company's future revenues has not yet been determined.
Even more recently the executive branch of the United States government has
publicly stated its intention to initiate certain litigation against the
tobacco industry which would be similar to that initiated by the states which
was recently settled. The exact parameters of the proposed litigation and the
impact, if any, of this proposed litigation upon the Company's future revenues
is presently unclear.
The Company is not aware of any proposed governmental regulation which would
materially limit the availability to motorsports of promotion, sponsorship or
<PAGE>
advertising revenue from the alcoholic beverage industry. The combined
advertising and sponsorship revenue from the tobacco and alcoholic beverage
industries accounted for approximately 1.5% and 1.6% of the Company's total
revenues in fiscal 1997 and fiscal 1998, 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 Series and Busch Series - Grand
National Division.
LEGAL PROCEEDINGS
The Company and its indirect subsidiary, Americrown Service Corporation, are
parties to certain legal proceedings alleging price-fixing activities in
connection with the sale of racing souvenirs and merchandise as described in
"Part II - Other Information". While the Company and Americrown dispute the
allegations and intend to defend the actions fully and vigorously, neither the
cost of defending the suits nor the potential damages or other remedies for
which the Company and Americrown might be liable is insured. Management is
presently unable to predict or quantify the outcome of these matters. But,
there can be no assurance the defense of the suits, or a possible adverse
resolution, will not require material expenditures by the Company.
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 (collectively the "Shared Employees") devote portions of
their time to NASCAR's affairs. Each of the Shared Employees 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 Shared Employees 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.
COMPETITION
The Company's racing events face competition from other spectator-oriented
sporting events and other leisure and recreational activities, including
professional football, basketball and baseball. 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"), Indy Racing League ("IRL"), the United States Auto Club
("USAC"), the National Hot Rod Association ("NHRA"), the Sports Car Club of
America ("SCCA"), the United States Road Racing Championship ("USRRC"), 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.
<PAGE>
Many sports and entertainment businesses have resources that exceed those of
the Company.
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.
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.
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.
OTHER REGULATORY 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
<PAGE>
process of improving existing facilities, and/or materially increase the costs
of any of such activities.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U. S.
interest rates affect the interest earned on the Company's cash equivalents
and short term investments as well as interest paid on its debt.
The objective of the Company's asset management activities is to provide an
adequate level of interest income and liquidity to fund operations and capital
expansion, while minimizing market risk. The Company utilizes short term
investments consisting of certificates of deposit and obligations of U.S.
Government agencies and municipal securities to minimize the interest rate
risk. The Company does not believe that its interest rate risk related to its
cash equivalents and short term investments is material due to the short term
nature of the investments.
The Company does not believe that its interest rate risk related to its debt
is material due to the balance of approximately $2.8 million.
Additionally, the Company maintained its certificates of deposit with one
financial institution at November 30, 1998. The Company believes that it is
not exposed to any significant credit risk on its certificates of deposit due
to the strength of the financial institution and the short term nature of the
certificates of deposit.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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 November 30, 1997
and 1998, and the related consolidated statements of income, shareholders'
equity and cash flows for the year ended August 31, 1996, the three month
period ended November 30, 1996, and the years ended November 30, 1997 and
1998. Our audits also included the financial statement schedule listed in the
index at Item 14(a). These financial statements and schedule 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 November 30, 1997
and 1998, and the consolidated results of their operations and their cash
flows for the year ended August 31, 1996, the three month period ended
November 30, 1996 and the years ended November 30, 1997 and 1998, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
Ernst & Young LLP
Jacksonville, Florida
January 22, 1999<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
November 30
______________________
1997 1998
(In thousands)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents ......................... $ 9,974 $ 38,676
Short-term investments (Note 4) ................... 23,601 54,127
Receivables, less allowance of $100 ............... 7,425 9,445
Inventories ....................................... 866 953
Prepaid expenses and other current assets ......... 4,077 5,243
-------- --------
Total Current Assets ................................ 45,943 108,444
Property and Equipment:
Land and leasehold improvements ................... 15,177 32,651
Buildings, grandstands and tracks ................. 153,044 198,636
Furniture and equipment ........................... 33,168 36,726
Construction in progress ....... .................. 18,606 23,347
-------- --------
219,995 291,360
Less: accumulated depreciation .................... 53,917 65,529
-------- --------
166,078 225,831
Other Assets:
Cash surrender value of life insurance ............ 3,590 4,913
Equity investments (Note 2) ....................... 45,844 44,087
Goodwill, less accumulated amortization of $382
and $1,386, respectively (Note 3)................ 40,400 38,927
Designated investments (Note 4) ................... - 53,500
Long-term investments (Note 4) .................... 500 500
Other ............................................. 468 616
-------- --------
90,802 142,543
-------- --------
Total Assets ........................................ $302,823 $476,818
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable .................................. $ 5,896 $ 10,367
Income taxes payable (Note 5) ..................... 7 5,088
Deferred income ................................... 49,338 62,253
Current portion of note payable ................... 13,295 598
Other current liabilities ......................... 2,383 2,648
------- --------
Total Current Liabilities ........................... 70,919 80,954
Notes Payable ....................................... 1,007 2,775
Deferred Income Taxes (Note 5) ...................... 20,990 26,234
Commitments and Contingencies (Note 8)
Shareholders' Equity (Notes 1 and 7):
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized; 5,342,042 and 11,529,590 issued and outstanding
in 1997 and 1998, respectively .................. 53 115
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 33,154,920 and 31,573,043 issued and outstanding
in 1997 and 1998, respectively .................. 332 316
Additional paid-in capital ........................ 86,437 205,089
Retained earnings ................................. 125,457 163,201
--------- --------
212,279 368,721
Less unearned compensation--restricted stock (Note 11) 2,372 1,866
--------- --------
Total Shareholders' Equity .......................... 209,907 366,855
--------- --------
Total Liabilities and Shareholders' Equity .......... $302,823 $476,818
========= ========
</TABLE>
See accompanying notes.<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED YEAR ENDED
AUGUST 31, NOVEMBER 30, NOVEMBER 30,
----------- -------------- -------------- -------------
1996 1996 1997 1998
----------- -------------- -------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues:
Admissions, net ................................... $ 50,140 $ 4,191 $ 69,487 $ 86,946
Motorsports related income ........................ 27,433 3,972 46,650 71,793
Food, beverage and souvenir income ................ 17,505 1,943 23,408 28,597
Other income ...................................... 964 390 1,829 1,632
--------- --------- ---------- ----------
96,042 10,496 141,374 188,968
Expenses:
Direct expenses:
Prize and point fund monies and NASCAR
sanction fees .................................. 13,865 1,301 20,567 28,767
Motorsports related expenses ..................... 15,336 2,814 23,075 33,283
Food, beverage and souvenir expenses ............. 10,278 1,536 13,435 15,025
General and administrative expenses ............... 20,930 5,057 29,486 37,842
Depreciation and amortization ..................... 6,302 2,353 9,910 13,137
--------- --------- ---------- ----------
66,711 13,061 96,473 128,054
--------- --------- ---------- ----------
Operating income (loss) ............................ 29,331 (2,565) 44,901 60,914
Interest income, net ............................... 872 261 2,687 3,832
Equity in net income (loss) from
equity investments ............................... 1,441 (304) 366 (905)
Gain on sale of equity investment .................. - - - 1,245
--------- ---------- ---------- ----------
Income (loss) before income taxes .................. 31,644 (2,608) 47,954 65,086
Income taxes (benefit) (Note 5) .................... 11,963 (741) 18,158 24,894
--------- ---------- ---------- ----------
Net income (loss) .................................. $ 19,681 $ (1,867) $ 29,796 $ 40,192
========= ========= ========== ==========
Basic earnings (loss) per share (Note 1) ........... $ 0.58 $ (0.05) $ 0.78 $ 1.00
========= ========== ========== ==========
Diluted earnings (loss) per share (Note 1) ......... $ 0.57 $ (0.05) $ 0.78 $ 1.00
========= ========== ========== ==========
Dividends per share (Note 1) ....................... 5.3/cent/ -- 6.0/cent/ 6.0/cent/
========= ========== ========== ==========
</TABLE>
See accompanying notes.<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON COMMON UNEARNED
STOCK STOCK ADDITIONAL COMPENSATION-- TOTAL
$.01 PAR $.01 PAR PAID-IN RETAINED RESTRICTED SHAREHOLDERS'
VALUE VALUE CAPITAL EARNINGS STOCK EQUITY
---------- ---------- ------------- ------------ ---------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
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 ............................. -- (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 ...... -- -- 4,677 -- -- 4,677
--- ------ -------- -------- -------- --------
BALANCE AT AUGUST 31, 1996 .................. -- 344 8,127 99,986 (1,790) 106,667
Net loss ................................... -- -- -- (1,867) -- (1,867)
Public offering - Class A Common Stock ..... 40 -- 74,327 -- -- 74,367
Forfeiture of restricted shares ............ -- -- (218) -- 218 --
Amortization of unearned
compensation (Note 11) ................... -- -- -- -- 122 122
--- ------ -------- -------- -------- --------
BALANCE AT NOVEMBER 30, 1996 ................ 40 344 82,236 98,119 (1,450) 179,289
Net income ................................. -- -- -- 29,796 -- 29,796
Cash dividends (6.0/cent/ per share) ....... -- -- -- (2,310) -- (2,310)
Increase in equity investments ............. -- -- 2,263 -- -- 2,263
Additional expense of Class A
Common Stock Offering .................... -- -- (46) -- -- (46)
Restricted stock granted (Note 11) ......... -- 1 1,984 -- (1,985) --
Reacquisition of previously issued
common stock ............................. -- -- -- (148) -- (148)
Conversion of Class B Common Stock to
Class A Common Stock ..................... 13 (13) -- -- -- --
Amortization of unearned
compensation (Note 11) ................... -- -- -- -- 1,063 1,063
--- ------ -------- -------- -------- --------
BALANCE AT NOVEMBER 30, 1997 ................ 53 332 86,437 125,457 (2,372) 209,907
Net income ................................ -- -- -- 40,192 - 40,192
Public offering - Class A Common Stock
(Note 7) ................................ 46 - 117,654 -- -- 117,700
Cash dividends (6.0/cent/per share) ....... - -- -- (2,310) -- (2,310)
Change in equity investment (Note 2) ...... - -- (7) -- -- (7)
Restricted stock granted (Note 11) ........ -- -- 680 -- (680) --
Reacquisition of previously issued
common stock ............................ -- -- (57) (138) -- (195)
Conversion of Class B Common Stock to
Class A Common Stock .................... 16 (16) -- -- -- --
Forfeiture of restricted shares ........... -- -- (110) -- 110 --
Income tax benefit related to restricted
stock plan (Note 11) .................... -- -- 492 -- -- 492
Amortization of unearned
compensation (Note 11) .................. -- -- -- -- 1,076 1,076
--- ------ --------- --------- -------- ---------
BALANCE AT NOVEMBER 30, 1998 ................ $115 $316 $205,089 $163,201 $(1,866) $366,855
==== ====== ========= ========= ======== =========
</TABLE>
See accompanying notes.<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION> THREE MONTHS
YEAR ENDED ENDED YEAR ENDED
AUGUST 31, NOVEMBER 30, NOVEMBER 30,
----------- -------------- ----------- -----------
1996 1996 1997 1998
----------- -------------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) .................................... $ 19,681 $ (1,867) $ 29,796 $ 40,192
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization ........................ 6,302 2,353 9,910 13,137
Amortization of unearned compensation ................ 606 122 1,063 1.076
Deferred income taxes ................................ 1,500 (766) 4,425 5,545
Undistributed (income) loss from
equity investments. ................................ (1,441) 304 (366) 905
Gain on sale of equity investment .................... -- -- (1,245)
Changes in Operating Assets and Liabilities:
Receivables ......................................... (1,661) (1,405) (667) (2,020)
Inventories ......................................... (251) 156 485 (87)
Prepaid expenses and other current assets ........... 712 651 (689) (1,166)
Other assets ........................................ (127) -- (204) (176)
Accounts payable .................................... 1,201 (514) 2,278 4,471
Deferred income ..................................... 6,111 9,797 6,791 12,915
Income taxes payable ................................ (267) 30 (80) 5,277
Other current liabilities ........................... 317 (1,038) 2,192 688
---------- --------- --------- ----------
Net Cash Provided by Operating Activities ............. 32,683 7,823 54,934 79,512
INVESTING ACTIVITIES
Acquisition of investments ............................ (83,502) (70,959) (145,391) (342,146)
Proceeds from maturities of investments ............... 106,330 3,771 197,347 258,120
Capital expenditures .................................. (34,784) (14,864) (38,627) (71,858)
Equity investments .................................... (15,287) -- (17,725) (410)
Cash surrender value of life insurance ................ (725) (1,123) (1,253) (1,323)
Proceeds from sale of equity investment ............... - - - 5,270
Acquisition of Watkins Glen International interest,
net of cash acquired ................................ -- -- (996) --
Acquisition of Phoenix International Raceway,
net of cash acquired ................................ -- -- (43,868) --
---------- --------- --------- ----------
Net Cash Used in Investing Activities ................. (27,968) (83,175) (50,513) (152,347)
FINANCING ACTIVITIES
Payment of notes payable .............................. - - - (13,658)
Reacquisition of previously issued common stock ....... (1,708) -- (148) (195)
Additional expense of Class A
Common Stock Offering ............................... -- -- (46)
Cash dividends paid ................................... (1,836) -- (2,310) (2,310)
Issuance of Class A Common Stock ...................... -- 74,367 - 117,700
Short-term borrowings ................................. -- 7,800 - -
Repayment of short-term borrowings .................... -- (7,800) - --
---------- --------- --------- -----------
Net Cash Provided by (Used in) Financing Activities.... (3,544) 74,367 (2,504) 101,537
---------- --------- --------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents .. 1,171 (985) 1,917 28,702
Cash and Cash Equivalents at Beginning of Period ....... 7,871 9,042 8,057 9,974
---------- --------- --------- ----------
Cash and Cash Equivalents at End of Period ............. $ 9,042 $ 8,057 $ 9,974 $ 38,676
========== ========= ========= ==========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1998
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 five premier
motorsports facilities--Daytona International Speedway ("Daytona"), 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;
Phoenix International Raceway ("Phoenix"), a one mile oval track located
outside of Phoenix, Arizona (See Note 3); Darlington Raceway, a 1.3 mile track
located in Darlington, South Carolina; and Watkins Glen International
("Watkins Glen"), a 3.4 mile road course located in Watkins Glen, New York
(See Note 3). The Company also operates Tucson Raceway Park in Pima County
Arizona.
At these facilities the Company promoted over 80 stock car, sports car,
truck, motorcycle and other racing events in 1998, including eight NASCAR
Winston Cup Series championship point races, two NASCAR Winston Cup Series
non-championship point races, five NASCAR Busch Series--Grand National
Division races, three NASCAR Craftsman Truck Series races, and a number of
prestigious sports car and motorcycle races.
The Company also has investments in other motorsports entertainment
companies. The Company holds a 45% interest in Homestead-Miami Speedway, LLC
("Miami"), the operator of the Miami Homestead Speedway. The Company also
holds an approximately 12% indirect interest in Penske Motorsports, Inc.
("PMI"), which owns and operates Michigan International Speedway,
Pennsylvania's Nazareth Speedway, the California Speedway, and the North
Carolina Motor Speedway.
The Company owns and operates DAYTONA USA--The Ultimate Motorsports
Attraction, a motorsports theme-entertainment complex that includes
interactive media, theaters, historical memorabilia and exhibits and tours of
Daytona International Speedway.
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 and at unaffiliated
sporting events.
The Company's proprietary MRN radio network and NASCAR Truck Network
produces and syndicates NASCAR Winston Cup Series, NASCAR Busch Series--Grand
National Division, NASCAR Craftsman Truck Series 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 which became effective
November 4, 1996, 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 modified the Company's authorized capital to include one
million shares of Preferred Stock, eighty million shares of Class A Common
<PAGE>
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 adjusted to give effect to the
recapitalization and related stock split.
Effective December 1, 1996, the Company changed its fiscal year end from
August 31 to November 30. This resulted in a three-month transition period
commencing September 1, 1996 and ending November 30, 1996.
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,
repurchase agreements and money market accounts at investment firms. Cash and
cash equivalents exclude certificates of deposit, obligations of U.S.
Government Agencies, U.S. Treasury Notes and U.S. Treasury Bills, regardless
of original maturity.
INVESTMENTS (NOTE 4): 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 at November 30, 1997,
represent a 40% ownership interest in Miami, a 20% ownership interest in PSH
Corp (resulting in an approximately 11% indirect interest in PMI) and an
approximately 7% interest in Grand Prix Association of Long Beach ("Long
Beach"). At November 30, 1998, equity investments represent a 45% interest in
Miami and a 20% ownership interest in PSH Corp. (resulting in an approximately
<PAGE>
12% indirect interest in PMI). These investments are accounted for using the
equity method of accounting. The Company's equity in the net income from
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 pro rata share of the underlying assets reduce the investment.
The Company's investment in excess of its pro rata share of the underlying
assets is amortized by the straight-line method over 20-40 years. The Company
recognizes the effects of transactions involving the sale or distribution by
an equity investee of its common stock as capital transactions.
GOODWILL (NOTE 3): Goodwill resulting from acquisitions is being
amortized by the straight-line method over 40 years. Recoverability of
intangibles is assessed using estimated undiscounted cash flows of related
operations. The amount amortized for the years ended November 30, 1997 and
November 30, 1998, was approximately $382,000 and $1,004,000, respectively.
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 November 30, 1998.
INCOME TAXES (NOTE 5): 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 AND RACE RELATED REVENUE: 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.
ADVERTISING EXPENSE: Advertising costs are expensed as incurred or, as
in the case of race-related advertising, upon the completion of the event.
Advertising expense was approximately $1.7 million, $290,000, $2.4 million and
$3.8 million for the year ended August 31, 1996, the three months ended
November 30, 1996 and the years ended November 30, 1997 and 1998,
respectively.
AMORTIZATION OF UNEARNED COMPENSATION (NOTE 11): The Company accounts for
its long-term incentive stock plans in accordance with APB 25.
EARNINGS PER SHARE: The Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share", during its first quarter
ended February 28, 1998. This statement requires the Company to present
"Basic" and "Diluted" earnings per share on the face of the income statement
for current periods and to restate earnings per share for prior periods.
Weighted average shares outstanding for the periods presented are:
<TABLE>
<CAPTION>
BASIC DILUTED
------------ -----------
<S> <C> <C>
Year ended August 31, 1996 .................... 34,191,106 34,317,430
Three months ended November 30, 1996 .......... 35,327,263 35,470,048
Year ended November 30, 1997 .................. 38,185,473 38,339,978
Year ended November 30, 1998 .................. 40,025,643 40,188,800
</TABLE>
The difference between basic weighted average shares and diluted weighted
average shares is related to shares issued under the Company's long-term
<PAGE>
incentive stock plans, using the treasury stock method as prescribed by the
standard.
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.
NEW ACCOUNTING PRONOUNCEMENTS: In June 1997, SFAS No. 130, "Reporting
Comprehensive Income," was issued. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements and is effective for fiscal years
beginning after December 15, 1997. The Company will adopt SFAS No. 130 in the
first quarter of fiscal 1999. SFAS No. 130 expands or modifies disclosures
and, accordingly, will have no impact on the Company's reported financial
position, results of operations or cash flows.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and reporting selected information
about operating segments in interim financial reports and is effective for
fiscal years beginning after December 15, 1997. The Company will adopt SFAS
131 in its November 30, 1999 annual financial statements. SFAS 131 expands or
modifies disclosures and, accordingly, will have no impact on the Company's
reported financial position, results of operations or cash flows.
COMPARABILITY: For comparability, certain 1996 and 1997 amounts have
been reclassified where appropriate to conform with the presentation adopted
in 1998.
NOTE 2--EQUITY INVESTMENTS
Equity investments includes the following:
<TABLE>
<CAPTION>
% %
1997 OWNERSHIP 1998 OWNERSHIP
---------------- ----------- --------------- ----------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
PSH Corp. ............................. $30,628 20 $31,470 20
Grand Prix Association of Long
Beach, Inc. .......................... 3,816 7 -- --
Homestead-Miami Speedway, LLC ......... 11,400 40 12,617 45
------- -------
$45,844 $44,087
======= =======
</TABLE>
During 1998, PMI issued an additional 60,558 shares of common stock in
conjunction with the 1997 investment in North Carolina Motor Speedway. The
Company recorded an increase in its equity investment of PSH Corp. of
approximately $190,000 and recorded a corresponding increase in deferred
income taxes and additional paid-in capital of approximately $75,000 and
$115,000, respectively.
During 1998 PMI announced plans to repurchase, from time to time, up to
$10 million of PMI's common stock in open market transactions. As of the
Company's year end, 242,500 shares had been repurchased at prices ranging from
$19.875 to $22.50 per share. As a result of these transactions, the Company
recorded a reduction in its equity investment of PSH Corp. of approximately
$200,000 and recorded a corresponding decrease in deferred income taxes and
<PAGE>
additional paid-in capital of approximately $80,000 and $120,000,
respectively.
In March of 1998, the Company acquired an additional 5% ownership
interest in Miami for approximately $2.8 million, which was substantially
financed by a 7.5% interest bearing note, payable on December 31, 2001. The
borrower has the option of calling $500,000 of this note on December 31, 2000.
In March, 1998, the Company sold its entire equity interest in Long Beach
for approximately $5.3 million. The Company recorded a pre-tax gain of
approximately $1.2 million from the sale.
The Company's investment in excess of its share of underlying net assets
in equity investments net of amortization amounted to $8.8 million and $8.0
million in 1997 and 1998, respectively. Amortization of the excess over the
Company's share of the underlying net assets for the years ended November 30,
1997 and 1998 was approximately $416,000 and $444,000, respectively.
The Company's share of undistributed equity in the earnings from equity
investments included in retained earnings at November 30, 1997 and 1998 was
approximately $2.3 million and $2.1 million, respectively.
Summarized financial information for the Company's affiliated companies
accounted for by the equity method is as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1998
-------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Current assets ................. $ 22,400 $ 14,907
Noncurrent assets .............. 379,900 359,213
Current liabilities ............ 44,100 33,516
Noncurrent liabilities ......... 116,200 117,785
Minority interests ............. 84,900 86,812
Net revenues ................... 126,800 119,007
Operating income ............... 29,200 18,281
Net income ..................... 8,900 739
</TABLE>
NOTE 3--ACQUISITIONS
On April 1, 1997, the Company exercised its contractual option to acquire
the 50% interest it did not already own in Watkins Glen from Corning, Inc. for
approximately $3.1 million. The transaction price represented the stock's book
value at December 31, 1996.
The Company's equity in Watkins Glen's net loss through March 31, 1997 is
included in equity in net income from equity investments at November 30, 1997.
The acquisition of the additional 50% interest was accounted for under the
purchase method. Subsequent to the acquisition on April 1, 1997, Watkins Glen
International is accounted for on a consolidated basis.
On July 14, 1997, Phoenix Speedway Corporation, a newly formed
wholly-owned subsidiary of the Company, acquired substantially all of the
assets comprising the business and motorsports complex known as "Phoenix
International Raceway" for consideration consisting of $46.4 million in cash,
notes payable of $13.8 million, and related acquisition costs. Interest is
being accrued on the note payable to the former principal and shareholder at
an annual rate of 9%.
The Phoenix acquisition has been accounted for under the purchase method
of accounting, and accordingly, the results of operations have been included
in the Company's consolidated statements of income since the date of
<PAGE>
acquisition. The purchase price was allocated to the assets and liabilities
acquired based on estimated fair values at the acquisition date. The excess of
the purchase price over the fair value of the net assets acquired was
approximately $40.8 million and was recorded as goodwill. During fiscal 1998,
a reduction of the purchase price in accordance with the original purchase
agreement resulted in an approximately $469,000 adjustment to goodwill and
notes payable.
The following unaudited pro forma financial information presents a
summary of consolidated results of operations as if the Phoenix transaction
had occurred as of September 1, 1995 after giving effect to certain
adjustments, including depreciation, amortization of goodwill, interest
income, interest expense on acquisition debt and related income tax effects.
The pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of what would have occurred had the acquisition
been made on that date, nor are they necessarily indicative of results which
may occur in the future.
<TABLE>
<CAPTION>
PRO FORMA
---------------------------------------------------
YEAR ENDED THREE MONTHS ENDED YEAR ENDED
AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1996 1996 1997
------------ -------------------- -------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Total revenues ................... $ 107,343 $17,449 $ 146,135
Net income ....................... 19,752 119 28,953
Basic income per share ........... 0.58 -- 0.76
Diluted income per share ......... 0.58 -- 0.76
</TABLE>
NOTE 4--INVESTMENTS
The following is a summary of short-term, long-term and designated
investments:
<TABLE>
<CAPTION>
NOVEMBER 30, 1997
-----------------------------------------------------
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ------------ ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Held-to-maturity securities
Obligations of U.S. Government
agencies ...................... $11,936 $36 $-- $11,972
Municipal securities ........... 957 -- 2 955
------- --- --- -------
12,893 36 2 12,927
Certificates of deposit ............ 11,208 -- -- 11,208
------- --- --- -------
$24,101 $36 $ 2 $24,135
======= === === =======
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 30, 1998
-----------------------------------------------------
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ------------ ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Held-to-maturity securities
Obligations of U.S. Government
agencies ...................... $ 5,978 $-- $ -- $ 5,978
Municipal securities ........... 1,149 4 -- 1,153
------- --- --- --------
7,127 4 -- 7,131
Certificates of deposit ............ 101,000 -- -- 101,000
------- --- --- ---------
$108,127 $ 4 $ -- $108,131
======== === === ========
</TABLE>
<PAGE>
At November 30, 1998, approximately $53.5 million of short-term
investments are designated for the Company's investment in Kansas
International Speedway. See Note 14.
The cost and market values of held-to-maturity securities include
accrued investment income of approximately $12,000 and $25,000 at November 30,
1997 and 1998, respectively.
The cost and estimated market value of the held-to-maturity securities at
November 30, 1998, 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.
<TABLE>
<CAPTION>
NOVEMBER 30, 1998
--------------------------
ESTIMATED
COST MARKET VALUE
---------- -------------
(IN THOUSANDS)
<S> <C> <C>
Held-to-maturity securities
Due in one year or less ........................ $6,627 $6,627
Due after one year through three years ......... 500 504
------- -------
$7,127 $7,131
======= =======
</TABLE>
The Company maintained its certificates of deposit with one financial
institution at November 30, 1998. The Company believes that it is not exposed
to any significant credit risk on its certificates of deposit due to the
strength of the financial institution and the short-term nature of the
certificates of deposit.
NOTE 5--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 are as follows:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS YEAR ENDED YEAR ENDED
AUGUST 31, ENDED NOVEMBER 30, NOVEMBER 30,
--------- NOVEMBER 30, ------------ ------------
1996 1996 1997 1998
--------- ----------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current tax expense (benefit):
Federal ........................... $ 9,117 $(1,140) $12,973 $15,864
State ............................. 1,310 (3) 2,042 1,869
Deferred tax expense:
Federal ........................... 1,341 352 2,181 6,158
State ............................. 195 50 962 1,003
------- -------- ------- -------
Provision for income taxes ......... $11,963 $ (741) $18,158 $24,894
======= ======== ========= =======
</TABLE>
<PAGE>
The reconciliation of income tax computed at the federal statutory tax
rates to income tax expense is as follows:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED YEAR ENDED YEAR ENDED
AUGUST 31, 1996 NOVEMBER 30, 1996 NOVEMBER 30, 1997 NOVEMBER 30, 1998
---------------- ----------------- ----------------- -----------------
% OF % OF % OF % OF
PRE-TAX PRE-TAX PRE-TAX PRE-TAX
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
---------------- ------------------ --------------------- ------------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income tax computed at
federal statutory rates .... $11,075 35.0% $ (913) (35.0%) $16,784 35.0% $22,780 35.0%
State income taxes, net of
federal tax benefit ........ 977 3.1 26 1.0 2,053 4.3 2,010 3.1
Non-taxable share of
(income) loss from
unconsolidated affiliates... (504) (1.6) 73 2.8 (238) (0.5) (212) (0.3)
Officers' life insurance
expense .................... 162 0.5 17 0.7 23 (20) -
Other, net .................. 253 0.8 56 2.1 (464) (0.9) 336 0.4
------ ---- ------- ---- ------ ------ ------- -----
$11,963 37.8% $ (741) (28.4%) $18,158 37.9% $24,894 38.2%
======= ===== ======= ======= ======== ====== ======= =====
</TABLE>
NOTE 6 CREDIT FACILITY
In May of 1998, the Company entered into a five-year, unsecured, $100
million revolving line of credit facility. Borrowings under the Credit
Facility will bear interest at the applicable LIBOR rate plus 40-80 basis
points depending on certain financial criteria. The Credit Facility includes
customary representations and warranties, covenants, defaults and conditions.
At November 30, 1998 there were no borrowings under the Credit Facility.
NOTE 7--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 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 of 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, 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
<PAGE>
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 Preferred Stock are outstanding. See also Note 1--Basis of
Presentation.
During July of 1998, the Company sold an additional 4,600,000 shares of
Class A Common Stock in a primary offering, including the Underwriters' over-
allotment, at a price to the public of $27.00. The net proceeds to the
Company were approximately $117.7 million, after deduction of underwriting
discounts and commissions and expenses of the offering. As of November 30,
1998, the Company had used approximately $24.4 million of the net proceeds for
the acquisition of land and preliminary construction related to Kansas
International Speedway and designated an additional $53.5 million for the
further funding of its investment in that facility. The Company intends to
use the remaining proceeds to partially fund completion of additions and
improvements to the Company's existing motorsports facilities, and for working
capital and other corporate purposes, including the pursuit of further
expansion opportunities.
NOTE 8--COMMITMENTS AND CONTINGENCIES
A. In 1985, International Speedway Corporation ("ISC") established a
salary incentive plan designed to qualify under Section 401(k) of the Internal
Revenue Code. Employees of ISC and certain participating subsidiaries who have
completed 1,000 hours and 12 months continuous service are eligible to
participate in the plan. Matching contributions are made to a savings trust
(subject to certain limits) concurrent with employees' contributions. The
level of the matching contribution depends upon the amount of the employee
contribution. Employees become 100% vested upon entrance to the plan.
The contribution expense for the plan was approximately $307,000,
$85,000, $376,000 and $ 523,000 for the year ended August 31, 1996, for the
three month period ended November 30, 1996 and the years ended November 30,
1997 and 1998, respectively.
B. The estimated cost to complete construction in progress at November
30, 1998 for existing facilities is approximately $34.3 million. At November
30, 1998, approximately $53.5 million of short-term investments is designated
for the Company's investment in Kansas International Speedway.
C. 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. In addition to
such routine litigation incident to its business the Company faces exposure
from other legal proceedings as described below.
The Company's indirect corporate subsidiary, Americrown Service
Corporation ("Americrown"), is the sole defendant in a class action proceeding
in the Circuit Court of Talladega County, Alabama which was filed in October
1996. The plaintiffs allege, among other things, that Americrown engaged in
price-fixing activities in connection with the sale of racing souvenirs and
merchandise at the Talladega Superspeedway. The suit seeks to recover at
least $500 for each member of the class but does not otherwise seek to recover
compensatory or punitive damages or statutory attorneys' fees. A class
consisting of persons who purchased racing souvenirs at Talladega
Superspeedway since September 1992 was certified on July 30, 1998 by the
court. Americrown has moved for reconsideration and intends to appeal the
<PAGE>
ruling to the Alabama Supreme Court. Americrown disputes the allegations and
intends to defend the action fully and vigorously.
In March 1997, two purported class action companion lawsuits were filed
in the United States District Court, Northern District of Georgia, against the
Company, Americrown, and a number of other persons alleging, in substance,
that the defendants unlawfully conspired to fix prices of souvenirs and
merchandise sold to consumers in violation of federal antitrust laws. One
suit was filed by Florida residents and the other suit was filed by Georgia
residents. Both suits seek damages and injunctive relief on behalf of all
persons who purchased souvenirs or merchandise from certain vendors at any
NASCAR Winston Cup race or supporting event in the United States during the
period 1991 to present. The two suits have been consolidated and the court is
considering class certification. Discovery has been concluded. The Company
and Americrown dispute the allegations and intend to defend the actions fully
and vigorously.
Management is presently unable to predict or quantify the outcome of
these matters
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 American Historic
Racing Motorcycle Association ("AHRMA"), the American Motorcyclist Association
("AMA"), the Automobile Racing Club of America ("ARCA"), the Championship Cup
Series ("CCS"), the Federation Internationale de l'Automobile ("FIA"), the
Federation Internationale Motocycliste ("FIM"), Historic Sportscar Racing
("HSR"), the International Race of Champions ("IROC"), the Indy Racing League
("IRL"), the National Association for Stock Car Auto Racing, Inc. ("NASCAR"),
the Sports Car Club of America ("SCCA"), the Sportscar Vintage Racing
Association ("SVRA"), the United States Auto Club ("USAC"), the United States
Road Racing Championship ("USRRC"), and the World Karting Association ("WKA").
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
combined voting power 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 $11.6, $17.0 and $23.1 million for the years
ended August 31, 1996, and November 30, 1997 and 1998, respectively. For the
three month period ended November 30, 1996, monies paid by the Company to
NASCAR for disbursements to competitors totaled approximately $1.1 million.
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 in October 1995. 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 records a net insurance
expense representing the excess of the premiums paid over the increase in cash
surrender value of the policies associated with these agreements. During the
years ended November 30, 1997 and 1998, premiums paid were approximately equal
to the increase in the cash surrender value of the policies.
<PAGE>
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 and interest for respective periods is
summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS YEARS ENDED
AUGUST 31, ENDED NOVEMBER 30,
----------- NOVEMBER 30, -----------------------------
1996 1996 1997 1998
---------- ------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Income taxes paid ......... $10,763 $185 $13,652 $13,618
======= ======= ======= =======
Interest paid ............. $ -- $ 69 $ 31 982
======= ======= ======= =======
</TABLE>
See Note 2 for discussion of non-cash equity investment transactions.
NOTE 11--LONG-TERM INCENTIVE STOCK PLANS
In November 1993, the Company's Board of Directors and a majority of the
Company shareholders approved the "International Speedway Corporation 1994
Long-Term Incentive Plan" (the "1994 Plan") for certain officers and managers
of the Company. Under the 1994 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 1994 Plan participants. Awards were granted under the 1994 Plan
based upon the Company's performance in fiscal years 1994, 1995 and 1996. The
ability to issue additional shares under the 1994 Plan expired with the grants
based on fiscal 1996 results, which were granted January 1, 1997.
In September 1996, the Company's Board of Directors and a majority of the
Company shareholders approved the "1996 Long-Term Incentive Plan" (the "1996
Plan") for certain officers, employees and consultants of the Company. The
1996 Plan authorizes the grant of stock options (incentive and nonstatutory),
stock appreciation rights ("SARs") and restricted stock. The Company has
reserved an aggregate of 1,000,000 shares (subject to adjustment for stock
splits and similar capital changes) of the Company's Class A Common Stock for
grants under the 1996 Plan. In April 1998, the first awards of restricted
stock under the 1996 Plan were made at no cost to Plan participants based upon
fiscal 1997 results. There have been no grants of stock options or SARs under
the 1996 Plan.
Shares of restricted stock awarded under the 1994 and 1996 Plans vest at
the rate of 50% of each award on the third anniversary of the award date and
the remaining 50% on the fifth anniversary of the award date. Shares awarded
under the 1994 and 1996 Plans generally are subject to forfeiture in the event
of termination of employment prior to the vesting dates. The 1994 and 1996
Plan participants own the shares and may vote and receive dividends, but are
subject to certain restrictions. 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 the right of first refusal to purchase any
shares of stock issued under the 1994 and 1996 Plans which are offered for
sale subsequent to vesting.
<PAGE>
On January 1, 1996 and 1997 a total of 102,075 and 98,010 of the
Company's Class B Common Stock , respectively, were awarded to certain
officers and managers under the 1994 Plan. On April 1, 1998, 22,236
restricted shares of the Company's Class A Common Stock were awarded to
certain officers and managers under the 1996 Plan. The market value of shares
awarded on January 1, 1996 and 1997 and April 1, 1998 amounted to
approximately $1,600,000, $1,985,000 and $680,000, 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
periods of the shares. In accordance with APB 25, the Company will recognize
a compensation charge over the vesting periods equal to the fair market value
of these shares on the date awarded. The expense measured under SFAS No. 123
does not differ from that measured under APB25.
The tax effect of income tax deductions that differ from expense under
these plans is credited or charged to additional paid-in capital.
NOTE 12--CHANGE IN FISCAL YEAR END
Effective December 1, 1996, the Company changed its fiscal year end from
August 31 to November 30. This resulted in a three-month transition period
commencing September 1, 1996 and ending November 30, 1996. Consequently, the
consolidated audited financial statements contain information as of and for
the three months ended November 30, 1996. The following supplemental unaudited
consolidated statement of operations and unaudited consolidated statement of
cash flows for the three months ended November 30, 1995 are presented for
comparative purposes only and were presented in the Transition Form 10-Q filed
for the period ended November 30, 1996.
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
NOVEMBER 30, 1995
------------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT
SHARE AND
PER SHARE AMOUNTS)
<S> <C>
Revenues ........................................................ $ 8,542
Expenses ........................................................ 10,016
----------
Operating loss .................................................. (1,474)
Interest income, net ............................................ 290
Equity in net loss from equity investments ...................... (154)
----------
Loss before income taxes ........................................ (1,338)
Income tax benefit .............................................. (318)
----------
Net loss ........................................................ $ (1,020)
==========
Basic loss per share ............................................ $ (0.03)
==========
Diluted loss per share .......................................... $ (0.03)
==========
Weighted average number of common shares outstanding--Basic ..... 34,214,610
Weighted average number of common shares outstanding--Diluted ... 34,315,301
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
NOVEMBER 30, 1995
-------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C>
Net cash provided by operating activities ....................... $ 3,673
Investing Activities
Proceeds from maturities of investments, net ................... 21,053
Capital expenditures ........................................... (8,229)
Investment in PSH Corp. ........................................ (14,975)
Other investing activities ..................................... (732)
----------
Net cash used in investing activities ........................... (2,883)
Net cash provided by financing activities ....................... --
----------
Net increase in cash and cash equivalents ....................... 790
Cash and cash equivalents at beginning of period ................ 7,871
----------
Cash and cash equivalents at end of period ...................... $ 8,661
==========
</TABLE>
NOTE 13--QUARTERLY DATA (UNAUDITED)
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 events. For example, one of Darlington Raceway's
Winston Cup Series events is traditionally held on the Sunday preceding Labor
Day. Accordingly, the timing of the Labor Day holiday in 1997 and 1998
resulted in the revenue and expenses for that race and the related supporting
events being recognized in the quarter ended August 31 in fiscal 1997, while
not being recognized until the quarter ending November 30 in fiscal 1998.
Further, in July 1998 the Company announced the postponement of the NASCAR
Winston Cup Series Pepsi 400 at Daytona from July 4, 1998 to October 17, 1998
as a result of the nationally publicized forest fire emergency throughout the
state of Florida. The rescheduling of the Pepsi 400 at Daytona resulted in
event-related revenues and expenses being recognized in the quarter ending
November 30, 1998 while corresponding revenues and expenses were recognized in
the quarter ended August 31 in fiscal 1997. Accordingly, the Company's
results of operations are not necessarily comparable on a period-to-period
basis.
The following table presents certain unaudited financial data for each
fiscal quarter of fiscal 1997 and fiscal 1998 (in thousands, except per share
amounts):
<PAGE>
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
------------------------------------------------------------
FEBRUARY 28, MAY 31, AUGUST 31, NOVEMBER 30,
1997 1997 1997 1997
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Total Revenues ................. $ 51,866 $ 29,630 $ 33,106 $ 26,772
Operating Income ............... 27,103 7,075 8,762 1,961
Net Income ..................... 17,475 4,486 5,985 1,850
Basic earnings per share ....... 0.46 0.12 0.16 0.05
Diluted earnings per share ..... 0.46 0.12 0.16 0.05
</TABLE>
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
------------------------------------------------------------
FEBRUARY 28, MAY 31, AUGUST 31, NOVEMBER 30,
1998 1998 1998 1998
-------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Total Revenues ................. $ 68,284 $ 38,191 $ 17,822 $ 64,671
Operating Income (loss) ........ 33,000 7,784 (4,687) 24,817
Net Income (loss) .............. 20,149 6,046 (1,944) 15,941
Basic earnings (loss) per share 0.53 0.16 (.05) 0.37
Diluted earnings (loss) per share 0.53 0.16 (.05) 0.37
</TABLE>
NOTE 14 -- SUBSEQUENT EVENTS
In January 1999, the Unified Government of Wyandotte County/Kansas City,
Kansas ("Unified Government") issued approximately $71.3 million in taxable
special obligation revenue ("TIF") bonds and approximately $24.3 million in
sales tax special obligation revenue ("STAR") bonds, in connection with the
financing of the phase I construction of the proposed Kansas International
Speedway. The STAR bonds will be retired with state and local taxes generated
within the project's boundaries. The TIF bonds will be a liability of the
Company and will be recorded as long term debt in the Company's first quarter
of fiscal 1999. Commencing in 1999 and continuing through 2027, the Company
will be required to make principal and interest payments escalating from an
annual rate of approximately $4.8 million in 1999 to $7.7 million in 2027.
The Company has granted a mortgage and security interest in the Kansas project
for its TIF Bond debt service obligations.
The Company's phase I equity contribution to Kansas International
Speedway is approximately $77.9 million, of which $24.4 million was funded
during fiscal 1998, primarily for land acquisition.
Subsequent to November 30, 1998, the Company invested an additional
approximately $2.5 million in Kansas International Speedway and deposited
approximately $51 million into a trust account concurrent with the Unified
Government's January 1999 issuance of the TIF and STAR bonds described above.
TIF and STAR bond proceeds are awaiting disbursement subject to certain
conditions of the bond insurer.
<PAGE>
Schedule II Valuation and Qualifying Accounts
Additions
Balance Charged to Balance
Beginning Costs and Deductions at End
Description of Period Expenses (A) Period
_____________________________________________
(Thousands of Dollars)
For the year ended
November 30, 1998
Allowance for
doubtful accounts $100 $ 79 $ 79 $ 100
For the year ended
November 30, 1997
Allowance for
doubtful accounts $ 35 $ 170 $ 105 $ 100
For the three months ended
November 30, 1996
Allowance for
doubtful accounts $ 35 $ (2) $ (2) $ 35
For the year ended
August 31, 1996
Allowance for
doubtful accounts $ 35 $ 52 $ 52 $ 35
(A) Uncollectible accounts written off, net of recoveries.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers, directors and nominees for directors of the Company
are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
<S> <C> <C>
William C. France 65 Chairman of the Board, Chief Executive Officer and Director
James C. France 54 President, Chief Operating Officer and Director
Lesa D. Kennedy 37 Executive Vice President and Director
H. Lee Combs 45 Senior Vice President--Operations and Director
Robert E. Smith 66 Vice President--Administration
Susan G. Schandel 35 Treasurer and Chief Financial Officer
Gregory J. Sullivan 43 Vice President--Marketing
John E. Graham, Jr. 50 Vice President
W. Grant Lynch, Jr. 45 Vice President
James H. Hunter 59 Vice President
John R. Saunders 42 Vice President--Corporate Administrative Services
W. Garrett Crotty 35 Secretary and General Counsel
J. Hyatt Brown 61 Director
John R. Cooper 66 Director
Robert R. Dyson 52 Director
James H. Foster 72 Director
Brian Z. France 36 Director
Christy F. Harris 53 Director
Raymond K. Mason, Jr. 43 Director
Edward H. Rensi 54 Director
Lloyd E. Reuss 62 Director
Chapman Root, II 49 Director
Thomas W. Staed 67 Director
</TABLE>
The Company's Articles provide that the Board of Directors be divided
into three classes, with regular three year staggered terms. 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, Ms. Kennedy and Messrs.
Brown, Dyson, Rensi and Staed will hold office until the annual meeting of
shareholders to be held in 2000, and Messrs. William C. France, Combs,
Foster, Harris and Root will hold office until the annual meeting of
shareholders to be held in 2001.
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.
Mr. France also serves as a director of Penske Motorsports.
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 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 and Grand Prix Association
of Long Beach, Inc.
<PAGE>
Mr. Robert E. Smith has served as Vice President--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.
Mr. Gregory J. 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. John R. Saunders has served as a Vice President since 1997 and was
President of Watkins Glen International from 1983 until 1997.
Mr. W. Garrett Crotty has served as Secretary and General Counsel since
1996. Prior to that time he had been in the private practice of law 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.
Beginning January 1996 Mr. Cooper rejoined the Company staff.
Mr. Robert R. Dyson, a director since January 1997, has served as
Chairman and Chief Executive Officer of the Dyson-Kissner-Moran Corporation
(DKM) since November 1992.
Mr. James H. Foster, a director since 1968, served as the Company's
Senior Vice President - Special Projects from January 1994 until his
retirement in 1997. Mr. Foster served as President of Daytona International
Speedway from 1988 until 1994.
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,
<PAGE>
including Winston Racing Series Administrative Assistant and National Tour
Director.
Mr. Christy F. Harris, a director since 1984, has been engaged in the
private practice of business and commercial law with Harris, Midyette, Geary,
Darby, & Morrell, P.A. for more than twenty years.
Mr. Raymond K. Mason, Jr., a director since 1981, had served as Chairman
and President of American Banks of Florida, Inc., Jacksonville, Florida, from
1978 until its sale in 1998.
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.
Mr. Edward H. Rensi, a director since January 1997, is an executive
consultant with McDonald's Corporation. He served as President and Chief
Executive Officer of McDonald's USA from 1991 until 1997. He is a Director of
McDonald's Corporation and Snap-On Incorporated.
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 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 1998 services totaled
approximately $111,000. The Company also reimburses directors for all expenses
incurred in connection with their activities as directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company during the fiscal year ended November 30, 1998, Forms 5 and
amendments thereto furnished to the Company with respect to the fiscal year
ended November 30, 1998, and written representations furnished to the Company,
James H. Foster and Christy F. Harris have been identified as failing to file
on a timely basis reports required by section 16(a) of the Exchange Act during
the fiscal year ended November 30, 1998. Mr. Foster and Mr. Harris each had
one transaction which should have been reported on Form 4 which was reported
late on Form 5. Mr. Harris' Form 5 was filed late. Based solely on the
review, there is no other person who, at any time during the fiscal year, was
a director, officer, beneficial owner of more than ten percent of any class of
the Company's securities that failed to file on a timely basis reports
required by section 16(a) of the Exchange Act during the fiscal year ended
November 30, 1998.
<PAGE>
ITEM 11. 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 1998 (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 (3) Stock Awards(1) Compensation(2)
- ------------------- ----------------------------- -------------- ------ ---------
<S> <C> <C> <C> <C> <C>
William C. France 1998 $380,513 $153,622 $ 0 $774,441
Chairman and Chief 1997 $330,538 $150,282 $ 0 $769,351
Executive Officer 1996 $278,707 $130,679 $ 0 $771,368
James C. France 1998 $341,342 $111,168 $ 0 $477,319
President and Chief 1997 $264,644 $ 96,231 $ 0 $474,575
Operating Officer 1996 $224,778 $ 83,679 $ 0 $473,923
Lesa D. Kennedy 1998 $222,977 $ 71,295 $121,000 $ 9,559
Executive Vice 1997 $213,488 $ 75,837 $372,398 $ 8,355
President 1996 $173,553 $ 69,223 $149,695 $ 8,648
H. Lee Combs 1998 $218,161 $ 70,018 $121,000 $ 13,156
Sr Vice President 1997 $208,335 $ 69,672 $372,398 $ 12,373
Operations 1996 $172,226 $ 72,179 $172,020 $ 11,102
W. Grant Lynch, Jr. 1998 $187,778 $ 97,246 $ 64,406 $ 9,825
Vice President 1997 $176,965 $ 55,028 $177,694 $ 6,663
1996 $150,809 $ 52,570 $235,940 $ 10,255
</TABLE>
(1) For fiscal years prior to 1998, reflects the aggregate market value of
shares awarded under the Company's 1994 Long-Term Incentive Plan
(calculated as of the date of the award). The indicated awards were
made in January with respect to services rendered in the prior fiscal
year. For fiscal year 1998, reflects the aggregate market value of
shares awarded under the Company's 1996 Long-Term Incentive Plan
(calculated as of the date of the award). The indicated awards were
made in April with respect to services rendered in the prior fiscal
year. See Note 11 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, group health insurance, and long term
disability 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 1998 are as follows:
William C. France ($773,577, $864 and $0, respectively); James C. France
($468,161, $2,758 and $6,400, respectively); Lesa D. Kennedy ($3,159,
$0 and $6,400, respectively); H. Lee Combs ($3,142, $3,614 and $6,400,
respectively); and W. Grant Lynch, Jr. ($3,031, $394 and $6,400,
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) The bonus for the Chairman/CEO and President COO are the Company's
estimates for fiscal 1998, which have not yet been approved by the Board
of Directors of the Company.
<PAGE>
COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION
The Company's Executive Officer Compensation is overseen by the
Compensation Committee of the Board of Directors which is composed entirely of
independent directors.
PHILOSOPHY AND POLICIES. Executive Officer Compensation is structured
and administered to offer competitive compensation based on the Executive
Officer's contribution and personal performance in support of the Company's
strategic plan and business mission.
In 1989, based upon recommendation of the Compensation Committee, the
Company retained TPF&C to perform a salary study to determine benchmark salary
ranges. TPF&C made recommendations to the Company concerning salary ranges and
a bonus structure. The recommendations were followed in establishing the
corporate compensation plan which is reviewed and reevaluated every year. As
part of the overall compensation plan the Company's Executive Officers are
grouped in structured pay grades based upon job responsibility and
description. Each grade has an established range for annual salary. The
salary ranges for each grade were originally established based upon the TPF&C
salary study and have been reevaluated and adjusted annually by the
Compensation Committee based upon changes in market conditions and company
performance factors.
CORPORATE PERFORMANCE MEASURES USED TO DETERMINE EXECUTIVE OFFICER
COMPENSATION. Based on Company performance (determined subjectively by the
Committee in accordance with the sound business judgment of its members after
consideration of earnings per share, revenue growth and established salary
ranges, the Committee established a total pool of dollars which was used to
provide for increases in annual salary compensation to all employees including
the Executive Officers other than the Chairman/CEO and President/COO. The
Compensation Committee recommended a proposed salary for the Chairman/CEO and
President/COO to the entire Board of Directors (other than the Chairman/CEO
and President/COO) which approved the salaries as recommended.
SALARY COMPENSATION. All other Executive Officers' annual salaries were
set by the Chairman/CEO and President/COO who were given the authority to set
all salaries other than their own so long as (1) the total pool of available
dollars allocated for annual salary compensation for Executive Officers was
not exceeded and (2) provided each Executive Officer's annual salary was
within the established range for the salary grade. In setting Executive
Officer salaries the Chairman/CEO and President/COO considered (1) Company
performance as measured against management goals approved by the Board of
Directors, (2) personal performance in support of Company goals as measured by
annual evaluation criteria, and (3) intangible factors and criteria such as
payments by competitors for similar positions although no particular weighting
of the factors or formula was used.
In recommending the annual salaries of the Chairman/CEO and
President/COO, the Committee considered similar criteria as well as the
Committee members' assessment of the Company's financial size and condition.
INCENTIVE COMPENSATION. The Company has an Annual Incentive
Compensation Plan for Management in which the Executive Officers participate.
As a result Executive Officer Compensation is significantly at risk.
Incentive compensation for Executive Officers can be as high as 29% of total
annual compensation.
Each Executive Officer is assigned a target bonus opportunity based on
corporate and personal goals for the year. The actual bonus for each
Executive Officer will range from 0% to 125% of the target depending upon
<PAGE>
results of corporate and personal performance during the year. The current
corporate financial measurements are earnings per share and revenue growth.
These may vary from year to year as established by the Compensation Committee.
Personal performance factors are based on individual (functional) objectives
and are tailored for each Executive Officer. A portion of each Executive
Officer's incentive award will be based upon the Chairman/CEO and
President/COO's discretionary judgment of the individual's overall performance
during the plan year.
The incentive compensation for the Chairman/CEO and President/COO is,
again, proposed by the Compensation Committee and presented to the full Board
of Directors for ratification.
LONG TERM INCENTIVE PLAN COMPENSATION
1994 LONG-TERM INCENTIVE PLAN. In 1993, based upon recommendation of
the Compensation Committee, the Company retained the HayGroup to assist in the
design of a long term incentive compensation plan for specified key employees,
which is known as the "International Speedway Corporation 1994 Long-Term
Incentive Plan" (the "1994 Plan"). The 1994 Plan was recommended by the
Compensation Committee of the Board of Directors, unanimously approved by all
outside directors and ratified by the entire Board of Directors on November
17, 1993. It was approved by the written consent of the holders of a majority
of the outstanding shares of the Company on the same date. The purpose of the
1994 Plan was to attract and retain qualified and competent executives by
providing significant opportunities for capital accumulation and to enhance
the growth and profitability of International Speedway Corporation (the
"Company") by focusing on long-term goals and creation of increases in
shareholder value. The 1994 Plan set aside restricted stock in the amount of
50,000 old pre 15-1 split shares of common stock for its implementation, which
were converted, on the 15-1 basis, into 750,000 shares of Class B Common
Stock. Awards of restricted shares of stock were assigned to officers and key
employees who were capable of having a significant impact on the performance
of the Company. The amount of shares for each initial participant was based
primarily on an analysis and recommendations by compensation specialists of
the HayGroup. Awards were granted based upon Company performance in fiscal
years 1994, 1995 and 1996. The ability to issue additional shares under the
1994 Plan expired after the grants based on fiscal 1996 results. The
restricted shares were granted to participants each year based upon the
Company's performance as measured against annual financial goals established
in advance by the Board of Directors. Several aspects of the 1994 Plan and
its implementation are subject to the discretion of the Compensation
Committee.
The shares which were granted under the 1994 Plan are initially
restricted and do not immediately vest to the participant, but, instead carry
a continued employment restriction of 3 years on 50% of the grant and 5 years
on the other 50% of the grant. If employment ends prior to the expiration of
the vesting period for reasons acceptable to the Compensation Committee
(death, disability, retirement, etc.) the Company may determine to vest all or
a portion of the unvested and unearned restricted shares. Termination of
employment for any other reason will result in forfeiture of all unvested and
unearned shares.
Prior to vesting the participant may vote the shares and receive
dividends on the restricted shares as granted. Prior to vesting the
certificates for the restricted shares are held in escrow by the Company.
After vesting the certificates for the restricted shares will be delivered to
the participant. The Company has the right of first refusal to buy any stock
issued (and vested) under the 1994 Plan which any participant wishes to sell.
<PAGE>
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 consistent 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. The first awards under the 1996 Plan were made
in April 1998, based upon fiscal 1997 results. The amount of the awards was
based upon the Company's performance as measured against annual financial
goals established in advance by the Board of Directors. These awards were
restricted shares of Class A Common Stock and are initially restricted and
will not immediately vest to the participant, but, instead carry a continued
employment restriction of 3 years on 50% of the grant and 5 years on the other
50% of the grant. If employment ends prior to the expiration of the vesting
period for reasons acceptable to the Compensation Committee (death,
disability, retirement, etc.) the Company may determine to vest all or a
portion of the unvested and unearned restricted shares. Termination of
employment for any other reason will result in forfeiture of all unvested and
unearned shares. Awards under the 1996 Plan are to be made in April 1999,
based upon fiscal 1998 results and will carry restrictions equivalent to those
imposed on the awards in 1998.
Prior to vesting the participant may vote the shares and receive
dividends on the restricted shares as granted. Prior to vesting the
certificates for the restricted shares will be held in escrow by the Company.
After vesting the certificates for the restricted shares will be delivered to
the participant. The Company has the right of first refusal to buy any stock
issued (and vested) under the 1996 Plan which any participant wishes to sell.
<PAGE>
COLLATERAL ASSIGNMENT SPLIT-DOLLAR INSURANCE
In October 1995, based upon evaluation and recommendation of the
Compensation Committee, the Company entered into collateral assignment split-
dollar insurance agreements covering the lives of the Chairman/CEO, the
President/COO and their respective spouses. Pursuant to the agreements, the
Company will advance 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 the repayment of an
amount equal to the cumulative premiums paid by the Company. Although
Securities and Exchange Commission (SEC) rules require disclosure of the
entire premium advanced by the Company in the Summary Compensation Table, the
Compensation Committee determined the compensation aspect of the plan was
actually less than the total premium because of the repayment requirement and
represented reasonable and appropriate compensation to the covered executives,
when considered in light of their total compensation package.
CHAIRMAN/CEO COMPENSATION BASES. The Compensation Committee determined a
15% increase in Chairman/CEO compensation was appropriate in light of the
continued growth in earnings per share in 1997.
Thomas W. Staed
Chapman J. Root, II
Lloyd E. Reuss
PERFORMANCE GRAPH
The rules of the Securities and Exchange Commission ("SEC") require the
Company to provide a line graph covering at least the last five fiscal years
and comparing the yearly percentage change in the Company's total shareholder
return on common stock with the cumulative total return of a broad equity
index assuming reinvestment of dividends and the cumulative total return,
assuming reinvestment of dividends, of a published industry or
line-of-business index; peer issuers selected in good faith; or issuers with
similar market capitalization. The graph below compares the cumulative total
five year return of the Company's common stock (upon the assumption that an
original $100 investment was made in pre-split common stock which
automatically converted to Class B Common Stock on November 4, 1996) with that
of the NASDAQ Stock Market Index (U.S. Companies) and with the 40 NASDAQ
issues (U.S. companies) listed in SIC codes 7900-7999, which encompasses
service businesses in the amusement, sports and recreation industry, which
includes indoor operations which are not subject to the impact of weather on
operations and pari-mutual and other wagering operations. The Company conducts
large outdoor sporting and entertainment events which are subject to the
impact of weather, and is not involved in pari-mutual or other wagering. The
stock price shown has been estimated from the high and low prices for each
quarter for which the close is not available. Because of the unique nature of
the Company's business and the fact that only short-term public information is
available concerning a limited number of companies involved in the same line
of business, and no public information is available concerning other companies
in that line of business, the Company does not believe that the information
presented below is meaningful.
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG
INTERNATIONAL SPEEDWAY CORP., NASDAQ Market Index and NASDAQ SIC 7900 Index
[The line graph on the information statement furnished to shareholders depicts
the plotting of the following information.]
Measurement Period ISC NASDAQ NASDAQ
(Fiscal Year Covered) Market SIC 7900
Index Index
Measurement Pt - 11/30/93 $100.00 $100.00 $100.00
FYE* 11/30/94 $102.85 $100.20 $ 59.85
FYE* 11/30/95 $246.24 $142.87 $ 48.28
FYE* 11/30/96 $308.62 $174.91 $ 43.11
FYE 11/30/97 $317.15 $217.89 $ 52.94
FYE 11/30/98 $533.51 $267.00 $ 48.60
* Adjusted to reflect current fiscal year end for comparability purposes.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 8, 1999, the Company had 11,783,548 shares of Class A Common
Stock and 31,291,621 shares of Class B Common Stock issued and outstanding.
Each share of the Class A Common Stock is entitled to one-fifth of one vote on
matters submitted to shareholder approval or a vote of shareholders. Each
share of the Class B Common Stock is entitled to one vote on matters submitted
to shareholder approval or a vote of shareholders. The following table sets
forth certain information as of February 8, 1999 with respect to the
beneficial ownership of each class of the Company's common stock by: (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of each class of common stock, (ii) each director of the
Company who beneficially owns any such shares, (iii) each of the Company's
executive officers who beneficially owns any such shares, and (iv) all
directors and executive officers of the Company as a group. 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>
NUMBER OF SHARES PERCENTAGE OF PERCENTAGE OF
OF COMMON STOCK COMMON STOCK COMBINED VOTING
BENEFICIALLY OWNED (2) BENEFICIALLY OWNED POWER OF ALL
------------------------------------- -------------------------- CLASSES OF
NAME OF BENEFICIAL OWNER (1) CLASS A CLASS B TOTAL CLASS A CLASS B TOTAL COMMON STOCK
- ----------------------------- ------------------------------------- -------------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
France Family Group(3) ..... 15,972 21,158,081 21,174,053 * 67.62% 49.16% 62.89%
James C. France(4) .......... 3,000 15,352,721 15,355,721 * 49.06% 35.65% 45.63%
William C. France(5) ........ 1,600 15,340,501 15,342,101 * 49.02% 35.62% 45.59%
Putnam Investments, Inc.(6).. 1,501,477 0 1,501,477 12.74% * 3.49% *
The Putnam
Advisory Company, Inc.(7).. 761,100 0 761,100 6.46% * 1.77% *
Putnam Investment
Management, Inc.(8)........ 740,377 0 740,377 6.28% * 1.72% *
Lesa D. Kennedy (9).......... 3,000 383,355 386,355 * 1.23% * 1.14%
Brian Z. France.............. 0 261,740 261,740 * * * *
Raymond K. Mason, Jr.(10).... 0 196,740 196,740 * * * *
James H. Foster(11). ........ 22,205 168,884 191,089 * * * *
H. Lee Combs................. 5,372 47,116 52,488 * * * *
Thomas W. Staed(12).......... 2,450 45,000 47,450 * * * *
Robert R. Dyson(13).......... 17,000 29,500 46,500 * * * *
James H. Hunter.............. 2,211 29,113 31,324 * * * *
John E. Graham, Jr........... 3,765 26,415 30,180 * * * *
W. Grant Lynch, Jr........... 3,561 22,160 25,721 * * * *
John R. Saunders............. 2,561 17,551 20,112 * * * *
Chapman J. Root, II ......... 2,500 13,500 16,000 * * * *
Susan G. Schandel............ 2,695 12,392 15,087 * * * *
Robert E. Smith(14) ......... 2,090 9,999 12,089 * * * *
Gregory J. Sullivan.......... 2,400 8,775 11,470 * * * *
J. Hyatt Brown(15) .......... 2,400 9,000 11,400 * * * *
John R. Cooper .............. 5,000 1,500 6,500 * * * *
W. Garrett Crotty(16)........ 1,500 4,495 5,995 * * * *
Lloyd E. Reuss............... 5,000 0 5,000 * * * *
Christy F. Harris(17)........ 3,600 150 3,750 * * * *
Edward H. Rensi.............. 0 1,500 1,500 * * * *
All directors and
executive officers as a
group (23 persons)(18) .... 94,205 21,307,593 21,401,798 * 68.09% 49.68% 63.38%
</TABLE>
- -------------------------------
* Less than 1%.
(1) Unless otherwise indicated the address of each of the beneficial
owners identified is c/o the Company, 1801 West International Speedway
Boulevard, Daytona Beach, Florida 32114.
(2) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares.
(3) Reflects the aggregate of 7,600 Class A and 20,325,448 Class B 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 4,500 Class A
shares held of record and 832,633 Class B shares held beneficially by
the adult children of James C. France. See footnotes (4), (5) and (9).
(4) Includes (i) 1,500 Class A shares held of record and 304,725 Class B
shares held beneficially by Sharon M. France, his spouse, (ii) 9,115,125
Class B shares held of record by Western Opportunity Limited
Partnership ("Western Opportunity"), (iii) 4,052,369 Class B shares
held of record by Carl Investment Limited Partnership ("Carl"), and
(iv) 1,880,502 Class B shares held of record by White River Investment
Limited Partnership ("White River"). James C. France is the sole
shareholder and director of (x) Principal Investment Company, one of the
two general partners of Western Opportunity, (y) Quaternary Investment
Company, the general partner of Carl, and (z) Secondary Investment
Company, one of the two general partners of White River. Also see
footnote (5). Does not include an aggregate of 4,500 Class A and
832,633 Class B shares held of record by the adult children of James C.
France.
(5) Includes (i) 600 Class A shares held of record by Betty Jane France,
his spouse, (ii) 9,115,125 Class B shares held of record by Western
Opportunity, (iii) 3,763,750 Class B shares held of record by Polk City
Limited Partnership ("Polk City"), and (iv) 1,880,502 Class B shares
held of record by White River. William C. France is the sole
shareholder and director of each of (x) Sierra Central Corp., one of
the two general partners of Western Opportunity, (y) Boone County
Corporation, the general partner of Polk City, and (z) Cen Rock Corp.,
one of the two general partners of White River. Also see footnote (4).
Does not include the aggregate of 3,000 Class A and 645,095 Class B
shares shown in the table as beneficially owned by Lesa D. Kennedy and
Brian Z. France, adult children of William C. France.
(6) This owner's address is One Post Office Square, Boston, Massachusetts
02109. Shares reported for Putnam Investment Management, Inc. and The
Putnam Advisory Company, Inc. are included.
(7) This owner's address is One Post Office Square, Boston, Massachusetts
02109. Shares reported are also included in those reported for Putnam
Investments, Inc.
(8) This owner's address is One Post Office Square, Boston, Massachusetts
02109. Shares reported are also included in those reported for Putnam
Investments, Inc.
(9) Includes (i) 1,500 Class A shares held of record by Ms. Kennedy as
custodian for her minor son, Benjamin, (ii) 1,500 Class A shares held
jointly with her spouse, and (iii) 343,950 Class B shares held of record
by BBL Limited Partnership. Mrs. Kennedy is the sole shareholder and a
director of BBL Company, the sole general partner of BBL Limited
Partnership.
(10) Includes 75 Class B shares owned by The Raymond K. Mason, III Trust,
as to which Mr. Mason disclaims beneficial ownership.
(11) Includes (i) 75,000 Class B shares held of record by Mr. Foster as
trustee, and (ii) 65,000 Class B shares held of record by Barbara S.
Foster, his spouse, as trustee, as to which Mr. Foster disclaims
beneficial ownership.
(12) Owned jointly with Barbara Staed, his spouse.
(13) Includes 5,000 Class A shares held in the Robert R. Dyson 1987 Family
Trust and 7,000 Class A Shares held as Trustee of the Charles H. Dyson
Trust No. 2, U/A dated 4/15/76.
(14) Includes 795 Class B shares held of record as joint tenants with his
spouse.
(15) Held of record as joint tenants with Cynthia R. Brown, his spouse.
(16) Includes 100 Class B shares held by Mr. Crotty as Trustee for his son
and 1,500 shares held by Bellows Falls Investment, Inc.
(17) Includes (i) 500 Class A shares held by M. Dale Harris, his spouse,
(ii) 1,500 Class A shares held by Mr. Harris as trustee of The Harris,
Midyette, Geary, Darby & Morrell, P.A. Profit Sharing Plan and Trust,
(iii) 100 Class A shares held by Mr. Harris as Trustee of the Harris
Children's Trust as to which Mr. Harris disclaims beneficial ownership.
(18) See footnotes (4),(5), and (9) through (17).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NASCAR, which sanctions most of the Company's major racing events, is
controlled by William C. France and James C. France. 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 1996, 1997 and
1998 were $13.9 million, $20.6 million, and $28.8 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, totaled approximately $359,000,
$720,000, and $160,000 during fiscal 1996, 1997 and 1998, 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 $294,000, $166,000, and $240,000 during fiscal
1996, 1997 and 1998, respectively.
All of these transactions, payments and exchanges are considered normal
in the ordinary course of business. Transactions, payments and exchanges
similar to all of the above are planned during the Company's current fiscal
year.
<PAGE>
PART IV
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report
1. Consolidated Financial Statements listed below:
Consolidated Balance Sheets
- November 30, 1997 and 1998
Consolidated Statements of Income
- Year ended August 31, 1996,
three months ended November 30, 1996 and
years ended November 30, 1997 and 1998
Consolidated Statements of Shareholders' Equity
- Year ended August 31, 1996,
three months ended November 30, 1996 and
years ended November 30, 1997 and 1998
Consolidated Statements of Cash Flows
- Year ended August 31, 1996,
three months ended November 30, 1996 and
years ended November 30, 1997 and 1998
Notes to Consolidated Financial Statements
2. Consolidated Financial Statement Schedules listed below:
II - Valuation and qualifying accounts
All other schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule,
or because the information required is included in the financial statements
and notes thereto.
3. Exhibits:
Exhibit
Number Description of Exhibit Filing Status
1. (3)(i) - Articles of Incorporation filed herewith
2. (3)(ii) - By-Laws filed herewith
3. (10) - Daytona Property Lease filed herewith
4. (10) - 1994 Long-Term Incentive Plan* filed herewith
5. (10) - 1996 Long-Term Incentive Plan* filed herewith
6. (10) - Split-Dollar Agreement (WCF)* filed herewith
7. (10) - Split-Dollar Agreement (JCF)* filed herewith
8. (22) - Subsidiaries of the Registrant filed herewith
9. (27) - Financial Data Schedule filed herewith
* Compensatory Plan required to be filed as an exhibit pursuant to Item 14(c).
(b) Reports on Form 8-K
During the fourth quarter of the period covered by this report the Company
filed no reports on Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
INTERNATIONAL SPEEDWAY CORPORATION
DATE: February 9, 1999 /s/ William C. France
William C. France, Chairman,
Chief Executive Officer & Director
DATE: February 9, 1999 /s/ Susan G. Schandel
Susan G. Schandel
Chief Financial Officer
DATE: February 9, 1999 /s/ James C. France
James C. France
Director
DATE: February 9, 1999 /s/ Lesa D. Kennedy
Lesa D. Kennedy
Director
DATE: February 9, 1999 /s/ H. Lee Combs
H. Lee Combs
Director
DATE: February 9, 1999 /s/ James H. Foster
James H. Foster
Director
DATE: February 9, 1999 /s/ J. Hyatt Brown
J. Hyatt Brown
Director
DATE: February 9, 1999 /s/ Brian Z. France
Brian Z. France
Director
DATE: February 9, 1999 /s/ Raymond K. Mason, Jr.
Raymond K. Mason, Jr.
Director
DATE: February 9, 1999 /s/ Daniel W. Houser
Daniel W. Houser
Controller
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
(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
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:
(a) a dividend or distribution in Common Stock on Class B
Common Stock may be paid or made in shares of Class A Common Stock
or shares of Class B Common Stock or a combination of both;
(b) a dividend or distribution in Common Stock on Class A
Common Stock may be paid only in shares of Class A Common Stock;
(c) a dividend or distribution with respect to Common Stock
payable in shares of the Corporation's capital stock may be paid
or made only in shares of Common Stock;
(d) whenever a dividend or distribution is payable in shares
of Class B Common Stock and/or Class A Common Stock, the number of
shares of Common Stock payable as a dividend or distribution per
each share of Common Stock shall be equal in number; and
(e) a dividend or distribution on Class B Common Stock which
is paid or made in shares of Class B Common Stock shall be
considered identical to a dividend or distribution on Class A
Common Stock which is paid or made in a proportionate number of
shares of Class A Common Stock.
3. CONVERSION.
(a) OPTIONAL CONVERSION. Each share of Class B Common Stock
may from time to time, at the option of the holder of record thereof and without
payment of any consideration, be converted into one fully paid and nonassessable
share of Class A Common Stock (an "Optional Conversion")(i) upon the Effective
Date (as hereinafter defined) if the shares of Class A Common Stock to be issued
upon such conversion are to be offered pursuant to the Registration Statement
(as hereinafter defined), and (ii) otherwise commencing on the 91st day after
the Effective Date. Any holder of any share of Class B Common Stock may effect a
conversion by surrendering such holder's certificate r certificates representing
the shares of Class B Common Stock to be converted, duly endorsed, during normal
business hours at the office of the Corporation or any transfer agent for the
Common Stock (the "Transfer Agent"), together with a written notice that the
holder elects to convert all or a specified whole number of shares of Class B
Common Stock and stating the name or names in which such holder desires the
certificate or certificates representing the shares of Class A Common Stock to
be issued. If so required by the Corporation or the Transfer Agent, any
certificate for shares surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation or the Transfer
Agent, duly executed by the holder of such shares or the duly authorized
representative of such holder, together with funds for the payment of any
transfer tax required pursuant to paragraph (f) of this Subsection 3. In the
event that any shares of Class B Common Stock tendered for conversion are
subject to restrictions upon transfer noted in a legend on the certificates
representing such shares, the Corporation and the Transfer Agent shall require
the holder of such shares to submit, as a condition to the conversion of such
Class B Common Stock into Class A Common Stock, satisfactory evidence that the
proposed conversion will not violate any of the noted restrictions upon transfer
of such shares.
(b) MANDATORY CONVERSION. If, on the record date for any
meeting of shareholders of the Corporation, the number of shares of Class A
Common Stock then outstanding constitutes less than 10% of the aggregate number
of shares of Class A Common Stock and Class B Common Stock outstanding, as
determined by the Board, then each share of Class B Common Stock then issued or
outstanding shall thereupon be converted automatically as of such record date
into one fully paid and nonassessable share of Class A Common Stock and will
have one-fifth vote per share at 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.
(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 or 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.
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.
ARTICLE IV
The Corporation shall exist perpetually unless sooner dissolved according
to law.
ARTICLE V
The Corporation's mailing address and the address of the Corporation's
principal office is 1801 West International Speedway Boulevard, Daytona Beach,
Florida 32114. The address of the Corporation's registered office is 150-A South
Palmetto Avenue, Daytona Beach, Florida 32114, and the Corporation's registered
agent at such office is Doyle Tumbleson.
ARTICLE VI
A. NUMBER AND TERM OF DIRECTORS. The Corporation's Board shall consist of
not less than five (5) nor more than fifteen (15) members, with the exact number
to be fixed from time to time by resolution of the Board. No decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director. The Board shall be divided into three classes, Class I,
Class II and Class III with the directors of each class to be elected for a
staggered term of three years and to serve until their successors are duly
elected and qualified or until their earlier resignation, death or removal from
office. The number of directors elected to each class shall be as nearly equal
in number as possible. The Board shall apportion any increase or decrease in the
number of directorships among the classes so as to make the number of directors
in each class as nearly equal as possible.
B. DIRECTOR VACANCIES; REMOVAL. Whenever any vacancy on the Board shall
occur due to death, resignation, retirement, disqualification, removal, increase
in the number of directors or otherwise, a majority of directors in office,
although less than a quorum of the entire Board, may fill the vacancy or
vacancies for the balance of the unexpired term or terms, at which time a
successor or successors shall be duly elected by the shareholders and qualified.
Notwithstanding the provisions of any other Article herein, only the remaining
directors of the Corporation shall have the authority, in accordance with the
procedure stated above, to fill any vacancy that exists on the Board for the
balance of the unexpired term or terms. The Company's shareholders shall not,
and shall have no power to, fill any vacancy on the Board. Shareholders may
remove a director from office prior to the expiration of his or her term, with
or without "cause," by an affirmative vote of a majority of all votes entitled
to be case for the election of directors.
C. SHAREHOLDER NOMINATIONS OF DIRECTOR CANDIDATES. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation. Nominations of persons for election to
the Board at an annual or special meeting of shareholders may be made by or at
the direction of the Board by any nominating committee or person appointed by
the Board or by any shareholder of the Corporation entitled to vote for the
election of directors at such meeting who complies with the procedures set forth
in this Section C; provided, however, that nominations of persons for election
to the Board at a special meeting may be made only if the election of directors
is one of the purposes described in the special meeting notice required by
Section 607.0705 of the Florida Business Corporation Act. Nominations of persons
for election at a special meeting, other than nominations made by or at the
direction of the Board, shall be made pursuant to notice in writing delivered to
or mailed and received at the principal executive offices of the Corporation not
later than the close of business on the fifth (5th) day following the date on
which notice of such meeting is given to shareholders or made public, whichever
first occurs. Nominations of persons for election at an annual meeting, other
than nominations made by or at the direction of the Board, shall be made
pursuant to timely notice in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and 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.
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. Garrett Crotty
-----------------------------------
W. Garrett Crotty
Secretary and General Counsel
/TEXT
<PAGE>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>3
<DESCRIPTION>BY-LAWS OF THE REGISTRANT
AMENDED AND RESTATED BYLAWS
OF
INTERNATIONAL SPEEDWAY CORPORATION
(A FLORIDA CORPORATION)
<PAGE>
<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..............................................2
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..............................................5
7. Special Meetings and Notice...................................5
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..................................................7
<PAGE>
<PAGE>
5. Term; Resignation; Removal; Vacancies.........................7
6. Chairman of the Board.........................................8
7. President.....................................................8
8. Vice Presidents...............................................8
9. Secretary.....................................................8
10. Chief Financial Officer.......................................8
11. Treasurer.....................................................8
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.................................10
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......................................11
(ii)
<PAGE>
<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 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
-2-
<PAGE>
<PAGE>
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 meting 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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<PAGE>
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 t 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 o 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.
* * *
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AGREEMENT
THIS AGREEMENT, Made and entered into by and between DAYTONA BEACH RACING
AND RECREATIONAL FACILITIES DISTRICT, created by Chapter 31343, Special Laws
of Florida, 1955 (hereinafter sometimes called the "District"), and BILL
FRANCE RACING, INC. to be hereafter known as DAYTONA INTERNATIONAL SPEEDWAY
CORPORATION, a corporation organized and existing under and pursuant to the
laws of the State of Florida, having its principal office in the City of
Daytona Beach, County of Volusia, State of Florida (hereinafter sometimes
called the "Corporation"), WITNESSETH:
WHEREAS, the District was created and established by Chapter 313432,
Special Laws of Florida, 1955, for the purpose of providing racing and
recreational facilities within the territorial limits of the District; and,
WHEREAS, the District holds a lease for a term of years covering and/or
owns the lands in Volusia County, Florida, more particularly described
hereinafter; and
WHEREAS, the District has determined that the acquisition and
construction of a motor vehicular speedway establishment and the operation
thereon and thereat of motor vehicular races, exhibitions, exhibits, and other
activities and displays of a historical, scientific, educational, and
recreational nature will serve a public purpose by providing an educational
and recreational facility and attraction to the citizens of and visitors to
the City of Daytona Beach and Volusia County, and by aiding the development of
the area contiguous to the lands aforementioned as a vacation resort through
the attraction of a large number of visitors to the area;
NOW, THEREFORE, for and in consideration of the sum of One ($1.00) Dollar
in hand paid this date by each of the parties hereto to the other, and other
good and valuable considerations, receipt whereof is hereby acknowledged by
both parties, and in consideration of the mutual covenants and promises herein
contained, the parties agree as follows:
The lessor does hereby demise and sub-let and lease unto the lessee, all
the following described premises situated and being in Volusia County,
Florida, to-wit:
Parcel 1: A portion of fractional Section 23 and a portion of Section
39, otherwise known as the Samuel Williams Grant, all being and lying within
Township 15 South, Range 32 East, Public Land Surveys of Volusia County,
Florida, being more particularly described as follows;
Beginning at the intersection of the Westerly line of the said Samuel
Williams Grant (Section 39, Township 15 South, Range 32 East) with the
Southerly right of way line of the Daytona Beach-DeLand Highway, known as U.S.
Route 92; thence South 24 degrees 58' East along the said Westerly line of the
Samuel Williams Grant, a distance of 3160.42 feet to a point; thence South 24
degrees 38' East and still along the Westerly line of the said Samuel Williams
Grant, a distance of 459.58 feet to a point; thence North 65 degrees 22' East
a distance of 2687.7 feet to a point; thence North 11 degrees 45' 30" East a
distance of 2347.25 feet to a point; thence due North a distance of 606.36
feet; thence North 10 degrees 38' West a distance of 1745.6 feet to a point in
the Southerly right of way line of the aforesaid Daytona Beach-DeLand (U.S.
92) Highway; thence South 67 degrees 48' 30" West a distance of 2890.4 feet
along the Southerly right of way line of U.S. Route 92 to a point; thence
Counterclockwise along the arc of a circle and along the Southerly right of
way line of Daytona Beach-DeLand Highway a distance of 2036.96 feet to the
point of beginning, excepting therefrom the following described property now
occupied by the low frequency radio range station: Beginning at a point in
the South line of aforesaid U.S. 92 at a point which is 934 feet on a bearing
of South 67 degrees 48' 30" West of the Northeasterly corner of the above
described property; thence South 22 degrees 11' 30" East a distance of 440
feet; thence South 87 degrees 56'30" West a distance of 319.5 feet; thence
North 22 degrees 11' 30" West a distance of 330 feet; thence North 67 degrees
48' 30" East a distance of 300 feet to the point of beginning, it being the
intention to describe a tract of land comprising an area of approximately 374
acres, more or less.
PARCEL 2: A portion of Government Lot 3, Section 23, Township 15 South,
Range 32 East, Volusia County, Florida, being more particularly described as
follows: Beginning at a point on the Westerly line of the Samuel Williams
Grant, being Section 39, Township 15 South, Range 32 East, said point being
located a distance of 1066.71 feet South 24 degrees 57' 55" East of an
intersection with the southerly right-of-way line of U. S. Highway #92; thence
South 13 degrees 35' 35" West a distance of 500 feet to a point; thence South
25 degrees 08' 20" West a distance of 581.23 feet to a point; thence North 89
degrees 54' 30" East a distance of 835.0 feet to a point on the West line of
the aforesaid Samuel Williams Grant; thence North 24 degrees 57' 55" West
along the West line of the aforesaid Samuel Williams grant, a distance of 1115
feet to the place of beginning, the above circumscribed property comprising an
areas of 9.06 acres, and being no nearer than 65' from the Odds Board of
Volusia County Kennel Club at its nearest point.
PARCEL 3: A portion of Lot 3, Fractional Section 23; a portion of Lots 1
and 2, Fractional Section 26, and a portion of Section 22, all being in
Township 15 South, Range 32 East, Public Land Surveys of Volusia County,
Florida, and being more particularly described as follows:
Beginning at a point in the Westerly line of the Samuel Williams Grant,
being otherwise known as section 39 in said Township 15 South, Range 32 East,
said point being marked with a concrete monument and being the Southeast
corner of said Fractional Sections 23 and the Northeast corner of said
Fractional Section 26; thence from said point of beginning, go South 24
degrees 38' East a distance of 459.58 feet to a point; thence South 71 degrees
58' 30" West a distance of 1560.0 feet to a point; thence North 24 degrees 38'
West a distance of 1742 feet to a point; thence North 89 degrees 54' 30" West
a distance of 335.7 feet to a point on the right of way line of the Daytona
Beach-DeLand Highway; thence North 25 degrees 00' 30" East and along the
Easterly right of way line of the Daytona Beach-DeLand Highway a distance of
225.33 feet to a point; thence South 89 degrees 54' 30" East along the
Southerly boundary of land owned by the Volusia County Kennel Club, a distance
of 1844.6 feet to a point in the Westerly line of the Samuel Williams Grant;
thence South 24 degrees 58' East along the Westerly line of the Samuel
Williams Grant a distance of 978.71 feet to the point of beginning.
TO HAVE AND TO HOLD the same, with all rights, privileges, easements and
appurtenances thereunto attaching and belonging unto the said Corporation for
and during the term of fifty (50) years, commencing on the 8th day of
November, A.D. 1957, the said Corporation, its successors and assigns paying
rent therefor and yielding possession thereof as hereinafter provided.
RENT
Said Corporation in consideration of the leasing of the said premises does
hereby covenant and agree to pay rent to the District as follows: The sum of
Twelve Thousand Five Hundred ($12,500.00) Dollars at the expiration of one
year after date hereof; the sum of Sixteen Thousand ($16,000.00) Dollars at
the expiration of two years after date hereof, the sum of Sixteen Thousand
($16,000.00) Dollars at the expiration of three years after date hereof; the
sum of Eleven Thousand ($11,000.00) Dollars at the expiration of four years
after date hereof; the sum of Eleven Thousand ($11,000.00) Dollars at the
expiration of five years after date hereof; the sum of Six Thousand
($6,000.00) Dollars at the expiration of six years after date hereof and a
like sum upon the anniversary date of said payment for each year for a period
of nine (9) years thereafter; the sum of Seven Thousand Five Hundred
($7,500.00) Dollars on the 8th day of November, 1973, and a like sum upon the
anniversary date of said payment each year for a period of 19 years after the
date thereof; and the sum of Ten Thousand ($10,000.00) Dollars on the 8th day
of November, 1993, and a like sum upon the anniversary date of said payment
for each year for a period of 14 years after date thereof.
In the absence of any default on the part of the Corporation, the
Corporation shall have the right at any time during the term hereof, to extend
this lease and sub-lease for a further term of 25 years, from, to-wit: the
8th day of November, 2007, to and including the 7th day of November, 2032,
paying therefor a yearly rental of Twenty Thousand ($20,000.00) Dollars a year
beginning the 8th day of November, 2008, and payable on the 8th day of
November of each year thereafter during the said term as extended. Written
notice of the Corporation's election to exercise the option to extend the
lease and sub-lease as aforesaid shall be served upon the District on or
before the 1st day of May, 2007, otherwise this option shall be deemed to be
waived. In the event the Corporation elects to exercise the option to extend
the term of this lease and sub-lease all other terms, conditions, covenants,
and provisions hereof, be and the same shall remain in full force and effect
for and during said term as extended.
SECTION II.
CONSTRUCTION
The Corporation covenants and agrees to and with the District to
construct, erect and complete at its own cost and expense within five years
from the date hereof a racing facility complete with two and one-half mile
paved race course, and grandstands, permanent and/or temporary, having a
seating capacity of not less than 10,000, and to this end the District shall
within 90 days after request therefor by the Corporation remove all buildings
and structures now existing upon the premises at its own cost and expense.
The District further agrees that the Corporation or its tenants may erect,
construct, and maintain other and additional structures and improvements upon
said premises from time to time as the Corporation shall determine to be
necessary or desirable without securing the consent of the District, so long
as said improvements are of such nature as are not contrary to law, and so
long as the design and construction complies with all valid rules and
regulations of the City of Daytona Beach, County of Volusia, State of Florida,
and U.S. Government acting through the Civil Aeronautics Authority. The
Corporation agrees that it will provide adequate crash rails, and incorporate
into the race course and grandstands such equipment as may be reasonably
necessary or required to protect the patrons of the Facility against injury.
TAXES
(a) The District covenants and agrees that it will hold the
Corporation harmless from any and all liability for real property taxes, if
any, assessed, levied or imposed upon or with respect to the lands herein let
and demised to the Corporation. Any and all other taxes lawfully imposed on
the Corporation by virtue of its use of the demised lands shall be paid by the
Corporation.
(b) It is expressly agreed, however, that the Corporation shall
not be required to pay, discharge or remove any tax (including penalties and
interest) assessment, tax lien, forfeiture, or other imposition or charge upon
or against the Corporation made by reason of or because of the Corporation's
use of the improvements at any time made to, on and at the demised premises so
long as the Corporation shall in good faith contest the same or the validity
thereof by appropriate legal proceedings which shall operate to prevent the
collection of the tax, assessment, forfeiture, lien, or imposition so
contested or the sale of any such improvements, or any part thereof, to
satisfy the same.
(c) Any proceeding or proceedings for contesting the validity of
the amount of taxes, assessments or other public charges, or to recover back
any tax assessment or other imposition, paid by the Corporation, may be
brought by the Corporation in the name of the District or in the name of the
Corporation or both, as the Corporation may deem advisable; provided, however,
if any such proceedings be brought in the name of the District, the
Corporation shall indemnify and save harmless the District against any and all
loss, costs, or expenses of any kind that may be imposed upon the District in
connection therewith. The Corporation shall be entitled to any refund of any
taxes, assessments or other public charges or impositions, and penalties and
interest thereon which have been paid by the Corporation, or paid by the
District and for which the District has been fully reimbursed including
interest thereon to the date of reimbursement. If the Corporation shall
default in the payment of any taxes, assessments, or public charges above
required to be paid by the Corporation, then the District after reasonable
notice to the Corporation, shall have the right to pay the same together with
any penalties and interest in which event the amount so paid by the District
shall be added to the next installment of rental required to be paid the
District hereunder together with interest on any such amounts so paid at the
rate of 6% per annum.
USE
(A) The Corporation covenants and agrees that it will not use or
permit the premises in question to be used in any manner which might
constitute an airport hazard or serious interference with the operation and
development of the Daytona Beach Municipal Airport, and that it will not erect
or permit to be erected on the premises any structure which might constitute
an airport hazard, or hazard to the taking off or landing of aircraft at the
Daytona Beach Municipal Airport. The Corporation is cognizant of and familiar
with the provisions of Resolution #55-154, reserving and dedicating a right of
flight over and across the premises for the use and benefit of those members
of the public who use the Daytona Beach Municipal Airport for landing or
taking off of aircraft and this lease is executed with full knowledge and
subject to such reservation and dedication.
(B) The Corporation will comply with all applicable laws,
ordinances, and regulations of duly constituted public authorities applicable
to the Corporation. The Corporation shall, however, have the right to
contest, by appropriate legal proceedings, without cost or expense to the
District, the validity of any such law, ordinance or regulation, and the
Corporation may postpone compliance therewith until the final determination of
any court proceedings, if, in the opinion of counsel selected by the
Corporation and approved by the District, there is no possibility that the
demised premises or any part thereof will be lost or forfeited or otherwise
imperiled during the pendency of such proceedings. All such proceedings shall
be prosecuted with all due diligence and dispatch. The District agrees to
execute and deliver any papers, documents, or other instruments which may be
necessary or proper to permit the Corporation to make any such contest. If as
a result of such contest the District shall suffer any penalty or additional
expense in any way which would have been avoided by compliance with such law,
ordinance, order, rule, regulation or requirement of the nature aforesaid,
then this Corporation shall pay to the District upon demand the amount
thereof.
(C) The Corporation agrees to hold the District financially
harmless (a) from the consequences of any violation of such laws, ordinances,
or regulations and (b) from all claims or damage on account of injuries, death
or property damage resulting from such violation. The Corporation further
agrees that it will not permit any unlawful occupation, business or trade to
be conducted on the demised property or any use to be made thereof contrary to
law, ordinance, or regulation as aforesaid with respect thereto.
(D) The Corporation will not at any time permit any mechanic's,
laborer's or materialman's lien to stand against the demised property for any
labor or material furnished to the Corporation or claimed to have been
furnished to the Corporation or to the Corporation's agents, contractors, or
tenants in connection with work of any character performed or claimed to have
been performed on the demised property by or at the direction or sufferance of
the Corporation; provided, however, that the Corporation shall have the right
to contest the validity or amount of any such lien or claimed lien, upon
giving to the District such reasonable security as may be demanded by the
District to insure payment thereof and to prevent any sale, foreclosure, or
forfeiture of the demised property by reason of such non-payment, provided
such security shall not exceed one and one-half times the amount of such lien
or claimed lien. On final determination of the lien or claim for lien the
Corporation will immediately pay any final judgment rendered with all proper
costs and charges and shall have the lien released or judgment satisfied at
the Corporation's own expenses.
LIABILITY
The Corporation agrees to maintain public liability insurance with a
responsible company or companies approved by the District protecting the
District and the Corporation from liability in the amount satisfactory to the
District but not to exceed the sum of $100,000.00 for injury, sickness, or
death to any one person and not to exceed the sum of $1,000,000.00 for injury,
sickness or death, or property damage claims arising out of any one accident
occurring on or about the demised premises or any part thereof, when racing
events are being conducted, and upon request the Corporation will deliver to
the District evidence of such insurance.
DEFAULT
It is further covenanted and agreed by and between the parties hereto
that in the event default shall be made by said Corporation, its successors or
assigns, in the payment of any rent herein provided for upon the day when the
same shall become due and payable, and such default shall continue for thirty
days after notice in writing given by said District, its successors or
assigns, to said Corporation; or in the event said Corporation, its successors
or assigns, shall fail to pay any of the taxes and assessments as hereinbefore
provided to be paid within the time provided by law, said District, its
successors or assigns, agents, or attorneys, may at its option, after ninety
(90) days' notice in writing given to said Corporation, its successors or
assigns, declare this lease canceled and the term thereof ended, and may
enter upon said premises, with or without process of law, and take possession
thereof, with any and all buildings or improvements which may have been
erected thereon, the Corporation hereby waiving any demand for possession
thereof, and all buildings, fixtures and improvements then situated on said
premises shall be and become the property of the District, its successors or
assigns.
EMINENT DOMAIN
The District shall at all times retain fee simple title to the demised
premises and leasehold unless the same shall be taken by eminent domain
proceedings for other public use by higher governmental authority. It is
agreed that if at any time during the continuance of this lease and sub-lease
such taking of the entire property shall occur, the District shall be entitled
to receive so much of the award given therefor, which shall not be in excess
of the sum of One Hundred Twenty Thousand ($120,000.00) Dollars, which is the
agreed value of the land at the present date.
It is agreed that if at any time during the continuance of this lease and
sub-lease such taking of a portion of the property herein demised shall occur,
the award shall be apportioned between the parties ratably upon the same basis
set forth in the plan specified in the case of taking of the entire property.
In the event that they are unable to agree upon the proper proportion of said
award to which they are entitled, the entire controversy shall be submitted to
a board of arbitration of one arbitrator appointed by each of the parties, and
in the event that the said arbitrators are unable to agree then they shall
submit the controversy to a third arbitrator, and in that event the parties
hereto shall be bound by the decision of a majority of said arbitrators. The
arbitration contemplated by this paragraph shall be had within thirty days
after the confirmation of said award, and in the event that either party shall
fail to name his arbitrator within said thirty day period, the arbitration
shall proceed with a single arbitrator.
<PAGE>
WAIVER OF BREACH
No waiver of any breach of any covenant, condition or stipulation
hereunder shall be taken to be a waiver of any succeeding breach of the same
covenant, condition or stipulation.
DESTRUCTION OF IMPROVEMENTS
No damage to or destruction of any building or structure on the premises
by fire or other casualty shall be taken to entitle the Corporation to
surrender possession of the demised premises or termination of this Lease, nor
shall the damage to or destruction of any building or structure on said
premises by fire or other casualty entitle the Corporation to any abatement of
the rent stated in this Lease, it being understood and the Corporation
covenanting and agreeing at all times notwithstanding the condition of said
Facility to continue to pay rent to the District as herein provided.
The Corporation shall have the right and privilege of maintaining fire
and other such insurance coverage for and covering improvements installed on
and at the demised premises as it may deem necessary and desirable at its own
expense and the proceeds of any such insurance so carried or maintained by the
Corporation shall be and remain the sole property of the Corporation.
RESERVATION
The District reserves for the use and benefit of the United States
Government, with respect to said premises, all right and interest of the
United States Government to all uranium, thorium and other materials
determined pursuant to section 5(b)(1) of the Atomic Energy Act of 1946 (60
Stat. 761) to be particularly essential to the production of fissionable
materials.
GENERAL
(A) The Corporation, paying the rent hereby reserved and observing
and performing the several covenants and stipulations herein on its part
contained, shall peaceably hold and enjoy the demised premises during the said
term without any interruption by the District or any person likely claiming
under it.
(B) The covenants and agreements herein contained shall apply to
and bind and inure to the benefit of the successors and assigns of the
respective parties.
(C) The District is responsible for rental payments required to be
paid the City of Daytona Beach, a municipal corporation of the State of
Florida, in accordance with the Lease it holds covering a part of the demised
property and any real property taxes assessed against the demised premises and
if the District shall fail or refuse to pay any such rental or taxes before
the same shall become delinquent, then the Corporation shall have the right
and option to pay same and to deduct any sums so expended from any rent
thereafter to become due the District, pursuant to the terms hereof.
(D) The Corporation may assign this Lease and sub-lease and sub-
let any part of the demised property; provided, however, that in the event of
any such assignment or sub-letting, the Corporation shall remain primarily
responsible for the full and faithful performance of all of the terms,
conditions, and covenants hereof on its part to be done and performed.
(E) The District may terminate this lease at the end of the 20th
year of the term herein granted, or at the end of any succeeding 10th year
period hereof, upon giving notice to the Corporation of its intention so to
do, at least 180 days prior to the end of such 20th year or succeeding 10th
year period. In such event, the District shall pay to the Corporation as full
compensation for all of its interest in this lease and in the property
comprising the facility, a sum of money, in cash, equal to 10 times the gross
income to the Corporation from all activities conducted on or at the facility
during the last preceding full fiscal year that the Corporation operated said
facility, prior to the giving of notice as aforesaid. Upon the making of such
payment, all rights of the Corporation under this lease shall be terminated.
Any termination of the Corporation's interest in accordance with this
provision of this lease shall be subject to any and all sub-leases made by the
Corporation and then existing and the rights of those claiming by, though or
under the Corporation by assignment, franchise, sub-lease or otherwise, which
has not been in existence for a period of twenty (20) years, and provided that
same may be terminated by the District when any such sub-lease, assignment,
franchise, or the like shall have been in force for a full twenty (20) year
period.
DISTRICT USE
(A) The District shall have the right to use the grandstands,
parking area and race course, or race courses, including but not restricted to
the area within the race course or race courses, for all proper public uses
and purposes for periods aggregating at least three months in each fiscal year
hereafter and during the term of this agreement, on dates and for terms when
the facility or any such part thereof desired by the District is not being
used by the Corporation, and the use of any such part of the facility on any
such date or for any such term does not unreasonably interfere with or
conflict with the Corporation's plans therefor or use thereof.
The District shall have no right to use any such part of said
facility for such public uses and purposes on any date or during any period of
term when the facility or such part thereof is being used by the Corporation
under and pursuant to the terms hereof, even though the total use made of the
facility by the District during a particular fiscal year in the aggregate
totals less than three months. It is intended that during any and all periods
and terms when the Corporation is using the facility or any part thereof, the
Corporation shall have the full, exclusive and complete use of the part
thereof being used by the Corporation and of all rights, privileges, licenses
and other incidents appertaining thereto, of every kind and nature whatsoever.
It is further intended that at all times when the grandstands,
parking areas, and race course or courses or any part thereof is not being
utilized by the Corporation, such part or parts of the said facility as is
herein made available to the District, shall be available to the District for
all proper public uses and purposes, for periods totaling not more than three
months in each fiscal year.
The District shall not use nor permit any part of the facility to be
used for motorized races, motorized exhibits, motorized exhibitions and
displays, and motorized shows, including but not limited to motor vehicular
races, motor vehicular thrill shows and other motor vehicular attractions and
exhibitions, contests, demonstrations and events of like nature, of every kind
and description, excepting only that this prohibition shall not apply to
isolated attractions of a motorized nature operated as a side show and a part
of and in connection with circuses, carnivals, fairs and other such events of
a temporary nature only, and so long as the same are not the primary event or
attraction offered or staged.
The procedure to be followed by the District in scheduling the
dates, periods and terms when it shall have the use of the part or parts of
the facility hereinbefore enumerated and actual physical possession thereof or
any part thereof is as follows:
(1) That no attractions, exhibitions, or other events of any kind
or nature shall be staged or produced at or on the Facility by the District
on or before 18 months after the beginning of the first fiscal year of this
agreement without the written consent of the Corporation, it being the intent
and purpose of the parties hereto to give and grant the Corporation a
reasonable opportunity to stage and produce on and at the facility and as the
first event or attraction thereat, and for the grand opening thereof, a motor
vehicular racing event.
(2) On or before the expiration of the first fiscal year of this
agreement, the District shall furnish the Corporation a written schedule of
the dates and terms during which the District desires the use and physical
possession of those portions of the facility which it shall be entitled to use
for public purposes as aforesaid, for the second fiscal year. If the
aggregate of such dates and terms so certified to the Corporation does not
total 3 months then the District shall have the right and privilege of adding
additional dates and terms to any such schedule from time to time during the
second fiscal year, and so long as the total of such dates and terms, in the
aggregate, does not exceed a period of three months, and providing further,
that the Corporation is given 6 months notice in advance of the dates and term
or terms to be added to the said schedule as aforesaid from time to time.
(3) That after the first schedule of dates and terms when the
District is to have the use of parts of the facility is certified to the
Corporation as hereinbefore provided for, then and thereafter during the life
of this agreement, the District shall from time to time certify to the
Corporation the dates and terms on which the District desires to use parts of
the facility and when the District is to have actual physical possession of
such portions as it is entitled to use, thereof, during or for any particular
fiscal year, giving the Corporation 6 months notice in writing of any such
date or term and limiting the total of such dates or terms scheduled by the
District with the Corporation to a total of not more than 3 months during any
fiscal year.
(4) It is fully understood and agreed that any dates or uses
requested by the District which conflict with events or uses scheduled or
planned by the Corporation may be rejected by the Corporation by written
notice to the District given on or before the expiration of 3 months after
such request is received from the District.
(B) The District shall be responsible for the maintenance, repair
and replacement at its own expense of all parts of the facility authorized to
be used by it or its licensees under the prior provisions of this lease,
including all lands, buildings, structures, equipment and improvements of any
kind thereon or therein, during such periods of time as the District or its
licensees have actual physical possession of such parts. The District shall
make all repairs to such parts of the Facility, including all lands,
buildings, structures, equipment and improvements of any kind, both inside and
outside, during such periods of time as the District or its licensees have
actual physical possession of such parts, as are necessary to maintain them in
first class condition and working order and to restore them to the condition
in which they were at the time the physical possession thereof was given to
the District.
The District shall keep all of such parts of the facility, when in its
physical possession, in a safe, clean and sanitary condition, and shall comply
with all Federal, State, county or municipal requirements relating thereto.
The District shall inspect such parts of the facility to which it is to
be given physical possession, not less than 10 days before actual possession
thereof is to be given to the District under the terms hereof for any period
or term, and if any of such parts of the facility are found not to be in a
good state of repair, the District shall forthwith notify the Corporation in
writing of any and all defects complained of, and if such defects are not
forthwith remedied, the acceptance of possession by the District shall be made
subject to returning the property in the same condition as received, rather
than in first class working order and condition, as would otherwise be
required.
On or before 5 days after the end of each period or term during which
the District had physical possession of any parts of the facility, the
Corporation shall cause an inspection to be made of such parts of the facility
as have been surrendered and returned to it, and if any of such parts of the
facility are found not to be in a good state of repair, the Corporation shall
forthwith notify the District in writing of any and all defects complained of
and of the repairs or replacements reasonably necessary or required to place
such parts of the facility in first class condition and working order, and if
the District shall not have commenced the making of such repairs or
replacements within 5 days after delivery of such notice or shall not
thereafter continue the making of such repairs or replacements with all
expedition practicable, then and in that event the Corporation shall have the
right and privilege of making such repairs or replacements and the cost or
expense of making the same shall be deducted from the next installment of
rental required to be paid hereunder.
NOTICES
Any notice, demand, direction, request or other instrument authorized or
required by this agreement to be given or filed with the District or with the
Corporation shall be deemed to have been sufficiently given or filed for all
purposes of this agreement if and when sent by registered mail, postage
prepaid, return receipt requested:
To the District, if addressed to:
Daytona Beach Racing and Recreational Facilities District
354 North Beach Street
Daytona Beach, Florida
To the Corporation, if addressed to:
DAYTONA INTERNATIONAL SPEEDWAY CORPORATION
27 South Atlantic Avenue
Daytona Beach, Florida
or to such other addresses as may be designated in writing from time to time
by the District or the Corporation, respectively. Any rental payments
required to be paid by the Corporation may be paid by check.
SURRENDER
It is mutually covenanted and agreed that upon the termination of the
lease the said Corporation will peaceably and quietly deliver up the said
premises and all improvements thereon to the said District upon the prorata
adjustment of insurance, or other charges prepaid by the Corporation.
IN WITNESS WHEREOF, each of the parties hereto has caused this instrument
to be executed and the seal affixed by its proper officers after due corporate
authorization this 8th day of November, A. D. 1957.
In the presence of: DAYTONA BEACH RACING AND
RECREATIONAL FACILITIES DISTRICT
By: s/ J. Saxton Lloyd
Attest: s/ Thomas T. Cobb
Secretary
BILL FRANCE RACING, INC.
By: s/ William H. G. France
Attest: s/ Annie B. France
Secretary
STATE OF FLORIDA
COUNTY OF VOLUSIA
On this 8th day of November, 1957, before me, Ellie S. Brown, a Notary
Public in and for the County and State aforesaid, personally appeared J.
Saxton Lloyd and Thomas T. Cobb, to me known and known to me to be the
Chairman and Secretary and Treasurer, respectively, of the Daytona Beach
Racing and Recreational District, and to me known to be the persons who
executed the foregoing instrument, and each acknowledged the execution thereof
to be his free act and deed and the free act and deed of said Daytona Beach
Racing and Recreational Facilities District, for the uses and purposes therein
mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day and year in the certificate first above written.
s/ Ellie S. Brown
Notary Public, State of Florida
at Large, My Commission expires
9-11-59
STATE OF FLORIDA
COUNTY OF VOLUSIA
On this 8th day of November, 1957, before me, Ellie S. Brown, a Notary
Public in and for the County and State aforesaid, personally appeared William
H. G. France and Annie B. France, to me known and known to me to be the
President and Secretary respectively, of Bill France Racing, Inc., a
corporation organized and existing under the laws of the State of Florida, and
to me known to be the persons who executed the foregoing instrument, and each
acknowledged the execution thereof to be his free act and deed and the free
act and deed of said corporation, for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day and year in the certificate first above written.
s/ Ellie S. Brown
Notary Public, State of Florida
at Large, My Commission expires
9-11-59
INTERNATIONAL SPEEDWAY CORPORATION
1994 LONG-TERM INCENTIVE PLAN
By action of its Board of Directors, International Speedway Corporation
has established the following incentive compensation plan for specified key
employees, to be known as the "International Speedway Corporation 1994 Long-
Term Incentive Plan" and to be effective as of the Effective Date specified
below. The purpose of this Plan is to attract and retain qualified and
competent executives by providing significant opportunities for capital
accumulation and to enhance the growth and profitability of International
Speedway Corporation (the "Company") by focusing on long-term goals and
creation of increases in shareholder value. Awards of restricted shares of
Stock will be assigned to officers and key employees who are capable of having
a significant impact on the performance of the Company.
ARTICLE I. DEFINITIONS.
For purposes of this Plan, the following terms or phrases shall have the
indicated meanings.
1.1 Achieved Performance. The Achieved Performance shall be the corporate
performance grade earned under the Company's annual incentive compensation
plan.
1.2 Award Dates. The Award Dates shall be January 1, 1994 for Initial Awards
and January 1, of 1995, 1996 and 1997 for Future Performance Awards.
1.3 Board. The Board of Directors of the Company.
1.4 Company. International Speedway Corporation, a Florida corporation, its
successors and assigns.
1.5 Effective Date. The Effective Date of this Plan, which shall be the date
upon which this Plan was approved by the Board.
1.6 Fair Market Value. "Fair Market Value" shall mean (a) The closing price
of a share of the Company's Stock on the principal exchange on which shares of
the Company's Stock are then trading, if any, on such date, or, if shares were
not traded on such date, then on the next preceding day during which a sale
occurred; (b) if such Stock is not traded on an exchange, but is quoted on
NASDAQ or a successor quotation system, (i) the last sales price (if the Stock
is then listed as National Market Issue under the NASD National Market System)
or (ii) the mean between the closing representative bid and asked prices (in
all other cases) for the Stock on such date as reported by NASDAQ or such
successor quotation system; or (c) if such Stock is not publicly traded on an
exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for the Stock on such date as
determined in good faith by the Board.
1.7 Participant. An employee or officer of the Company designated as a
Participant in this Plan in accordance with Article II.
1.8 Corporate Performance Multipliers. The Corporate Performance Grade is the
Achieved Performance goal at which all or a specified portion of a
Participant's award shall be granted and is based upon the corporate
performance grade earned under the Company's annual incentive compensation
<PAGE>
plan. Because this is based on corporate Achieved Performance grades, all
Participants will participate at the same Performance Multiplier. The
Corporate Performance Grades and related Performance Multipliers are as
specified below:
Corporate
Performance Performance
Grade Multiplier
___________ ___________
A 125%
B 100%
C 80%
D 50%
<D 0%
For performance between levels, the shares issued will be based on
straight-line interpolation.
1.9 Plan. The International Speedway Corporation 1994 Long-Term Incentive
Plan as described in this plan document.
1.10 Plan Administrator. The Compensation Committee of the Board.
1.11 Stock. International Speedway Corporation common stock, $.10 par value
per share.
1.12 Term or Term of the Plan. The period beginning on the Effective Date and
ending thirty (30) days after the last Award Date.
1.13 Vesting Date. The date upon which the restrictions contained in Section
3.6 lapse with respect to an award made in accordance with Sections 3.3 and
3.4, which shall be the date which is the third anniversary of the Award Date
with respect to 50% of each award, and the fifth anniversary of the Award Date
with respect to the other 50% of each award.
ARTICLE II. ELIGIBILITY.
2.1 Initial Participants. Upon the Effective Date, the Board designated and
approved a list of Initial Participants. Such individuals will be considered
Initial Participants for all purposes under this Plan, and shall receive an
award pursuant to Section 3.3
2.2 Post-Effective Date Participants. The Plan Administrator, in its
discretion, shall have the right to add Participants to this Plan at any time
during the Term of the Plan.
ARTICLE III. INCENTIVE AWARDS.
3.1 Award Pool. The number of shares of Company Stock reserved for this Plan
is fifty thousand (50,000).
3.2 Awards. The Plan Administrator shall determine an award opportunity for
each Participant. The award opportunity for Initial Participants shall
consist of Initial Awards and Future Performance Awards as described below.
The award opportunity for Post-Effective Date Participants shall consist of
only Future Performance Awards. The Plan Administrator shall consider a
Participant's job position, responsibilities and salary in determining the
amount of restricted shares in a Participant's award opportunity.
3.3 Initial Awards. Each Initial Participant shall receive an award of
restricted Stock on the grant date of January 1, 1994. The size of this award
was determined by the Plan Administrator based upon an analysis of competitive
market practices and Company performance during Fiscal 1992 and 1993.
3.4 Future Performance Awards. Future awards of restricted Stock may be made
to Participants on Future Award Dates based on Company performance, the
judgment of the Plan Administrator and the continuance of the Plan. The
number of shares of restricted Stock awarded to a Participant on a Future
Award Date shall equal the annual Award Opportunity for that Participant (as
specified by the Plan Administrator) multiplied by the Performance Multipliers
specified in section 1.8. No awards may be made after the end of the Term of
the Plan.
3.5 Delivery of Shares.
(a) Shares awarded pursuant to Sections 3.3 and 3.4 of this Plan shall be
registered in the name of the affected Participant within sixty (60) days
after the Award Date. Such shares shall, however be subject to the
restrictions described in Sections 3.6 and 3.7 below until the Vesting Date
for such shares, and the certificates evidencing the shares shall bear a
legend noticing those restrictions either specifically or by reference to the
provisions of this Plan. Such shares, when issued in accordance with this
Plan, shall be deemed to be fully paid and nonassessable. Certificates
representing such shares shall be held in the custody of the Company (or its
designated agent) until the Vesting Date.
(b) Certificates representing awarded shares (without the legend described in
Section 3.5(a)) which have vested pursuant to Sections 3.6 or 3.7 shall be
delivered to the affected Participant within thirty (30) business days after
the Vesting Date with respect to such shares.
3.6 Restrictions on Awarded Shares. Shares awarded pursuant to Sections 3.3
and 3.4 of this Plan will be subject to the following restrictions until their
respective Vesting Dates:
(a) Subject to Section 3.7, if the Participant's employment with the Company
is terminated for any reason prior to the Vesting Date for an award, the
Participant shall forfeit all rights with respect to the shares included in
that award, and the certificates evidencing such shares shall be null, void
and of no effect as of the date his or her employment terminates. Such shares
shall revert to the Company and shall be available for reissue as part of
future awards under this Plan.
(b) Prior to the Vesting Date with respect to such shares, the shares shall be
nontransferable and may not be sold, hypothecated or otherwise assigned or
conveyed by a Participant to any party. Any shares of Stock accruing to
awarded shares as a result of any adjustment under Section 3.11 or 3.12 will
be subject to the same restrictions (and have the same Vesting Date) as the
shares to which they accrue.
3.7 Special Vesting.
(a) Notwithstanding anything in Section 3.6 to the contrary, at the discretion
of the Plan Administrator, awards which have not yet vested may not be
forfeited upon termination of employment and may be allowed to otherwise vest
upon the regular Vesting Date for those shares if a Participant terminates
employment to accept other employment approved in advance by the Plan
Administrator and the Board as in the best interests of the Company and
remains in that approved employment until the regular Vesting Date.
(b) Notwithstanding anything in Section 3.6 to the contrary, at the discretion
of the Plan Administrator, awards may vest upon:
(i) The date a Participant terminates employment by approved normal
retirement;
(ii) The date the Participant dies; or
(iii) The date the Participant becomes totally disabled as determined by
the Plan Administrator in its sole discretion.
(c) The dates specified in Section 3.7(b) shall be considered Vesting Dates
for purposes of this Plan.
3.8 Ownership Rights. Except as provided in Section 3.6, Participants who
hold shares of restricted Stock awarded pursuant to Sections 3.3 and 3.4 shall
exercise all ownership rights (including, without limitation, the right to
vote and the right to received dividends) with respect to such shares.
Participants shall have the same rights with respect to any shares of Stock
accruing to awarded shares as a result of any adjustment under Sections 3.11
and 3.12.
3.9 Company's Right of First Refusal. A Participant cannot make a valid
transfer (as hereinafter defined) of any shares of Stock the restrictions upon
which have lapsed, or any interest in such shares, unless such transfer is
made in compliance with the following provisions:
(a) Before there can be a valid transfer of any shares or any interest
therein, the record holder of the shares to be transferred (the "Offered
Shares") shall give written notice (by registered or certified mail) to the
Company of the desire to sell the shares. The date such notice is mailed
shall be hereinafter referred to as the "Notice Date" and the record holder of
the Offered Shares shall be hereinafter referred to as the "Offerer."
(b) For a period of ten (10) business days after the Notice Date, the Company
shall have the option to purchase all (but not less than all) of the Offered
Shares at their Fair Market Value in accordance with the terms set forth in
this Section 3.9. This right shall be exercisable by the Company by mailing
(by registered or certified mail) written notice of exercise to the Offeror
prior to the end of such ten (10) business day period.
(c) As used in this Section 3.9, the term "transfer" means any sale,
encumbrance, pledge, or other form of disposition or transfer of shares of the
Company's Stock or any legal or equitable interest therein; provided, however,
that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution.
(d) Certificates of Stock evidencing shares of Stock shall bear an appropriate
legend referring to the transfer restrictions imposed by this Section 3.9.
3.10 No Bar to Corporate Restructuring. The existence of this Plan or
outstanding awards under this Plan shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any and all
adjustments, recapitalization, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting the Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or part of its
assets or business or any other corporate act or proceeding, whether of a
similar character or otherwise.
3.11 Capital Readjustments/Share Allocation Modifications. The shares
included in Participant awards granted under this Plan are shares of the Stock
as constituted on the Effective Date of this Plan, but if, and whenever, after
such Effective Date and prior to the earlier of the last day of the Term of
this Plan or the delivery by the Company of all of the shares of Stock
included in Participant awards, the Company shall effect:
(a) A change in the par value of its Stock;
(b) A change in the number of shares of Stock having par value into the same
or a different number of shares without par value;
(c) A subdivision or consolidation of shares;
(d) Any other capital readjustment;
(e) The payment of a Stock dividend; or
(f) Any other increase or reduction of the number of shares of Stock
outstanding; without the receipt of consideration by the Company, then
(aa) The Plan Administrator shall make concomitant adjustments in the maximum
outstanding Participant awards specified in Section 3.2 as appropriate; and
(bb) In the event of no change in the number of shares outstanding in
connection with a change in par value of the Stock or a change from par value
to no par value, the shares resulting from any such change shall be deemed to
be Stock under this Plan.
3.12 Mergers and Consolidations. In case at any time the Company shall be a
party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of the Common Stock) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company (in a situation not covered under Section 3.11) or
common stock or other securities of another corporation or interests in a
non-corporate entity or other property (including cash) or any combination of
the foregoing (each such transaction being herein called a "Transaction," and
the Company (in the case of the recapitalization of the Common Stock) or such
other corporation or entity (in the case of a merger, consolidation or such
sale) being herein called the "Acquiring Company"), then as a condition of the
consummation of the Transaction, lawful and adequate provision shall be made
so that each Participant shall be entitled to receive, in lieu of the Shares
which were awarded to such Participant and are still subject to the
restrictions contained in Section 3.5 of this Plan on or prior to the
consummation of the Transaction, the securities or other property to which
each such Participant would have been entitled upon consummation of the
Transaction if such Participant had been able to tender or otherwise transfer
his or her shares without restriction. Any such securities or other property
received as contemplated by this Section 3.12 shall be held by the Company or
its successor (or an agent designated by the Company or such successor) until
the restrictions as set forth in Section 3.6 of this Agreement shall have
lapsed.
3.13 Legal Impediments to Implementation. Anything in this Plan to the
contrary notwithstanding, if at any time specified herein for the award or
delivery of restricted shares to Participants, any law or regulations of any
governmental authority having jurisdiction in the matter shall require either
the Company or the Participant to take any action or refrain from action in
connection therewith, then the award or delivery of such shares shall be
deferred until such action shall have been taken or such restriction on action
shall have been removed.
3.14 Fractional Shares. Notwithstanding anything in this Plan to the
contrary, Participant awards and grants of restricted shares shall always be
in whole number of shares. In the event any adjustment to a Participant award
or the calculation of an award pursuant to this Plan would otherwise result in
the creation of a fractional share interest, the affected Participant award or
grant of restricted shares shall be rounded to the nearest whole share (with
0.5 share rounded to the next higher whole number).
ARTICLE IV. PLAN ADMINISTRATION.
4.1 Plan Administrator. The Plan shall be administered by the Compensation
Committee of the Board. Decisions and determinations by the Plan
Administrator shall be final and binding upon all parties, including the
Company, shareholders, Participants and other employees. The Plan
Administrator shall have the authority to interpret the Plan, to adopt and
revise rules and regulations relating to the Plan and to make any other
determinations which it believes necessary or advisable for the administration
of the Plan. The Plan Administrator (and individual members thereof) shall
not be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to the
member's own willful misconduct or lack of good faith.
ARTICLE V. AMENDMENT AND PLAN TERMINATION.
5.1 The Board expressly reserves the right to amend or terminate the Plan at
any time, provided however, that no amendment or termination shall have the
effect of reducing the number of shares of Stock awarded to a Participant
after an Award Date or otherwise changing the Plan provisions as they impact
such previously awarded shares of Stock (except as may be required by law)
without the written approval of the affected Participant(s).
ARTICLE VI. MISCELLANEOUS PROVISIONS.
6.1 Non-Transferability/Designation of Beneficiary.
(a) Except as provided in subparagraph (b), a Participant may not either
voluntarily or involuntarily assign, anticipate, alienate, commute, pledge or
encumber an award to which he or she is or may become entitled to under the
Plan, nor may the same be subject to attachment or garnishment by any creditor
of a Participant.
(b) Notwithstanding anything in subsection (a) to the contrary, a Participant
must designate a person or persons to receive, in the event of his death, any
right to which he would be entitled under the Plan. Such designation shall be
made in writing, and filed with the Company. A beneficiary designation may be
changed or revoked by a Participant at any time by filing a written statement
of such change or revocation with the Company. If a Participant fails to
designate a beneficiary, then his or her estate shall be deemed to be his
beneficiary.
6.2 Continued Employment. Although the Company intends that the awards under
this Plan to be a term of employment and a part of each Participant's
compensation and benefits package, nothing in the establishment of the Plan is
to be construed as giving any Participant the right to be retained in the
employment of the Company.
6.3 Awards Unfunded. The awards provided pursuant to this Plan (if any) shall
be provided solely from the general assets of the Corporation. No trust or
other funding device providing for the identification or segregation of assets
to fund Plan awards has been established, nor is it the Company's intention to
do so. Each Participant shall be a general and unsecured creditor of the
Company with respect to any interest he or she may have under this Plan,
provided that awards of Stock with respect to which certificates have been
issued pursuant to Section 3.5 of this Plan shall be deemed the property of
the Participant in whose name they are issued subject to the ownership
restrictions described in Section 3.6 and the transfer restrictions described
in Section 3.9. With respect to such Stock the Company shall be deemed a
custodian.
6.4 Taxation of Awards. Awards under this Plan will be compensation subject
to federal and state taxes in the calendar year in which they vest.
6.5 Retirement Plans and Welfare Benefit Plans. Except as otherwise specified
in this Plan and the plan in question, awards will not be included as
"compensation" for purposes of the Company's retirement plans (both qualified
and non-qualified) or welfare benefit plans.
6.6 Governing Law. The Plan shall be construed and its provisions enforced
and administered in accordance with the laws of the State of Florida and,
where applicable, federal law.
6.7 Severability. If any provision of this Plan should be held illegal or
invalid for any reason, such determination shall not affect the provisions of
this Plan, but instead the Plan shall be construed as if such provisions had
never been included herein.
6.8 Headings. Headings contained in this Plan are for convenience only and
shall in no event be construed as part of this Plan.
ARTICLE VII. EFFECTIVE DATE
7.1 Effective Date. This Plan shall become effective on the Effective Date as
defined in Section 1.5.
International Speedway Corporation
1996 Long-Term Stock Incentive Plan
1. Definitions: As used herein, the following definitions shall apply:
a. "Board of Directors" shall mean the Board of Directors of the
Corporation.
b. "Committee" shall mean the Compensation Committee designated by
the Board of Directors of the Corporation, or such other committee as shall be
specified by the Board of Directors to perform the functions and duties of the
Committee under the Plan; provided, however, that the Committee shall comply
with the requirements of (I) Rule 16b-3 of the Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (ii)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations thereunder.
c. "Common Stock" shall mean Class A Common Stock of the Corporation.
d. "Corporation" shall mean International Speedway Corporation, a
Florida corporation, or any successor thereof.
e. "Discretion" shall mean in the sole discretion of the Committee,
with no requirement whatsoever that the Committee follow past practices, act
in a manner consistent with past practices, or treat a key employee,
consultant or advisor in a manner consistent with the treatment afforded other
key employees, consultants or advisors with respect to the Plan.
f. "Fair Market Value" shall mean (a) The closing price of a share
of the Corporation's Common Stock on the principal exchange on which shares of
the Corporation's Common Stock are then trading, if any, on such date, or, if
shares were not traded on such date, then on the next preceding day during
which a sale occurred; (b) if such Stock is not traded on an exchange, but is
quoted on NASDAQ or a successor quotation system, (i) the last sales price (if
the Stock is then listed on the NASDAQ National Market) or (ii) the mean
between the closing representative bid and asked prices (in all other cases)
for the Stock on such date as reported by NASDAQ or such successor quotation
system; or (c) if such Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the closing
bid and asked prices for the Stock on such date as determined in good faith by
the Committee.
g. "Incentive Option" shall mean an option to purchase Common Stock
of the Corporation which meets the requirements set forth in the Plan and also
meets the definition of an incentive stock option within the meaning of
Section 422 of the Code; provided, however, that Incentive Options may only be
granted to persons who are employees of the Corporation or of a subsidiary
corporation in which the Corporation owns, directly or indirectly, 50% or more
of the combined voting power of all classes of stock of the subsidiary
corporation. The stock option agreement for an Incentive Option shall state
that the option is intended to be an Incentive Option.
h. "Plan Administrator" shall mean the Committee.
i. "Nonqualified Option" shall mean an option to purchase Common
Stock of the Corporation which meets the requirements set forth in the Plan
but does not meet the definition of an incentive stock option within the
meaning of Section 422 of the Code. The stock option agreement for a
Nonqualified Option shall state that the option is intended to be a
Nonqualified Option.
j. "Participant" shall mean any individual designated by the
Committee under Paragraph 6 for participation in the Plan.
k. "Plan" shall mean this International Speedway Corporation 1996
Stock Incentive Plan.
l. "Restricted stock award' shall mean a grant of Common Stock of
the Corporation which is subject to forfeiture, restrictions against transfer,
and such other terms and conditions determined by the Committee, as provided
in Paragraph 18.
m. "Stock appreciation right" shall mean a right to receive the
appreciation in value, or a portion of the appreciation in value, of a
specified number of shares of the Common Stock of the Corporation, as provided
in Paragraph 12.
n. "Subsidiary" shall mean any corporation or similar entity in
which the Corporation owns, directly or indirectly, stock or other equity
interest ("Stock") possessing more than 25% of the combined voting power of
all classes of Stock; provided, however, that an Incentive Option may be
granted to an employee of a Subsidiary only if the Subsidiary is a corporation
and the Corporation owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of Stock of the Subsidiary.
2. Purpose of Plan: The purpose of the Plan is to provide key employees
(including officers and directors who are also key employees), consultants and
advisors of the Corporation and its Subsidiaries with an increased incentive
to make significant and extraordinary contributions to the long-term
performance and growth of the Corporation and its Subsidiaries, to join the
interests of key employees, consultants and advisors with the interests of the
shareholders of the Corporation, by focusing on long-term goals and creation
of increases in shareholder value, and to facilitate attracting and retaining
key employees, consultants and advisors of exceptional ability by providing
significant opportunities for capital accumulation.
3. Administration: The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the committee shall determine, from
those eligible to be Participants under the Plan, the persons to be granted
stock options, stock appreciation rights and restricted stock, the amount of
stock or rights to be optioned or granted to each such person, and the terms
and conditions of any stock options, stock appreciation rights and restricted
stock. Subject to the provisions of the Plan, the Committee is authorized to
interpret the Plan, to make, amend and rescind rules and regulations relating
to the Plan and to make all other determinations necessary or advisable for
the Plan's administration. Interpretation and construction of any provision
of the Plan by the Committee shall, unless otherwise determined by the Board
of Directors of the Corporation, be final and conclusive. A majority of the
Committee shall constitute a quorum, and the acts approved by a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee, shall be the acts of the
Committee.
4. Indemnification of Committee Members: In addition to such other rights
of indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation in connection with any claim, action, suit or
proceeding relating to any action taken or failure to act under or in
connection with the Plan or any option, stock appreciation right or restricted
stock granted hereunder to the full extent provided for under the
Corporation's Bylaws with respect to indemnification of directors of the
Corporation.
5. Maximum Number of Shares Subject to Plan: The maximum number of shares
with respect to which stock options or stock appreciation rights may be
granted or which may be awarded as restricted stock under the Plan shall be
1,000,000 shares in the aggregate of Common Stock of the Corporation. The
number of shares with respect to which a stock appreciation right is granted,
but not the number of shares which the Corporation delivers or could deliver
to a Participant upon exercise of a stock appreciation right, shall be charged
against the aggregate number of shares remaining available under the Plan;
provided, however, that in the case of a stock appreciation right granted in
conjunction with a stock option under circumstances in which the exercise of
the stock appreciation right results in termination of the stock option and
vice versa, only the number of shares subject to the stock option shall be
charged against the aggregate number of shares remaining available under the
Plan. If a stock option or stock appreciation right expires or terminates for
any reason (other than termination as a result of the exercise of a related
right) without having been fully exercised, or if shares of restricted stock
are forfeited, the number of shares with respect to which the stock option or
stock appreciation right was not exercised at the time of its expiration or
termination, and the number of forfeited shares of restricted stock, shall
again become available for the grant of stock options or stock appreciation
rights, or the award of restricted stock, under the Plan, unless the Plan
shall have been terminated.
Notwithstanding any other provision in this Plan, no employee, consultant
or advisor of the Corporation or a Subsidiary may receive options, stock
appreciation rights, restricted stock or any combination thereof for more than
200,000 shares of Common Stock of the Corporation over the term of the Plan,
as provided in Paragraph 25. For purposes of this 200,000 share per-person
limitation, there shall be taken into account all shares covered by stock
options and stock appreciation rights granted, and all restricted shares
awarded, to an employee regardless of whether such stock options or stock
appreciation rights expire or terminate without being fully exercised or
whether such restricted shares are forfeited back to the Corporation.
The number of shares subject to each outstanding stock option, stock
appreciation right or restricted stock award, the option price with respect to
outstanding stock options, the grant value with respect to outstanding stock
appreciation rights, the aggregate number of shares remaining available under
the Plan and the 200,000 share per-person limitation shall be subject to such
adjustment as the Committee, in its discretion, deems appropriate to reflect
such events as stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of or by the Corporation; provided, however,
that no fractional shares shall be issued pursuant to the Plan, no rights may
be granted under the Plan with respect to fractional shares, and any
fractional shares resulting from such adjustments shall be eliminated from any
outstanding stock option, stock appreciation right, or restricted stock award.
6. Participants: The Committee shall determine and designate from time
to time, in its Discretion, those key employees, consultants or advisors of
the Corporation or any Subsidiary to receive stock options, stock appreciation
rights, or restricted stock who, in the judgment of the Committee, are or will
become responsible for the direction and financial success of the Corporation
or any Subsidiary; provided, however, that Incentive Options may be granted
only to persons who are key employees of the Corporation or a Subsidiary, and
in the case of a Subsidiary only if (i) the Corporation owns, directly or
indirectly, 50% or more of the total combined voting power of all classes of
Stock of the Subsidiary and (ii) the Subsidiary is a corporation. For the
purposes of the Plan, key employees shall include officers and directors who
are also key employees of the Corporation or any Subsidiary.
7. Written Agreement: Each stock option, stock appreciation right and
restricted stock award shall be evidenced by a written agreement (each a
"Corporation-Participant Agreement") containing such provisions as may be
approved by the Committee. Each such Corporation-Participant Agreement shall
constitute a binding contract between the Corporation and the Participant and
every Participant, upon acceptance of such Agreement, shall be bound by the
terms and restrictions of the Plan and of such Agreement. The terms of each
such Corporation-Participant Agreement shall be in accordance with the Plan,
but each Agreement may include such additional provisions and restrictions
determined by the Committee, in its Discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms of the Plan.
8. Allotment of Shares: The Committee shall determine and fix, in its
Discretion, the number of shares of Common Stock with respect to which a
Participant may be granted stock options and stock appreciation rights and the
number of shares of restricted stock which a Participant may be awarded;
provided, however, that no Incentive Option may be granted under the Plan to
any one Participant which would result in the aggregate fair market value,
determined as of the date the option is granted, of underlying stock with
respect to which incentive stock options are exercisable for the first time by
such Participant during any calendar year under any plan maintained by the
Corporation (or any parent or subsidiary corporation of the Corporation)
exceeding $ 100,000.
9. Stock Options: Subject to the terms of the Plan, the Committee, in
its Discretion, may grant to Participants either Incentive Options or
Nonqualified Options or any combination thereof. Each option granted under
the Plan shall designate the number of shares covered thereby, if any, with
respect to which the option is an Incentive Option, and the number of shares
covered thereby, if any, with respect to which the option is a Nonqualified
Option.
10. Stock Option Price: Subject to the rules set forth in this Paragraph
10, at the time any stock option is granted, the Committee, in its Discretion,
shall establish the price per share for which the shares covered by the option
may be purchased. With respect to an Incentive Option, such option price
shall not be less than 100% of the fair market value of the stock on the date
on which such option is granted; provided, however, that with respect to an
Incentive Option granted to an employee who at the time of the grant owns
(after applying the attribution rules of Section 424(d) of the Code) more than
10% of the total combined voting stock of the Corporation or of any parent or
subsidiary, the option price shall not be less than 110% of the fair market
value of the stock on the date such option is granted. With respect to a
Nonqualified Option, the option price shall not be less than 50% of the fair
market value of the stock on the date upon which such option is granted. The
option price shall be subject to adjustment in accordance with the provisions
of Paragraph 5 of the Plan.
11. Payment of Stock Option Price: To exercise in whole or in part any
stock option granted hereunder, payment of the option price in full in cash
or, with the consent of the Committee, in Common Stock of the Corporation or
by a promissory note payable to the order of the Corporation in a form
acceptable to the Committee, shall be made by the Participant for all shares
so purchased. Such payment may, with the consent of the Committee, also
consist of a cash down payment and delivery of such promissory note in the
amount of the unpaid exercise price. In the Discretion of and subject to such
conditions as may be established by the Committee, payment of the option price
may also be made by the Corporation retaining from the shares to be delivered
upon exercise of the stock option that number of shares having a fair market
value on the date of exercise equal to the option price of the number of
shares with respect to which the Participant exercises the stock option. Such
payment may also be made in such other manner as the Committee determines is
appropriate, in its Discretion. No Participant shall have any of the rights
of a shareholder of the Corporation under any stock option until the actual
issuance of shares to said Participant, and prior to such issuance no
adjustment shall be made for dividends, distributions or other rights in
respect of such shares, except as may be provided in Paragraph 5.
12. Stock Appreciation Rights: Subject to the terms of the Plan, the
Committee may grant stock appreciation rights to Participants either in
conjunction with, or independently of, any stock options granted under the
Plan. A stock appreciation right granted in conjunction with a stock option
may be an alternative right wherein the exercise of the stock option
terminates the stock appreciation right to the extent of the number of shares
purchased upon exercise of the stock option and, correspondingly, the exercise
of the stock appreciation right terminates the stock option to the extent of
the number of shares with respect to which the stock appreciation right is
exercised. Alternatively, a stock appreciation right granted in conjunction
with a stock option may be an additional right wherein both the stock
appreciation right and the stock option may be exercised. A stock
appreciation right may not be granted in conjunction with an Incentive Option
under circumstances in which the exercise of the stock appreciation right
affects the right to exercise the Incentive Option or vice versa, unless the
stock appreciation right, by its terms, meets all of the following
requirements:
a. the stock appreciation right will expire no later than the
Incentive Option;
b. the stock appreciation right may be for no more than the
difference between the option price of the Incentive Option and the fair
market value of the shares subject to the Incentive Option at the time the
stock appreciation right is exercised;
c. the stock appreciation right is transferable only when the
Incentive Option is transferable, and under the same conditions;
d. the stock appreciation right may be exercised only when the
Incentive Option is eligible to be exercised; and
e. the stock appreciation right may be exercised only when the fair
market value
of the shares subject to the Incentive Option exceeds the option price of the
Incentive Option.
Upon exercise of a stock appreciation right, a Participant shall be
entitled to receive, without payment to the Corporation (except for applicable
withholding taxes), an amount equal to the excess of or, in the Discretion of
the Committee if provided in the Corporation-Participant Agreement, a portion
of the excess of (i) the then aggregate fair market value of the number of
shares with respect to which the Participant exercises the stock appreciation
right, over (ii) the aggregate fair market value of such number of shares at
the time the stock appreciation right was granted. This amount shall be
payable by the Corporation, in the Discretion of the Committee, in cash or in
shares of Common Stock of the Corporation or any combination thereof.
13. Granting and Exercising of Stock Options and Stock Appreciation
Rights: Subject to the provisions of this Paragraph 13, each stock option
and stock appreciation right granted hereunder shall be exercisable at any
such time or times or in any such installments as may be determined by the
Committee at the time of the grant; provided, however, no stock option or
stock appreciation right may be exercisable prior to the expiration of six
months from the date of grant unless the Participant dies or becomes disabled
prior thereto. Notwithstanding anything contained in the Plan to the
contrary, stock appreciation rights shall always be granted and exercised in
such a manner as to conform to the provisions of rules adopted pursuant to the
provisions of §ion 16 the Exchange Act. In addition, the aggregate fair
market value (determined at the time the option is granted) of the Common
Stock with respect to which Incentive Options are exercisable for the first
time by a Participant during any calendar year shall not exceed $100,000.
A Participant may exercise a stock option or stock appreciation right, if
then exercisable, in whole or in part by delivery to the Corporation of
written notice of the exercise, in such form as the Committee may prescribe,
accompanied, in the case of a stock option, by (i) payment for the shares with
respect to which the stock option is exercised in accordance with Paragraph
11. or (ii) in the Discretion of the Committee, irrevocable instructions to a
stock broker to promptly deliver to the Corporation full payment for the
shares with respect to which the stock option is exercised from the proceeds
of the stock broker's sale of or loan against the shares. Except as provided
in Paragraph 17, stock options and stock appreciation rights granted to a
Participant may be exercised only while the Participant is an employee of the
Corporation or a Subsidiary.
Successive stock options and stock appreciation rights may be granted to
the same Participant, whether or not the stock option(s) and stock
appreciation right(s) previously granted to such Participant remain
unexercised. A Participant may exercise a stock option or a stock
appreciation right, if then exercisable, notwithstanding that stock options
and stock appreciation rights previously granted to such Participant remain
unexercised.
The Committee in its sole discretion may by giving written notice
("Cancellation Notice") cancel, effective upon the date of any corporate
transaction described in Paragraph 22 hereof, any stock option or stock
appreciation right that remains unexercised on such date. The Cancellation
Notice shall be given a reasonable period of time prior to the proposed date
of cancellation and may be given either before or after shareholder approval
of such corporate transaction.
14. Non-transferability of Stock Options and Stock Appreciation Rights:
No stock option or stock appreciation right granted under the Plan to a
Participant shall be transferable by such Participant otherwise than by will
or by the laws of descent and distribution, and stock options and stock
appreciation rights shall be exercisable, during the lifetime of the
Participant, only by the Participant.
15. Term of Stock Options and Stock Appreciation Rights: If not sooner
terminated, each stock option and stock appreciation right granted hereunder
shall expire not more than 10 years from the date of the granting thereof;
provided, however, that with respect to an Incentive Option or a related stock
appreciation right granted to a Participant who, at the time of the grant,
owns (after applying the attribution rules of Section 424(d) of the Code) more
than 10% of the total combined voting stock of all classes of stock of the
Corporation or of any parent or subsidiary, such option and stock appreciation
right shall expire not more than five (5) years after the date of granting
thereof.
16. Continuation of Employment: The Committee may require, in its
Discretion, that any Participant under the Plan to whom a stock option or
stock appreciation right shall be granted shall agree in writing as a
condition of the granting of such stock option or stock appreciation right to
remain in the employ of the Corporation or a Subsidiary as an employee,
consultant or advisor for a designed minimum period from the date of the
granting of such stock option or stock appreciation right as shall be fixed by
the Committee.
17. Termination of Employment: If the employment or consultancy of a
Participant by the Corporation or a Subsidiary shall terminate, the Committee
may, in its Discretion, permit the exercise of stock options and stock
appreciation rights granted to such Participant (i) for a period not to exceed
three months following termination of employment with respect to Incentive
Options or related stock appreciation rights if termination of employment is
not due to death or permanent disability of the Participant, (ii) for a period
not to exceed one year following termination of employment with respect to
Incentive Options or related stock appreciation rights if termination of
employment is due to the death or permanent disability of the Participant, and
(iii) for a period not to extend beyond the expiration date with respect to
Nonqualified Options or related or independently granted stock appreciation
rights. In no event, however, shall a stock option or stock appreciation
right be exercisable subsequent to its expiration date and, furthermore,
unless the Committee in its Discretion determine otherwise, a stock option or
stock appreciation right may only be exercised after termination of a
Participant's employment or consultancy to the extent exercisable on the date
of such termination or to the extent exercisable as a result of the reason for
such termination. The period of time, if any, a Participant shall have to
exercise stock options or stock appreciation rights upon termination of
employment or consultancy shall be set forth in the Corporation-Participant
Agreement, subject to extension of such time period by the Committee in its
Discretion.
18. Restricted Stock Awards: Subject to the terms of the Plan, the
Committee may award shares of restricted stock to Participants. All shares of
restricted stock granted to Participants under the Plan shall be subject to
the following terms and conditions (and to such other terms and conditions
prescribed by the Committee):
a. At the time of each award of restricted shares, there shall be
established for the shares a restricted period, which shall be no less than
six months and no greater than five years. Such restricted period may differ
among Participants and may have different expiration dates with respect to
portions of shares covered by the same award.
b. Shares of restricted stock awarded to Participants may not be
sold, assigned, transferred, pledged, hypothecated or otherwise encumbered
during the restricted period applicable to such shares. Except for such
restrictions on transfer, a Participant shall have all of the rights of a
shareholder in respect of restricted shares awarded to him or her including,
but not limited to, the right to receive any dividends on, and the right to
vote, the shares.
c. If the employment of a Participant as an employee, consultant or
advisor of the Corporation or a Subsidiary terminates for any reason
(voluntary or involuntary, and with or without cause) other than death or
permanent disability, all shares theretofore awarded to the Participant which
are still subject to the restrictions imposed by Paragraph 18(b) shall upon
such termination of employment be forfeited and transferred back to the
Corporation, without payment of any consideration by the Corporation. In the
event such employment is terminated by action of the Corporation or a
Subsidiary without cause or by agreement between the Corporation or a
Subsidiary and the Participant, however, the Committee may, in its Discretion,
release some or all of the shares from the restrictions.
d. If the employment of a Participant as an employee, consultant or
advisor of the Corporation or a Subsidiary terminates by reason of death or
permanent disability, the restrictions imposed by Paragraph 18(b) shall lapse
upon the expiration of a ten day period following the death or determination
of permanent disability of a participant with respect to shares then subject
to such restrictions, unless otherwise determined by the Committee prior to
the expiration of the ten day period.
e. Stock certificates shall be issued in respect of shares of
restricted stock awarded hereunder and shall be registered in the name of the
Participant. Such certificates shall be deposited with the Corporation or its
designee, together with a stock power endorsed in blank, and, in the
Discretion of the Committee, a legend shall be placed upon such certificates
reflecting that the shares represented thereby are subject to restrictions
against transfer and forfeiture.
f. At the expiration of the restricted period applicable to the
shares, the Corporation shall deliver to the Participant or the legal
representative of the Participant's estate the stock certificates deposited
with it or its designee and as to which the restricted period has expired. If
a legend has been placed on such certificates, the Corporation shall cause
such certificates to be reissued without any legend which is no longer
applicable.
In the case of events such as stock dividends, stock splits,
recapitalizations. mergers, consolidations or reorganizations of or by the
Corporation, any stock, securities or other property which a Participant
receives or is entitled to receive by reason of his or her ownership of
restricted shares shall, unless otherwise determined by the Committee, be
subject to the same restrictions applicable to the restricted shares and shall
be deposited with the Corporation or its designee.
19. Investment Purpose: If the Committee in its Discretion determines
that as a matter of law such procedure is or may be desirable, it may require
a Participant, upon any acquisition of Common Stock hereunder (whether by
reason of the exercise of stock options or stock appreciation rights or the
award of restricted stock) and as a condition to the Corporation's obligation
to issue or deliver certificates representing such shares, to execute and
deliver to the Corporation a written statement, in form satisfactory to the
Committee, representing and warranting that the Participant's acquisition of
shares of stock shall be for such person's own account, for investment and not
with a view to the resale or distribution thereof and that any subsequent
offer for sale or sale of any such shares shall be made either pursuant to (a)
a registration statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), which registration statement has
become effective and is current with respect to the shares being offered and
sold, or (b) a specific exemption from the registration requirements of the
Securities Act, but in claiming such exemption the Participant shall, prior to
any offer for sale or sale of such shares, obtain a favorable written opinion
from counsel for or approved by the Corporation as to the availability of such
exemption. The Corporation may endorse an appropriate legend referring to the
foregoing restriction upon the certificate or certificates representing any
shares issued or transferred to a Participant under the Plan.
20. Corporation's Right of First Refusal. A Participant cannot make a
valid transfer (as hereinafter defined) of any shares of Common Stock
acquired pursuant to this Plan (whether by reason of the of the exercise of
stock options or stock appreciation rights or the award of restricted stock)
the other restrictions upon which have lapsed, or any interest in such shares,
unless such transfer is made in compliance with the following provisions:
a. Before there can be a valid transfer of any shares or any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares") shall give written notice (by registered or certified mail)
to the Corporation of the desire to sell the shares. The date such notice is
mailed shall be hereinafter referred to as the "Notice Date" and the record
holder of the Offered Shares shall be hereinafter referred to as the
"Offeror."
b. For a period of ten (10) business days after the Notice Date, the
Corporation shall have the option to purchase all (but not less than all) of
the Offered Shares at their Fair Market Value in accordance with the terms set
forth in this Section 20. This right shall be exercisable by the Corporation
by mailing (by registered or certified mail) written notice of exercise to the
Offeror prior to the end of such ten (10) business day period.
c. As used in this Section 20, the term "transfer" means any sale,
encumbrance, pledge, or other form of disposition or transfer of shares of the
Corporation's Stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares
or interests by will or by the applicable laws of descent and distribution.
d. Certificates of Stock evidencing shares of Stock shall bear an
appropriate legend referring to the transfer restrictions imposed by this
Section 20.
21. No Rights to Continued Employment: Nothing contained in the Plan or
in any stock option, stock appreciation right or restricted stock granted or
awarded pursuant to the Plan, nor any action taken by the Committee hereunder,
shall confer upon any Participant any right with respect to continuation of
employment as an employee, consultant or advisor of the Corporation or a
Subsidiary nor interfere in any way with the right of the Corporation or a
Subsidiary to terminate such person's employment at any time.
22. No Bar to Corporate Restructuring. The existence of this Plan or
outstanding awards under this Plan shall not affect in any way the right or
power of the Corporation or its stockholders to make or authorize any and all
adjustments, recapitalization, reorganizations or other changes in the
Corporation's capital structure or its business, or any merger or
consolidation of the Corporation, or any issue of bonds, debentures, preferred
or preference stocks ahead of or affecting the Stock or the rights thereof, or
the dissolution or liquidation of the Corporation, or any sale or transfer of
all or part of its assets or business or any other corporate act or
proceeding, whether of a similar character or otherwise.
23. Withholding Payments: If upon the exercise of a Nonqualified Option
or stock appreciation right, or upon the award of restricted stock or the
expiration of restrictions applicable to restricted stock, or upon a
disqualifying disposition (within the meaning of Section 422 of the Code) of
shares acquired upon exercise of an Incentive Option, there shall be payable
by the Corporation or a Subsidiary any amount for income tax withholding, in
the Committee's Discretion, either the Corporation shall appropriately reduce
the amount of Common Stock or cash to be delivered or paid to the Participant
or the Participant shall pay such amount to the Corporation or Subsidiary to
reimburse it for such income tax withholding. The Committee may, in its
Discretion, permit Participants to satisfy such withholding obligations, in
whole or in part, by electing to have the amount of Common Stock delivered or
deliverable by the Corporation upon exercise of a stock option or stock
appreciation right or upon award of restricted stock appropriately reduced, or
by electing to tender Common Stock back to the Corporation subsequent to
exercise of a stock option or stock appreciation right or award of restricted
stock, to reimburse the Corporation or a Subsidiary for such income tax
withholding (any such election being irrevocable), subject to such rules and
regulations as the Committee may adopt, including such rules as it determines
appropriate with respect to Participants subject to the reporting requirements
of Section 16(a) o the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to effect such tax withholding in compliance with the Rules
established by the Securities and Exchange Commission (the "Commission") under
Section 16 of the Exchange Act and the positions of the staff of the
Commission thereunder expressed in no-action letters exempting such tax
withholding from liability under Section 16(b) of the Exchange Act. The
Committee may make such other arrangements with respect to income tax
withholding as it shall determine.
24. Effectiveness of Plan: The Plan shall be effective on the date the
Board of Directors of the Corporation adopts the Plan, provided that the
shareholders of the Corporation approve the Plan within 12 months of its
adoption by the Board of Directors. Stock options, stock appreciation rights
and restricted stock may be granted or awarded prior to shareholder approval
of the Plan, but each such stock option, stock appreciation right or
restricted stock grant or award shall be subject to shareholder approval of
the Plan. No stock option or stock appreciation right may be exercised prior
to shareholder approval, and any restricted stock awarded is subject to
forfeiture if such shareholder approval is not obtained.
25. Termination, Duration and Amendments of Plan: The Plan may be
abandoned or terminated at any time by the Board of Directors of the
Corporation. Unless sooner terminated, the Plan shall terminate on the date
ten years after its adoption by the Board of Directors, and no stock options,
stock appreciation rights or restricted stock may be granted or awarded
thereafter. The termination of the Plan shall not affect the validity of any
stock option, stock appreciation right or restricted stock outstanding on the
date of termination.
For the purpose of conforming to any changes in applicable law or
governmental regulations, or for any other lawful purpose, the Board of
Directors shall have the right, with or without approval of the shareholders
of the Corporation, to amend or revise the terms of the Plan at any time.
26. Capital Readjustments/Share Allocation Modifications. The shares
included in Participant awards granted under this Plan are shares of the Stock
as constituted on the Effective Date of this Plan, but if, and whenever, after
such Effective Date and prior to the earlier of the last day of the Term of
this Plan or the delivery by the Corporation of all of the shares of Stock
included in Participant awards, the Corporation shall effect:
a. A change in the par value of its Stock;
b. A change in the number of shares of Stock having par value into the same or
a different number of shares without par value;
c. A subdivision or consolidation of shares;
d. Any other capital readjustment;
e. The payment of a Stock dividend; or
f. Any other increase or reduction of the number of shares of Stock
outstanding; without the receipt of consideration by the Corporation, then
(1) The Plan Administrator shall make concomitant adjustments in the maximum
outstanding Participant awards specified in Section 3.2 as appropriate; and
(2) In the event of no change in the number of shares outstanding in
connection with a change in par value of the Stock or a change from par value
to no par value, the shares resulting from any such change shall be deemed to
be Stock under this Plan.
27. Mergers and Consolidations. In case at any time the Corporation
shall be a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Corporation's assets,
liquidation or recapitalization of the Common Stock) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Corporation (in a situation not covered under Section 3.11)
or common stock or other securities of another corporation or interests in a
non-corporate entity or other property (including cash) or any combination of
the foregoing (each such transaction being herein called a "Transaction," and
the Corporation (in the case of the recapitalization of the Common Stock) or
such other corporation or entity (in the case of a merger, consolidation or
such sale) being herein called the "Acquiring Corporation"), then as a
condition of the consummation of the Transaction, lawful and adequate
provision shall be made so that each Participant shall be entitled to receive,
in lieu of the Shares which were awarded to such Participant and are still
subject to the restrictions contained in Section 3.5 of this Plan on or prior
to the consummation of the Transaction, the securities or other property to
which each such Participant would have been entitled upon consummation of the
Transaction if such Participant had been able to tender or otherwise transfer
his or her shares without restriction. Any such securities or other property
received as contemplated by this Section 3.12 shall be held by the Corporation
or its successor (or an agent designated by the Corporation or such successor)
until the restrictions as set forth in Section 3.6 of this Agreement shall
have lapsed.
28. Legal Impediments to Implementation. Anything in this Plan to the
contrary notwithstanding, if at any time specified herein for the award or
delivery of restricted shares to Participants, any law or regulations of any
governmental authority having jurisdiction in the matter shall require either
the Corporation or the Participant to take any action or refrain from action
in connection therewith, then the award or delivery of such shares shall be
deferred until such action shall have been taken or such restriction on action
shall have been removed.
29. Non-Transferability/Designation of Beneficiary.
a. Except as provided in subparagraph b, a Participant may not either
voluntarily or involuntarily assign, anticipate, alienate, commute, pledge or
encumber an award to which he or she is or may become entitled to under the
Plan, nor may the same be subject to attachment or garnishment by any creditor
of a Participant.
b. Notwithstanding anything in subparagraph a to the contrary, a
Participant must designate a person or persons to receive, in the event of his
death, any right to which he would be entitled under the Plan. Such
designation shall be made in writing, and filed with the Corporation. A
beneficiary designation may be changed or revoked by a Participant at any time
by filing a written statement of such change or revocation with the
Corporation. If a Participant fails to designate a beneficiary, then his or
her estate shall be deemed to be his beneficiary.
30. Awards Unfunded. The awards provided pursuant to this Plan (if any)
shall be provided solely from the general assets of the Corporation. No trust
or other funding device providing for the identification or segregation of
assets to fund Plan awards has been established, nor is it the Corporation's
intention to do so. Each Participant shall be a general and unsecured
creditor of the Corporation with respect to any interest he or she may have
under this Plan, provided that awards of Stock with respect to which
certificates have been issued pursuant to this Plan shall be deemed the
property of the Participant in whose name they are issued subject to the
ownership and transfer restrictions described elsewhere. With respect to such
Stock the Corporation shall be deemed a custodian.
31. Taxation of Awards. Awards under this Plan will be compensation
subject to federal and state taxes.
32. Retirement Plans and Welfare Benefit Plans. Except as otherwise
specified in this Plan and the plan in question, awards will not be included
as "compensation" for purposes of the Corporation's retirement plans (both
qualified and non-qualified) or welfare benefit plans.
33. Governing Law. The Plan shall be construed and its provisions
enforced and administered in accordance with the laws of the State of Florida
and, where applicable, federal law.
34. Severability. If any provision of this Plan should be held illegal
or invalid for any reason, such determination shall not affect the provisions
of this Plan, but instead the Plan shall be construed as if such provisions
had never been included herein.
35. Headings. Headings contained in this Plan are for convenience only
and shall in no event be construed as part of this Plan.
SPLIT-DOLLAR AGREEMENT
THIS SPLIT DOLLAR AGREEMENT ("Agreement") is made and entered into as of
the 17th day of October, 1995, by and among INTERNATIONAL SPEEDWAY
CORPORATION, a Florida corporation (hereinafter referred to as the
"Corporation"), WILLIAM C. FRANCE ("William"), BETTY JANE FRANCE ("Betty
Jane") and DESERT TRANQUILITY LIMITED PARTNERSHIP, a Nevada limited
partnership, by and through its sole general partner, WESTERN SANDUNE CORP., a
Nevada corporation (the "Owner").
R E C I T A T I O N S
A. William is an executive officer of the Corporation.
B. William and Betty Jane (referred to hereinafter together as the
"Insureds") are husband and wife.
C. The Corporation desires to help William create a life insurance
program for the benefit of his family by the establishment of a split-dollar
life insurance plan and the payment of a portion of the premiums on the
second-to-die life insurance policies described on Schedule "A" attached
hereto (collectively, the "Policy") on the lives of the Insureds.
D. The Owner possesses or will possess all incidents of ownership in
and to the Policy.
E. The Corporation wishes to have the Policy collaterally assigned to
it by the Owner, in order to secure the repayment of the amounts that the
Corporation paid or will pay in respect of the premiums on the Policy as more
fully specified herein.
F. The parties intend that by such collateral assignment the
Corporation shall receive only the right to such repayment, with the Owner
retaining all other ownership rights in the Policy, as specified herein.
O P E R A T I V E P R O V I S I O N S
IN CONSIDERATION of the foregoing recitations, the mutual covenants of
the parties set forth herein and other good and valuable considerations, the
receipt and sufficiency of which are acknowledged hereby, the parties hereto,
intending legally to be bound, agree as follows:
1. PURCHASE OF POLICY. The Owner has applied to the Insurance
Company for the Policy, and with the assistance of the Corporation, will take
all reasonable steps to cause the Policy to be issued. When the Policy is
issued, the insurance company, policy number, effective date, face amount and
plan of insurance shall be recorded on Schedule A attached hereto, and the
Policy shall become subject to the terms of this Agreement. The Owner owns or
will own the Policy issued by the insurers described on Schedule "A" attached
hereto (collectively, the "Insurer"). The parties hereto have taken or will
take all action that may be necessary to cause the Policy to conform to the
provisions of this Agreement.
2. OWNERSHIP OF POLICY.
(a) The Owner shall be the sole and absolute owner of the Policy
and may exercise all ownership rights granted to the owner thereof by the
terms of the Policy, except as may otherwise be provided herein.
(b) It is the intention of the parties to this Agreement and the
collateral assignment executed by the Owner in favor of the Corporation in
connection herewith that the Owner shall retain all rights that the Policy
grants to the owner thereof, except the right of the Corporation to its
Collateral Interest in the Policy. The Corporation's "Collateral Interest" in
the Policy shall mean the aggregate sum of all premiums then or theretofore
paid by the Corporation to the Insurance Company and credited to the Policy,
including any amounts considered taxable "economic benefit" to the Insureds as
a result of such premium payments. The Corporation shall neither have nor
exercise any right as collateral assignee of the Policy that could in any way
defeat or impair the Owner's right to receive the death proceeds of the Policy
in excess of the amount due the Corporation hereunder. All provisions of this
Agreement and of such collateral assignment shall be construed so as to carry
out such intention.
3. PAYMENT OF PREMIUMS.
(a) The Owner may elect to pay part or all of any premiums on
the Policy and shall deliver notice of such election to the Corporation on or
before the premium due date.
(b) The Corporation shall advance on behalf of the Owner an
amount equal to all premiums on the Policy not paid by the Owner. The amount
advanced by the Corporation shall not exceed $750,000 per year for a period
not exceeding eight years. The Corporation shall pay all such advances
directly to the Insurer within the grace period following the due date of each
such premium.
(c) It is currently anticipated that on the date first set forth
above and each anniversary date thereof the Corporation shall advance annually
out of its own funds a sufficient sum to make up the requisite net annual
premium (*i.e., the full premium less the amount that the Owner has
contributed). While both Insureds are alive, the Insureds shall be deemed to
receive a taxable economic benefit in an amount equal to the sum of v * qx *
qy' where v = 1/1.025, qx and qy = the annual mortality rates for ages x and
y, respectively, computed from the values in U.S. Life Table 38, and x and y =
the ages of William and Betty Jane, respectively, on the due date of each
annual premium. After the death of the first of the Insureds to die, the
surviving Insured shall be deemed to receive a taxable economic benefit in an
amount equal to the economic benefit based on the surviving Insured pursuant
to the provisions of Rev. Rul. 64-328, 1964-2 CB 11, Rev. Rul. 66-110, 1966-1
CB 12, Rev. Rul. 55-747, 1955-2 CB 228 and Rev. Rul. 67-154, 1967-1 CB 11.
5. PAYMENT OF BONUSES. In order to minimize the tax consequences of
this plan on the Insureds during the term of this Agreement the Corporation
agrees to provide additional annual compensation in the form of a bonus to the
Insureds for a period of no more than 15 years in an amount equal to the
applicable federal income taxes on the taxable economic benefit as a result of
the premium payments by the Corporation plus an amount equal to the applicable
federal income taxes on the aggregate bonuses.
6. COLLATERAL ASSIGNMENT. To secure the repayment to the Corporation
of its Collateral Interest in the Policy, the Owner shall assign the Policy to
the Corporation as collateral, pursuant to the form of collateral assignment
attached hereto as Exhibit "1" (the "Collateral Assignment"). Such repayment
shall not exceed (i) the cash surrender value of the Policy if this Agreement
is terminated or if the Owner surrenders or cancels the Policy, or (ii) the
death proceeds of the Policy if both of the Insureds should die while the
Policy and this Agreement remain in force. In no event shall the Corporation
have any right to borrow against the Policy. The Collateral Assignment of the
Policy to the Corporation hereunder shall not be terminated, altered or
amended by the Owner without the express written consent of the Corporation.
The parties hereto agree to take all action necessary to cause such Collateral
Assignment to conform to the provisions of this Agreement.
7. LIMITATION ON OWNER'S RIGHTS IN POLICY.
(a) The Owner shall take no action with respect to the Policy
that would in any way compromise or jeopardize the Corporation's right to be
repaid its Collateral Interest in the Policy.
(b) The Owner shall have the sole right to surrender or cancel
the Policy and to receive the full cash surrender value of the Policy directly
from the Insurer. Upon the surrender or cancellation of the Policy, the
Corporation shall have the unqualified right to receive its Collateral
Interest in the Policy. Immediately upon receipt of the cash value, the Owner
shall pay to the Corporation its Collateral Interest in the Policy.
8. COLLECTION OF DEATH PROCEEDS.
(a) Following the deaths of both Insureds, the Corporation and
the Owner promptly shall take all action necessary to obtain the death benefit
provided under the Policy.
(b) The Corporation shall have the unqualified right to receive
a portion of such death benefit equal to its Collateral Interest in the
Policy. The balance of the death benefit provided under the Policy, if any,
shall be paid directly to the Owner, pursuant to the beneficiary designation
for the Policy. In no event shall the amount payable to the Corporation
hereunder exceed the Policy proceeds payable at the death of the Insureds. No
amount shall be paid from such death benefit by the Owner until the full
amount due the Corporation hereunder has been paid. The parties hereto agree
that the beneficiary designation provisions of the Policy shall conform to the
provisions hereof.
9. TERMINATION OF AGREEMENT.
(a) This Agreement shall terminate, without notice, upon the
occurrence of (i) the total cessation of the business of the Corporation or
(ii) the bankruptcy, receivership or dissolution of the Corporation.
(b) In addition, the Corporation or the Owner shall have the
right to terminate this Agreement, by written notice to the other parties
hereto, at any time that the cash surrender value of the Policy equals or
exceeds the aggregate sum of all premiums then or theretofore paid by the
Corporation to the Insurance Company and credited to the Policy, including
amounts considered "economic benefit" to the Insureds as a result of such
premium payments. Such termination shall be effective as of the date of such
notice.
10. DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT.
(a) Within sixty (60) days following the date of the termination
of this Agreement, the Owner shall obtain from the Corporation the release of
the Collateral Assignment of the Policy. To obtain such release, the Owner
shall repay to the Corporation its Collateral Interest in the Policy. Upon
receipt of such amount, the Corporation shall release the Collateral
Assignment of the Policy by the execution and delivery of an appropriate
instrument of release.
(b) If the Owner fails to obtain the release of the Collateral
Assignment within such sixty (60) day period, then the Corporation may enforce
its right to be repaid its Collateral Interest in the Policy from the cash
surrender value of the Policy under the Collateral Assignment of the Policy.
11. INSURER NOT A PARTY. The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefits to
the beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy. In no event shall the Insurer be considered a party
to this Agreement or any modification or amendment thereof. No provision of
this Agreement, or of any modification or amendment hereof, shall be construed
in any way as enlarging, changing, varying or in any other way affecting the
obligations of the Insurer as expressly provided in the Policy, except insofar
as the provisions hereof are made a part of the Policy by the Collateral
Assignment executed by the Owner and filed with the Insurer in connection
herewith.
12. NAMED FIDUCIARY; DETERMINATION OF BENEFITS; CLAIMS PROCEDURE; AND
ADMINISTRATION.
(a) The Corporation is hereby designated as the named fiduciary
under this Agreement. The named fiduciary shall have authority to control and
manage the operation and administration of this Agreement. All premiums in
respect of the Policy shall be paid to the Insurer when due, pursuant to
Paragraph 3 of this Agreement.
(b) The Corporation shall make all determinations concerning
rights to benefits under this Agreement. Any decision by the Corporation
denying a claim by the Owner for benefits under this Agreement shall be stated
in writing and delivered or mailed to the Owner. Such decision shall set
forth the specific reasons for the denial, written, to the best of the
Corporation's ability, in a manner that may be understood without legal or
actuarial counsel. In addition, the Corporation shall afford a reasonable
opportunity to the Owner for a full and fair review of the decision denying
such claim. In no event shall the Corporation, acting as the named fiduciary,
perform any such act that violates the prohibited transaction rules of the
Employee Retirement Income Security Act of 1974.
13. AMENDMENT. This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto or their
respective successors or assigns, and may not be terminated otherwise, except
as provided herein.
14. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Corporation and the Owner, and their respective
successors and assigns, and the Insureds, and their respective successors,
assigns, heirs, executors and administrators.
15. NOTICE. Any notice, consent, demand or other communication
required or permitted to be given under the provisions of this Agreement shall
be in writing (including telefacsimile transmission or similar writing) and
shall be given to such party at its address or telefacsimile number set forth
on Schedule "B" attached hereto or as given subsequently to the sender by the
addressee. Such notice shall be signed by the party giving or making the
same. If such notice, consent, demand or other communication is mailed to a
party hereto, it shall be sent by United States certified mail, postage
prepaid, properly addressed. Each such notice, consent, demand or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails as aforesaid or (ii) if given by any
other means, when delivered at the address specified.
16. GOVERNING LAW. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of
the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
CORPORATION:
INTERNATIONAL SPEEDWAY
CORPORATION, a Florida Corporation
Attest: /s/ Lesa D. Kennedy By: /s/ James C. France
Lesa D. Kennedy James C. France
Secretary President
<PAGE>
<PAGE>
WITNESSES: INSUREDS:
/s/ Robert E. Smith /s/ William C. France
Robert E. Smith WILLIAM C. FRANCE
/s/ Geraldine McMullin
Geraldine McMullin
/s/ Robert E. Smith /s/ Betty Jane France
Robert E. Smith BETTY JANE FRANCE
/s/ Geraldine McMullin
Geraldine McMullin
OWNER:
DESERT TRANQUILITY LIMITED
PARTNERSHIP, a Nevada Limited
Partnership
By: WESTERN SANDUNE CORP. a Nevada
corporation, its sole general
partner
Attest: /s/ William C. France By: /s/ William C. France
William C. France William C. France
Secretary President
<PAGE>
<PAGE> SCHEDULE "A"
INSURANCE POLICIES
It is agreed, pursuant to the foregoing Split-Dollar Agreement dated
October 17, 1995, that the policies of life insurance described below shall be
subject to the provisions of said Agreement.
Company Policy # Face Amount Insureds
Connecticut General 7016557 $12,500,000.00 William C.
Insurance Company France and Betty
Jane France
John Hancock Mutual 80126808 $ 7,800,000.00 William C.
Life Insurance Company France and Betty
Jane France
<PAGE>
<PAGE> SCHEDULE "B"
ADDRESS OF PARTIES
International Speedway Corporation
Attn: Lesa D. Kennedy
Post Office Box 2801
Daytona Beach, Florida 32120-2801
Desert Tranquility Limited Partnership
c/o Western Sandune Corp.
245 East Liberty Street, 3rd Floor
Reno, Nevada 89501
William C. France
Betty Jane France
1600 South Peninsula Drive
Daytona Beach, Florida 32118
<PAGE>
<PAGE> EXHIBIT "1"
FORM OF COLLATERAL ASSIGNMENT
<PAGE>
<PAGE>
COLLATERAL ASSIGNMENT OF LIFE INSURANCE POLICY
A. FOR VALUE RECEIVED, the undersigned (hereinafter the "Owner")
hereby assigns, transfers and sets over to INTERNATIONAL SPEEDWAY CORPORATION,
a Florida corporation, its successors and assigns (hereinafter the
"Assignee"), the following specific rights (and only those specific rights) in
and to the policies listed on Exhibit A issued by the respective insurers
(hereinafter the "Insurers") shown on Exhibit A, and any supplementary
contract or contracts issued in connection therewith (said policies and any
such contracts hereinafter the "Policies"), insuring the lives of William C.
France and Betty Jane France (hereinafter the "Insureds"), subject to all the
terms and conditions of the Policies and to all superior liens, if any, which
the Insurers may have against the Policies. The Owner, by this Assignment, and
the Assignee, by acceptance of the assignment of the Policies to it hereunder,
agree to the terms and conditions contained herein.
B. This assignment is made, and the Policies are to be held as
collateral security for, all liabilities of the Owner to the Assignee, now
existing or hereafter arising under and pursuant to that certain Split-Dollar
Agreement, by and between the Owner and the Assignee dated of even date
herewith (hereinafter the "Agreement"). The Owner reserves all rights and
powers in and to the Policies, except those specific, limited rights granted
in the Policies to the Assignee hereby, as security for the liabilities of the
Owner to the Assignee under the Agreement.
C. It is expressly agreed that the Assignee's interest in the
Policies under and by virtue of this Assignment shall be limited to the
following specific rights, and no others: (a) the right to be paid the amount
due it under the Agreement by recovering said amount out of the net death
proceeds of the Policies, upon the death of the survivor of the Insureds; and
(b) the right to be paid the amount due it under the Agreement by recovering
said amount from the net cash surrender proceeds of the Policies, in the event
the Policies are surrendered or canceled by the Owner. The Assignee shall have
no other rights or powers in and to the Policies as a result of the assignment
to it hereunder and specifically shall not have the right or power to borrow
against or obtain loans or advances on the Policies, make withdrawals from the
Policies, nor cancel or surrender the Policies.
D. Notwithstanding this Assignment, the Owner shall specifically
retain all incidents of ownership in and to the Policies, including, but not
limited to: (a) the sole right to cancel or surrender the Policies and receive
the surrender value thereof at any time provided by the terms of the Policies
and at such other times as the Insurers may allow; (b) the sole right to
collect and receive all distributions or shares of surplus, dividend deposits
or additions to the Policies now or hereafter made or apportioned thereto, and
to exercise any and all options contained in the Policies with respect
thereto; (c) the sole right to exercise all non-forfeiture rights permitted by
the terms of the Policies or allowed by the Insurers and to receive all
benefits and advantages derived therefrom; (d) the sole right to designate and
change the beneficiaries of the Policies (for any amount in excess of the
amount due the Assignee under the Agreement); (e) the sole right to elect any
optional mode of settlement permitted by the Policies or allowed by the
Insurer: (f) the sole right to borrow against, obtain loans or advances on,
or make withdrawals from the Policies; (g) the sole right to assign the
Policies (subject to this Assignment and Agreement); and (h) the sole right to
collect directly from the Insurers that portion of the net death proceeds of
the Policies in excess of those proceeds payable to the Assignee under the
Agreement; provided, however, that all of the foregoing rights retained by the
Owner in the Policies shall be subject to the terms and conditions of the
Agreement.
E. Notwithstanding anything in this Assignment to the contrary, the
Insurers shall be under no obligation to monitor the obligation of the
Assignee hereunder to pay to the persons entitled thereto any amounts received
from the Insurers remaining after payment of the then existing liabilities of
the Owner to the Assignee under the Agreement; the Insurers shall have no
obligation or liability to any person or entity if the Assignee fails to pay
such amounts as required hereunder.
F. The Insurers are hereby authorized to recognize, and are protected
in recognizing, the Assignee's claims to amounts due it hereunder without
investigating the validity of its claim thereto, the reason for any action
taken by the Assignee, the validity or accuracy of the amount of any of the
liabilities of the Owner to the Assignee under the Agreement, the existence of
any default therein, the giving of any notice required herein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The sole receipt of the Assignee for any amounts received by it
shall be a full discharge and release therefor to the Insurer.
G. Except as otherwise provided in the Agreement, the Assignee shall
be under no obligation to pay any premium on the Policies or the principal of
or interest on any loans or advances on the Policies, whether or not obtained
by the Assignee, or any other charges on the Policies.
H. The Insurers shall be fully protected in recognizing the request
made by the Owner for cancellation or surrender of the Policies, with or
without the consent of the Assignee, and upon such cancellation or surrender,
the Policies shall be terminated and be of no further force or effect.
I. Upon the full payment of the liabilities of the Owner to the
Assignee pursuant to the Agreement, the Assignee shall promptly release this
Assignment and thereby reassign to the Owner all specific rights in the
Policies included herein.
J. The Assignee may take or release other security, may grant
extensions, renewals or indulgences with respect to the obligations of the
Owner to the Assignee under the Agreement, or may apply the proceeds of the
Policies hereby assigned or any amount received on account of the policies by
the exercise of any right permitted under this assignment, without resorting
to or regard to other security for such obligations, if any.
K. In the event of any conflict between the provisions of this
Assignment and the provisions of the Agreement with respect to the Policies or
the Assignee's rights therein, the provisions of this Assignment shall
prevail.
L. The Owner declares that no proceedings in bankruptcy are pending
against the Owner, and that the Owner's property is not subject to any
assignment for the benefit of creditors of the Owner.
Signed and sealed this ______ day of October, 1995.
DESERT TRANQUILITY LIMITED
PARTNERSHIP, a Nevada limited
partnership
By: WESTERN SANDUNE CORP., a
Nevada corporation, its sole general
partner
By: _________________________________
William C. France, President
ACKNOWLEDGMENT OF INSURANCE COMPANY
The undersigned Insurance Company hereby acknowledges receipt of an original
counterpart of this Collateral Assignment and that the same has been filed at
its home office and noted on its records.
Dated: ______________________, 1995 By: ____________________________
President or Authorized Officer
<PAGE> EXHIBIT A
The policies of life insurance described below, on the lives of William
C. France and his wife, Betty Jane France, are subject to the provisions of
this Assignment.
Company Policy # Face Amount
SPLIT-DOLLAR AGREEMENT
THIS SPLIT DOLLAR AGREEMENT ("Agreement") is made and entered into as of
the 17th day of October, 1995, by and among INTERNATIONAL SPEEDWAY
CORPORATION, a Florida corporation (hereinafter referred to as the
"Corporation"), JAMES C. FRANCE ("James"), SHARON M. FRANCE ("Sharon") and J &
S POLICY LIMITED PARTNERSHIP, a Nevada limited partnership, by and through its
sole general partner, TERTIARY INVESTMENT COMPANY, a Nevada corporation (the
"Owner").
R E C I T A T I O N S
A. James is an executive officer of the Corporation.
B. James and Sharon (referred to hereinafter together as the
"Insureds") are husband and wife.
C. The Corporation desires to help James create a life insurance
program for the benefit of his family by the establishment of a split-dollar
life insurance plan and the payment of a portion of the premiums on the
second-to-die life insurance policies described on Schedule "A" attached
hereto (collectively, the "Policy") on the lives of the Insureds.
D. The Owner possesses or will possess all incidents of ownership in
and to the Policy.
E. The Corporation wishes to have the Policy collaterally assigned to
it by the Owner, in order to secure the repayment of the amounts that the
Corporation paid or will pay in respect of the premiums on the Policy as more
fully specified herein.
F. The parties intend that by such collateral assignment the
Corporation shall receive only the right to such repayment, with the Owner
retaining all other ownership rights in the Policy, as specified herein.
O P E R A T I V E P R O V I S I O N S
IN CONSIDERATION of the foregoing recitations, the mutual covenants of
the parties set forth herein and other good and valuable considerations, the
receipt and sufficiency of which are acknowledged hereby, the parties hereto,
intending legally to be bound, agree as follows:
1. PURCHASE OF POLICY. The Owner has applied to the Insurance
Company for the Policy, and with the assistance of the Corporation, will take
all reasonable steps to cause the Policy to be issued. When the Policy is
issued, the insurance company, policy number, effective date, face amount and
plan of insurance shall be recorded on Schedule A attached hereto, and the
Policy shall become subject to the terms of this Agreement. The Owner owns or
will own the Policy issued by the insurers described on Schedule "A" attached
hereto (collectively, the "Insurer"). The parties hereto have taken or will
take all action that may be necessary to cause the Policy to conform to the
provisions of this Agreement.
2. OWNERSHIP OF POLICY.
(a) The Owner shall be the sole and absolute owner of the Policy
and may exercise all ownership rights granted to the owner thereof by the
terms of the Policy, except as may otherwise be provided herein.
(b) It is the intention of the parties to this Agreement and the
collateral assignment executed by the Owner in favor of the Corporation in
connection herewith that the Owner shall retain all rights that the Policy
grants to the owner thereof, except the right of the Corporation to its
Collateral Interest in the Policy. The Corporation's "Collateral Interest" in
the Policy shall mean the aggregate sum of all premiums then or theretofore
paid by the Corporation to the Insurance Company and credited to the Policy,
including any amounts considered taxable "economic benefit" to the Insureds as
a result of such premium payments. The Corporation shall neither have nor
exercise any right as collateral assignee of the Policy that could in any way
defeat or impair the Owner's right to receive the death proceeds of the Policy
in excess of the amount due the Corporation hereunder. All provisions of this
Agreement and of such collateral assignment shall be construed so as to carry
out such intention.
3. PAYMENT OF PREMIUMS.
(a) The Owner may elect to pay part or all of any premiums on
the Policy and shall deliver notice of such election to the Corporation on or
before the premium due date.
(b) The Corporation shall advance on behalf of the Owner an
amount equal to all premiums on the Policy not paid by the Owner. The amount
advanced by the Corporation shall not exceed $455,000 per year for a period
not exceeding eight years. The Corporation shall pay all such advances
directly to the Insurer within the grace period following the due date of each
such premium.
(c) It is currently anticipated that on the date first set forth
above and each anniversary date thereof the Corporation shall advance annually
out of its own funds a sufficient sum to make up the requisite net annual
premium (*i.e., the full premium less the amount that the Owner has
contributed). While both Insureds are alive, the Insureds shall be deemed to
receive a taxable economic benefit in an amount equal to the sum of v * qx *
qy' where v = 1/1.025, qx and qy = the annual mortality rates for ages x and
y, respectively, computed from the values in U.S. Life Table 38, and x and y =
the ages of James and Sharon, respectively, on the due date of each annual
premium. After the death of the first of the Insureds to die, the surviving
Insured shall be deemed to receive a taxable economic benefit in an amount
equal to the economic benefit based on the surviving Insured pursuant to the
provisions of Rev. Rul. 64-328, 1964-2 CB 11, Rev. Rul. 66-110, 1966-1 CB 12,
Rev. Rul. 55-747, 1955-2 CB 228 and Rev. Rul. 67-154, 1967-1 CB 11.
5. PAYMENT OF BONUSES. In order to minimize the tax consequences of
this plan on the Insureds during the term of this Agreement the Corporation
agrees to provide additional annual compensation in the form of a bonus to the
Insureds for a period of no more than 15 years in an amount equal to the
applicable federal income taxes on the taxable economic benefit as a result of
the premium payments by the Corporation plus an amount equal to the applicable
federal income taxes on the aggregate bonuses.
6. COLLATERAL ASSIGNMENT. To secure the repayment to the Corporation
of its Collateral Interest in the Policy, the Owner shall assign the Policy to
the Corporation as collateral, pursuant to the form of collateral assignment
attached hereto as Exhibit "1" (the "Collateral Assignment"). Such repayment
shall not exceed (i) the cash surrender value of the Policy if this Agreement
is terminated or if the Owner surrenders or cancels the Policy, or (ii) the
death proceeds of the Policy if both of the Insureds should die while the
Policy and this Agreement remain in force. In no event shall the Corporation
have any right to borrow against the Policy. The Collateral Assignment of the
Policy to the Corporation hereunder shall not be terminated, altered or
amended by the Owner without the express written consent of the Corporation.
The parties hereto agree to take all action necessary to cause such Collateral
Assignment to conform to the provisions of this Agreement.
7. LIMITATION ON OWNER'S RIGHTS IN POLICY.
(a) The Owner shall take no action with respect to the Policy
that would in any way compromise or jeopardize the Corporation's right to be
repaid its Collateral Interest in the Policy.
(b) The Owner shall have the sole right to surrender or cancel
the Policy and to receive the full cash surrender value of the Policy directly
from the Insurer. Upon the surrender or cancellation of the Policy, the
Corporation shall have the unqualified right to receive its Collateral
Interest in the Policy. Immediately upon receipt of the cash value, the Owner
shall pay to the Corporation its Collateral Interest in the Policy.
8. COLLECTION OF DEATH PROCEEDS.
(a) Following the deaths of both Insureds, the Corporation and
the Owner promptly shall take all action necessary to obtain the death benefit
provided under the Policy.
(b) The Corporation shall have the unqualified right to receive
a portion of such death benefit equal to its Collateral Interest in the
Policy. The balance of the death benefit provided under the Policy, if any,
shall be paid directly to the Owner, pursuant to the beneficiary designation
for the Policy. In no event shall the amount payable to the Corporation
hereunder exceed the Policy proceeds payable at the death of the Insureds. No
amount shall be paid from such death benefit by the Owner until the full
amount due the Corporation hereunder has been paid. The parties hereto agree
that the beneficiary designation provisions of the Policy shall conform to the
provisions hereof.
9. TERMINATION OF AGREEMENT.
(a) This Agreement shall terminate, without notice, upon the
occurrence of (i) the total cessation of the business of the Corporation or
(ii) the bankruptcy, receivership or dissolution of the Corporation.
(b) In addition, at any time, the Corporation or the Owner shall
have the right to terminate this Agreement, by written notice to the other
parties hereto, at any time that the cash surrender value of the Policy equals
or exceeds the aggregate sum of all premiums then or theretofore paid by the
Corporation to the Insurance Company and credited to the Policy, including
amounts considered "economic benefit" to the Insureds as a result of such
premium payments. Such termination shall be effective as of the date of such
notice.
10. DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT.
(a) Within sixty (60)days following the date of the termination
of this Agreement, the Owner shall obtain from the Corporation the release of
the Collateral Assignment of the Policy. To obtain such release, the Owner
shall repay to the Corporation its Collateral Interest in the Policy. Upon
receipt of such amount, the Corporation shall release the Collateral
Assignment of the Policy by the execution and delivery of an appropriate
instrument of release.
(b) If the Owner fails to obtain the release of the Collateral
Assignment within such sixty (60) day period, then the Corporation may enforce
its right to be repaid its Collateral Interest in the Policy from the cash
surrender value of the Policy under the Collateral Assignment of the Policy.
11. INSURER NOT A PARTY. The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefits to
the beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy. In no event shall the Insurer be considered a party
to this Agreement or any modification or amendment thereof. No provision of
this Agreement, or of any modification or amendment hereof, shall be construed
in any way as enlarging, changing, varying or in any other way affecting the
obligations of the Insurer as expressly provided in the Policy, except insofar
as the provisions hereof are made a part of the Policy by the Collateral
Assignment executed by the Owner and filed with the Insurer in connection
herewith.
12. NAMED FIDUCIARY; DETERMINATION OF BENEFITS; CLAIMS PROCEDURE; AND
ADMINISTRATION.
(a) The Corporation is hereby designated as the named fiduciary
under this Agreement. The named fiduciary shall have authority to control and
manage the operation and administration of this Agreement. All premiums in
respect of the Policy shall be paid to the Insurer when due, pursuant to
Paragraph 3 of this Agreement.
(b) The Corporation shall make all determinations concerning
rights to benefits under this Agreement. Any decision by the Corporation
denying a claim by the Owner for benefits under this Agreement shall be stated
in writing and delivered or mailed to the Owner. Such decision shall set
forth the specific reasons for the denial, written, to the best of the
Corporation's ability, in a manner that may be understood without legal or
actuarial counsel. In addition, the Corporation shall afford a reasonable
opportunity to the Owner for a full and fair review of the decision denying
such claim. In no event shall the Corporation, acting as the named fiduciary,
perform any such act that violates the prohibited transaction rules of the
Employee Retirement Income Security Act of 1974.
13. AMENDMENT. This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto or their
respective successors or assigns, and may not be terminated otherwise, except
as provided herein.
14. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Corporation and the Owner, and their respective
successors and assigns, and the Insureds, and their respective successors,
assigns, heirs, executors and administrators.
15. NOTICE. Any notice, consent, demand or other communication
required or permitted to be given under the provisions of this Agreement shall
be in writing (including telefacsimile transmission or similar writing) and
shall be given to such party at its address or telefacsimile number set forth
on Schedule "B" attached hereto or as given subsequently to the sender by the
addressee. Such notice shall be signed by the party giving or making the
same. If such notice, consent, demand or other communication is mailed to a
party hereto, it shall be sent by United States certified mail, postage
prepaid, properly addressed. Each such notice, consent, demand or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails as aforesaid or (ii) if given by any
other means, when delivered at the address specified.
16. GOVERNING LAW. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of
the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
CORPORATION:
INTERNATIONAL SPEEDWAY
CORPORATION, a Florida Corporation
Attest: /s/ Lesa D. Kennedy By: /s/ William C. France
Lesa D. Kennedy William C. France
Secretary Chairman & CEO
<PAGE>
<PAGE>
WITNESSES: INSUREDS:
/s/Susan G. Schandel /s/ James C. France
Susan G. Schandel JAMES C. FRANCE
/s/ W. G. Crotty
W. G. Crotty
/s/ Robert E. Smith /s/ Sharon M. France
Robert E. Smith SHARON M. FRANCE
/s/ Lorraine Gerardo
Lorraine Gerardo
OWNER:
J & S POLICY LIMITED PARTNERSHIP,
a Nevada Limited Partnership
By: TERTIARY INVESTMENT COMPANY a Nevada
corporation, its sole general partner
Attest: /s/ James C. France By: /s/ James C. France
James C. France James C. France
Secretary President
<PAGE>
<PAGE> SCHEDULE "A"
INSURANCE POLICIES
It is agreed, pursuant to the foregoing Split-Dollar Agreement dated
October 17, 1995, that the policies of life insurance described below shall be
subject to the provisions of said Agreement.
Company Policy # Face Amount Insureds
Connecticut General 7016559 $12,500,000.00 James C. France
Life Insurance Company and Sharon France
John Hancock Mutual 80126782 $ 7,800,000.00 James C. France
Life Insurance Company and Sharon France
<PAGE>
<PAGE> SCHEDULE "B"
ADDRESSES OF PARTIES
International Speedway Corporation
Attn: Lesa D. Kennedy
Post Office Box 2801
Daytona Beach, Florida 32120-2801
J & S Policy Limited Partnership
c/o Tertiary Investment Company
245 East Liberty Street, 3rd Floor
Reno, Nevada 89501
James C. France
Sharon M. France
125 Seminole Drive
Ormond Beach, Florida 32174
<PAGE>
<PAGE> EXHIBIT "1"
FORM OF COLLATERAL ASSIGNMENT
<PAGE>
<PAGE> COLLATERAL ASSIGNMENT OF LIFE INSURANCE POLICY
A. FOR VALUE RECEIVED, the undersigned (hereinafter the "Owner")
hereby assigns, transfers and sets over to INTERNATIONAL SPEEDWAY CORPORATION,
a Florida corporation, its successors and assigns (hereinafter the
"Assignee"), the following specific rights (and only those specific rights) in
and to the policies listed on Exhibit A issued by the respective insurers
(hereinafter the "Insurers") shown on Exhibit A, and any supplementary
contract or contracts issued in connection therewith (said policies and any
such contracts hereinafter the "Policies"), insuring the lives of James C.
France and Sharon M. France (hereinafter the "Insureds"), subject to all the
terms and conditions of the Policies and to all superior liens, if any, which
the Insurers may have against the Policies. The Owner, by this Assignment, and
the Assignee, by acceptance of the assignment of the Policies to it hereunder,
agree to the terms and conditions contained herein.
B. This assignment is made, and the Policies are to be held as
collateral security for, all liabilities of the Owner to the Assignee, now
existing or hereafter arising under and pursuant to that certain Split-Dollar
Agreement, by and between the Owner and the Assignee dated of even date
herewith (hereinafter the "Agreement"). The Owner reserves all rights and
powers in and to the Policies, except those specific, limited rights granted
in the Policies to the Assignee hereby, as security for the liabilities of the
Owner to the Assignee under the Agreement.
C. It is expressly agreed that the Assignee's interest in the
Policies under and by virtue of this Assignment shall be limited to the
following specific rights, and no others: (a) the right to be paid the amount
due it under the Agreement by recovering said amount out of the net death
proceeds of the Policies, upon the death of the survivor of the Insureds; and
(b) the right to be paid the amount due it under the Agreement by recovering
said amount from the net cash surrender proceeds of the Policies, in the event
the Policies are surrendered or canceled by the Owner. The Assignee shall have
no other rights or powers in and to the Policies as a result of the assignment
to it hereunder and specifically shall not have the right or power to borrow
against or obtain loans or advances on the Policies, make withdrawals from the
Policies, nor cancel or surrender the Policies.
D. Notwithstanding this Assignment, the Owner shall specifically
retain all incidents of ownership in and to the Policies, including, but not
limited to: (a) the sole right to cancel or surrender the Policies and receive
the surrender value thereof at any time provided by the terms of the Policies
and at such other times as the Insurers may allow; (b) the sole right to
collect and receive all distributions or shares of surplus, dividend deposits
or additions to the Policies now or hereafter made or apportioned thereto, and
to exercise any and all options contained in the Policies with respect
thereto; (c) the sole right to exercise all non-forfeiture rights permitted by
the terms of the Policies or allowed by the Insurers and to receive all
benefits and advantages derived therefrom; (d) the sole right to designate and
change the beneficiaries of the Policies (for any amount in excess of the
amount due the Assignee under the Agreement); (e) the sole right to elect any
optional mode of settlement permitted by the Policies or allowed by the
Insurer: (f) the sole right to borrow against, obtain loans or advances on,
or make withdrawals from the Policies; (g) the sole right to assign the
Policies (subject to this Assignment and Agreement); and (h) the sole right to
collect directly from the Insurers that portion of the net death proceeds of
the Policies in excess of those proceeds payable to the Assignee under the
Agreement; provided, however, that all of the foregoing rights retained by the
Owner in the Policies shall be subject to the terms and conditions of the
Agreement.
E. Notwithstanding anything in this Assignment to the contrary, the
Insurers shall be under no obligation to monitor the obligation of the
Assignee hereunder to pay to the persons entitled thereto any amounts received
from the Insurers remaining after payment of the then existing liabilities of
the Owner to the Assignee under the Agreement; the Insurers shall have no
obligation or liability to any person or entity if the Assignee fails to pay
such amounts as required hereunder.
F. The Insurers are hereby authorized to recognize, and are protected
in recognizing, the Assignee's claims to amounts due it hereunder without
investigating the validity of its claim thereto, the reason for any action
taken by the Assignee, the validity or accuracy of the amount of any of the
liabilities of the Owner to the Assignee under the Agreement, the existence of
any default therein, the giving of any notice required herein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The sole receipt of the Assignee for any amounts received by it
shall be a full discharge and release therefor to the Insurer.
G. Except as otherwise provided in the Agreement, the Assignee shall
be under no obligation to pay any premium on the Policies or the principal of
or interest on any loans or advances on the Policies, whether or not obtained
by the Assignee, or any other charges on the Policies.
H. The Insurers shall be fully protected in recognizing the request
made by the Owner for cancellation or surrender of the Policies, with or
without the consent of the Assignee, and upon such cancellation or surrender,
the Policies shall be terminated and be of no further force or effect.
I. Upon the full payment of the liabilities of the Owner to the
Assignee pursuant to the Agreement, the Assignee shall promptly release this
Assignment and thereby reassign to the Owner all specific rights in the
Policies included herein.
J. The Assignee may take or release other security, may grant
extensions, renewals or indulgences with respect to the obligations of the
Owner to the Assignee under the Agreement, or may apply the proceeds of the
Policies hereby assigned or any amount received on account of the policies by
the exercise of any right permitted under this assignment, without resorting
to or regard to other security for such obligations, if any.
K. In the event of any conflict between the provisions of this
Assignment and the provisions of the Agreement with respect to the Policies or
the Assignee's rights therein, the provisions of this Assignment shall
prevail.
L. The Owner declares that no proceedings in bankruptcy are pending
against the Owner, and that the Owner's property is not subject to any
assignment for the benefit of creditors of the Owner.
Signed and sealed this _____ day of October, 1995.
J & S POLICY LIMITED
PARTNERSHIP, a Nevada limited
partnership
By: TERTIARY INVESTMENT COMPANY, a Nevada
corporation, its sole general partner
By:___________________________________
James C. France, President
ACKNOWLEDGMENT OF INSURANCE COMPANY
The undersigned Insurance Company hereby acknowledges receipt of an original
counterpart of this Collateral Assignment and that the same has been filed at
its home office and noted on its records.
Dated: ___________, 1995 By: _________________________________
President or Authorized Officer
<PAGE> EXHIBIT A
The policies of life insurance described below, on the lives of James C.
France and his wife, Sharon M. France, are subject to the provisions of this
Assignment.
Company Policy # Face Amount
SUBSIDIARIES OF THE REGISTRANT
Americrown Service Corporation,
a South Carolina Corporation
Chicago Holdings, Inc.,
a Nevada Corporation
Event Equipment Leasing, Inc.,
a Florida Corporation
Event Support Corporation,
a Florida Corporation
Facility Investments, Inc.,
a Nevada Corporation
Great Western Sports, Inc.,
an Arizona Corporation,
d/b/a Tucson Raceway Park
ISC Properties, Inc.
a Florida Corporation
Kansas International Speedway Corporation,
a Kansas Corporation
Miami Speedway Corp.,
a Nevada Corporation
Midwest Facility Investments, Inc.,
a Florida Corporation
North American Testing Company,
a Florida Corporation
Phoenix Speedway Corp.,
a Delaware Corporation
d/b/a/ Phoenix International Raceway
Seasonal Services, Inc.,
a Florida Corporation
South Carolina International Speedway Corporation,
a South Carolina Corporation,
d/b/a Darlington International Raceway
Watkins Glen International, Inc.,
a New York Corporation
d/b/a Watkins Glen International
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS OF INTERNATIONAL SPEEDWAY CORPORATION AS OF NOVEMBER 30, 1998 AND
THE RELATED CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS' EQUITY AND CASH
FLOWS FOR THE YEAR ENDED NOVEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> NOV-30-1998
<CASH> 38,676
<SECURITIES> 54,127
<RECEIVABLES> 9,545
<ALLOWANCES> 100
<INVENTORY> 953
<CURRENT-ASSETS> 108,444
<PP&E> 291,360
<DEPRECIATION> 65,529
<TOTAL-ASSETS> 476,818
<CURRENT-LIABILITIES> 80,954
<BONDS> 0
0
0
<COMMON> 431
<OTHER-SE> 366,424
<TOTAL-LIABILITY-AND-EQUITY> 476,818
<SALES> 187,336
<TOTAL-REVENUES> 188,968
<CGS> 77,075
<TOTAL-COSTS> 77,075
<OTHER-EXPENSES> 50,979
<LOSS-PROVISION> 79
<INTEREST-EXPENSE> 582
<INCOME-PRETAX> 65,086
<INCOME-TAX> 24,894
<INCOME-CONTINUING> 40,192
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,192
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
