<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BAY MEADOWS OPERATING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
BAY MEADOWS OPERATING COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, Par Value $.01 Per Share
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
5,763,257
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
BAY MEADOWS OPERATING COMPANY
2600 South Delaware Street
P.O. Box 5050
San Mateo, California 94402
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Friday, July 12, 1996
To the Stockholders of Bay Meadows Operating Company:
Notice is hereby given that the Annual Stockholders Meeting of Bay
Meadows Operating Company will be held on Friday, July 12, 1996, at 11:00 a.m.
Pacific Daylight Time, at the Clubhouse of Bay Meadows Racecourse, 2600 South
Delaware Street, San Mateo, California, for the following purposes:
1. To elect five directors, the names of whom are set forth
in the accompanying proxy statement, to serve until the
1997 Annual Meeting, or until their successors have been
elected and qualified.
2. To ratify the Board of Directors' selection of Deloitte
& Touche LLP as independent public accountants for the
year 1996.
3. To transact such other business as may properly be
brought before the meeting.
Stockholders of record at the close of business on May 16, 1996, are
the only stockholders entitled to notice of and to vote at the Annual
Stockholders Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
LEE R. TUCKER
Secretary
Dated June 14, 1996
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE VOTE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE AS PROMPTLY AS
POSSIBLE. If you attend the meeting, you may vote your shares in person, even
though you have previously signed and returned your proxy.
<PAGE> 3
BAY MEADOWS OPERATING COMPANY
2600 South Delaware Street
P.O. Box 2050
San Mateo, California 94402
----------------------
PROXY STATEMENT
----------------------
SOLICITATION OF PROXY, CUMULATIVE VOTING AND REVOCABILITY
This Proxy Statement is furnished in connection with the solicitation
of proxies to be used at the Annual Stockholders Meeting (the "Annual Meeting")
of Bay Meadows Operating Company (the "Company"), a Delaware corporation, to be
held on Friday, July 12, 1996, at 11:00 a.m. Pacific Daylight Time, at the
Clubhouse of Bay Meadows Racecourse, 2600 South Delaware Street, San Mateo,
California, and at any adjournment or postponements thereof. The stockholders of
the Company will consider (i) the election of five directors to serve until the
1997 Annual Meeting or until their successors have been elected and qualified,
(ii) the ratification of the appointment of Deloitte & Touche LLP as independent
public accountants for the year 1996 and (iii) such other business as may
properly be brought before the Annual Meeting.
The solicitation of proxies in the enclosed WHITE proxy card is made on
behalf of the Board of Directors of the Company.
The cost of preparing, assembling, and mailing the proxy material and
of reimbursing brokers, nominees and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy material to the beneficial
owners of shares held of record by such persons will be borne by the Company.
The solicitation of proxies will be made by use of the mails and may also be
made by telephone, telegraph, or personally, by certain directors, officers and
regular employees of the Company who will receive no extra compensation for such
services. In addition, the Company has retained MacKenzie Partners, Inc., a
proxy distribution and solicitation firm, to assist in the distribution and
solicitation of proxies for shares, for a fee of approximately $5,000 plus
reimbursement of reasonable out-of-pocket expenses. The proxy materials are
being mailed to stockholders of record at the close of business on May 16, 1996.
This Proxy Statement and the form of WHITE proxy card were first sent
or given to stockholders on or about June 14, 1996.
A stockholder signing and returning a proxy on the enclosed WHITE proxy
card has the power to revoke it at any time before the shares represented
thereby are voted by notifying the Secretary of the Company in writing,
executing a subsequently dated proxy or by attending and voting such shares at
the Annual Meeting. If a stockholder specifies how the proxy is to be voted with
respect to any of the proposals for which a choice is provided, the proxy will
be voted in accordance with such specifications and, in the event that
cumulative voting is properly invoked, the proxy will be voted cumulatively as
provided in the following paragraph.
Holders of the Company's Common Stock ("BMOC Common Stock") are
entitled to one vote for each share held. The Company's Certificate of
Incorporation provides that a stockholder, or his proxy, may cumulate votes in
the election of directors. That is, each stockholder is entitled to the number
of votes that is equal to the number of shares owned by him multiplied by the
number of directors to be elected (five for the Annual Meeting), and he may
cumulate such votes for a single candidate or distribute such votes among as
many candidates as he deems appropriate. Certain affirmative steps must be taken
by stockholders of the Company in order to be entitled to vote their shares
cumulatively in the election of directors. At a stockholders' meeting at which
directors are to be elected, such as the Annual Meeting, no stockholder shall be
entitled to cumulate votes for any candidate or candidates unless the
candidate's or candidates' names have been placed in nomination prior to the
commencement of the voting and a stockholder who appears in person at the
meeting has given notice thereat prior to the commencement of the voting of the
stockholder's intention to cumulate votes. If any stockholder has given such
notice at the Annual Meeting, then every stockholder entitled to vote may
cumulate votes for candidates in nomination. Subject to any withholding of
authority to vote for any
1
<PAGE> 4
nominee, in which case such proxy will be voted as provided in the following
sentences, the Board of Directors is soliciting, and the proxy holders will
have, full discretion and authority to vote cumulatively, to allocate votes
among any or all of the nominees of the Board of Directors and to vote for the
election of less than all of the nominees of the Board of Directors (and in such
order as they may determine) if candidates other than those named herein for
directors are proposed at the Annual Meeting by others than the Board of
Directors and the requirements for cumulative voting are satisfied. If
cumulative voting is properly invoked and a stockholder withholds authority to
vote for any individual nominee by checking the box marked "FOR all nominees
listed at the right (except as instructed to the contrary)" and writing the name
of such nominee for whom authority to vote is withheld in the space provided on
the WHITE proxy card, then the proxy holders will have full discretion and
authority to vote cumulatively, to allocate votes among any or all of the
nominees of the Board of Directors (other than those nominees for whom authority
to vote has been withheld) and to vote for less than all of the nominees of the
Board of Directors (and in such order as they many determine). Alternatively,
all discretionary authority of the proxy holders to cumulate votes among the
Board's nominees may be withheld by checking the box marked "withhold authority
to vote for all nominees listed at right." If this latter alternative is
selected by a stockholder, none of the stockholder's shares will be voted
(cumulatively or otherwise) for any of the nominees of the Board of Directors
unless such stockholder appears and votes in person at the Annual Meeting.
Ballots will be available at the Annual Meeting for persons desiring to vote in
person.
If voting on the election of directors at the Annual Meeting is not
conducted by cumulative voting, each stockholder will be entitled to cast one
vote per share for each of up to five candidates. Whether or not there is
cumulative voting on the election of directors, the five candidates receiving
the highest number of votes will be elected as directors. Accordingly, broker
non-votes and abstentions will not be counted, except for quorum purposes, and
will have no effect on the election of the directors. Voting on all other
matters to be submitted at the Annual Meeting is noncumulative and a majority of
the shares present in person or represented by proxy at the Annual Meeting is
required to approve such other matters. In determining whether the requisite
majority has been received on any such matter, broker non-votes will not be
counted, while abstentions will be counted and will therefore have the same
effect as a vote against the matter.
OUTSTANDING VOTING SECURITIES
Only stockholders of record at the close of business on May 16, 1996
(the "Record Date") are entitled to vote at the Annual Meeting. On that day,
there were issued and outstanding 5,763,257 shares of BMOC Common Stock.
The outstanding shares of BMOC Common Stock are "paired" with the
outstanding shares of the Common Stock, $.01 par value per share ("CJC Common
Stock"), of California Jockey Club ("CJC"), a Delaware corporation, so that they
are transferable and tradable only in combination as units, each unit consisting
of one share of BMOC Common Stock and one share of BMOC Common Stock (a unit of
"Paired Common Stock"). These restrictions on transfer are imposed by the Bylaws
of the Company and CJC. The pairing is evidenced by "back-to-back" certificates
and the certificates bear a legend referring to the restrictions on transfer
imposed by the Bylaws of the Company and CJC.
The following table sets forth, as of April 30, 1996, the number of
shares of BMOC Common Stock owned (i) by each director and nominee for director,
(ii) by the Named Executive Officers (identified below, see "Executive
Compensation" section), (iii) by all directors and executive officers of the
Company as a group, and (iv) by all those known by the Company to be beneficial
owners as a group of more than five percent (5%) of the BMOC Common Stock,
together with the percentage of stock so owned.
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAMES OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENTAGE OF TOTAL (9)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Eugene F. Barsotti, Jr ........................ 49,801(2)(3) *
John C.Harris ................................. 71,245(4) 1.1
Lee R.Tucker .................................. 7,300 *
Anthony J. Zidich ............................. 5,000 *
F. Jack Liebau ................................ 68,433(5)(6) 1.0
Frank Trigeiro ................................ 0 *
"Gabelli Group" ............................... 420,100(7) 7.3
Directors and executive officers, as a group .. 201,779(8) 3.5
</TABLE>
- ------------------------
*Less than one percent (1%) of the outstanding BMOC Common Stock.
(1) Unless otherwise indicated in the footnotes, and subject to community
property laws where applicable, each named stockholder has sole voting
and investment power with respect to the shares of BMOC Common Stock
beneficially owned by such stockholder.
(2) Includes 43,692 shares held in a revocable trust, 100 shares held in an
Individual Retirement Account for the benefit of Mr. Barsotti's wife,
and 176 shares held in an Individual Retirement Account for the benefit
of Mr. Barsotti.
(3) Includes 5,833 shares issuable upon exercise of outstanding stock
options within 60 days of April 30, 1996.
(4) Includes 9,000 shares of Common Stock held by Harris Farms, Inc., of
which Mr. Harris is the sole stockholder.
(5) Includes 5,100 shares held by a partnership in which Mr. Liebau is a
partner.
(6) Includes 58,333 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of April 30, 1996.
(7) A "Schedule 13D" (Amendment No. 2) filing dated July 28, 1994, was made
by the "Gabelli Group". The Gabelli Group is comprised of Gabelli Funds,
Inc., GAMCO Investors, Inc., Gabelli & Company, Inc., Gabelli
International Limited II, Gabelli Performance Partnership, Gabelli
International Limited, and Mario Gabelli. The Schedule 13D filing
indicates that the aggregate number of shares owned by the group is
420,100 shares. The address of the Gabelli Group is One Corporate
Center, Rye, N.Y. 10580-1435.
(8) Includes 64,166 shares issuable upon exercise of outstanding stock
options that are exercisable within 60 days of April 30, 1996.
(9) Percentages shown indicate what the total percentage beneficial
ownership of BMOC Common Stock would be for each named stockholder if
such holder, but no other stockholder, whether or not named, exercised
those of his stock options that were exercisable on April 30, 1996, or
that will become exercisable 60 days thereafter.
3
<PAGE> 6
ELECTION OF DIRECTORS
(PROPOSAL 1)
Five directors will be elected at the Annual Meeting to serve until the
Annual Meeting in 1997. Each director elected will continue in office until a
successor has been elected and qualified. If any nominee is unable to serve or
declines to serve, which the Board of Directors has no reason to expect, the
persons named in the accompanying Proxy intend to vote for the balance of those
named and, if they deem advisable, for a substitute nominee. The names of the
nominees for directors of the Company are listed in the following table.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND
NAME AGE SINCE BUSINESS EXPERIENCE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Eugene F. Barsotti, Jr. 58 1983 Vice President, Racing of the Company since March 1995.
Director of Racing of the Company since September 1987.
Assistant Racing Secretary of Bay Meadows Racing Association
and Pacific Racing Association from 1975 until September
1987. Director of the former California Jockey Club from
1981 until its reorganization in 1983.
John C. Harris 52 1992 Chairman of the Board since October 1992. Owner and Chief
Executive Officer of Harris Farms, Inc. (a diversified
agricultural production and marketing company).
Thoroughbred owner and breeder for over 25 years. Director,
President (as of April 1996) and past President of
California Thoroughbred Breeders Association. Member of the
Jockey Club. Chairman of the Board of St. Agnes Medical
Center in Fresno, California.
F. Jack Liebau 57 1994 President and Chief Executive Officer of the Company since
1992. President and Director of N.J. Financial Corporation
and its affiliated companies since 1985. Director,
Secretary (as of April 1996) and past President of
California Thoroughbred Breeders Association. Member of the
Jockey Club. Of Counsel (1987-90) and Partner (1981-87),
Morgan, Lewis & Bockius (law firm). Partner, Adams, Duque &
Hazeltine (law firm) from 1968-81.
Lee R. Tucker 64 1990 Secretary of the Company since June 1995. President and
Chairman of the Board of L.M., Inc. (food brokers and
investments) since 1980.
Anthony J. Zidich 67 1991 Treasurer of the Company since January 1993. City
Treasurer, City of Daly City, since 1972. Director of the
Peninsula Quarter Horse Racing Association since 1980.
Director of the Horseman's Quarter Horse Racing Association
since 1989.
</TABLE>
There is no family relationship among any of the Company's executive
officers, directors or nominees for director.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE ABOVE
NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY.
4
<PAGE> 7
COMPENSATION OF DIRECTORS
For 1995, members of the Board of Directors received an annual fee of
$12,000 each. Eugene F. Barsotti, Jr. and F. Jack Liebau, as employees of the
Company, received no such annual fee. The directors who are appointed to various
committees serve in such capacities without compensation for their services.
During 1995, each director was also provided a food and beverage allowance of
$1,000 for use by the director and his or her guests in the Directors Room and
Turf Club at Bay Meadows Race Track.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors of the Company held a total of 11 meetings
during the year ended December 31, 1995. During 1995, none of the directors
attended fewer than 75% of the combined total number of meetings of the Board of
Directors and the total number of meetings held by all committees of the Board
of Directors on which they served.
The Board of Directors has appointed an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Board of Directors has not appointed
a Nominating Committee.
The Audit Committee includes: Anthony J. Zidich (Chairman), John C.
Harris and Lee R. Tucker. The functions of the Audit Committee are to review the
annual financial statements with the Company's independent public accountants,
to review their work, approve any non-audit services performed by them, and to
make annual recommendations to the Board of Directors for the appointment of
independent public accountants for the ensuing year. The Audit Committee had
three meetings in 1995.
The Compensation Committee includes: Lee R. Tucker (Chairman), John C.
Harris and Anthony J. Zidich. The functions of the Compensation Committee are to
review the compensation paid to each of the officers of the Company and make
recommendations to the Board of Directors. During 1995, the Compensation
Committee held one meeting.
The Stock Option Committee includes: Lee R. Tucker (Chairman), John C.
Harris and Anthony J. Zidich. The functions of the Stock Option Committee are to
administer and interpret the Bay Meadows Operating Company 1988 Stock Option
Plan (the "Option Plan"), and to grant options under the Option Plan, subject to
the approval of the entire Board of Directors. During 1995, the Stock Option
Committee held one meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of its equity securities, file with the Securities
and Exchange Commission and the American Stock Exchange initial reports of
ownership, and reports of changes in ownership, of Common Stock and other equity
securities of the Company. Officers, directors and "greater than ten percent"
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they have filed.
To the Company's knowledge, based solely on the review of copies of
such reports furnished to the Company during the fiscal year ended December 31,
1995, and written representations that no other reports were required, all
Section 16(a) filing requirements applicable to its officers, directors and
"greater than ten percent" beneficial owners were complied with, except that a
Statement of Changes in Beneficial Ownership of Securities (Form 4) covering one
transaction was filed late by Mr. Barsotti.
EXECUTIVE COMPENSATION
The following table discloses compensation received for the three
fiscal years ended December 31, 1995, by the Company's Chief Executive Officer
and each executive officer of the Company at the end of 1995, whose aggregate
cash compensation in 1995 exceeded $100,000 (all such executive officers,
including the President and Chief Executive Officer, are herein collectively
referred to as the "Named Executive Officers").
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation Award
----------------------------------------------------------
Name and All Other
Principal Position Salary Securities Underlying Compensation
Year ($) Options/SARs (#) ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
F. Jack Liebau 1995 225,000 25,000 11,250(a)
President 1994 206,250 20,000 15,750(a)
and CEO 1993 150,000 30,000 9,000(a)
Frank Trigeiro 1995 115,000(b) - 8,625(a)
Vice President-Finance 1994 - - -
1993 - - -
</TABLE>
(a) Contribution to pension plan.
(b) Mr. Trigeiro has been employed with the Company since March, 1995. There
is, therefore, no compensation data for Mr. Trigeiro for years prior to
1995.
From March 1, 1994 to February 29, 1996, Mr. Liebau was employed by the Company
pursuant to a written employment agreement. Although Mr. Liebau continues to be
employed substantially in accordance with the terms of that agreement, the term
of the written agreement has not been formally extended.
OPTION/STOCK APPRECIATION RIGHTS ("SAR") GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning
Options/SARs granted during 1995 to the Named Executive Officers.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term (a)
- ------------------------------------------------------------------------------------ -------------------------
Securities % of Total
Underlying Options/SARs
Options/ Granted to Exercise or
SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
F. Jack Liebau 25,000 71.43% $15.00 01/16/2005 235,835 597,653
Frank Trigeiro 0 0.00% - - - -
</TABLE>
(a) These columns present hypothetical future values of the stock obtainable
upon exercise of the options net of the exercise price, assuming that the
market price of the Company's common stock appreciates at a five and ten
percent compound annual rate over the ten-year term of the options. The
five and ten percent rates of stock appreciation are presented as examples
pursuant to the Securities and Exchange Commission's Proxy Rules and do
not necessarily reflect management's assessment of the Company's future
stock performance. The potential realizable values presented are not
intended to indicate the value of the options.
6
<PAGE> 9
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTIONS/SAR VALUES
The following table summarizes options and SARs exercised during 1995
and presents the value of unexercised options and SARs held by the Named
Executive Officers at December 31, 1995.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs at In-the-Money
Fiscal Year-End (#) Options/SARs at Fiscal
Shares Acquired Exercisable (E)/ Year-End ($)
on Exercise Value Realized Unexercisable (U) Exercisable (E)/
Name (#) ($) Unexercisable (U)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
F. Jack Liebau 0 N/A 50,000 E $112,500 E
25,000 U
Frank Trigeiro 0 N/A N/A N/A
</TABLE>
PENSION PLAN
The table that follows shows the estimated annual benefits payable upon
retirement to nonunion employees of the Company under the California Race Track
Pension Plan. Participants are fully vested after five years of service.
<TABLE>
<CAPTION>
Average Annual
Earnings 5 Years 10 Years 20 Years 30 Years 40 Years
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 6,250 $12,500 $25,000 $ 37,500 $ 50,000
100,000 12,500 25,000 50,000 75,000 100,000
150,000 and over 18,750 37,500 75,000 112,500 118,800(1)
</TABLE>
(1) In accordance with Section 415 Limits - IRS Code.
The compensation covered by the above plan are the annual earnings of
an employee. The covered compensation is the same as the compensation reported
in the Summary Compensation Table under the Salary column (up to a maximum of
$150,000 per year). The pension table above sets forth estimated annual
retirement benefits payable as a straight-life annuity, assuming retirement at
age 65 and using the normal form of benefit under the above plan. The benefits
listed are not subject to any deduction for social security or other offset
amounts.
With regard to the Named Executive Officers, as of December 31, 1995,
Mr. Liebau had three years of credited service and Mr. Trigeiro had one year of
credited service.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is composed of three outside directors and
is responsible for annually reviewing the compensation paid to all of the
officers of the Company. The Compensation Committee develops recommendations
with respect to the Board of Directors for adoption and/or modification.
The Compensation Committee seeks to provide the Company's executive
officers with reasonable and sufficient compensation to attract and retain
experienced individuals as executive officers. The Company's executive officers
are primarily compensated through their salaries, although the Company has a
stock option plan. The Company does not have any formal bonus plan or restricted
plan.
7
<PAGE> 10
In exercising its judgment as to the appropriate compensation to be
paid to each executive officer, the Compensation Committee reviews annually the
experience and performance of each executive officer as well as the Company's
overall performance. There is, however, no specific quantifiable relationship
between the Company's performance and the compensation levels for executive
officers. The Compensation Committee also considers the compensation packages at
other publicly-traded companies which run Thoroughbred racing meets.
Specifically, in 1995, the Compensation Committee considered the results of a
compensation study performed by outside consultants at the request of the
Compensation Committee. In comparing the Company's salaries to those paid by
other companies, the Compensation Committee takes into account the small number
of executive officers at the Company, the responsibilities resulting from the
Company being publicly held and the limited forms of compensation it uses. The
Compensation Committee also takes into account prior salary adjustments, as well
as the relative salary levels of the Company's executive officers.
Mr. Liebau was originally appointed as President and Chief Executive
Officer of the Company in November 1992. In light of the factors considered by
the Compensation Committee which are discussed above, Mr. Liebau's compensation
was increased $18,750 in 1995 over his 1994 compensation level. Specifically, in
setting Mr. Liebau's salary last year, the Committee took into account a number
of factors including the results of the compensation study performed by the
outside consultants, the Company's and Mr. Liebau's performances, Mr. Liebau's
prior experience as a lawyer and corporate executive, his knowledge of the
Thoroughbred industry and the amount of time he was spending in fulfilling his
duties as President and CEO.
Compensation Committee
Lee R. Tucker, Chairman
John C. Harris, Member
Anthony J. Zidich, Member
STOCK OPTION COMMITTEE REPORT
The Company has a stock option plan, and from time to time options have
been awarded to executive officers and other employees. The stock option plan is
a part of the compensation package for executive officers and stock options can
augment an employee's salary.
Effective January 16, 1995, Mr. Liebau was granted stock options to
purchase up to 25,000 shares of Paired Common Stock at the January 16, 1995
market price of $15.00 per share. The level of the option grant was based on the
judgment of the Board taking into account the Company's overall performance, Mr.
Liebau's compensation level, the levels of prior option grants to the Company's
other executive officer and key employees and the levels of prior option grants
to the Company's former officers. There were no option grants to any executive
officer other than Mr. Liebau during 1995, although other grants of options were
made to various key employees.
Stock Option Committee
Lee R. Tucker, Chairman
John C. Harris, Member
Anthony J. Zidich, Member
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative returns during the
five year period ended December 31, 1995, of the Paired Common Stock, Standard
and Poor's 500 Composite Index ("S&P 500 Index") and the National Association of
Real Estate Investment Trust's All REIT Index:
[GRAPH]
<TABLE>
<CAPTION>
--------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BMOC/CJC 100 106 100 116 139 148
--------------------------------------------------------------------
S&P 500 INDEX 100 131 141 155 157 215
--------------------------------------------------------------------
ALL REIT INDEX 100 136 152 180 182 215
--------------------------------------------------------------------
</TABLE>
The stock performance graph assumes that the original investment in the
Companies' Pair Common Stock and the amount invested in the two indexes was $100
on December 31, 1990, and that all dividends during the period were reinvested.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
The firm of Deloitte & Touche LLP, which served the Company as
independent public accountants for the 1995 fiscal year, has been selected by
the Board of Directors of the Company as the Company's independent public
accountants for the 1996 fiscal year. Deloitte & Touche LLP has no interest,
financial or otherwise, in the Company. All proxies will be voted for
appointment of the selection of Deloitte & Touche LLP, unless authority to vote
for the ratification of such selection is withheld or an abstention is noted.
Representatives from Deloitte & Touche LLP will be present at the
Annual Meeting. They will have the opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
1996.
9
<PAGE> 12
OTHER MATTERS
STOCKHOLDERS' PROPOSAL FOR NEXT ANNUAL MEETING
A stockholders proposal intended to be presented at the 1997 Annual
Meeting must be received by the Company no later than January 16, 1997, for
inclusion in the Company's proxy statement and form of proxy for that meeting.
ANNUAL REPORT AND ANNUAL REPORT ON FORM 10-K
In lieu of the Company's Annual Report to Stockholders, the Company is
enclosing with this proxy statement the Company's 1995 Annual Report on Form
10-K, filed jointly with the Securities and Exchange Commission by the Company
and CJC.
OTHER MATTERS
The Company's Bylaws provide that stockholders intending to nominate
candidates for election as directors or to bring business before a stockholders'
meeting must give the prescribed notice and information to the Company at least
60 days prior to the meeting of stockholders. However, the Bylaws also provide
that, where less than 70 days' notice or prior public disclosure of the date of
a stockholders' meeting is given, advance notice of stockholder nominations for
the election of directors or business to be brought before any stockholders'
meeting must be delivered or mailed to and received at the principal executive
offices of the Company not later than the close of business on the tenth day
following the day on which the notice of the meeting of stockholders was mailed,
or such public disclosure was made. Pursuant to and in accordance with the
foregoing Bylaw provisions, as of the date of this Proxy Statement, the Company
was notified of no other business to be brought before the Annual Meeting,
although one stockholder has notified that Company that he intends to nominate
one individual for election to the Board of Directors at the Annual Meeting. If
any stockholder proposal or other business should properly come before the
Annual Meeting, the persons named in the enclosed form of proxy, or their
substitutes, will vote the shares represented by the proxies with respect to any
such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
LEE R. TUCKER
Secretary
Dated June 14, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
RETURN THE ACCOMPANYING WHITE PROXY CARD IN THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE.
10
<PAGE> 13
PROXY
BAY MEADOWS OPERATING COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders of Bay Meadows Operating Company, a Delaware corporation (the
"Company"), and the accompanying Proxy Statement dated June 14, 1996, and
revoking any proxy heretofore given hereby appoints Eugene F. Barsotti, Jr.,
John C. Harris and F. Jack Liebau, or any of them, each with full power of
substitution, as proxies of the undersigned, to attend the Annual Meeting of
Stockholders of the Company to be held at the Clubhouse of Bay Meadows
Racecourse, 2600 South Delaware Street, San Mateo, California on Friday, July
12, 1996, at 11:00 a.m. and any adjournment or postponement thereof, and to
vote the number of shares the undersigned would be entitled to vote if
personally present at the meeting.
AS DESCRIBED MORE FULLY IN THE PROXY STATEMENT, THIS PROXY WILL BE VOTED AS
SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE VOTED "FOR" THE FIVE NOMINEES
OF THE BOARD FOR ELECTION AS DIRECTORS (PROPOSAL 1) AND "FOR" RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL 2), AS ALSO DESCRIBED MORE
FULLY IN THE PROXY STATEMENT, IF CANDIDATES FOR DIRECTORS OTHER THAN THOSE
NAMED HEREIN ARE PROPOSED AT THE ANNUAL MEETING BY OTHERS THAN THE BOARD OF
DIRECTORS AND THE REQUIREMENTS FOR CUMULATIVE VOTING ARE SATISFIED, THE PROXY
HOLDERS NAMED ABOVE SHALL HAVE FULL DISCRETION AND AUTHORITY TO VOTE
CUMULATIVELY THE SHARES OF THE UNDERSIGNED, ALLOCATE VOTES AMONG ANY OR ALL OF
THE NOMINEES OF THE BOARD OF DIRECTORS, AND VOTE FOR THE ELECTION OF LESS THAN
ALL THE NOMINEES OF THE BOARD OF DIRECTORS (AND IN SUCH ORDER AS THEY MAY
DETERMINE), SUBJECT TO ANY WITHHOLDING OF AUTHORITY TO VOTE FOR ANY NOMINEE, IN
WHICH CASE THIS PROXY WILL BE VOTED CUMULATIVELY AS PROVIDED IN THE FOLLOWING
SENTENCE. IN THE EVENT THIS PROXY WITHHOLDS AUTHORITY TO VOTE FOR ANY NOMINEE,
THEN, AS DESCRIBED MORE FULLY IN THE PROXY STATEMENT, THE PROXY HOLDERS SHALL
HAVE THE SAME DISCRETION AND AUTHORITY AS SET FORTH IN THE PRECEDING SENTENCE
EXCEPT THAT NO VOTES SHALL BE ALLOCATED TO ANY NOMINEE FOR WHOM THIS PROXY
WITHHOLDS AUTHORITY TO VOTE.
(To be completed and signed on reverse side)
- -------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
<PAGE> 14
- --------------------------------------------------------------------------------
Please mark
your vote as
indicated in
the example /X/
ELECTION OF DIRECTORS Eugene F. Barsotti, Jr.; 2. Ratify the appointment
John C. Harris; F. Jack of Deloitte & Touche
Liebau; Lee R. Tucker; LLP as independent
FOR all nominees WITHHOLD Anthony J. Zidich auditors for the year
listed to the AUTHORITY ended December 31, 1996
right (except to vote
as instructed for all
to the contrary) nominees
listed to
the right
/ / / / INSTRUCTION: To withhold FOR AGAINST ABSTAIN
authority to vote for any / / / / / /
individual nominee, write
that nominee's name in the
space provided below.
- --------------------------------------------- The Board of Directors
The Board of Directors recommends a vote FOR recommends a vote FOR
the foregoing nominees. the ratification of the
appointment of Deloitte
& Touche LLP.
3. The proxies are
authorized to vote in
their discretion upon
any other matters as
may properly come before
the meeting or any
adjournment or postpone-
ment thereof.
(Please sign exactly as
name appears. When
shares are held by
joint tenants, both
should sign. When
signing as attorney,
executor, administrator,
trustee, or guardian,
please give full title
as such. If a corpora-
tion, please sign in
full corporate name by
President or other
authorized officer.
If a partnership,
please sign in
partnership name
by authorized person.)
Dated: _________1996
____________________
Signature
____________________
Signature, if held
jointly
STOCKHOLDERS ARE URGED
TO MARK, DATE, SIGN
AND RETURN THIS PROXY
IN THE ENVELOPE
PROVIDED, WHICH
REQUIRES NO POSTAGE
IF MAILED IN THE
UNITED STATES.
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
