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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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Bay Meadows Operating Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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BAY MEADOWS OPERATING COMPANY
2600 SOUTH DELAWARE STREET
P.O. BOX 5050
SAN MATEO, CALIFORNIA 94402
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
FRIDAY, AUGUST 30, 1996
------------------------
TO THE STOCKHOLDERS OF BAY MEADOWS OPERATING COMPANY:
Notice is hereby given that a Special Meeting of Stockholders of Bay
Meadows Operating Company will
be held on Friday, August 30, 1996, at 9:30 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 vote on the following resolutions:
WHEREAS, Bay Meadows Operating Company ("BMOC") is in the business of
conducting live Thoroughbred racing and wagering on live and off-track
racing at the Bay Meadows Racecourse (the "Bay Meadows Racing
Operations");
WHEREAS, California Jockey Club ("CJC") is the owner of the 175 acres on
which the Bay Meadows Racecourse and related racing facilities are
situated and have been operating for over 60 years;
WHEREAS, the stock of BMOC and CJC trades on a paired basis on the
American Stock Exchange and the stock ownership of BMOC and CJC are
identical;
WHEREAS, almost 100% of the combined revenue of BMOC and CJC is
attributable to the Bay Meadows Racing Operations conducted at the Bay
Meadows Racecourse;
WHEREAS, CJC has entered into agreements to sell a 40 acre parcel
contiguous to Highway 101 on which a training track is now situated and
the approximately 32 acre parcel consisting of the stable area, and thus
BMOC will lose its existing on-site stabling and training facilities;
WHEREAS, BMOC's Board of Directors has concluded that the construction
of 900 or more stalls on or contiguous to the Bay Meadows Racecourse is
in the best interest of the shareholders of CJC and BMOC, and CJC has
not yet provided for the construction of such stalls;
WHEREAS, the stockholders of BMOC and CJC believe that the failure to
timely provide for the stabling of more than 900 horses on or contiguous
to the Bay Meadows Racecourse will adversely affect and may destroy the
ability of BMOC to continue to conduct the Bay Meadows Racing Operations
in a way substantially similar to the manner in which they are presently
conducted and the stockholders of BMOC and CJC believe it is in their
best interest that BMOC continue to conduct the Bay Meadows Racing
Operations in a way substantially similar to the manner in which it is
presently conducted;
NOW, THEREFORE, BE IT RESOLVED that, BMOC, with the full support of CJC,
shall continue to conduct the Bay Meadows Racing Operations at the Bay
Meadows Racecourse in a way substantially similar to the manner in which
it is presently conducted;
RESOLVED FURTHER that, it is hereby determined that, in order to ensure
the continuation of the Bay Meadows Racing Operations at the Bay Meadows
Racecourse in a way substantially similar to the manner in which it is
presently conducted, it is critical that stabling for 900 horses be
available as soon as practicable on or contiguous to the Bay Meadows
Racecourse;
RESOLVED FURTHER that, the Board of Directors of BMOC is hereby
authorized, empowered and directed, and the Board of Directors of CJC is
hereby requested, to take any and all actions
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(including the expenditure of funds) necessary, desirable or reasonable
to ensure the continuation of Bay Meadows Racing Operations at the Bay
Meadows Racecourse in a way substantially similar to the manner in which
it is presently conducted, including, but not limited to, the
expeditious development of stabling for 900 horses on or contiguous to
the Bay Meadows Racecourse.
2. To transact such other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on August 7, 1996, are the
only stockholders entitled to notice of and to vote at the Special Meeting of
Stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
LEE TUCKER
Secretary
Dated August 13, 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> 4
BAY MEADOWS OPERATING COMPANY
2600 SOUTH DELAWARE STREET
P.O. BOX 2050
SAN MATEO, CALIFORNIA 94402
------------------------
PROXY STATEMENT FOR SPECIAL MEETING
------------------------
SOLICITATION OF PROXY
This Proxy Statement is furnished by the Board of Directors of Bay Meadows
Operating Company ("Bay Meadows"), a Delaware corporation, in connection with
its solicitation of proxies to be used at the Special Meeting of Stockholders
(the "Special Meeting") of Bay Meadows to be held on Friday, August 30, 1996, at
9:30 a.m. Pacific Daylight Time, at the Clubhouse of Bay Meadows Racecourse,
2600 South Delaware Street, San Mateo, California, and at any adjournment or
postponement thereof. The stockholders of Bay Meadows will consider and vote on
(1) certain resolutions set forth below (see section entitled "Approval of
Resolutions") and (2) such other business as may properly be brought before the
Special Meeting.
This Proxy Statement and the form of proxy card were first sent or given to
stockholders on or about August 13, 1996. The proxy materials are being mailed
to stockholders of record at the close of business on August 7, 1996 (the
"Record Date"). Only stockholders of record on the Record Date are entitled to
vote at the Special Meeting. On that day, there were issued and outstanding
5,763,257 shares of the Common Stock of Bay Meadows.
APPROVAL OF RESOLUTIONS
(PROPOSAL 1)
THE RESOLUTIONS
At the Special Meeting, stockholders will be asked to consider and vote on
the following resolutions (the "Resolutions"):
WHEREAS, Bay Meadows Operating Company ("BMOC") is in the business of
conducting live Thoroughbred racing and wagering on live and off-track
racing at the Bay Meadows Racecourse (the "Bay Meadows Racing
Operations");
WHEREAS, California Jockey Club ("CJC") is the owner of the 175 acres on
which the Bay Meadows Racecourse and related racing facilities are
situated and have been operating for over 60 years;
WHEREAS, the stock of BMOC and CJC trades on a paired basis on the
American Stock Exchange and the stock ownership of BMOC and CJC are
identical;
WHEREAS, almost 100% of the combined revenue of BMOC and CJC is
attributable to the Bay Meadows Racing Operations conducted at the Bay
Meadows Racecourse;
WHEREAS, CJC has entered into agreements to sell a 40 acre parcel
contiguous to Highway 101 on which a training track is now situated and
the approximately 32 acre parcel consisting of the stable area, and thus
BMOC will lose its existing on-site stabling and training facilities;
WHEREAS, BMOC's Board of Directors has concluded that the construction
of 900 or more stalls on or contiguous to the Bay Meadows Racecourse is
in the best interest of the shareholders of CJC and BMOC, and CJC has
not yet provided for the construction of such stalls;
WHEREAS, the stockholders of BMOC and CJC believe that the failure to
timely provide for the stabling of more than 900 horses on or contiguous
to the Bay Meadows Racecourse will adversely
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affect and may destroy the ability of BMOC to continue to conduct the
Bay Meadows Racing Operations in a way substantially similar to the
manner in which they are presently conducted and the stockholders of
BMOC and CJC believe it is in their best interest that BMOC continue to
conduct the Bay Meadows Racing Operations in a way substantially similar
to the manner in which it is presently conducted;
NOW, THEREFORE, BE IT RESOLVED that, BMOC, with the full support of CJC,
shall continue to conduct the Bay Meadows Racing Operations at the Bay
Meadows Racecourse in a way substantially similar to the manner in which
it is presently conducted;
RESOLVED FURTHER that, it is hereby determined that, in order to ensure
the continuation of the Bay Meadows Racing Operations at the Bay Meadows
Racecourse in a way substantially similar to the manner in which it is
presently conducted, it is critical that stabling for 900 horses be
available as soon as practicable on or contiguous to the Bay Meadows
Racecourse;
RESOLVED FURTHER that, the Board of Directors of BMOC is hereby
authorized, empowered and directed, and the Board of Directors of CJC is
hereby requested, to take any and all actions (including the expenditure
of funds) necessary, desirable or reasonable to ensure the continuation
of Bay Meadows Racing Operations at the Bay Meadows Racecourse in a way
substantially similar to the manner in which it is presently conducted,
including, but not limited to, the expeditious development of stabling
for 900 horses on or contiguous to the Bay Meadows Racecourse.
The Resolutions authorize the Bay Meadows Board to take any and all actions
necessary, desirable or reasonable to ensure the continuation of Bay Meadows
Racing Operations at the Bay Meadows Racecourse but the Bay Meadows Board of
Directors will not be bound to take any action if the Resolutions are approved.
Additionally, with regard to California Jockey Club ("Cal Jockey"), the
Resolutions are a recommendation only. Because the Bay Meadows Board of
Directors believes that the lack of on-site stabling will have an adverse effect
on Bay Meadows' ability to conduct live Thoroughbred racing at the Bay Meadows
Racecourse, the Bay Meadows Board of Directors is presenting the Resolutions to
the Bay Meadows stockholders in the interest of seeking direction from the
stockholders as to whether alternatives for on-site stabling should be pursued
by Bay Meadows.
NO RECOMMENDATION REGARDING CALIFORNIA JOCKEY CLUB PROXY CONTEST
As described more fully below, the outstanding shares of Bay Meadows Common
Stock are "paired" with the outstanding shares of Cal Jockey Common Stock (see
OTHER MATTERS -- Paired Stock). Bay Meadows and Cal Jockey are, however,
separate companies, each with their own Boards of Directors. Cal Jockey will
hold its Annual Meeting of Stockholders on August 30, 1996, the same day, as the
Special Meeting of Bay Meadows. One of the members of the Board of Directors of
Bay Meadows, John C. Harris, is a participant in a solicitation by the
California Jockey Club Shareholders Committee which, in connection with the
Annual Meeting of Stockholders of Cal Jockey, is soliciting proxies for the
election of a slate of nominees in opposition to the current Cal Jockey Board of
Directors. Bay Meadows, however, is not a participant in such solicitation. Bay
Meadows is not seeking hereby to influence the election at the Cal Jockey Annual
Meeting. The Board of Directors believes that the subject matter of the
Resolutions is critical to the future of Bay Meadows and that it is important
that the Resolutions be approved by Bay Meadows stockholders, regardless of the
make up of the Cal Jockey Board, either now, or after the election. FURTHER,
NEITHER BAY MEADOWS NOR THE BAY MEADOWS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION WITH REGARD TO THE ELECTION OF DIRECTORS AT THE ANNUAL MEETING OF
CAL JOCKEY.
BAY MEADOWS' BUSINESS
Bay Meadows conducts live Thoroughbred racing at Bay Meadows Racecourse in
San Mateo, California, and offers pari-mutuel wagering on live and off-track
horse racing (collectively, the "Bay Meadows Racing Operations"). It also
generates revenues from racetrack admissions, parking, and program sales, and
from the food and beverage concession at Bay Meadows Racecourse. Additionally,
Bay Meadows sublets the Bay Meadows Racecourse facilities to the San Mateo
County Fair for horse racing events (a two week race
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meet), and to trade shows and others for various events. Other sources of
revenue include a nine hole golf course located in the infield of the racetrack
and an indoor tennis club located near Bay Meadows Racecourse.
THE BAY MEADOWS RACECOURSE PROPERTIES
Bay Meadows Racecourse is a horse race track located on approximately one
hundred seventy-five (175) acres of contiguous land in San Mateo, California.
Its principal facilities include:
- the main 1-mile dirt horse race track with 6 furlongs and 1 1/4 mile
chutes, inside of which is a 7 furlong turf course;
- the track's infield area, on which is situated a 9 hole/3 par golf
course;
- a main structure, which contains a grandstand, a clubhouse and a
turf club;
- a parking area, a portion of which is provided by an easement
granted by the County of San Mateo;
- a barn and stable area situated on approximately thirty-two (32)
acres and containing approximately one thousand five hundred fifty
(1,550) horse stalls (the "Stable Area"); and
- a 5/8-mile training track oval situated on approximately forty (40)
acres adjacent to the Stable Area (the "Training Track Area").
Historically, the entire 175 acre site has been used in conjunction with the Bay
Meadows Racing Operations carried on at Bay Meadows Racecourse.
LEASE OF BAY MEADOWS RACECOURSE
Cal Jockey owns Bay Meadows Racecourse, but does not operate it. Cal Jockey
operates as an equity real estate investment trust under the Internal Revenue
Code of 1986, as amended. Cal Jockey leases the Bay Meadows Racecourse and other
minor nearby properties to Bay Meadows. The term of the master lease between Cal
Jockey and Bay Meadows expired on March 31, 1996. Bay Meadows continues to rent
Bay Meadows Racecourse under terms substantially similar to those in the prior
lease. Bay Meadows has been advised that a three-year lease extension was
approved by the Board of Directors of Cal Jockey. Although an agreement
memorializing the extension has not yet been delivered, Bay Meadows maintains
that the lease has been extended as agreed.
CHRB LICENSE
In order to conduct live Thoroughbred racing meets and to act as a
satellite facility for off-track racing, Bay Meadows must secure, on an annual
basis, a license from the California Horse Racing Board (the "CHRB"). Bay
Meadows has been granted an annual license each year since 1934; however, the
granting of the license annually is not assured. As part of the licensing
process, the CHRB allocates racing days among racecourses in California. Bay
Meadows competes for such racing days with other racecourses in the Northern
California Racing Zone. Bay Meadows management is very concerned that
significant changes in its operations, due to off-site stabling as discussed
below, will cause Bay Meadows to lose a significant number (and possibly all) of
the racing days potentially allocable to Bay Meadows by the CHRB and/or the
specific racing dates that Bay Meadows prefers.
CAL JOCKEY'S SALE OF STABLE AND TRAINING TRACK AREAS AND PROPOSALS TO REPLACE
THE STABLE AREA
As the sole owner of the Bay Meadows Racecourse properties, Cal Jockey has
entered into an agreement to sell substantially all of the Stable Area where
most of the horses racing at Bay Meadows are stabled during Bay Meadows' meets.
Cal Jockey has also entered into an agreement to sell the adjoining Training
Track Area.
Since the sales of the Stable Area and the Training Track Area were
announced, Bay Meadows and Cal Jockey have been investigating and considering
various alternative stabling arrangements. As of the date of this proxy
statement, no definitive plan for the replacement of the Stable Area following
its sale, which could occur as early as Spring of 1997, has been selected and
committed to by Cal Jockey. There are essentially two
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alternatives to the current stabling at Bay Meadows Racecourse: on-site or
contiguous stabling and off-site stabling.
On-Site or Contiguous Stabling
As reported in the Joint Form 10-K for the year ending December 31, 1995
filed by Bay Meadows and Cal Jockey, a proposal (the "Infield Proposal") to
construct approximately 900 new stalls at Bay Meadows has been under
consideration. Under the Infield Proposal, a majority of the new stalls would be
recessed into the ground in the infield of the main track with the balance
located in a portion of the existing parking area and the site on which the
north end of the existing grandstand is situated. A tunnel under the race track
would have to be installed in order to connect the stalls areas. The north end
of the existing grandstand would also have to be removed to create space for
some of the new stalls and the remaining grandstand would have to be renovated
and reconfigured. A new training track possibly could be created on the infield
site inside the present turf course. This alternative presents a number of
complex planning, financing and construction issues. Moreover, Bay Meadows has
been informed by attorneys for the prospective purchaser of the Stable Area
(Property Resources, Inc., an affiliate of Franklin Resources, Inc.) that they
believe that, by proceeding with the Infield Proposal, the permitting for the
development of the Stable Area would be delayed, and such delay would allegedly
constitute intentional interference by Bay Meadows with the purchase contract
between Cal Jockey and Property Resources. In none of the discussions between
Bay Meadows and Cal Jockey with respect to the Infield Proposal has Cal Jockey
informed Bay Meadows that the Infield Proposal would constitute a breach of the
contract between Cal Jockey and Property Resources or that pursuing the Infield
Proposal would constitute intentional interference with that contract. While Bay
Meadows management does not believe that pursuing the Infield Proposal
interferes with the Cal Jockey-Property Resources contract, there can be no
assurance that Property Resources would not institute the threatened litigation
and would not be able to delay or block the Infield Proposal.
A second on-site or contiguous stabling proposal is also under
consideration. Under this second proposal (the "Parking Lot Proposal"),
approximately 1,150 stalls could be built on a portion of the contiguous parking
lot property that is north of the racetrack. The north end of the existing
grandstand would have to be removed to create space for some of the new stalls
and the remaining grandstand would have to be renovated and reconfigured. Cal
Jockey's Chairman, Kjell H. Qvale, and President, James M. Harris, have recently
indicated support for the Parking Lot Proposal concept in discussions with Bay
Meadows management with respect to the proposal. Cal Jockey owns a portion of
the property on which slightly less than one-half the stalls could be built and
the County of San Mateo owns a portion of the property on which the remainder of
the stalls could be built. The County of San Mateo would have to agree to permit
the construction of the stalls, which agreement has not yet been received.
Assuming such an agreement is reached, Bay Meadows management believes there
would still be sufficient remaining parking for race track patrons. This
alternative also presents a number of complex planning, financing and
construction issues. Bay Meadows has not yet discussed the Parking Lot Proposal
with Property Resources and there can be no assurances that Property Resources
will not also object to this proposal.
At this time, Bay Meadows is unable to estimate the costs of implementing
the Infield Proposal or the Parking Lot Proposal. Bay Meadows management is
continuing to investigate and explore other possibilities for on-site or
contiguous stabling. Other proposals may be developed in the future which may
prove to be more feasible or viable than the Infield Proposal or the Parking Lot
Proposal.
Off-Site Stabling
The possibility of establishing a training and stable area at an off-site
location has been investigated and is believed to be under consideration by Cal
Jockey. If horses are stabled at an off-site location, it will be necessary to
construct approximately 200 stalls at the Bay Meadows Racecourse to serve as
transit stalls to be used on race days. Depending upon their location, the
acreage retained by Cal Jockey for the construction of such stalls and
associated activities may be inadequate. Bay Meadows management has been
informed that Cal Jockey was negotiating with the County of San Mateo to secure
additional space for a staging area for use in the loading and unloading of
horses from vans. Bay Meadows management does not know the status of such
negotiations. Bay Meadows management has also been informed that Cal Jockey has
had some discussions
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with respect to at least one off-site stabling location. Bay Meadows management
does not know the status of such negotiations either. Bay Meadows management
also believes that there are complex planning, financing and construction issues
associated with any off-site stabling proposal.
BAY MEADOWS' REASONS FOR THE RESOLUTIONS
The Board of Directors of Bay Meadows believes Bay Meadows is at a
cross-roads in the decision to pursue on-site or contiguous stabling, rather
than off-site stabling. Also, it has been suggested that the combined value of
Bay Meadows and Cal Jockey is the same with or without the Bay Meadows Racing
Operations. The Bay Meadows Board does not believe such to be the case and
believes it is in the best interests of the stockholders of Bay Meadows and Cal
Jockey for Bay Meadows to continue the Bay Meadows Racing Operations in a way
substantially similar to the manner in which they are presently conducted. While
the Bay Meadows Board is of the view that on-site or contiguous stabling is
essential for the reasons discussed below, the Board desires to receive
direction from Bay Meadows' and Cal Jockey's stockholders on this subject. The
Board of Bay Meadows believes that an affirmative vote in favor of the
Resolutions indicates the stockholders' concurrence that Bay Meadows Racing
Operations should be continued in a way substantially similar to the manner in
which they are presently conducted and that on-site or contiguous stabling
should be implemented, in lieu of off-site stabling. Conversely, a negative vote
against the Resolutions will indicate, the Bay Meadows Board believes, that
stockholders are not concerned about changes to Bay Meadows Racing Operations
and that on-site stabling should not be pursued to the exclusion of off-site
stabling.
The Bay Meadows Board of Directors views it as critical that alternative
stabling arrangements be selected and implemented in the near future. Bay
Meadows management understands, although it has not been so advised by Cal
Jockey, that, depending on the speed with which entitlements are granted,
Property Resources could tear down the stalls at Bay Meadows Racecourse as early
as Spring of 1997. Since the San Mateo County Fair race meet typically runs in
August and since Bay Meadows' meet typically follows the San Mateo County Fair
meet, replacement stalls would have to be in place by early summer 1997. Bay
Meadows' management believes that the failure to have replacement stalls in
place on-site or contiguous to the Bay Meadows Racecourse by that time would
substantially cripple Bay Meadows Racing Operations.
The Bay Meadows Board and the Cal Jockey Board have not been able to reach
a definitive agreement on whether to pursue on-site or contiguous stabling or
off-site stabling. As discussed above, the Cal Jockey Board has been considering
off-site stabling, while not definitively supporting on-site or contiguous
stabling. The Bay Meadows Board has been informed in the past that off-site
stabling is simply unacceptable to many horse owners and trainers who vigorously
protested a prior proposal for an off-site training and stabling facility in
Livermore. The Thoroughbred Owners of California, the organization recognized by
the CHRB as representing owners, and the California Horsemen's Benevolent and
Protective Association, the organization recognized by the CHRB as representing
trainers, have each advised Bay Meadows management previously that they do not
approve of horses being stabled and trained at an off-site location for the
long-term. Bay Meadows is not aware of any change in their positions since they
were previously communicated to Bay Meadows. The Bay Meadows Board is also
concerned that Bay Meadows' inability to stable a sufficient number of horses at
the Bay Meadows Racecourse would result in Bay Meadows being allocated less
favorable racing dates and/or fewer racing days by the CHRB. Irrespective of the
potential impact on Bay Meadows' allocation of racing days and/or dates, the Bay
Meadows Board is concerned that horse trainers' and owners' dislikes with racing
and training horses at different locations would adversely affect the quantity
and quality of horses racing at Bay Meadows Racecourse which, in turn, would
adversely affect Bay Meadows' Racing Operations. The Bay Meadows Board believes
that there would be substantially more support from owners and trainers for
on-site or contiguous stabling. Finally, although it is premature to compare the
exact economics of on-site or contiguous and off-site stabling, Bay Meadows
Board believes that there will be significant, additional operating costs
incurred by Bay Meadows under any off-site stabling proposal as a result of the
need to van horses between two sites and the need to pay for upkeep and
maintenance upon two sites. In light of the foregoing, the Bay Meadows Board
believes that it is most prudent to actively pursue on-site or contiguous
stabling and that such course of action is necessary to preserve Bay Meadows'
Racing Operations. The Bay Meadows Board believes that the preservation of such
business is in the best interest of stockholders because to do otherwise would
result in a diminution of the value of Bay Meadows. THE BOARD OF DIRECTORS
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THEREFORE BELIEVES THAT APPROVAL OF THE RESOLUTIONS IS IN THE BEST
INTERESTS OF STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS APPROVE THE
RESOLUTIONS.
Because Bay Meadows does not own the Bay Meadows Racecourse and because Bay
Meadows pays Cal Jockey substantially all of its net income as rent, Bay Meadows
is not in a financial position to finance all the necessary improvements for
either on-site or contiguous stabling or off-site stabling. Bay Meadows is
dependent on Cal Jockey to provide such funds. Cal Jockey has, in the past,
indicated an inclination to fund to the extent practicable any economically
viable alternative. To date, however, Bay Meadows has not received, despite its
requests, a firm commitment from Cal Jockey as to any specific expenditures that
Cal Jockey will make either for on-site or contiguous stabling or off-site
stabling.
Because the stockholders of Bay Meadows are the same as those of the Cal
Jockey, it is the belief of the Bay Meadows Board that a clear expression of
stockholder preference should guide both companies. However, because Cal Jockey
is a separate corporation, the effect of approval of the Resolutions on Cal
Jockey is not certain even though the Resolutions would have been approved by
its stockholders. The effect on Bay Meadows is more certain. If approved, the
Bay Meadows Board intends to do what it can to comply with the stockholders
desires to develop, or secure funds for the expeditious development of, stabling
for more than 900 horses on or contiguous to the Bay Meadows Racecourse.
Moreover, the Bay Meadows Board will continue to try to work with the Board of
Directors of Cal Jockey towards these same ends. Whether or not Cal Jockey's
Board complies with the stockholders' sentiment if the Resolutions are approved
will be determined by the members of the Cal Jockey Board.
Finally, there is no legal requirement that the Resolutions be submitted to
the stockholders of Bay Meadows for approval. Bay Meadows' Board of Directors
and the Board of Directors of Cal Jockey have the legal authority, independent
of the Resolutions, to take actions necessary to ensure the continuation of live
Thoroughbred racing and live and off-track wagering at Bay Meadows Racecourse as
set forth in the Resolutions and will continue to have such legal authority even
if the Resolutions are not approved. Further, even if the Resolutions are not
approved by the stockholders, the Bay Meadows Board of Directors anticipates
that Bay Meadows will continue to take such actions as it deems reasonable,
prudent and in the best interests of stockholders to ensure that Bay Meadows
Racing Operations continue at Bay Meadows Racecourse in substantially the same
manner as it is presently conducted.
FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS OF BAY MEADOWS RECOMMENDS
THAT STOCKHOLDERS VOTE TO APPROVE THE RESOLUTIONS.
VOTE REQUIRED FOR APPROVAL OF THE RESOLUTIONS
The Resolutions will be approved if a majority of Bay Meadows' shares
present in person or represented by proxy at the Special Meeting and entitled to
vote on the proposal vote "FOR" the Resolutions. In determining whether the
Resolutions are approved or disapproved, abstentions will be counted and will
therefore have the same effect as a vote against the Resolutions. IN OTHER
WORDS, IF YOU ABSTAIN, IT WILL HAVE THE SAME EFFECT AS IF YOU WERE CASTING A
VOTE AGAINST THE RESOLUTIONS. Holders of Bay Meadows Common Stock are entitled
to one vote for each share held.
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OTHER MATTERS
VOTING OF PROXIES
A stockholder signing and returning a proxy on the enclosed proxy card has
the power to revoke it at any time before the shares represented thereby are
voted by (1) notifying the Secretary of Bay Meadows in writing, (2) executing
and delivering a later dated proxy or (3) attending and voting such shares at
the Special Meeting. If the enclosed proxy is completed in the appropriate
spaces, signed, dated and returned, the proxy will be voted by the proxy holders
as specified in the proxy. If no specification is made, the proxy will be voted
"FOR" the Resolutions, and will be voted on such other matters as may come
before the Special Meeting at the discretion of the proxy holders.
ADDITIONAL INFORMATION CONCERNING SOLICITATION OF PROXIES
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 Bay Meadows. 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 Bay Meadows who will receive no extra compensation for such
services. In addition, Bay Meadows 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 $7,500 plus
reimbursement of reasonable out-of-pocket expenses.
PAIRED STOCK
The outstanding shares of Bay Meadows Common Stock are "paired" with the
outstanding shares of the Cal Jockey Common Stock, $.01 par value per share
("Cal Jockey Common Stock"), so that they are transferable and tradable only in
combination as units, each unit consisting of one share of Bay Meadows Common
Stock and one share of Cal Jockey Common Stock (a unit of "Paired Common
Stock"). These restrictions on transfer are imposed by the Bylaws of Bay Meadows
and those of Cal Jockey. 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 Bay Meadows and Cal Jockey.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholder proposals intended to be presented at the 1997 Annual Meeting
must be received by Bay Meadows no later than January 16, 1997, for inclusion in
Bay Meadows' proxy statement and form of proxy for that meeting.
OUTSTANDING VOTING SECURITIES
The following table sets forth, as of July 15, 1996, the number of shares
of Bay Meadows Common Stock owned (i) by each director of Bay Meadows, (ii) by
the executive officers of Bay Meadows, (iii) by all directors and executive
officers of Bay Meadows as a group, and (iv) by all those known by Bay Meadows
to be beneficial owners as a group of more than five percent (5%) of the Bay
Meadows Common Stock, together with the percentage of stock so owned.
7
<PAGE> 11
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE
NAMES OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF TOTAL(13)
- ---------------------------------------------------------- ----------------------- ------------
<S> <C> <C>
Eugene F. Barsotti, Jr. .................................. 49,801(2)(3) *
Greg S. Gunderson......................................... 49,836(4) *
John C. Harris............................................ 71,245(5) 1.1
Anthony J. Zidich......................................... 5,000 *
F. Jack Liebau............................................ 88,433(6)(7)(8) 1.0
Frank Trigeiro............................................ 7,500(8)(9) *
"Gabelli Group"........................................... 420,100(10) 7.3
Hudson Bay Partners, L.P. and David H. Lesser............. 288,300(11) 5.0
Directors and executive officers, as a group.............. 253,815(12) 4.3
</TABLE>
- ---------------
* Less than one percent (1%) of the outstanding Bay Meadows 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 Bay Meadows 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 July 15, 1996.
(4) Includes 200 shares of Bay Meadows Common Stock held by Mr. Gunderson's
son.
(5) Includes 9,000 shares of Bay Meadows Common Stock held by Harris Farms,
Inc., of which Mr. Harris is the sole stockholder.
(6) Includes 5,100 shares held by a partnership in which Mr. Liebau is a
partner.
(7) Includes 78,333 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days of July 15, 1996.
(8) On March 2, 1996, Bay Meadow's Board of Directors granted to Mr. Liebau an
option to purchase 20,000 additional shares of Paired Common Stock.
Subsequently, options to purchase 30,000 additional shares of Paired Common
Stock were granted to other individuals, including an option to purchase
7,500 shares to Mr. Trigeiro, Bay Meadows' Chief Financial Officer. While
Bay Meadows has been advised that the Cal Jockey Board has agreed to cover
these options to purchase a total of 50,000 shares, as to the Cal Jockey
Common Stock portion of such shares of Paired Common Stock, when exercised,
the formal document pertaining to such obligation has not been delivered to
Bay Meadows by Cal Jockey.
(9) Includes 7,500 issuable upon exercise of outstanding stock options that are
exercisable within 60 days of July 15, 1996.
(10) 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.
(11) A "Schedule 13D" filing dated June 10, 1996, was made by Hudson Bay
Partners, L.P. and David H. Lesser. The Schedule 13D filing indicates that
the aggregate number of shares owned by the filing persons is 288,300
shares. In the Schedule 13D, Mr. Lesser, who owns 12,800 shares of record
individually, disclaims beneficial ownership of the 275,000 shares of
Hudson Bay Partners, L.P. The address of the filing persons is Mr. David H.
Lesser, Hudson Bay Partners, L.P., 2 West 45th Street, Suite 908, New York,
New York 10036.
(12) Includes 64,166 shares issuable upon exercise of outstanding stock options
that are exercisable within 60 days of July 15, 1996.
8
<PAGE> 12
(13) Percentages shown indicate what the total percentage beneficial ownership
of Bay Meadows Common Stock would be for each named stockholder if such
holder, but no other stockholder, whether or not named, exercised those of
his stock options that were exercisable on July 15, 1996, or that will
become exercisable 60 days thereafter.
OTHER BUSINESS
Bay Meadows' Bylaws provide that stockholders intending to bring business
before a stockholders meeting must give the prescribed notice and information to
Bay Meadows at least 60 days prior to the meeting. 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 business to be
brought before any such stockholders meeting must be delivered or mailed to and
received at the principal executive offices of Bay Meadows 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, Bay Meadows had not been notified of any further business to be
brought before the Special Meeting.
As of the date of this Proxy Statement, the Board of Directors does not
know of any other business to be presented for consideration at the Special
Meeting. If any other business should properly come before the Special 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 TUCKER
Secretary
Dated August 13, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND RETURN THE ACCOMPANYING WHITE PROXY CARD IN THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE.
9
<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 Special Meeting of
Stockholders of Bay Meadows Operating Company ("Bay Meadows"), and the
accompanying Proxy Statement dated August 13, 1996 and, revoking any proxy
relating to such Special Meeting 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 Special
Meeting of Stockholders of Bay Meadows to be held at the Clubhouse of Bay
Meadows Racecourse, 2600 South Delaware Street, San Mateo, California on August
30, 1996, at 9:30 a.m., and any adjournment or postponements thereof, and to
vote the number of shares the undersigned would be entitled to vote if
personally present at the Special Meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS SPECIFIED, WILL BE
VOTED "FOR" THE RESOLUTIONS AUTHORIZING BAY MEADOWS BOARD OF DIRECTORS TO
CONTINUE TO CONDUCT BAY MEADOWS' RACING OPERATIONS IN A WAY SUBSTANTIALLY
SIMILAR TO THE MANNER IN WHICH THEY ARE PRESENTLY CONDUCTED AND TO PURSUE THE
DEVELOPMENT OF ON-SITE STABLING AT BAY MEADOWS RACECOURSE OR STABLING ON
PROPERTY CONTIGUOUS TO BAY MEADOWS RACECOURSE, RATHER THAN OFF-SITE STABLING, AS
SUCH RESOLUTIONS ARE SET FORTH MORE FULLY IN THE NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS. IF ANY OTHER MATTER IS BROUGHT BEFORE THE SPECIAL MEETING OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF, THE PROXIES NAMED ABOVE OR THEIR
SUBSTITUTES, OR ANY OF THEM, SHALL HAVE THE AUTHORITY TO VOTE THE SHARES OF THE
UNDERSIGNED WITH RESPECT TO ANY SUCH MATTER IN ACCORDANCE WITH THEIR BEST
JUDGMENT.
(To be completed and signed on reverse side)
<PAGE> 14
/X/ Please mark your vote this way
COMMON SHARES
------------
1. To approve resolutions authorizing the Bay Meadows Board of Directors to
continue to conduct Bay Meadows' racing operations in a way substantially
similar to the manner in which they are presently conducted and to pursue the
development of on-site stabling at Bay Meadows Racecourse or stabling on
property contiguous to Bay Meadows Racecourse, rather than off-site stabling, as
such resolutions are set forth more fully in the Notice of Special Meeting of
Stockholders.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS.
2. The proxies are authorized to vote in their discretion upon any and all
other matters as may properly come before the Special Meeting or any adjournment
or postponement thereof.
(Please sign exactly as name
appears. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by President or other authorized
officer. If a partnership, please
sign in full partnership name by
authorized person.)
Dated: , 1996
---------------------
---------------------------------
Signature
---------------------------------
Signature, if held jointly
STOCKHOLDERS ARE URGED TO MARK,
DATE, SIGN AND RETURN THIS PROXY
IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES
