<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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>
Scioto Downs
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] 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: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
SCIOTO DOWNS, INC.
6000 South High Street Columbus, Ohio
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To the Shareholders of
Scioto Downs, Inc.:
Notice is hereby given that the annual meeting of the shareholders of
Scioto Downs, Inc. will be held in the Clubhouse at Scioto Downs, 6000 South
High Street, Columbus, Ohio, on Tuesday, February 23, 1999, at 2:00 P.M.
(E.S.T.). The meeting is being held for the following purposes, all of which are
more completely set forth in the accompanying Proxy Statement:
(1) To elect three directors, each for a term of three (3) years.
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
The board has fixed December 28, 1998 as the record date for the
determination of shareholders entitled to notice of and to vote at the annual
meeting, or any adjournments thereof.
If you do not expect to be present in person, there is enclosed
herewith for your use a proxy which you are requested to sign, date and return
promptly in the enclosed self-addressed, stamped envelope.
Very truly yours,
RODERICK H. WILLCOX
Secretary
Dated: February 4, 1999
Columbus, Ohio
<PAGE> 3
SCIOTO DOWNS, INC.
6000 SOUTH HIGH STREET
COLUMBUS, OHIO 43207
PROXY STATEMENT
The enclosed proxy is solicited by the board of directors of Scioto
Downs, Inc. at the cost of the corporation for use at the annual meeting of the
shareholders of the corporation to be held on Tuesday, February 23, 1999, or any
adjournments thereof. This proxy statement is dated February 4, 1999, the
intended date of mailing.
Without affecting any vote previously taken, the proxy may be revoked
by a shareholder at any time before it is voted by delivering to the corporation
a later-dated proxy or by giving notice of revocation to the corporation in
writing or in open meeting. All proxies which are signed, dated and received
prior to the meeting and not revoked will be voted as specified thereon or, in
the absence of specific instructions to the contrary, will be voted FOR the
election as directors of the nominees listed below under "ELECTION OF
DIRECTORS".
As used herein, the term "corporation" means Scioto Downs, Inc.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING RIGHTS
The total number of outstanding voting securities of the corporation
entitled to vote at the annual meeting is 595,767 common shares. Each
shareholder is entitled to one (1) vote for each common share held of record on
the 28th day of December, 1998. There are no cumulative voting rights in the
election of directors. There are no rights of appraisal or similar rights of
dissenting shareholders with regard to the election of directors.
2
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth those persons or entities known to the
corporation to be the beneficial owners of more than five percent (5%) of the
outstanding voting securities of the corporation on December 28, 1998.
<TABLE>
<CAPTION>
Amount and
Nature of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
- ------- ------------------- ----------- --------
<C> <S> <C> <C>
Common LaVerne A. Hill (1) ...................... 204,222 34.27%
4814 Riverside Drive
Columbus, Ohio 43220
Common Bud C. Hatfield .......................... 135,780 22.79%
4000 West Broad Street
Columbus, Ohio 43228
Common Mid-America Racing ....................... 63,420 10.64%
Association, Inc. (1)
6000 South High Street
Columbus, Ohio 43207
</TABLE>
(1) LaVerne A. Hill owns 140,802 shares of the corporation directly,
constituting 23.63% of the outstanding voting securities. LaVerne A.
Hill is also a majority shareholder of Mid-America Racing Association,
Inc., which owns 63,420 shares of the corporation, constituting 10.64%
of the outstanding voting securities. LaVerne A. Hill therefore
beneficially owns 204,222 shares which represents 34.27% of the
outstanding voting securities. The shares owned by Mid-America Racing
Association, Inc. as shown above are also included in the number of
shares beneficially owned by LaVerne A. Hill. See also footnote (3)
under ELECTION OF DIRECTORS.
SECURITY OWNERSHIP OF MANAGEMENT
For further information, see footnotes under ELECTION OF DIRECTORS.
<TABLE>
<CAPTION>
Amount and
Nature of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
- ------- ------------------- ----------- --------
<C> <S> <C> <C>
Common LaVerne A. Hill ......................... 204,222 34.27%
4814 Riverside Drive
Columbus OH 43220
Common Robert S. Steele ........................ 6,267 1.05
2607 Geyerwood Court
Grove City OH 43123
Common John J. Chester ......................... 3,979 .66
4906 Riverside Drive
Columbus OH 43220
Common Delmer L. Bone .......................... 9,000 1.51
208 North King
Xenia OH 45385
Common John F. Fissell ......................... 3,242 .54
565 Lawnwood Court
Circleville OH 43113
Common William C. Heer ......................... 9,265 1.55
124 Ashbourne
Columbus OH 43209
Common Robert R. Schwartz ...................... 181 .03
4004 State Route 238 N.E.
Bloomingburg OH 43106
Common Richard H. McClelland ................... 0 0
5495 Marysville Pike
Zanesville, Ohio 43701
</TABLE>
3
<PAGE> 5
CHANGES IN CONTROL
No arrangements are known to the corporation the operation of which may
at a subsequent date result in a change in control of the corporation.
ELECTION OF DIRECTORS
The board of directors has designated the nominees listed below for
election as directors of the corporation for terms expiring in 2002. All of the
nominees are presently directors of the corporation and, except for Richard H.
McClelland, have been previously elected by the shareholders. Dr. Paul A.
Soldner died in September of 1997 and Richard H. McClelland was elected by the
board to serve as a director for Dr. Soldner's unexpired term. Russel G. Means
died in September of 1998 and that vacancy has not yet been filled. The enclosed
proxy will be voted as specified thereon, or if no instructions are given to the
contrary, FOR the nominees; however, the persons designated as proxies reserve
full discretion to cast votes for other persons in the event the nominee who
would otherwise receive the votes is unable to serve. The board of directors has
no reason to believe that any of the nominees will be unable to serve.
Under Ohio law and the corporation's Code of Regulations, the
three nominees receiving the greatest number of votes will be elected as
directors. Votes will be tabulated by Inspectors of Election appointed at the
annual meeting. Abstentions are tabulated but not counted in total of votes
"for" a nominee.
The following table sets forth the nominees for election to
the board of directors, the directors of the corporation whose terms in office
will continue, and certain information, as of December 28, 1998, with respect to
each nominee and director and all directors and executive officers as a group.
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH CORPORATION COMMON SHARES
CONTINUOUSLY AND BUSINESS EXPERIENCE BENEFICIALLY
NAME AND AGE SINCE DURING PAST FIVE YEARS OWNED (1)
- ------------ ------------ -------------------------- -------------
<S> <C> <C> <C>
NOMINEES - TERMS TO EXPIRE IN 2002
John F. Fissell, 69 1986 Director, Scioto Downs, Inc.; 3,242
Consultant, S & D Properties
William C. Heer, 77 1952 Director and Treasurer, Scioto 9,265 (3)(5)
Downs, Inc.; Vice President,
National Graphics; Director and
Treasurer, Mid-America Racing
Association, Inc.
Richard H. McClelland, 60 1998 Director, Scioto Downs, Inc. 0
President, Shelly & Sands;
Vice-President, O.K. Coal
& Concrete Company
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH CORPORATION COMMON SHARES
CONTINUOUSLY AND BUSINESS EXPERIENCE BENEFICIALLY
NAME AND AGE SINCE DURING PAST FIVE YEARS OWNED (1)
- ------------ ------------ -------------------------- -------------
<S> <C> <C> <C>
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2000
LaVerne A. Hill, 75 1985 Director and Vice-President, 204,222 (2)(3)
Scioto Downs, Inc.; President and
Director, Mid-America Racing
Association, Inc.
Robert S. Steele, 79 1974 Director, President and Chief 6,267(3)(4)
Operating Officer, Scioto Downs,
Inc.; Vice-President and Director,
Mid-America Racing Association,
Inc.
Robert R. Schwartz, 51 1997 Director, Scioto Downs, Inc.; 181
Doctor of Veterinary Medicine
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2001
John J. Chester, 78 1976 Director, Scioto Downs, Inc.; 3,979 (3)(6)
Partner in law firm of Chester,
Willcox & Saxbe LLP
Delmer L. Bone, 68 1995 Director, Scioto Downs, Inc.; 9,000
Retired elected official; Retired
business executive
All executive officers and directors as a group (9 people) .................... 236,256 (7)
</TABLE>
- ----------
(1) All amounts are as of December 28, 1998. Unless otherwise
indicated, each named person has sole investment power over the listed shares,
or shares such power with his spouse. LaVerne A. Hill (34.27%), Delmer L. Bone
(1.51%), William C. Heer (1.55%) and Robert S. Steele (1.05%) are the only
directors, nominees or executive officers with beneficial ownership of more than
1% of the corporation's outstanding common shares.
(2) See footnote (1) under "Security Ownership of Certain Beneficial
Owners".
(3) LaVerne A. Hill, John J. Chester, Robert S. Steele and William C.
Heer own all of the outstanding shares of Mid-America Racing Association, Inc.
Mid-America Racing Association, Inc. owns 63,420 shares of the corporation.
LaVerne A. Hill is a majority shareholder, President and director of Mid-America
Racing Association, Inc. Mr. Heer is Treasurer and a director of Mid-America
Racing Association, Inc. Mr. Steele is Vice-President and a director of
Mid-America Racing Association, Inc. John J. Chester is a director of
Mid-America Racing Association, Inc.
There is in effect a lease of its premises from the corporation to
Mid-America Racing Association, Inc. for the conducting of a harness race
meeting. This race meeting has traditionally been held following the conclusion
of the race meeting conducted by the corporation. The term of the lease is for
twenty-five years, commencing January 1, 1988. The remuneration therefrom is
determined on the basis of a percentage of the mutuel handle plus the sharing of
certain expenses. During the fiscal year ending October 31, 1998, $395,418 plus
$241,519 in shared expenses, was received by the corporation pursuant to this
lease. Management believes that this lease arrangement with Mid-America Racing
Association, Inc. is no less favorable to the Company than one that might be
obtained from a nonaffiliated party. Improvements have been made by the
corporation, at its expense, to the racing facilities owned by it located at
6000 South High Street. Under the applicable provisions of the Ohio racing law,
improvements that meet certain standards may be approved as qualifying for tax
abatement. Up to seventy percent (70%) of the cost of approved improvements may
be recovered through this tax abatement program which is based on a reduction in
parimutuel taxes. During the fiscal year ending October 31, 1998, Mid-America
Racing Association, Inc. retained $192,354 as a result of the tax abatement
program, which funds were returned to the corporation at whose expense the
improvements were made. In addition, Mid-America Racing Association, Inc. paid
the corporation $156,165 in 1998 which represents two (2) monthly payments on
the loan carried by the corporation with National City Bank to finance the
clubhouse remodeling and forty-seven percent (47%) of the payments due on the
loan for simulcasting equipment.
(4) Robert S. Steele owns 3,648 shares directly. Robert S. Steele and
his wife jointly own 2582 shares and exercise voting and investment powers as to
these shares. Robert S. Steele holds 37 shares as custodian for his son and
exercises voting and investment powers as to these shares.
(5) William C. Heer owns 8,265 shares directly. William C. Heer's wife
owns 1000 shares and exercises voting and investment powers as to these shares.
Mr. Heer is Vice President of National Graphics Corporation which did printing
business with the corporation in 1998 in the amount of $73,795. Mr. Heer has no
ownership interest in National Graphics Corporation.
5
<PAGE> 7
(6) John J. Chester is a partner in the law firm of Chester, Willcox &
Saxbe, LLP which has been retained as legal counsel for the corporation during
the last fiscal year and which is legal counsel for the corporation during the
current fiscal year.
(7) See Notes 1 - 5 above. These 236,256 shares represent 39.65% of the
corporation's outstanding common shares and include 100 shares owned by Roderick
H. Willcox, secretary of the corporation.
None of the directors or nominees are also directors of companies with
a class of equity securities registered pursuant to the Securities Exchange Act
of 1934, or otherwise subject to its periodic reporting requirements.
No family relationships exist among the directors and nominees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the knowledge of the corporation all reports required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 have been
filed.
COMPENSATION OF DIRECTORS
Each director receives $300 for each board meeting attended as
compensation for their services as a director. In addition, a director is
compensated for travel expenses to a board meeting at the rate of 32.5 cents per
mile for all mileage traveled inside the State of Ohio, but outside of Franklin
County. Directors who are members of a committee receive $300 for each committee
meeting attended by that director.
COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors has an audit committee which consisted of Delmer
L. Bone, John F. Fissell and William C. Heer. The audit committee met once in
February of 1998 at which time the committee members reviewed the Form 10K to be
filed with the Securities and Exchange Commission. In addition, the committee
reviewed the corporation's management system and the scope of the work performed
by the corporation's auditors with representatives of PricewaterhouseCoopers
LLP.
The board of directors has a compensation committee consisting of
Delmer L. Bone, John F. Fissell and John J. Chester. This committee did not meet
during 1998. The function of this committee is to review the compensation of
executive officers and report their findings and recommendations to the full
board. It is anticipated that this will be done prior to the annual meeting in
February, 1999.
The board of directors does not have a nominating committee.
During the last fiscal year ending October 31, 1998, there were six
meetings of the board of directors. All directors attended at least 75% of the
aggregate of (1) the total number of meetings of the board held during the
period for which they were a director, and (2) the total number of meetings held
by all committees of the board on which he or she served.
6
<PAGE> 8
EXECUTIVE OFFICERS
The following information relates to the present executive officers of
the corporation.
<TABLE>
<CAPTION>
Name and Age Office Business Experience - Five Years
- ------------ ------ --------------------------------
<S> <C> <C>
Robert S. Steele, 79 President and Chief Operating President and Chief Operating Officer,
Officer since 1989. Scioto Downs, Inc.; Vice President and
Director, Mid-America Racing Association, Inc.
LaVerne A. Hill, 75 Vice-President since 1992. Vice-President Scioto Downs, Inc.;
President and Director, Mid-America
Racing Association, Inc.
William C. Heer, 77 Treasurer since 1959. Vice-President National Graphics;
Treasurer, Scioto Downs, Inc.; Director
and Treasurer, Mid-America Racing
Association, Inc.
Roderick H. Willcox, 65 Secretary since 1974. Partner in law firm of Chester,
Willcox & Saxbe, LLP, counsel for
Scioto Downs, Inc.
</TABLE>
No family relationships exist among the Executive Officers.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information for the fiscal
years ended October 31, 1998, 1997 and 1996 as to cash compensation paid by the
corporation, as well as certain other compensation paid or accrued for those
years, to the corporation's chief executive officer or person serving in that
capacity.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
--------------------------------
Annual Compensation Awards Payouts
---------------------------------- --------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All Other
Compensation
($)(1)
Other
Annual Restricted
Name and Compensation Stock LTIP Total
Principal ($) Awards Options Payouts Matching Pension
Position Year Salary($) Bonus($) ($) SARs (#) ($) 401K Received
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Robert S. 10/31/98 62,500 -0- -0- -0- -0- -0- 1,725 24,872
Steele, 10/31/97 57,500 12,500 -0- -0- -0- -0- 1,725 24,872
President 10/31/96 57,500 -0- -0- -0- -0- -0- 1,725 24,872
and Chief
Operating
Officer
</TABLE>
(1) One-half of this pension distribution is attributable to Scioto Downs,
Inc. and one-half to Mid-America Racing Association, Inc.
7
<PAGE> 9
LEGAL PROCEEDINGS
To the corporation's knowledge, there are no material pending legal
proceedings to which any director, officer or affiliate of the corporation, any
owner of record or beneficially of more than five percent of the voting
securities of the corporation, or any associate of any such director, officer or
security holder is a party adverse to the corporation or has a material interest
adverse to the corporation.
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. has been the independent public accounting
firm for the corporation. Coopers & Lybrand, L.L.P. is now a part of
PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP, with offices at 100
East Broad Street, Columbus, Ohio, is the independent public accounting firm for
the corporation. It is selected by the board of directors. It is expected that
representatives of PricewaterhouseCoopers LLP will be present at the
shareholders' meeting and will be given an opportunity to make a statement and
to respond to appropriate questions.
The corporation's financial statements for the previous fiscal year
were audited by Coopers & Lybrand, L.L.P. now a part of PricewaterhouseCoopers
LLP. In addition, they also reviewed the corporation's annual and quarterly
reports filed with the Securities and Exchange Commission.
FINANCIAL INFORMATION
The financial information contained in the 1998 annual report of the
corporation audited by PricewaterhouseCoopers LLP is incorporated herein by
reference.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting of the corporation must be received by the corporation for inclusion in
the proxy statement and proxy relating to that meeting no later than September
20, 1999.
OTHER MATTERS
Management knows of no other business which may be brought before the
forthcoming annual meeting of shareholders. However, if any other matter shall
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote such proxy in accordance with their best
judgment on such matters.
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, PLEASE EXECUTE THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED WITHIN THE UNITED STATES. EXECUTORS, ADMINISTRATORS, TRUSTEES, AND
OTHER FIDUCIARIES SHOULD SO INDICATE WHEN SIGNING THE PROXY. IF STOCK IS OWNED
BY MORE THAN ONE PERSON, SIGNATURES OF ALL OWNERS ARE NECESSARY.
IT IS IMPORTANT TO RETURN THE ENCLOSED PROXY IMMEDIATELY SO THAT YOUR
CORPORATION MAY BE MANAGED PROPERLY.
By order of the board of directors.
RODERICK H. WILLCOX
Secretary
Dated: February 4, 1999
Columbus, Ohio
8
<PAGE> 10
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SCIOTO DOWNS, INC.
------------------
6000 SOUTH HIGH STREET COLUMBUS, OHIO
The undersigned hereby appoints Robert R. Schwartz, John J. Chester and
LaVerne A. Hill, and each of them, as proxies, with full powers of substitution,
and hereby authorizes them to represent and to vote all of the shares of Scioto
Downs, Inc. standing in the name of the undersigned at the annual meeting of
shareholders of said company to be held at Scioto Downs, 6000 South High Street,
Columbus, Ohio, on February 23, 1999, at 2:00 P.M., or at any adjournment
thereof, as designated below. A majority of said attorneys and proxies who shall
be present at the meeting (or if only one be present and act, then that one)
shall have and exercise all the powers hereunder.
1. ELECTION OF DIRECTORS WITHHOLD AUTHORITY
For all nominees listed below [ ] to vote for all
(except as marked to the nominees listed
contrary below) below [ ]
Nominees for terms ending in 2002: John F. Fissell, William C. Heer and Richard
H. McClelland.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THE NOMINEE'S
NAME IN THE SPACE PROVIDED BELOW
- -------------------------------------------------------------------------------
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
<PAGE> 11
2. Upon such other business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF AUTHORITY TO
VOTE FOR ANY NOMINEE IS NOT WITHHELD, THE PROXY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEE.
Dated _______________________, 1999
Shareholder's Signature
--------------------------------------------
--------------------------------------------
Executors, Administrators, Trustees,
Guardians and persons signing under powers
of attorney should indicate their respective
capacity. If shares are held jointly, each
holder should sign.
PLEASE SIGN, DATE AND MAIL PROMPTLY
