<PAGE>
CANTERBURY PARK HOLDING CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 1998
Notice is hereby given that the Annual Meeting of Shareholders of
Canterbury Park Holding Corporation will be held at Canterbury Park, 1100
Canterbury Road, Shakopee, Minnesota 55379, on Thursday, June 4, 1998 at 4:00
p.m., Central Daylight Time, for the following purposes:
1. To elect seven (7) directors to hold office until the 1999 Annual
Meeting of Shareholders or until their successors are elected.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on April 15, 1998 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
By Order of the Board of Directors
Richard A. Primuth,
SECRETARY
Shakopee, Minnesota
April 29, 1998
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND IN
PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE
IN PERSON IF THEY SO DESIRE.
<PAGE>
CANTERBURY PARK HOLDING CORPORATION
1100 CANTERBURY ROAD
SHAKOPEE, MINNESOTA 55379
(612) 445-7223
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Canterbury Park
Holding Corporation ("CPHC" or the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company to be voted at
the Annual Meeting of Shareholders to be held at Canterbury Park, 1100
Canterbury Road, Shakopee, Minnesota 55379 on Thursday, June 4, 1998, beginning
at 4:00 p.m. or at any adjournment or adjournments thereof. The cost of this
solicitation will be paid by the Company. In addition to solicitation by mail,
officers, directors and employees of the Company may solicit proxies by
telephone, telegraph or in person. The Company may also request banks and
brokers to solicit their customers who have a beneficial interest in the
Company's Common Stock registered in the names of nominees and will reimburse
such banks and brokers for their reasonable out-of-pocket expenses.
Any proxy may be revoked at any time before it is voted by receipt of a
proxy properly signed and dated subsequent to an earlier proxy, or by revocation
of a written proxy by request in person at the Annual Meeting. If not so
revoked, the shares represented by such proxy will be voted by the persons
designated as proxies in favor of the matters indicated. In the event any other
matters properly come before the meeting calling for a vote of shareholders, the
persons named as proxies will vote in accordance with their judgment on such
matters. The Company's corporate offices are located at 1100 Canterbury Road,
Shakopee, Minnesota 55379, and its telephone number is (612) 445-7223. The
mailing of this Proxy Statement to shareholders of the Company commenced on or
about April 29, 1998.
The total number of shares outstanding and entitled to vote at the meeting
as of April 15, 1998 consisted of 3,001,848 shares of $.01 par value Common
Stock. Each share of Common Stock is entitled to one vote. Cumulative voting
in the election of directors is not permitted. Only shareholders of record at
the close of business on April 15, 1998 will be entitled to vote at the meeting.
The presence in person or by proxy of the holders of a majority of the shares
entitled to vote at the Annual Meeting of Shareholders constitutes a quorum for
the transaction of business.
Under Minnesota law, each item of business properly presented at a meeting
of shareholders generally must be approved by the affirmative vote of the
holders of a majority of the voting power of the shares present, in person or by
proxy, and entitled to vote on that item of business. However, if the shares
present and entitled to vote on any particular item of business would not
constitute a quorum for the transaction of business at the meeting, then that
item must be approved by holders of a majority of the minimum number of shares
that would constitute such a quorum. Votes cast by proxy or in person at the
Annual Meeting of Shareholders will be tabulated at the meeting to determine
whether or not a quorum is present. Abstentions on a particular item of
business will be treated as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, but as unvoted for purposes of
determining the approval of the matter. If a broker indicates on the proxy that
it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, based upon information available as of
April 3, 1998, the beneficial ownership of shares of the Company's common stock
of each person known by the Company to own of record or beneficially five
percent (5%) or more of the Company's common stock and the beneficial ownership
of all officers and directors of the Company as a group (including beneficial
ownership attributed to such person or group through ownership of currently
exercisable options or warrants to purchase common stock).
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class*
------------------- -------------------- --------
<S> <C> <C>
Curtis A. Sampson 1,391,031(1) 41.50%
1100 Canterbury Road
Shakopee, MN 55379
Dale H. Schenian 552,458(2) 17.71%
1100 Canterbury Road
Shakopee, MN 55379
Richard W. Perkins 325,000(3) 10.08%
730 E. Lake Street
Wayzata, MN 55391
Randall D. Sampson 209,699(4) 6.72%
1100 Canterbury Road
Shakopee, MN 55379
All directors and officers 2,472,761(5) 64.54%
as a group (10 persons)
</TABLE>
- -----------------------------------
* Based upon 2,998,848 shares of common stock outstanding increased, for each
calculation, by the number of shares which would be issued upon exercise of
options and warrants held by the named person or group.
(1) Includes 352,703 shares issuable upon the exercise of currently exercisable
options and warrants.
(2) Includes 116,410 shares issuable upon the exercise of currently exercisable
options and warrants, as well as 5,000 shares and 5,000 warrants held by
Mr. Schenian's wife as to which beneficial ownership is disclaimed.
(3) Represents 100,000 shares of Company common stock and warrants to acquire
an additional 225,000 shares of Company common stock held on behalf of
various accounts and with respect to which the named person shares the
power to vote and/or dispose of the securities.
(4) Includes 119,612 shares issuable upon the exercise of currently exercisable
options and warrants.
(5) Includes 832,725 shares issuable upon the exercise of currently exercisable
options and warrants held by officers and directors as a group.
ELECTION OF DIRECTORS
The Board of Directors has nominated and recommends for reelection as directors
of the Company the persons named below, all of which have been directors since
1994. The Board of Directors believes that each nominee named below will be
able to serve, but should a nominee be unable to serve as a director, the
persons named in the proxies have advised that they will vote for the election
of such substitute nominee as the Board of Directors may propose.
2
<PAGE>
Information regarding the directors, including information regarding their
principal occupations currently and for the preceding five years, is set forth
below. Ownership of Company common stock is given as of April 3, 1998.
Percentage ownership presented for each director assumes shares outstanding
increased by the respective number of options and warrants indicated. To the
best of the Company's knowledge, the persons indicated possess sole voting and
investment power with respect to their stock ownership.
<TABLE>
<CAPTION>
Amount of Percent of
Stock Outstand-
Name and Age Principal Occupation; Other Directorships Ownership ing Stock
- ------------ ----------------------------------------- --------- ---------
<S> <C> <C> <C>
Brian C. Barenscheer Partner, Boyum & Barenscheer, P.L.L.P. 112,500 (1) 3.69%
(55) Minneapolis, Minnesota (certified public
accountants).
Gibson Carothers Gibson & Carothers, Minneapolis, 38,000 (2) 1.25%
(54) Minnesota (marketing and product
development).
Terence J. McWilliams Regional Sales Manager, Autotote Systems 25,500 (3) .84%
(48) (totalizator services to horse tracks, dog
tracks and jai alai frontons) since November
1993; from April to November 1993, Vice
President-Administration, U.S. Transformer;
prior thereto, General Manager, Canterbury
Downs.
Carin Offerman President and CEO, Offerman & Company, 12,700 (4) .42%
(49) Minneapolis, Minnesota (investment banking
and brokerage firm).
Curtis A. Sampson Chairman and CEO of Communications 1,391,031 (5) 41.50%
(64)* Systems Inc., Hector, Minnesota (connecting
devices for telephone and computer equipment);
Chairman and CEO of Hector Communications
Corporation, Hector, Minnesota (independent
telephone companies).
Randall D. Sampson President of the Company since March 1994; 209,699 (5) 6.72%
(40)* prior thereto, President, Sampson Racing,
Inc. (thoroughbred racing and breeding
operations).
Dale H. Schenian President, City Auto Glass, St. Paul, 552,458 (5) 17.71%
(56) Minnesota (automotive glass repair and
replacement); Director of First American
Metro (bank holding company), St. Paul,
Minnesota.
</TABLE>
- --------------------------------------
Footnotes follow on p. 4.
3
<PAGE>
Footnotes to Director Nominee Table
- --------------------------------------
* Curtis A. Sampson is the father of Randall D. Sampson.
(1) Includes options and warrants to acquire 47,500 shares of common stock.
(2) Includes options to acquire 37,000 shares of common stock.
(3) Includes options to acquire 24,500 shares of common stock.
(4) Includes options and warrants to acquire 11,000 shares of common stock.
(5) See "Security Ownership of Certain Beneficial Owners and Management" above
and the footnote applicable to such person thereunder.
INFORMATION REGARDING BOARD AND BOARD COMMITTEES
The Board of Directors of the Company met fourteen times during 1997. In
1997 each director attended at least 75% of the meetings of the Board and each
committee on which such director served.
Each non-employee member of the Board is paid an annual fee of $2,400, plus
$200 for each meeting attended. Mr. Randall D. Sampson, who is employed by the
Company, receives no additional compensation for service on the Board.
Under the Company's 1994 Stock Plan, each non-employee member of the Board
of Directors upon initially being elected to the Board, receives an option to
acquire 2,500 shares and, in addition, receives at the time of his or her
reelection to the Board at the annual meeting of the shareholders an option to
purchase 2,000 shares of the Company's common stock. Each such option is at a
price equal to the fair market value of the Company's common stock on the date
of grant and is exercisable over a ten-year period beginning six months after
the date the option is granted.
The Board has established an Audit Committee, the current members of which
are Brian C. Barenscheer and Carin Offerman. The Audit Committee recommends to
the full Board of Directors the selection of independent accountants and reviews
the activities and reports of the independent accountants, as well as the
internal accounting controls of the Company. The Audit Committee met twice in
1997.
The Company has established a Compensation Committee, the current members
of which are Terence J. McWilliams, Dale H. Schenian and Randall D. Sampson.
The Compensation Committee met twice in 1997. The Compensation Committee
recommends to the Board of Directors compensation for executive officers and key
personnel and reviews the Company's compensation policies and practices.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following tables show for the three fiscal years ended December 31,
1995, 1996, and 1997 the cash and other compensation paid to or accrued by the
Company for its chief executive officer in all capacities served, as well as
information relating to option grants. No executive officer of the Company
received cash compensation of more than $100,000 in fiscal 1997.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------
------------------- SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS
- --------------------------- ---- ------ -------
<S> <C> <C> <C>
Randall D. Sampson, President and Chief Executive 1997 $ 94,557 30,000
Officer 1996 64,771 10,000
1995 54,496 15,000
</TABLE>
Note: Certain columns have been excluded from this table because the
information called for is not applicable.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
% OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
GRANTED STOCK PRICE
TO MARKET APPRECIATION
EMPLOYEES EXERCISE PRICE ON FOR OPTION TERM
OPTIONS IN FISCAL PRICE PER DATE OF EXPIRATION ---------------
NAME GRANTED YEAR SHARE GRANT DATE 5% 10%
- ---- ------- ---- ----- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Randall D. Sampson 30,000 34% $2.0625 $2.0625 January 7, 2007 $30,913 $98,613
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END(1)
ACQUIRED VALUE ----------------- -----------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Randall D. Sampson - 0 - - 0 - 55,000 15,000 $38,438 $12,188
</TABLE>
- ----------------------------------
(1) Based on closing price of $2.875 per share of the Company's Common Stock on
December 31, 1997.
CERTAIN TRANSACTIONS
SERVICES PROVIDED BY AUTOTOTE SYSTEMS, INC.
The Company has entered into a Totalizator Services Agreement with Autotote
Systems, Inc. Pursuant to the Agreement, which has a five year term ending May
1, 1999, Autotote provides totalizator equipment and computer programs which
record and process all wagers and calculate the odds and payoffs. For such
services, Autotote receives a fee of approximately .35% of the gross monies
wagered. Amounts charged to operations under this Agreement for the periods
ended December 31, 1997 and 1996 were approximately $311,000 and $291,000,
respectively. Also, during the 1997 live race meet, Autotote provided uplink
services which enabled the Company to simulcast horse races held at Canterbury
Park to
5
<PAGE>
out-of-state racetracks. These services were provided at a rate of
approximately $1,800 and $2,000 per day, respectively, resulting in an amount
charged to operations in 1997 and 1996 of approximately $95,000 and $102,000,
respectively. Mr. Terence J. McWilliams, a director of the Company, is the
Regional Sales Manager for Autotote.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that executive officers and directors and beneficial holders of 10% or more of
the Company's securities file reports of their beneficial ownership with the
Securities and Exchange Commission on SEC Forms 3, 4 and 5. According to the
Company's records, during the period from January 1, 1997 to December 31, 1997,
officers, directors and ten percent beneficial holders of the Company filed all
reports with the Securities and Exchange Commission required under Section
16(a).
THE COMPANY'S AUDITORS
Deloitte & Touche have been the auditors for the Company since 1994 and
have been selected by the Board of Directors, upon recommendation of the Audit
Committee, to serve as such for the current fiscal year. A representative of
Deloitte & Touche is expected to be present at the Annual Meeting of
Shareholders and will have an opportunity to make a statement and will be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The proxy rules of the Securities and Exchange Commission permit
shareholders of the Company, after timely notice to the Company, to present
proposals for shareholder action in the Company's proxy statement where such
proposals are consistent with applicable law, pertain to matters appropriate for
shareholder action and are not properly omitted by Company action in accordance
with the Commission's proxy rules. The next annual meeting of the shareholders
of Canterbury Park Holding Corporation is expected to be held on or about May
30, 1999 and proxy materials in connection with that meeting are expected to be
mailed on or about April 15, 1999. Shareholder proposals prepared in accordance
with the Commission's proxy rules must be received at the Company's corporate
office, 1100 Canterbury Road, Shakopee, Minnesota 55379, Attention: President,
by January 15, 1999, in order to be considered for inclusion in the Board of
Directors' Proxy Statement and proxy card for the 1999 Annual Meeting of
Shareholders. Any such proposals must be in writing and signed by the
shareholder.
The Bylaws of the Company establish an advance notice procedure with regard
to (i) certain business to be brought before an annual meeting of shareholders
of the Company and (ii) the nomination by shareholders of candidates for
election as directors.
PROPERLY BROUGHT BUSINESS. The Bylaws provide that at the annual meeting
only such business may be conducted as is of a nature that is appropriate for
consideration at an annual meeting and has been either specified in the notice
of the meeting, otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or otherwise properly brought before the
meeting by a shareholder who has given timely written notice to the Secretary of
the Company of such shareholder's intention to bring
6
<PAGE>
such business before the meeting. To be timely, the notice must be given by
such shareholder to the Secretary of the Company not less than 45 days nor more
than 75 days prior to a meeting date corresponding to the previous year's annual
meeting. Notice relating to the conduct of such business at an annual meeting
must contain certain information as described in Section 2.9 of the Company's
Bylaws, which are available for inspection by shareholders at the Company's
principal executive offices pursuant to Section 302A.461, subd. 4 of the
Minnesota Statutes. Nothing in the Bylaws precludes discussion by any
shareholder of any business properly brought before the annual meeting in
accordance with the Company's Bylaws.
SHAREHOLDER NOMINATIONS. The Bylaws provide that a notice of proposed
shareholder nominations for the election of directors must be timely given in
writing to the Secretary of the Company prior to the meeting at which directors
are to be elected. To be timely, the notice must be given by such shareholder
to the Secretary of the Company not less than 45 days nor more than 75 days
prior to a meeting date corresponding to the previous year's annual meeting.
The notice to the Company from a shareholder who intends to nominate a person at
the meeting for election as a director must contain certain information as
described in Section 3.7 of the Company's Bylaws, which are available for
inspection by shareholders as described above. If the presiding officer of a
meeting of shareholders determines that a person was not nominated in accordance
with the foregoing procedure, such person will not be eligible for election as a
director.
OTHER MATTERS
Management knows of no other matters that will be presented at the meeting.
If any other matters arise at the meeting, it is intended that the shares
represented by the proxies in the accompanying form will be voted in accordance
with the judgment of the persons named in the proxy.
The Company is transmitting with this Proxy Statement its Annual Report for
the year ended December 31, 1997. SHAREHOLDERS MAY REQUEST THE COMPANY'S 1997
ANNUAL REPORT ON FORM 10-KSB AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION BY WRITING TO THE UNDERSIGNED AT THE COMPANY'S ADDRESS ON THE FIRST
PAGE OF THIS PROXY STATEMENT.
By Order of the Board of Directors,
Richard A. Primuth, SECRETARY
7
<PAGE>
CANTERBURY PARK HOLDING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON JUNE 4, 1998
The undersigned hereby appoints Curtis A. Sampson, Randall D. Sampson and
Dale H. Schenian, or any of them, as proxies, with full power of substitution to
vote all the shares of common stock which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of Canterbury
Park Holding Corporation, to be held Thursday, June 4, 1998, at 4:00 p.m.
Central Daylight Time at Canterbury Park, 1100 Canterbury Road, Shakopee,
Minnesota 55379, or at any adjournments thereof, upon any and all matters which
may properly be brought before the meeting or adjournment thereof, hereby
revoking all former proxies.
1. ELECTION OF DIRECTORS. / / WITH AUTHORITY to / / WITHOUT AUTHORITY
vote for all nominees to vote for nominees
listed below listed below
(except as (Instructions: to
indicated to the withhold authority
contrary) for a to vote for any
term ending at the individual nominee
next Annual write that
Meeting of nominee's name in
Shareholders the space provided
below.)
Brian C. Barenscheer, Gibson Carothers, Terence J. McWilliams, Carin Offerman
Curtis A. Sampson, Randall D. Sampson, Dale H. Schenian
________________________________________
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS NAMED ON THE REVERSE SIDE OF THIS CARD UNLESS OTHERWISE SPECIFIED.
PLEASE DATE AND SIGN exactly as your name(s) appears below indicating, where
proper, official position or representative capacity in which you are signing.
When signing as executor, administrator, trustee or guardian, give full title as
such; when shares have been issued in names of two or more persons, all should
sign.
Dated _______________________, 1998
___________________________________
Signature
___________________________________
Signature if held jointly
