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
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HOLLYWOOD PARK, INC.
- --------------------------------------------------------------------------------
(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):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 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 ActRule 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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[_] 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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HOLLYWOOD PARK, INC.
1050 SOUTH PRAIRIE AVENUE
INGLEWOOD, CALIFORNIA 90301
June 20, 1995
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Hollywood Park, Inc., to be held at the Hollywood Park Casino (located adjacent
to the Hollywood Park Race Track), 1088 South Prairie Avenue, Gates 3 or 4,
Inglewood, California 90301 on July 18, 1995 at 10:00 a.m. local time.
In addition to the election of directors, the Annual Meeting will provide us
with an opportunity to review with you in person the various projects which the
Company is undertaking, including the proposed football stadium project and the
Pyramid Casino in Compton, both of which we view as exciting opportunities for
the Company.
The enclosed proxy statement contains important information concerning the
directors to be elected at the Annual Meeting. We hope you will take the time
to study it carefully. Your vote is very important, regardless of how many
shares you own. Even if you presently plan to attend our Annual Meeting, please
complete, sign, date and return the enclosed proxy card promptly in the
accompanying self-addressed postage prepaid envelope. If you do join us at the
Annual Meeting and wish to vote in person, you may revoke your proxy at that
time.
Sincerely,
/s/ R.D. HUBBARD
R.D. HUBBARD
Chairman of the Board and
Chief Executive Officer
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR
NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING.
HOLLYWOOD PARK, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 18, 1995
TO THE STOCKHOLDERS OF HOLLYWOOD PARK, INC.:
The Annual Meeting of Stockholders (the "Annual Meeting") of Hollywood Park,
Inc., a Delaware corporation (the "Company"), will be held in the Hollywood
Park Casino (located adjacent to the Hollywood Park Race Track), 1088 South
Prairie Avenue, Gates 3 or 4, Inglewood, California 90301, on July 18, 1995 at
10:00 a.m. local time, for the following purposes:
1. To elect a board of 11 directors for the Company to serve for the coming
year.
2. To consider and transact such other business as may properly come before
the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record on the books of the Company as of the close of
business on June 16, 1995 will be entitled to notice of and to vote at the
Annual Meeting and any adjournments or postponements thereof.
PLEASE READ THE ENCLOSED PROXY STATEMENT CAREFULLY.
It is important that your shares be represented at the Annual Meeting.
THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD. If you
later find that you can be present or desire to revoke your proxy for any
reason, you may do so at any time before the voting at the Annual Meeting.
By Order of the Board of Directors of
the Company
WARREN B. WILLIAMSON
Vice President and Secretary
June 20, 1995
Inglewood, California
HOLLYWOOD PARK, INC.
1050 SOUTH PRAIRIE AVENUE
INGLEWOOD, CALIFORNIA 90301
PROXY STATEMENT RELATING TO
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 18, 1995
This Proxy Statement is furnished in connection with the solicitation of the
enclosed proxy by the Board of Directors of Hollywood Park, Inc., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders of
the Company to be held in the Hollywood Park Casino (located adjacent to the
Hollywood Park Race Track), 1088 South Prairie Avenue, Inglewood, California,
90301, on July 18, 1995 at 10:00 a.m. local time, and at any adjournments or
postponements thereof (the "Annual Meeting"). The stockholders of the Company
will consider (i) the election of 11 directors for the Company who would serve
for the coming year, and (ii) any other business that properly comes before the
Annual Meeting.
----------------
This Proxy Statement is dated June 20, 1995 and, together with the form of
proxy, shall first be mailed to the Company's stockholders on or about June 23,
1995.
VOTING RIGHTS AND PROXIES
RECORD DATE; OUTSTANDING SECURITIES
Only stockholders of record on the books of the Company as of the close of
business on June 16, 1995 (the "Record Date") will be entitled to notice of and
to vote at the Annual Meeting. On that date, the Company had 18,369,634 shares
of common stock (the "Common Stock") issued and outstanding. Each share of
Common Stock outstanding on the Record Date is entitled to one vote at the
Annual Meeting.
QUORUM
The holders of one-third of the outstanding shares entitled to vote at the
Annual Meeting, present in person or represented by proxy (including
abstentions and broker non-votes), constitute a quorum for the transaction of
business at the Annual Meeting.
PROXIES AND SOLICITATION OF PROXIES
Your proxy may be revoked by you at any time prior to its use by (i) filing
with the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date or (ii) attending the Annual Meeting and voting in person.
Subject to such revocation, all shares represented by valid proxies will be
voted at the Annual Meeting in accordance with the specifications on such
proxies. If no specifications are given by the stockholder executing the proxy
card, valid proxies will be voted to elect the persons nominated for election
to the Board of Directors of the Company listed on the proxy card, and in the
discretion of the appointed proxies upon such other matters as may properly
come before the Annual Meeting. The Company is not aware of any other matters
to be considered at the Annual Meeting. Under the Company's By-Laws,
stockholders may not present proposals for action, or nominate directors, at
the Annual Meeting unless written notice thereof, containing the information
required by such By-Laws, was delivered to the Secretary of the Company no
later than May 31, 1995. No such proposals or nominations were received by such
date.
Proxies may be solicited by mail, personal interview, telephone and telecopy
by directors, officers and employees of the Company on a part-time basis and
for no additional compensation. In addition, the Company has retained D.F. King
& Co., Inc. ("D.F. King") at a cost of $3,000, plus reimbursement of expenses
(which are not expected to exceed $14,000), to assist in the solicitation of
proxies from brokerage
firms, nominees, institutions and individuals and to perform other related
services. The entire cost of soliciting proxies under this Proxy Statement will
be borne by the Company and will include, in addition to the amounts paid D.F.
King, amounts paid in reimbursement to banks, brokerage firms and others for
their expenses in forwarding soliciting material.
If you have any questions or need further assistance in voting your shares,
please call the Company's proxy solicitor, D.F. King & Co., Inc. at (800) 669-
5550.
ELECTION OF DIRECTORS
(ITEM NO. 1 ON PROXY CARD)
At the Company's Annual Meeting, common stockholders will be asked to vote on
the election of 11 directors who will constitute the full Board of Directors of
the Company. The eleven nominees receiving the highest number of votes from
holders of shares of the Common Stock of the Company represented and voting at
the Annual Meeting will be elected to the Board of Directors of the Company.
Unless a nominee other than the nominees listed below is properly nominated,
abstentions and broker non-votes will not have an effect on the election of the
nominees listed below. Each director so elected will hold office until the next
annual meeting and until his successor is elected and qualified.
GENERAL
Each proxy received will be voted for the election of the persons named
below, unless the stockholder signing such proxy withholds authority to vote
for one or more of these nominees in the manner described on the proxy.
Although it is not contemplated that any nominee named below will decline or be
unable to serve as a director, in the event any nominee declines or is unable
to serve as a director, the proxies will be voted by the proxy holders as
directed by the Board of Directors.
There are no family relationships between any director, nominee or executive
officer and any other director, nominee or executive officer of the Company.
There are no arrangements or understandings between any director, nominee or
executive officer and any other person pursuant to which he has been or will be
selected as a director and/or executive officer of the Company.
INFORMATION REGARDING THE DIRECTORS AND NOMINEES FOR THE BOARD OF DIRECTORS OF
THE COMPANY
The following table lists the persons nominated by the Board of Directors of
the Company for election as directors of the Company and provides certain
information concerning each such person. All of the nominees are currently
directors of the Company.
NAME AND AGE, POSITION WITH SERVED
THE COMPANY (IF ANY), PRINCIPAL AS A
OCCUPATIONS DURING LAST FIVE (5) YEARS; DIRECTOR
CERTAIN DIRECTORSHIPS SINCE
--------------------------------------- --------
NOMINEES
John J. Brunetti, 64, Chairman of the Board and Chief Executive Offi- 1993
cer, Joseph J. Brunetti Construction Company (real estate develop-
ment, ownership and management) since 1968; Chairman of the Board,
Chief Executive Officer and principal stockholder, Hialeah Park
(thoroughbred horse racing) since 1977; Owner, Red Oak Farm (thor-
oughbred breeding farm and racing stable); Member, Board of Trust-
ees, New York Military Academy, since 1973 (President since 1987);
Member, New Jersey HBPA, 1967; Florida TOBA, since 1969; Director,
Monmouth Park Jockey Club from 1982 to 1987; Member, Turf & Field
Club since 1976.
2
NAME AND AGE, POSITION WITH SERVED
THE COMPANY (IF ANY), PRINCIPAL AS A
OCCUPATIONS DURING LAST FIVE (5) YEARS; DIRECTOR
CERTAIN DIRECTORSHIPS SINCE
--------------------------------------- --------
R.D. Hubbard, 60, Chairman of the Board and Chief Executive Officer 1990
of the Company since September 1991; Chairman of the Board and Chief
Executive Officer of Hollywood Park Operating Company since February
1991; President of Hollywood Park Operating Company from February to
July 1991; Chairman, AFG Industries, Inc. and its parent company,
Clarity Holdings Corp. (glass manufacturing) and director of AFG In-
dustries, Inc.'s subsidiaries, from 1978 to July 1993; Chairman of
the Board and 60% stockholder, Sunflower Racing, Inc. (Woodlands
Race Tracks--horse racing and greyhound racing) from 1988 to March
1994; President, Director, and owner of Ruidoso Downs Racing, Inc.
(horse racing) since 1988; Chairman of the Board, Chief Executive
Officer and sole stockholder, Multnomah Kennel Club, Inc. (greyhound
racing) since December 1991; Owner and breeder of numerous thorough-
breds and quarter horses since 1962.
J.R. Johnson, 74, Director, Hollywood Park Operating Company from 1991
February 1991 to January 1992; Chairman, President and Chief Execu-
tive Officer, NEWMAR (marine electronics manufacturing) since 1980;
Director, Logicon, Inc. (defense oriented intelligence); Trustee,
Westminster College.
Howard W. Koch, 79, Director, Hollywood Park Operating Company or its 1991
predecessor from 1977 to 1988 and February 1991 to January 1992; In-
dependent Motion Picture Producer and Director with Paramount Pic-
tures Corp. since 1964.
Robert T. Manfuso, 57, Director, Hollywood Park Operating Company 1991
from February 1991 to January 1992; Co-Chairman of the Board, Laurel
Racing Association (horse racetrack management) from 1984 to Febru-
ary 1994; Vice Chairman of the Board, The Maryland Jockey Club
(horse racing) from 1986 to February 1994; Executive Vice President,
Laurel Racing Association from 1984 to May 1990; Executive Vice
President, The Maryland Jockey Club from 1986 to June 1990; Direc-
tor, Maryland Horse Breeders Association from 1984 to 1992 and since
1993; Member, Executive Committee, Maryland Million since 1991.
John V. Newman, 85, Treasurer of the Company from 1989 to September 1989
1991; Director, Hollywood Park Operating Company from 1977 to Janu-
ary 1992; President and Chief Executive Officer, Newman Ranch Com-
pany (citrus farming) since 1989; Chairman Emeritus of the Board of
Directors, Sunkist Growers, Inc. (citrus marketing) since 1977;
Chairman of the Board, California Horse Racing Board from 1972 to
1977.
Harry Ornest, 71, Vice Chairman of the Board of the Company since 1991
September 1991; Director, Hollywood Park Operating Company since
1988; Vice Chairman of the Board, Hollywood Park Operating Company
since February 1991; Owner and Chairman, Toronto Argonauts Football
Club (Canadian Football League club) from 1988 to May 1991.
Kjell H. Qvale, 75, Director, Hollywood Park Operating Company from 1991
February 1991 to January 1992; Owner and Chief Executive Officer,
British Motor Car Distributors, Ltd. (auto dealership), since 1947;
Director, Pacific Racing Association (operates horse racing for
Golden Gate Fields Racetrack) from 1988 to January 1992; Chairman,
California Jockey Club (horse racing) since 1991.
Lynn P. Reitnouer, 62, Director, Hollywood Park Operating Company 1991
from September 1991 to January 1992; Partner, Crowell Weedon & Co.
(stock brokerage) since 1969; Director and President, Forest Lawn
Memorial Parks Association, since 1975; Director and Secretary,
COHR, Inc. (subsidiary of Hospital Council of Southern California),
since 1986; Trustee, University of California Santa Barbara Founda-
tion since 1992.
3
NAME AND AGE, POSITION WITH SERVED
THE COMPANY (IF ANY), PRINCIPAL AS A
OCCUPATIONS DURING LAST FIVE (5) YEARS; DIRECTOR
CERTAIN DIRECTORSHIPS SINCE
--------------------------------------- --------
Herman Sarkowsky, 70, Director, Hollywood Park Operating Company from 1991
February 1991 to January 1992; Owner, Sarkowsky Investment Corpora-
tion and SPF Holding, Inc. (real estate development and investments)
since 1980; Director, The Sarkowsky Foundation (charitable founda-
tion) since 1982; thoroughbred horse breeder and owner since 1959;
Director, Synetics, Inc. (porous plastic manufacturing); Director,
Seafirst Corporation (banking).
Warren B. Williamson, 66, Vice President and Secretary of the Company 1988
since September 1991; Chairman of the Board and Chief Executive Of-
ficer of the Company from 1989 to September 1991; Director, Holly-
wood Park Operating Company since 1985; Vice President and Secre-
tary, Hollywood Park Operating Company since February 1991; Secre-
tary and Treasurer, Hollywood Park Operating Company from 1985 to
November 1990; Chairman and Chief Executive Officer, Chandis Securi-
ties Co. (holding company) since 1985; Director, Times Mirror Compa-
ny; Trustee, Hospital of the Good Samaritan; Trustee, California
Thoroughbred Breeders Foundation; Trustee, Claremont McKenna Col-
lege; Chairman Emeritus, Art Center College of Design; Breeder and
racer of thoroughbreds since 1970.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF THE NOMINEES
LISTED ABOVE AS DIRECTORS.
CERTAIN INFORMATION CONCERNING THE BOARD OF
DIRECTORS AND ITS COMMITTEES
The Company has a standing Executive Committee which is chaired by Mr. Ornest
and currently consists of Messrs. Hubbard, Koch, Ornest, Reitnouer and
Williamson. The Executive Committee has and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Company to the fullest extent authorized by Delaware law. The
Executive Committee had seven formal meetings in 1994 and acted by unanimous
written consent on four occasions.
The Company has a standing Audit Committee which is chaired by Mr. Newman and
currently consists of Messrs. Newman, Reitnouer, Sarkowsky and Johnson. The
functions of the Audit Committee are to review the audits of the Company's
books performed by outside independent auditors, to consider matters of
accounting policy and to investigate and recommend to the Board independent
auditors for the following year. The Audit Committee met once in 1994.
The Company has a standing Compensation Committee, which currently consists
of Messrs. Johnson, Manfuso, Sarkowsky and Williamson. Mr. Johnson chairs the
Compensation Committee. The functions of the Compensation Committee are to make
recommendations to the Board of Directors regarding the annual salaries and
other compensation of the officers of the Company, to provide assistance and
recommendations with respect to the compensation policies and practices of the
Company and to assist with the administration of the Company's compensation
plans. The Compensation Committee met once in 1994.
The Executive Committee acts as the Company's nominating committee. The
Executive Committee generally does not consider nominees recommended by the
Company's stockholders.
During the year ended December 31, 1994, each incumbent director of the
Company attended at least 75% of the aggregate of (i) the three meetings of the
Board of Directors and (ii) the total number of meetings of the committees on
which he served (during the periods that he served).
During the year ended December 31, 1994, each director of the Company
received a fee at the rate of $18,000 per year. In addition, each member of the
Executive Committee receives $1,000 for each meeting of that Committee, while
other committee members receive $500 per meeting. Directors of the Company may
elect to defer all or a portion of their fees pursuant to the Directors
Deferred Compensation Plan. Any such
4
deferred compensation is credited to a deferred compensation account, either in
cash, shares of the Company's Common Stock, or a combination of both. Any
deferred accounts that are credited in shares of Common Stock are also credited
in shares of Common Stock for any dividends with respect to the Common Stock
that are declared by the Board. All of the Company's directors have elected to
defer their fees and to have their deferred compensation accounts credited with
shares of Common Stock.
In addition, directors and their guests are entitled, without charge, to use
the Directors' Room at Hollywood Park, which is open on weekends and holidays
during the racing season.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of Directors
for the 1994 fiscal year were Messrs. Johnson, Manfuso and Qvale. None of such
persons were officers or employees or former officers or employees of the
Company or any of its subsidiaries, or had any relationships which would
require disclosure by the Company pursuant to Item 404 of Regulation S-K
("Certain Relationships and Related Transactions").
EXECUTIVE OFFICERS
Each of the executive officers of the Company holds office at the pleasure of
the Board of Directors. The current executive officers of the Company are as
follows:
NAME POSITION
---- --------
R.D. Hubbard.......... Chairman of the Board and Chief Executive Officer
Harry Ornest.......... Vice Chairman of the Board
Donald M. Robbins..... President; President, Racing Division; and
Assistant Secretary
G. Michael Finnigan... President, Gaming and Entertainment Division;
Executive Vice President, Treasurer and Chief
Financial Officer
Warren B. Williamson.. Vice President and Secretary
Background information for all executive officers other than Messrs. Robbins
and Finnigan is provided above. See "Election of Directors."
Mr. Robbins, 47, has been President, Racing since February 1994; President
and Assistant Secretary of the Company since September 1991; General Manager of
Hollywood Park Operating Company ("Operating Company"; collectively, the
Company and Operating Company are referred to herein as the "Companies") from
1986 to February 1994, Executive Vice President of Operating Company since
1988, and President and Secretary of Operating Company since July 1991.
Mr. Finnigan, 46, has been President, Gaming and Entertainment, since
February 1994; Executive Vice President and Chief Financial Officer of each of
the Companies since March 1989; and Treasurer of each of the Companies since
March 1992.
5
EXECUTIVE COMPENSATION
The following tables summarize the annual and long-term compensation of and
stock options held by the Company's Chief Executive Officer and the two
additional most highly compensated executive officers whose annual salaries and
bonuses exceeded $100,000 in total during the fiscal year ended December 31,
1994.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
SECURITIES
OTHER UNDERLYING
NAME AND ANNUAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) SARS(#) COMPENSATION($)
------------------ ---- --------- -------- --------------- ---------- ---------------
R.D. Hubbard............. 1994 $400,000 $0 $ 0 0 $ 0
Chief Executive Officer 1993 400,000 0 0 0 0
1992 266,667(1) 0 26,400(2) 0 0
Donald M. Robbins........ 1994 $255,501 $0 $ 0 20,000 $245,833(3)
President; President, 1993 255,501 0 0 30,000 246,313(3)
Racing Division, 1992 246,681 0 0 0 246,313(3)
and Assistant Secretary
G. Michael Finnigan...... 1994 $262,608 $ 0 $ 0 20,000 $ 0
President, Gaming and 1993 262,608 0 0 30,000 1,308(4)
Entertainment Division 1992 250,008 0 0 0 1,308(4)
Executive Vice
President,
Treasurer and Chief
Financial Officer
- --------
(1) In April, 1992, the Company entered into a management agreement with R.D.
Hubbard Enterprises, Inc. to provide Mr. Hubbard's services as Chief
Executive Officer of the Company at an annual base amount of $400,000, plus
such bonuses as may be determined by the Board of Directors.
(2) From June 1991 until May 1992, the Company leased an apartment for use by
track officials and guests of the Company. Mr. Hubbard used the apartment
when he was in Los Angeles. The annual lease rate for the apartment was
approximately $132,000. The Company has apportioned 60% of the lease
payments to Mr. Hubbard based on the approximate relative usage of the
apartment by Mr. Hubbard. Mr. Hubbard assumed the lease obligations on the
apartment in May 1992 when the Company began paying the $400,000 annual
fee.
(3) In April, 1992, the Company and Mr. Robbins entered into an agreement
terminating his employment agreement with the Company and providing for the
payment to Mr. Robbins of the change of control benefit under that contract
in three equal annual installments of $245,833 in April, 1992, 1993 and
1994. The amount shown represents the second installment, as well as $480
in matching contributions in 1992 and 1993 under the Company's 401(k) Plan.
Mr. Robbins is currently employed by the Company without an employment
contract.
(4) Reflects matching contributions under the Company's 401(k) Plan.
OPTION GRANTS IN THE YEAR ENDED DECEMBER 31, 1994
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (A)
OPTIONS EMPLOYEES PRICE PER EXPIRATION -----------------------------
NAME GRANTED (#) IN FISCAL YEAR SHARE DATE 0% 5% 10%
---- ---------- -------------- --------- ---------- ----- ---------- ------------
R.D. Hubbard............ -- -- $ -- -- $ 0 $ 0 $ 0
Donald M. Robbins....... 20,000 23.5% 22.00 02/09/04 0 717,000 1,141,000
G. Michael Finnigan..... 20,000 23.5% 22.00 02/09/04 0 717,000 1,141,000
6
Options granted in 1994 are exercisable starting 12 months after the grant
date, with 33 1/3% of the shares covered thereby becoming exercisable at that
time, and with an additional 33 1/3% of the option shares becoming exercisable
on each successive anniversary date. The options expire ten years from the date
of grant, one month after termination of employment, or six months after the
death or permanent disability of the optionee. Each of the options was granted
under the 1993 Stock Option plan with an exercise price equal to 100% of the
closing price of the Company's Common Stock on that date on the NASDAQ National
Market System.
(a) The amounts shown are not the values of the options on the dates they
were granted. Instead, these are hypothetical future values based on the
difference between the option exercise price and the assumed future Common
Stock price at the end of the 10-year term of the options using hypothetical
rates of growth of 0%, 5% and 10%, respectively. There can be no assurance that
the growth rates specified in the table will be achieved.
PENSION PLAN
YEARS OF QUALIFIED SERVICE
FINAL AVERAGE ANNUAL
SALARY 10 15 20 25 30
- -------------------- ------- ------- -------- -------- --------
$100,000................ $24,920 $37,380 $ 49,839 $ 62,299 $ 67,299
150,000................ 38,170 57,255 76,339 95,424 102,924
200,000(2)............. 51,420 77,130 102,839 118,800(1) 118,800(1)
250,000 to 500,000(2).. 64,670 97,005 118,800(1) 118,800(1) 118,800(1)
- --------
(1) Under current provisions of the Internal Revenue Code, the maximum annual
benefit that may be paid under the Pension Plan is $118,800 for a
participant retiring at age 65 in 1994.
(2) Under current provisions of the Code, the maximum average salary that may
be used in calculating retirement benefits in 1994 is $150,000. Benefits
accrued on April 1, 1994 (based on prior compensation limits) are
grandfathered.
The Company's Pension Plan (the "Pension Plan") is a non-contributory,
defined benefit plan which applies to all employees who have completed one year
of qualified service, including directors who are employees. In general,
pension benefits are based on years of service and eligible earnings. Donald M.
Robbins and G. Michael Finnigan are the only officers or directors of the
Company who are currently participating in the Pension Plan and currently have
approximately eight years and five years of qualified service, respectively.
Only amounts earned by Messrs. Robbins and Finnigan as "salary" as shown in the
Executive Compensation Table, above, are considered in determining their
benefit levels.
The amounts shown in the table above are estimated annual retirement benefits
under the Pension Plan (assuming payments are made on the normal life annuity
basis and not under the provisions on survivor benefits) upon normal retirement
at age 65 in 1994, after various years of qualified service and at selected
average annual compensation levels. Benefits do not become vested until an
employee has completed five years and are not subject to deduction for Social
Security or other offset amounts.
The amounts required to fund the Pension Plan are determined actuarially and
are paid by the Company to a life insurance company under an unallocated group
annuity contract. In 1994, the Company did not make any contributions to the
Pension Plan on behalf of Messrs. Robbins and Finnigan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, which is composed
entirely of independent outside directors, is responsible for making
recommendations to the Board regarding the annual salaries and other
compensation of the officers of the Company, providing assistance and
recommendations with respect to the compensation policies and practices of the
Company and assisting with the administration of the Company's compensation
plans.
7
In order to attract and retain well-qualified executives, which the
Compensation Committee believes is crucial to the Company's success, the
Compensation Committee's general approach to compensating executives is to pay
cash salaries which are commensurate with the executives' experience and
expertise and, where relevant, are competitive with the salaries paid to
executives in the Company's main industries and primary geographic locations,
which are currently thoroughbred horse racing tracks and card clubs in Southern
California and horse and dog racing tracks in Kansas and Arizona and other
jurisdictions. In addition, to align its executives' compensation with the
Company's business strategies, values and management initiatives, both short
and long term, the Committee may, with the Board's approval, authorize the
payment of discretionary bonuses based upon an assessment of each executive's
contributions to the Company. In general, the Compensation Committee believes
that these discretionary bonuses should be related to the Company's and the
executive's performance, although specific performance criteria have not been
established.
The Compensation Committee also believes that stock ownership by key
executives provides a valuable incentive for such executives and helps align
executives' and stockholders' interests. To facilitate these objectives, the
Company adopted the 1993 Stock Option Plan, pursuant to which the Company may
grant stock options to executives (as well as other employees and directors) to
purchase up to 625,000 shares of the Company's Common Stock. In 1994, the
Compensation Committee approved grants of options to purchase 85,000 shares of
the Company's Common Stock, with an exercise price equal to the Company's stock
price on the date of grant. Of these, Messrs. Robbins and Finnigan each
received options to purchase 20,000 shares of the Company's Common Stock. In
order to ensure that the options fulfilled their purpose of helping the Company
attract and retain key employees, the Compensation Committee determined to
lower the exercise price for all of the Company's outstanding stock options to
$13.00, the Company's closing stock price on the date on which the action was
taken.
In 1994, the management company which provides Mr. Hubbard's services to the
Company was paid a fee of $400,000. This payment was fixed in 1992 based upon
an analysis of (i) the annual compensation received by the Chief Executive
Officer of Santa Anita Racetrack, (ii) the annual base salaries currently being
paid to Messrs. Robbins and Finnigan, (iii) the prominence of Mr. Hubbard in
the business community in general and the horse racing community in particular,
(iv) the level and value of the contribution that the Compensation Committee
believes Mr. Hubbard has made, and can make in the future, to the Company and
(v) the fact that Mr. Hubbard was willing to accept this amount even though the
Committee believes that he could command a much higher compensation level based
upon his business experience and expertise. The Compensation Committee
continued this salary level even though it believes that Mr. Hubbard would be
entitled to significantly higher levels of base compensation based upon not
only the above-mentioned factors, but also the Company's expansion into the
card club and gaming business, where executive salaries tend to be
substantially higher than those in the thoroughbred horse racing business.
While Mr. Hubbard's base salary is not dependent upon the Company's
performance, it is anticipated that any bonuses he may receive, based upon the
recommendation of the Compensation Committee and the approval of the Board of
Directors, would be, at least in part, so dependent.
June 14, 1995 COMPENSATION COMMITTEE
J.R. Johnson (Chairman)
Robert T. Manfuso
Herman Sarkowsky
Warren B. Williamson
8
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, MEDIA GENERAL STANDARD INDUSTRIAL CODE 7999 INDEX--AMUSEMENT
AND RECREATION SERVICES & THE NASDAQ MARKET INDEX**
[PERFORMANCE GRAPH APPEARS HERE]
Measurement Period HOLLYWOOD SIC CODE NASDAQ
(Fiscal Year Covered) PARK, INC. 7999 Market Index
- --------------------- ---------- -------- ------------
Measurement Pt-12/31/1989 $100 $100 $100
FYE 12/31/1990 $166.48 $ 60.32 $ 81.12
FYE 12/31/1991 $124.62 $ 94.82 $104.14
FYE 12/31/1992 $ 96.39 $111.81 $105.16
FYE 12/31/1993 $307.62 $181.27 $126.14
FYE 12/31/1994 $112.79 $143.81 $132.14
* ASSUMES $100 INVESTED ON DECEMBER 31, 1989 IN COMMON STOCK OF THE COMPANY,
MEDIA GENERAL STANDARD INDUSTRIAL CODE 7999 INDEX--AMUSEMENT AND RECREATION
SERVICES & THE NASDAQ MARKET INDEX
** TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
The above graph shows historical stock price performance (including
reinvestment of dividends) and is not necessarily indicative of future
performance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into an aircraft time sharing agreement with R.D.
Hubbard Enterprises, Inc. ("Hubbard Enterprises"), which is wholly owned by Mr.
Hubbard. The agreement covers the period November 1, 1993 through December 31,
1994. Thereafter, the agreement automatically renews for additional terms of
one month each, unless written notice of termination is given by one party to
the other at least two weeks before a renewal term. Pursuant to the agreement,
the Company agreed to reimburse Hubbard Enterprises for expenses incurred as a
result of the Company's use of the aircraft, which totalled approximately
$139,000 in 1994.
The Company also pays Hubbard Enterprises a management fee for Mr. Hubbard's
services as Chief Executive Officer; such fee was $400,000 in 1994.
On March 23, 1994, the Company acquired Sunflower Racing, Inc. ("Sunflower"),
a greyhound and thoroughbred track located in Kansas City, Kansas, of which Mr.
Hubbard was Chairman of the Board and 60% stockholder. Sunflower, operating as
the Woodlands, became a wholly-owned Subsidiary of the Company. The purchase
price was $15,000,000 and was paid with 591,715 shares of Hollywood Park Common
Stock, of which Mr. Hubbard received 236,686 shares, then valued at
approximately $6,000,000.
9
In addition, immediately following the merger, Hollywood Park contributed
$5,000,000 in cash to repay a portion of the subordinated debt owed by
Sunflower to Mr. Hubbard in return for more favorable terms on the
approximately $13,059,000 remaining balance of the subordinated debt, which is
payable in full on January 1, 2003. The agreement of merger also provided that
under certain circumstances the former Sunflower shareholders would be entitled
to receive additional shares of Hollywood Park Common Stock. As of March 23,
1995, the former Sunflower shareholders transferred their right to such
additional consideration to Hollywood Park for nominal consideration and have
no further entitlement to additional consideration.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the name, address (address is provided for
persons listed as beneficial owners of 5% or more of the Common Stock or
Depositary Shares) and number of shares and percent of the Common Stock or
Depositary Shares, respectively, beneficially owned as of June 1, 1995, by each
person known to the Board of Directors to be the beneficial owner of 5% or more
of the outstanding shares of Common Stock or Depositary Shares, each Director,
each named Executive Officer and Directors and Executive Officers as a group.
COMMON STOCK DEPOSITARY SHARES(B)
-------------------------------------------- -----------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF AMOUNT AND
BENEFICIAL BENEFICIAL PERCENT OF NATURE OF PERCENT OF
OWNERSHIP OWNERSHIP SHARES BENEFICIAL SHARES
NAME OF BENEFICIAL OWNER (PRIMARY) (FULLY DILUTED)(A) OUTSTANDING(A) OWNERSHIP OUTSTANDING
- ------------------------ ---------- ------------------ -------------- ---------- -----------
R. D. Hubbard........... 2,119,840 2,619,820(c) 13.9% 600,000(d) 21.8%
Hollywood Park, Inc.
1050 South Prairie
Avenue
Inglewood, California
90301
State of Wisconsin In-
vestment Board......... 1,752,000 1,752,000(e) 9.5% -- --
P.O. Box 7842
Madison, Wisconsin
53707
Harry Ornest............ 1,176,300 1,226,298(f) 6.7% 60,000 2.2%
Hollywood Park, Inc.
1050 South Prairie
Avenue
Inglewood, California
90301
Legg Mason, Inc. ....... 1,207,000 1,207,000(g) 6.6% -- --
111 South Calvert
Street
Baltimore, Maryland
21202
John J. Brunetti........ 683,680 683,680(h) 3.7% -- --
J.R. Johnson............ 189,583 368,743(i) 2.0% 215,000 7.8%
Warren B. Williamson.... 125,000 147,916(j) * 27,500 1.0%
Lynn P. Reitnouer....... 35,000 35,000 * -- --
John V. Newman.......... 26,670 26,670(k) * -- --
Kjell H. Qvale.......... 21,266 21,266(l) * -- --
Robert T. Manfuso....... 20,000 28,333(m) * 10,000 *
Herman Sarkowsky........ 10,938 10,938 * -- --
Howard W. Koch.......... 1,458 1,458 * -- --
G. Michael Finnigan..... 25,415 52,082(n) * -- --
Donald M. Robbins....... 12,339 39,006(o) * -- --
Directors and Executive
Officers as
a group (13 persons)... 4,447,489 5,261,210(p) 27.4% 912,500 32.8%
10
- --------
* Less than one percent (1%) of the outstanding common or depositary shares.
(a) Assumes exercise of stock options or conversion of the Depositary Shares
beneficially owned by the named individual or entity into shares of Common
Stock.
(b) Each depositary share may be converted into 0.8333 shares of Common Stock,
subject to adjustment in certain circumstances.
(c) Includes 499,980 shares of Common Stock issuable upon conversion of 600,000
Depositary Shares, including 300,000 Depositary Shares owned by the R.D.
and Joan Dale Hubbard Foundation.
(d) Includes 300,000 Depositary Shares owned by the R.D. and Joan Dale Hubbard
Foundation.
(e) Based upon information provided by the stockholder in a Schedule 13G filed
with the Securities and Exchange Commission on February 14, 1995.
(f) Includes 49,998 shares of Common Stock issuable upon conversion of 60,000
Depositary Shares. Also includes 40,000 shares of Common Stock held by the
Ornest Family Foundation, for which Mr. Ornest acts as a trustee (Mr.
Ornest disclaims any pecuniary interest in these shares). In addition, as
Trustee of the Harry and Ruth Ornest Trust, Mr. Ornest and his wife, Ruth
Ornest, share the power to vote 60% of the interest in the Ornest Family
Partnership (the "Partnership"), which in turn has the power to dispose of
the 1,136,300 shares of Common Stock held in the name of the Partnership.
(g) Based upon information provided by the stockholder in a Schedule 13G filed
with the Securities and Exchange Commission on March 3, 1995.
(h) All of the shares are owned by Elberon Investment Corp., of which Mr.
Brunetti owns all of the outstanding Common Stock.
(i) Includes 179,160 shares of Common Stock issuable upon conversion of 215,000
Depositary Shares.
(j) Includes 22,916 shares of Common Stock issuable upon conversion of 27,500
Depositary Shares.
(k) All of the shares are owned by the Newman Family Trust, for which Mr.
Newman and his wife serve as trustees.
(l) All the shares are owned by the Kjell and Kathryn Qvale Family Trust, for
which Mr. Qvale and his wife serve as trustees.
(m) Includes 8,333 shares of Common Stock issuable upon conversion of 10,000
Depositary Shares.
(n) Includes 26,667 shares of Common Stock which Mr. Finnigan has the right to
acquire pursuant to options granted under Hollywood Park's 1993 Stock
Option Plan which are exercisable within sixty days of June 1, 1995.
(o) Includes 26,667 shares of Common Stock which Mr. Robbins has the right to
acquire pursuant to options granted under Hollywood Park's 1993 Stock
Option Plan which are exercisable within sixty days of June 1, 1995.
(p) Includes 813,720 shares of Common Stock of which the Directors and
Executive Officers may be deemed to have beneficial ownership following (i)
conversion of 912,500 Depositary Shares and (ii) the exercise of options to
purchase 53,334 shares of Common Stock which are exercisable within sixty
days of June 1, 1995. Excluding such shares, the Directors and Executive
Officers of the Company have beneficial ownership of 4,447,489 shares of
Common Stock, which represents 24.2% of the shares of Common Stock
outstanding as of June 1, 1995.
Based solely upon a review of reports received by the Company during or with
respect to the year ended December 31, 1994 pursuant to Rule 16a-3(e) of the
Securities Exchange Act of 1934, Mr. Ornest did not timely file two reports,
each covering one purchase of shares of Common Stock; Mr. Manfuso did not
timely file one report covering one purchase of shares of Common Stock; Mr.
Hubbard did not timely file one report covering the acquisition of Common Stock
in exchange for the stock of Sunflower owned by Mr. Hubbard; Mr. Brunetti did
not timely file seven reports, each covering one purchase of shares of Common
Stock; and Mr. Qvale did not timely file one report covering one purchase of
shares of Common Stock.
11
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen & Co. LLP has served as the Company's independent
public accountants for the fiscal year ending December 31, 1994.
Representatives of Arthur Andersen & Co. LLP are expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and to
make any statements they desire.
Until April 28, 1994, the Company's auditors were KPMG Peat Marwick LLP.
Following a competitive bidding process, the Company, with the approval of the
Audit Committee, retained Arthur Andersen & Co. LLP as its auditors for the
fiscal year ended December 31, 1994. The decision to dismiss KPMG Peat Marwick
LLP was not motivated by any disagreements as to any accounting matters. KPMG
Peat Marwick LLP was advised of the change on April 28, 1994. Since KPMG Peat
Marwick LLP was retained on March 11, 1991, none of its reports on the
Company's financial statements contained an adverse opinion or a disclaimer of
opinion, or was qualified or modified as to uncertainty, audit scope, or
accounting principles. In addition, since that date there have been no
disagreements relative to accounting principles, practices, financial statement
disclosure, auditing scope or procedures which, if not resolved to the
auditor's satisfaction, would have resulted in a reference to the subject
matter of the disagreements in connection with its reports, nor were there any
events of the type requiring disclosure under Item 304(a)(1)(v) of Regulation
S-K.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Stockholders who wish to present proposals for action, or to nominate
directors, at the next annual meeting of stockholders of the Company (that is,
the next annual meeting following the Annual Meeting that is now scheduled to
be held on July 18, 1995) must give written notice thereof to the Secretary of
the Company at the address set forth on the cover page of this Proxy Statement
not less than ninety days in advance of such meeting or, if later, the seventh
day following the first public announcement of such meeting. Such written
notice must contain the information required by Section 2.13 of Article II of
the Company's By-Laws.
In order to be eligible for inclusion in the Company's proxy statement and
proxy card for the next annual meeting pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, stockholder proposals must be received by the
Secretary of the appropriate Company no later than February 21, 1996. However,
in order for such stockholder proposals to be eligible to be brought before the
stockholders at the next annual meeting, the stockholder submitting such
proposals must also comply with the procedures, including the deadlines,
required by Section 2.13 of Article II of the Company's By-Laws, as referenced
in the preceding paragraph. Stockholder nominations of directors are not
stockholder proposals within the meaning of Rule 14a-8 and are not eligible for
inclusion in the Company's proxy statement.
/s/ R.D. HUBBARD
R.D. HUBBARD
Chairman of the Board and
Chief Executive Officer
Hollywood Park, Inc.
12
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PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 18, 1995
HOLLYWOOD PARK, INC.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders of Hollywood Park, Inc. (the "Company") dated June 20, 1995 and
the accompanying Proxy Statement relating to the above-referenced Annual
Meeting, and hereby appoints R.D. Hubbard or, in his absence, Warren B.
Williamson, with full power of substitution in each, as attorneys and proxies
of the undersigned.
Said proxies are hereby given authority to vote all shares of common stock of
Hollywood Park, Inc. which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders of the Company, to be held on July 18, 1995 at
the Hollywood Park Casino (located adjacent to the principal executive offices
of the Company), 1088 South Prairie Avenue, Inglewood, California 90301, at
10:00 a.m. and at any and all adjournments or postponements thereof (the
"Annual Meeting") on behalf of the undersigned on the following matters and in
the manner designated below:
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, AND WHEN
PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE
WITH THE INSTRUCTIONS IN THIS PROXY. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES NAMED BELOW AS DIRECTORS OF THE
COMPANY.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
- --------------------------------------------------------------------------------
1. Election of Eleven (11) Directors
FOR all nominees listed to the right
(except as marked to the contrary) [_]
WITHHOLD AUTHORITY to vote for all
nominees listed to the right [_]
NOMINEES: John J. Brunetti, R.D. Hubbard, J.R. Johnson, Howard W. Koch, Robert
T. Manfuso, John V. Newman, Harry Ornest, Kjell H. Qvale, Lynn P. Reitnouer,
Herman Sarkowsky and Warren B. Williamson
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided:
- --------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote for the election of
such substitute nominee(s) for directors as the Board of Directors of the
Company shall select and upon such other matters as may come before the
Annual Meeting.
FOR [_] AGAINST [_] ABSTAIN [_]
Note: Please date and sign exactly as your name(s) appear on this proxy card.
If shares are registered in more than one name, all such persons should sign. A
corporation should sign in its full corporate name by a duly authorized offi-
cer, stating his title. When signing as attorney, executor, administrator,
trustee or guardian, please sign in your official capacity and give your full
title as such. If a partnership, please sign in the partnership name by an au-
thorized person.
Dated: ___________________________________________________________________, 1995
- --------------------------------------------------------------------------------
(Signature)
- --------------------------------------------------------------------------------
(Signature, if held jointly)
PLEASE DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED SELF-
ADDRESSED, POSTAGE PAID ENVELOPE
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-- FOLD AND DETACH HERE --