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OFFICIAL PROSPECTUS STATEMENT The official prosi cctus issued by those who have the matter in hand best deserll es in what manner and under what auspices racing is to be legally re ¬ sumed This prospectus set forth among other things that thatUnder Under the laws of tho State of Indiana sanc ¬ tioning and regulating race meetings meetings not to exceed fifteen days duration on a given track or enclosure may be held and no second meeting may be held unless thirty days have elapsed following the last day of the previous meeting nor can more than fortyfive days racing be held on a given race track in the State of Indiana during tho legal rac ¬ ing season which is limited to a period between April 15 and November 15 of each year The pur ¬ pose of tho law is not only to mako continuous racing impossible but likewise to limit the racing season to the supposedly clement months and In this respect the Indiana legislature unquestionably yielded to the snirit of commercialism which domi ¬ nated racing during the early Os The passage of the Seller law as the racing statute of Indiana is commonly called was provoked bV the utter disre ¬ gard of all coiisciouahle rules of racing by those who owned and conducted race tracks in Lake County at that period when the Chicago racing season which commenced in April and closed In November was followed by a period of winter racing just over the line in Indiana IndianaTho Tho prospectus goes on to say sayWhile While the old racing regime with its postseason of winter racing and obnoxious open betting rings has passed never to return the real glory of thor ¬ oughbred racing under conditions which mako for permanence legitimacy and a broadening patron ¬ age survives as witness the popularity and stability of this keenest of sports in Canada and the Stale of Kentucky where it nourishes under ideal legal safeguards Drawing their inspiration from this spectacle of the survival of racing from depressive influences hardly less destructive than those which assailed tho sport of kings in other sections of the country leading citizens of the State of Indiana have determined to avail themselves of the benefits of the sanction and regulation which the Seller law affords and restore racing as a snort to its high estate free from the blight of commercialism which carried in its wake the evils of the betting ring and a lowering of standards in every department of the institution of racing They have decided to give one or more fifteenday meetings on race eoifrscs in Lake and Porter Counties the construction of which will bo rushed forward at once each course to be built and owned by local capitalists professional men and merchants all citizens of the State of Indiana IndianaIn In order to free the business and control of racing entirely from Hie taint of commercialism on one side and a none too disinterested influence of tln owners of racing stables or any obscured inter ¬ ests behind them on the other local jockey clubs country clubs and driving associations having no financial interest in the profits of racing will have complete jurisdiction of meetings that are given in enclosures controlled by them These annual racing programs will be an incident only of tho numerous features which will provide the widest possible range of divertiscment to the membership including golf links tennis courts tho facilities of commodious club houses bungalows and other ap ¬ purtenances which go to make country life a joy forever to the tired city man These country club bouses with their grounds forest preserves and race courses will be owned exclusively by citizens of Indiana and will lie maintained from their pri ¬ vate resources and from the annual dues of the membership of tho leasing clubs without regard to tin profits of racing is the following details in ¬ volving the operation of Racing Foundation Corpora ¬ tion will disclose discloseHoards Hoards of racing directors or governors chosen by the members of each of these local organizations will exercise control and direction of race meetings which may be given under the auspices of these or ¬ ganizations As these associations by reason of the fact that they are organized not for pecuniary gain are not authorized or qualified to undertake the financing of such projects it is the purpose of the subscribers to the common stock of the Racing Foundation Coriwratioii to provide the necessary liuancinl facilities from the treasury of the corpora ¬ tion from the sale of 7 per cent preferred cumu ¬ lative and participating stock stockThe The conditions on which treasury stock of Racing Foundation Corporation are offered for public sub ¬ scription should appeal to every conservative investor whether or not a patron of the sport a breeder and owner of thoroughbreds a merchant having a mater ¬ ial interest in the revival of racing or a represen ¬ tative of that large class of public spirited citizens who would gladly cooperate financially in the en ¬ couragement of thoroughbred racing if they could be assured of the cleanliness of the sport under com ¬ petent yet financially disinterested auspices and were further assured of an equitable participation iu the profits to be derived by a financial corporation for the stock of which they had subscribed with such purpose in view All of these assurances and more are held out by the plans of these cooperating but financially dissociated organizations the preferred treasury stock of one of which Racing Foundation Corporation of America is offered for public sub ¬ scription at par under such limitations and provis ¬ ions explicitly set forth on each Certificate that the following contract features obtain obtainPreferred Preferred participatingMoney stock is fully participating Money derived from the sale of 7 per cent pre ¬ ferred treasury stock may be used only for defray ¬ ing the racing expenditures of an association con ¬ ducting race meetings legally in the state of Indiana IndianaThe The contract under which Racing Foundation CorjKiration agrees to relieve a racing association of financial liability secures to the treasury of Racing Foundation Corporation all moneys and profits de ¬ rived by and incidental to the racing program speci ¬ fically covered by contract contractNo No cost of organization or promotion may be paid from the funds in the treasury derived from the sale of preferred stock Such liabilities are to be met under a contingent contract which permits tiic setting over of preferred stock for the benefit of all contracts for promotion and legal services inci ¬ dent thereto representing 10 per cent of the pre ¬ ferred stock of Corporation sold at par Promotion shares will be released from escrow by the board of directors with each 10 per cent distribution of sur ¬ pluses to outstanding shares over and above the 7 per cent annual dividends due said stock Under the ap ¬ plication of this provision of promotion contract when outstanding shares have earned 100 per cent In ad ¬ dition to tho 7 per cent annual dividends due the holders of promotion contracts shall have received shares equal to 10 per cent of all treasury shares sold at par for which a treasury balance must evi ¬ dence no impairment of the parity of all outstand ¬ ing stock If any loss occur to treasury from the use of same as authorized by the ByLaws no liabili ¬ ties against the Corporation whatsoever may ensue under the contracts covering promotion and organiza ¬ tion tionAll All expenses of administration are to be met from the moneys paid in from the sale of common stock at par parIn In the event of liquidation of Corporation the holders of preferred stock shall be entitled to bo paid in full both the par value of such preferred stock and any dividends due thereon before any distributions shall be made to the holders of the common stock Surpluses in such event shall be distributed rat ably to all outstanding shares com ¬ mon and preferred preferredIt It will be seen that a decrease In the value of preferred stock may only occur in tho event of de ¬ ficits resulting from actual money losses incurred hv the financial risks involved In the racing itself which losses if any must fall on the treasury of Racing Foundation Corporation CorporationThe The revival of thoroughbred racing in the vicinity of Chicago under legal conditions and proper race governing auspices is practically assured by the creation of Racins Foundation Corporation a finan ¬ cial agency organized solely for the puriKWp of re ¬ lieving competent racing associations from all finan ¬ cial liabilities incident to carrying out a racing pro ¬ gram within enclosures leased owned or controlled by them providing a proper contract lias first been entered into with Racing Foundation Corporation CorporationRacing Racing Foundation Corporation acts as a fiscal principal discharging all liabilities set out and item ¬ ized in a given racing budget compensation for such services being of a eoutingeut character coyefet by compensation clause of contract setting ever to Racing Foundation Corporation all incomes derived by the racing organization as sitccltied In detail From this it is seen that all profits accruing from racemeetings under contract belong to Racing Foun ¬ dation CoriK ration for the particular benefit of its preferred and common stock shareholders shareholdersThe The preferred stock which is being offered for public subscription at par is designed to create a treasury or foundation from which racing liabilities are to be met and the uses of all moneys derived fiom the sale of preferred stock of the corporation are limited by special contract uniformly engraved in each stock certificate it being clearly expressed that no loss to the value of preferred stock may re ¬ sult by reason of corporation liabilities of any nature whatsoever other than the contingent risk assumed by the corporation in acting as a Fiscal Principal for racing organizations with whom contracts may be made in strict accordance with the bylaws No diminution in the value of preferred stock such value being based upon a ready convertibility of preferred stock into casli equal to the par value of all outstanding stock may occur by reason of pro ¬ motion liabilities or other costs incident to organiza ¬ tion tionLiability Liability to loss to the preferred stock of the Cor ¬ poration is confined to the risk incurred in the con ¬ tingent contracts which the board of directors are authorized to make with racing organizations in the state of Indiana which may give racemeetings of not to exceed fifteen days duration in conformity to the Seller law lawAs As the preferred stock is both cumulative and fully participating earning 7 per cent per annum before the common stock which has no liability ex ¬ emptions shall be entitled to a distribution from profits or surpluses at any rate whatsoever it will be seen that the efforts of the organizers have been 1 to create a treasury from tbe sale of preferred stock protected from risk other than that to be in ¬ curred in tho uses of the moneys for tbe restricted purposes for which they were subscribed yet 2 affording such stock equal benefits of participation with common stock in profits and 3 the additional security that in the event of enforced or voluntary liquidation the preferred stock shall be entitled to a distribution equal to the par value of such shares with accumulated interest due thereon if any before any distribution may be made in favor of the com ¬ mon stock
