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RACING FOUNDATION CORPORATION I he objects of incorporation of the Racing Founda ¬ tion Corporation of America are represented to be as follows followsTo To create and maintain a treasury from which to defray tho liabilities of Jockey Clubs Country Clubs and other associations which are peculiarly qualified to give and conduct race meetings in tho State of Indiana in accordance with the laws of said state to act as a financial principal for asso ¬ ciations that are organized not for pecuniary profit and that aro otherwise qualified to give and conduct race meetings in the State of Indiana in accordance with Hie laws of said state to act as a financial principal for associations qualified to give and con ¬ duct race meetings in the State of Indiana in ac ¬ cordance with the laws of said state but which associations either by reason of inadequacy of treasury or deficiency of authority require that the liabilities to be incurred in giving race meetings be paid from extraneous sources To lease and maintain race tracks to buy race tracks and provide for their upkeep to buy lands build and equip race t Kicks thereon and provide for their upkccp provided that said leasing buying building and upkeeping of same shall be from fuuds of the Corporation which are a surplus in the treas ¬ ury the use of which surplus shall be in keeping with articles of incorporation and pursuant to diroe tions of the bylaws bylawsThe The above paragraphs setting forth object of incorporation of Racing Foundation Corporation of America aro not in the exact legal terms of its Articles of IncoriMiratioii but aro however a concise and explicit statement of the scope of authority which shall bo assumed by Racing Foundation Cor ¬ poration through its ollicers and board of directors in negotiating contracts involving the uses of moneys derived from the sale of pref erred stock of the cor ¬ poration or otherwise incurring risks which might impair the value of said stock stockRacing Racing Foundation Corporation of America is a voluntary association organized under the laws of the State of South Dakota having a capital stock of no MH consisting of one hundred 100 shares common voting stock and four thousand nine hun ¬ dred 4UOO share 7 vcr cent cumulative and parti ¬ cipating preferred stiick The common stock pro ¬ vides sufficient capital for the administrative needs of the organization anil to meet all the expenses in ¬ volved in the preliminary work of the body in keep ¬ ing with the requirements and limitations of its charter and bylaws bylawsThe The common stock shall be fully subscribed IHV fore the treasury stock may be ottered for public subscription at rar to create a treasury to carry out the objects of the corporation Within the scope of its charter the treasury is primarily a foundation from which organizations qualified to give and con ¬ duct race meetings under specifically defined condi ¬ tions may in the absence of financial means or re ¬ quirements of their own or by reason of legal dis ¬ abilities secure exemption from a discharge of all liabilities to be incurred In givng such race meetings by iiigotating a contract wlirrcin Kacing Founda ¬ tion Corporation of America within tho exorcise of its corporate authority agrees to act as a financial principal without assuming responsibility for any acts of Hie grantee company or association under said contract nor any financial liabilities not properly set forth itemized and approved in accordance with the provisions of said contract and pursuant to authority conferred by bylaws The compensation for said services upon the part of Racing Foundation Corporation of America shall IK of a contingent nature secured by an assignment of the cash receipts from gate paddock and grand ¬ stand admissions and such other moneys as may lie realized from thu sale or leasing of commercial concessions or net profits resulting from the opera ¬ tion of the same also such moneys as the racing body may receive by virtue of the enforcement of racing rules during the period its receipts and in ¬ comes are under contract set over for the benefit of Racing Foundation Corporation of America AmericaThe The exact purpose and object of this division of responsibilities are to permit a jockey club coun ¬ try club or other association to exercise complete governmental control and diiection of all racing matters with total exemption from financial lia ¬ bility and risk while Racing Foundation Corpora ¬ tion waiving all interests direct or indirect in tlio matters which pertain to and involve racing or the direction and control of race meetings assumes to discharge the liabilities to be incurred by tho former in giving a race meeting for and in consideration of its treasury specifically a racing foundation be ¬ ing the sole beneficiary of the money that may bo derived from the business of racing racingOnly Only in the event that the moneys paid into tho treasury from these authorized sources are largely in excess of the financial requirements of the pri ¬ mary object of the Foundation may tho Hoard of Directors exercise the authority which is a second ¬ ary object of the charter viz buying building leasing and maintaining nice tracks as provided for specifically by the bylaws bylawsUnder Under no circumstances may the board of direc ¬ tors or ollicers of Racing Foundation Corporation of America give or conduct race meetings or oper ¬ ate race tracks involving the use of any moneys in the treasury derived from tho sale of preferred stock stockTho Tho ByLaws ByLawsThe The bylaws of the corporation are in full as follows followsARTICLE ARTICLE I ISection Section 1 The officers of this corporation shall consist of a president vicepresident secretary and treasurer who shall be elected by the directors and who shall perform the duties usually appertain ¬ ing to their respective offices Said officers shall hold office for one year and until their successors are elected and qualified qualifiedSec Sec 2 No person shall be eligible to the office of president vicepresident or treasurer who Is not a director and no person shall be eligible to the office of director who is not a holder of one or more shares of common stock A president a vicepresi ¬ dent treasurer or director who ceases at any time to be such stockholder shall at the same time cease to corporationSec hold any office in this corporation Sec C The board of directors may by resolution require any and all of the general ollicers whose acts are of a fiduciary nature to give a bond to the corporation with sufficient sureties conditioned for the faithful performance of the duties of their res ¬ pective ofliccs and such other conditions as may from time to time be required by the board of directors directorsSec Sec 4 The board of directors shall require that tho treasurer give a bond with ample sureties to protect the treasury of the corporation at all times against losses of any nature whatsoever which may grow out of sucli ollicers failure to properly perform the duties of his office officeSec Sec 5 All written contracts entered into in be ¬ half of this corporation sllall be signed by the presi ¬ dent and secretary and the corporate seal shall be thereto attached attachedARTICLE ARTICLE II Directors DirectorsSection Section 1 The affairs of this corporation shall be managed by a board of seven directors who shall lie elected bv the common share stockholders at the regular annual meetings and who shall hold office for one year and until their successors are elected electedSec Sec 2 The directors shall elect all other officers 6f the corporation and appoint all Its agents Va ¬ cancies in the board of directors may be filled by the remaining members of the board at any regular or special meeting of the board Sec A director shall receive no salary or com ¬ pensation for his services as director lie may re ceive a salary authorized by the board of directors if lie acts in another capacity as an officer of the corporation to whose office a salary may attach by proper resolution of the board of directors directorsSec Sec 4 The regular meeting of the board of di ¬ rectors shall be held immediately after the adjourn incut of each regular annual meeting of the common share stockholders Such meeting shall be held at the business office of tbe corporation at Gary Ind on the first day of November Should November I fall on Sunday annual meetings of the stockholders and board of directors shall be held on the Monday following followingSec Sec 5 Special meetings of the board of directors may be called at any time by the president by mail ing to each director a writien or printed notice stating the time place and object of holding such meetings at least one day before the time of such meeting meetingSec Sec 0 At all regular or special meetings of tho board of directors a majority of the directors shall constitute a quorum for the transaction of business but a smaller number may adjourn the meeting to another day or hour hourSec Sec 7 At each regular annual meeting of the stockholders the board of directors shall present a statement of condition of the treasury and report upon the plans if any for employing the treasury balances in accordance with object of Incorporation ARTICLE III IIIStock Stock StockSection Section 1 The capital stock of this corporation filial be divided into 5000 shares of the value of 100 each 100 common shares and 1900 preferred shares The voting power shall be vested in the common stock stockSec Sec 2 All certificates of slock shall lie signed by the president and secretary and the corporate seal shall be attached thereto theretoSec Sec o Shares of the capital stock may be trans ¬ ferred by endorsement of the certificate and it sur ¬ rendered to the secretary for cancellation where ¬ upon a new certificate shall be issued to the trans feree The board of directors may by resolution forbid the transfer of stock for a space of time not exceeding thirty oO days immediately before the meeting of the stockholders or immediately before the payableSec time when a dividend is payable Sec 4 The owners of both preferred and com mon stock shall bo entitled to receive dividends out of the net profits at the race of 7 per cent per annum Should there not be a sullicicnt surplus in the treasury to pay such dividends without dimin ¬ ishing the value of all outstanding shares below par the owners of preferred stock shall be paid a divi deud at the rate of 7 per cent por annum and the owners of tho common shares shall receive ratably a lesser dividend from the remaining net surplus if any Should the surplus in the treasury be iusuf ficient to pay a dividend at the rate of 7 per cent Hr annum to the owners of the preferred stock without impairing the parity of the outstanding stock or maintain a treasury required to carry on the business of the corporation such dividend shall IH passed iu which event no dividends at any rale shall be duo tho owners of common stock until nil passed dividends due the owners of the preferred stock shall first have been paid Dividends shall ho payable on the first day of November each year Sec yearSec t In case of liquidation or dissolution of the corporation tho holders of the preferred stock shall be entitled to be paid the par value of their shares and any dividends which may lie due thereon before a distribution of any kind may be made to the holders of tho common stock stockSec Sec i Distribution of profits in excess of the annual dividends at the rate of 7 per cent equal to an amount not less than 10 por cent to all outstand ing shares common and preferred may bo made at the discretion of the board of directors providing tlu par value of all outstanding shares may not be impaired thereby therebySec Sec 7 In the event of the passage of any net by the Legislature of the State of Indiana which may in effect restrict or invalidate the functions of tho corporation now conferred by its charter and sn set forth in its articles of incorporation or wbib may impair tho powers of the corporation to prop erly conserve the interests for which a treasury lias been created or to maintain tho parity of oit standing shares provisions may be made by 1 In ¬ board of directors for a conversion of all property personal or real belonging to tbe corporation into ash and a distribution of total cash assets of the corporation shall follow such distribution being in effect a settlement in full on all outstanding shares and in accordance with Art III Sec r Sec S In the event of the passage of any act by the Legislature of the State of Indiana or tbe passage of any federal or state acts which may 5 effect restrict or invalidate the functions of the cor noralion or impair the powers of the corporation to properly conserve the interests for which the treas ¬ ury has been created or to comply with Un pro visions of contracts expressed in certificates of pre ¬ ferred stock or which may otherwise impair the ability of the corporation to maintain the parity of outstanding stock of the corporation the holders of common stock at a special meeting which shall be called by the president or board of directors may iy a majority vote reduce tho capital slock of the cor poration to 10000 which shall bo the common stock and a disbursement of the moneys in Hi treasury shall be made to liquidate outstanding pre ¬ ferred stock in full such settlement calling for pay meiif to each share of amounts equal to par value of share and dividends which may lie due thereon and such additional payments as the equitable par ticipation of the preferred stock in the total assets of the corporation may enforce Should such siUI ment be impossible by reason of inadequacy of HJO Ireasurv the board of directors shall proceed under the authority conferred in Sec 7 preceding precedingSec Sec The board of directors at their discretion uiav by resolution authorize the treasurer to offer for public subscription such amount of the preferred slock iu Hie treasury as may lie required from time to lime and at their discretion may return any subscriptions in excess of the required amount amountARTICLE ARTICLE IV Stockholders Meetings MeetingsSection Section 1 The regular annual meeting of tbe vot iug stockholders of this corporation shall be held in the business ollice of the corporation in tho cilv of Gary Ind on the first day of November in cadi year at the hour of 10 a in provided that when said day shall fall on Sunday such meeting shall be held on the following day at the same place and hour Special meetings of the stockholders may be called by the directors directorsSec Sec 2 The secretary shall mail to each stock holder at his own place of residence a written or printed notice of the time and place of holding every annual and special stockholders meeting Such notice shall be mailed at least ten 10 days before the time at which tlie meeting is to be hold holdSec Sec At all meetings of the holders of common stock each stockholder shall be entitled to cast one vote for each share of common stock owned by him lie may vote in person or bv proxy the ap ointment leiiig made in writing and duly filed with the secre tary and by him entered upon the records of tin proceedings of the meeting meetingSec Sec 4 At any stockholders meeting a majority of tbe common stock must be represented in order to ccnstitute a quorum for the transaction of business but the stockholders present at any meeting ai though less than a quorum may adjourn the meeting to some oilier day or hour hourSec Sec 5 The president and secretary of the corpor ¬ ation shall act as president and secretary of each stockholders meeting unless the meeting shall other ¬ wise decide Any stockholders meeting may at any time elect a president and secretary of the meeting Mid thereupon the president and secretary of the cor ¬ poration Shall no longer act as president and secre ¬ tary of said meeting meetingARTICLE ARTICLE V VDischarging Discharging Liabilities Incurred in Giving Race Meetings MeetingsSection Section 1 The board of directors pursuant to au ¬ thority conferred by charter and articles of incorpor ¬ ation may upon proper application from a jockey club country club or other association qualified to give a racemeeting of not to exceed fifteen 15 days duration on a race course located in the state of Indiana such meeting to be in accordance with the provisions of tbe laws of said state authorizing racemeetings and regulating the conduct of indi ¬ viduals and associations giving the same authorize the treasurer of the corporation to set over for the uses of such qualified applicants or its agents a fund sufficient to meet all liabilities to be incurred in conducting such authorized racemeeting racemeetingProvided Provided said jockey club country club or asso ¬ ciation may have first submitted to the board of di ¬ rectors for their examination and approval a com ¬ plete budget of racing expenditures containing a specific statement of all liabilities to lie incurred with all contracts items guaranties money prom ises and obligations of whatsoever character incident to iindcnntiiigent upon carrying out a specific racing program of not more thaic fifteen 15 days duration and andProvided Provided further said applicant club or association through its authorized representatives or agent j agrees to make a proper and complete iccouiitiug to the board of directors of all revenues that may be derived from general admission to the grounds ad ¬ missions to grandstand and paddock and from other revenue earning sources incident to racing or from tho leasing or sale of commercial concessions or oper ¬ ation of the same by the applicant club or associa ¬ tion and andProvided Provided further that the proper contract baa lcen drawn up and duly signed by the authorized otlicers and agents of botli parties to said contract wherein the applicant jockey club country club or association agrees to set over for the sole uses of the treasury of Racing Foundation Corporation of America subject to the provision and direction of gaja contract all moneys so derived releasing aj claim thereto anil receiving from tlie Racing Foun ilatlon Corporation of America through its president Jirul treasurer upon a mutually satisfactory com ¬ pliance with the terms anil conditions of said con ¬ tract a proper receipt in full settlement of all serv ¬ ices money advanced and guaranties rendered and made by said corporation corporationSec Sec 2 Salaries due oflicials and agents of the corporation involving performances of duties incident to the execution of each separate contract entered Into with jockey clubs country clubs or associations shall be covered in the itemized list of expenses in common with those incurred by such clubs or asso ¬ ciations and enumerated by them in their racing budgets budgetsARTICLE ARTICLE VI Directors May Authorize BuildingRace Leasing Buying or Building Race Tracks TracksSection Section 1 Upon the approval of the board of di ¬ rectors pursuant to authority conferred by charter uud articles of incorporation land building and appurtenances required for racing may be purchased and maintained or land purchased and construction and maintenance of a complete racing plant author ¬ ized providing appropriations of moneys necessary for the purposes shall not deplete the surplus in the treasury and Impair the primary object for which such treasury is maintained viz the uses of treas ¬ ury for the purposes set forth in Art V VARTICLE ARTICLE VII VIISection Section 1 No contract may be made or entered into by the board of directors nor by an officer of the corporation acting as an agent for the corpora ¬ tion wherein any illegal acts of others may be aided or abetted and whereby the treasury may re reive any benefits whatsoever or whereby benefits may accrue to others not compatible with the exor ¬ cise of proper corporate authority authorityARTICLE ARTICLE VIII VIIIAmendments Amendments AmendmentsSection Section 1 These bylaws or any of them may not be altered amended added to or repealed with ¬ out the consent of a majority of holders of preferred ami common stock each stockholder being entitled to cast one vote for each share of stock The conditions engraved in the certificates of the preferred stock of Racing Foundation Corporation of America a 7 per cent preferred cumulative par ¬ ticipating and limited risk stock are as follows followsOne One hundred dollars has been paid into the treasury of Racing Foundation Corporation of Ainer iwi for each share represented in this certificate by the subscriber hereof with the express understanding by and the consent of the subscriber or any subse ¬ quent holder thereof thereofThat That the moneys so subscribed together with all other moneys in the treasury of the corporation may be used for such purposes as accord with the char ¬ ter of the corporation subject to its articles of in ¬ corporation and authorized by its bylaws 1 Article V Section 1 The board of direc ¬ tors pursuant to authority conferred by charter and articles of incorporation may upon proper applica lion from a jockey club country club or other asso ¬ ciation qualified to give a race meeting of not to fxfeeil fifteen 15 days duration on a race course located within the state of Indiana such meeting to be in accord with the provisions of the laws of fiaid state authorizing race meetings and regulating Hie conduct of individuals and associations giving the same set over for the uses of such qualified ap ¬ plicant or its agents a fund sufficient to meet all liabilities to bo incurred in conducting such author ¬ ized race meeting meetingProvided Provided said jockey club country club associa ¬ tion may have first submitted to the board of direc ¬ tors of the Racing Foundation Corporation of America for their examination and approval a com ¬ plete budget of racing expenditures containing a upcciilc statement of all liabilities to be incurred with all contracts items guaranties money prom ises and obligations of whatsoever character incident to and contingent upon carrying out a specific racing program of not more than fifteen 15 days dura ¬ tion and andProvided Provided further said applicant club or Asso ¬ ciation through its authorized representatives or agents agrees to make a proi or and complete ac ¬ counting to tiie board of directors of the Racing Foundation Corporation of America of all revenues that may be derived frbui general admissions to the grounds grandstand and paddock admissions and other revenue producing sources incident to racing or from the leasing or sale of commercial concessions or operation of same by the applicant club or as ¬ sociation and andProvided Provided further that the proper contract has been drawn up and duly signed by the authorized officers and agents of both parties to said contract wherein the applicant jockey club country club or association agrees to set over for the sole uses of the Racing Foundation Corporation of America sub ¬ ject to the provisions and direction of said contract all moneys so derived releasing all claim thereto and receiving from the Racing Foundation Corpora ¬ tion of America through its president and treasurer upon a mutually satisfactory compliance with the terms and conditions of said contract a proper re ¬ ceipt In full settlement of all services money ad ¬ vances and guaranties rendered and made by said corporation 2 Article VI Section 1 That upon approval of the board of directors pursuant to authority con ferrcd by charter and articles of incorporation land buildings and appurtenances required for racing may be purchased and maintained or land purchased and construction and maintenance of racing plant author ¬ ized providing appropriation of moneys necessary for the purpose shall not deplete the reserve in the treasury and impair the primary object for which such treasury is maintained viz The uses of treasury for the purposes set forth in article V VNo No cost of organization or promotion may be paid out of funds in the treasury derived from the sale of preferred stock Such liabilities are to be dis ¬ charged under a contingent contract which permits the setting over 5f preferred stock for the benefit of holders of contracts covering promotion and organiza ¬ tion including legal services representing an amount equal to 10 per cent of all stock of the corporation sold at par Such shares shall be released from es ¬ crow by the board of directors proportionately with each 10 per cent distribution of profits to outstand ¬ ing stock over and above the 7 per cent annual divi ¬ dend due on the same Under this provision of pro ¬ motion and organization contracts when outstand ¬ ing shares for which par has been paid have re ¬ ceived dividends equal to their face value in addition to the 7 per cent annual dividends pledged to said slock holders ot promotion contracts will have re ¬ ceived full compensation in an amount of stock equal to 10 per cent of such benefited shares sharesIn In the event of the passage of any act by the Legislature of the State of Indiana which may in effect restrict or invalidate the functions of the cor ¬ poration as set forth in its articles of incorporation or impair the powers of the corporation to properly conserve the interests for which a treasury had been created or maintain the parity of outstanding shares provisions may be made by the board of directors for a conversion of all property personal and real belonging to the corporation into cash and a distribution of total cash assets shall follow such distribution being in effect a settlement in full for all outstanding shares in accordance with Art III Sec 5 of the bylaws bylawsIn In the event of the passage of any act by the Legislature of the State of Indiana or the passage of any federal or state acts which may in effect restrict or invalidate the functions of the corpora ¬ tion or impair the powers of the corporation to prop ¬ erly conserve the interests for which the treasuy has been created or to comply with th provisions of i contracts expressed in certificates of preferred stock or which may otherwise impair the ability of the corporation to maintain the parity of outstanding stock of the corporation the holders of common stock at a special meeting which shall be called by the president or board of directors may by a majority vote reduce the capital stock of the corporation to 10000 which shall be the common stock and a dis biirsement of the moneys in the treasury shall be made to liquidate outstanding preferred stock in full such settlement calling for payment to each share of amounts equal to par value of share and dividends which may be due thereon and such addi ¬ tional payments as the equitable participation of the preferred stock in the total assets of the cor ¬ poration may enforce Should such settlement be impossible by reason of inadequacy of the treasury the board of directors shall proceed under the au ¬ thority conferred in Art III Sec 7 of the by ¬ laws
