Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant  ☒

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 Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

Canterbury Park Holding Corporation

(Name of Registrant as Specified In Its Charter)

Canterbury Park Holding Corporation


(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 all boxes that apply):

 

No fee required.

 

 

Fee paid previously with preliminary materials

 

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

CANTERBURY PARK HOLDING CORPORATION

1100 Canterbury Road
Shakopee, Minnesota 55379
(952) 445-7223

 


 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

June 2, 20226, 2024

 


 

Notice is hereby given that the Annual Meeting of Shareholders of Canterbury Park Holding Corporation will be held in the Triple Crown Room at Canterbury Park, 1100 Canterbury Road, Shakopee, Minnesota 55379, on Thursday, June 2, 2022,6, 2024, beginning at 10:00 a.m. local time, for the following purposes:

 

 

1.

To elect fiveseven directors to hold office until the next Annual Meeting of Shareholders or until their successors are elected and qualified; and

 

 

2.

To ratify the appointment of Wipfli LLP as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2022; and

3.

To approve, on a non-binding basis, the compensation paid to our named executive officers.2024.

 

The Board of Directors has fixed the close of business on April 7, 202211, 2024 as the record date for the determination of shareholders entitled to notice of and to vote at the meeting.

 

As our Annual Report to Shareholders for 2021,2023, we are also separately supplying our Annual Report on Form 10-K for the year ended December 31, 20212023 as filed with the Securities and Exchange Commission (SEC) on March 18, 2022.12, 2024.

 

All shareholders are cordially invited to attend the Annual Meeting of Shareholders in person. Whether or not you expect to attend, please vote as soon as possible. If your shares are registered in your name, information regarding how you can vote in person, over the Internet or by mail is provided in the materials sent to you, and, if you have received a proxy card, it provides information on how to vote your shares. If you hold shares beneficially through a financial institution or other nominee, please follow the voting instructions it provides. Shareholders who attend the meeting may revoke their proxies and vote in person if they so desire.

 

 

By Order of the Board of Directors,

/s/ Randall D. Sampson

Randall D. Sampson

President and Chief Executive Officer

 

Shakopee, Minnesota

 

April 19, 202226, 2024

 

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS:

 

Copies of this Notice, the proxy statement following this Notice and the Companys Annual Report on Form 10-K for its 20212023 fiscal year are available at: https://canterbury-park-holding-corporation.ir.rdgfilings.com/all-sec-filings/at www.proxyvote.com..

 

 

 

CANTERBURY PARK HOLDING CORPORATION

 

PROXY STATEMENT

 

TABLE OF CONTENTS

 

GENERAL INFORMATION

1
  

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

1

What is the purpose of the meeting?

1

Will any other business be conducted?

1

How does the Board recommend that I vote?

1

Who is entitled to vote at the meeting?

21

What is the difference between a shareholder of record and a street name holder?

2

What are the voting rights of the shareholders?

2

How many shares must be present to hold the meeting?

2

How do I vote my shares?

2

What does it mean if I receive more than one proxy card or voting instruction card?

3

May I vote my shares in person at the meeting?

3

What vote is required for each proposal?

3

How are votes recorded and counted?

3

May I change my vote?

4

Who pays for the cost of proxy preparation and solicitation?

4

How can a shareholder present a proposal at the 20232025 Annual Meeting?

4

How can a shareholder get a copy of the Company’s 20212023 Annual Report on Form 10-K?

45

What if I do not specify a choice for any matter when returning my proxy?proxy

45
  

CORPORATE GOVERNANCE AND BOARD MATTERS

56

General.

56

Board Leadership.

6

Director Independence.

56

Board Committees and Committee Independence.

57

Meeting Attendance.

68

Director Nominations.

6

Retiring Director.8

8

Nominations by Shareholders.

89

Code of Conduct.

810

Contacting the Board of Directors.

910

Board’s Role in Managing Risk.

910
  

PROPOSAL 1 ELECTION OF DIRECTORS

1011
  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

1214
  

AUDIT COMMITTEE REPORT

1315
  

PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1416

Fees Billed and Paid to Independent Registered Public Accounting Firms.

1416

Audit Committee Pre-Approval Policies and Procedures.

1517

 

i

 

PROPOSAL 3 ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

16

EXECUTIVE COMPENSATION PROGRAMS AND PRACTICES

1718

Role of the Compensation Committee in the Compensation Process.

1718

Objectives of Our Compensation Programs.

1718

Information about the Components of our Compensation Programs.

1819

Hedging, Pledging and Insider Trading Policies

21

Employment Arrangements with Named Executive Officers and Post-Employment Compensation.

2021

Other Compensation.

2022

Summary Compensation Table.

2123

Outstanding Equity Awards at Fiscal Year-End.

2124

Pay Versus Performance.

25
  

DIRECTOR COMPENSATION

2228

Cash Compensation.

2228

Equity Compensation.

2228

20212023 Director Compensation.

2329
  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

2329
  

OTHER INFORMATION

2430

Shareholder Proposals and Nominees for 20232025 Annual Meeting.

2430

Annual Report.

2530

Householding of Proxy Materials.

31

Other Matters.

2531

 

ii

 

CANTERBURY PARK HOLDING CORPORATION

 


 

PROXY STATEMENT FOR JUNE 2, 20226, 2024 ANNUAL MEETING OF SHAREHOLDERS

 


 

GENERAL INFORMATION

 

This proxy statement is being provided on behalf of the Board of Directors (the “Board”) of Canterbury Park Holding Corporation (the “Company,” “Canterbury,” or “we”) in connection with the Annual Meeting of Shareholders to be held at Canterbury Park, 1100 Canterbury Road, Shakopee, Minnesota 55379, on Thursday, June 2, 2022,6, 2024, beginning at 10:00 a.m. Central Daylight Time (the “Annual Meeting”). The Board of Directors is soliciting proxies to be voted at the Annual Meeting, and at any adjournment and reconvening of the meeting. We first made this proxy statement available to our shareholders on or about April 19, 2022.26, 2024.

 

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the purpose of the meeting?

 

At our Annual Meeting, shareholders will be asked to vote on threetwo matters. These are:

 

 

The election of fiveseven directors; and

 

 

Ratifying the appointment of Wipfli LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022; and

Approval, on a non-binding basis, the compensation paid to our named executive officers.2024.

 

During the informal portion following the formal portion of the Annual meeting, the Company’s management will also report on the Company’s performance during the last fiscal year and respond to appropriate questions from shareholders.

 

Will any other business be conducted?

 

While we do not expect that other business will be conducted at the Annual Meeting, we will consider other business, if any, that is properly presented at the meeting.

 

How does the Board recommend that I vote?

 

The Board of Directors named in this proxy statement recommends a vote:

 

 

“FOR” the election of the fiveseven nominees recommended by the Board of Directors; and

 

 

“FOR” the ratification of the appointment of Wipfli LLP; andLLP.

“FOR” the approval, on a non-binding basis, the compensation paid to our named executive officers.

1

Who is entitled to vote at the meeting?

 

If you are a shareholder of record at the close of business on April 7, 2022,11, 2024, you are entitled to vote at the meeting. As of April 7, 2022,11, 2024, there were 4,831,6864,982,870 shares of common stock outstanding and eligible to vote.

1

 

What is the difference between a shareholder of record and a street name holder?

 

If your shares are registered directly in your name, you are considered the “shareholder of record” for those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of those shares, and your shares are held by the financial institution or nominee in “street name.” If you are a “street name” holder, you will receive a voting instruction card, which is very similar to a proxy card. Please follow the voting instructions as directed on your voting instruction card in order to ensure your shares are voted at the meeting.

 

What are the voting rights of the shareholders?

 

Holders of common stock are entitled to one vote per share. There is no cumulative voting for the election of directors.

 

How many shares must be present to hold the meeting?

 

A quorum is necessary to hold the meeting and conduct business. The presence, in person or by proxy, of the holders of a majority of the voting power of the shares entitled to vote at a meeting constitutes a quorum.

 

If the broker, bank, trustee or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform us that it does not have the authority to vote on the matter with respect to your shares. This is generally referred to as a “broker non-vote.” Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.

 

How do I vote my shares?

 

If you are a shareholder of record, you may give a proxy to be voted at the meeting either by:

 

 

Accessing the Internet website specified on your proxy card;

 

 

Calling the toll-free number specified on your proxy card; or

 

 

Signing and returning your proxy card in the postage-paid envelope provided.

 

If you hold shares beneficially in street name, you may also vote your shares by accessing the Internet website specified on your voting instruction card, by telephone or by mail following the instructions provided to you by your broker, bank, trustee or nominee. The telephone and Internet voting procedures have been set up for your convenience. The procedures have been designed to authenticate your identity, to allow you to give voting instructions, and to confirm that those instructions have been recorded properly. You may also vote in person at the meeting as described below in “May I vote my shares in person at the meeting?” below.

 

2

 

What does it mean if I receive more than one proxy card or voting instruction card?

 

It means you hold shares of the Company stock in more than one account. To ensure that all of your shares are voted, sign and return each proxy card or voting instruction card or, if you vote by telephone or via the Internet, vote once for each proxy card or voting instruction card you receive.

What is a Notice of Internet Availability of proxy materials?

As permitted by rules adopted by the SEC, we are furnishing proxy materials to many of our shareholders via the internet. On or about April 26, 2024, we mailed or otherwise made available to our shareholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our Annual Report, via the internet at www.proxyvote.com. The Notice of Internet Availability also includes instructions to access your form of proxy to vote via the internet at www.proxyvote.com. Certain shareholders, in accordance with their prior requests, have received e-mail notification of how to access our proxy materials and vote via the internet at www.proxyvote.com or have been mailed paper copies of our proxy materials and proxy card.

 

May I vote my shares in person at the meeting?

 

Yes. If you are a shareholder of record, you may vote your shares at the meeting by completing a ballot at the meeting. Even if you currently plan to attend the meeting, however, we recommend that you submit your proxy ahead of time so that your vote will be counted if, for whatever reason, you later decide not to attend the meeting.

 

If you hold your shares in street name, and then decide to attend the meeting, you may vote your shares in person at the meeting only if you obtain a signed proxy from your broker, bank, trustee or other nominee giving you the right to vote these shares at the meeting.

 

What vote is required for each proposal?

 

Directors are elected by a plurality of the votes cast at the Annual Meeting by holders of common stock voting for the election of directors. This means that since shareholders will be electing fiveseven directors as part of Proposal 1, the fiveseven nominees receiving the highest number of votes will be elected.

 

The affirmative vote of a majority of the outstanding shares of the Company’s common stock voting at the annual meeting in person or by proxy is required for Proposal 2, shareholder ratification of the appointment of Wipfli to serve as the Company’s independent registered public accounting firm for the 20222024 fiscal year.

Approval of Proposal 3 relating to the compensation paid to our named executive officers, requires the affirmative vote of the holders of the majority of the shares present, in person or by proxy, and entitled to vote on Proposal 3.

 

How are votes recorded and counted?

 

Shareholders may either vote FOR or WITHHOLD authority to vote for each nominee for election to the Board of Directors identified in Proposal 1. Shareholders may vote FOR, AGAINST, or ABSTAIN on Proposals 2 and 3.Proposal 2.

 

If you WITHHOLD authority to vote for one or more of the nominees for director, this will have no effect on the election of any director from whom votes are withheld because directors are elected by a plurality.

 

Abstentions will be counted for purposes of calculating whether a quorum is present at the annual meeting, but are not counted for the purposes of determining whether shareholders have approved that matter. Therefore, if you vote ABSTAIN from voting on ProposalsProposal 2, and 3, your abstentionABSTAIN vote has the same effect as a vote against that proposal.

3

 

Brokers who hold shares in street name have discretionary authority to vote on certain “routine” items even if they have not received instructions from the persons entitled to vote these shares. However, brokers do not have authority to vote on “non-routine” items without these instructions. If you hold your shares in street name and do not provide voting instructions to your broker or nominee, your shares will be considered to be “broker non-votes” and will not be voted on any proposal on which your broker or nominee does not have discretionary authority to vote. Shares that constitute broker non-votes will be present at the meeting for the purpose of determining a quorum but are not considered entitled to vote on proposals for which no instructions were given. Proposal 2, the ratification of the selection of Wipfli as the Company’s independent registered public accounting firm, is the only routine proposal on the ballot for the 2024 Annual Meeting. Your broker or nominee has discretionary authority to vote your shares on the ratification of the appointment of Wipfli as our independent registered public accounting firm even if your broker or nominee does not receive voting instructions from you.

3

directors, is non-routine.

 

May I change my vote?

 

Yes. If you are a shareholder of record, you may change your vote and revoke your proxy at any time before it is voted at the meeting in any of the following ways:

 

 

By sending a written notice of revocation to our Corporate Secretary;

 

 

By submitting another properly signed proxy card with a later date to our Corporate Secretary;

 

 

If you voted by telephone or through the Internet, by voting again by telephone or through the Internet prior to the close of the voting facility; or

 

 

By voting in person at the meeting.

 

If you are a street name holder, please consult your broker, bank, trustee or nominee for instructions on how to change your vote.

 

All shares represented by valid, unrevoked proxies will be voted at the Annual Meeting and any adjournment(s) or postponement(s) thereof.

 

Who pays for the cost of proxy preparation and solicitation?

 

We pay for the cost of preparing this proxy statement and this solicitation, including the charges and expenses of brokerage firms or other nominees for forwarding proxy materials to beneficial owners of shares held in street name.

 

We are soliciting proxies primarily by mail. In addition, proxies may be solicited by telephone or facsimile, or personally by our directors, officers and regular employees. These individuals will receive no compensation (other than their regular salaries) for these services.

 

How can a shareholder present a proposal at the 20232025 Annual Meeting?

 

In order for a shareholder proposal to be considered for inclusion in our proxy statement for the 20232025 Annual Meeting, the written proposal must be received at our principal executive offices by the close of business on December 21, 2022.28, 2024. The proposal must comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials. Please review “Other Information – Shareholder Proposals and Nominees for 20232025 Meeting” at the end of this proxy statement.

4

 

In addition, shareholders should review “Other Information – Shareholder Proposals and Nominees for 20222025 Meeting” for more information regarding the steps to be taken under our bylaws for such proposal to be properly brought before shareholders at our 20232025 Annual Meeting, whether or not the proposal would be included in our proxy statement for that meeting.

 

How can a shareholder get a copy of the Companys 20212023 Annual Report on Form 10-K?

 

OurCopies of the notice of the Annual Meeting, this proxy statement and our Annual Report on Form 10-K for 2023 are available at www.proxyvote.com. For shareholders who have been mailed paper copies of our proxy materials and proxy card, the paper copies include our Annual Report on Form 10-K for our fiscal year ended December 31, 2021 is being supplied as our Annual Report to Shareholders for 2021 with this proxy statement. It is also available electronically with this proxy statement at the link on the Notice of Annual Meeting above.2023. Our Annual Report on Form 10-K is also available at our website, www.canterburypark.com,, by following the “SEC Filings” link in the “Investors” page.

 

What if I do not specify a choice for any matter when returning my proxy?

 

If you just sign and submit your proxy without voting instructions, the persons named as proxies on the proxy card will vote your shares “FOR” the election of each of the nominees to the Board of Directors presented in Proposal 1 and “FOR” each of Proposals 2 and 3.Proposal 2.

 

If any other matters come up for a vote at the meeting, the proxy holders will vote according to the recommendations of our Board of Directors or, if there is no recommendation, in their own discretion.

 

45

 

CORPORATE GOVERNANCE AND BOARD MATTERS

General.

 

Our Board of Directors is committed to sound and effective corporate governance practices. Our policies comply with the rules of the Securities and Exchange Commission (“SEC”) and listing standards of the Nasdaq Stock Market (“Nasdaq”). We also periodically review our governance policies and practices in comparison to those suggested by authorities in corporate governance and the practices of other public companies.

 

You can access the charters of our Audit Committee, Compensation Committee, Governance Committee, and our Code of Conduct and our Governance Guidelines in the Investors section of our website at www.canterburypark.com or by writing to the Investor Relations Department at: Canterbury Park Holding Corporation, 1100 Canterbury Road, Shakopee, Minnesota 55379, or by e-mailing our Investor Relations Department at investorrelations@canterburypark.com.investorrelations@canterburypark.com.

Board Leadership.

The roles of our Board Chair and Chief Executive Officer are combined and Mr. Sampson has served in this combined role since October 3, 2019. Mr. Sampson is responsible for the general management and operation of the Company, providing guidance and oversight to senior management and formulating the strategic direction of the Company. As Board Chair, Mr. Sampson is also responsible for the content, quality and timeliness of information provided to our Board and consults with our Board regarding oversight of our business affairs.

In addition, the Board appointed Carin J. Offerman in October 2019 as the lead independent director to, among other things, facilitate communication between management and the independent directors. The responsibilities of the lead independent director include:

consulting with the Board Chair regarding the information, agendas and schedules of Board and Board committee meetings, including the ability to add items to the agendas for any meeting;

scheduling, setting the agenda for and serving as chair of meetings of independent directors;

serving as principal liaison between the independent directors and the Board Chair and between the independent directors and senior management;

presiding at all meetings of the Board at which the Board Chair is not present, including executive sessions of the independent directors; and

in the event of the death, incapacity, resignation or removal of the Board Chair, serving as the acting Board Chair until a new Board Chair is selected.

The Company believes its current leadership structure is appropriate given the nature of the industry in which it operates and the leadership structures of its peer group.

 

Director Independence.

 

The Board of Directors follows director independence guidelines that are consistent with the definitions of “independence” set forth in Nasdaq’s listing standards. In accordance with these guidelines, the Board of Directors has reviewed and considered facts and circumstances relevant to the independence of each of our current directors and our director nominees and has determined that, each of the following current directors qualifies as “independent” under Nasdaq listing standards: Maureen H. Bausch, Mark Chronister, John S. Himle, Carin J. Offerman, Damon E. Schramm and Dale H. Schenian.Peter Ahn. Current director Randall D. Sampson does not qualify as independent under Nasdaq listing standards because he is our President and Chief Executive Officer.

 

6

Board Committees and Committee Independence.

 

Board Committees. Our Board of Directors has established three committees: an Audit Committee, a Compensation Committee and a Governance Committee. The composition and function of each of these committees are set forth below. Each of the Audit Committee, Compensation Committee and Governance Committee operates under a written charter adopted by the Board of Directors that is available at www.canterburypark.com under the tab “Corporate Governance Documents” on the “Investors” page.

 

Audit Committee. The Audit Committee is responsible for the engagement, retention and replacement of the independent auditors, approval of transactions between us and a director or executive officer unrelated to service as a director or officer, approval of non-audit services provided by our independent registered public accounting firm, oversight of our accounting, financial reporting and internal controls, and the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters. Wipfli, our independent registered public accounting firm, reports directly to the Audit Committee. The Audit Committee operates under a formal charter that is reviewed annually. The current members of the Audit Committee are Mark Chronister (Chair), Carin J. Offerman, Peter Ahn and John S. Himle, each of whom is independent under Rule 10A-3 of the Exchange Act and Nasdaq listing standards. Further, the Board of Directors has determined that Ms. Offerman and Mr.Messrs. Ahn and Chronister meet the Securities and Exchange Commission definition of an “audit committee financial expert.” As required by its charter, all of the members of the Audit Committee meet the Nasdaq requirements regarding financial literacy and financial sophistication. The Audit Committee held four regular meetings during 2021.2023.

 

Compensation Committee. The Compensation Committee provides oversight of our overall compensation strategy, reviews and recommends to the Board of Directors the compensation of our Chief Executive Officer and the other executive officers, administers our equity-based compensation plans and oversees our 401(k) Plan and similar employee benefit plans. The Compensation Committee operates under a charter that is reviewed annually. The current members of the Compensation Committee are Carin J. Offerman (Chair), Maureen H. Bausch, Damon E. Schramm and Mark Chronister, each of whom is independent under Nasdaq listing standards and the independence requirements of the Securities and Exchange Commission. The Compensation Committee held twothree meetings in 2021.2023.

5

 

Governance Committee. Under its charter, the Governance Committee assists the Board in identifying qualified individuals to become directors, makes recommendations to the Board concerning the size, structure and composition of the Board and its committees and monitors the process to assess the Board’s effectiveness. In evaluating potential nominees to the Board, the Governance Committee will consider the criteria set forth in our Governance Guidelines and will consider candidates proposed by shareholders and evaluates them using the same criteria as for other candidates. Our Governance Guidelines are available at www.canterburypark.com under the tab “Corporate Governance Documents” on the “Investors” page. In 2022, the Governance Committee adopted a formal diversity policy. When evaluating candidates for nomination as new directors, the Governance Committee will consider, and will ask any search firm that it engages to provide, a set of candidates that includes qualified women and individuals from historically underrepresented groups. In 2021,groups, in accordance with the Company’s formal diversity policy. The Governance Committee began to exercise oversightalso oversees on behalf of the Board overthe Company’s environmental, social, and governance (ESG) matters. In 2022, the charter of the Governance Committee expanded the responsibility of the Governance Committee to include the responsibility tomatters, including periodically reviewreviewing and assessassessing the Company’s significant ESGthe issues, risks and trends, and overseeoverseeing our engagement with, and disclosures to, shareholders and other interested parties concerning ESGthese matters. The current members of the Governance Committee are John S. Himle (Chair), Carin J. Offerman,Peter Ahn, Damon E. Schramm and Maureen H. Bausch. The Governance Committee held two meetings in 2021.2023.

7

 

Meeting Attendance.

 

Our Board of Directors meets regularly during the year to review matters affecting the Company and to act on matters requiring Board approval. In 2021,2023, the Canterbury Board held five18 regular meetings at which directors participated in person, by telephone, or video conference, and in addition held several informal meetings in which all or a majority of Board members participated. Meetings generally included an executive session without the presence of non-independent directors and management.

 

Each of our directors is expected to make a reasonable effort to attend all meetings of the Board, applicable committee meetings and our annual meeting of shareholders. Each of our current directors attended at least 75% of the meetings of the Board and committees on which he or she served during 2021. Due2023. Under our governance guidelines, each director is strongly encouraged to the COVID-19 pandemic, only threeattend our Annual Meeting of Shareholders. Each of the Company’s directors who were serving as of June 3, 2021 attended the Company’s 20212023 Annual Meeting of Shareholders.

 

Director Nominations.

 

Nominee Selection Process. The Governance Committee is responsible for identifying, evaluating and recommending qualified candidates for nomination as directors. The nominees for the Annual Meeting were selected by the Governance Committee in March 2022 and all2024. All nominees were elected by shareholders at the 20212023 Annual Meeting of Shareholders.

The Governance Committee will consider candidates for Board membership suggested by its members, other Board members as well as management and shareholders, subject to the requirements of our bylaws.

 

When identifying and evaluating new nominees to the Board, of Directors, the Governance Committee generally first establishes a profile of the new Board member based upon criteria for selection as a nominee and the specific qualities or skills being sought based on input from members of the Board and, if the Governance Committee deems appropriate, a third-party search firm. The Governance Committee evaluates any candidates identified by reviewing the candidates’ biographical information and qualifications and checking the candidates’ references. One or more Governance Committee members and other directors may interview the prospective nominees in person, by video or by telephone. After completing the evaluation, the Governance Committee makes a recommendation to the full Board of the nominees to be presented for the approval of the shareholders or for election to fill a vacancy.

 

6

As disclosed elsewhere, Mr. Schenian will not be standing for re-election at the Annual Meeting due to his retirement from the Board. As part of the Board succession planning process that is overseen by the Governance Committee, the Governance Committee has initiated a director recruitment process with a view toward enhancing the gaming, real estate and other expertise relevant to our business and strategic direction and enhancing the diversity of the Board. In that respect, in March 2022, the Governance Committee adopted a formal policy with respect to diversity through its charter. Under that policy, when evaluating candidates for nomination as new directors, the Governance Committee will consider, and will ask any search firm that it engages to provide, a set of candidates that includes qualified women and individuals from historically underrepresented groups.

Our Governance Guidelines provide that the Board should generally have between five and nine directors. Following the Annual Meeting, theThe Board of Directors will beis comprised of fiveseven directors. The Governance Committee believes that a Board of six or seven directors would be most appropriate at this time and intends to target its director recruitment process accordingly. In determining the number of directors serving on the Board, the Governance Committee will seekseeks to ensure that the Board of Directors has a diversity of talent and experience to draw upon, is able to appropriately staff the committees of the Board and is able to engage the directors in Board and committee service, all while maintaining efficient function and communication among members.

 

Criteria for Nomination to Board; Diversity Policy. While the Governance Committee has no specific minimum qualifications for director nominees, the Governance Committee has adopted a policy regarding critical factors to be considered in selecting director nominees, which include:

 

 

the nominee’s personal and professional ethics, integrity and values;

 

 

the nominee’s intellect, judgment, foresight, skills, experience (including understanding of marketing, operations, finance, real estate development events, gaming/racing and other elements relevant to the success of an organization such as Canterbury Park) and achievements, all of which are viewed in the context of the overall composition of the Board;

8

 

 

the absence of any conflict of interest (whether due to a business or personal relationship) or legal impediment to, or restriction on the nominee serving as a director;

 

 

having a majority of independent directors on the Board; and

 

 

representation of the long-term interests of the shareholders as a whole and a diversity of backgrounds and expertise, which are most needed and beneficial to the Board and Canterbury Park.

 

In selecting the nominees, the Governance Committee reviews the composition of the full Board to determine the qualifications and areas of expertise needed for effective governance.

 

The Governance Committee is committed to Board diversity and takes into account the personal characteristics, experience and skills of current and prospective directors, including gender, race and ethnicity, to ensure that a broad range of perspectives is represented on the Board to effectively perform its governance role and oversee the execution of our strategy. As noted above,In March 2022, the Governance Committee adopted a formal policy with respect to diversity through its charter. Under that policy, when evaluating candidates for nomination as new directors, the Governance Committee will consider, and will ask any search firm that it engages to provide, a set of candidates that includes qualified women and individuals from historically underrepresented groups.

 

Canterbury Board Diversity. RecentlyNasdaq adopted Nasdaq listing requirements require each listed company to have, or explain why it does not have, two diverse directors on the Board. Smaller reporting companies, like Canterbury Park, can achieve these diversity objectives by having two female directors. Accordingly,We believe our current Board composition is in compliance with the Nasdaq diversity requirements, which begin to taketook effect in August 2023.

7

 

The table below provides certain highlights of the composition of our current Board members. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).

 

Board Diversity Matrix (As of April 7, 2022)

Total Number of Directors

6

 

Female

Male

Non-
Binary

Did Not
Disclose
Gender

Part I: Gender Identity

 

Directors

2

4

0

0

Part II: Demographic Background

  

White

2

4

0

0

LGBTQ+

0

Did Not Disclose Demographic Background

0

Retiring Director.

Director Dale H. Schenian will be retiring from the Board at the Annual Meeting and therefore, is not standing for reelection at the Annual Shareholders. We want to express our sincere appreciation for Mr. Schenian’s faithful and dedicated service. Mr. Schenian was a founding director of the Company in 1994 and has been a director since the Company was incorporated. Mr. Schenian served as Vice Chair of the Board from 1994 to October 2019 and upon retiring as Vice Chair of the Board, assumed the title as Vice Chairman Emeritus. The continuing directors are grateful for Mr. Schenian’s loyal and dedicated service to the Company.

Board Diversity Matrix (As of March 7, 2024)

Total Number of Directors

7

 

Female

Male

Non-
Binary

Did Not
Disclose
Gender

Part I: Gender Identity

 

Directors

2

5

0

0

Part II: Demographic Background

  

White

2

4

0

0

Asian

0

1

0

0

LGBTQ+

0

Did Not Disclose Demographic Background

0

 

Nominations by Shareholders.

 

The Board of Directors will consider qualified individuals proposed by shareholders along with other potential candidates when determining what individuals it will recommend for election at our annual shareholders meeting. Shareholders can submit proposed candidates, together with appropriate biographical information, to the Board of Directors at: Canterbury Park Holding Corporation, 1100 Canterbury Road, Shakopee, Minnesota 55379, Attention: Chief Executive Officer. Submissions will be forwarded to the independent directors for review and consideration.

 

Our bylaws provide that shareholders may directly nominate an individual for election to the Board at our shareholders meeting if certain procedures are timely followed. A shareholder wishing to formally nominate an individual to election to the Board at a future shareholder meeting should timely follow the procedure set forth below under the caption “Other Information – Shareholder Proposals and Nominees for 20232025 Annual Meeting -- Shareholder Nominations” at the end of this proxy statement.

9

 

Code of Conduct.

 

We have adopted a Code of Conduct (the “Code”) applicable to all of our officers, directors, employees and consultants that specifies guidelines for professional and ethical conduct in the workplace. The Code also incorporates a special set of guidelines applicable to our senior financial officers, including the chief executive officer, chief financial officer and others involved in preparation of our financial reports. These guidelines are intended to promote the ethical handling of conflicts of interest, full and fair disclosure in periodic reports filed by us and compliance with laws, rules and regulations concerning this periodic reporting. The Code is available at www.canterburypark.com under the tab “Corporate Governance Documents” on the “Investors” page.

8

 

Contacting the Board of Directors.

 

Any shareholder who desires to contact our Board of Directors may do so by writing to the Board of Directors, generally, or to an individual director at: Canterbury Park Holding Corporation, 1100 Canterbury Road, Shakopee, Minnesota 55379. Communications received electronically or in writing are distributed to the full Board of Directors, a committee or an individual director, as appropriate, depending on the facts and circumstances described in the communication received. For example, a complaint regarding accounting, internal accounting controls or auditing matters will be forwarded to the Chair of the Audit Committee for review. Complaints and other communications may be submitted on a confidential or anonymous basis.

 

Boards Role in Managing Risk.

 

In general, management is responsible for the day-to-day management of the risks the Company faces, while the Board, acting as a whole and through its standing committees, has responsibility for oversight of risk management. Senior management attends the regular meetings of the Board and is available to address questions and concerns raised by the Board related to risk management, and our Board regularly discusses with management identified major risk exposures, their potential financial and other business impact on the Company and steps that can be taken to manage these risks.

 

The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls, cybersecurity risk, and compliance with legal and regulatory requirements. The Audit Committee reviews the Company’s financial statements and meets with the Company’s independent registered public accounting firm at regularly scheduled meetings to receive reports on the firm’s review of the Company’s financial statements. The Compensation Committee is responsible for managing risks in connection with our compensation policies, programs and practices and for managing risk associated with succession planning for the Chief Executive Officer position. The Governance Committee is responsible for managing risk associated with succession planning for the Board of Directors, as well as ESGenvironment, social and corporate governance matters generally.

 

910

 

PROPOSAL 1


ELECTION OF DIRECTORS

 

The Governance Committee has nominated and recommend for election as our directors the fiveseven individuals named below, each of whom is a current director of the Company. Proxies cannot be voted for a greater number of persons than the number of nominees named. Pursuant to our bylaws, the authorized number of directors is set at seven and the Board of Directors has nominated for election the seven persons named below.

The Board of Directors believes that each nominee named below will be able to serve, but if a nominee is unable to serve as a director, the persons named in the proxies have advised us that they would vote for the election of such substitute nominee as the Governance Committee may propose.

 

We know of no arrangements or understandings between a director or nominee and any other person pursuant to which he or she has been selected as a director or nominee. There is no family relationship between any of the nominees, our directors or our executive officers.

Information regarding the experience, qualifications and other attributes that qualify each of the nominees to serve on the Company’s Board is set forth below.

 

PETER AHN, age 59, has been a director since October 5, 2022. In 2001, Mr. Ahn co-founded Hemisphere, a private investment group that founds, incubates, owns, operates, and makes investments in companies in a wide variety of industries, including gaming, restaurant and hotel businesses. From 1999 to 2001, Mr. Ahn was an investment banker with Jefferies and Company, Inc. Prior to joining Jefferies, Mr. Ahn spent four years at RBC Dain Rauscher in the fixed income and equity capital market groups. Mr. Ahn holds a B.A. degree in economics from Macalester College in St. Paul, Minnesota, and an M.B.A. in strategic management from the University of Minnesota’s Carlson School of Management.

Mr. Ahn contributes to the Board through his deep gaming, restaurant and hotel industry expertise and background in investment banking.

MAUREEN H. BAUSCH, age 67,69, has served as a member of the Board of Directors of the Company since October 2019. Ms. Bausch is currently amanaging partner inat Bold North Associates, providing experiential and consulting services for retail, event and destination attraction businesses. Ms. Bausch served from December 2014 until February 2018 as CEO and an Executive Board Member of the Super Bowl Host Committee in connection with the February 4, 2018 Super Bowl LII held in Minneapolis. Prior to that, Ms. Bausch worked in positions of increasing responsibility at the Mall of America, serving most recently as Executive Vice President, managing the $1B$1 billion asset.

Ms. Bausch’s long and deep involvement and experience in the Minnesota community and the local retail, event and destination attraction businesses brings a good perspective to the Board with Canterbury’s continuing focus on its card casino, racing and special events.

 

MARK CHRONISTER, age 70,72, has beenserved as a directormember of the Board of Directors of the Company since October 1, 2020. Mr. Chronister retired in 2007 as an audit partner in the Minneapolis office of PricewaterhouseCoopers, LLP (PwC) after 34 years at the firm. FromDuring his career and since his retirement from PwC in 2007, to current, Mr. Chronister has been focused on board and community service. Currently, Mr. Chronister is an Advisory Board member of RiskClimate LLC, a start-up creating enterprise risk management software for higher education, the past chair of Finance and Development Council for the Pax Christi Catholic Community, a past Treasurer and past Audit and Finance Committee Chair for the Science Museum of Minnesota, and an Advisory Board member for the Hendrickson Institute of Ethical Leadership and St. Mary’s University of Minnesota. Mark is alsoMinnesota, the Board Treasurer for the Minnesota USA Expo 2027. 2027 and the Audit Committee Chair for Artistry Theater and Visual Arts.

11

Mr. Chronister brings to the Board substantial financial expertise and he is an “audit committee financial expert.”

 

JOHN S. HIMLE, age 67,69, has served as a member of the Board of the Company since October 2019. Mr. Himle is Chief Executive Officer of Himle LLC, a specialized consultancy that advises companies, not-for-profit entities and other organizations with insight and strategy related to shaping complex business decisions and related matters. Mr. Himle was the founder and Chief Executive Officer of Himle Horner Inc. and Himle Rapp and Co. before selling his interests in 2017. He also served five terms in the Minnesota House of Representatives holding a series of leadership positions, including Assistant Majority Leader and Assistant Minority Leader.

Mr. Himle’s experience in, and knowledge of, government, regulatory matters, risk management, public relations and communications bring a helpful and well-informed perspective to the Company as the Company pursues its card casino, racing, special events and real estate development opportunities.

 

10

CARIN J. OFFERMAN, age 73,75, has been a director of the Company since 1994 and was named lead independent director in October 2019. Ms. Offerman is currently engaged in private investment activities. From 1997 to 2000, Ms. Offerman was the President and CEO of Offerman & Company, a regional investment banking and retail broker-dealer firm, and from 1990 to 1997 was its Executive Vice President. Prior to 1990, Ms. Offerman served in various capacities with Offerman & Company for the preceding six years, including as registered representative and sales retail manager. Ms. Offerman was a member of the board of the Minnesota Thoroughbred Association from 1993 to 1996 and served as its President in 1993 and 1994. Ms. Offerman has been an owner and breeder of both show horses and thoroughbreds, and she has been or is currently licensed as a horse owner in Minnesota, Iowa and Nebraska. Ms. Offerman was also a member of the Minnesota Racing Commission’s Breeders Fund Advisory Board and served as its Chair from 2003 to 2017.

As a member of the Company’s Board of Directors, Ms. Offerman brings a unique blend of entrepreneurial experience, knowledge and experience in investment banking and finance, and an understanding of the local and national horse industry.

 

RANDALL D. SAMPSON, age 64,66, co-founded the Company with his father in 1994 and has served as its President and Chief Executive Officer and on the Company’s Board of Directors since inception. Mr. Sampson was also named Executive Chairman of the Board on October 3, 2019. After graduating from college with a degree in accounting, Mr. Sampson worked for five years in the audit department of Deloitte & Touche where he earned his CPA certification. He subsequently gained experience as a controller of a private company and, thereafter, served as a Chief Financial Officer of a public company before becoming one of the three co-founders of Canterbury Park Holding Corporation in 1994. From 1987 to 1994, Mr. Sampson also managed Sampson Farms, a thoroughbred breeding and racing operation. SinceFrom 1999 to 2022, Mr. Sampson has beenwas a director of Communications Systems, Inc. (Nasdaq: JCS) (“CSI”). Mr. Sampson has continued to serve as a director following the merger of CSI with Pineapple Energy LLC in March 2022 to become Pineapple Energy Inc. (Nasdaq: PEGY), a growing domestic operator and consolidator of residential solar, battery storage, and grid service solutions. Mr. Sampson is also a director and former vice president of the Thoroughbred Racing Association of North America. Prior to becoming Chief Executive Officer, Mr. Sampson was a horse owner and active in horse industry associations and advisory boards.

12

As the Company’s Executive Chairman and Chief Executive Officer, Mr. Sampson brings to the Board long-time experience in the horse industry, financial expertise with over 25 years of operating history at Canterbury Park, an in-depth understanding of the Company’s personnel, operations, real estate development efforts, financial performance, financial position, challenges and opportunities.

 

DAMON E. SCHRAMM, age 56, has served as a member of the Board of Directors of the Company since October 5, 2022. Since August 2022, Mr. Schramm has served as the Vice President - General Counsel at Togetherwork, a private company providing integrated software and payments solutions for managing communities, groups, and organizations. Previously, Mr. Schramm was Interim General Counsel at KASA Holdings, LLC, a private company involved in specialty e-commerce stores, from August 2021 to August 2022. From December 2020 to August 2021, Mr. Schramm was counsel at the law firm of Lathrop GPM. Mr. Schramm served as Chief Legal and Administrative Officer of Bite Squad, a restaurant delivery service company, from 2017 until it was acquired in February 2019 by Waitr Holdings Inc. (Nasdaq: ASAP), an online ordering technology platform. From February 2019 to May 2020, Mr. Schramm served as the Chief Legal Officer of Waitr Holdings. From 2015 until 2017, he was Senior Vice President, General Counsel and Corporate Secretary at Evine Live Inc. (Nasdaq: EVLV), a multiplatform interactive digital commerce company that offered a mix of proprietary, exclusive and name-brand merchandise, which is now iMedia Brands Inc. (Nasdaq: IMBI). From 2005 until 2015, Mr. Schramm was Vice President, General Counsel and Corporate Secretary of Lakes Entertainment, Inc. (Nasdaq: LACO), a casino gaming and entertainment company that completed a merger in August 2015 with Sartini Gaming, Inc. to become Golden Entertainment, Inc. (Nasdaq: GDEN). Prior to that, Mr. Schramm was a partner with the law firm of Gray Plant Mooty (now Lathrop GPM) where he practiced corporate law with an emphasis in finance, mergers and acquisitions, and corporate transactions. Mr. Schramm holds a B.A. degree from the University of Minnesota-Duluth, a J.D. from William Mitchell College of Law, and an LL.M. (Masters of Law) in Securities and Financial Regulation from Georgetown University Law Center.

Mr. Schramm contributes to the Board through his deep understanding of gaming operations and strategy, mergers & acquisitions, and public company governance and securities reporting.

Board Voting Recommendation.

 

The Board of Directors Unanimously Recommends
Shareholders Vote FOR Each Nominee Identified in Proposal 1.

 

1113

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth, based upon information available as of April 7, 2022,11, 2024, the beneficial ownership of shares of our common stock (i) by each person known by us to own of record or beneficially five percent or more of our common stock; (ii) by the Named Executive Officers listed in the Summary Compensation Table below; (iii) by each of our directors, who are also the director nominees; and (iv) by all of our current executive officers and directors as a group. Unless otherwise indicated, the persons listed below may be contacted by mail at 1100 Canterbury Road, Shakopee, Minnesota 55379.

 

Name and Address of Beneficial Owner

 

Amount and Nature of

Beneficial Ownership

 (1) 

Percent of

Class

 
          

Randall D. Sampson (2)(3)(4)

  1,135,818 (5)  23.5%
          

Gabelli Asset Management, Inc.

  612,188 (6)  12.7%

One Corporate Center

         

Rye, New York 10580-1435

         
          

Black Diamond Capital Management, LLC

  593,427 (7)  12.3%

2187 Atlantic Street

         

Stamford, CT 06902

         
          

Gate City Capital Management, LLC

  249,681 (8)  5.2%

425 South Financial Place

         

Chicago, IL 60605

         
          

Dale H. Schenian (3)

  525,819 (9)  10.9%

Carin J. Offerman (3)(4)

  109,564    2.3%

Mark Chronister (3)(4)

  4,240    * 

John S. Himle (3)(4)

  8,162    * 

Maureen H. Bausch (3)(4)

  7,801    * 

Randy J. Dehmer (2)

  13,354    * 

All current directors and executive officers as a group (7 persons)

  1,804,758    37.4%

 

Name and Address of Beneficial Owner

 

Amount and Nature of

Beneficial Ownership

 (1) 

Percent of

Class

 
         

Randall D. Sampson (2)(3)(4)

  1,006,974 (5)  20.2%
         

Black Diamond Capital Management, LLC

      16.5%

2187 Atlantic Street

   821,274 (7)    

Stamford, Connecticut 06902

        
         

Gabelli Asset Management, Inc.

        

One Corporate Center

  590,931 (6)  11.9%

Rye, New York 10580-1435

        
         

Estate of Dale H. Schenian

        

1100 Canterbury Road

  525,819 (8)  10.6%

Shakopee, Minnesota 55379

        
         

Carin J. Offerman (3)(4)

  112,245   2.3%

Mark Chronister (3)(4)

  6,921   * 

John S. Himle (3)(4)

  10,843   * 

Maureen H. Bausch (3)(4)

  10,482   * 

Peter Ahn (3)(4)

  2,162   * 

Damon E. Schramm (3)(4)

  2,162   * 

Randy J. Dehmer (2)

  18,952   * 

All current directors and executive officers as a group (8 persons)

  1,170,741   23.5%

 

*

Indicates ownership of less than one percent

 

(1)

Includes the following number of shares not currently outstanding but deemed beneficially owned by virtue of the right of a person or group to acquire them within 60 days of April 7, 202211, 2024 as follows: Mr. Sampson, 0 shares; Mr. Schenian, 5,755no shares; Ms. Offerman, 8,0132,681 shares; Mr. Chronister, 4,2402,681 shares; Mr. Himle, 6,5682,681 shares; Ms. Bausch, 6,2072,681 shares; Mr. Ahn, 2,162 shares; Mr. Schramm, 2,162 shares; Mr. Dehmer, 0 shares,no shares; and all current directors and executive officers as a group, 30,78315,048 shares. These shares are treated as outstanding only when determining the amount and percent owned by the respective individual or group.

 

(2)

Named Executive Officer.

 

(3)

Director.

 

(4)

Nominee for election at the Annual Meeting.

 

(5)

Includes the following: (i) 136,69434,173 shares of common stock held by the Marian ArlisRandall D. Sampson Exempt Marital Trust, of which Mr. Sampson is one of five trustees and Mr. Sampson and another trustee each have been delegated authority by the trustees to act alone; (ii) 58,200 shares of common stock held by the Marian Arlis Sampson RevocableGST Trust, of which Mr. Sampson is the sole trustee; (iii) 140 shares of common stock held by the Marian Sampson IRA, of which Mr. Sampson is an attorney-in-fact authorized to act alone and Ms. Sampson retains authority to act on behalf of the Marian Sampson IRA; (iv)(ii) 667,387 shares of common stock held by Sampson Family Real Estate Holdings, LLC, of which Mr. Sampson is the sole manager; and (v) 300 shares of common stock held by the Sampson Family Foundation, a charitable foundation of which Mr. Sampson is one of five directors. The two officers of the Sampson Family Foundation have the authority to vote and dispose of the shares of common stock held by the Sampson Family Foundation. Mr. Sampson is not an officer of the Sampson Family Foundation.manager. Mr. Sampson disclaims beneficial ownership of all of the shares of the Company’s common stock except those shares he holds individually or jointly with his spouse.

 

(6)

Based upon Amendment 2526 to Schedule 13D filed by GAMCO Investors, Inc. on March 18, 2021,November 15, 2023, which reports shares beneficially owned as of March 17, 2021November 13, 2023 by Gabelli Funds, GAMCO Asset Management, Teton Advisors, Inc., Gabelli & Company Investment Advisors, Inc. and MJG Associates, Inc.

 

(7)

Based upon Amendment No. 25 to Schedule 13G filed by Black Diamond Capital Management, L.L.C. and Stephen H. Deckhoff, on February 14, 20222024 reporting beneficial ownership as of December 31, 2021.2023.

 

(8)

Based upon Amendment No. 123 to Schedule 13G filed by Gate City Capital Management, LLC,Dale H. Schenian on February 14, 2022 reporting beneficial ownership13, 2023 in which Mr. Schenian reports, as of December 31, 2021.

(9)

Includes2022, sole voting and dispositive power over 492,819 shares and reports shared voting and dispositive power over 33,000 shares held byshares. Mr. Schenian’s spouse as to which beneficial ownership is disclaimed.Schenian passed away on August 25, 2023.

 

1214

 

AUDIT COMMITTEE REPORT

 

The Audit Committee of the Board of Directors, which currently consists of Mark Chronister (Chair), Carin J. Offerman, Peter Ahn and John S. Himle, held four meetings during 20212023 with management and our independent registered public accounting firm. These meetings also included executive sessions designed to facilitate and encourage private communication between the Audit Committee and our independent registered public accounting firm.

 

The Audit Committee reviewed and discussed the audited financial statements of the Company for the year ended December 31, 20212023 with management and Wipfli at its meeting on March 16, 2022.7, 2024. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee also reviewed and discussed with the independent registered public accounting firm the firm’s judgments as to the quality of the accounting principles applied in our financial reporting and the critical audit matter (‘‘CAM’’) addressed in the audit and the relevant financial statement accounts or disclosures that relate to the CAM.reporting. The discussions with Wipfli also included the matters required to be discussed by the applicable requirements of the SEC and the applicable auditing standards of the Public Company Accounting Oversight Board (“PCAOB”), as periodically amended (including significant accounting policies, alternative accounting treatments and estimates, judgments and uncertainties).

 

Wipfli also provided to the Audit Committee the written disclosures and the letter regarding its independence required by the PCAOB Auditing Standard No. 16. This information was discussed with the Audit Committee.

 

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20212023 for filing with the Securities and Exchange Commission.

 

By the Audit Committee of the Board of Directors:

 

Mark Chronister (Chair)
Carin J. Offerman
John S. Himle

Peter Ahn

 

1315

 

PROPOSAL 2


RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

 

Wipfli LLP has been the Company’s independent registered public accounting firm since August 31, 2014. The Board of Directors, upon recommendation of2014, and the Audit Committee is requesting shareholder ratification of the appointment ofhas selected Wipfli to serve as theour independent registered public accounting firm for the Company for the current fiscal year endingended December 31, 2022.2024. While the Audit Committee retains the sole authority to retain, compensate, oversee and terminate the independent registered public accounting firm, however, the Audit Committee is submitting the reappointment of Wipfli as our independent registered public accountants for ratification. In the event the shareholders do not ratify the reappointment of Wipfli, the Audit Committee will reconsider the selection. A representative of Wipfli is expected to be present at the Annual Meeting of Shareholders, will have an opportunity to make a statement and will be available to respond to appropriate questions.

 

Fees Billed and Paid to Independent Registered Public Accounting Firms.

 

The table below provides a summary of fees paid to Wipfli for professional services rendered in the two fiscal years ended December 31, 20212023 and 2020:2022:

 

Fee Category

 

2021

  

2020

  

2023

  

2022

 
        

Audit Fees

 $192,040  $144,462  $190,670  $185,689 

Audit-Related Fees

  2,500   -   218,050   7,500 

Tax Fees

  -   -   -   - 

All Other Fees

  -   -   -   - 

Total Fees

 $194,540  $144,694  $408,720  $193,189 

 

Audit Fees. This category consists of fees billed for professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports, auditing of our benefit plans, and the issuance of consent in connection with registration statement filings with the SEC.

 

Audit-Related Fees. This category consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not otherwise reported under “Audit Fees.” In 2021,2023, the Company paid Wipfli $2,500$218,050 for work performed regarding long-term strategic growth initiatives. In 2022, the Company paid Wipfli $7,500 for developing agreed upon procedures required under a material contract with a third party. The Company paid Wipfli no such fees in 2020.

 

Tax Fees. This category consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal and state tax compliance and acquisitions. The Company paid no fees to Wipfli for tax compliance, tax advice, or tax planning in 20212023 or 2020.2022.

 

All Other Fees. This category consists of all fees paid to the independent registered public accounting firm for matters other than the three listed above. The Company paid Wipfli no such fees in 20212023 or 2020.2022.

 

1416

 

Audit Committee Pre-Approval Policies and Procedures.

 

We have adopted a written pre-approval policy for the Audit Committee that require the Audit Committee to pre-approve all audit and all permitted non-audit engagements and services (including the fees and terms thereof) by the independent auditors, except that the Audit Committee may delegate the authority to pre-approve any engagement or service less than $10,000 to one of its members, but requires that the member report such pre-approval at the next full Audit Committee meeting. The Audit Committee may not delegate its pre-approval authority for any services rendered by our independent auditors relating to internal controls. This pre-approval policy prohibits delegation of the Audit Committee’s responsibilities to our management. Under the pre-approval policy, the Audit Committee may pre-approve specifically described categories of services which are expected to be conducted over the subsequent twelve months on its own volition, or upon application by management or the independent auditor. The policy prohibits the Audit Committee from approving certain non-audit services may not be provided by the independent auditor under law.

 

All of the services described above for 20212023 and 20202022 were pre-approved by the Audit Committee before Wipfli was engaged to render the services.

 

Vote Required for Shareholder Approval.

 

The affirmative vote of a majority of the outstanding shares of the Company’s common stock voting at the annual meeting in person or by proxy is required for shareholder ratification of the appointment of Wipfli to serve as the Company’s independent registered public accounting firm for the 20222024 fiscal year.

 

Board Voting Recommendation.

 

The Board of Directors Unanimously Recommends
Shareholders Vote FOR
Proposal 2: Ratification of Appointment of Wipfli LLP.

 

15

PROPOSAL 3


ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

Our Board of Directors determined that an advisory vote on named executive officer compensation (commonly referred to as “say-on-pay”) will be held every three years. As required by Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to cast an advisory vote on named executive officer compensation.

As described in the section entitled “Executive Compensation Programs and Practices,” we have designed our executive compensation program to implement core compensation principles, including pay for performance and alignment of our management’s interests with those of our shareholders. Under these programs, we reward our Named Executive Officers in large part for the achievement of specific financial performance goals and design incentive compensation programs to drive achievement of financial performance, both in the short-term and long-term. We encourage shareholders to read the “Executive Compensation Programs and Practices” section of this proxy statement for a more detailed discussion of our executive compensation programs, including information about 2021 compensation of our Named Executive Officers.

The say-on-pay proposal presented at our 2019 Annual Meeting of Shareholders received 98.7% approval by our shareholders. Although the vote was non-binding, the Compensation Committee believes this level of approval percentage indicates that our shareholders strongly support our core compensation principles and our executive compensation program.

We are asking our shareholders to indicate their support for our Named Executive Officer compensation as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholder to vote “FOR” the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of Canterbury Park Holding Corporation approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in Canterbury Park Holding Corporation’s proxy statement for the 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.

Vote Required for Shareholder Approval.

Approval of this Proposal 3 requires the affirmative vote of the holders of the majority of the shares present, in person or by proxy, and entitled to vote on this Proposal 3. While this vote is advisory, and not binding on the Compensation Committee or the Board of Directors, it will provide valuable information that the Compensation Committee will be able to consider when determining executive compensation philosophy, policies and practices for the remainder of 2022 and future years.

Board Voting Recommendation.

The Board of Directors Unanimously Recommends
Shareholders Vote FOR
Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation.

1617

 

EXECUTIVE COMPENSATION PROGRAMS AND PRACTICES

 

Role of the Compensation Committee in the Compensation Process.

 

The Compensation Committee has the following duties and responsibilities relating to executive compensation:

 

 

To review, approve and oversee our overall compensation strategy;

 

 

To review and recommend the compensation and other terms of employment of Randall D. Sampson, our President and Chief Executive Officer, and other executive officers, (our executive officers that are identified in the “Summary Compensation Table” below are referred to as the “Named Executive Officers” or “NEOs”),which for 2023 consisted of Randy J. Dehmer, our Chief Financial Officer, and recommend to the entire Board the compensation and the other terms of employment of these officers; and

 

 

To oversee the administration of the Company’s incentive-based or equity-based compensation plans and periodically consider and recommend changes in existing plans or the adoption of other or additional equity-based compensation plans.

Messrs. Sampson and Dehmer are sometimes referred to as the “Named Executive Officers” or “NEOs”.

 

Under its charter, the Compensation Committee has the authority to engage the services of outside advisors, experts and others to assist it in performing its duties. In October 2019, the Compensation Committee engaged Total Rewards Group, LLC, an executive compensation consulting firm, to provide recommendations and advice to the Compensation Committee. The Compensation Committee continued to refer to these recommendations and advice in setting compensation programs for 20212023 as described below.

 

In discharging its responsibilities, the Compensation Committee solicits certain information and advice from our President and Chief Executive Officer, our Senior Vice President of Finance and Chief Financial Officer and our Vice President of Human Resources. These officers participate in the deliberations of the Compensation Committee regarding compensation of other employees, including providing information regarding salary history, historical bonus practices and related financial data, the responsibilities and performance of employees and recommendations regarding the appropriate levels of compensation, but do not take part in deliberations regarding their own compensation.

 

Objectives of Our Compensation Programs.

 

It is the objective of the Compensation Committee to provide competitive levels of compensation that will attract, motivate and retain executives with superior leadership and management abilities and to provide incentives to executive officers so that we may achieve superior financial performance and to structure the forms of compensation paid to align the interests of our executive officers with those of the Company. With these objectives in mind, it has been our practice to provide a mix of base salary, bonus compensation, long-term, equity-based compensation and retirement compensation. Historically, base salary has represented approximately 75% or more of the total value of executive officer compensation, with cash bonuses, the value of long-term equity compensation and retirement compensation comprising the remainder. The Compensation Committee believes that these forms of compensation provide an appropriate combination of competitive fixed pay and variable pay as incentives to motivate superior short-term operational performance balanced with other incentives to achieve longer term operational goals and positive long-term stock price performance.

 

1718

 

Information about the Components of our Compensation Programs.

 

Base Salary and Deferred Stock In Lieu of Increasesfor 2023

 

We establish base salaries for our executive officers by reference to base salaries paid to executives in similar positions with similar responsibilities. We review the base salaries annually and adjustments, if any, are usually made in February or March of each year. The Compensation Committee consider other factors, including Company financial performance and subjective judgments by the Compensation Committee on individual performance based on factors such as development and execution of strategic plans, changes in areas of responsibility, the development and management of employees and participation in industry, regulatory or political initiatives beneficial to our business. The Compensation Committee does not, however, assign specific weights to these various qualitative factors in making decisions on base compensation.

 

For 2020,On March 16, 2023, the Compensation Committee considered the input of its compensation consultant, Total Rewards Group, in setting the initial 2020 base salaries for the named executive officers, which reflected a 3% increase from 2019. The 2020 initial base salaries of Messrs. Sampsonrecommended, and Dehmer were $271,465 and $200,000, respectively.

Beginning on April 1, 2020, the salaries for our Named Executive Officers were significantly impacted by our efforts to reduce expenses and preserve liquidity in response to the COVID-19 pandemic and its impact on our business. In response, the Compensation Committee implemented as series of adjustments beginning on April 1, 2020 that resulted in the base salaries of Messrs. Sampson and Dehmer being at a reduced level from April 1, 2020 to the end of 2020. At the end of 2020, Mr. Sampson’s and Mr. Dehmer’s base salaries then in effect reflected a total reduction of 25% and 20% from their respective initial base salaries set at the beginning of 2020.

On January 27, 2021, the Board of Directors approved, based upon the recommendation of the Compensation Committee, a 10% increase in the then-effective base salaries of Mr. Sampson and Mr. Dehmer given our expectations that we would be able to return to more normalized operations in 2021. However, the base salaries of Mr. Sampson and Mr. Dehmer continued to be reduced as compared to their base salaries in effect at the beginning of 2020.

In February 2021, the Compensation Committee again reviewed base salaries for executive officers in light of our business, our plans for operations and the impacts of the COVID-19 pandemic at that time. While recognizing the need to preserve cash and liquidity in 2021, the Compensation Committee also recognized the contributions of these executive officers in their roles and the desire of the Compensation Committee to deliver market-competitive base pay. In order to address these competing factors, the Compensation Committee approved an award of deferred stock instead of increasing the base salaries of Messrs. Sampson and Dehmer at that time. The Compensation Committee viewed the deferred stock awards as a means to deliver value to the executives without utilizing cash and without subjecting the executives to the volatility of our stock price as with a stock option. The Compensation Committee approved an award of deferred stock to Messrs. Sampson and Dehmer of 3,600 shares and 1,800 shares, with vesting on the one-year anniversary of the date of grant. The deferred stock award corresponded to the approximate decrease in base salary for Messrs. Sampson and Dehmer of $42,643 and $21,500, respectively, if continued throughout 2021. The one-year vesting corresponded to the time frame in which the Compensation Committee intended to deliver the award’s value given that the deferred stock awards were in lieu of an increase to annual base salaries.

On October 13, 2021, the Board of Directors approved, based on the recommendation of the Compensation Committee, merit increases in the annual base salaries of Mr. Sampson and Mr. Dehmer dueDehmer. The Compensation Committee determined to our strong financial performance through the third quarter of 2021, which continued into the fourth quarter of 2021.increase Mr. Sampson’s annual base salary was increasedby 4% to $250,357, or an 8.5% merit increase;$315,050 and Mr. Dehmer’s bases salary was increased to $210,000, or a 5% merit increase. The increase was effective the first pay period in July 2021. At that time and through the remainder of 2021, Mr. Sampson’s adjustedannual base salary of $250,357 continuedby 4% to be less than his pre-COVID-19 pandemic base salary of $271,465.

18

Bonus Compensation for 2021$252,252.

 

Historically, theAnnual Bonus Plan for 2023

The Compensation Committee has used cash bonuses to provide exempt level employees, including executive officers, with an opportunity to receive additional cash compensation, but only if earned based on individual performance and the Company’s financial performance. We have adopted the Canterbury Park Holding Corporation Annual Incentive Plan (the “Annual Bonus Plan”), which is a comprehensive framework pursuant to which opportunities for incentive compensation generally covering periods of one year or less can be awarded the Company’s executive officers, other senior executives and other employees of the Company. Each year, the Compensation Committee has typically adopted a plan for paying annual incentive compensation togrants the NEOs, as well as other officers and key employees, calledan opportunity under the Canterbury Park annual incentive plan. Under the annual incentive plan, participating employees including the NEOs were ableAnnual Bonus Plan to earn a percentage of their respective annual base salaries based upon achievement of performance goals set by the Compensation Committee relating to specified performance measures determined by the Compensation Committee.

 

Due to the general uncertainty that persisted throughout 2021 and the challenges associated with setting targets at the beginning of 2021 for financial performance goals,On March 16, 2023, the Compensation Committee did not adopt a 2021 annualrecommended, and the Board of Directors adopted, 2023 performance goals under the Annual Bonus Plan and granted cash incentive plan. Instead,pay opportunities (referred to as “Incentive Awards”) under the Annual Bonus Plan to the Company’s eligible employees, which include Mr. Sampson and Mr. Dehmer.

Payouts of Incentive Awards were based on our 2023 financial performance compared to two performance goals established by the Compensation Committee and the Board of Directors, which were adjusted income from operations for 2023 and consolidated revenue for 2023, weighted 70% and 30%, respectively. Adjusted income from operations (AIFO) was defined as income from operations, calculated in accordance with U.S. generally accepted accounting principles (GAAP), adjusted to exclude certain extraordinary, unusual or other amounts as determined that it would award discretionary cash bonuses if such bonuses were justified by our financial performancethe Compensation Committee. Revenue was calculated in 2021. Theaccordance with GAAP.

Also on March 16, 2023, the Compensation Committee believes that discretionary bonuses should berecommended, and the Board of Directors also approved, minimum, target and maximum levels of performance based.for 2023 AIFO and revenue. Under matrices associated with the 2023 Annual Bonus Plan, achievement at less than the target level resulted in a decreasing bonus and, if achievement failed to meet the minimum performance level, the participants would earn no payout under their Incentive Awards for 2023. The Compensation Committee determined that itthe total payout under any Incentive Award would exercise its discretion consistent with the historic design of the annual incentive plan, capped atnot exceed 150% of historic target, amounts. Accordingly,even if our 2023 AIFO and revenue exceed the maximum level of performance. The target 2023 AIFO was $9,405,000 and target 2023 revenue was $64,726,000.

19

Pursuant to the Annual Bonus Plan, on March 16, 2023, the Compensation Committee considered our performance for 2021 adjusted income from operations (AIFO)recommended, and 2021 revenue as compared to 2021 budgeted amounts, as well asthe Board of Directors approved, 2023 bonus opportunities at target achievement for Mr. Sampson and Mr. Dehmer, expressed as percentage of 35% and 25%, respectively. In establishing2023 base salary based upon the Company’s achievement at target levels of each performance goal. The cash payout that the Company’s executive officers could earn at the target bonus opportunities,level of achievement as a percentage of their respective salaries was as follows: Mr. Sampson, 45%, and Mr. Dehmer, 35%.

Based on the Company’s 2023 performance and the matrices associated with the 2023 Annual Bonus Plan, the Compensation Committee sought input from its compensation consultantdetermined on March 12, 2024 that our 2023 AIFO was $7,156,880 and agreed that2023 revenue was $61,437,377. In accordance with the relatively modest increase would appropriate reward employees for their contributions, makematrices associated with the Company more competitive2023 Annual Bonus Plan approved by the Committee, the 2023 AIFO was 76.10% of target and 2023 revenue was 94.92% of target, which resulted in the talent market, and encourage retention, as well as right size the compensation to the Company’s future expected size and peer group for compensation. In addition tobonuses of 53.98% of target based on these quantitative factors, the Compensation Committee also considered the Company’s very strong financial performance in 2021 in light of the challenges we faced in 2021 in returning to normalized operations and the performance of Mr.results. Accordingly, Messrs. Sampson and Mr. Dehmer in addressing these challenges. After considerationreceived a cash payment of these factors,$75,853 and $47,237, respectively, under the Compensation Committee approved bonuses to Mr. Sampson and Mr. Dehmer of $117,899 and $73,039, respectively.2023 Annual Bonus Plan.

 

Determinations Under the Long-Term IncentiveHistoric LTI Plan for 2021Practices and 2023 Deferred Stock Awards

 

The Company has adopted a plan for paying long-term, performance-based incentive compensation to the Company’s NEOs and other Senior Executives called the Canterbury Park Long Term Incentive Plan (the “LTI Plan”). The LTI Plan authorizes the grant of Long TermLong-Term Incentive Awards that provide an opportunity to executive officers and other senior officers to receive a payment (a “payout”) in cash or shares of the Company’s common stock to the extent of Company achievement at the end of a period greater than one year (the “performance period”) in comparison to performance goals established for the performance period. The LTI Plan is a sub-plan of the Company’s Stock Plan. Further information regarding the LTI Plan is provided in and the text of the LTI Plan is an exhibit to the Company’s Form 8-K Report filed April 5, 2016.

 

19

The following summarizes the Compensation Committee’s historic practice in implementing the LTI Plan each year. Performance iswas measured over three-year performance periods. The performance goals currently used arewere adjusted income from operations and revenue. At the beginning of each three-year performance period, the Compensation Committee determinesdetermined (i) performance goals for each of the three years in the performance period and (ii) the payout opportunities for each executive officer and other senior officers to earn incentive compensation as a percentage of his or her average annual base salary over the three-year period. Under the matrices associated with each three-year performance period, achievement of the performance goals at less than target for that year resultswould result in a decreasing payout earned and, if achievement failsfailed to meet the minimum performance goals for that year, the participant willwould not earn any payout under the LTI Plan for that year. Following the end of each three-year performance period, the Company averageswould average achievement in the three years compared to performance goals and comparescompare the result to target achievement to determine the payout earned, which is then would be paid in common stock.

 

Due to the general uncertainty that persisted at the beginning of 2021 when the 2021 to 20232021-2023 LTI Plan, the 2022-2024 LTI Plan and the 2023-2025 LTI Plan would have been adopted and the challenges in developing a three-year forecast for an LTI Plan for the 2021-2023relevant performance period,periods, the Compensation Committee did not adopt an LTI Plan for either of the three-year performance periodperiods of 2021 to 2023.2021-2023, 2022-2024 or 2023-2025. Instead, the Compensation Committee granted deferred stock awards in February 2021, February 2022, and March 2023 with view that these awards accomplish similar compensation-related purposes toas the 2021 to 2023 LTI Plan.Plans for those years. Specifically, the Compensation Committee believed that the deferred stock awards incorporated elements of the long-term incentives provided by the LTI Plan through the three-year vesting period, provided meaningful incentives for Company performance generally over that three-year vesting period (which in turn would drive stock price appreciation), and allowed the necessary flexibility in incentivizing performance that fixed performance criteria could not. For 2023, the Compensation Committee determined to keep the vesting period of the deferred stock awards at four years in order to emphasize long-term Company performance and stock price appreciation. The Compensation Committee determined the size of the deferred stock awards in 2023 by targeting approximately 75% ofreference to the target opportunity that the executive officers would have had under the 2021 to 20232023-2025 LTI Plan had it been adopted. adopted, which was for Mr. Sampson, 35% of his base salary at target, and for Mr. Dehmer, 25% of his base salary at target.

20

Based upon these factors, in February 2022,March 2023, the Compensation Committee granted 5,4004,600 shares of deferred stock to Mr. Sampson and 2,7002,600 shares of deferred stock to Mr. Dehmer. These deferred stock awards were granted from the Company’s Stock Plan and will vest in equal 1/325% increments on each of the threefour anniversaries of the grant date.

 

However, consistent with its past practices, the Compensation Committee made determinations relating to 2021, which impacted the third year of the 2019 to 2021 LTI Plan as explained below. For 2021, the only outstanding LTI Plan was the 2019 to 2021 LTI Plan.Hedging, Pledging and Insider Trading Policies.

 

In February 2022,We have adopted an insider trading policy designed to promote compliance with applicable laws, rules, and regulations. Our insider trading policy applies to all Canterbury employees (including executive officers) and our directors. Effective October 2023, the Compensation Committee made determinations regardingpolicy specifically prohibits hedging and monetization transactions (such as prepaid variable forward contracts, equity swaps, collars, and exchange funds) by directors, officers and employees. The policy also prohibits short selling our stock, requires any stock purchased in the achievement of 2021 performance goals under the 2019 to 2021 LTI Plan. Mr. Sampson’s opportunity under the 2019 to 2021 LTI Plan as a percentage of his 2019 to 2021 average annual base salary was 25% at target and 37.5% at maximum. Mr. Dehmer’s opportunity under the 2019 to 2021 LTI Plan as a percentage of his 2019 to 2021 average annual base salary was 20% at target and 30% at maximum. The Compensation Committee indicated it was more appropriate to use unadjusted base payopen market for the purposes of calculating the payout under the 2019 to 2021 LTI Plan so that the participants were not further penalized for the base pay reduction due to the our COVID-19 pandemic cash conservation efforts, particularly given management’s efforts in handling our COVID-19 pandemic response and the 2021 financial results. For 2021, the Compensation Committee determined that we achieved the maximum level of performance goals for 2021 relating to adjusted income from operations, which had maximum of $10,210,000 as compared to our actual adjusted income from operations of $10,934,000. For 2021, the Compensation Committee also determined that we achieved more than the minimum but less than the target performance goals for 2021 relating to revenue, which had a minimum of $59,832,000 as compared to our actual revenue of $59,884,000.

The Compensation Committee did not adjust the performance period, performance goalssix months, prohibits margin transactions, and transactions in put options, call options or performance targets for any portion of the 2019 to 2021 LTI Plan to account for any adverse impacts arising from the COVID-19 pandemic. Based upon the achievements of the performance goals for the first year and third year (2019 and 2021) in the 2019 to 2021 LTI Plan, the Compensation Committee averaged the achievement for the 2019 to 2021 performance period to determine that Mr. Sampson would earn a payout of $35,243 and Mr. Dehmer would earn a payout of $18,661, which at a stock price of $14.81 resulted in the issuance of 2,379 shares to Mr. Sampson and 1,260 shares to Mr. Dehmer, respectively.other derivative securities.

 

Employment Arrangements with Named Executive Officers and Post-Employment Compensation.

 

For 2021, we did not have any employment agreements with anyAs part of its review of competitive pay practices and in order to align the interests of our executive officers with those of its shareholders, on March 17, 2022, the Compensation Committee recommended, and the Board of Directors approved, a letter agreement relating to severance and change in control benefits (the “Letter Agreement”) and approved Canterbury entering into the Letter Agreement with each of whom serves “at will.” Additionally, we do not have any contract, agreement, plan or arrangement, whether written or unwritten,Messrs. Sampson and Dehmer, which are in identical form.

The Letter Agreement provides that providesif the executive officer’s employment is terminated without Cause (other than during the 12-month period following a Change in Control), the executive will be entitled to payments of the executive officer’s regular base salary for paymentsa period of six months. The executive officer will also be paid the average of the short-term annual cash incentive bonus amounts the executive received with respect to the Named Executive Officerthree complete calendar years prior to the date of his termination. The short-term incentive bonus amount will be paid in six equal installments consistent with the Company’s regular payroll practices. We also will pay a portion of the premiums for continued health, dental and group life insurance until the earlier of six months from the date COBRA coverage begins or date COBRA coverage otherwise terminates.

Under the Letter Agreements, if a Change in Control occurs, but the executive officer’s employment is not terminated within 12 months of the Change in Control, the executive is not entitled to any payment or benefit. Accordingly, the Letter Agreement is a “double trigger” arrangement requiring both a change of control and a qualifying termination of employment.

21

The Letter Agreements provide that if a Change in Control occurs and within 12 months of the Change in Control the executive officer’s employment is terminated by us without Cause or by the executive for Good Reason, we must pay the executive a cash severance payment. The severance payment is payable within sixty days of the date of termination and will be equal to 100% of the sum of the executive’s annual base salary and his Target Bonus in effect on such date (without giving effect to any reduction that results in the executive’s termination for Good Reason). The Target Bonus is the cash amount under all of our short-term annual incentive compensation plans in which the executive participates, waiving any condition precedent to the payment to the executive and assuming that the performance goals for the period were achieved at following,the 100% level. We will pay a portion of the premiums for continued health, dental and group life insurance until the earlier of 12 months from the date COBRA coverage begins or the date COBRA coverage otherwise terminates.

Additionally, immediately prior to a Change in connectionControl, all equity awards held by the executive, other than equity awards subject to performance criteria or goals and any options granted under the Employee Stock Purchase Plan, will vest in full and all restrictions on such awards will lapse.

These salary continuation and Change in Control benefits are conditioned upon the executive officer’s execution of a general release and compliance with a restrictive covenants agreement. Further, in the event that the vesting of options upon a Change in Control, together with all other payments or benefits provided by the Letter Agreement, would result in all or a portion of such amount being subject to excise tax then the executive will be entitled to either the full amount of the payments or value of benefits under the Letter Agreements or such lesser amount as determined by us that would result in no portion of the payment being subject to excise tax, whichever results in the receipt by the executive officer of the greatest amount on an after-tax basis.

Additionally, if the amounts payable under the Letter Agreements would be subject to the requirements of Section 409A of the Internal Revenue Code, we may amend the Letter Agreements as it may determine, including to delay the start of any termination or change-in-control.payment as provided in the Letter Agreements, amend the definition of Change in Control, and amend the definition of disability. In the event any such payment is so delayed, the amount of the first payment to the executive officer will be increased for interest earned on the delayed payment based upon interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the date the payment should otherwise have been provided.

 

Other Compensation.

 

The Company doesWe do not pay itsour executive officersofficers’ compensation other than as described above. In particular the Company doeswe do not provide for personal benefits or perquisites (“perks”) as a significant element of compensation of the Named Executive Officers, in particular, or employees of the Company generally.

 

2022

 

Summary Compensation Table.

 

The following table presents the compensation earned for services in all capacities during 20212023 and 20202022 by (i) our President and Chief Executive Officer, Randall D. Sampson and (ii) our Senior Vice President of Finance and Chief Financial Officer, Randy J. Dehmer. Messrs. Sampson and Dehmer (togetherwere our only executive officers and together are referred to as our “Named Executive Officers”).Officers.”

 

Name and Position

 

Year

  

Salary

($)

  

Bonus

($)

  

Stock

Awards ($)(2)

  

All Other

Compensation

($)(1)

  

Total ($)

 

Year

 

Salary ($)

  

Stock

Awards

($)(1)

  

Non-equity

incentive

plan

compensation

($)(2)

  

All Other

Compensation

($)(3)

  

Total ($)

 

Randall D. Sampson

  2021   239,531   117,899   167,550   9,183   534,163 

2023

  312,253   117,254   75,853   13,567   518,927 

President and Chief

Executive Officer

 2020  232,990  -  123,797  11,926  368,713 
President and Chief2022  275,971   86,480   89,564   11,396   463,411 
Executive Officer                     
 

Randy J. Dehmer

  2021   194,769   73,038   85,185   5,845   358,837 

2023

  250,013   66,274   47,237   10,089   373,613 
Senior Vice President of Finance and Chief Financial Officer 2020  180,846  -  60,885  5,712  247,443 2022  221,469   51,888   51,340   7,664   332,361 

 


 

(1)

The components of this amount include the Company’s contributions in cash or stock to the Company’s 401(k) plan to partially match contributions by the respective individuals and the Company paid premium on executive term life insurance.

(2)

The values expressed represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and Item 402(r)(2)(iv) of Regulation S-K, using the assumptions discussed in Note 5, “Stockholders’ Equity and Stock-Based Compensation” in the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.2023. This amount represents both the payout of the LTI shares and deferred stock awards granted in the year noted.

(2)

Represents cash incentive pay to the Named Executive Officers under the Annual Bonus Plan for the year noted, which are reported for the year in which the related services were performed. See “Executive Compensation Programs and Practices – Annual Bonus Plan for 2023” for a description of the 2023 Annual Bonus Plan.

(3)

The components of this amount include the Company’s contributions in cash or stock to the Company’s 401(k) plan to partially match contributions by the respective individuals and the Company paid premium on executive term life insurance.

23

 

Outstanding Equity Awards at Fiscal Year-End.

 

The following table sets forth certain information concerning outstanding equity awards held by Named Executive Officers as of December 31, 2021.2023. No option awards were outstanding to the Named Executive Officers as of December 31, 2023.

 

Stock Awards

Name

Number of

Unvested

Stock Awards

(#)

Market Value of

Unvested Stock

Awards ($) (1)

Randall D. Sampson

3,400 (2)58,752

Randall D. Sampson

3,600 (3)62,208

Randall D. Sampson

5,400 (4)93,313

Randy J. Dehmer

2,200 (2)38,016

Randy J. Dehmer

1,800 (3)31,104

Randy J. Dehmer

2,700 (4)46,656
  

Stock Awards

 

Name

 

Number of Unvested Stock

Awards (#)

  

Market Value of Unvested Stock

Awards ($) (1)

 

Randall D. Sampson

  1,800 (2)  36,774 

Randall D. Sampson

  3,000 (3)  61,290 

Randall D. Sampson

  4,600 (4)  93,978 

Randy J. Dehmer

  900 (2)  18,387 

Randy J. Dehmer

  1,800 (3)  36,774 

Randy J. Dehmer

  2,600 (4)  53,118 

 


 

(1)

Value based on a share price of $17.28,$20.43, which was the closing sales price of our common stock on The Nasdaq Stock Market on December 31, 2021.2023.

 

(2)

Deferred stock awards vested 60%33% in December 2020February 2022 with the remaining 40%66% to be vested one-half in March 2022February 2023 and one-half in March 2023.February 2024.

 

(3)

Deferred stock awards vesting 100%25% in February 2022.2023, 2024, 2025 and 2026.

 

(4)

Deferred stock awards vesting 33%25% in February 2022, 2023,March 2024, 2025, 2026 and 2024.2027.

 

24

Pay Versus Performance.

In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer, or PEO, and Non-PEO named executive officer, or Non-PEO NEO, and Company performance for the years listed below. Our PEO is Randall D. Sampson. We have one Non-PEO NEO, which is Randy J. Dehmer, our Chief Financial Officer.

The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

Year

 

Summary

Compensation

Table Total

for PEO(1)

  

Compensation

Actually Paid

to PEO (2)

  

Average

Summary

Compensation

Table Total

for Non-PEO

NEO(3)

  

Average

Compensation

Actually Paid

to Non-PEO

NEO(4)

  

Value of

Initial Fixed

$100

Investment

Based on

Total

Shareholder

Return

(“TSR”)(5)

  

Net

Income(6)

 

2023

 $518,927  $304,024  $373,613  $252,117  $66  $10,563,249 

2022

 $463,411  $536,270  $332,361  $368,321  $183  $7,512,946 

2021

 $534,163  $420,217  $358,837  $303,109  $144  $11,798,153 

(1)

The dollar amounts reported are the amounts of total compensation reported for Mr. Sampson, our President and Chief Executive Officer, for each corresponding year in the “Total” column of the Summary Compensation Table (SCT).

(2)

The dollar amounts reported represent the amount of “compensation actually paid” to Mr. Sampson, computed in accordance with SEC regulations. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Sampson during the applicable year. The following adjustments were made to Mr. Sampson’s total compensation for each year to determine “compensation actually paid” in accordance with SEC regulations:

Adjustments to Determine Compensation Actually Paid for PEO

 

2023

  

2022

  

2021

 

Deduction for amounts reported under the “Stock Awards” column in the SCT

  (117,254)  (86,480)  (167,550)

(Deduction)/increase for fair value of awards granted during year that remain unvested as of year end

  (23,276)  38,560   35,550 

(Deduction)/increase for change in fair value from prior year end to current year end of awards granted prior to year that were outstanding and unvested as of year end

  (51,984)  74,094   18,054 

(Deduction)/increase for change in fair value from prior year end to vesting date of awards granted prior to year that vested during year

  (23,894)  46,307   - 

Increase for value of dividends paid on equity awards not otherwise reflected in fair value of awards

  1,505   378   - 

Total Adjustments

  (214,903)  72,859   (113,946)

Year-end fair values were determined based on the same methodology used for grant date fair value purposes. Deferred stock was valued based on the closing stock price on the relevant measurement date.

25

(3)

The dollar amounts reported represent the average of the amounts reported for the NEOs as a group (excluding our PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The NEO included for purposes of calculating the amounts in each applicable year is Randy J. Dehmer, our Chief Financial Officer, who is the only named executive officer other than our PEO.

(4)

The dollar amounts reported represent the amount of “compensation actually paid” to the NEOs as a group (excluding our PEO), as computed in accordance with SEC regulations. Again, the NEOs as a group (excluding our PEO) refers to Randy J. Dehmer, our Chief Financial Officer, who is the only named executive officer other than our PEO. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Dehmer during the applicable year. The following adjustments were made to the Non-PEO NEO total compensation for each year to determine “compensation actually paid” in accordance with SEC regulations, using the same methodology described above in Note 2:

Adjustments to Determine Compensation Actually Paid for Non-PEO NEO

 

2023

  

2022

  

2021

 

Deduction for amounts reported under the “Stock Awards” Column in the SCT

  (66,274)  (51,888)  (85,185)

(Deduction)/increase for fair value of awards granted during year that remain unvested as of year end

  (13,156)  23,136   17,775 

(Deduction)/increase for change in fair value from prior year end to current year end of awards granted prior to year that were outstanding and unvested as of year end

  (29,241)  40,452   11,682 

(Deduction)/increase for change in fair value from prior year end to vesting date of awards granted prior to year that vested during year

  (13,693)  23,981   - 

Increase for value of dividends paid on equity awards not otherwise reflected in fair value of awards

  868   189   - 

Total Adjustments

  (121,496)  35,960   (55,728)

(5)

Cumulative TSR is calculated by dividing the sum of (i) the cumulative amount of dividends per share for the measurement period, assuming dividend reinvestment, and (ii) the difference between our share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. We do not use TSR as a performance measure in our executive compensation program.

(6)

The dollar amounts reported represent the amount of net income reflected in our audited financial statements for the applicable year. We do not use net income as a performance measure in our executive compensation program.

Relationship Disclosure to Pay Versus Performance Table

In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following descriptions of the relationships between information presented in the Pay Versus Performance table.

26

The charts below show, for the past three years, the relationship between the compensation actually paid (CAP) to our PEO and the compensation actually paid (CAP) to our non-PEO NEO to (i) the Company’s cumulative TSR; and (ii) the Company’s net income.

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All information provided above under the Pay Versus Performance heading will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

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DIRECTOR COMPENSATION

Cash Compensation.

 

Each non-employee director receives a cash retainer paid at the annual rate of $30,000 for service as a director. In addition, in 2023, each non-employee director received a cash retainer of $10,000 for services related to long-term strategic growth initiatives in 2023. Furthermore, non-employee directors receive compensation for service on Board committees. Members of the Audit Committee receive a retainer paid at the annual rate of $8,000, and the Chair of the Audit Committee receives an additional retainer paid at the annual rate of $4,000. Members of the Compensation Committee receive a retainer paid at the annual rate of $4,000, and the Chair of the Compensation Committee receives an additionalcash retainer paid at the annual rate of $8,000. Members of the Compensation Committee and the Governance Committee receive a cash retainer paid at the annual rate of $4,000, and the Chair$4,000. The chairs of the Governance Committeeeach committee receive an additional annual cash retainer of $4,000. The lead independent director also receives an additional retainer paid at the annual ratecash retainer of $4,000.

Starting in April 2020, we modified For 2023, Carin J. Offerman was the cash compensation paid to non-employee directors in an effort to preserve cash during the COVID-19 pandemic. This change was recommended by the Compensation Committee and approved by the Board. This change resulted in non-employee directors receiving deferred stock awards on June 25, 2020 in lieu of cash payments for their services on Board committees from April 2020 through June 2021. The Board retainer of $30,000 continued to be paid in cash.lead independent director.

 

Equity Compensation.

 

Non-employee members of our Board receive equity compensation pursuant to the terms of the Company’s Stock Plan. Under the Stock Plan, the BoardCompensation Committee has the authority to determine prior to each annual meeting of shareholders the equity compensationawards to be paidissued to each non-employee director elected or re-elected at such annual meeting, including (1) whetherthe form of the equity compensation, should be in the form of an award of restricted stock, or deferred stock, or an award of non-qualified stock options (NQSOs), or any combination of these, and (2) the number of shares covered by the award or awards. Any awards of deferred stock, restricted stock, or NQSOs, or any combination of these, become effective and are paid to those individuals elected or re-elected as non-employee directors atThe grant date for the award is the annual meeting of shareholders following the BoardCompensation Committee’s determination. AnyThe Stock Plan specifies the terms of the award. In the case of deferred stock awards, the award will not vest unlessone year after the date of grant, provided that the non-employee director continues to serve as a directormember of the Board until the next following annual meeting of shareholders, and resale of the restricted stock, stock issued under a restricted stock or deferred stock award, or shares acquired upon exercise of the NQSOson vesting may not occur until two years afterbe sold before the second anniversary of the date of grant, unless otherwise determined by the annual meeting at whichBoard. Under this provision of the awards were granted. PursuantStock Plan, the Compensation Committee approved a grant of $30,000 of deferred stock to Board action on June 3, 2021, the non-employee directors elected at the 2021 annual meeting,2023 Annual Meeting, which were Mr. Ahn, Ms. Bausch, Mr. Chronister, Mr. Himle, Ms. Offerman and Mr. SchenianSchramm. Accordingly, each of these directors received an award of 2,1421,303 shares of deferred stock on June 3, 2021. This5, 2023, which will vest on the date of this Annual Meeting and will be delivered one year from the vesting date.

In March 2024, the Compensation Committee determined that each non-employee director elected or re-elected at this Meeting will receive an award of deferred stock, awardwith the number of underlying shares equal to $40,000 divided by the fair market value of our common stock on the grant date. The deferred stock will vest June 3, 2022, but not be delivered until June 3, 2023.have the same vesting and delivery terms as the deferred stock granted in connection with the 2023 Annual Meeting.

 

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20212023 Director Compensation.

 

The following table presents the cash and other compensation paid by us to each non-employee member of our Board of Directors in 2021:2023:

 

Name

 

Fees Earned or
Paid in Cash ($)(1)

  

Stock Awards ($)(2)

  

Total ($)

  

Fees Earned or
Paid in Cash ($)(1)

  

Stock Awards ($)(2)

  

Total ($)

 

Maureen H. Bausch

 $34,667  $30,000  $64,667  $48,000  $30,000  $78,000 

Mark Chronister

 $39,333  $30,000  $69,333  $56,000  $30,000  $86,000 

John S. Himle

 $39,333  $30,000  $69,333  $56,000  $30,000  $86,000 

Carin J. Offerman

 $44,000  $30,000  $74,000  $61,667  $30,000  $91,667 

Dale H. Schenian

 $30,000  $30,000  $60,000 

Peter Ahn

 $50,333  $30,000  $80,333 

Damon E. Schramm

 $46,333  $30,000  $76,333 

 


 

(1)

Represents a combination of retainers and committee fees received in 20212023 as described above.

 

(2)

Represents deferred stock awards granted on June 3, 2021, that vests 100% on June 3, 2022 and will be subject to restrictions on resale for an additional year.described above. The values expressed represent the aggregate grant date fair value for these fiscal 2021 deferred stock awards as determined pursuant to Accounting Standards Codification 718, Compensation – Stock Compensation (“ASC 718”), using the assumptions discussed in Note 5, “Stock Based Compensation,” in the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

2023. For a summary of the stock awards held by Mr. Sampson at December 31, 2021,2023, please see “Executive Compensation Programs and Practices – Outstanding Equity Awards at Fiscal Year End.” No non-employee director held any option awards at December 31, 2021.2023. As of December 31, 2021,2023, the non-employee directors then serving held deferred stock awards for the following number of deferred stock awards:shares: Ms. Bausch, 6,2072,681 shares, Mr. Chronister, 4,2402,681 shares, Mr. Himle, 6,5682,681 shares, Ms. Offerman 8,0132,681 shares, Mr. Ahn, 2,162 shares, and Mr. Schenian, 5,755Schramm, 2,162 shares.

 

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

Since the beginning of 2021,2023, we have not entered into any transaction, and there are no currently proposed transactions, in which we were or are to be a participant and in which any related person had or will have a direct or indirect material interest.

 

Our Audit Committee Charter provides that the Audit Committee is responsible for reviewing, approving and providing oversight in regard to related party transactions. Our Code of Conduct also prohibits our employees, including our executive officers, and our directors from engaging in conflict-of-interest transactions, certain of which may also be transactions in which we and a related person has or will have a direct or indirect material interest. By its charter, the Audit Committee is empowered to periodically review the Code of Conduct, as well as any other programs established to monitor compliance with any codes of conduct or business ethics policies established in the future.

 

While we do not have a written policy regarding the standards to be applied by our Audit Committee in reviewing conflict of interest transactions, Minnesota law establishes a procedure to be applied to such transactions which focuses on full disclosure of all of the material facts of the transaction to the Audit Committee, approval of the transaction by disinterested directors, and a showing that the transaction was fair and reasonable to the Company at the time it was authorized, approved, or ratified. We believe the Audit Committee would apply these same standards to any potential transaction in which the Company was a participant and in which any related person had or would have a direct or indirect material interest.

 

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OTHER INFORMATION

 

Shareholder Proposals and Nominees for 20232025 Annual Meeting.

 

The proxy rules of the Securities and Exchange Commission permit our shareholders, after timely notice to us, to present proposals for shareholder action in our proxy statement where these 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 June 1, 20235, 2025 and proxy materials in connection with that meeting are expected to be mailed on or about April 20, 2023.15, 2025. Shareholder proposals prepared in accordance with the Commission’s proxy rules must be received at our corporate office, 1100 Canterbury Road, Shakopee, Minnesota 55379, Attention: President, by December 21, 2022,28, 2024, in order to be considered for inclusion in the Board of Directors’ proxy statement and proxy card for the 20232025 Annual Meeting of Shareholders. Any such proposals must be in writing and signed by the shareholder.

 

Our Bylaws establish an advance notice procedure with regard to (i) business shareholders may wish to present directly at an annual meeting of our shareholders and (ii) the nomination by shareholders of candidates for election as directors. Any shareholder wishing to raise an item of proper business or a nominee directly at an annual meeting must timely comply with the procedural and content requirements of our Bylaws.

 

Properly Brought Business. Our 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 that shareholder’s intention to bring that business before the meeting. To be timely, the notice must be given by the 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 2.92.09 of our Bylaws, which are available for inspection by our shareholders at our 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 our Bylaws.

 

Shareholder Nominations. Our 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 a 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 us 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 3.73.06 of our 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, that person would not be eligible for election as a director.

 

In addition to satisfying the foregoing advance notice requirements under our Bylaws, to comply with the universal proxy rules (once effective) under the Exchange Act, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-9 under the Exchange Act no later than April 3, 2023,5, 2025, which is 60 days prior to the anniversary date of the 20222024 Annual Meeting.

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Annual Report.

 

For its Annual Report to Shareholders for 2021,2023, the Company is providing its Annual Report on Form 10-K for its fiscal year ended December 31, 20212023 as filed with the Securities and Exchange CommissionSEC in connection with paper and electronic deliveries of this proxy statement, and it is also available at https://canterbury-park-holding-corporation.ir.rdgfilings.com/all-sec-filings/.on the “Investors” section of our website at www.canterburypark.com under “SEC Filings.” Shareholders may also request our 20212023 Annual Report on Form 10-K as filed with the Securities and Exchange Commission by writing to the Secretary of the Company at our address on the first page of this proxy statement.

 

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Householding of Proxy Materials.

Registered and street name shareholders who reside at a single address receive only one annual report and proxy statement at that address unless a shareholder provides contrary instructions. This practice is known as “householding” and is designed to reduce duplicate printing and postage costs. However, if a shareholder wishes in the future to receive a separate annual report or proxy statement, he or she may contact the Company in writing at 1100 Canterbury Road, Shakopee, Minnesota 55379. Shareholders can request householding if they receive multiple copies of the annual report and proxy statement by contacting the Company at the address above.

Other Matters.

 

Management knows of no other matters that will be presented at this 20222024 Annual Meeting of Shareholders. If any other matters are properly presented 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.

 

 

 

By Order of the Board of Directors,

/s/ Randall D. Sampson

Randall D. Sampson
President and Chief Executive Officer

 

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