| MEMORANDUM
OF AGREEMENT
This
Agreement is between
WOODBINE ENTERTAINMENT GROUP ("WEG")
WEG is an Association as defined by the Canadian Pari-Mutuel
Agency and is the owner and operator of Woodbine and Mohawk
Racetracks at which standardbred horses race.
and
THE
ONTARIO HARNESS HORSE ASSOCIATION ("OHHA").
OHHA is a trade association of owners and trainers of standardbred
race horses and provide representation and services for
its members and their employees engaged in standardbred
horse racing.
The
parties mutually agree to the following terms and conditions
of this agreement:
Exclusive Representation
During
the term of the agreement, WEG recognizes OHHA as the exclusive
representative of those owners and trainers of standardbred
horses in Ontario which race and stable at both Mohawk and
Woodbine Racetracks. In the event the term of this agreement
expires before a new agreement is executed, then it is mutually
agreed that a ninety-day cure period will follow the expiry
date of this agreement. During this cure period both parties
agree to negotiate in good faith and WEG agrees and acknowledges
that during the above referenced cure period OHHA shall
be the exclusive representative and bargaining agent for
horsepeople in respect to standardbred racing matters.
Term
of Agreement
Unless
terminated, this agreement is effective from January 1,
2003 until and including December 31, 2005. This agreement
shall be automatically renewed for a further period of one
(1) year. Unless either party notifies the other party in
writing on or before October 1, 2005 that it wishes to terminate
this agreement, in which case the agreement shall terminate
on December 31, 2005.
Discussion
and Consultation
During
the term of the agreement, WEG and OHHA agree to meet on
a quarterly basis to discuss matters of mutual interest.
Matters discussed will relate specifically to issues that
directly affect horsepeople (i.e. purse accounts, purses,
race dates, racing surfaces, training and stabling facilities
and race office).
WEG
will be represented by three (3) members of Senior Management.
OHHA will be represented by its Executive Director and no
more than two (2) members of its board.
These representatives will also meet to discuss those matters
in this agreement that specifically require consultation
including race date applications. At least 14 days prior
to the submission of WEG's annual application to the Ontario
Racing Commission ("ORC") for Standardbred and
Thoroughbred race dates, the representatives will meet to
discuss such application. WEG agrees to inform OHHA of any
subsequent application for changes in the Standardbred and
Thoroughbred racing schedule. OHHA, by virtue of such consultation,
shall not be deem to have waived its rights to thereafter
oppose WEG's application at the ORC hearings.
Purse
Distribution.
The
aggregate purse amounts to be distributed through the standardbred
horsemen's purse accounts during the term of this Agreement
shall be calculated as follows:
(a)
in respect of live standardbred races conducted by the Association,
fifty per cent (50%) of the gross commission revenue;
(b)
fifty per cent (50%) of the net breakage from wagering on
all standardbred races at WEG facilities;
(c)
in respect of wagering on simulcast races, the following
amounts of the gross commission revenue:
on thoroughbred
simulcasts originating from U.S. racetracks during the historical
fourteen week standardbred winter meet (being approximately
early-December to mid-March):
to the
Association, fifty per cent (50%);
to the
standardbred purse account, twenty-five per cent (25%);
to the
thoroughbred purse account, twenty-five per cent (25%);
(ii)
on thoroughbred simulcasts originating from Hong Kong racetracks:
(a)
to the Association, fifty per cent (50%);
(b)
to the standardbred purse account, twenty-five per cent
(25%);
(c)
to the thoroughbred purse account, twenty-five per cent
(25%);
(iii) on all other standardbred simulcasts:
to the
WEG, fifty per cent (50%);
to the
standardbred purse account, fifty per cent (50%);
to the
thoroughbred purse account, no amount
on all
thoroughbred simulcasts:
(a)
to the WEG, fifty per cent (50%);
(b)
to the standardbred purse account, no amount;
(c)
to the thoroughbred purse account, fifty per cent (50%);
(d)
plus or minus, as the case may be, in respect of interest
on underpayments or overpayments of purses calculated weekly
on the amount of such underpayment or overpayment before
interest, as at the close of business each Saturday, based
upon the interest rates in effect on the first banking day
after each Saturday as provided by the Scotia Bank, Toronto
Main Branch. The amount of interest is determined as follows:
(i)
on the first $1 million, interest will be calculated at
a rate of prime minus 3%;
(ii)
on any balance in excess thereof, interest will be calculated
at a rate of prime minus 2%;
(e)
WEG shall add to the aggregate purse amounts a sum equal
to fifty percent (50%) of the balance of uncashed pari-mutuel
tickets and voucher revenue, as determined by WEG annually
throughout the term of this agreement,
For
these purposes, 'gross commission revenue' means gross commission
revenue derived and retained by WEG from its share of money
wagered at WEG facilities on the relevant races, including
all inter-track, off-track, simulcast, teletheatre, telephone
account betting, or other forms of remote wagering involving
standardbred racing; and also for these purposes, "gross
commission revenue" shall be calculated net of takeout
adjustments in respect of the HorsePlayer® Rewards Program
and any simulcast fees paid to host tracks.
Horsepeople's Administration Fees
During
the term of this Agreement, WEG will pay to OHHA an amount
equal to one and one-half percent ( 1 ½ %) of total
purses paid. OHHA undertakes to ensure that all other racetracks
in Ontario who operate standardbred race dates will remit
to OHHA the same ( 1 ½ %) portion of purses paid.
Simulcasts
and Live Race Dates
(a)
WEG undertakes to apply for a minimum of 260 race dates
per year during the term of this agreement.
(b)
WEG is committed to the provision of high quality live standardbred
racing at its racetracks. WEG and OHHA agree that simulcasting
will be used to supplement existing live racing and will
not be used to displace live racing. The uninterrupted availability
to the public of simulcast racing product is critical to
the ongoing competitive position of WEG, its horsepeople
and the many thousands of people employed in the industry.
WEG agrees to advise OHHA of its plans for standardbred
and thoroughbred simulcast programs in writing in advance
of the ORC race date hearings each year.
WEG
may simulcast individual races or full programs from both
Mohawk and Woodbine racetracks to other racetracks, teletheatres
and/or casinos for the purpose of conducting wagering on
such races. WEG will use reasonable commercial efforts to
negotiate the best possible financial arrangements regarding
the simulcasting with the other racetracks, teletheatres
and/or casinos and the financial arrangements negotiated
will be deemed to be acceptable to OHHA.
(c)
WEG will use reasonable commercial efforts to card a minimum
of ten races per live card. It is acknowledged by WEG and
OHHA that large fields are necessary and desirable and further
that the availability of horses will determine the number
of races carded.
Purses
and Stake Races
(a)
WEG will allocate to stakes races no more than 13.75% of
the sum of total purses paid on standardbred races less
monies provided by provincial grant or sponsors unless otherwise
agreed to by OHHA. Further, any amount paid out for stakes
races in excess of 13.75% of the purse distribution in the
current year may be carried forward and deducted from purse
monies allocated to stakes races in the following year.
(b) Any purse monies generated from the Provincial levy
(i.e. 2% on all bet types except trifectas and 4% on trifectas)
shall be in addition to the purse for each such event, provided
that such monies shall not form part of said 13.75% described
in paragraph (a).
(c)
Prior to finalization of the Stakes Schedule and before
the value of any stakes race is increased or decreased or
before the conditions thereof are altered, including the
amount of nomination and sustaining payment fees for early
closing stakes, and before any new stakes races are added
or existing stakes races deleted, representatives of WEG
will participate in a process of meaningful consultation
with OHHA as contemplated in paragraph 3 of the agreement.
(d)
Insurance premiums on bonuses paid to multiple stakes winners
will be paid out of the purse distribution.
(e)
Any purse monies generated from Provincial levy shall be
in addition to the purse distribution and shall be paid
in accordance with the requirements of the OHRIA Memorandum
of Understanding which stipulates the distribution of takeouts.
However, any portion of such purse monies not allocated
to stakes races by such requirements shall be applied to
overnight purses and purse grant monies shall be considered
part of this purse distribution for purposes of this Agreement.
(f)
Summaries showing total wagering, net breakage, purses accruing
to horsemen, total purses paid, stakes to date as a percentage
of total purses paid, the amount of any underpayment or
overpayment of purses for the year to date, and the amount
of interest thereon, will be delivered to OHHA office monthly.
All
purses shall be distributed as between first (50%), second
(25%), third (12%), fourth (8%) and fifth (5%) place finishers.
In the event there are less than (5) starters, then Rule
18:02 of the ORC Rules of Standardbred Racing shall apply.
(g)
Before implementing any increases or decreases in the overnight
purse scales and in the absence of an agreed formula, WEG
will engage in a process of meaningful consultation with
OHHA as contemplated in paragraph 3 of this agreement.
Horsepeople's
Benevolent Fund
WEG
agrees to contribute two hundred dollars ($200.00) per live
standardbred racing program conducted at its standardbred
racetracks in each calendar year during the term of this
agreement into a special fund to be known as the "Woodbine
Entertainment Harness Horsepeople's Benevolent Fund".
The Fund shall be used to provide financial benefits to
drivers, trainers, grooms and their families in the event
any driver, trainer or groom may be injured or die while
working on the Woodbine or Mohawk racetracks. A committee
composed of an equal number of WEG and OHHA representatives
shall be established for the purpose of managing and disbursing
monies from the fund.
The amount to be paid pursuant to this paragraph shall be
deposited within fifteen (15) days of the end of each month
in to the aforementioned accounts. OHHA agrees to prepare
and distribute to WEG a financial accounting of the fund
twice a year.
9.
Members Participation in Races:
It
has been and will continue to be the policy of WEG during
the term of this Agreement to advise officials of the Ontario
Racing Commission ("ORC") before an ORC licensee
is prohibited from participating in standardbred racing
at Woodbine. In addition to complying with this policy,
WEG undertakes that prior to such prohibition decision being
made:
(a)
WEG will permit the ORC licensee to present to the Vice-President
Standardbred Racing his or her reasons why he or she should
continue to be permitted entry to WEG's Mohawk and Woodbine
premises for the purpose of participating in standardbred
racing. It is understood and agreed that such person shall
be entitled to bring with him a member of the executive
of OHHA, who is available to meet on a timely basis, for
the purpose of assisting such person in his or her discussions
with the Vice-President Standardbred Racing. The purpose
of any such discussion will be to provide each of WEG and
OHHA and the individual in question with an understanding
of the position of each of the others. Following such discussion
and after due consideration of all respective positions,
the Vice-President Standardbred Racing will, in his sole
discretion, determine whether to continue to permit the
individual in question continued entry to WEG's Mohawk and
Woodbine premises for purposes of participating in standardbred
racing.
(b)
In the event of a decision by the Vice-President Standardbred
Racing to prohibit an ORC licensee from participating in
standardbred racing at both Mohawk and Woodbine racetracks,
WEG shall advise OHHA when any consultation with officials
of the ORC is contemplated in order that the position of
OHHA on the matter may be communicated to the ORC.
10.
Revenue Sharing - Racetrack Slot Machines
It
is agreed by WEG and OHHA that the horsepeople's share of
slot machine revenues generated at Woodbine and Mohawk racetracks
will be split 50% to the Standardbred purse account and
50% to the Thoroughbred purse account.
11.
Teletheatres:
For
purposes of the Agreement, the parties agree that Teletheatres
operated by WEG constitute an extension of on-track wagering.
WOODBINE
ENTERTAINMENT GROUP
By:___________________________________ name: David Willmot
Chairman, President & Chief Executive Officer
By:___________________________________
name: Hugh Mitchell
Sr. Vice President - Racing
We have
authority to bind the Corporation
ONTARIO
HARNESS HORSE ASSOCIATION
By:___________________________________
name: Jim Whelan
President
By:___________________________________
name: John Walzak
Chief Operating Officer
We
have authority to bind the Association
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