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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 24, 1996
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Fair Grounds Corporation
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(Exact name of registrant as specified in its charter)
Louisiana 0-7607 72-0361770
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(State or Other Juris- (Commission (IRS Employer
diction of Incorporation) File Number) Identification No.)
1751 Gentilly Boulevard, New Orleans, Louisiana 70119
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (504) 944-5515
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 1. CHANGE IN CONTROL OF REGISTRANT.
(a) Effective April 24, 1996, Richard Katcher, Trustee u/t/a/
between John G. Masoni and John G. Masoni, Trustee, pursuant to a restatement
of his Trust Agreement dated April 19, 1991, as modified (the "Trust"),
transferred the 339,604 common shares of Fair Grounds Corporation (the
"Registrant") previously owned by the Trust to Bryan G. Krantz for an
aggregate consideration of $9,984,358. Such purchase price was evidenced by a
promissory note (the "Note") in the principal amount of $9,984,358, bearing
interest at the rate of 5.76% per annum. Interest accrues on the Note until
the first to occur of (i) the expiration of three years from the date of the
Note or (ii) the death of Helen Masoni, whereupon such accrued interest is due
and payable. Thereafter, interest is due and payable quarterly. The principal
balance of the Note is due and payable in full nine years from the date of the
Note. The Note may not be prepaid in whole or in part.
The Note is a nonrecourse obligation, but is secured by a Stock Pledge
Agreement executed by Bryan G. Krantz and Marie G. Krantz, in her capacity as
Voting Trustee under the Voting Trust Agreement described below, in favor of
the Trust. Accordingly, in the event of a default on the Note, the Trust is
limited to foreclosure of the common shares which are the subject of such Stock
Pledge Agreement.
Simultaneously with the transfer of the 339,604 common shares from the
Trust to Bryan G. Krantz, as described above, Bryan G. Krantz and the Trust
entered into an Amendment to Voting Trust Agreement (the "Voting Trust
Agreement") with Marie G. Krantz as Voting Trustee, pursuant to which the
parties, among other things, (i) agreed to the cancellation of a voting trust
certificate previously issued to the Trust and the issuance of a new voting
trust certificate to Bryan G. Krantz relating to the 339,604 common shares
acquired from the Trust; (ii) confirmed that such common shares remain subject
to the terms and conditions of the Voting Trust established pursuant to the
Voting Trust Agreement; and (iii) confirmed that the common shares transferred
to Bryan G. Krantz by the Trust remain subject to the Pledge Agreement
described below in favor of the First National Bank of Commerce. The Voting
Trust Agreement provides that title to such common shares is vested in Marie G.
Krantz as Voting Trustee during the term of the Voting Trust Agreement, and
that in such capacity she may exercise all rights of a holder of common shares
of the Registrant, including the right to vote such shares. Bryan G. Krantz
is not entitled during the term of the Voting Trust Agreement to vote the
shares subject to the Agreement or to take any other action that holders of
shares are entitled to take; however, he has retained the right to receive any
and all dividends and distributions made by the Registrant to the holders of
its common shares. The Voting Trust Agreement is for a term of 15 years
commencing August 31, 1993, is irrevocable during its term, and is to survive
the death of the
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grantors. It may be extended for an additional 10 years at the written request
of such grantors. The common shares which are subject to the Agreement may not
be transferred, sold, assigned or otherwise disposed of by Marie G. Krantz
during the term of the Voting Trust Agreement, other than in connection with
any corporate event or action which affects shares other than the shares
subject to the Voting Trust Agreement.
As a result of the transaction described above, Bryan G. Krantz is the
beneficial owner of 342,204 common shares, constituting approximately 73.1% of
the common shares issued and outstanding, and consisting of (i) the 340,104
common shares held by Marie G. Krantz as Voting Trustee, constituting
approximately 72.6% of the common shares issued and outstanding; (ii) 2,000
common shares held jointly by Bryan G. Krantz and his wife, constituting less
than 1% of the common shares issued and outstanding; and (iii) 100 shares held
by Jefferson Downs Corporation, constituting less than 1% of the common shares
issued and outstanding. Bryan G. Krantz has the sole power to dispose or
direct the disposition of the 340,104 common shares held by Marie G. Krantz as
Voting Trustee, and shares with his wife the power to vote or direct the vote
and to dispose or direct the disposition of the 2,000 common shares held
jointly with her. As an officer and director of Jefferson Downs Corporation,
he may be deemed to share with Marie G. Krantz the power to vote or to direct
the vote and the power to dispose or to direct the disposition of the common
shares held by such corporation. Mr. Krantz's power to dispose of all of the
common shares beneficially owned by him is subject to the terms and conditions
of the Voting Trust Agreement, the Loan Agreement and the various pledge
agreements described herein.
Marie G. Krantz is the beneficial owner of 380 common shares held
directly by her, as to which she has sole voting and dispositive power, and of
100 common shares held by Jefferson Downs Corporation, constituting less than
1% of the common shares issued and outstanding, as to which she may be deemed
to share voting and dispositive power with Bryan G. Krantz. By virtue of her
position as Voting Trustee pursuant to the Agreement described herein, Marie G.
Krantz may be deemed to be the beneficial owner of the 340,104 Shares held by
her in such capacity. Ms. Krantz's power to dispose of all of the common
shares beneficially owned by her is subject to the terms and conditions of the
Voting Trust Agreement, the Loan Agreement and the various pledge agreements
described herein.
(b) All of the common shares of the Registrant owned in the
aggregate by the Marie Krantz, Bryan Krantz, Vickie Krantz and Jefferson Downs
Corporation are subject to pledge agreements (the "Pledge Agreements") in favor
of the First National Bank of Commerce ("FNBC"), as security for the
Registrant's obligations to FNBC under a Loan Agreement entered into in 1995.
Pursuant to the Pledge Agreements, each such shareholder has granted to FNBC a
security interest in all common shares of the Registrant owned by
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such shareholder, and in any additional common shares which may be received.
So long as the Registrant's indebtedness under such Loan Agreement remains
outstanding, the common shares subject to the Pledge Agreements may not be
sold, transferred or disposed of in any way. FNBC has consented to the sale of
common shares by the Trust to Bryan G. Krantz, as described above. Unless and
until an event of default occurs, each shareholder is entitled to exercise all
voting rights and receive all dividends with respect to such shares. In the
event of a default, including a default under any other guaranty or security
agreement entered into in connection with such Loan Agreement, FNBC will be
entitled, among other things, to transfer all or part of the pledged shares
into its name, exercise all voting rights and sell all or any part of such
shares. Any such sale of all or a substantial portion of the common shares
subject to the Pledge Agreements would result in a change of control of the
Registrant. Except as described above, the Registrant is not aware of any
arrangements, the operation of which may at a subsequent date result in a
change in control of the Registrant.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
FAIR GROUNDS CORPORATION
By: /s/ Gordon Robertson
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Its: Vice President and CFO
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Date: May 9, 1996
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