SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 [X]
Definitive Additional Materials [ ]
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MID-STATE RACEWAY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MID-STATE RACEWAY, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14(a)-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
5) Total Fee Paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- -------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------
4) Date Filed:
----------------------------------------------------------------------
<PAGE>
MID-STATE RACEWAY, INC.
VERNON DOWNS
VERNON, NEW YORK
December 18, 1996
Frank O. White, Jr..
President and
Chief Executive Officer
TO THE SHAREHOLDERS OF MID-STATE RACEWAY, INC.:
You are cordially invited to attend a SPECIAL MEETING OF SHAREHOLDERS on
January 14, 1997 at 9:30 A.M. in the Miracle Mile Room of the lower clubhouse at
Vernon Downs, Vernon, New York.
Your attention is directed to the enclosed letter to shareholders,
describing management's position with respect to the nomination of alternative
candidates to the Board of Directors. Also enclosed is the notice of this
meeting, proxy statement, financial statements and proxy card.
It is important that your stock be represented at the meeting, regardless
of the number of shares you may hold. Whether or not you plan to attend the
meeting, please sign, date and return the enclosed proxy card in order to be
sure that your shares will be voted at the meeting. You may revoke your proxy
and vote in person if you do attend the meeting. It is not necessary that your
signature be witnessed.
Yours sincerely,
President and
Chief Executive Officer
<PAGE>
[company logo]
---------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
---------------------------------------------
A Special Meeting of Shareholders of MID-STATE RACEWAY, INC. (the
"Company") will be held in the Miracle Mile Room of the lower clubhouse, Vernon
Downs, Vernon, New York 13476 on Tuesday, January 14, 1997 at 9:30 A.M. to
consider and take action upon the following matters:
1. To elect three directors, each for a term of three years;
2. To ratify the appointment of Douglas Burch to fill a vacancy on the
Board; and
3. To transact other business that may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on December 5, 1996
are entitled to notice and to vote at the meeting. This notice is being issued
at the direction of the Board of Directors.
By Order of the Board of Directors
James J. Moran
Vice President and Secretary
Dated: December 18, 1996
<PAGE>
PROXY STATEMENT
TO THE SHAREHOLDERS:
The solicitation of the enclosed proxy is made by and on behalf of
Mid-State Raceway, Inc., P. O. Box 860, Vernon, New York 13476 and the cost of
solicitation will be borne by the Company. The proxy is revocable at any time
prior to its exercise. A proxy may be revoked by giving written notice to the
Secretary of the Company at the Company's address, by attending the Special
Meeting and voting your shares of stock in person, or by executing and
delivering to the Secretary a later-dated proxy prior to the Special Meeting.
Shareholders of record at the close of business on December 5, 1996 are
entitled to notice and to vote at the Special Meeting. On December 5, 1996,
250,386 shares of Common Stock were issued and outstanding with each share
entitled to one vote.
Proxies and proxy soliciting material are being mailed to shareholders on
or about December 18, 1996.
ITEMS 1 AND 2. ELECTION OF DIRECTORS
The first item to be acted upon at the Special Meeting is the election of
three directors who stand for election to the nine member Board of Directors. In
accordance with the Company's Certificate of Incorporation and Bylaws, the Board
of Directors is divided into three classes as nearly equal in number as
possible. The members of each class are elected for a term of three years, and
until their successor is duly elected and qualified. One class of directors is
elected at an annual meeting. In addition, action will be taken to ratify the
appointment of Douglas Burch to fill a vacancy in a separate class of directors
for one year, and until his successor is duly elected and qualified. Mr. Burch
was appointed to fill the vacancy created by the resignation of Dick MacPherson
on September 5, 1996.
Shares represented by the enclosed proxy are intended to be voted, unless
authority is withheld, for the election of the nominees listed below. Should any
nominee become unavailable to serve as director, which is not anticipated, those
shares will be voted for an alternate, or alternates, if any, designated by the
Board of Directors. The other members of the Board, who are listed below,
presently are expected to continue to serve on the Board until their respective
terms expire.
The nominees designated by the Board of Directors are listed on the
following pages with brief statements setting forth their present principal
occupations and other relevant information.
<PAGE>
The Company, has also received a written notice from Gwen Bennett,
president of Standardbred Enterprises Limited, placing in nomination the names
of Robert V. McSweeney, Jeremiah C. Law, and Robert Sprague as candidates for
directors, together with their consent to serve as a director. Subsequently, Mr.
Sprague withdrew his name as a nominee.
Neil Wager, the beneficial owner of 1,750 shares of common stock, from
Garden City, New York, has also submitted a written notice requesting that Sal
Trovato, David Slyman, Sr., and Albert J. Wozniak be nominated as directors,
together with their consent to serve as a director. No information regarding the
background or qualifications of these nominees was submitted to the Company.
Accordingly, five candidates plus the Board's three incumbent nominees are
eligible candidates for the three open positions on the Board. The three
nominees receiving a plurality of the votes represented in person or by proxy at
the Meeting will be elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" ROBERT W.
JAQUINT, CARL J. EILENBERG, AND JAMES E. RAYMONDA, THE NOMINEES LISTED BELOW.
<PAGE>
NOMINEES FOR DIRECTOR AND DIRECTORS CONTINUING IN OFFICE
NOMINEES
TERMS EXPIRING AT ANNUAL MEETING IN 1999
<TABLE>
<CAPTION>
Common Shares
Beneficially
Owned as of
Became December 5,
Name and Age Principal Occupation Director 1996(A)
------------ -------------------- -------- -------------
<S> <C> <C> <C> <C>
Robert W. Jaquint (71) Former Treasurer 1979-1994; 1979 378
* *** **** Comptroller and Assistant Secretary
1968-1978; Comptroller 1963-1978;
Treasurer and Director of Syracuse
Mile, Inc.; Certified Public
Accountant.
Carl J. Eilenberg (66) Executive Editor of Rome Observer; 1994 100
** *** President of Rome Sports Hall-Of-
Fame; Director of Rome Chapter, American
Red Cross as well as numerous other
organizations; Internal Communications
Director (PA) at Carrier Dome, Syracuse
University; Former Mayor (three terms,
1980-91) Rome, New York.
James E. Raymonda (63) Former Chairman, Mohawk Valley 1988 100
*** **** Regional Board, Fleet Bank of N.Y.;
Director of Utica First Insurance Company;
Director of Heritage Home; Member of St.
Elizabeth Hospital Board of Trustees;
Director and Treasurer of Community
Foundation of Herkimer & Oneida Counties;
Director and Past President of United Way
of Greater Utica as well as numerous other
organizations.
</TABLE>
<PAGE>
<TABLE>
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING AT ANNUAL MEETING IN 1997
<CAPTION>
Common Shares
Beneficially
Owned as of
Became December 5,
Name and Age Principal Occupation Director 1996(A)
------------ -------------------- -------- -------------
<S> <C> <C> <C> <C>
Jerome M. Wilson (79) Former Vice President, 1973-1994; 1962 3,138-5/6(a)
Vice President and Secretary, 1977-1987;
Director of Syracuse Mile, Inc.; Chairman
of John Wilson Realty Co., Syracuse, N.Y.;
Regional Director of Chase Manhattan Bank,
N.A., Syracuse, N.Y.; Director of Syracuse
Welfare Corp.; Regent of LeMoyne College,
Syracuse, N.Y.; Partner, Lloyd-Martin
Antiques; Trustee of Cazenovia College,
Cazenovia, N.Y.
Frank O. White (73) Former President and Chief Executive 1970 1,794
* **** Officer, 1973-1994; Executive Vice
President, 1965-1972; Chairman of the Board
and Director of Syracuse Mile, Inc.;
Director of Harness Horse Breeders of
N.Y.S.; Director of HTA Insurance Co., Ltd.
Bermuda; Trustee of the Trotting Horse
Museum and Hall of Fame of the Trotter;
President and Director of Hinman Charitable
Foundation.
(continued on next page)
</TABLE>
<PAGE>
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING AT ANNUAL MEETING IN 1997
<TABLE>
<CAPTION>
Common Shares
Beneficially
Owned as of
Became December 5,
Name and Age Principal Occupation Director 1996(A)
------------ -------------------- -------- -------------
<S> <C> <C> <C> <C>
Douglas Burch (41) President and Treasurer of Capital 1996 0
District Sports, Inc. since 1993; Vice
President of Corporate Marketing for the
Olympic Authority in Lake Placid, N.Y.,
1982-1993; Director of Marketing and Public
Relations of Adirondack Red Wings,
1978-1982; Albany representative on the
American Hockey League's Board of
Governors, serving on both the Marketing
and Expansion Committees; Serves as Mayor's
appointee on the Capitalize Albany
Committee for Economic Development. 1995
Honors Unanimously elected recipient of the
James C. Hendy Memorial Award as the AHL's
Executive of the Year.
</TABLE>
(continued on next page)
<PAGE>
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING AT ANNUAL MEETING IN 1998
<TABLE>
<CAPTION>
Common Shares
Beneficially
Owned as of
Became December 5,
Name and Age Principal Occupation Director 1996(A)
------------ -------------------- -------- -------------
<S> <C> <C> <C> <C>
Frank O. White, Jr. (42) President and Chief Executive Officer 1985 1,142
* ** since April, 1994; Vice President and
General Manager, 1990-1994; Assistant
General Manager 1983-1990; Director of
Mutuels since 1981; Assistant Mutuel
Manager 1979-1980; Mr. White is the son of
director Frank O. White; Vice President and
Director of Harness Tracks of America,
Inc.; Director of United States Trotting
Association; Director of Syracuse Mile,
Inc.; Director of HTA Insurance Co., Ltd.
Bermuda; Director of Community Memorial
Hospital, Hamilton, N.Y.; Trustee of Oneida
Savings Bank; Member of Equine Advisory
Council, College of Veterinary Medicine,
Cornell University.
James J. Moran (56) Vice President and Secretary since 1986 100
* ** 1994; Assistant Secretary 1985-1994;
Director of Publicity/Public Relations
since 1975; Track Announcer since 1964;
Served in Racing and Program Departments
1962 and 1963; Past President and Chairman
of the Board of the North American Harness
Publicists Assn.; Secretary/Treasurer of
Vernon Chapter of U.S. Harness Writers
Assn.; Alternate Director of Harness Tracks
of America, Inc.
</TABLE>
(continued on next page)
<PAGE>
<TABLE>
<CAPTION>
Common Shares
Beneficially
Owned as of
Became December 5,
Name and Age Principal Occupation Director 1996(A)
------------ -------------------- -------- -------------
<S> <C> <C> <C> <C>
David H. Brown (57) Assistant to the President since 1994: 1995 358
* Assistant Mutuel Manager. 1989-
1994: Mutuel Clerk and Executive
Board member. Local 234, S.E.I.U.,
1967-1988; Director of Mutuels
Syracuse Mile, Inc., since 1994; Vice
President and Executive Board
Member of Catholic School
Administrators' Assn. of N.Y.S. 1981-
1990; Teacher, Coach. Athletic
Director and Assistant Principal, Notre
Dame, High School, Utica, N.Y.
1963-1992.
All officers and directors as a group (including 9 individuals named 7,110-5/6 2.84%
above)
</TABLE>
(a) The percentage of Common Stock beneficially owned by each director is
less than 1%, except with respect to Mr. Wilson, whose percentage ownership is
1.25%. Mr. Wilson's stated holdings include 1,151 shares held by Mr. Wilson's
wife, as to which he disclaims beneficial ownership.
* Member of Executive Committee
** Member of the Advertising Committee
*** Member of the Compensation Committee
**** Member of the Audit Committee
<PAGE>
COMMITTEES OF THE BOARD
The Board of Directors of the Company has Executive, Compensation, Audit
and Advertising Committees. Although the Company does not have a Nominating
Committee, the Board of Directors, as a committee of the whole, performs the
functions of such a committee by reviewing nominations and then making a
recommendation to the shareholders. The Bylaws of the Company provide that a
shareholder entitled to vote in the election of directors may nominate one or
more persons for election only if a written request is received by the Secretary
of the Company, not less than 30 days prior to the date fixed for the meeting,
together with the written consent of the nominee to serve as a director. The
Board of Directors will consider shareholders' recommendations for directors
sent to James J. Moran, Vice President and Secretary, Mid-State Raceway, Inc.,
P.O. Box 860, Vernon, New York 13476.
EXECUTIVE COMMITTEE. The Executive Committee held one meeting during the
nine month period ended December 31, 1995 and has all the authority of the Board
of Directors.
COMPENSATION COMMITTEE. The Compensation Committee held one meeting during
the nine month period ended December 31, 1995 to review the compensation of all
employees and makes recommendations to the Board of Directors.
AUDIT COMMITTEE. The Audit Committee held one meeting during the nine month
period ended December 31, 1995. It reviews, with the Company's independent
auditors, the scope of the audits to be made to determine whether or not such
audits are adequate to protect the interests of the Company. It also reviews the
scope and results of the examination made by such auditors.
ADVERTISING COMMITTEE. The Advertising Committee held twelve meetings
during the nine month period ended December 31, 1995. It recommends to the Board
of Directors the annual advertising budget and reviews the production and media
expenditures with the advertising/public relations agency.
The Board of Directors of the Company held six regular meetings during the
nine month period ended December 31, 1995. Each director attended at least 75%
of all meetings of the Board of Directors and all committees on which the
director served.
COMPENSATION OF DIRECTORS
Employee directors of the Company are not paid any fees or remuneration for
service as members of the Board of Directors. During the nine month period ended
December 31, 1995, non-employee directors received $250 for each Board Meeting
attended and $125 for each Committee Meeting attended.
<PAGE>
OWNERSHIP OF COMMON STOCK
At the close of business on December 5, 1996, the Company had outstanding
250,386 shares of Common Stock. No person or group is known by the Company to
beneficially own more than five percent (5%) of the Company's Common Stock
except as set forth in the following table.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class
- ------------------- ------------------ ----------
Standardbred Enterprises, Ltd 135,606 54%
3837 Peterboro Road
Oneida, NY 13421
CHANGE OF CONTROL
Since the last Annual Meeting of Shareholders, a change of control in the
stock ownership of the Company has occurred from Patrick R. Bennett to his wife,
Gwen Bennett based upon the transfer of beneficial ownership of Company common
stock constituting a majority interest. The information disclosed in this
section in accordance with the SEC Rule 14a-3 is taken from the Schedule 13D
filed by Gwen Bennett and the Company has not confirmed or verified the current
status of these matters.
As disclosed in the Schedule 13D filed April 30, 1996, Standardbred
Enterprises Limited ("Standardbred Enterprises") acquired 126,657 shares of the
Company's common stock as of December 28, 1995 from Patrick R. Bennett for the
purchase price of $1,950,000. Gwen Bennett, wife of Patrick R. Bennett, owns
100% of the stock and is President of Standardbred Enterprises. As sole
consideration for the transfer of the 126,657 shares, Patrick R. Bennett
received a promissory note from Standardbred Enterprises in the amount of
$1,950,000 (the "Note"), which Note matures in full on December 30, 1999. The
Note provides for payments of interest only of $195,000 annually on December 31,
1996, 1997, and 1998 and a final payment of principal and interest of $2,145,000
on December 30, 1999. The Schedule 13D does not disclose the existence of any
pledge, voting arrangement, or other security given by Standardbred Enterprises
in connection with issuing the Note for $1,950,000 to acquire the shares.
CERTAIN RELATED TRANSACTIONS
During the nine months ended December 31, 1995, various companies
affiliated with the former majority shareholder, Patrick R. Bennett, paid in
aggregate $148,000 to the Company for corporate sponsorship of various races.
<PAGE>
In 1994, the Company entered into a lease agreement with a partnership that
includes the Company's former majority shareholder, Patrick R. Bennett. Pursuant
to the lease agreement, the Company leases a portion of its real property for
the purpose of permitting the lessee to operate a hotel adjacent to the
Company's facilities. The term of the lease is for 20 years with renewal options
for an additional 20 years. Anytime during the lease or any renewal period of
the lease, the Company may elect to assume all of lessee's duties, obligations,
rights and responsibilities under the lease with respect to the hotel. Lease
payments during the initial 20 year period are $10,000 per year.
EXECUTIVE COMPENSATION
The following table sets forth information concerning annual compensation
paid by the Company to those persons who were, at December 31, 1995, (i) the
chief executive officer and (ii) the other executive officers whose annual
salary and bonus exceeded $100,000 during the last three fiscal years.
Summary Compensation Table
Name and Principal Position Year Salary
--------------------------- ---- -------
Frank O. White, Jr. 1995 $ 90,000
President and CEO 1994 $ 77,000(1)
The Company has an employment agreement with Frank O. White, Jr. providing
for his employment as the Company's President and Chief Executive Officer
through June 30, 1999, unless terminated early pursuant to the terms of the
Agreement. The Agreement may be terminated by the Board for good cause at any
time. The Agreement requires that Mr. White devote his full working time and
attention to performance of his duties for an annual salary of not less than
$90,000. The Agreement also provides that if Mr. White's employment is
terminated following a change in control of the Company, Mr. White would be
entitled to a payment equal to 2.95 times his annualized includible compensation
and be given full credit for service until age 65 for purposes of retirement
benefits and other employee benefit programs. The Company has an employment
agreement with one other executive officer which contains similar provisions as
the agreement with Mr. White.
- --------
(1) Mr. White was appointed President and CEO effective April 1, 1994 at a
base salary of $90,000. Thus, the amount reported for 1995 is more than 1994 not
because of a raise in salary, but because 1994 does not reflect a full year's
salary to Mr. White as President and CEO.
<PAGE>
The Company provides group coverage benefits for life, health and hospital
insurance and a retirement/savings plan which are available to all full time
salaried employees.
OTHER MATTERS
The management is not aware of any other matters to be presented at the
meeting. If other matters properly come before the meeting, it is the intention
of the persons named in the proxy to vote with regard thereto in accordance with
their judgment.
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Corporation no later than February 1, 1997 in
order to be included in the 1997 proxy statement and proxy relating to that
meeting.
A copy of Mid-State Raceway, Inc.'s December 31, 1995 Annual Report on
Form 10-K, filed with the Securities and Exchange Commission, is available
without charge to those shareholders who wish more detailed information
concerning the Company. If you wish a copy, please write to: JAMES J. MORAN,
VICE PRESIDENT AND SECRETARY, MID-STATE RACEWAY, INC., P.O. BOX 860, VERNON, NEW
YORK 13476.
By Order of the Board of Directors
Vice President and Secretary
James J. Moran
Dated: December 18, 1996
<PAGE>
Form of Proxy
-------------
MID-STATE RACEWAY, INC.
PROXY for Special Meeting of Shareholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Frank O. White, James J. Moran, and Frank
O. White, Jr., or any of them, each with power of substitution, as proxies of
the undersigned to attend the Meeting of Shareholders of Mid-State Raceway,
Inc., that will be held in the lower clubhouse Miracle Mile Room at Vernon
Downs, Vernon, NY on January 14, 1997 at 9:30 A.M. and any adjournment thereof,
and to vote the number of shares the undersigned would be entitled to vote if
personally present in the manner indicated below and on the reverse side hereof,
and in their discretion on any other matter which may properly come before the
meeting.
The Board of Directors recommends that the shareholders vote "FOR" the
following proposals.
1. The election of Robert W. Jaquint, Carl J. Eilenberg and James E.
Raymonda to the Board of Directors:
FOR / / (Except as noted below) Vote Withheld / /
To withhold your vote on any individual nominee for director, strike a line
through the nominee's name below:
Robert W. Jaquint Carl J. Eilenberg James E. Raymonda
2. The ratification of the appointment of Douglas Burch to fill a vacancy
on the Board:
FOR / / AGAINST / / ABSTAIN / /
(Continued And To Be Signed On The Other Side)
- -------------------------------------------------------------------------------
(Continued From Other Side)
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
"FOR" ALL PROPOSALS.
The undersigned hereby acknowledges receipt of the notice of the Meeting of
Shareholders of the Corporation.
------------------------------------
------------------------------------
Please sign exactly as your name
appears at left.
Date:
-------------------------------
/ / I PLAN TO ATTEND THE MEETING
(Please mark, sign, date, and mail in the enclosed envelope)
MID-STATE RACEWAY, INC.
[Company Letterhead]
Dear Shareholder:
We are finally able to conduct the shareholders meeting which would
normally have been held last June. The meeting is now scheduled for January 14,
1997. Enclosed is a proxy statement together with the annual report for the year
ending December 31, 1995.
As previously reported, the delay in holding the annual meeting was brought
about when our accountants, Coopers & Lybrand, who had served as our auditors
for 34 years, abruptly resigned, apparently so that one of their partners,
Richard Breeden, could become trustee in bankruptcy of the Bennett companies.
As you know, in 1992 Patrick Bennett acquired a controlling interest in the
Company by his acquisition of approximately 54% of the outstanding common stock.
At Patrick's request, Dick MacPherson, who became affiliated with the Bennett
companies after his coaching career ended, became a member of the Board of
Directors. Those who had previously served as directors continued in office.
Thereafter, Patrick and his family provided considerable support to our
operations in the form of promotions and sponsorships.
Then, in the Spring of 1996, the Securities & Exchange Commission ("SEC")
initiated proceedings against Patrick, and several of the family-owned companies
based on allegations of widespread fraud and the promotion of a so-called
"Ponzi" scheme. Shortly thereafter, several of the principal Bennett companies
went into bankruptcy.
On April 30, 1996, Gwen K. Bennett, Patrick's wife, filed a report with the
SEC in which she stated that she, as 100% owner of the common stock of
Standardbred Enterprises Limited, had acquired 126,657 shares of common stock of
Mid-State from her husband for a purchase price of $1,950,000. She disclosed
that the source of funds for the purchase was a loan from her husband in the
amount of the purchase price evidenced by a promissory note dated as of December
28, 1995 calling for payments of interest only on December 30, 1996, 1997 and
1998 and a final payment of both interest and principal of $2,145,000 on
December 30, 1999. The Mid-State shares were not pledged as collateral for the
promissory note, and therefore Gwen received the shares free and clear of any
liens.
Following the commencement of the Bennett companies bankruptcy proceeding,
Dick MacPherson resigned from the Mid-State Board of Directors.
In July, 1996, Gwen Bennett nominated Robert Sprague, Robert V. McSweeney
and Jeremiah Law for election to the position of director of Mid-State Raceway,
Inc. Mr. Sprague was a business associate of the Bennett family. Robert
McSweeney is the manager of the hotel adjacent to the Mid-State racetrack.
Jeremiah C. Law is the owner of a restaurant on Route 5 near Vernon known as the
"Squat and Gobble." Gwen Bennett was formerly employed by that restaurant in a
service capacity. Thereafter, Robert Sprague withdrew his nomination.
Neil Wager, the beneficial owner of 1,750 shares of Mid-State, has
nominated Sal Trovato, David Slyman, Sr. and Albert J. Wozniak for the position
of director. It is our understanding that Mr. Wager acquired from Patrick
Bennett the promissory note his wife gave in payment for the Mid-State stock,
which Patrick transferred to Standardbred Enterprises
<PAGE>
Limited. Mr. Wager has provided no information about the background or
experience of the nominees except for addresses, and they are not personally
known to any members of the Mid-State Board or the officers of Mid-State. The
notice lists an address for Mr. Trovato in East Northport, New York, an address
for Mr. Slyman in Muscle Shoals, Alabama, and an address for Mr. Worniak in
Moonachie, New Jersey.
On September 5, 1996, the Board of Directors appointed Douglas Burch as a
member of the Board to fill the vacancy created by the resignation of Dick
MacPherson. A detailed biographical resume was received from Mr. Burch and is
included in the Proxy Statement.
The Board of Directors has notified Mrs. Bennett that it does not consider
her nominees to be qualified to serve as directors of Mid-State and has
nominated for re-election the three incumbents, Robert W. Jaquint, Carl J.
Eilenberg and James E. Raymonda. Because Mr. Burch was appointed by the Board to
fill a vacancy, his appointment will be voted on at the shareholders meeting,
and the Board recommends ratification of his appointment.
The Board of Directors believes that in these difficult times it is
important not to make wholesale changes in the Board of Directors and it is
especially not appropriate to remove incumbent directors and replace them with
individuals who have no "track record" in the management of harness racetrack
operations. Accordingly, the Board strongly recommends the re-election of the
three incumbents, Robert W. Jaquint, Carl J. Eilenberg and James E. Raymonda and
the ratification of Douglas Burch's appointment so that all four of these
qualified individuals can bring to bear their knowledge and experience in the
management of the Company's affairs.
It is important that your shares be represented at the Special Meeting.
Whether or not you plan to attend the Special Meeting, you are requested to
complete, sign and return the enclosed proxy card in the attached
self-addressed, postage prepaid envelope as soon as possible.
Very truly yours,
Frank O. White, Jr.
President and Chief Executive Officer
