Schedule 14C Information
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Sheet
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
MID-STATE RACEWAY, INC.
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(Name of Registrant As Specified In Its Charter)
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MID-STATE RACEWAY, INC.
P. O. BOX 860
VERNON, NY 13476
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
JANUARY 18, 1999
To the Shareholders of Mid-State Raceway, Inc.:
At the direction of the President and Board of Directors of Mid-State
Raceway, Inc., a New York corporation (the "Company"), notice is hereby given
that a Special Meeting of Shareholders of the Company (the "Special Meeting")
will be held at 10:00 a.m. on Monday, January 18, 1999 in the Miracle Mile Room,
Vernon Downs, Vernon, New York for the following purposes:
1. To approve an amendment to the Company's Certificate of
Incorporation to eliminate Shareholder's preemptive rights.
2. To transact such other business as may properly come before
the Special Meeting or any adjournments thereof.
The proposed amendment to the Certificate of Incorporation will, if
adopted, entitle holders of shares objecting or dissenting and registering their
dissent or objection in the manner required by law to assert rights under
Section 623 of the New York Business Corporation Law to receive payment for
their shares. A copy of Section 623 of the New York Business Corporation Law is
enclosed with this mailing.
The Board of Directors has fixed the close of business on December 2,
1998 as the record date for the determination of Shareholders entitled to notice
of and to vote at the Special Meeting, or any adjournments thereof.
By Order of the President and the Board of Directors
/S/JUSTICE M. CHENEY
Justice M. Cheney, President
/S/JAMES J. MORAN
James J. Moran, Secretary
Dated: December 28, 1998
Vernon, New York
<PAGE>
MID-STATE RACEWAY, INC.
INFORMATION STATEMENT
JANUARY 18, 1999 SPECIAL MEETING OF SHAREHOLDERS
WE ARE NOT ASKING YOU FOR A PROXY
GENERAL INFORMATION
This Information Statement is being delivered in connection with the January 18,
1999 Special Meeting of Shareholders (the "Special Meeting") of Mid-State
Raceway, Inc. (the "Company") to be held on Monday, January 18, 1999 at 10:00
a.m. local time for the following purposes:
1. To approve an amendment to the Company's Certificate of
Incorporation to eliminate Shareholder's preemptive rights.
2. To transact such other business as may properly come before
the Special Meeting or any adjournments thereof.
The Special Meeting will be held in the Miracle Mile Room, Vernon
Downs, Vernon, New York.
The Company's principal executive offices are located at Vernon Downs,
Vernon, New York 13476. The telephone number at that address is (315)829-2201.
This Information Statement was mailed on or about December 28, 1998 to
all Shareholders entitled to vote at the Special Meeting.
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on December 2, 1998
were entitled to notice of, and to vote at, the Special Meeting. At the record
date 250,386 shares of the Company's $0.10 par value common stock ("Common
Stock") were issued, outstanding and entitled to vote at the Special Meeting.
VOTING
Every Shareholder voting for the proposals submitted for approval at
the Special Meeting is entitled to one vote for each share held on the record
date. The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Special Meeting is
necessary to constitute a quorum for the transaction of business. The proposals
must be approved by at least a majority of the votes cast at the Special
Meeting.
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DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of Shareholders which are intended to be presented by such
Shareholders at the Company's 1999 Annual Meeting must be received by the
Secretary of the Company at the Company's principal executive offices no later
than April 1, 1999 in order to be included in the information statement or proxy
soliciting material, as the case may be, relating to that meeting.
COMPENSATION OF DIRECTORS
The Company does not currently compensate persons for serving on its
Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of December 2, 1998 (i) by
each person who is known by the Company to own beneficially more than 5% of the
Company's common stock, (ii) each Director and (iii) all Directors and Executive
Officers as a group.
Directors, Officers Shares Beneficially Owned
5% Shareholders Numbers Percent
------------------- ------- -------
Standardbred Enterprises, Ltd
3837 Peterboro Road
Oneida, New York 13421(3) 126,657 50.58%
David Slyman, Sr. (1) 0 0
Jeremiah Law (1) 10 (2)
Justice M. Cheney (1) 120 (2)
Neil Wager (1,4) 1,750 (2)
Edward Leffler (1) 0 0
Thomas M. Hunter (1) 0 0
Abe Acee, Jr. (1) 0 0
James J. Moran (1) 100 (2)
Paul V. Noyes (1) 0 0
Gwen Bennett (1,5) 8,949 3.57%
Patrick Bombardo (1) 0 0
All Directors and Executive
Officers as a group (11 persons) 137,586 54.95%
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1 Directors of the Company
2 Denotes less than one percent of class.
3 Standardbred Enterprises, Ltd. pledged 126,657 shares of Common Stock
as security for a loan made by NW Investors II, LLC. NW Investors II,
LLC asserts that loan is in default and NW Investors II, LLC is
attempting to obtain possession of the shares because of the alleged
default.
4 Mr. Wager is managing member of NW Investors II, LLC which claims
ownership of the 126,657 shares of Common Stock held in the name of
Standardbred Enterprises, Ltd.
5 Ms. Bennett is the majority shareholder of Standardbred Enterprises,
Ltd.
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EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation of
the Company's Chief Executive Officer for services to the Company during the
three fiscal years ended December 31, 1997. Justice M. Cheney, current President
and CEO, has been drawing an annual salary of $60,000 since April 1998.
Name and Principal Position Year Salary Bonus Other
--------------------------- ------ --------- ------- -------
Frank O. White, Jr
President and CEO 1997 $81,000 -- --
1996 $81,000 -- --
1995 $90,000 -- --
No other executive officer received an annual salary and bonus in
excess of $100,000 over the last three fiscal years.
The Company had 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 provides that the Board for good cause may
terminate it at any time. On March 10, 1998, Mr. White was terminated for cause
as a result of the assessment of fines against the Company by the New York State
Racing and Wagering Board for substantial violations of its rules and
regulations. Mr. White has disputed the termination.
COMPLIANCE WITH SECTION (A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Executive Officers and Directors and persons who own more 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
and the National Association of Securities Dealers, Inc. Such Officers,
Directors and 10% Shareholders are also required by SEC Rules to furnish the
Company with the copies of all Section 16(a) forms that they file. Based solely
on its review of copies of such reports received by it, the Company believes
that during the fiscal year ended December 31, 1997 all such filing requirements
were complied with in a timely fashion.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
The Company's Board of Directors has approved an amendment to the
Company's Certificate of Incorporation that eliminates Shareholder preemptive
rights. Preemptive rights enable Shareholders to maintain their proportionate
ownership interest in the Company. Preemptive rights entitle a Shareholder to
purchase the number of shares necessary to retain that Shareholder's
proportionate ownership interest in the Company in the event the company issues
additional shares.
All Shareholders were automatically granted preemptive rights under New
York State law at the time of the incorporation of the Company. The Board of
Directors has determined that it is in the Company's best interests to eliminate
preemptive rights in order to allow the Company to raise equity through a
private placement offering of its stock to accredited investors only.
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The Company anticipates that it will lose over $700,000 in
1998 from its business operations and does not expect to be able to turn a
profit in the future without a substantial investment in its business.
Accordingly, the Board of Directors needs to have the option available to make a
private offering of the Company's stock, as opposed to a public offering, to
raise needed capital. In a private offering, capital can be raised quickly and
relatively inexpensively. Generally, a private offering must be made to
accredited investors and a maximum of 35 unaccredited investors. Generally
accredited investors must have a net worth in excess of $1,000,000 or have
earnings in excess of $200,000 a year. If the Company were to offer preemptive
rights to its Shareholders, the offering would be in violation of Securities and
Exchange Commission regulations if 35 or more Shareholders that were not
accredited investors purchased the shares. Accordingly, it is necessary to
eliminate preemptive rights in order to have the option to go forward with a
private offering.
NOTICE
The proposed amendment to the Certificate of Incorporation will, if
adopted, entitle holders of shares objecting or dissenting and registering their
dissent or objection in the manner required by law to assert rights under
Section 623 of the New York Business Corporation Law to receive payment for
their shares.
The Board of Directors retain the right to abandon the proposed
Amendment to the Certificate of Incorporation if more than 5,000 shares are
tendered for payment by objecting Shareholders.
OTHER MATTERS
The Company knows no other matters to be submitted at the Special
Meeting.
THE BOARD OF DIRECTORS
Dated: December 28, 1998
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