MID-STATE RACEWAY, INC.
INFORMATION STATEMENT
1999 ANNUAL MEETING OF SHAREHOLDERS
WE ARE NOT ASKING YOU FOR A PROXY
GENERAL INFORMATION
This Information Statement is being delivered in connection with the 1999
Annual Meeting of Shareholders (the "Annual Meeting") of Mid-State Raceway, Inc.
(the "Company") to be held on Friday, June 25, 1999 at 2:00 p.m. local time for
the purposes of electing four Directors whose terms will expire at the Company's
2002 Annual meeting of Shareholders. The Annual Meeting will be held at 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 and the Annual Report to Shareholders were first
mailed on or about June 4, 1999, to all shareholders entitled to vote at the
Annual Meeting.
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on May 26, 1999 are
entitled to notice of, and to vote at, the Annual 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 Annual Meeting.
VOTING
Every shareholder voting for the election for Directors is entitled to one
vote for each share held of record 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 meeting is necessary to constitute a quorum for
the transaction of business. Directors are elected by a plurality of the votes
cast at the meeting.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders which are intended to be presented by such
shareholders at the Company's 2000 Annual Meeting must be received by the
Secretary of the Company at the Company's principal executive offices no later
than April 1, 2000 in order to be included in the information statement or proxy
soliciting material, as the case may be, relating to that meeting.
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BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of 12 meetings during the calendar year
ending December 31, 1998. No person who is presently a Director of the Company
attended fewer than 75 percent of all such meetings of the Board of Directors
and of the Committees, if any, on which such Director served. Gwen K. Bennett,
Patrick Bombardo and Paul V. Noyes, however, were elected to the Board on August
13, 1998, and so did not attend any Board of Directors or Committee meetings
prior to that date.
The Company has a standing Compensation-Labor Relations Committee of the
Board of Directors.
The Company's Compensation-Labor Relations Committee currently consists of
Justice M. Cheney, Patrick Bombardo and Jeremiah Law. The Compensation-Labor
Relations Committee reviews compensation and benefits for the Company's
employees and makes recommendations to the Board of Directors. Except for
Justice M. Cheney, no member of the Compensation-Labor Relations Committee was
or is an employee of the Company.
The Company has no Audit Committee or Nominating Committee. The Board of
Directors, however, performs the functions of Nominating Committee and may
nominate one or more persons for election to the Board of Directors. Any
shareholder may nominate one or more persons for election to the Board of
Directors, provided such nomination is in writing, received by the Secretary of
the Company at the Company's principal executive office not less than 30 days
prior to the meeting date and is accompanied by the written consent of such
nominee to serve as a director.
COMPENSATION OF DIRECTORS
The Company does not compensate persons for serving on its Board of
Directors.
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, 1998.
Name and Principal Position Year Salary Bonus Other
- --------------------------- ---- ------ ----- -----
Justice M. Cheney ..................... 1998 $46,316 -- --
President and Chief
Executive Officer
No other executive officer received an annual salary and bonus in excess of
$100,000 over the last three fiscal years. Justice M. Cheney is currently
receiving an annual salary of $60,000.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of May 26, 1999 (i) by each person
who is known by the Company to own beneficially more than five percent of the
Company's common stock, (ii) each Director and nominee for Director of the
Company and (iii) all Directors and Executive Officers as a group.
Shares Beneficially Owned
Directors, Executive Officers -------------------------
5% Shareholders Number Percent
----------------------------- -------- ---------
Standardbred Enterprises, Ltd.
3837 Peterboro Road
Oneida, New York 13421 ...................... 126,657(4) 50.58%
Abe Acee, Jr.(1)............................. 200 (2)
Gwen K. Bennett(1),(4)....................... 8,949 3.57%
Patrick Bombardo(1).......................... 100 (2)
Justice M. Cheney(1),(6)..................... 270 (2)
Thomas M. Hunter(1).......................... 0 0
Edward A. Kiley(5)........................... 250 (2)
Jeremiah Law(1).............................. 510 (2)
Dr. Robert Legler, DVM(5).................... 0 0
James J. Moran(1),(6)........................ 100 (2)
Paul V. Noyes(1)............................. 600 (2)
David Slyman, Sr.(1)......................... 0 0
Neil Wager(1),(3)............................ 1,750 (2)
Wesley E. Wendt, Sr.(5)...................... 0 0
All Directors and Executive
Officers as a Group (11 persons) ............ 139,236 55.60%
- ------------
(1) Director of the Company
(2) Denotes less than one percent of ownership
(3) Mr. Wager is managing member of NW Investors II, LLC which claims ownership
of 126,657 shares in the name of Standardbred Enterprises, Ltd. by virtue
of those shares being pledged to it as security for a loan and such load
being in default.
(4) Mrs. Bennett is the majority shareholder of Standardbred Enterprises, Ltd.,
which owns 126,657 shares of the Company. Neil Wager and the Trustee of the
Bennett Funding, Inc. Bankruptcy claim ownership of the shares.
(5) Nominee for Director
(6) Executive Officer of the Company
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COMPLIANCE WITH SECTION 16(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 than 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 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 calendar year ended December 31, 1998, all such filing requirements
were complied with in a timely fashion.
ELECTION OF DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS
The Company's Board of Directors is comprised of three classes of
Directors; each of which class contains up to four directors who serve staggered
three-year terms. The terms of Jeremiah Law, David Slyman, Sr. and Neil Wager
will expire at the 1999 Annual Meeting of Shareholders. The names of the
Company's Directors whose terms extend beyond the 1999 Annual meeting and who
will continue in office following such meeting are as follows:
Name of Director Term Expires
---------------- ------------
Abe Acee, Jr. ........................... 2000
Justice M. Cheney ....................... 2000
Thomas M. Hunter ........................ 2000
Gwen K. Bennett ......................... 2001
Patrick Bombardo ........................ 2001
James J. Moran .......................... 2001
Paul V. Noyes ........................... 2001
ABE ACEE, JR. (age 53) has served as a Director since December 1997. He has
been a resident of Vernon, New York for 20 years and is proprietor of the
Nothin' Fancy Cafe and Country Edition in Vernon, New York. From 1977 to 1993,
he has provided feed service to Vernon Downs and also brokered hay and straw to
major Standardbred and Thoroughbred facilities and breeding farms in the
northeastern United States. He is one of the founders of the Vernon Merchants
Association and continues to be an active member of the Association.
GWEN K. BENNETT (age 41) has served as a Director since August 1998. She is
President of the Comfort Suites Hotel at Vernon Downs. Mrs. Bennett has
previously worked in managerial or service positions with Pizza Hut, the Squat
and Gobble Restaurant, Carinci's Restaurant and Days Inn. Mrs. Bennett has been
licensed by the United States Trotting Association and the New York State Racing
and Wagering Board for approximately 10 years. She is a member of the Town of
Vernon Merchants Association as well as being active with Choice Hotels
International.
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PATRICK BOMBARDO (age 56) has served as a Director since August 1998. He is
General Manager of the Comfort Suites Hotel at Vernon Downs. He is an
experienced professional with more than 20 years of business experience,
specializing in accounting, operations, management, training and finance. Mr.
Bombardo served as Chief Financial Officer/Controller at J-K Independent Lumber
Corporation in New Hartford from 1986 to February 1998. He possesses leadership
experience in retailing, manufacturing and service organizations.
JUSTICE M. CHENEY (age 66) has been President and Chief Executive Officer
of the Company since December 1997, and has served as a Director since December
1997. He was an adjunct professor with the Department of Vocational/Technical
Education, SUNY Oswego. He has been a member of the United States Trotting
Association since 1953 and is licensed as an owner, trainer, driver and breeder
of Standardbred horses. He has raced harness horses as both a driver and trainer
at Vernon Downs, Saratoga Raceway and various New York State and County Fairs.
THOMAS M. HUNTER (age 52) has served as a Director since December 1997. He
has been a licensed Standardbred trainer since 1980 and is licensed as such by
the New York State Racing and Wagering Board. Mr. Hunter is currently employed
by H&B Marketing working in the area of advertising sales. Prior to 1992, Mr.
Hunter was a self-employed businessman working in telecommunications management,
marketing sales and development.
JAMES J. MORAN (age 59) has been Secretary of the Company since 1994 and
Assistant Secretary since 1985. He has served as a Director since 1986. He has
been Director of Publicity/Public Relations since 1975 and Track Announcer since
1964. He is past President and Chairman of the Board of the North American
Harness Publicists Association and Secretary/Treasurer of the Vernon Chapter of
the United States Harness Writers Association.
PAUL V. NOYES (age 68) has served as a Director since August 1998. He is a
prominent area lawyer with an office in Sherrill, New York. He is a graduate of
Hamilton College and Cornell University Law School. He is a Board member of the
Mid-York Foundation, Kenwood Benevolent Society, Oneida Community Mansion House,
Madison County Children's Camp, Mid-York Library System, and serves as Treasurer
for the Madison County Democrat Committee.
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NOMINEES
Four Directors are to be elected at the Annual Meeting. The terms of these
Directors will expire at the 2002 Annual Meeting of Shareholders or until their
successors have been elected and qualified. The following persons have been
nominated by Company shareholders for election to the Board of Directors: Edward
A. Kiley, Jeremiah Law, Dr. Robert Legler, DVM, and Wesley E. Wendt, Sr. Except
for Jeremiah Law, none of the nominees are presently Directors of the Company.
Certain information regarding each nominee is set forth below:
EDWARD A. KILEY is a 1964 graduate of Brown University and Dean's List and
Cum Laude graduate of the Syracuse University School of Law. A member of the New
York, Florida and United States Supreme Court bars before retiring from the
practice of law in 1995. He is currently employed as a financial planner. He is
the eldest son of Vernon Downs founder William F. Kiley.
JEREMIAH LAW has served as a Director of the Company since December 1997.
He is the proprietor of the Squat and Gobble Restaurant in Vernon, New York.
DR. ROBERT LEGLER, DVM underwent his pre-med studies at Siena College after
four years of United States Submarine Service where he attained the rank of
Petty Officer 1st Class. He is a 1965 graduate of Cornell University's College
of Veterinary Medicine. He worked at the Gluck Equine Research
Station-University of Kentucky as an intern, and as an assistant to Dr. John
Steele in Vernon. He set up his own veterinary practice in 1968 and has been
employed as the track veterinarian at Vernon Downs since 1995. He has owned and
managed the Bar-Log, Inc. logging and building operation and the Barb Farm,
which is devoted to the breeding and racing of Standardbreds. He also maintained
a competitive stable of draft horses. He is presently the owner and general
manager of the Vernon Apartments. Dr. Legler serves on the Town of Vernon Zoning
Board of Appeals.
WESLEY E. WENDT, SR. is a self-made and successful businessman. He has
bought, improved and then sold many properties in Oneida and Madison counties.
In addition, he has owned and operated several restaurants, most notably Dibbles
Inn in Vernon, New York. He now manages all food service enterprises at the
Vernon Downs Racetrack. In the Spring of 1998, when this track was close to
financial collapse, he organized on short notice a loan of one million dollars
to the track. For many years, he has supported very quietly and generously many
civic causes.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting.
THE BOARD OF DIRECTORS
Dated: June 4, 1999
