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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MTR GAMING GROUP, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
553769100
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(CUSIP Number)
Edson R. Arneault
State Route 2 South
Chester, West Virginia 26034
(304) 387-5712
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
JANUARY 15, 1992*
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box. [ ]
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*See Attached Schedule 1.
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CUSIP NO. 553769100
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(1) NAME OF REPORTING PERSON
Edson R. Arneault
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
OO
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF (7) SOLE VOTING POWER
Initially 541,299 shares acquired on January 15, 1992
increasing to 4,065,567 on August 23, 1999 as
SHARES described in Schedule 1 hereto.
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BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY --------------------------------------------------------------
(9) SOLE DISPOSITIVE POWER
EACH Initially 541,299 shares acquired on January 15, 1992
increasing to 4,065,567 on August 23, 1999 as
REPORTING described in Schedule 1 hereto.
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PERSON WITH (10) SHARED DISPOSITIVE POWER
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
4,065,567 shares (as of August 23, 1999)
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11)
19.2% (as of August 23, 1999)
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(14) TYPE OF REPORTING PERSON (1)
IN
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(1) Edson R. Arneault owns 4,065,567 shares of the Issuer (the "Securities")
directly and indirectly through one or more partnerships or other entities. Mr.
Arneault exercises sole voting and investment power over all the Securities
owned by all such partnerships and other entities.
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ITEM 1. SECURITY AND ISSUER
(a) Common Stock, $.00001 par value
(b) MTR Gaming Group, Inc., State Route 2 South, P.O. Box 358, Chester,
West Virginia 26034
ITEM 2. IDENTITY AND BACKGROUND
(a) This statement is filed by Edson R. Arneault. Mr. Arneault owns the
Securities directly and indirectly, through one or more partnerships or other
entities. He exercises sole voting and investment power over all the Securities.
(b) The address of the principal place of business and principal office of
Edson R. Arneault is Route 2 South, Chester, West Virginia 26034.
(c) The principal occupation of Edson R. Arneault is as the President,
Chief Executive Officer, Chief Financial Officer and Chairman of the Board of
MTR Gaming Group, Inc.
(d) Edson R. Arneault has not, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Edson R. Arneault has not, during the last five years, been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or which found any
violation with respect to such laws.
(f) Edson R. Arneault is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Securities were acquired by Mr. Arneault directly and indirectly
through third parties under Mr. Arneault's control, by (i) vending of assets
including real property and other assets in exchange for shares; (ii) conversion
of unpaid salary into shares; (iii) conversion of certain debts into shares;
(iv) waiver of registration rights; and (v) loans from the Issuer evidenced by
Promissory Notes issued by Mr. Arneault dated August 31, 1998 and August 24,
1999 (the terms of the August 31, 1998 Note were amended pursuant to a Letter
Agreement and Stock Pledge Agreement between Mr. Arneault and the Issuer and the
August 24, 1999 Note is subject to the terms of a Stock Pledge Agreement also
entered into by Mr. Arneault and the Company). Please see "Item 7 -- Material
to be filed as Exhibits."
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ITEM 4. PURPOSE OF TRANSACTION
The purpose of the acquisition of the Securities is for investment.
Other than as set forth above, Mr. Arneault does not have any plans or
proposals which relate to, or could result in, any of the matters referred to in
paragraphs (b) through (j), inclusive, of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The aggregate percentage of shares reported beneficially owned by Mr.
Arneault herein is based on 21,222,849 shares of Common Stock outstanding at
November 8, 1999, as reflected in the Form 10-Q of the Company for the three
months ending September 30, 1999.
(b) Mr. Arneault possesses and exercises voting and investment power over
all the Securities. By reason of the provisions of Rule 13d-3 of the Act, Mr.
Arneault may be deemed to own beneficially 4,065,567 Shares of Securities,
constituting approximately 19.2% of the outstanding shares of Common Stock of
the Issuer.
(c) Mr. Arneault has not effected any transactions in the Securities
during the past 60 days. Acquisitions and dispositions of the Issuer's Common
Stock by Mr. Arneault directly and indirectly (through third party entities)
have been previously disclosed in filings by Mr. Arneault and the Issuer with
the Securities and Exchange Commission.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than with respect to third party entities and other transactions
described herein, there are no contracts, understandings or relationships (legal
or otherwise) among the person named in Item 2 hereof and between any person
with respect to any securities of the Company, including but not limited to
transfer or voting of any of the Shares, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
There is filed herewith the following Exhibits:
EXHIBIT 1 -- Promissory Note dated August 31, 1998 executed by Edson R.
Arneault.
EXHIBIT 2 -- Promissory Note dated August 24, 1999 executed by Edson R.
Arneault.
EXHIBIT 3 -- Letter Agreement between the Issuer and Edson R. Arneault
dated August 30, 1999.
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EXHIBIT 4 -- Stock Pledge Agreement between the Issuer and Edson R.
Arneault dated August 30, 1999 with respect to pledge of
378,415 shares.
EXHIBIT 5 -- Stock Pledge Agreement between the Issuer and Edson R.
Arneault dated August 30, 1999 with respect to pledge of
141,336 shares.
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
November 24, 1999
/s/ Edson R. Arneault
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Edson R. Arneault
Page 5 of 14
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SCHEDULE 1
Additional dates of events which require filing of this statement(1):
May 7, 1993 -- Acquisition of 226,286 shares through a third party
entity controlled by Mr. Arneault.
August 5, 1993 -- Shareholder approval of grant of options to purchase
381,334 shares of which options to purchase 240,000
shares have expired and 141,334 have been exercised.
September 11, 1995 -- Shareholder approval of grant of options to purchase
300,000 shares expiring January 23, 2001.
October 2, 1995 -- Approval of issuance of 329,126 shares through a
third party entity controlled by Mr. Arneault.
September 24, 1996 -- Issuance of 362,866 shares to Mr. Arneault in lieu of
certain salary and vacation benefits.
October 15, 1996 -- Shareholder approval of grant of options to purchase
378,415 shares all of which options have been
exercised.
March 10, 1998 -- Shareholder approval of grant of options to purchase
700,000 shares expiring March 10, 2003.
October 21, 1998 -- Shareholder approval of grant of options to purchase
300,000 shares expiring January 26, 2003.
February 29, 1999 -- Shareholder approval of grant of options to purchase
200,000 shares expiring February 23, 2004.
August 23, 1999 -- Shareholder approval of grant of options to purchase
300,000 shares expiring February 23, 2004.
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(1) Additional dates reflect material acquisitions of shares subsequent to
Mr. Arneault's initial acquisition of an aggregate amount of 541,299
shares of the Issuer's Common Stock on January 15, 1992 through third
party entities controlled by Mr. Arneault. This information does not
include dates of other individual non-material acquisitions and
dispositions of shares subsequent to January 15, 1992 directly, and
indirectly through third party entities, by Mr. Arneault which in the
aggregate amount to the acquisition of an additional 286,241 shares of
the Issuer's Common Stock.
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EXHIBIT 1
PROMISSORY NOTE
$461,208.41
Chester, West Virginia
August 31, 1998
On or before the 31st day of August, 1999, the undersigned promises to
pay to the order of MTR Gaming Group, Inc. the sum of $461,208.41 together with
interest at the rate of 8.5% per annum, the prime rate on this date.
The maker, endorsers, sureties, guarantors and assignors of this note
severally waive demand, presentment of payment, protest and notice of protest,
and nonpayment, and agree and consent that the time for its payment may be
extended, or said note renewed from time to time and for any term or terms by
agreement between the holder and any of them without notice, and that after such
extension or extensions, renewal or renewals, the liabilities of all parties
shall remain as if no extension or renewal has been had. If this note is not
paid when due, and is given to an attorney for collection, or suit filed
thereon, the parties hereto severally agree to pay in addition to the unpaid
principal and interest, the costs of collection and reasonable attorney's fees.
/s/ Edson R. Arneault
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Edson R. Arneault
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EXHIBIT 2
Promissory Note
$149,812.62
Chester, West Virginia
August 24, 1999
On or before the 24th day of August, 2000, the undersigned promises to
pay to the order of MTR Gaming Group, Inc. the sum of $149,812.62 together with
interest at the rate of 8.0% per annum, the prime rate on this date.
The maker, endorsers, sureties, guarantors and assignors of this note
severally waive demand, presentment of payment, protest and notice of protest,
and nonpayment, and agree and consent that the time for its payment may be
extended, or said note renewed from time to time and for any term or terms by
agreement between the holder and any of them without notice, and that after such
extension or extensions, renewal or renewals, the liabilities of all parties
shall remain as if no extension or renewal has been had. If this note is not
paid when due, and is given to an attorney for collection, or suit filed
thereon, the maker agrees to pay in addition to the unpaid principal and
interest, the costs of collection and reasonable attorney's fees.
/s/ Edson R. Arneault
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Edson R. Arneault
Page 8 of 14
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EXHIBIT 3
[MTR GAMING GROUP, INC.]
August 30, 1999
Edson R. Arneault
MTR Gaming Group, Inc.
Route 2
P.O. Box 356
Chester, WV 26034
Dear Ted:
Reference is made to your August 31, 1998 exercise of options to
purchase 378,415 common shares of the Company (the "Shares") and the
contemporaneous Promissory Note (the "Note") delivered to the Company by which
you agreed to pay the original principal amount of $461,208.41 plus interest.
As you know, the Note comes due in full on August 31, 1999. This letter
is to memorialize your agreement with the Company to extend the term of the Note
for an additional year (the "Additional Term") (all amounts of principal and
interest to come due by the close of business on August 31, 2000) provided you
pay all interest accrued on the Note up through and including August 31, 1999,
which amount shall be payable by December 1, 1999. All terms and conditions of
the Note and the Company's rights and remedies thereunder shall remain in full
force and effect for the Additional Term.
You have also agree to pledge the Shares to the Company to secure
repayment of the Note. Please forward this fully executed agreement, the
certificate for the Shares and the executed Pledge Agreement (form enclosed) to
Rob.
BOARD OF DIRECTORS- COMPENSATION COMMITTEE
/s/ Robert L. Ruben
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By: Robert L. Ruben, Member
/s/ Robert A. Blatt
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By: Robert A. Blatt, Member
Page 9 of 14
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SEEN AND AGREED:
/s/ Edson R. Arneault
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Edson R. Arneault
Page 10 of 14
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EXHIBIT 4
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement made this 30th day of August, 1999, by and
between MTR Gaming Group, Inc., a Delaware corporation (the "Company"), and
Edson R. Arneault ("Pledgor"), an individual.
W I T N E S S E T H:
WHEREAS, on August 31, 1998, Pledgor exercised options to purchase
378,415 common shares of the Company (the "Shares") for $1.2188 per share, which
options were granted Pledgor on May 4, 1995 subject to the Company's July 29,
1998 Non-Qualified Stock Option Agreement (the "Agreement"); and
WHEREAS, in return for the Shares, Pledgor delivered to the Company the
sum of $3.79 cash and a Promissory Note (the "Note") pursuant to which Pledgor
agreed to pay the Company the original principal amount of $461,208.41 plus
interest, with payment due in full by the close of business on August 31, 1999;
and
WHEREAS, Pledgor and the Company have agreed, pursuant to the terms of
that certain letter agreement of even date herewith, to extend the term of the
Note for one year to become due on August 31, 2000; and
WHEREAS, as security for the Note and the extension of the term, Pledgor
has agreed to pledge the Shares pursuant to the terms and conditions set
forth below.
NOW, THEREFORE, the parties agree as follows:
1. The term "Pledged Stock" as used herein shall mean and include all
of the Shares.
2. (a) As collateral security for the due payment of all indebtedness
of the Pledgor to the Company under the Note, the Pledgor hereby pledges,
assigns, hypothecates, delivers, and sets over to the Company all the Pledged
Stock, and hereby grants to the Company a security interest in all the
Pledged Stock and in any and all proceeds thereof and substitutions therefor.
(b) Pledgor shall herewith deliver to the Company any and all
stock certificates previously issued with respect to the Pledged Stock.
3. In the event of default by Pledgor under the Note, the Company,
without demand of performance or other demand or notice of any kind to Pledgor,
shall have all rights with respect to the Shares afforded to a secured party
under the Uniform Commercial Code. Pledgor acknowledges that the Note remains a
full recourse obligation of Pledgor.
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4. Pledgor warrants and represents to the Company that upon delivery
of the Pledged Stock to the Company, this Stock Pledge Agreement creates and
grants a valid lien on and perfected security interest in the Pledged Stock,
subject to no prior security interest, lien, or encumbrance of any kind.
5. The Pledgor shall at any time and from time to time upon the
written request of the Company execute and deliver such further documents and
perform such further acts as the Company may reasonably require to give
effect to the purposes of this Stock Pledge Agreement.
IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed and delivered the day and year first above written.
MTR GAMING GROUP, INC.
/s/ Robert L. Ruben
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By: Robert L. Ruben
Its: Vice President and Assistant Secretary
PLEDGOR
/s/ Edson R. Arneault
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By: Edson R. Arneault
Page 12 of 14
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EXHIBIT 5
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement made this 30th day of August, 1999, by and
between MTR Gaming Group, Inc., a Delaware corporation (the "Company"), and
Edson R. Arneault ("Pledgor"), an individual.
WHEREAS, on August 24, 1999 Pledgor exercised options to purchase
141,334 common shares of the Company (the "Shares") for $1.06 per share, which
options were granted Pledgor on May 28, 1992 subject to the Company's July 29,
1998 Non-Qualified Stock Option Agreement (the "Agreement"); and
WHEREAS, in return for the Shares, Pledgor delivered to the Company the
sum of $1.42 cash and a Promissory Note (the "Note") pursuant to which Pledgor
agreed to pay the Company the original principal amount of $149,812.62 plus
interest, with payment due in full by the close of business on August 24, 2000;
and
WHEREAS, as security for the Note, Pledgor has agreed to pledge the
Shares pursuant to the terms and conditions contained below.
NOW, THEREFORE, the parties agree as follows:
1. The term "Pledged Stock" as used herein shall mean and include all
of the Shares.
2. (a) As collateral security for the due payment of all indebtedness
of the Pledgor to the Company under the Note, the Pledgor hereby pledges,
assigns, hypothecates, delivers, and sets over to the Company all the Pledged
Stock, and hereby grants to the Company a security interest in all the
Pledged Stock and in any and all proceeds thereof and substitutions therefor.
(b) Pledgor shall herewith deliver to the Company any and all
stock certificates previously issued with respect to the Pledged Stock.
3. In the event of default by Pledgor under either the Note, the
Company, without demand of performance or other demand or notice of any kind to
Pledgor, have all rights with respect to the Shares afforded to a secured party
under the Uniform Commercial Code. Pledgor acknowledges that the Note remains a
full recourse obligation of Pledgor.
4. Pledgor warrants and represents to the Company that upon delivery
of the Pledged Stock to the Company, this Stock Pledge Agreement creates and
grants a valid lien on and perfected security interest in the Pledged Stock,
subject to no prior security interest, lien, or encumbrance of any kind.
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5. The Pledgor shall at any time and from time to time upon the
written request of the Company execute and deliver such further documents and
perform such further acts as the Company may reasonably require to give effect
to the purposes of this Stock Pledge Agreement.
IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed and delivered the day and year first above written.
MTR GAMING GROUP, INC.
/s/Robert L. Ruben
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By: Robert L. Ruben
Its: Vice President and Assistant Secretary
PLEDGOR
/s/Edson R. Arneault
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By: Edson R. Arneault
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