-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pt8OMCMFVtOlwNODiOIYUucNtLpK0clNSp7umn3H90WTh9Xdx2o1zr0XB903AKvJ 0TjhctFA/nQoi/HD55f7qQ== 0000912057-99-007859.txt : 19991202 0000912057-99-007859.hdr.sgml : 19991202 ACCESSION NUMBER: 0000912057-99-007859 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19991201 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MTR GAMING GROUP INC CENTRAL INDEX KEY: 0000834162 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 841103135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-50735 FILM NUMBER: 99767136 BUSINESS ADDRESS: STREET 1: ROUTE 2 STREET 2: PO BOX 356 CITY: CHESTER STATE: WV ZIP: 26034 BUSINESS PHONE: 3043875712 MAIL ADDRESS: STREET 1: ROUTE 2 STREET 2: P O BOX 356 CITY: CHESTER STATE: WV ZIP: 26034 FORMER COMPANY: FORMER CONFORMED NAME: WINNERS ENTERTAINMENT INC DATE OF NAME CHANGE: 19931117 FORMER COMPANY: FORMER CONFORMED NAME: EXCALIBUR HOLDING CORPORATION DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: EXCALIBUR SECURITY SERVICES INC DATE OF NAME CHANGE: 19920202 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ARNEAULT EDSON R CENTRAL INDEX KEY: 0000844430 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: STATE ROUTE 2 SOUTH CITY: CHESTER STATE: WV ZIP: 26034 MAIL ADDRESS: STREET 1: STATE ROUTE 2 SOUTH CITY: CHESTER STATE: WV ZIP: 26034 SC 13D 1 SCH 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 MTR GAMING GROUP, INC. ------------------------------- (Name of Issuer) Common Stock ------------------------------- (Title of Class of Securities) 553769100 ------------------------------- (CUSIP Number) Edson R. Arneault State Route 2 South Chester, West Virginia 26034 (304) 387-5712 ------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 15, 1992* ------------------------------- (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. [ ] - ----------------------------------- *See Attached Schedule 1. CUSIP NO. 553769100 - -------------------------------------------------------------------------------- (1) NAME OF REPORTING PERSON Edson R. Arneault - -------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- (3) SEC USE ONLY - -------------------------------------------------------------------------------- (4) SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 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. -------------------------------------------------------------- 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. -------------------------------------------------------------- PERSON WITH (10) SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,065,567 shares (as of August 23, 1999) - -------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.2% (as of August 23, 1999) - -------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON (1) IN - -------------------------------------------------------------------------------- (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. Page 2 of 14 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." Page 3 of 14 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. Page 4 of 14 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 --------------------- Edson R. Arneault Page 5 of 14 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. - ---------------------------------- (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. Page 6 of 14 EX-1 2 EXHIBIT 1 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 --------------------- Edson R. Arneault Page 7 of 14 EX-2 3 EXHIBIT 2 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 --------------------- Edson R. Arneault Page 8 of 14 EX-3 4 EXHIBIT 3 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 ------------------------------------ By: Robert L. Ruben, Member /s/ Robert A. Blatt ------------------------------------ By: Robert A. Blatt, Member Page 9 of 14 SEEN AND AGREED: /s/ Edson R. Arneault --------------------- Edson R. Arneault Page 10 of 14 EX-4 5 EXHIBIT 4 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. Page 11 of 14 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 -------------------------------------------- By: Robert L. Ruben Its: Vice President and Assistant Secretary PLEDGOR /s/ Edson R. Arneault -------------------------------------------- By: Edson R. Arneault Page 12 of 14 EX-5 6 EXHIBIT 5 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. Page 13 of 14 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 -------------------------------------------- By: Robert L. Ruben Its: Vice President and Assistant Secretary PLEDGOR /s/Edson R. Arneault -------------------------------------------- By: Edson R. Arneault Page 14 of 14 -----END PRIVACY-ENHANCED MESSAGE-----