SCHEDULE 14A INFORMATION
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant |X|
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))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MTR GAMING GROUP, INC.
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
MTR GAMING GROUP, INC.
State Route 2
Chester, West Virginia 26034
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
MTR Gaming Group, Inc. to be held on July 31, 2002, at 10:00 a.m. local time, in
the convention center at the Company's corporate headquarters at the Mountaineer
Racetrack & Gaming Resort, State Route 2, Chester, West Virginia 26034.
The accompanying Notice of Annual Meeting and Proxy Statement describe the
business to be conducted at the meeting. There will be a brief report on the
current status of our business.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the Notice of Annual
Meeting and Proxy Statement, please complete, sign and date your proxy ballot,
and return it in the envelope provided.
On behalf of the Officers and Directors of MTR Gaming Group, Inc., I thank
you for your interest in the Company and hope that you will be able to attend
our Annual Meeting.
For The Board of Directors,
EDSON R. ARNEAULT
Chairman of the Board of
Directors and President
June 27, 2002
MTR GAMING GROUP, INC.
State Route 2
Chester, West Virginia 26034
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MTR
Gaming Group, Inc. will be held on July 31, 2002 at 10:00 a.m. local time, at
the Company's corporate headquarters at the Mountaineer Racetrack & Gaming
Resort, State Route 2, Chester, West Virginia 26034 for the following purposes:
1. To elect five persons to serve as directors of the Corporation until
their successors are duly elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the Corporation's
accountants and independent auditors; and
3. To transact such other business as may properly come before the
meeting.
Stockholders entitled to notice and to vote at the meeting will be
determined as of the close of business on June 24, 2002, the record date fixed
by the Board of Directors for such purposes.
By order of the Board of Directors
Rose Mary Williams, Secretary
June 27, 2002
--------------------------------------------------------
Please sign the enclosed proxy and return it promptly in
the enclosed envelope. If mailed in the United States,
no postage required.
--------------------------------------------------------
MTR GAMING GROUP, INC.
State Route 2
Chester, West Virginia 26034
(304) 387-8300
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of MTR Gaming Group, Inc. (the "Company") for
use at the Annual Meeting of Stockholders to be held on July 31, 2002.
A copy of the Company's report with financial statements for the year
ended December 31, 2001 is enclosed. This proxy statement and form of proxy were
first sent to stockholders on or about the date stated on the accompanying
Notice of Annual Meeting of Stockholders.
Only stockholders of record as of the close of business on June 24, 2002
will be entitled to notice of and to vote at the meeting and any postponement or
adjournments thereof. As of that date, 27,058,908 shares of Common Stock of the
Company were issued and outstanding. Each share outstanding as of the record
date will be entitled to one vote, and stockholders may vote in person or by
proxy. Execution of a proxy will not in any way affect a stockholder's right to
attend the meeting and vote in person. Any stockholder giving a proxy has the
right to revoke it at any time before it is exercised by written notice to the
Secretary of the Company or by submission of another proxy bearing a later date.
In addition, stockholders attending the meeting may revoke their proxies at any
time before they are exercised.
If no contrary instructions are indicated, all properly executed proxies
returned in time to be cast at the meeting will be voted FOR: (i) the election
of the directors nominated herein, and (ii) the ratification of the selection of
the auditors. Members of the Company's management intend to vote their shares in
favor of each of the proposals. The holders of a majority of the shares of
Common Stock outstanding and entitled to vote at the Annual Meeting will
constitute a quorum for the transaction of business at the Annual Meeting.
Shares of Common Stock represented in person or by proxy (including shares which
abstain or do not vote with respect to one or more of the matters presented for
stockholder approval) will be counted for purposes of determining whether a
quorum is present at the Annual Meeting.
Stockholders will vote at the meeting by ballot and votes cast at the
meeting in person or by proxy will be tallied by the Company's transfer agent.
Shares held by stockholders present in person at the meeting who do not vote and
ballots marked "abstain" or "withheld" will be counted as present at the meeting
for quorum purposes, but will not be counted as part of the vote necessary to
approve the proposals for the election of directors or the confirmation of the
auditors.
The solicitation of proxies will be made primarily by mail. Proxies may
also be solicited personally and by telephone or telegraph by regular employees
of the Company, without any additional remuneration. The cost of soliciting
proxies will be borne by the Company. The Company may also retain a proxy
solicitation firm to solicit proxies, in which case, the Company
will pay the solicitation firm's fees. The Company will also make arrangements
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to beneficial owners of stock held of record by such
persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses in forwarding solicitation material.
The Company knows of no other matter to be presented at the meeting. If
any other matter should be presented at the meeting upon which a vote properly
may be taken, then the persons named as proxies will use their own judgment in
voting shares represented by proxies.
ITEM 1
ELECTION OF DIRECTORS
The directors of the Company are currently elected annually and hold
office until the next annual meeting and until their successors have been
elected and have qualified. The Company's Board of Directors (the "Board") has
fixed the number of Directors at seven. However, the Board has nominated five
candidates for service, each of whom serves for a term of one year, or until
their successors are elected and qualify. Directors elected at this Annual
Meeting shall serve until the 2003 annual meeting or until their successors are
duly elected and qualified.
Unless you instruct otherwise or withhold authority to vote, the enclosed
proxy, if signed and returned, will be voted for the election of the nominees
listed below. If for any reason any nominee is unable to accept the nomination
or to serve as a director, an event not currently anticipated, the persons named
as proxies reserve the right to exercise their discretionary authority to
nominate someone else or to reduce the number of management nominees to such
extent as the persons named as proxies may deem advisable.
A plurality of the votes cast in person or by proxy of holders of Common
Stock is required to elect a director. Accordingly, abstentions and "broker
non-votes" will have no effect on the outcome of the election of directors
assuming a quorum is present or represented by proxy at the Annual Meeting. A
broker non-vote occurs if a broker or other nominee does not have discretionary
authority and has not received instructions with respect to a particular item.
Stockholders may not cumulate their votes in the election of directors.
Any stockholder submitting a proxy has the right to withhold authority to
vote for an individual nominee to the Board by writing that nominee's name in
the space provided on the proxy. Shares represented by all proxies received by
the Company and not marked to withhold authority to vote for any individual
director or for all directors will be voted FOR the election of all of the
nominees named below. Proxies cannot be voted for a greater number of persons
than the number of nominees named.
Nominees for Directors
The following persons have been nominated to serve as directors: Edson R.
Arneault, Robert L. Ruben, Robert A. Blatt, Donald J. Duffy, and James V.
Stanton. Each of the nominees for director currently serve as a director of the
Company.
Edson R. Arneault, 55, has been a director of the Company since January
1992 and has served as the Company's President and Chief Executive Officer since
April 26, 1995. He is also an officer and director of the Company's
subsidiaries, Mountaineer Park, Inc., ExCal Energy
2
Corp., Speakeasy Gaming of Reno Inc. ("Speakeasy Reno"), Speakeasy Gaming of Las
Vegas, Inc. ("Speakeasy Las Vegas") and Presque Isle Downs, Inc. Mr. Arneault is
also a principal in numerous ventures directly or indirectly engaged in the
development, production and transportation of oil and gas. Since becoming the
President of the Company and Mountaineer Park, however, Mr. Arneault has devoted
virtually all his time and attention to the business of the Company. Mr.
Arneault is a certified public accountant, and has served as a tax partner with
Seidman and Seidman (now "BDO Seidman LLP"), a public accounting firm, in Grand
Rapids, Michigan, from 1977 to 1980. Mr. Arneault was employed as a certified
public accountant by Arthur Andersen in the tax department of its Cleveland
office from 1972 to 1976. Mr. Arneault is a member of the Independent Producers
Association of America, the Ohio Oil and Gas Association, the Michigan Oil and
Gas Association and the Michigan Association of Certified Public Accountants.
Mr. Arneault received his Bachelor of Science in Business Administration from
Bowling Green University in 1969, his Master of Arts from Wayne State University
in 1971, and his Masters in Business Administration from Cleveland State
University in 1978. Mr. Arneault also serves as a member of the Hospitality and
Tourism Management Board of Visitors of Robert Morris College in Pittsburgh,
Pennsylvania.
Robert L. Ruben, 40, has been a director of the Company since September
1995 and a Vice President since February 1999. He also serves as Assistant
Secretary of the Company, is Chairman of the Company's Compensation Committee,
and serves as a Director and Assistant Secretary of Mountaineer Park. He is a
partner in Ruben & Aronson, LLP, a Washington, D.C. law firm. Previously, Mr.
Ruben was a principal in Freer, McGarry, Bodansky & Rubin, P.C., a Washington,
D.C. law firm, where he practiced from 1991 until 1997. From 1986 to 1988, Mr.
Ruben was associated with the firm of Bishop, Cook, Purcell & Reynolds, which
later merged with Winston & Strawn, and from 1989 to 1991, Mr. Ruben was
associated with the firm of Wickens, Koches & Brooks. Mr. Ruben practices
principally in the areas of commercial litigation and securities regulation. Mr.
Ruben received his Bachelor of Arts from the University of Virginia in 1983 and
his Juris Doctor from the Dickinson School of Law of Penn State University in
1986. He is a member of the bars of the District of Columbia and the
Commonwealth of Pennsylvania. Ruben & Aronson, LLP currently serves as counsel
to the Company, and Mr. Ruben has represented Mr. Arneault and various of his
affiliates since 1987.
Robert A. Blatt, 61, has been a director of the Company since September
1995 and a Vice President since February 1999. Mr. Blatt is also a Director and
Assistant Secretary of Mountaineer Park, Chairman of the Company's Finance
Committee and a member of the Company's Compensation Committee. Mr. Blatt is the
Chief Executive Officer and managing member of New England National, L.L.C. and
a member of the board of directors of AFP Imaging Corporation. Since 1979 he has
been chairman and majority owner of CRC Group, Inc., and related entities, a
developer, owner, and operator of shopping centers and other commercial
properties, and since 1985, a member (seat owner) of the New York Stock
Exchange, Inc. From 1959 through 1991, Mr. Blatt served as director, officer or
principal of numerous public and private enterprises. In July 1999, certain
creditors of CGE Shattuck, LLC ("CGE") filed an involuntary bankruptcy petition
against CGE in the United States Bankruptcy Court for the District of New
Hampshire (In Re: CGE Shattuck, LLC). Although Mr. Blatt reports that he was no
longer an executive with CGE at the time of the filing, he was the Chief
Executive Officer and Managing Member of CGE within the two-year period prior to
the commencement of that action, which is still pending. Mr. Blatt informed the
Company that CGE's inability to satisfy its obligations to creditors in July
1999 resulted from a bank's wrongful refusal to release certain residential land
held as collateral by the bank. Mr. Blatt received his Bachelor of Science in
3
Finance from the University of Southern California in 1962 and his Juris Doctor
from the University of California at Los Angeles in 1965. He is a member of the
State Bar of California.
James V. Stanton, 70, has been a director of the Company since February,
1998 and serves on the Company's Audit Committee and as Chairman of the
Company's Compliance Committee. Mr. Stanton has his own law and lobbying firm,
Stanton & Associates, in Washington, D.C. From 1971-1978, Mr. Stanton
represented the 20th Congressional District of Ohio in the United States House
of Representatives. While in Congress Mr. Stanton served on the Select Committee
on Intelligence, the Government Operations Committee, and the Public Works and
Transportation Committee. Mr. Stanton has held a wide variety of public service
positions, including service as the youngest City Council President in the
history of Cleveland, Ohio and membership on the Board of Regents of the
Catholic University of America in Washington, D.C. Mr. Stanton is also former
Executive Vice President of Delaware North, a privately held international
company which, during Mr. Stanton's tenure, had annual sales of over $1 billion
and became the leading parimutuel wagering company in the United States, with
worldwide operations including horse racing, harness racing, dog racing, and
Jai-Lai. Delaware North also owned the Boston Garden and the Boston Bruins
hockey team. From 1985-1994, Mr. Stanton was a principal and co-founder of
Western Entertainment Corporation, which pioneered one of the first Native
American Gaming operations in the United States, a 90,000 square foot bingo and
casino gaming operation located on the San Manuel Indian Reservation in
California, which generated annual revenues in excess of $50 million. Mr.
Stanton also serves on the Board of Directors of Lottery and Wagering Solutions,
Inc.
Donald J. Duffy, 34, has been a director of the Company since June 2001
and serves as Chairman of the Company's Audit Committee and since April of 2002
as a member of the Compensation Committee. Mr. Duffy is presently a director of
Integrated Corporate Relations, a consulting firm. Mr. Duffy co-founded Meyer,
Duffy & Associates in 1994 and Meyer Duffy Ventures in 1999. At Meyer Duffy, Mr.
Duffy played an integral role in numerous seed and early stage companies. His
expertise is focusing on the development and implementation of business plans
including financial forecasting and analysis, management team development,
corporate strategy and capital formation. Prior to co-founding Meyer, Duffy &
Associates, Mr. Duffy was a Senior Vice President at Oak Hall Capital Advisors
where he specialized in investments in the leisure, gaming and technology
markets. Prior to Oak Hall, Mr. Duffy was an investment fund partner at Sloate,
Weisman, Murray & Company, specializing in investments in the leisure, gaming,
technology and retail markets. Mr. Duffy is a graduate of St. John's University.
The Board held two regular meetings and one special meeting and acted
eight times by written consent during the fiscal year ended December 31, 2001.
All directors attended all of the meetings. The Board does not have a standing
nominating committee. Messrs. Stanton, Duffy and William D. Fugazy, Jr. make up
the Board's Audit Committee. The Audit Committee is composed entirely of
Independent Directors who are also "independent" directors under the rules of
the NASD. In June of 2000, the Board of Directors established a formal Charter
for the Audit Committee. Mr. Ruben, Mr. Blatt and Mr. Duffy make up the Board's
Compensation Committee, Mr. Duffy having joined the Committee in April of 2002.
During 2001, the Committee held four meetings. Mr. Blatt is the sole member of
the Board's Finance Committee. Mr. Fugazy has decided not to stand for
re-election and will not continue as a director of the Company after the
upcoming Annual Meeting. The Company is currently conducting a search for an
individual to become an independent director and Audit Committee member upon
election by the Company's Board of Directors, effective as soon as possible
following the upcoming Annual Meeting. The Compensation Committee makes
recommendations with respect to salaries, bonuses, restricted
4
stock, and deferred compensation for the Company's executive officers as well as
the policies underlying the methods by which the Company compensates its
executives. During the fiscal year ended December 31, 2001, the Compensation
Committee held 3 meetings. As a matter of policy, and to assure compliance with
Rule 16b-3(d)(1) of the Securities Exchange Act of 1934, the decisions of the
Compensation Committee are subject to ratification by a majority of the Board.
The Finance Committee monitors the Company's relationships with its lenders and
investment bankers and negotiates on behalf of the Company with respect to
proposed financing arrangements.
Report of the Audit Committee
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to
the quality, not just the acceptability, of the Company's accounting principles
and such other matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, the Committee has discussed
with the independent auditors' the auditors' independence from management and
the Company including the matters in the written disclosures required by the
Independence Standards Board and considered the compatibility of non-audit
services with the auditors' independence.
The Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Committee
meets with the internal and independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls, and the overall quality of the Company's financial
reporting. The Committee held four meetings during fiscal year 2001.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2001 for filing with the Securities and
Exchange Commission. The Committee and the Board have also recommended, subject
to shareholder approval, the selection of the Company's independent auditors.
James V. Stanton
William D. Fugazy, Jr.
Donald J. Duffy
5
Executive Officers; Officers
The following persons serve as the officers indicated:
Principal
Occupation
Name and Address Position Last 5 Years
---------------- -------- ------------
EDSON R. ARNEAULT* Director,
MTR Gaming Group, Inc. President, Chief President of the Company and its
State Route 2 South Executive Officer and Treasurer subsidiaries
P.O. Box 356
Chester, WV 26034
ROBERT L. RUBEN** Director, Vice President, Assistant Law
3299 K Street, N.W. Secretary
Suite 403
Washington, D.C. 20007
ROBERT A. BLATT** Director, Vice President, Assistant Commercial Development
1890 Palmer Avenue Secretary
Suite 303
Larchmont, NY 10538
ROSE MARY WILLIAMS*** Secretary Horse Racing Management
MTR Gaming Group, Inc.
State Route 2 South
Chester, WV 26034
ROGER M. SZEPELAK**** Vice President, Chief Operating Hotel and Casino Management
3227 Civic Center Drive Officer, Nevada Properties
North Las Vegas, NV 89030
JOHN W. BITTNER, JR. Chief Financial Officer Accounting
MTR GAMING GROUP, INC.
State Route 2 South
Chester, WV 26034
- ----------
* Also an officer and director of Mountaineer Park, Inc., Speakeasy Gaming
of Las Vegas, Inc., Speakeasy Gaming of Reno, Inc., ExCal Energy
Corporation, and Presque Isle Downs, Inc. the Company's subsidiaries.
** Also assistant secretary of Mountaineer Park, Inc.
*** Also secretary of Mountaineer Park, Inc.
**** Officer of Speakeasy Gaming of Las Vegas, Inc. and Speakeasy Gaming of
Reno, Inc.
6
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of June 24, 2002, the ownership of the
presently issued and outstanding shares of the Company's Common Stock by persons
owning more than 5% of such stock, and the ownership of such stock by the
Company's officers, directors and key employees, individually and as a group. As
of June 24, 2002, there were 27,058,908 shares of common stock outstanding with
each share entitled to one vote. All such shares were owned both beneficially
and of record, except as otherwise noted.
Name and Address Amount and Nature Of Percentage of
- ---------------- Beneficial Ownership Class
-------------------- -------------
Edson R. Arneault(1) 4,019,717 13.93%
MTR Gaming Group, Inc.
State Route 2 South
P.O. Box 356
Chester, WV 26034
Robert L. Ruben(2) 817,228 2.95%
Ruben & Aronson, LLP
3299 K Street, N.W.
Suite 403
Washington, DC 20007
Robert A. Blatt(3) 1,316,084 4.75%
The CRC Group
Larchmont Plaza
1890 Palmer Avenue,
Suite 303
Larchmont, NY 10538
James V. Stanton(4) 106,900 Less than 1%
815 Connecticut Avenue, NW
Suite 620
Washington, DC 20006
William D. Fugazy, Jr.(4) 111,700 Less than 1%
9 Disbrow Circle
New Rochelle, NY 10804
Donald J. Duffy (4) 25,000 Less than 1%
Integrated Corporate Relations
24 Post Road
Westport, Conn. 06880
Rose Mary Williams(5) 60,000 Less than 1%
State Route 2
Chester, West Virginia 26034
John W. Bittner, Jr.(6) 25,000 Less than 1%
State Route 2
Chester, WV 26034
Roger Szepelak(7) 2,500 Less than 1%
3227 Civic Center Drive
North Las Vegas, Nevada 89030
- ---------------------------------------------------
Total Officers and Directors as a Group (9 persons) 6,486,629 21.41%
- ----------
(1) Includes 2,219,717 shares and options to acquire beneficial ownership of
1,800,000 shares within 60 days held by Mr. Arneault or his affiliates.
Also includes 30,000 shares held in the name of Mr. Arneault's dependent
son and 19,209 shares held by a partnership of which Mr. Arneault is a
general partner.
(2) Includes 167,228 shares and options to acquire beneficial ownership of
650,000 shares within 60 days held by Mr. Ruben.
(3) Includes 666,084 shares and options to acquire beneficial ownership of
650,000 shares exercisable within 60 days held by Mr. Blatt.
(4) Includes 106,900 shares held by Mr. Stanton. Includes 86,700 shares and
options to acquire beneficial ownership of 25,000 shares exercisable
within 60 days held by Mr. Fugazy. Includes no shares and options to
acquire beneficial ownership of 25,000 shares exercisable within 60 days
held by Mr. Duffy. For each year of service on the Company's Board of
Directors, Mr. Stanton, Mr. Fugazy and Mr. Duffy each receive options to
purchase 25,000 shares of common stock of the Company.
(5) Includes no shares and options to acquire beneficial ownership of 60,000
shares within 60 days held by Ms. Williams.
(6) Includes no shares and options to acquire beneficial ownership of 25,000
shares within 60 days held by Mr. Bittner. For each year of service with
the Company during the three-year employment agreement, Mr. Bittner will
receive options to purchase 25,000 shares of common stock.
(7) Includes 2,500 shares. For each year of service with the Company during
the three-year employment agreement, Mr. Szepelak will receive options to
purchase 25,000 shares of common stock. Also based upon performance
levels, Mr. Szepelak could receive an additional 25,000 shares of common
stock per year. Such options will be exercisable for a term of five years
from date of grant.
7
Section 16(a) Beneficial Ownership Reporting Compliance
Under the provisions of Section 16(a) of the Exchange Act, the Company's
executive officers, directors and 10% beneficial stockholders are required to
file reports of their transactions in the Company's securities with the
Commission. Based solely on a review of the Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, the Company believes that as of March 26, 2002, all of its
executive officers, directors and greater than 10% beneficial stockholders
complied with all filing requirements applicable to them during 2001, except
that Mr. Stanton filed one late report with respect to one transaction (sale of
2,000 shares of common stock) and Mr. Arneault filed one late report with
respect to two transactions (each a gift of 100 shares of common stock).
The following table sets forth the compensation awarded, paid to or earned
by the most highly compensated executive officers of the Company whose
compensation exceeded $100,000 in the fiscal year ended December 31, 2001.
8
Summary Compensation Table
Long Term
Annual Compensation
Compensation Awards Payouts
--------------------- Other --------------------- -------------------
Annual Restricted Options LTIP All Other
Bonus Comp. Stock SARs Payouts Comp.
Name Year Salary ($) ($) ($)(1) Awards ($) (#)(2) ($) ($)(4)
- ---- ---- ---------- --- ------ ---------- ------ --- ------
Edson R. Arneault(3) 2001 830,326 100,000 336,339 -- 100,000 -- 84,568
Chairman, President and 2000 469,904 100,000 254,664 -- 300,000 -- 84,568
Chief Executive Officer of 1999 447,461 100,000 304,300 -- 500,000 -- 23,324
MTR Gaming Group, Inc.
Robert A. Blatt, Vice 2001 213,857 -- 1,393 -- 50,000 -- 19,594
President(3) 2000 182,649 -- 1,288 -- 150,000 -- 19,594
1999 132,328 -- -- -- 150,000 -- 3,115
Roger M. Szepelak 2001 151,154 -- -- -- -- -- --
Vice President and Chief
Operating Officer
Nevada Properties
Mary Jo Needham 2001 104,000 -- 1,300 -- 25,000 -- --
Chief Financial Officer
- -----------
(1) As to Mr. Arneault for 2001 includes $330,111 performance bonus earned in
2001 and to be paid in 2002; an estimated pension contribution of $6,228;
for 2000 includes $250,000 performance bonus earned in 2000 and paid in
2001 and an estimated pension plan contribution of $4,664; for 1999
includes $303,000 performance bonus earned in 1999 and paid in 2000 and an
estimated pension plan contribution of $1,300; As to Mr. Blatt consists of
an estimated pension plan contribution of $1,393 and $1,288 in 2001 and
2000, respectively. As to Ms. Needham, other annual compensation consists
of an estimated pension contribution.
(2) Grants in 2001 and 2000 consisted of non-qualified stock options for a
term of ten years. The options are fully vested and have an exercise price
of $7.30 and $2.50 per share, respectively. All grants in 1999 consisted
of non-qualified stock options for a term of five years. The 1999 options
are fully vested and have an exercise price of $2.00 per share.
(3) See "Employment Agreements" below. Mr. Blatt commenced employment with the
Company in 1999, having previously acted as a consultant.
(4) Consists of premiums for life insurance pursuant to a qualified plan in
accordance with Section 419 of Internal Revenue Code. The incremental cost
to the Company of providing perquisites and other personal benefits during
the indicated periods did not exceed, as to any Named Executive Officer,
the lesser of $50,000 or 10% of the total salary and bonus paid to such
executive officer for any such year and, accordingly, is omitted from the
table.
9
OPTION GRANTS IN 2001
The following table contains information concerning the grant of stock
options during fiscal year 2001 to the Company's executive officers named in the
Summary Compensation Table.
Potential Realizable Value at
Number of Assumed Annual Rates of Stock
Securities % of Total Price Appreciation for Option
Underlying Options Term(1)
Options Granted in Exercise -----------------------------
Name Granted(#)(1) Fiscal Year Price Expiration Date 5% 10%
- ---- ------------- ----------- ----- --------------- -- ---
Edson R. Arneault 100,000 16% $ 7.30 May 2011 459,170 1,163,620
Robert A. Blatt 50,000 8% $ 7.30 May 2011 229,585 581,810
Roger M. Szepelak -- -- -- -- -- --
Mary Jo Needham 25,000 4% $ 7.30 May 2011 114,792 290,905
- -----------
(1) In accordance with the rules of the Securities and Exchange Commission,
"Potential Realizable Value" has been calculated assuming an aggregate
ten-year appreciation of the fair market value of the Company's common
stock on the date of the grant at annual compounded rates of 5% and 10%,
respectively. These amounts represent hypothetical gains that could be
achieved. Actual gains, if any, on the exercise of stock options will
depend on the future performance of the Company's stock and the date on
which the options are exercised. Moreover, the gains shown are net of the
option exercise price, but do not include deductions for taxes or other
expenses associated with the exercise of the option or the sale of the
underlying shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table sets forth information regarding the number and value
of options held by each of the Company's executive officers named in the Summary
Compensation Table as of December 31, 2001.
Number of Securities
Underlying Unexercised Value of Unexercised in-the-Money
Options at Fiscal Year End Options at Year End($)(1)
Shares -------------------------- ---------------------------------
Acquired On Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Edson R. Arneault 250,000 $634,625 1,800,000 -- $24,716,110 --
Robert A. Blatt 125,000 338,313 650,000 -- 9,092,740 --
Roger M. Szepelak -- -- 50,000 -- 487,500 --
Mary Jo Needham 60,000 346,875 25,000 -- 217,500 --
- ----------
(1) Based on the market price of the Company's Common Stock of $16.00 on
December 31, 2001, as reported by Nasdaq.
Employment Agreements
On September 28, 2001, the Company entered into a new five-year agreement
with it's President and Chief Executive Officer, Edson R. Arneault. The new
employment agreement, which
10
is effective as of January 1, 2001 and ratified by the Board on May 28, 2002,
and replaces an agreement entered into in February 1999, provides for, among
other things, an annual base salary of $750,000, semi-annual cash awards, an
annual performance bonus tied to EBITDA growth, and a long-term incentive bonus,
subject to a cap, payable at the end of the five-year term based upon growth
compared to fiscal year 2000 in a variety of objective measurements, including
earnings per share, the market price of the Company's common stock, EBITDA and
gross revenue. Other factors affecting the long-term bonus are acquisitions of
other racetracks and pari-mutuel facilities, acquisition of gaming operations
that generate positive EBITDA in the Company's first full year of operation, and
successful legislative initiatives.
The agreement provides that Mr. Arneault shall be entitled, at the
Company's expense, to reasonable living and/or office quarters (to be leased or
purchased at the Company's election) in any state or jurisdiction in which the
Company is currently doing business or commences substantial business
operations. Pursuant to the employment agreement, and in connection with the
conversion into needed office space of a company owned residence previously used
by Mr. Arneault, Mountaineer Park has purchased a residence approximately ten
miles from the Company's headquarters and took possession in August of 2001. The
purchase price was $1.3 million, including certain furniture and approximately
seven undeveloped acres, and the Company has spent approximately $800,000 on
capital improvements. The residence is used primarily by Mr. Arneault, but also
by other executives and consultants from time to time, and for corporate
entertaining. The Company believes that the incremental cost to the Company of
Mr. Arneault's use of the residence during 2001, together with all other
perquisites and personal benefits, was less than $50,000 and thus not material
for purposes of Item 402 (executive compensation) of Regulation S-K.
The agreement provides that if Mr. Arneault's period of employment is
terminated by reason of death or physical or mental incapacity, the Company will
continue to pay Mr. Arneault or his estate the compensation otherwise payable to
Mr. Arneault for a period of two years. If Mr. Arneault's period of employment
is terminated for a reason other than death or physical or mental incapacity or
for cause, the Company will continue to pay Mr. Arneault the compensation that
otherwise would have been due him for the remaining period of employment. If Mr.
Arneault's period of employment is terminated for cause, the Company will have
no further obligation to pay Mr. Arneault, other than compensation unpaid at the
date of termination.
In the event that the termination of Mr. Arneault's period of employment
occurs after there has been a change of control of the Company, as defined, and
(i) the termination is not for cause or by reason of the death or physical or
mental disability of Mr. Arneault or (ii) Mr. Arneault terminates his employment
for good reason, as defined in the agreement, then Mr. Arneault will have the
right to receive within thirty days of the termination, a sum that is three
times his annual base salary and payment by the Company of the next five annual
premium payments for the insurance policy called for by the deferred
compensation plan described below.
The February 1999 employment agreement with Mr. Arneault was to be for a
term of five (5) years ending January 31, 2004, and called for an annual base
salary of $450,000 (subject to automatic annual cost of living increases of 5%),
semi-annual cash bonuses of $50,000, and a performance bonus for each year equal
to 1% of the gross operating revenue increase over 1998 operating revenue
(provided, however, that EBITDA, as defined, exceeds 1998 EBITDA). In April
2000, in order to make the agreement at least coextensive with the Company's
long-term debt facility (which requires an $8 million key-man life insurance
policy on Mr. Arneault's life), this
11
employment agreement was amended to extend the term of the agreement through
December 31, 2004. The amendment also provided for a performance bonus for
calendar year 2004 equal to 1% of the gross operating revenue increase over 1999
operating revenue. In March of 2001, Mr. Arneault irrevocably waived the
performance bonus of $875,000 that would have been due under the employment
agreement in exchange for $250,000 and the Company's promise to negotiate in
good faith to conclude a new employment agreement during the first quarter of
2001.
In January of 1999, the Company entered into a deferred compensation
agreement with Mr. Arneault. Pursuant to the agreement, the Company has
purchased a life insurance policy on Mr. Arneault's life (face amount of
$4,400,000 and annual premium of $150,000). The owner of the policy is the
Company. The agreement entitles Mr. Arneault or his beneficiary to an annual
benefit, as defined, upon retirement, death or termination out of the cash value
of the insurance policy, after the Company has recouped the aggregate amount of
premiums paid. The benefits provided by the agreement were granted as additional
benefits and not as part of any salary reduction plan or arrangement deferring a
bonus or a salary increase.
In February of 1999, the Company entered into an employment agreement with
Robert A. Blatt. The agreement is for a term of five (5) years, calls for an
annual base salary of $46,000 (subject to automatic annual cost of living
increases of 5%) and additional compensation of $2,500 per day in the event Mr.
Blatt performs additional services. The employment agreement also entitles Mr.
Blatt to participate in the Company's various benefit plans for health
insurance, life insurance and the like. In the event Mr. Blatt terminates the
employment agreement for good reason, as defined, or the Company terminates the
agreement other than for cause or a permanent and total disability, he will be
entitled to the compensation otherwise payable to him under the employment
agreement. In the event Mr. Blatt's employment is terminated in connection with
a change in control of the Company, Mr. Blatt would be entitled to a cash
severance payment equal to three times his annual base salary and payment by the
Company of the next five annual premium payments for the insurance policy called
for by the deferred compensation plan described below.
In June of 1999, the Company entered into a deferred compensation
agreement with Mr. Blatt. Pursuant to the agreement, the Company has purchased a
life insurance policy on Mr. Blatt's life (face amount of $700,000 and annual
premium of $37,500). The owner of the policy is the Company. The agreement
entitles Mr. Blatt or his beneficiary to an annual benefit, as defined, upon
retirement, death or termination out of the cash value of the insurance policy,
after the Company has recouped the aggregate amount of premiums paid. The
benefits provided by the agreement were granted as additional benefits and not
as part of any salary reduction plan or arrangement deferring a bonus or a
salary increase.
In October of 2000, the Company entered into a three-year employment
agreement with Roger Szepelak as Vice President and Chief Operating Officer for
Speakeasy Gaming of Las Vegas, Inc. and Speakeasy Gaming of Reno, Inc. The
agreement calls for an annual base salary of $150,000 with annual automatic cost
of living increases of 5% and entitles Mr. Szepelak to a car allowance as well
as to participate in the Company's various employee benefit plans. In the event
Mr. Szepelak's employment is terminated by the Company other than for cause or a
permanent and total disability, he will be entitled to the compensation
otherwise payable to him under the employment agreement. Mr. Szepelak's
employment agreement does not provide for any additional compensation in the
event of termination in connection with a change in control.
In January 2002, the Company entered into a three-year employment
agreement with John W. Bittner, Jr. as Chief Financial Officer. The agreement
calls for an annual salary of $160,000 and
12
entitles Mr. Bittner to a car allowance as well as to participate in the
Company's various employee benefit plans. In the event Mr. Bittner's employment
is terminated by the Company other than for cause or permanent disability, he
will be entitled to the compensation otherwise payable to him under the
employment agreement. Further, in the event Mr. Bittner is discharged during the
last year of the term of the agreement in connection with a change in control of
the Company, as defined in the agreement, Mr. Bittner would be entitled to a
cash payment in the amount of one year of Mr. Bittner's then current salary.
Stock Performance Graph
The following graph demonstrates a comparison of cumulative total returns
of the Company, the NASDAQ Market Index (which is considered to be a broad
index) and an industry peer group index based upon companies which are publicly
traded with the same four digit standard industrial classification code ("SIC")
as the Company (SIC 7999 - Amusement and Recreational Services) for the past
five years. The beginning date for the graph is January 1, 1997. The following
graph assumes $100 invested in each of the above groups and the reinvestment of
dividends.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG MTR GAMING GROUP, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
[GRAPH OMITTED]
================================================================================
Company 1996 1997 1998 1999 2000 2001
================================================================================
MTR Gaming Group, Inc. 100.00 200.00 243.75 306.25 475.00 1600.00
- --------------------------------------------------------------------------------
Industry Index 100.00 104.37 77.45 97.91 68.56 79.41
- --------------------------------------------------------------------------------
NASDAQ Market Index 100.00 122.32 172.52 304.29 191.25 152.46
================================================================================
(1) The peer group consists of the following companies: American Wagering,
Inc.; Argosy Gaming Co.; Boyd Gaming Corp.; Dover Motorsports, Inc.;
Gametech International, Inc.; Imax Corp.; Isle of Capris Casinos; Lakes
Gaming Inc.; Littlefield Corporation; MDI Entertainment; MGM Mirage, Inc.;
Multimedia Games, Inc.; Renaissance Entertainment Corp.; Sands Regent;
Skyline Multimedia Entertainment; TBA Entertainment Corp.; Ticketmaster
Inc.; Tickets.com, Inc.; Trans World Corp.; Vail Resorts, Inc.; Winter
Sports, Inc.; and Youbet.com, Inc.
Compensation of Directors
The Company's non-employee directors receive an annual stipend of $12,000,
a per meeting fee of $1,500, and an award of options to purchase 25,000 shares
of the Company's common stock. Directors who are employees of the Company do not
receive compensation for attendance at Board meetings. All board members are
reimbursed for expenses they incur in attending meetings.
13
Compensation Committee Interlocks and Insider Participation
On November 8, 1995, the Board voted to form an executive compensation
committee consisting of Mr. Ruben and Mr. Blatt, (the "Committee"). In April of
2002, the Board elected Mr. Duffy to the Committee. The Committee is authorized
to review all compensation matters involving directors and executive officers
and Committee approval is required for any compensation to be paid to executive
officers or directors who are employees of the Company. As a matter of policy
and to assure compliance with Rule 16b-3(d)(1) of the Securities Exchange Act of
1934, the decisions of the Compensation Committee are subject to ratification by
a majority of the Board. Both Messrs. Blatt and Ruben serve as officers and
directors of the Company and of Mountaineer Park.
Board Compensation Committee Report on Executive Compensation
Policy
The Committee's decisions with respect to executive compensation will be
guided by the general principle that compensation be designed: (i) to assure
that the Company's executives receive fair compensation relative to their peers
at similar companies; (ii) to assure that the Company's shareholders are
receiving fair value for the compensation paid to the Company's executives; and
(iii) to allow the Company to secure and retain the services of high quality
executives.
The Company's compensation program currently consists of three elements: a
base salary; annual incentives in the form of cash or restricted stock bonuses;
and long-term incentives in the form of stock options and/or cash. The Committee
believes that annual incentives, or bonuses, should be used to reward an
executive for exceptional performance. The determination of what constitutes
exceptional performance is generally a subjective judgment by the Committee
based on the executive's contribution to the Company's revenues, legislative and
regulatory efforts, recruitment of high quality personnel, elevating public
awareness and perception of the Company's gaming and resort businesses, and
development of the Company's prospects. With respect to compensation for the
Company's current CEO, performance bonuses are calculated pursuant to a formula
tied to increases in the Company's gross operating revenues, subject to certain
conditions and limitations. The Committee recently concluded a new five-year
agreement with the Company's CEO which is described above.
Stock options allow the Company to motivate executives to increase
stockholder value. This type of incentive also allows the Company to recruit
members of the management team whose contributions and skills are important to
its long-term success. The Committee intends to employ a combination of cash
incentives, stock and option awards.
Chief Executive Officer Compensation; Employment Agreement
During the fiscal year ended December 31, 2001, Mr. Arneault's base salary
and bonuses were based upon a September 2001 employment agreement which was
effective as of January 1, 2002, and replaced an agreement entered into in
February 1999. Prior to the execution of the September 2001 employment
agreement, during the fiscal year ended December 31, 2001, Mr. Arneault's base
salary and bonuses were based upon his February 1999 employment agreement. The
current performance bonus is based upon an objective formula tied to EBITDA
growth,
14
subject to certain conditions and limitations. In addition, in 2001, the
Committee recommended, and the Board approved, grants to Mr. Arneault of
non-qualified options to purchase 100,000 shares of the Company's common stock
at the fair market value on the date of grant of $7.30 per share. The Committee
believed that the total compensation was warranted by Mr. Arneault's overall
performance and in particular his ongoing pivotal role in the continued growth
of the Company's West Virginia business.
Respectfully submitted,
Robert A. Blatt
Robert L. Ruben
Donald J. Duffy
CERTAIN TRANSACTIONS
In connection with the exercise of stock options and the payment of taxes
incident to such exercises during 2001 and prior years, the Company's President
and CEO, Edson Arneault, delivered to the Company full recourse promissory notes
totaling approximately $2,242,000 in principal that remained outstanding at
December 31, 2001. The notes were to mature variously in 2002 through 2004 and
bore interest at annual rates ranging from 6% to 9% or 1% above the prime rate.
Mr. Arneault repaid all of the notes, together with accrued interest, in full
subsequent to December 31, 2001.
Mr. Robert Ruben, an officer and member of the Company's board, is a
member of the law firm Ruben & Aronson, LLP, which has performed legal services
for the Company. The Company and Ruben & Aronson anticipate that the law firm
will perform legal services for the Company in the future. During the fiscal
year ended December 31, 2001, the Company paid Ruben & Aronson the sum of
$1,222,000 for legal services. In connection with the exercise of stock options
and payment of taxes incident to such exercises during 2001 and prior years, Mr.
Ruben delivered to the Company full recourse promissory notes totaling
approximately $702,000. In August of 2001, Mr. Ruben repaid approximately
$90,000 of principal and interest, leaving a principal balance of $612,000
outstanding at December 31, 2001. The notes were to mature variously in 2003
through 2004 and bore interest at 6% to 8% or 1% above the prime rate. Mr. Ruben
repaid all of the notes, together with accrued interest, in full subsequent to
December 31, 2001.
Also in connection with the exercise of stock options and the payment of
taxes incident to such exercises during 2001 and prior years, Mr. Robert Blatt
delivered to the Company full recourse promissory notes totaling approximately
$665,854 in principal that remained outstanding at December 31, 2001. The notes
mature variously in 2002 through 2004 and bear interest at an annual rate of 6%
to 9% or 1% above the prime rate. Mr. Blatt has pledged the 175,000 shares
purchased in connection with such exercises to secure repayment of the notes.
Mr. Blatt repaid approximately $560,000 of principal and interest subsequent to
December 31, 2001.
Also in connection with the exercise of stock options during 2001, Mr.
James Stanton, a director of the Company, delivered to the Company a full
recourse promissory note for approximately $175,000. The note was to be due on
or before April 2003 with interest at an annual rate of 8%. Mr. Stanton repaid
the note in full subsequent to December 31, 2001.
15
Also in connection with the exercise of stock options during 2001, Mr.
William Fugazy, Jr., a director of the Company, delivered to the Company a full
recourse promissory note for approximately $175,000. The note was due on or
before April 2003 and bore interest at an annual rate of 8%. Mr. Fugazy repaid
the note, including accrued interest, in full in June 2001.
ITEM 2
RATIFICATION OF SELECTION OF AUDITORS
The Board has selected the firm of Ernst & Young LLP ("E&Y"), independent
public accountants, to serve as auditors for the fiscal year ending December 31,
2002, subject to ratification by the stockholders.
Audit Fees
Aggregate fees billed by E&Y for the last Fiscal Year for annual audit and
reviews of the financial statements in the Company's Forms 10-Q were $257,891,
including additional audit and reporting related services of $33,459.
Financial Information Systems Design and Implementation Fees
E&Y billed no fees for the last fiscal year for financial information
systems design and implementation.
All Other Fees
Aggregate fees billed by E&Y for the last Fiscal Year for all other
services were $408,715, which consisted primarily of tax compliance and
consultation services, fixed asset review and purchasing/procurement process
analysis.
The Board recommends a vote FOR ratification of this selection.
It is expected that a member of E&Y will be present at the Annual Meeting
and will have an opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
Effective September 6, 2000, in connection with its engagement of E&Y, the
Company dismissed BDO Seidman, LLP ("BDO") as independent accountants to audit
the financial statements of the Company and its subsidiaries for the Company's
fiscal year ending December 31, 2000.
The Company's decision to change accountants was recommended by the
Company's management and approved by the Audit Committee of the Company's Board
of Directors.
BDO's report for the past year did not contain any adverse opinion or
disclaimer of opinion nor was it qualified or modified as to uncertainty, audit
scope or accounting principles.
During the Company's two most recent fiscal years and any subsequent
interim period preceding BDO's dismissal, there were no disagreements with BDO
on any matter of accounting
16
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of BDO would
have caused it to make reference to the subject matters of the disagreements in
connection with its report.
During the Company's two most recent fiscal years and any subsequent
interim period preceding this dismissal, BDO did not advise the Company with
respect to any of the matters described in paragraphs (a)(1)(v)(A) through (D)
of Item 304 of Regulation S-K.
The Company engaged E&Y as the independent accountants of the Company as
approved by the Audit Committee of the Company's Board of Directors effective
September 6, 2000. Prior to the engagement of E&Y there were no consultations by
the Company with E&Y relating to disclosable disagreements with BDO, how
accounting principles would be applied by E&Y to a specific transaction, or the
type of opinion E&Y might render. The Company has afforded E&Y an opportunity to
furnish a letter to the SEC with its comments with regard to the foregoing
disclosures.
The Company has provided BDO with a copy of the foregoing disclosures and
has requested in writing that BDO furnish it with a letter addressed to the SEC
stating whether or not it agrees with such disclosures. A copy of BDO's letter
stating that it does not disagree with such disclosures is attached hereto as
Exhibit A.
FINANCIAL INFORMATION
The Financial Statements of the Company included in the Company's Annual
Report to Stockholders that accompanies this Proxy Statement are incorporated
herein by reference.
OTHER MATTERS
Stockholder Proposals for Next Meeting
Proposals of stockholders intended for inclusion in the proxy statement
for the Annual Meeting of Stockholders to be held in 2003 must be received by
the Company's executive offices not later than March 20, 2003. Proponents should
submit their proposals by Certified Mail--Return Receipt Requested. Proposals
received after that date will be deemed untimely.
Notice Regarding Abandoned Property Law of New York State
The Company has been informed by its Transfer Agent, Continental Stock
Transfer & Trust Company, that New York State now requires the Company's
Transfer Agent to report and escheat all shares held by the Company's record
shareholders if there has been no written communication received from the
shareholder for a period of five years. This regulation pertains specifically to
corporate issuers who do not pay dividends and their shareholders with New York,
foreign or unknown addresses. The law mandates escheatment of shares even though
the certificates are not in the Transfer Agent's possession, and even though the
shareholder's address of record is apparently correct.
The Transfer Agent has advised the Company that the law requires the
Transfer Agent to search its records as of June 30 each year in order to
determine those New York resident shareholders from whom it has had no written
communication within the past five years. Written
17
communication would include transfer activity, voted proxies, address changes or
other miscellaneous written inquiries. For those shareholders who have not
contacted the Transfer Agent in over five years, a first-class letter must be
sent notifying them that their shares will be escheated in November if they do
not contact the Transfer Agent in writing prior thereto. All written responses
will be entered in the Transfer Agent's files, but those who do not respond will
have their shares escheated. Shareholders will be able to apply to New York
State for the return of their shares.
Accordingly, shareholders that may be subject to New York's Abandoned
Property Law should make their inquiries and otherwise communicate, with respect
to the Company, in writing. Shareholders should contact their attorneys with any
questions they may have regarding this matter.
No Other Business
Management is not aware at this date that any other business matters will
come before the meeting. If, however, any other matters should properly come
before the meeting, it is the intention of the persons named in the proxy to
vote thereon in accordance with their judgment.
June 27, 2002 MTR GAMING GROUP, INC.
Rose Mary Williams, Secretary
18
EXHIBIT A
September 7, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
We have been furnished with a copy of the response to Item 4 of Form 8-K for the
event that occurred on September 6, 2000, to be filed by our former client, MTR
Gaming Group, Inc. We agree with the statements contained in paragraphs (a)(1)
(iii), (iv) and (v) made in response to Item 4 insofar as they relate to our
Firm.
BDO Seidman, LLP