Exhibit 10.9

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), is dated and is to be effective as of
September 23, 2008 (the “Effective Date”), by and between MTR Gaming
Group, Inc., a Delaware corporation (hereinafter referred to as “Company” or
“Employer”), and Robert F. Griffin, an individual (hereinafter referred to as
“Executive”) residing at the address set forth on the signature page hereof.

 

W I T N E S S E T H:

 

WHEREAS, Employer desires to engage or employ Executive to perform services for
Employer (or any present or future parent, subsidiary, or affiliate of Employer
and any successor or assign of Employer) upon the terms and conditions set forth
below, and Executive desires to accept employment upon such terms and
conditions.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1.                                      EMPLOYMENT.  Employer hereby employs
Executive to serve in the position of President and Chief Executive Officer, and
Executive hereby accepts employment by Employer in such position, upon all of
the terms and conditions set forth in this Agreement.

 

2.                                      TERM.  This Agreement and the term of
Executive’s employment hereunder (the “Employment Term”) shall begin on
January 2, 2009 or sooner if the parties agree (the “Start Date”) and, unless
earlier terminated as set forth in Section 8 hereof, shall continue for two
years following the Start Date (the “Initial Term”).  Further, the phrase
“termination of employment” as used hereinafter shall be deemed to be
“separation from service” under Section 409A of the Internal Revenue Code (the
“Code”).  Ninety (90) days prior to the end of the Initial Term the parties will
negotiate in good-faith to extend the term of the Agreement for at least two
years (including reasonable compensation / benefits based upon Executive’s
contributions to the Company).  If the parties are unable to reach an agreement
to extend the term, then upon the expiration of the Agreement, Executive will be
entitled to receive an amount equal to the Executive’s then applicable annual
Base Compensation payable in monthly installments and a monthly amount so that
Executive shall be able to continue to receive the health benefits coverage in
effect on the effective date of termination.  The Company’s payment obligations
with respect to Base Compensation shall end on the earlier of (A) the first
anniversary of such termination of employment, or (B) the date on which
Executive accepts employment with or provides service to, in any capacity, any
other business or entity in exchange for compensation. The Company’s payment
obligations with respect to health benefits shall end on the earlier of (A) the
second anniversary of such termination of employment, or (B) the date on which
Executive

 

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accepts employment with or provides service to, in any capacity, any other
business or entity in exchange for compensation.  If the Executive is offered at
least a two year extension of the term (including reasonable compensation /
benefits based upon Executive’s contributions to the Company), but elects not to
renew the Agreement because he does not wish to work for the Company any longer,
then the Executive will not receive the amounts above, but will be entitled to
receive the payments specified in Section 8(d).

 

3.                                      EXECUTIVE’S REPRESENTATIONS AND
WARRANTIES.  Executive represents, warrants and covenants to Employer that he is
free to accept employment with Employer as contemplated herein and has no other
written or oral obligations or commitments of any kind or nature that would in
any way interfere with his acceptance of employment pursuant to the terms hereof
or the full performance of his obligations hereunder or that would otherwise
pose any conflict of interest.  Company acknowledges that for one year following
Executive’s separation date from Isle of Capri Casinos, Inc. (“Isle of Capri’)
he is restricted from competing with Isle of Capri, specifically said
restriction applies to a 75 mile radius around any casino managed or owned, in
whole or in part, by Isle of Capri.  Company further acknowledges that Executive
may not solicit, hire or attempt to hire any Isle of Capri employee during the 6
months following his separation from Isle of Capri absent written consent from
Isle of Capri.

 

4.                                      DUTIES AND EXTENT OF SERVICES.

 

(a)                                  Duties.  During the Employment Term,
Executive shall serve in the position of President and Chief Executive Officer
and shall have such authority and perform such duties as are commensurate with
such position and as reasonably assigned by Employer and consistent with such
position.  In addition, Executive shall hold such other office(s) with Employer
(or any affiliates of Employer) to which he may be elected, appointed or
assigned from time to time, and to which he has consented, and shall discharge
the duties related to such offices.  In performance of his duties, Executive
shall be subject to the direction of the Board of Directors.

 

(b)                                 Extent of Service.  During the Employment
Term, excluding periods of vacation and sick leave to which Executive is
entitled, Executive shall devote his full business time, skill, attention and
energy exclusively, diligently, and competently to perform the duties and
responsibilities assigned to him hereunder or pursuant hereto, provided that he
may manage personal investments, and, with the consent of Employer which shall
not be unreasonably withheld, delayed or conditioned, serve on civic or
charitable boards.  Executive shall be available to travel as the reasonable
needs of the business of Employer require.

 

5.                                      COMPENSATION.

 

(a)                                  Base Salary.  Subject to Section 11 of this
Agreement, for all services rendered under this Agreement during the Term,
Employer shall pay to Executive a base salary of Five Hundred Fifty Thousand
Dollars ($550,000) per annum,

 

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as adjusted from time to time with the approval of the Compensation Committee
(“Base Compensation”).  The Base Compensation shall be payable in installments
in accordance with Employer’s normal payroll practices for compensating its
Executives and shall be subject to payroll deductions and tax withholdings in
accordance with Employer’s usual practices and as required by law.  At a
minimum, Executive’s Base Compensation shall be reviewed annually and may be
increased, but not decreased, subject to the approval of the Compensation
Committee.

 

(b)                                 Incentive Compensation.   Each year
Executive shall be entitled to annual performance-based incentive compensation
(“Incentive Compensation”) in an amount no less than 30% of the Base
Compensation (“Minimum Incentive Compensation”).  The Incentive Compensation
payable for each applicable period shall be determined by the Compensation
Committee of the Board of Directors.  Performance goals will be mutually agreed
upon and shall be contingent on and based on corporate and individual
performance criteria recommended by the Compensation Committee and approved by
the Board of Directors from time to time.  To the extent practicable, the
performance criteria will include objective factors.  In the event the Executive
and the Employer are unable to agree on the criteria for the Incentive
Compensation by March 31 of any year during the Employment Term, then the
criteria for that calendar year shall be established by the Compensation
Committee and approved by the Board of Directors.

 

Incentive Compensation shall be payable on June 1 of the calendar year following
the calendar year then completed.  The budgets and performance criteria used for
the above analysis will be the budget approved by the Board of Directors for the
fiscal period in question and shall be provided to Executive not later than
April 1 of each year.

 

For the time period from the Effective Date through December 31, 2008, Executive
will be eligible for a pro-rata portion of the Minimum Incentive Compensation. 
Beginning January 1, 2009, Executive is fully eligible for Incentive
Compensation.

 

(c)                                  Deferral of Non-Deductible Amounts. 
Notwithstanding any provision to the contrary contained herein, to the extent
Executive’s total compensation for any calendar year would otherwise exceed the
amount the Company is permitted to deduct as compensation expense for federal
income tax purposes (the “Section 162 Maximum”) pursuant to Section 162 of the
Internal Revenue Code of 1986, as amended (the “Code”), Executive hereby elects
to defer the time for payment of any amounts above the Section 162 Maximum in a
manner that will not result in compensation exceeding the Section 162 Maximum. 
In no event, however, shall such an election result in or be construed as a
waiver of the right to such compensation.  Compensation deferred pursuant to
this Section 5(c) shall be paid to the Executive six (6) months following the
Executive’s separation from service (within the meaning of Section 409A of the
Code).

 

(d)                                 Long Term Incentive Compensation.  On the
date of execution of this Agreement, the Company will grant to Executive
non-qualified options to purchase 150,000 shares of MTR’s common stock.  The
exercise price of those options will be the Nasdaq Official Close Price of the
stock on the date of grant. 50,000 of options shall be fully vested upon the
Effective Date. Provided Executive remains employed by the

 

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Company, 50,000 options shall vest on the first anniversary of this Agreement
and the final 50,000 options shall vest on the second anniversary of this
Agreement.  Executive acknowledges that all of the terms and conditions of the
Long Term Incentive Compensation shall be set forth in a Non-Qualified Stock
Option Agreement in the form attached hereto as Exhibit A.

 

6.                                      FRINGE BENEFITS AND EXPENSES.

 

(a)                                  Fringe Benefits.  Executive shall be
entitled to such fringe benefits as are generally made available by Employer to
executive personnel, including, but not limited to, health insurance, subject to
and on a basis consistent with the terms, conditions and overall administration
of such benefit plans.

 

(b)                                 Relocation Expenses.  The Company shall
reimburse Executive for relocation expenses as follows:  (i) customary brokerage
commission and other closing costs customarily paid by sellers in Wildwood,
Missouri in connection with the sale of Executive’s residence; (ii) all moving,
storage and other reasonable expenses related to the relocation of Executive and
his family to a location within reasonable commuting distance of the Company’s
corporate headquarter; (iii) expenses Executive and spouse may incur for up to
three trips to identify a new home; and (iv) closing costs on purchase of new
home (not including any discount points, but including up to a 1% loan
origination fee, settlement / attorney fees, title insurance premiums,
inspection fees, and other customary closing costs).  It is contemplated for the
first thirty days of the Employment Term; Executive will reside in the Company’s
hotel.  Thereafter, the Company will reimburse Executive for temporary living
expenses for Executive and his family until he moves into the new permanent
residence (up to $3,000.00 per month for a period not to exceed six (6) months
from the Start Date).  In the event that, as a result of payments to or for the
benefit of Executive under this provision, any state, local or federal taxing
authority imposes any taxes on Executive related to the payment and/or
reimbursement of expenses described herein, then Employer shall pay to Executive
at the time any such tax becomes payable an amount equal to the amount of any
such tax imposed on Executive.  Any tax amounts Executive may pay in connection
with payments made pursuant to this provision may be presented by Executive to
the Compensation Committee to be taken into account for purposes of determining
Executive’s incentive compensation for the year.

 

(c)                                  Job Related Expenses.  Employer shall also
reimburse Executive for his reasonable out-of-pocket costs and expenses in
connection with the performance of his duties and responsibilities hereunder,
subject to the submission of appropriate vouchers, bills and receipts in
accordance with Employer’s policies from time to time in effect, including
sufficient detail to entitle Employer to income tax deductions for such paid
items, if such items are so deductible.  All travel and other expenses incident
to the rendering of services by Executive hereunder, including the expenses
associated with gaming licensing in any state in which the Company or one of its
affiliates requests Executive to become licensed, shall be paid by the Company. 
The Company shall also provide Executive a Company cellular telephone, or, at
the Company’s election,

 

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reimburse Executive for the cost of a cellular phone and monthly service charges
maintained by Executive.

 

(d)                                 Vacation.  Executive shall be entitled to
four (4) weeks paid vacation annually each calendar year, to be taken at time or
times mutually satisfactory to Executive and the Company.  Accrued vacation time
not utilized by Executive due to business commitments may be carried over the
following year (provided, however, that Executive shall not in any event utilize
more than eight weeks of vacation in any twelve month period) or paid to
Executive at the end of the year as additional compensation at Executive’s
election.

 

(e)                                  Working Facilities.  The Company shall
provide Executive with an office, secretarial, administrative and other
assistance, and such other facilities and services as shall be suitable to his
position and appropriate for the performance of his duties.  All such working
facilities shall be provided at the Company’s corporate headquarters and, on an
as needed basis, in any other jurisdiction in which the Company is conducting or
pursuing substantial business.

 

(f)                                    Automobile Allowance.  During the Period
of Employment, Executive shall be entitled to $700 per month toward the lease or
purchase, insurance and maintenance of an automobile.  In the alternative, at
Executive’s election, Executive may have the use, for business purposes, of an
automobile currently owned by the Company.  Executive shall likewise be entitled
to reimbursement for the cost of gasoline purchased for business travel.

 

(g)                                 Life Insurance.  During the Employment Term,
the Company will maintain, at its sole cost and expense, a term life insurance
policy for Executive with a face value equal to at least three (3) times
Executive’s Base Compensation.  Executive shall have the right to name the
beneficiary of such term life insurance policy.  Notwithstanding the foregoing,
the Company’s obligation to pay premiums for such term life insurance policy
shall be limited to the rate charged for preferred non-smokers.

 

7.                                      NON-COMPETITION AND NON-SOLICITATION.

 

(a)                                  The Company and Executive acknowledge that
the services to be performed by Executive under this Agreement are unique and
extraordinary and, as a result of such employment, Executive will be in
possession of confidential information and trade secrets (collectively,
“Confidential Material”) relating to the business practices of the Company and
its Affiliates.  Executive agrees that he will not, directly or indirectly,
(i) disclose to any other person or entity either during or after his employment
by the Company or (ii) use, except during his employment by the Company in the
business and for the benefit of the Company or any of its Affiliates, any
Confidential Material acquired by Executive during his employment by the
Company, without the prior written consent of the Company or otherwise than as
required by law or any rule or regulation of any federal or state authority. 
Upon termination of his employment with the Company for any reason, Executive
agrees to return to the Company all tangible manifestations of Confidential
Materials and all copies thereof, not to disparage the

 

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Company, and for a period of one year from the date of such termination not to
solicit, or assist any person other than Employer to solicit for employment or
hire any employee of the Company.  All programs, ideas, strategies, approaches,
practices or inventions created, developed, obtained or conceived of by
Executive during the term hereof by reason of his engagement by the Company,
shall be owned by and belong exclusively to the Company, provided that they are
related in any manner to the Company’s business or that of any of its
Affiliates.  Executive shall (i) promptly disclose all such programs, ideas,
strategies, approaches, practices, inventions or business opportunities to the
Company, and (ii) execute and deliver to the Company, without additional
compensation, such instruments as the Company may require from time to time to
evidence its ownership of any such items.

 

(b)                                 Executive agrees that during the term of
employment he will not become a stockholder, director, officer, employee or
agent of or consultant to any corporation, or member of or consultant to any
partnership or other entity, or engage in any business as a sole proprietor or
act as a consultant to any such entity, or otherwise engage, directly or
indirectly, in any enterprise, in each case which competes with any business or
activity engaged in, or known by Executive to be contemplated to be engaged in,
by the Company or any of its Affiliates or in which Executive has knowledge that
the Company or any of its Affiliates contemplates doing business; provided,
however, that competition shall not include the ownership (solely as an investor
and without any other participation in or contact with the management of the
business) of less than five percent (5%) of the outstanding shares of stock of
any corporation engaged in any such business, which shares are regularly traded
on a national securities exchange or in an over-the-counter market.

 

(c)                                  Executive agrees that for a period of one
(1) year from date of his separation from employment for any reason, other than
in connection with a Change in Control of the company or Executive’s resignation
of his employment for Good Reason, he will not accept employment as an executive
with any racetrack or casino within one hundred (100) miles of any racetrack or
casino then owned or operated by the Company or its affiliates.

 

(d)                                 Executive has carefully read and considered
the provisions of this Section 7, and, having done so, agrees that (i) the
restrictions set forth herein are reasonable, in terms of scope, duration,
geographic scope and otherwise, (ii) the protection afforded to Employer
hereunder is necessary to protect its legitimate business interests and is no
greater than necessary to protect Employer’s legitimate business interests,
(iii) the agreement to observe such restrictions forms a material part of the
consideration for this Agreement, and (iv) upon the termination of Executive’s
employment with Employer for any reason, he will be able to earn a livelihood
without violating the foregoing restrictions.  In the event that,
notwithstanding the foregoing, any of the provisions of this Section 7 shall be
held to be invalid or unenforceable, the remaining provisions thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein.  In the event that any
provision of this Section 7 relating to the time period and/or the areas of
restriction and/or related aspects shall be declared by a court of competent
jurisdiction to exceed the

 

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maximum restrictiveness such court deems reasonable and enforceable, the time
period and/or areas of restriction and/or related aspects deemed reasonable and
enforceable by the court shall become and thereafter be the maximum restriction
in such regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court.

 

(e)                                  Executive agrees that Employer’s remedies
at law for any breach or threat of breach by his of any of the provisions of
this Section 7 will be inadequate and that Employer shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Section 7 and to enforce specifically the terms and provisions thereof, in
addition to any other remedy to which Employer may be entitled at law or equity.

 

8.                                      TERMINATION OF EMPLOYMENT.

 

(a)                                  Upon sixty (60) days’ prior written notice,
Employer may terminate Executive’s employment, with or without “Cause,” as
defined in Section 8(f) below.  Upon sixty (60) days’ prior written notice,
Executive may terminate his employment, with or without “Good Reason,” as
defined in Section 8(e) below.  Upon any termination of Executive’s employment
(the “Date of Termination”) for any reason, Employer shall:

 

(i)                                   pay to Executive any unpaid Base
Compensation through the Date of Termination;

 

(ii)                                pay to Executive any unpaid Incentive
Compensation earned with respect to completed fiscal periods but not paid
through the date of termination under the terms of applicable incentive
compensation arrangements; and

 

(iii)                             pay to Executive all deferred payment amounts
referenced in Section 5(c), if any; and

 

(iv)                            provide to or for the benefit of Executive the
benefits, if any, otherwise expressly provided under this Section 8, Section 9
or Section 10, as applicable.

 

Any payments under this Section 8, Section 9 or Section 10 that are to be made
in connection with the termination of Executive’s employment are subject to the
provisions of Section 18 and will be paid in cash (with deduction of such amount
as may be required to be withheld under applicable law and regulations) within
ten (10) business days of Executive’s termination of employment.

 

All other compensation and employment benefit arrangements provided for in this
Agreement shall cease upon such termination of employment except to the extent
required by law or otherwise expressly provided by such arrangements.

 

(b)                                 In the event Employer terminates Executive’s
employment without Cause or Executive terminates his employment for Good Reason,
then, during the twelve (12) month period immediately following such termination
(the “Severance Period”) in

 

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addition to the benefits provided for under Sections 8(a)(i), 8(a)(ii) and
8(a)(iii) and subject to the provisions of Sections 10 and 18, Employer shall
pay to Executive:

 

(i)                                   a severance benefit equal to Executive’s
then applicable monthly Base Compensation each month for a period of twelve (12)
months following the termination of employment;

 

(ii)                                a severance benefit equal to Executive’s
monthly bonus amount each month for a period of twelve (12) months (determined
by dividing the highest amount of any Incentive Compensation paid to Executive
in respect of either the first or second full calendar year immediately
preceding the effective date of termination (or, in the event that such
termination occurs prior to the payment of any annual bonus, based upon the
Minimum Incentive Compensation as defined in Section 5(b) above) divided by
twelve;

 

(iii)                             a monthly amount so that Executive shall be
able to continue to receive the health benefits coverage in effect on the
effective date of termination for Executive and, if any, Executive’s spouse and
dependents until the earlier of (A) the second anniversary of such termination
of employment, or (B) the date on which Executive accepts employment with or
provides service to, in any capacity, any other business or entity, such amount
to be based upon Executive’s level of enrollment in the Company’s group medical
plan as of the date of his date of termination, and contingent upon Executive’s
timely election to continue his coverage under the Company’s group medical plan
in accordance with Code Section 4980B.

 

(iv)                            In addition, all unvested stock options shall
vest, and all stock options that must be exercised shall be exercisable in
accordance with the terms of the Non-Qualified Stock Option Agreement. On or
before May 1 of the calendar year following the calendar year in which
Executive’s employment with Employer is terminated, Employer shall calculate the
amount of Incentive Compensation Executive would have received had Executive
remained employed by Employer for the entire applicable calendar year.  Employer
shall then prorate the Incentive Compensation for the amount of time Executive
was employed by the Company during the applicable calendar year and promptly pay
to Executive the Incentive Compensation.

 

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(c)                                  In the event Employer terminates
Executive’s employment for Cause, then, in addition to the benefits provided for
under Sections 8(a)(i), 8(a)(ii) and 8(a)(iii), all unvested stock options shall
be terminated and all vested stock options shall be exercisable in accordance
with the terms of the Non-Qualified Stock Option Agreement.

 

(d)                                 In the event Executive terminates his
employment without Good Reason, then, in addition to the benefits provided for
under Sections 8(a)(i), 8(a)(ii) and 8(a)(iii), all unvested stock options shall
be terminated and all vested stock options shall be exercisable in accordance
with the terms of the Non-Qualified Stock Option Agreement.

 

(e)                                  For purposes of this Agreement, Executive
shall be considered to have “Good Reason” to terminate his employment if,
without his express written consent (except as contemplated by this Agreement or
in connection with the termination of his employment voluntarily by Executive,
by Employer for Cause, or under the circumstances described in Section 10
hereof), (i) the responsibilities of Executive are substantially reduced or
altered, (ii) Executive’s Base Compensation is reduced without his consent, or
(iii) Executive’s offices are relocated anywhere other than within a fifty (50)
mile radius of the Company’s corporate headquarters in West Virginia;
provided, however, that the assignment of tasks or responsibilities previously
performed by Executive to Executive’s subordinates shall not constitute Good
Reason; and provided, further, that if Executive terminates this Agreement for
one or more of the reasons stated in clauses (i) or (ii), Employer shall have a
period of thirty (30) business days after actual receipt written notice of
Executive’s assertion of Good Reason to cure the basis for such assertion, and,
in the event of cure (or the commencement of steps reasonably designed to result
in prompt cure), the assertion of Good Reason shall be null and void.

 

(f)                                    For purposes of this Agreement, Employer
shall have “Cause” to terminate Executive’s employment hereunder upon (i) the
continued, willful and deliberate failure of Executive to perform his duties in
a manner substantially consistent with the manner prescribed by the Board of
Directors (other than any such failure resulting from his incapacity due to
physical or mental illness), (ii) the engaging by Executive in misconduct
materially and demonstrably injurious to Employer, (iii) the conviction of
Executive of commission of a felony, whether or not such felony was committed in
connection with Employer’s business, (iv) Executive’s engaging in activity that
the Board of Directors determines in its reasonable judgment would result in the
suspension or revocation of any video lottery, pari-mutuel, or other gaming
license or permit held by the Company or any of its affiliates,  (v) a
determination by any state gaming or racing regulatory agency that Executive is
not suitable to hold his position or otherwise to participate in a gaming
enterprise in the state in question,  or (vi) the circumstances described in
Section 10 hereof, in which case the provisions of Section 10 shall govern the
rights and obligations of the parties.  Prior to any termination for “Cause”,
Company shall provide Executive with written notice of such cause, specify steps
required to cure and a reasonable time to cure, which cure period shall be no
less than forty-five (45) days; provided, however, that Employer shall have no
duty to provide

 

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written notice, and Executive shall have no right to cure, if the grounds for
termination for Cause are those set forth in Section 8(f)(iii), 8(f)(iv) or
8(f)(v).

 

(g)                                 Notwithstanding any other provision hereof,
Executive shall be entitled to receive any payment under Section 8 or 9 of this
Agreement that is treated as “deferred compensation” within the meaning of
Section 409A of the Code and the regulations thereunder at the earliest time
when such payment is permitted to be made under Section 409A(a)(2)(B) of the
Code.

 

9.                                      CHANGE IN CONTROL.

 

(a)                                  All unvested stock options and any other
equity-based compensation arrangements theretofore granted to Executive shall
vest in full on the date of a “Change in Control” (as defined in
Section 9(c) below).

 

(b)                                 In the event that Employer terminates
Executive’s employment with Employer without Cause within six months after a
“Change in Control” (as defined in Section 9(c) below), or if Executive
terminates his employment with Employer for Good Reason (in accordance with
Sections 8(e) and 8(f) above) within six months after a Change in Control, then,
in addition to the benefits provided for under Sections 8(a)(i), 8(a)(ii) and
8(a)(iii), Employer shall pay to Executive a lump sum cash payment including:

 

(i)                                   an amount equal to two times the
Executive’s then applicable annual Base Compensation payable in cash within ten
(10) business days after the date of Executive’s termination of employment; and

 

(ii)                                an amount equal to the highest amount of any
Incentive Compensation paid to Executive in respect of either the first or
second full calendar year immediately preceding the effective date of
termination (or, in the event that such termination occurs prior to the payment
of any annual bonus, based upon the Minimum Incentive Compensation as defined in
Section 5(b) above) payable in cash within ten (10) business days after the date
of Executive’s termination of employment.

 

(iii)                             In addition, Company will pay a monthly amount
so that Executive shall be able to continue to receive the health benefits
coverage in effect on the effective date of termination for Executive and, if
any, Executive’s spouse and dependents until the earlier of (A) the second
anniversary of such termination of employment, or (B) the date on which
Executive accepts employment with or provides service to, in any capacity, any
other business or entity, such amount to be based upon Executive’s level of

 

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enrollment in the Company’s group medical plan as of the date of his date of
termination, and contingent upon Executive’s timely election to continue his
coverage under the Company’s group medical plan in accordance with Code
Section 4980B.

 

(iv)                            All unvested stock options shall vest and all
stock options that must be exercised shall be exercisable in accordance with the
terms of the Non-Qualified Stock Option Agreement.

 

(c)                                  For purposes of this Agreement, “Change in
Control” shall mean an occurrence of any of the following events:

 

(i)                                   an acquisition (other than directly from
Employer) of any voting securities of Employer (the “Voting Securities”) by any
“person or group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) other than an employee
benefit plan of Employer or any “person or group” (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) currently holding more than
10% of the Employer’s Voting Securities, immediately after which such person or
group has “Beneficial Ownership” (within the meaning of Rule 13d-3 under the
Exchange Act) of more than fifty percent (50%) of the combined voting power of
Employer’s then outstanding Voting Securities; or

 

(ii)                                the consummation of (A) a merger,
consolidation or reorganization involving Employer, unless the company resulting
from such merger, consolidation or reorganization (the “Surviving Corporation”)
shall adopt or assume this Agreement and the stockholders of Employer
immediately before such merger, consolidation or reorganization own, directly or
indirectly immediately following such merger, consolidation or reorganization,
at least fifty percent (50%) of the combined voting power of the Surviving
Corporation in substantially the same proportion as their ownership immediately
before such merger, consolidation or reorganization, (B) a complete liquidation
or dissolution of Employer, or (C) a sale or transfer of all or substantially
all of the assets of Employer.

 

(d)                                 In the event that, as a result of payments
to or for the benefit of Executive under this Agreement or otherwise in
connection with a Change in Control or Termination without Cause or Termination
for Good Reason, any state, local or federal taxing authority imposes any taxes
on Executive (other than income taxes) that would not

 

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be imposed but for the occurrence of a Change in Control, including any excise
tax under Section 4999 of the Internal Revenue Code and any successor or
comparable provision, then, in addition to any benefits provided for under
Sections 8(a)(i), 8(a)(ii), 8(a)(iii), 8(b) and under Sections 9(a) and 9(b),
Employer (including any successor to Employer) shall pay to Executive at the
time any such tax becomes payable an amount equal to the amount of any such tax
imposed on Executive.  For the avoidance of doubt, in the event that the
Executive receives a payment pursuant to this Section 9(d), the Employer shall
not pay and/or reimburse the Executive for the taxes imposed with respect to
such payment.

 

(e)                                  Notwithstanding anything herein to the
contrary, Executive’s right to any severance benefit shall be conditioned upon
Executive providing the Company a General Release in the form attached hereto as
Exhibit B.

 

(f)                                    For the avoidance of doubt, if the
Executive is compensated under Section 9(b), the Executive shall not also be
entitled to compensation under Section 8(b).

 

10.                               DISABILITY; DEATH.

 

(a)                                  If, prior to the expiration or termination
of the Employment Term, Executive shall be unable to perform his duties by
reason of disability or impairment of health for at least six consecutive
calendar months, Company shall have the right to terminate Executive’s
employment on account of disability by giving written notice to Executive to
that effect, but only if at the time such notice is given such disability or
impairment is still continuing.  In the event of a dispute as to whether
Executive is disabled within the meaning of this Section 10(a), either party may
from time to time request a medical examination of Executive by a doctor
selected by Company, and the written medical opinion of such doctor shall be
conclusive and binding upon the parties as to whether Executive has become
disabled and the date when such disability arose.  The cost of any such medical
examination shall be borne by Employer.  If Company terminates Executive’s
employment on account of disability, then, in addition to the benefits provided
for under Sections 8(a)(i), 8(a)(ii) and 8(a)(iii), Executive shall receive the
other amounts set forth in Section 8(b)(iii)(capped at the amount the Company
paid for the prior year) and 8(b)(i) above, less any amounts paid or to be paid
pursuant to policies of disability insurance for which the Company has paid the
premiums.

 

(b)                                 If, prior to the expiration or termination
of the Employment Term, Executive shall die, then, in addition to the benefits
provided for under Sections 8(a)(i),8(a)(ii) and 8(a)(iii), the Employment Term
shall terminate without further notice.  Nothing contained in this Section 10
shall impair or otherwise affect any rights and interests of Executive under any
insurance arrangements, death benefit plan or other compensation plan or
arrangement of Employer which may be adopted by the Board.

 

11.                               LAW APPLICABLE.  This Agreement shall be
governed by and construed pursuant to the laws of the State of Delaware, without
giving effect to conflicts of laws principles.

 

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12.                               NOTICES.  Any notices required or permitted to
be given pursuant to this Agreement shall be sufficient, if in writing and sent
by certified or registered mail, return receipt requested, to the residence,
listed on the signature page of this Agreement, in the case of Executive, and to
State Route 2, South, Chester, WV 26034, Attention: Chairman of the Board, in
the case of Employer, with a copy to Ruben & Aronson, LLP, 4800 Montgomery Lane,
Suite 150, Bethesda, MD 20814, Attention:  Managing Partner.

 

13.                               ASSIGNMENT, ETC.  This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
legal representatives, heirs, assignees and/or successors in interest of any
kind whatsoever; provided, however, that Executive acknowledges and agrees that
he cannot assign or delegate any of his rights, duties, responsibilities or
obligations hereunder to any other person or entity.  Employer may assign its
rights under this Agreement to any affiliate of Employer or to any entity upon
any sale of all or substantially all of the assets of Employer, or upon any
merger or consolidation of Employer with or into any other entity, provided that
such assignment shall not relieve Employer of its obligations hereunder without
the written consent of Executive.

 

14.                               ENTIRE AGREEMENT; MODIFICATIONS.  This
Agreement, together with the exhibits hereto, constitutes the entire final
agreement between the parties with respect to, and supersedes any and all prior
agreements between the parties hereto both oral and written concerning, the
subject matter hereof and may not be amended, modified or terminated except by a
writing duly signed by the parties hereto.

 

15.                               SEVERABILITY.  If any provision of this
Agreement shall be held to be invalid or unenforceable, and is not reformed by a
court of competent jurisdiction, such invalidity or unenforceability shall
attach only to such provision and shall not in any way affect or render invalid
or unenforceable any other provision of this Agreement, and this Agreement shall
be carried out as if such invalid or unenforceable provision were not contained
herein.

 

16.                               NO WAIVER.  A waiver of any breach or
violation of any term, provision or covenant contained herein shall not be
deemed a continuing waiver or a waiver of any future or past breach or
violation.  No oral waiver shall be binding.  The failure of a party to insist
upon strict adherence to any term of this Agreement on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.

 

17.                               ARBITRATION.

 

(a)                                  Agreement to Arbitrate.  In the event of
differences between Employer and Executive arising out of or relating to his
employment with Employer or the termination of that employment, Executive and
Employer mutually agree to arbitration.  Executive understands that his assent
to mandatory arbitration is a condition of employment and continued employment. 
Any claim or controversy that arises out of or relates to this Agreement or the
breach of it, as well as all other claims made arbitrable by this Agreement,
will be settled by arbitration in the State of West Virginia in

 

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accordance with the rules of the American Arbitration Association.  Judgment
upon the award rendered may be entered in any court possessing jurisdiction of
arbitration awards.  A request by a party to a court for interim measures or
specific performance necessary to preserve a party’s rights and remedies for
resolution pursuant to this Section 17 shall not be deemed a waiver of the
agreement to arbitrate.

 

(b)                                 Covered Claims.  Except as otherwise
provided in this Agreement, Executive and Employer hereby consent to the
resolution by arbitration of all claims or controversies for which a court
otherwise would be authorized by law to grant relief, in any way arising out of,
relating to, or associated with Executive’s employment with Employer or its
termination (“Claims”) that Employer may have against Executive or that
Executive may have against Employer or against its officers, directors,
employees, or agents, in their capacity as such or otherwise.  The Claims
covered by this Agreement include, but are not limited to:  claims for
discrimination based on race, sex, religion, national origin, age, marital
status, handicap, disability, or medical condition; claims for benefits, except
as excluded in the following paragraph, and claims for violation of any federal,
state, or other governmental constitution, statute, ordinance, or regulation
(including but not limited to claims arising under Title VII of the Civil Rights
Act, the Americans with Disabilities Act, the Age Discrimination in Employment
Act, the Family Medical Leave Act, the Fair Labor Standards Act, and Employee
Retirement Income Security Act).  Additionally, any and all issues of
arbitrability (whether a claim is covered by this Agreement) will be decided by
the arbitrator(s) and not a court.

 

(c)                                  Claims Not Covered.  This agreement to
arbitrate does not apply to or cover claims for workers’ compensation benefits;
claims for unemployment compensation benefits; claims by Employer for injunctive
and/or other equitable relief for breach of Section 7 or for unfair competition
and/or the use and/or unauthorized disclosure of trade secrets or confidential
information; and claims based upon an employee pension or benefit plan, the
terms of which contain an arbitration or other non-judicial dispute resolution
procedure, in which case the provisions of such plan shall apply.

 

18.                               COMPLIANCE WITH SECTION 409A.  Because the
parties hereto intend that any payment under this Agreement shall be paid in
compliance with Section 409A of the Code (“Section 409A”) and all regulations,
guidance and other interpretative authority thereunder, such that there will be
no adverse tax consequences, interest or penalties as a result of such payments,
the parties hereby agree to modify the timing (but not the amount) of any
payment hereunder to the extent necessary to comply with Section 409A and avoid
application of any taxes, penalties or interest thereunder.  Consequently,
notwithstanding any provision of this Agreement to the contrary, if Executive is
a “specified employee” as defined in Section 409A, Executive shall not be
entitled to any payments upon Date of Termination until the earlier of (i) the
date which is six (6) months after Date of Termination for any reason other than
death, or (ii) the date of Executive’s death.  Any amounts otherwise payable to
Executive following Date of Termination that are not so paid by reason of this
Section 18 shall be paid immediately  after the date that is six (6) months
after Date of Termination (or, if earlier, the date of Executive’s death).  The
provisions of this Section 18 shall only apply if, and to the

 

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extent, required to comply with Section 409A in a manner such that Executive is
not subject to additional taxes and/or penalties under Section 409A.

 

19.                               COUNTERPARTS.  This Agreement may be executed
in counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this agreement to account for all such counterparts.

 

20.                               INDEMNIFICATION.  The Company shall indemnify,
defend and hold the Executive harmless, to the extent permitted by law,
including the reimbursement of reasonable attorneys’ fees, if the Company does
not directly provide Executive’s defense, from and against any and all civil
claims made by anyone, including, but not limited to, a corporate entity,
company, other employee, agent, patron or member of the general public with
respect to any claims that assert as a basis, any acts, omissions or other
circumstances involving the performance of Executive’s employment duties
hereunder unless such claim is finally determined by a court of competent
jurisdiction to arise from Executive’s gross negligence or willful, intentional
and/or wanton act.

 

21.                               CODE OF ETHICS.  Executive acknowledges
receipt of and agreement to comply with MTR Gaming Group, Inc.’s Code of Ethics
and Business Conduct and Conflicts of Interest Policy, copies of which are
attached to this Agreement as Exhibit C.  Executive also acknowledges that MTR’s
securities are publicly traded and agrees that he will not, while in possession
of material non-public information about MTR, trade in MTR’s securities or “tip”
others with respect to such trading.

 

22.                               DUE DILIGENCE BY COMPANY.  Company represents
that it has performed reasonable due diligence with respect to Executive’s
suitability, fitness and competence to serve in the position described above in
Section 1 of this Agreement and that through such due diligence has identified
no information that would support (whether in whole or in part) terminating
Executive for “Cause” as defined in Section 8(e) above.  Company further
acknowledges that Executive is terminating his employment with his existing
employer in reasonable reliance upon this representation as well as the terms
set forth herein.  Executive represents that there are no pending actions for
the suspension or revocation of any gaming, racing or other license or permit he
holds from any jurisdiction and that Executive is unaware of any existing fact
or circumstance that would reasonably lead to any material disciplinary action
against Executive by any such regulator.

 

23.                               PRESS RELEASE.  Company will not issue a press
release with respect to this Agreement or with respect to its employment of
Executive without Executive first reviewing and approving the terms of such
press release, which approval shall not be unreasonably withheld.
 Notwithstanding the foregoing, the Company may issue any press release required
by Nasdaq Marketplace Rules and file any document with the Securities and
Exchange Commission deemed necessary or advisable by its outside securities
counsel.

 

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IN WITNESS WHEREOF, the undersigned have hereunto set their hands to this
Agreement on the day and year first above written.

 

 

 

MTR GAMING GROUP, INC.

 

 

 

 

 

By:

\s\ Robert A. Blatt

 

Name:

Robert A. Blatt

 

Title:

Vice Chairman of the Board and

 

 

Chairman of the Succession Committee

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

\s\ Robert F. Griffin

 

Name:

Robert F. Griffin

 

 

 

 

Address:

16621 Wycliffe Place

 

 

Wildwood, MO. 63005

 

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