Exhibit 10.1

 

MTR Gaming Group, Inc.
2010 Long-Term Incentive Plan

 

 

Form of Nonqualified Stock Option Award Agreement

 

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MTR Gaming Group, Inc.
2010 Long-Term Incentive Plan
Nonqualified Stock Option Award Agreement

 

THIS AGREEMENT, effective as of the Date of Grant set forth below, represents
the grant of a Nonqualified Stock Option (a “Stock Option”) by MTR Gaming
Group, Inc., a Delaware corporation, (the “Company”), to the Participant named
below, pursuant to the provisions of the MTR Gaming Group, Inc. 2010 Long-Term
Incentive Plan (the “Plan”).

 

You have been selected to receive a grant of a Stock Option pursuant to the
Plan, as specified below.

 

The Plan provides a description of the terms and conditions governing the Stock
Option. If there is any inconsistency between the terms of this Agreement and
the terms of the Plan, the Plan’s terms shall completely supersede and replace
the conflicting terms of this Agreement. All capitalized terms shall have the
meanings ascribed to them in the Plan, unless specifically set forth otherwise
herein.

 

The parties hereto agree as follows:

 

Participant:

 

Date of Grant:

 

Number of Shares Covered by This Stock Option:

 

Exercise Price:

 

Date of Expiration:

 

1.           Service With the Company. Except as may otherwise be provided in
Sections 4, 5, or 6, the Stock Option granted hereunder is granted on the
condition that the Participant remains in Service with the Company or its
Subsidiaries from the Date of Grant through (and including) each applicable
Vesting Date (as provided in Section 2 below).

 

This grant of a Stock Option shall not confer any right to the Participant (or
any other Participant) to be granted in the future a Stock Option or other
Awards under the Plan.

 

2.           Vesting of Stock Option. Except as hereinafter provided, the shares
covered by this Stock Option shall vest according to the following schedule,
provided the Participant has continued his or her Service with the Company or
its Subsidiaries through such anniversary or anniversaries (as applicable, a
“Vesting Date”).

 

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Vesting Date

 

Number of Shares
Covered by This
Stock Option Vesting

 

Cumulative Number
of Shares Covered by This
Stock Option Vesting

 

 

 

 

 

 

 

anniversary of Date of Grant

 

 

 

 

 

anniversary of Date of Grant

 

 

 

 

 

anniversary of Date of Grant

 

 

 

 

 

 

3.           Exercise of Stock Option. Except as hereinafter provided, the
Participant may exercise this Stock Option at any time after the applicable
Vesting Date (according to the vesting schedule set forth in Section 2 of this
Agreement), provided that no exercise may occur subsequent to the close of
business on the Date of Expiration (as defined on page 1 of this Agreement).
This Stock Option may be exercised in whole or in part, but not for less than
one hundred (100) shares at any one time, unless fewer than one hundred (100)
shares then remain subject to the Stock Option, and the Stock Option is then
being exercised as to all such remaining shares.

 

4.           Termination of Service by Death or Disability. In the event the
Service of the Participant with the Company or its Subsidiaries is terminated by
reason of death or Disability (as defined below), all unvested shares covered by
this Stock Option shall immediately become fully vested as of the date of
termination, and all vested shares covered by this Stock Option shall remain
exercisable at any time prior to the Date of Expiration (as defined on page 1 of
this Agreement), or for one (1) year after the date of termination, whichever
period is shorter.  For purposes hereof, “Disability” shall mean that the
Participant is considered “disabled” within the meaning of
Section 409A(a)(2)(C) of the Code and the regulations thereunder.

 

5.           Termination of Service for Other Reasons. If the Service of the
Participant with the Company or its Subsidiaries shall terminate for any reason
other than the reasons set forth in Section 4, the shares covered by this Stock
Option not yet vested as of the date of termination shall be forfeited. All
shares covered by this Stock Option vested as of the date of termination shall
remain exercisable at any time prior to their expiration date, or for ninety
(90) days after the effective date of termination, whichever period is shorter. 
Notwithstanding the foregoing, if the Service of the Participant with the
Company or its Subsidiaries is terminated by the Company or its Subsidiaries for
Cause (as defined below), the Stock Option and the Participant’s right to
purchase any shares covered by the Stock Option, whether or not vested, shall
immediately terminate and all rights hereunder shall cease.

 

For purposes of this Section 5, “Cause” shall be determined solely by the
Committee in the exercise of good faith and reasonable judgment, and shall mean
the Participant’s termination of service due to:

 

(a)         Persistent neglect or negligence in the performance of the
Participant’s Service duties; or

 

(b)         Conviction (including pleas of guilty or no contest) for any act of
fraud, misappropriation or embezzlement, or for any criminal offense related to
the Participant’s Service; or

 

(c)         Any deliberate and material breach of fiduciary duty to the Company
or other conduct that leads to material damage or prejudice of the Company; or

 

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(d)         A material breach of an essential Company policy, such as the
Company’s code of conduct; or

 

(e)         An order of a federal or state regulatory agency or a court of
competent jurisdiction requiring the termination of the Participant’s Service
with the Company.

 

6.           Change in Control. Notwithstanding anything to the contrary in this
Agreement, in the event of a Change in Control of the Company prior to the
Participant’s termination of Service, all shares covered by this Stock Option
that have not previously become vested shall immediately vest subject to
applicable federal and state securities laws.

 

7.           Restrictions on Transfer. A Stock Option granted pursuant to this
Agreement may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated (a “Transfer”), other than by will or by the laws of
descent and distribution, except as provided in the Plan. If any Transfer,
whether voluntary or involuntary, of shares covered by this Stock Option is
made, or if any attachment, execution, garnishment, or lien shall be issued
against or placed upon the shares covered by this Stock Option, the
Participant’s right to such shares covered by this Stock Option shall be
immediately forfeited by the Participant to the Company, and this Agreement
shall lapse.

 

8.           Adjustments. The Stock Option granted hereunder shall be subject to
the provisions of Section 4.3 of the Plan relating to adjustments for
recapitalizations, reclassifications and other changes in the Company’s
corporate structure.

 

9.           Beneficiary Designation. The Participant may, from time to time,
name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under this Agreement is to be paid in case of
his death before he receives any or all of such benefit. Each such designation
shall revoke all prior designations by the Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Director of Human Resources of the Company
during the Participant’s lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant’s death shall be paid to the
Participant’s estate.

 

10.        Continuation of Service. This Agreement shall not confer upon the
Participant any right to continue Service with the Company or its Subsidiaries,
nor shall this Agreement interfere in any way with the Company’s or its
Subsidiaries’ right to terminate the Participant’s Service at any time. The
Participant’s Service shall continue to be on an “at-will” basis.

 

11.        Rights as a Stockholder. The Participant shall have no rights as a
stockholder of the Company with respect to the shares subject to this Agreement
until such time as the purchase price has been paid, and the shares have been
issued and delivered to him.

 

12.        Procedure for Exercise of Stock Option. This Stock Option may be
exercised by delivery of written notice to the Company at its executive offices,
addressed to the attention of the Secretary of the Company. Such notice:
(a) shall be signed by the Participant or his legal representative; (b) shall
specify the number of full shares then elected to be purchased with respect to
the Stock Option; and (c) shall be accompanied by payment in full of the
exercise price of the shares to be purchased and applicable withholding taxes,
and the Participant’s copy of this Agreement.  Upon the exercise of a portion of
the Stock Option at a time when there is not in effect a registration statement
under the Securities Act relating to the shares of Common Stock, the Participant
hereby

 

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represents and warrants, and by virtue of such exercise shall be deemed to
represent and warrant, to the Company that the shares of Common Stock shall be
acquired for investment and not with a view to the distribution thereof, and not
with any present intention of distributing the same, and the Participant shall
provide the Company with such further representations and warranties as the
Company may require in order to ensure compliance with applicable federal or
state registration, listing and/or qualification requirements.

 

Subject to limitations imposed by applicable laws, the exercise price and
applicable withholding taxes shall be payable to the Company in full either:
(a) in cash; (b) by personal, certified or cashiers’ check payable to the order
of the Company; (c) by tendering either actually or constructively by
attestation, shares of Common Stock having an aggregate Fair Market Value at the
time of exercise equal to the total exercise price; (d) by irrevocably
authorizing a third party, acceptable to the Committee, to sell shares of Common
Stock acquired upon exercise of the Stock Option and to remit to the Company a
sufficient portion of the sales proceeds to pay the entire exercise price and
any tax withholding resulting from such exercise; (e) by other property deemed
acceptable by the Committee, including a “net exercise” of stock options
allowing the Participant to exercise stock options by receiving the spread value
of the stock options exercised in the form of full value shares of Common Stock;
or (f) by a combination of (a), (b), (c), (d), or (e).

 

In the event the Participant chooses to pay the exercise price and applicable
withholding taxes by previously owned shares through the attestation method, the
number of shares issued to the Participant upon the exercise of the Stock Option
shall be net of the shares attested to.

 

As promptly as practicable after receipt of notice and payment upon exercise,
the Company shall cause to be issued and delivered to the Participant or his
legal representative, as the case may be, certificates for the shares of Common
Stock so purchased, which may, if appropriate, be endorsed with appropriate
restrictive legends. The share certificates shall be issued in the Participant’s
name (or, at the discretion of the Participant, jointly in the names of the
Participant and the Participant’s spouse). The Company shall maintain a record
of all information pertaining to the Participant’s rights under this Agreement,
including the number of shares of Common Stock for which his Stock Option is
exercisable. If the Stock Option shall have been exercised in full, this
Agreement shall be returned to the Company and canceled.

 

13.        Tax Withholding.  The exercise of this Stock Option, and the
Company’s obligation to issue shares of Common Stock upon exercise, is subject
to withholding of all federal, state, and local taxes (including the
Participant’s FICA obligation), domestic or foreign.  The Company shall have the
power and the right to deduct or withhold (including, without limitation, by
reduction of the number of shares of Common Stock subject to the Stock Option),
or require the Participant to remit to the Company, an amount sufficient to
satisfy such taxes, required by law to be withheld with respect to any exercise
of the Participant’s rights under this Agreement.  The Participant may elect,
subject to any procedural rules adopted by the Committee, to satisfy the
withholding requirement, in whole or in part, by any of the means for payment of
the exercise price provided in Section 12 hereof or by having the Company
withhold shares of Common Stock having an aggregate Fair Market Value on the
date the tax is to be determined, equal to the amount required to be withheld.

 

14.        Miscellaneous.

 

(a)         This Agreement and the rights of the Participant hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time,

 

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as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. The Committee shall have the right to impose such
restrictions on any shares acquired pursuant to this Agreement, as it may deem
advisable, including, without limitation, restrictions under applicable federal
securities laws, under the requirements of any stock exchange or market upon
which such shares are then listed and/or traded, and under any blue sky or state
securities laws applicable to such shares. It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan and this Agreement,
all of which shall be binding upon the Participant.

 

(b)         The Committee may limit the Participant’s methods for exercising a
Stock Option in the event that such exercise will cause unfavorable accounting
treatment to the Company.

 

(c)         The Participant agrees to take all steps necessary to comply with
all applicable provisions of federal and state securities laws in exercising his
rights under this Agreement.

 

(d)         This Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

 

(e)         All obligations of the Company under the Plan and this Agreement,
with respect to a Stock Option, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.

 

(f)          To the extent any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such holding and
shall continue in full force in accordance with their terms.

 

(g)         To the extent not preempted by federal law, this Agreement shall be
governed by, and construed in accordance with, the laws of the state of Delaware
without giving effect to the conflicts of laws principles thereof.

 

(h)         The Award is intended to satisfy the requirements of Section 409A of
the Code with respect to amounts subject thereto and shall be interpreted and
construed in a manner consistent with that intent.  The Award shall be subject
to Section 15.7 of the Plan with regard to compliance with Section 409A of the
Code.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the Date of Grant.

 

 

 

 

MTR Gaming Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

ATTEST:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

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