Exhibit 10.1


 


Execution Version


 


EMPLOYMENT AGREEMENT


 


	
  1.     EMPLOYER:

  	
  MTR
  Gaming Group, Inc. (the “Company”), having an address of State
  Route 2 South, Chester, W.V. 26034

  
	
   

  	
   

  
	
  2.     EMPLOYEE:

  	
  JOHN
  W. BITTNER, JR. (the “Executive”)

  
	
   

  	
   

  
	
  3.     PERIOD
  OF EMPLOYMENT:

  	
  The
  Company hereby agrees to employ the Executive, and the Executive hereby
  agrees to work in the employ of the Company, subject to the terms and
  conditions of this Agreement, for the period commencing on November 8,
  2010 (the “Employment Date”) and ending on the second anniversary of
  the Employment Date (such period, the “Agreement Term”); provided,
  however, such Agreement Term shall automatically be extended for successive
  one (1) year periods unless either party provides to the other party a
  written notice of non-renewal (a “Non-Renewal Notice”) at least 90
  days prior to the expiration date of the then applicable Agreement Term. The
  terms of this Agreement during any renewal of the Agreement Term shall be at
  least as favorable to Executive as those in effect during the Agreement Term
  that would have expired but for such renewal. The period of Executive’s
  employment under this Agreement shall be hereinafter referred to as the “Period
  of Employment.”

  
	
   

  	
   

  
	
  4.     DUTIES:

  	
  Executive currently serves
  as the Company’s Executive Vice-President of Finance and Accounting, and
  Treasurer, pursuant to an Employment Agreement dated November 9, 2009,
  as amended (the “Prior Employment Agreement”). Effective as of the
  Employment Date, Executive agrees that the Prior Employment Agreement shall
  be superseded by this Employment Agreement (this “Agreement”) and
  Executive shall serve, pursuant to the terms of this Agreement, as the
  Company’s Executive Vice President and Chief Financial Officer, and in such
  other positions, consistent with Executive’s role, which the Board of
  Directors of the Company (the “Board”) may appoint to Executive during
  the Period of Employment. Executive shall devote all of his business time,
  energy and skill to the business and affairs of the Company and its affiliates
  and to the promotion of the Company’s interests. The foregoing shall not
  preclude Executive from devoting a reasonable amount of time to charitable
  and volunteer activities including, without limitation, serving on the Boards
  of Directors of charitable or volunteer organizations, so long as such
  activities do not materially interfere with the performance of the
  Executive’s responsibilities hereunder. Executive shall report directly to
  and shall be subject to the direction of the Company’s Chief Executive

  



 


1

















 


	
   

  	
  Officer.

  
	
   

  	
   

  
	
  5.     COMPENSATION &
  BENEFITS:

  	
   

  
	
   

  	
   

  
	
  (a)

  	
   

  	
  Salary: During the Period of
  Employment, the Company shall pay Executive an annual base salary of
  $350,000, or such greater amount as may be approved from time to time by the
  Compensation Committee of the Board (the “Compensation Committee”)
  (the “Base Salary”). The Base Salary shall be paid in accordance with
  the normal payroll practices of the Company.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Annual Incentive Bonus: During
  the Period of Employment, Executive shall be eligible to participate in the
  Company’s annual incentive plan, as may be in effect from time to
  time, in the sole discretion of the Compensation Committee (“Incentive
  Plan”). Executive’s target bonus under the Incentive Plan shall be 40% of
  Base Salary (or such amount as may be determined by the Compensation
  Committee, in its discretion); actual awards may be earned above or below the
  targeted amount based on performance objectives, as may be established by the
  Compensation Committee, in its discretion.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Long Term Incentive Program: During the Period of Employment, Executive shall be
  eligible to participate in the Company’s Long Term Incentive Program, as may
  be in effect from time to time, and subject to the terms and conditions
  determined by the Compensation Committee, in its sole discretion.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Benefits: During the Period of
  Employment, Executive shall be eligible to participate in employee benefit
  plans made available by the Company from time to time to its executives,
  generally, as the Compensation Committee may periodically approve, in its
  sole discretion, including, without limitation, health insurance (including
  vision and dental), long and short term disability and participation in the
  Company’s 401k Plan.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Life Insurance: During the Period of
  Employment, the Company will maintain, at its sole cost and expense, a term
  life insurance policy for Executive with a face value equal to Executive’s
  Base Salary. 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.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Automobile Allowance: During the Period of
  Employment, Executive shall be entitled to $600.00 per month toward the lease
  

  



 


2

















 


	
   

  	
   

  	
  or
  purchase, insurance and maintenance of an automobile.

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Vacation: During the Period of
  Employment, Executive shall be entitled to paid vacation, which shall accrue
  at the rate of four (4) weeks per year in accordance with Company
  policy, and which shall be taken at a time or times mutually satisfactory to
  Executive and the Company. Up to two (2) weeks of unused vacation at the
  end of a year may be carried forward to the next year, and any additional
  unused vacation days at the end of the year shall be forfeited. Executive
  shall not in any event utilize more than six (6) weeks of vacation in
  any year. Vacation accruals and forfeitures for a year shall be
  determined based on the applicable anniversary of Executive’s date of
  hire.   Upon Executive’s termination of employment for any
  reason, a maximum of six (6) weeks of unused vacation will
  be paid out to Executive, and any additional unused vacation days will be
  forfeited at such time without any payment.

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Other Expenses: During the Period of
  Employment, the Company shall (i) reimburse Executive for reasonable
  travel and other expenses incident to the rendering of services by Executive
  hereunder, in accordance with Company policies, (ii) pay for expenses
  associated with Executive’s gaming licensure in each state in which Executive
  is directed by the Company or any of its affiliates to become licensed,
  (iii) provide Executive a Company cellular telephone, or, at the
  Company’s election, reimburse Executive for the cost of a cellular phone and
  reasonable monthly service charges maintained by Executive, subject to
  documentation in accordance with the Company’s policy, as in effect from time
  to time, and (iv) reimburse Executive for reasonable and necessary costs
  of maintaining his CPA license (including CPE courses), subject to
  appropriate documentation of such expenses. All payments and expense
  reimbursements under this Section 5(h) shall be subject to
  Executive’s submission of appropriate vouchers, bills and receipts in
  accordance with Company policies.

  
	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  Working Facilities: During the Period of
  Employment, 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.

  
	
   

  	
   

  	
   

  
	
  6.     TERMINATION:

  	
  Executive’s
  employment under this Agreement may be terminated by either party at any time
  and for any reason, subject to the consequences of termination as provided in
  this Section 6. Upon Executive’s termination of employment for any
  reason, the Period of Employment shall terminate and Executive shall be paid
  the 

  



 


3

















 


	
   

  	
  Accrued
  Rights. For purposes of this
  Agreement, “Accrued Rights” shall include: (i) Executive’s
  earned but unpaid Base Salary as of the date of his termination of employment
  and his accrued and unused vacation pursuant to
  Section 5(g) hereof, which shall be paid within thirty (30) days of
  termination; (ii) reimbursement
  for reasonable business expenses and authorized travel expenses incurred but
  still outstanding under Section 5(h) hereof, which shall be paid
  within thirty (30) days of termination; (iii) any bonus under the Incentive Plan earned and
  approved to be paid by the Compensation Committee with respect to completed
  fiscal periods that precede Executive’s date of termination but have not been
  paid through the date of termination, which shall be paid within thirty (30)
  days of the Compensation Committee’s approval of such payment, but in no
  event later than March 15 following the calendar year to which the bonus
  relates, if so approved; and
  (iv) all payments, rights and benefits due as of the date of
  termination under the terms of the Company’s employee and fringe benefit
  plans and programs in which Executive participated during the Period of
  Employment, the time and manner of payment of which shall be determined
  according to the terms and conditions of the applicable plans and programs.

  
	
   

  	
   

  
	
  (a)

  	
   

  	
  Termination Without Cause: Subject to
  Section 6(f) hereof, in the event that the Company terminates
  Executive’s employment hereunder without Cause, or Executive terminates his
  employment with Good Reason (as defined below), during the Agreement Term,
  then, in addition to the Accrued Rights, Executive shall be entitled to
  receive the following severance payments and benefits (the “Severance
  Payments”):

   

  (i) continued
  payment of the Base Salary for a period of twelve (12) months following the
  date of Executive’s termination of employment (the “Severance Period”),
  payable in accordance with the Company’s normal payroll practice;

   

  (ii) a bonus amount under the Incentive Plan,
  based on achievement of the applicable performance criteria for the Incentive
  Plan year in which Executive terminates employment, as determined at the
  Compensation Committee’s discretion, and adjusted on a pro rata basis based
  on the number of days Executive was actually employed during such year;
  provided, however, that Executive shall only be entitled to such payment if
  he is employed with the Company for a period of at least six (6) months
  during such Incentive Plan year. Such amount shall be paid in a lump sum
  within thirty (30) days of the Compensation Committee’s 

  
			



 


4

















 


	
   

  	
   

  	
  approval of such payment, but in no
  event later than March 15 following the calendar year to which the bonus
  relates, if so approved; and

   

  (iii) continued
  medical coverage under the Company’s group health plan for the Severance
  Period on the same terms and conditions that applied to Executive at the time
  of his termination of employment (including, without limitation, employee
  contribution rates, if applicable, and coverage); following the Severance
  Period, Executive shall be permitted to elect COBRA continuation coverage in
  accordance with applicable law.

   

  The
  Severance Payments will begin on the 60th day following Executive’s
  termination of employment, with the first such payment to include any amounts
  attributable to payroll intervals occurring prior to such date, provided,
  however, that, to the extent that the payments are exempt from Section 409A
  of the Internal Revenue Code of 1986, as amended (the “Code”), such
  exempt payments shall be made beginning with the first payroll date following
  the effectiveness of the general release of claims set forth in
  Section 6(f) hereof.

   

  In
  addition to the Severance Payments, and subject to
  Section 6(f) hereof, in the event that the Company terminates
  Executive’s employment hereunder without Cause, or Executive terminates his
  employment with Good Reason, all of Executive’s then-outstanding and otherwise
  unvested restricted stock units shall immediately vest upon such termination
  and be paid out in accordance with the terms of thereof.

   

  “Good
  Reason” shall mean the occurrence of either of the following events
  without Executive’s consent: (i) a material diminution in Executive’s
  duties as contemplated herein, (ii) a material reduction in Executive’s
  Base Salary (iii) prior to a Change in Control, the relocation by the
  Company of Executive’s place of employment to more than fifty (50) miles
  from any then-current or future operating facilities of the Company, or
  (iv) following a Change in Control, the relocation by the Company of
  Executive’s place of employment to more than fifty (50) miles from the
  Company’s Corporate office, as it may be located from time to time (which
  location is currently Wexford, PA); provided, however, that
  Executive shall give written notice to the Company of the applicable event
  within ninety (90) days of the occurrence thereof, and the Company shall have
  a period of thirty (30) business days after receipt of such notice to cure
  the event, and in the event of cure, (or the commencement of steps reasonably
  designed to result in prompt cure), Executive’s assertion of Good

  



 


5

















 


	
   

  	
   

  	
  Reason shall be null and void.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Termination For Cause; Termination by Executive: In the event
  that (i) the Company terminates Executive’s employment hereunder for
  Cause, or (ii) the Executive terminates his employment hereunder without
  Good Reason, Executive shall not be entitled to receive any payments or
  benefits under this Agreement other than the Accrued Rights. “Cause”
  shall mean (i) Executive’s conviction for a felony, crimen falsi or
  serious misdemeanor, (ii) Executive’s embezzlement or misappropriation
  of funds or property of the Company or any of its affiliates,
  (iii) Executive’s consistent refusal to substantially perform, or
  willful misconduct in the substantial performance of, his duties and
  obligations hereunder; (iv) Executive’s engaging in activity that the
  Chief Executive Officer of the Company determines in his 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 subsidiaries; (v) a determination by any state gaming 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) Executive’s material violation of the provisions of Section 10(g) hereof.
  Notwithstanding the foregoing, in no event shall the Executive’s employment
  be considered to have been terminated for “Cause” for reasons specified in
  item (iii) above unless and until the Company provides Executive written
  notice setting forth in reasonable detail the facts and circumstances claimed
  to provide a basis of termination for Cause under such item and Executive is
  given an opportunity to cure any such acts or omissions within 15 days of the
  Executive’s receipt of such written notice.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Death or Disability: In the event of
  Executive’s death or Disability (as defined below), the Period of Employment
  shall terminate and Executive shall not be entitled to receive any payments
  or benefits under this Agreement other than the Accrued Rights. For purposes
  of this Agreement, “Disability” shall mean the inability of Executive
  by reason of physical or mental disability to continue the proper performance
  of his duties hereunder for a period of 180 consecutive days.
  Notwithstanding the foregoing, in the event of Executive’s death, his estate
  or beneficiaries, as applicable, shall be entitled to receive the proceeds of
  the life insurance policy referred to in Section 5(e) hereof.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Expiration of Period of Employment. Subject to
  Section 6(f) hereof, in the event that Executive’s employment
  terminates upon expiration of the Agreement Term (including any renewal
  thereof) by reason of the Company’s provision of a Non-Renewal Notice, 

  



 


6

















 


	
   

  	
   

  	
  then
  Executive shall receive the Accrued Rights and the Severance Payments set
  forth in Section 6(a) hereof.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Change in Control: Notwithstanding any other
  provision of this Agreement to the contrary, and subject to
  Section 6(f) hereof, if a Change in Control shall occur during the
  Period of Employment, and, prior to the first anniversary of the consummation
  date of the Change in Control, either (i) the Company terminates
  Executive’s employment without Cause or (ii) Executive terminates his
  employment for Good Reason, then the Executive shall receive the Accrued
  Rights and the Severance Payments set forth in Section 6(a) hereof,
  except that the Severance Period shall be eighteen (18) months. For the
  avoidance of doubt, in the event of such a Change in Control, the Agreement
  Term shall continue in effect at least until the first anniversary of the
  Change in Control.

   

  “Change
  in Control” shall mean the occurrence of either of the following:

   

  (i) the
  acquisition by any individual, entity or group (within the meaning of
  Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
  1934, as amended) (the “Act”) of beneficial ownership (within the meaning of
  Rule 13d-3 of the Act) of more than 50% of the (A) then outstanding
  voting stock of the Company; or (B) the combined voting power of the
  then outstanding securities of the Company entitled to vote;

   

  (ii) 
  an ownership change in which the shareholders of the Company before such
  ownership change do not retain, directly or indirectly, at least a majority
  of the beneficial or legal interest in the voting stock of the Company after
  such transaction, or in which the Company is not the surviving company;

   

  (iii) the
  direct or indirect sale or exchange by the beneficial owners (directly or
  indirectly) of the Company of all or substantially all of the assets of the
  Company; or

   

  (iv) during
  any twenty-four (24) month period, individuals who, as of the beginning of
  such period, constitute the Board (the “Incumbent Directors”) cease
  for any reason to constitute at least a majority of the Board, provided that
  any person becoming a director subsequent to the beginning of such period
  whose election or nomination for election was approved by a vote of at least
  a majority of the Incumbent Directors then on the Board (either by a specific
  vote or by approval of the proxy statement of the Company in which such
  person is named as a nominee for director, without written objection to such
  nomination) shall be an 

  



 


7

















 


	
   

  	
   

  	
  Incumbent
  Director; provided, however, that no individual initially elected or
  nominated as a director of the Company as a result of an actual or threatened
  election contest with respect to directors or as a result of any other actual
  or threatened solicitation of proxies by or on behalf of any person other
  than the Board shall be deemed to be an Incumbent Director.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Release;
  Cessation of Severance Payments: Executive hereby agrees
  that Executive shall be entitled to the Severance Payments and other benefits
  provided for in Sections 6(a), 6(d) and 6(e) hereof (other than the
  Accrued Rights) (i) only if Executive timely executes and delivers to
  the Company a general release of claims specified by the Company and
  substantially in the form attached hereto as Exhibit A, and the
  general release of claims has become effective and irrevocable in accordance
  with its terms, and (ii) only so long as Executive does not breach any
  of the restrictive covenants in Section 7 hereof.

  
	
   

  	
   

  	
   

  
	
  7.     RESTRICTIVE
  COVENANTS:

  	
   

  
	
   

  	
   

  
	
  (a)

  	
   

  	
  Intellectual Property: 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)

  	
   

  	
  Confidentiality: Executive
  agrees that during the Period of Employment and at all times thereafter, 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
  information, proprietary information, competitive information and/or trade
  secrets (collectively, “Confidential Material”) relating to the
  business practices of the Company and/or its affiliates acquired by Executive
  during his employment by the Company, provided, however, that such
  Confidential Material shall not include any information that has become
  generally available to the public other than as a result of a disclosure by
  Executive. Nothing 

  



 


8

















 


	
   

  	
   

  	
  herein
  shall preclude Executive from disclosing Confidential Material to the extent
  such disclosure is required by law or court or administrative order, in which
  case Executive shall notify the Company in advance of any such disclosure (or
  if advance notice is not practicable, as soon as possible following such
  disclosure). 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.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Non-Competition:
  Executive agrees that during the Restricted Period (as defined
  below), Executive will not become a stockholder, member, director, officer,
  employee or agent of or consultant to any corporation, partnership or other
  entity that is engaged in a Competing Business within the Restricted Area (as
  each term is defined below), or otherwise engage, directly or indirectly, in
  a Competing Business within the Restricted Area. “Competing Business”
  shall mean the business of competitive gaming (including, without limitation,
  casino operation and horseracing). “Restricted Area” shall mean one
  hundred (100) miles from any location in which the Company or any
  affiliate does business or in which Executive has knowledge that the Company
  or any of its affiliates reasonably contemplates doing business. The
  foregoing shall not preclude the ownership by Executive (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.

   

  “Restricted
  Period” shall mean the Period of Employment and (i) if Executive’s
  employment terminates under the circumstances described in Section 6(a),
  (d), or (e) hereof, the applicable Severance Period provided for under
  such sections, or (ii) if Executive’s employment terminates under any
  other circumstances (including, without limitation, by the Company for Cause,
  or by Executive without Good Reason), the sixty (60) day period immediately
  following the Period of Employment.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Non-Solicitation:
  Executive agrees that during the Restricted Period, Executive shall
  not, directly or indirectly, without the express written consent of the
  Company, solicit any person who is or shall be in the employ or service of
  the Company to leave such employ or service for any other employment
  opportunity.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Acknowledgement: Executive
  acknowledges and agrees that (A) the agreements and covenants contained
  in this Section 7 are (i) reasonable and valid in geographical and
  temporal scope and in 

  



 


9

















 


	
   

  	
   

  	
  all
  other respects and (ii) essential to protect the value of the business
  and assets of the Company, and (B) by his employment with the Company,
  Executive has obtained and will obtain knowledge, contacts, know-how, training,
  and experience, and there is a substantial probability that such knowledge,
  contacts, know-how, training, and experience could be used to the substantial
  advantage of a competitor of the Company and to the substantial detriment of
  the Company.

  
	
   

  	
   

  	
   

  
	
  8.     TAXES:

  	
  The
  Company may withhold from any payments made under this Agreement all
  applicable taxes, including but not limited to income, employment, and social
  insurance taxes. Executive acknowledges and represents that the Company has
  not provided any tax advice to him in connection with this Agreement and that
  he has been advised by the Company to seek tax advice from his own tax
  advisors regarding this agreement and payments that may be made to Executive
  pursuant to this agreement, including specifically, the application of the
  provisions of Section 409A of the Code to such payments.

  
	
   

  	
   

  
	
  9.    APPLICATION OF
  SECTION 409A OF THE CODE:

  	
  To
  the extent applicable, it is intended that this Agreement comply with, or
  otherwise be exempt from, the provisions of Section 409A of the Code, so
  as to prevent inclusion in gross income of any amounts payable or benefits
  provided hereunder in a taxable year that is prior to the taxable year or
  years in which such amounts or benefits would otherwise actually be distributed,
  provided or otherwise made available to Executive. This Agreement shall be
  construed, administered, and governed in a manner consistent with this
  intent. If and to the extent that any payment or benefit under this Agreement
  is determined by the Company to constitute “non-qualified deferred
  compensation” subject to Section 409A of the Code and is payable to
  Executive by reason of Executive’s termination of employment, then such
  payment or benefit shall be made or provided to Executive only upon a “separation
  from service” as defined for purposes of Section 409A of the Code. In no
  event will the reimbursements or in-kind benefits to be provided pursuant to
  this Agreement in one taxable year affect the amount of reimbursements or
  in-kind benefits to be provided in any other taxable year, nor Executive’s
  right to reimbursement or in-kind benefits be subject to liquidation or
  exchange for another benefit. Each payment under this Agreement will be
  considered a “separate payment” and not one of a series of payments for
  purposes of Section 409A of the Code. Notwithstanding any provision of
  this Agreement to the contrary, if Executive is a “specified employee” within
  the meaning of Section 409A(a)(2)(B) of the Code (as determined by
  the Company), any payment (or portion thereof) otherwise due Executive during
  the first six months following

  



 


10
















 


	
   

  	
   

  	
  Executive’s termination of
  employment that is not exempt from Section 409A of the Code either as
  separation pay or as a short term deferral under applicable Treasury
  regulations will be held until and paid on the day following the expiration
  of such six-month period.  In no event
  shall the Company be liable for any additional tax, interest or penalties
  that may be imposed on Executive under Section 409A of the Code or any
  damages for failing to comply with Section 409A of the Code.  

  
	
   

  	
   

  	
   

  
	
  10.  INDEMNIFICATION

  	
   

  	
  The
  Company shall indemnify and hold harmless Executive from and against any and
  all losses resulting from or arising out of the performance of Executive’s
  duties under this Agreement during the Period of Employment, in accordance
  with the Company’s indemnification policies for executives generally, as in
  effect from time to time, and provide Executive with coverage, at the
  Company’s expense, under the Company’s directors and officers insurance
  policy, as in effect from time to time for executive of the Company
  generally.

  
	
   

  	
   

  	
   

  
	
  11.  GENERAL:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Parties In Interest:  This Agreement shall be binding upon and
  inure to the benefit of Executive and his heirs and beneficiaries, and it
  shall be binding upon and inure to the benefit of the Company and its
  successors and assigns. 

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Arbitration; Injunctive Relief:  Any disputes arising under the terms of
  this Agreement shall be settled by binding arbitration between the parties in
  the Wexford, Pennsylvania area in a proceeding held under the rules of
  the American Arbitration Association. 
  The arbitrators shall have no authority to grant either party any
  consequential, incidental, punitive or special damages.  Notwithstanding the foregoing provisions of
  this Section 10(b), recognizing the irreparable damage will result to
  the Company in the event of the breach or threatened breach of any of the
  covenants in Section 7 hereof, and that the Company’s remedies at law
  for any such breach or threatened breach will be inadequate, the Company, in
  addition to such other remedies which may be available to it (including,
  without, limitation immediate cessation of the Severance Payments), shall be
  entitled to an injunction, including a mandatory injunction, to be issued by
  any court of competent jurisdiction ordering compliance with this Agreement
  or enjoining and restraining Executive from the continuation of such
  breach.  

  



 


11

















 


	
   

  	
  (c)

  	
  Entire Agreement (Merger & Integration):  This Agreement supersedes any and all other
  agreements, either oral or in writing, between the parties hereto with
  respect to the employment of Executive by the Company, including without
  limitation, the Prior Employment Agreement, and contains all of the covenants
  and agreements between the parties with respect to such employment in any
  manner whatsoever.  Any modification of
  this Agreement will be effective only if it is in writing signed by the
  parties. 

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Governing Law:  Pennsylvania without giving effect to the
  choice of law or conflicts of law rules and laws of such jurisdiction. 

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Severability:  In the event that any term or condition
  contained in this Agreement shall for any reason be held by a court of
  competent jurisdiction to be invalid, illegal or unenforceable in any
  respect, such invalidity, illegality or unenforceability shall not affect any
  other term or condition of this Agreement, but this Agreement shall be
  construed as if such invalid or illegal or unenforceable term or condition
  had never been contained herein. 

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Counterparts:  This Agreement may be executed in two or
  more counterparts, each of which shall be deemed to be an original but all of
  which together shall constitute one and the same instrument.  The execution of this Agreement may be by
  actual or facsimile signature.

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Code
  of Ethics:  Executive
  acknowledges receipt of and agrees to comply with (i) MTR Gaming
  Group, Inc.’s Code of Ethics and Business Conduct, as well as the
  Conflicts of Interest Policies, copies of which are attached hereto as Exhibit B
  and incorporated by reference. 
  Additionally, Executive acknowledges that the Company’s securities are
  publicly traded and agrees that due to his position he may be in possession
  of material non-public information. 
  Accordingly, Executive warrants that he will neither (i) trade in
  the Company’s securities nor (ii) “tip” another person or entity, in
  each case, while Executive is in possession of material non-public
  information about the Company or its affiliates.

  
	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Notice:  Any notice required or
  permitted to be given pursuant to this Agreement shall be sufficient only if
  in writing and sent by certified or registered mail, return receipt
  requested, (i) if the notice is to the Company, to the Chief Executive
  Officer at the Company’s Corporate office, and (ii) if the notice is to
  Executive, at his address on record with the Company.  Notice shall also be sufficient if
  delivered by hand to the persons specified in the preceding sentence, as
  applicable.

  



 


12

















 


	
   

  	
  (i)

  	
  Board
  Approval:  This
  Agreement shall neither be valid nor binding until such time that it is
  approved of and/or ratified by the Board.

  
	
   

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Survival:  For the avoidance of doubt, neither the
  termination of the Agreement Term nor the termination of the Period of
  Employment shall relieve the parties of those obligations that are intended
  to survive any such termination.

  



 


SIGNATURE PAGE FOLLOWS.


 


13

















 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this 5th day of November, 2010.


 


	
   

  	
  MTR
  GAMING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /S/
  STEVEN M. BILLICK

  
	
   

  	
  Name:
  Steven M. Billick

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted
  by:

  	
  /S/
  JOHN W. BITTNER, JR.

  
	
   

  	
   

  	
  JOHN
  W. BITTNER, JR.

  



 


14

















 


Exhibit A


 


GENERAL RELEASE OF CLAIMS


 


This general release of
claims (this “General Release”) is entered into by and between John W.
Bittner, Jr. (“Executive”) and MTR Gaming Group, Inc. (the “Company”),
as of the date hereof, pursuant to the terms of the Employment Agreement dated
as of [            
    ], 2010 by and between Executive and the Company (the “Employment
Agreement”).


 


1.             Release.  In exchange for and in consideration of the
severance payments, benefits and other payments and rights of Executive
described in the Employment Agreement (the “Severance Payments and Benefits”)
and for other good and valuable consideration, Executive, on behalf of himself,
his agents, representatives, administrators, receivers, trustees, estates,
spouse, heirs, devisees, assignees, transferees, legal representatives and
attorneys, past or present (as the case may be), hereby irrevocably and
unconditionally releases, discharges, and acquits all of the Released Parties
(as defined below) from any and all claims, promises, demands, liabilities,
contracts, debts, losses, damages, attorneys’ fees and causes of action of
every kind and nature, known and unknown, which Executive may have against them
up to the Effective Date (as defined below) of this General Release arising out
of or related to Executive’s employment with the Company, or the termination
thereof (the “Released Claims”), including but not limited to causes of
action, claims or rights arising out of, or which might be considered to arise
out of or to be connected in any way with: (i) any treatment of Executive
by any of the Released Parties, which shall include, without limitation, any
treatment or decisions with respect to hiring, placement, promotion, work
hours, discipline, transfer, termination, compensation, performance review or
training; (ii) any damages or injury that Executive may have suffered,
including without limitation, emotional or physical injury, or compensatory
damages; and (iii) employment discrimination, which shall include, without
limitation, any individual or class claims of discrimination on the basis of
age, disability, sex, race, religion, national origin, citizenship status,
marital status, sexual preference, or any other basis whatsoever.   This release shall be construed as broadly
as possible and, without limiting the foregoing, the Released Claims shall
include any and all claims that Executive has alleged or could have alleged
arising out of or related to Executive’s employment with the Company, or
termination thereof, whether known or unknown, accrued or unaccrued, based on
acts, omissions, transactions or occurrences which occurred up to the Effective
Date against any Released Party for violation(s) of any of the following,
in each case, as amended: the National Labor Relations Act; Title VII of the
Civil Rights Act of 1964; the Age Discrimination in Employment Act; the Older
Workers Benefit Protection Act of 1990; the Civil Rights Act of 1991; Sections
1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the
Employee Retirement Income Security Act of 1974; the Immigration Reform Control
Act; the Americans with Disabilities Act of 1990; the Fair Labor Standards Act;
the Occupational Safety and Health Act; the Sarbanes-Oxley Act of 2002; any other
federal, state, or local law or ordinance; any public policy, whistleblower,
contract, tort, or common law; and any demand for costs or litigation expenses,
including but not limited to attorneys’ fees. 
In no event, however, shall any claims, causes of action, suits, demands
or other obligations or liabilities be released pursuant to the foregoing if
and to the extent they relate to (a) the Severance Payments and Benefits
which Executive is entitled to receive pursuant to the provisions of the
Employment Agreement; (b) any rights or benefits which Executive is 


 


15

















 


entitled to under the
Company’s option, restricted stock or other equity incentive plans; (c) any
vested benefits which Executive is entitled to under the Company’s pension,
savings, retirement, 401K or other plans; or (d) any rights that Executive
has or may have to be indemnified by the Company pursuant to any contract,
statute, or common law principle including, without limitation, the Company’s
Certificate of Incorporation, By-laws and directors and officers liability
insurance policies.


 


2.  Released Parties.  The term “Released Parties” or “Released
Party” as used herein shall mean and include: (i) the Company; (ii) the
Company’s former, current and future parents, subsidiaries, affiliates,
shareholders and lenders; (iii) any predecessor or successor of any person
listed in clauses (i) an (ii); and (iv) each former, current, and
future officer, director, agent, representative, employee, servant, owner,
shareholder, partner, joint venturer, attorney, employee benefit plan, employee
benefit plan administrator, insurer, administrator, and fiduciary of any of the
persons listed in clauses (i) through (iii), and any other person acting
by, through, under, or in concert with any of the persons or entities listed
herein.


 


3.  OWBPA and ADEA Release.  Pursuant to the Older
Workers Benefit Protection Act of 1990, Executive understands and acknowledges
that by executing this General Release and releasing all claims against any of
the Released Parties, he has waived any and all rights or claims that he has or
could have against any Released Party under the Age Discrimination in
Employment Act (“ADEA”), which includes any claim that any Released Party discriminated
against Executive on account of his age. 
Executive also acknowledges the following:


 


(a) The
Company, by this General Release, has advised Executive to consult with an
attorney prior to executing this General Release;


 


(b) Executive
has had the opportunity to consult with his own attorney concerning this
General Release;


 


(c) This
General Release does not include claims arising from any act, omission,
transaction or occurrence which happens on or after the Effective Date of this
General Release, provided, however, that any claims arising after the Effective
Date of this General Release from the then-present effect of acts or conduct
occurring before the Effective Date of this General Release shall be deemed
released under this General Release; and


 


(d) The
Company has provided Executive the opportunity to review and consider this
General Release for 21 days or, if Executive’s termination of employment is “in
connection with an exit incentive or other employment termination program” (as
such phrase is defined in ADEA), 45 days from the date Executive receives this
General Release (the “Review Period”). 
At Executive’s option and sole discretion, Executive may waive the
Review Period and execute this General Release before the expiration of 21 or
45 days, as applicable.  In electing to
waive the Review Period, Executive acknowledges and admits that he was given a
reasonable period of time within which to consider this General Release and his
waiver is made freely and voluntarily, without duress or any coercion by any
other person.


 


16

















 


4.  ADEA Revocation Period. Executive may
revoke this General Release within a period of seven days after execution of
this General Release. Executive agrees that any such revocation is not
effective unless it is made in writing and delivered to the attention of the
Secretary of the Company by the end of the seventh calendar day. Under any such
valid revocation, Executive shall not be entitled to any Severance Payment and Benefits
under the Employment Agreement. This General Release becomes effective on the
eighth calendar day after it is executed by both parties (the “Effective
Date”).


 


5.  Representations by Executive.  Executive confirms that no claim, charge, or complaint
against any of the Released Parties, brought by him, exists before any federal,
state, or local court or administrative agency. 
Executive represents and warrants that he has no knowledge of any
improper or illegal actions or omissions by the Company, nor does he know of
any basis on which any third party or governmental entity could reasonably
assert such a claim, in each case which has not been disclosed to the CEO or
the Board of Directors of the Company. This expressly includes any and all
conduct that potentially could give rise to claims under the Sarbanes-Oxley Act
of 2002 (Public Law 107-204).


 


6.  No Right to File Claims.  Executive agrees that he will not, unless
otherwise prohibited by law, at any time hereafter, voluntarily participate in
as a party, or permit to be filed by any other person on his behalf or as a
member of any alleged class of persons, any action or proceeding of any kind,
against the Company, or its past, present, or future parents, subsidiaries,
divisions, affiliates, successors and assigns and any of their past, present or
future directors, officers, agents, trustees, administrators, attorneys,
employees or assigns (whether acting as agents for the Company or in their
individual capacities), with respect to any Released Claims; in addition,
Executive agrees to have himself removed from any such action or proceeding
with respect to which he has involuntarily become a party.  Executive further agrees that he will not
seek or accept any award or settlement from any source or proceeding with
respect to any claim or right covered by this General Release and that this
General Release shall act as a bar to recovery in any such proceedings.


 


7.  No Admission of Liability.  Executive agrees that neither this General
Release nor the furnishing of the consideration for the general release set
forth in this General Release shall be deemed or construed at any time for any
purpose as an admission by the Released Parties of any liability or unlawful
conduct of any kind.  Executive further
acknowledges and agrees that the consideration provided for herein is adequate
consideration for Executive’s obligations under this General Release.


 


8.  Governing Law.  This General Release shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws provisions.  If any provision of the General Release other
than the general release set forth above, is declared legally or factually
invalid or unenforceable by any court of competent jurisdiction and if such
provision cannot be modified to be enforceable to any extent or in any
application, then such provision immediately shall become null and void,
leaving the remainder of this General Release in full force and affect.


 


17

















 


9.  Prior Agreements.  This General Release sets forth the entire
agreement between Executive and the Released Parties with respect to the
matters set forth herein, and supersedes any and all prior agreements or
understandings, whether written or oral, between the parties with respect to
the matters set forth herein, except as otherwise specified in this General
Release.  This General Release shall not
affect the continuing obligations of Executive or the Company under the Employment
Agreement.  Executive acknowledges that
he has not relied on any representations, promises, or agreements of any kind
made to him in connection with his decision to sign this General Release,
except for those set forth in this General Release.


 


10.  Amendment.  This General Release may not be amended
except by a written agreement signed by both parties, which specifically refers
to this General Release.


 


11.  Counterparts; Execution Signatures.  This General Release may be executed in any
number of counterparts by the parties hereto and in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which when taken together shall constitute one and the same agreement.


 


EXECUTIVE ACKNOWLEDGES THAT
HE CAREFULLY HAS READ THIS GENERAL RELEASE; THAT HE HAS HAD THE OPPORTUNITY TO
THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY
UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES
MADE TO SIGN THIS GENERAL RELEASE ARE THOSE STATED AND CONTAINED IN THIS
GENERAL RELEASE; AND THAT HE IS SIGNING THIS GENERAL RELEASE KNOWINGLY AND
VOLUNTARILY.  EXECUTIVE STATES THAT HE IS
IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND
UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING
THIS GENERAL RELEASE.


 


(SIGNATURE PAGE TO FOLLOW)


 


18

















 


IN WITNESS
WHEREOF,  Executive
has executed this General Release as of the        
day of                 
20    .


 


	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JOHN W. BITTNER, JR.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCEPTED AND ACKNOWLEDGED
  BY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MTR GAMING
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


19
















 


MTR Gaming Group, Inc.


 


Code of Ethics and Business Conduct


(As Amended)


 


This Code of Ethics and Business Conduct, which
includes our Conflict of Interest Policy attached as Exhibit A hereto (the
“Code”), embodies the commitment of MTR Gaming Group, Inc. and its
subsidiaries (the “Company”) to conduct business in accordance with all
applicable laws, rules and regulations, and ethical standards.  All employees, officers, and members of our
Board of Directors are expected to adhere to those principals and procedures
set forth in the Code that apply to them. 
We also expect the consultants that we retain generally to abide by the
Code.


 


The Code includes standards that are designed to
deter wrongdoing and to promote:


 


(1)               Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;


 


(2)               Full, fair, accurate, timely, and understandable disclosure in reports
and documents that the Company files with, or submits to, the Securities and
Exchange Commission (the “SEC”) and in other public communications made by the
Company;


 


(3)               Compliance with applicable governmental laws, rules and
regulations;


 


(4)               The prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and


 


(5)               Accountability for adherence to the Code.


 


Section I


 


A.                Implementation and Oversight of The Code


 


The Company’s Board of Directors (the “Board”)
is ultimately responsible for the implementation of the Code. The Board has
designated the Company’s Director of Administration to be the compliance
officer (the “Compliance Officer”) for the implementation and administration of
the Code, provided, however, that notwithstanding any provision to the contrary
in this Code, any matter submitted to the Audit Committee of the Company’s
Board of Directors pursuant to the Company’s Whistleblower Hotline Policy and
Procedures shall not be reviewed or otherwise administered by the Compliance
Officer unless so directed by the Audit Committee.


 


1

















 


Questions regarding the application or
interpretation of the Code are inevitable. Directors, officers, employees and
consultants of the Company should direct all questions to the Compliance
Officer.


 


The Code, and all amendments of the Code,
will be included in the Company’s periodic filings with the SEC and will be
available on the Company’s website.


 


Statements in the Code to the effect that
certain actions may be taken only with the “Company’s approval” mean that the
Compliance Officer must give prior written approval before the proposed action
may be undertaken.  The Compliance
Officer will act in a manner that is consistent with the requirements and
spirit of the Code.


 


The Code should be read in conjunction with
the Company’s other policy statements, including, without limitation, the
Company’s Whistleblower Hotline Policy and Procedures, Disclosure Controls and
Procedures, Insider Trading Policy, Conflicts of Interest Policy and Plan
of Compliance Review and Reporting System and Establishment of Compliance
Committee.


 


Periodic training may be provided regarding
the contents and importance of the Code and related policy statements and the
manner in which violations must be reported and waivers must be requested.


 


B.                Honest and Ethical Conduct


 


One person’s dishonest or unethical conduct
can harm the Company’s reputation and compromise the trust that the public and
our shareholders have in the Company. For that reason, you must be familiar
with and comply with the Code. Compliance with the Code - and therefore all
laws and regulations - forms the foundation of honest and ethical conduct.
Accordingly, compliance with the Code is not simply expected; it is mandatory.
In addition, the Company expects that directors, officers, employees and
consultants of the Company will:


 


·                  Establish an example by their behavior as a model for others subject to
the Code.


·                  Sustain a culture where honest and ethical conduct is recognized, valued
and exemplified by all directors, officers, employees, consultants and other
representatives of the Company.


·                  Personally participate in, and where applicable, lead compliance efforts
through meetings with others subject to the Code and monitor compliance matters
and programs.


·                  Raise and encourage others to raise concerns and questions about ethical
conduct and integrity.


 


The Company will take such disciplinary or
preventive action as it deems appropriate to address any existing or potential
violation of the Code brought to its attention. 
The Company’s Conflict of Interest Policy, which is attached to the Code
as


 


2

















 


Exhibit A, is an integral part of the
Code and all Company directors, officers, employees and consultants should
conduct themselves in accordance with its requirements and spirit.


 


A personal conflict of interest occurs when an
individual’s private interest improperly interferes with the interests of the
Company.  Personal conflicts of interest
are prohibited as a matter of Company policy, unless they have been approved by
the Company.  In particular, a director,
officer, employee, or consultant must never use his or her position with the
Company to obtain any improper personal benefit for himself or herself, for his
or her family members, or for any other person, including loans or guarantees
of obligations, from any person or entity, provided, however, that the Code is
not intended to prohibit doing business with vendors, service providers,
licensed lenders and the like who do business with the Company, so long as one
does not exploit his or her position with the Company to obtain preferential
treatment and so long as any such actions are not in violation of any
applicable law or regulation (including, without limitation, SEC and Nasdaq
rules).


 


Service to the Company should never be subordinated
to personal gain and advantage. 
Conflicts of interest, unless properly waived by the Company, must be
avoided.


 


Any director, officer, employee or consultant who
is aware of a transaction or relationship that could reasonably be expected to
give rise to a conflict of interest should disclose and discuss the matter
fully and promptly with the Compliance Officer, provided however, that
alternatively, any complaint may be reported anonymously as provided by the
Company’s Whistleblower Policy and Procedures referenced herein.


 


C.            Full, Fair, Accurate, Timely and Understandable
Public Disclosure


 


It is the Company’s policy that the information in
its public communications, including SEC filings, be full, fair, accurate,
timely, and understandable.  All
directors, officers, employees and consultants who are involved in the Company’s
disclosure process are responsible for acting in furtherance of this
policy.  In particular, these individuals
are required to maintain familiarity with the disclosure requirements
applicable to the Company and are prohibited from knowingly misrepresenting,
omitting, or causing others to misrepresent or omit, material facts about the
Company to others, whether within or outside the Company, including the Company’s
independent auditors. Our disclosures should comply with the letter and the
spirit of applicable law.


 


All directors, officers, employees and
consultants must follow these guidelines:


 


·                  Act honestly, ethically and with integrity.


·                  Comply with the Code.


·                  Endeavor to ensure full, fair, timely, accurate and understandable
disclosure in the Company’s filings with the SEC.


·                  Through communication, make sure that others at the Company understand the
Company’s obligations to the public and under the law with respect to its 


 


3

















 


disclosures, including that results are
never more important than compliance with the law.


·                  Encourage others at the Company to raise questions and concerns
regarding the Company’s public disclosures and ensure that such questions and
concerns are appropriately addressed.


·                  Provide the Company’s directors, officers, employees, consultants and
advisors involved in the preparation of the Company’s disclosures to the public
with information that is accurate, complete, objective, relevant, timely and
understandable.


·                  Act in good faith, responsibly, and with due care, competence and
diligence, without misrepresenting material facts or allowing your independent
judgment to be subordinated by others.


·                  Proactively promote honest and ethical behavior among peers in the work
environment.


·                  Achieve proper and responsible use of and control over Company assets
and resources.


·                  Record or participate in the recording of entries in the Company’s books
and records that are accurate.


·                  Comply with the Company’s disclosure controls and procedures, internal
controls and procedures for financial reporting and other policy statements.


 


D. Compliance with Laws, Rules, and Regulations


 


It is the Company’s policy to comply with all
applicable laws, rules, and regulations. Some laws carry criminal penalties. It
is the personal responsibility of each director, officer, employee and
consultant to adhere to the standards and restrictions imposed by those laws,
rules, and regulations.  The Company
expects each director, officer, employee and consultant to refrain from any
illegal, dishonest, or unethical conduct.


 


Generally, it is both illegal and against Company
policy for any director, officer, employee and consultant who is aware of
material nonpublic information relating to the Company, any of the Company’s
customers or any other private or governmental issuer of securities to buy or
sell any securities of those issuers, or recommend that another buy, sell or
hold the securities of those issuers. 
Any director, officer, employee or consultant with questions regarding
these types of transactions should contact the Compliance Officer or the
Company’s outside counsel free of charge.


 


E.  Internal Reporting Procedure


 


Each director, officer, employee, and
consultant must report promptly to the Compliance Officer the existence of any
outside association, interest, relationship or activity, as it arises, that
actually, potentially or apparently involves a conflict of interest violation
(or suspected violation) of the Code. Failure to report such relationships,
activities, interests or violations will be a ground for disciplinary action.


 


4

















 


Subject to the provisions of the Code, the
Compliance Officer will review disclosures of any actual, potential or apparent
violation of the Code and determine the appropriate manner by which the Company’s
approval or disapproval would be provided. Each director, officer, employee,
and consultant must cooperate fully in the review process by providing all
information that the Compliance Officer deems necessary to conduct an effective
review. Company actions with respect to the conflict of interest or potential
conflict of interest will take into account the spirit of the Code.


 


Each director, officer, employee, and
consultant must sign annually a statement reflecting continuing awareness and
understanding of the Code, including its conflicts of interest policy (“Ethics
Statement”). At the same time, each director, officer, employee and consultant
must report either the absence or presence of actual, potential or apparent
conflicts of interest. A form of Ethics Confirmation Statement is attached as
Exhibit B hereto.


 


All interests, relationships or
participation in transactions disclosed by any director, officer, employee or
consultant in accordance with this policy shall be held in confidence unless
the best interests of the Company dictate otherwise.


 


F.  Accountability


 


All who are subject to the Code are
responsible for complying with it and for reporting any known or suspected
violations of it. The Company recognizes that such a mandate may not be
meaningful without an accompanying provision for accountability and discipline
of violations of the Code.


 


Subject to the terms of the Code, reported
violations of the Code will be investigated, addressed promptly and treated
confidentially to the extent possible. The Company will strive to impose
discipline for each Code violation that fits the nature and particular facts of
the violation. The Company uses a system of progressive discipline and
generally will issue warnings or letters of reprimand for less significant,
first-time violations. Violations of a more serious nature may result in
suspension without pay, demotion, loss or reduction of bonus or option awards,
or any combination of such disciplinary violations. Termination of employment
generally is reserved for violations amounting to a breach of trust, such as
theft, violation of the Company’s Insider Trading Policy, or for cases where a
person has engaged in multiple violations.


 


Violations of the Code that go unaddressed
are treated by the SEC as implicit waivers of the Code. Accordingly, any
violation that is discovered and not addressed will have to be disclosed in
accordance with the rules and regulations of the SEC or applicable listing
standards. In such cases, the SEC’s rules will require disclosure of the
nature of any violation, the date of the violation and the name of the person
who committed the violation. Such disclosure would not only be harmful to the
Company, but also to the person warned either as one who is responsible for
monitoring and enforcing compliance with the Code or as one who has violated
it. In either case, depending on the


 


5

















 


nature of the violation, a person violating
the Code may be dismissed or their duties and responsibilities with the Company
may be changed.


 


Subject to the provisions of the Code and
the Company’s Whistleblower Policy and Procedures, all investigations of
reported violations of the Code will be supervised by the Compliance
Officer.  A violation shall be deemed to
have occurred and appropriate consequences shall be determined only by the
Board of Directors, any of its committees, or such other person designated by
the Board to act on its behalf.  Any
director, officer, employee or consultant who is the subject of a reported
violation of the Code shall be entitled to make a reasonable presentation to
the Compliance Officer or any other person considering the reported violation
on behalf of the Company, with respect to the facts, circumstances and other
related considerations in connection with any such violation.  It is the Company’s general policy to protect
the interests of each person that reports any violation or suspected violation
under the provisions of the Code.


 


Section II


 


A. Corporate Opportunities


 


Directors, officers and employees owe a duty to the
Company to advance the Company’s legitimate business interests when the
opportunity to do so arises.  Directors,
officers and employees are prohibited from taking for themselves (or directing
to a third party) a business opportunity that is discovered through the use of
corporate property, information, or position unless previously approved by the
Board.  More generally, directors,
officers, employees and consultants are prohibited from using corporate
property, information, or position for personal gain or competing with the
Company.


 


Sometimes the line between personal and Company
benefits may be difficult to discern. 
The only prudent course of conduct for our directors, officers,
employees and consultants is to make sure that any use of Company property or
services that is not solely for the benefit of the Company is approved
beforehand through the Compliance Officer.


 


B. Confidentiality


 


In carrying out the Company’s business, directors,
officers, employees and consultants often learn confidential or proprietary
information about the Company, its customers, or other third parties.  Directors, officers, employees and
consultants must maintain the confidentiality of all information so entrusted
to them, except when disclosure is authorized or legally mandated.  Confidential or proprietary information
includes, among other things, any non-public information concerning the
Company, including its business relationships, financial performance, results
or prospects, personnel information, guest information, compensation data,
computer processes, customer lists, marketing strategies, pending projects or
proposals, and any non-public information provided by a third party with the
expectation that the information be kept confidential and used solely for the
business purpose for which it was conveyed. 
Directors, officers, 


 


6

















 


employees and consultants should refer to the
Company’s Legal Department for more detailed guidance on this topic.


 


C. Fair Dealing


 


The successful business operation and reputation of
the Company are built upon the principals of fair dealing and ethical
conduct.  Our reputation for integrity
and excellence requires careful observance of the spirit and letter of all
applicable laws and regulations as well as a scrupulous regard for standards of
conduct and personal integrity consistent with this Code.  We do not seek competitive advantages through
illegal or unethical business practices. 
Each director, officer, employee and consultant should endeavor to deal
fairly with the Company’s customers, service providers, suppliers, competitors,
and other employees.  No director,
officer, employee or consultant should take unfair advantage of anyone through
manipulation, concealment, abuse of privileged information, misrepresentation
of material facts, or any unfair dealing practice.


 


D. Equal Employment Opportunity and Harassment


 


Our focus in personnel decisions is on merit and
contribution to the Company’s success. 
Concern for the personal dignity and individual worth of every person is
an indispensable element in the standard of conduct that we have set for
ourselves.  The Company affords equal
employment opportunity to all qualified persons without regard to any
impermissible criterion or circumstances. 
This means equal opportunity in regard to each individual’s terms and
conditions of employment and in regard to any other matter that affects in any
way the working environment of the employee. 
We do not tolerate or condone any type of discrimination prohibited by
law, including harassment.


 


E. Protection and Proper Use of Company Assets


 


All employees, officers, directors, and consultants
should protect the Company’s assets and ensure their efficient use.  All Company assets should be used for
legitimate business purposes only.


 


F.                 Outside Activities/Employment


 


Any outside association, including
activities with other entities, should not encroach on the time and attention
you are expected to devote to your Company duties and responsibilities,
adversely affect the quality or quantity of your work product or entail your
use of any Company assets, including its real and personal property, or imply
(without the Company’s approval) the Company’s sponsorship or support. In
addition, under no circumstances are you permitted to compete with the Company.


 


7

















 


Section III


 


Waivers and Amendments of The
Code


 


From time to time, the Company may amend the Code
or waive certain provisions of the Code. 
Any such amendment shall be disclosed in the manner and within the time
required by applicable laws, regulations, rules and listing
standards.  Any requests for a waiver of
any provision of the Code must be submitted in writing to the Compliance
Officer for review.  If a waiver of any
provision of the Code is granted, the Company must publicly disclose the nature
of the granted waiver, including any implicit waiver, the name of the person
requesting the waiver, the date of the waiver and any other disclosures as and
to the extent required by any rule of the SEC or applicable listing
standard.  Waivers of any provision of
the Code may be made only by the Board of Directors.


 


Section IV


 


Anonymous Reporting of Violations


 


Any violation of the Code and any violation by the
Company or its directors, officers, employees or consultants of the securities
laws, rules or regulations or other laws, rules or regulations
applicable to the Company may be reported anonymously using any one of the
methods described in the Company’s Whistleblower Hotline Policy and Procedures,
including, without limitation, the making of a phone call to a whistleblower
hotline at 800-418-6482, extension MTR (687). All such calls shall be subject
to the Company’s Whistleblower Hotline Policy and Procedures. A copy of the
Company’s Whistleblower Hotline Policy and Procedures is available on the
Company’s website, in employee break rooms and on employee bulletin boards.


 


Section V


 


Certain Relationships and Related
Transactions


 


Any proposed transaction between the Company and a
related party, or in which a related party would have a direct or indirect
material interest, must be promptly disclosed to the Compliance Committee of
the Company. The Compliance Committee is required to disclose such proposed
transactions promptly to the Company’s Audit Committee.


 


Transactions with related parties must be approved
by the Audit Committee of the Board of Directors. Any director having an
interest in the transaction is not permitted to vote on such transaction. The
Audit Committee will determine whether or not to approve such transaction on a
case by case basis and in accordance with the provisions of the Amended and
Restated Audit Committee Charter and the Code. 
A “related party” is any of the following:


 


8

















 


·                  an
executive officer of the Company;


 


·                  a
director (or director nominee) of the Company;


 


·                  an
immediate family member of any executive officer or director (or director
nominee);


 


·                  a
beneficial owner of five percent or more of any class of the Company’s voting
securities;


 


·                  an
entity in which one of the above described persons has a substantial ownership
interest or control of such entity; or


 


·                  any
other person or entity that would be deemed to be a related person under Item
404 of SEC Regulation S-K or applicable Nasdaq rules and regulations.


 


9

















 


EXHIBIT A


 


MTR GAMING GROUP, INC.


 


CONFLICTS OF INTEREST POLICY


 


I.              GENERAL STATEMENT OF POLICY


 


It is the policy of MTR Gaming Group, Inc. (“MTR”),
Mountaineer Park, Inc., Speakeasy Gaming of Reno, Inc., Speakeasy
Gaming of Las Vegas, Inc., Presque Isle Downs, Inc., and their
affiliated companies (collectively, the Company) that employees at all levels
be free from any interest, influence or relationship that might conflict, or
appear to conflict, with the best interests of the Company, and that they
perform their work with undivided loyalty as measured by the highest standards
of law and ethics.  The existence of an
actual or potential conflict of interest depends, of course, on specific
facts.  The principles discussed here are
intended to alert employees to the possibilities and furnish general
guidance.  In any uncertain situation, the
employee should immediately discuss the matter fully and frankly with his/her
supervisor.  Where there is any doubt as
to the existence of a conflict of interest, the situation should be disclosed
fully, in writing, to the MTR Compliance Officer or MTR’s outside counsel.


 


II.            SCOPE OF COVERAGE


 


This policy applies to both direct and indirect
interests of the employee and members of his or her immediate family.  It extends to transactions by any person who
may act on behalf of such employee or family members in connection with such
interests.  In general, an employee will
be regarded as having a beneficial interest in any property owned or any
transactions entered into by such employee’s spouse or minor children.


 


Further, this policy is applicable to all parts of
the Company including all domestic and foreign subsidiaries and affiliated
companies.


 


A.                                    Common Conflict of Interest Situations


 


The following sections describe a number of common
categories of conflicts of interest. 
They illustrate the application of Company policy to certain particular
situations where conflicts are most likely to arise.  They are not all-inclusive, however, and do
not cover all possible situations where conflicts might occur in violation of
Company policy:


 


B.                                    Relationships with Vendors, Purchasers and
Competitors of the Company


 


Any employee who holds any position or employment
with, or who receives any compensation, credits or loans from, or who owns or
acquires, directly or indirectly, a beneficial interest in, or rights to the
profits of income of, any concern he or she has reason to believe may supply
products or services to, or purchase from, or compete with, the Company, is
required to disclose the full details concerning such interest or relationship.
In such circumstances, a conflict may arise if such employee is in a position
to influence decisions with respect to any Company transaction involving such
other party and if the interest or relationship is such that it might bring
into question such employee’s continued ability to make independent, impartial
judgments in the Company’s best interest. In this connection, the mere
ownership of securities of a vendor, purchaser or competitor which are listed
on a stock exchange or publicly traded in a recognized over-the-counter market
and amounting to less than one percent of the class outstanding, need not be
reported.


 


C.                                    Gifts or Favors


 


Acceptance of money, gifts or favors from an
individual or concern which an employee has reason to believe may transact
business, or may seek to transact business, with the Company, will constitute
violation of this policy, unless such gift or favor is of a nominal nature and
extent ($100 or less) and is considered normal and customary under the
circumstances.  All offers of gifts or
favors beyond this policy should be immediately reported to the employee’s
supervisor, and to the MTR Compliance Officer or MTR’s outside counsel.


 


1

















 


D.                                    Sensitive Payments


 


The use of the Company funds or assets by employees
for any unlawful purpose is strictly prohibited.  Employees shall not:


 


1.                                       Establish for any purpose undisclosed or unrecorded funds or assets of
the Company.


 


2.                                       Make false or artificial entries in the books and records of the Company
for any reason.


 


3.                                       Engage in any arrangement that results in such prohibited acts.


 


Notwithstanding the foregoing in regard to the
making of payments, no tax consultants, legal advisors, or similar consultant
or advisor will be retained by the Company in regard to the resolution of tax
or any other matters where, because of the size and/or nature of the fees or
payment to be made, there is reason to believe that all or part of said
payments will be transmitted to government officials or their designee, except
for those situations in which such payments to, or on behalf of, such officials
perform legitimate services or functions; which they are obligated to perform
as part of their governmental responsibilities .


 


Any employee having information or knowledge of any
unrecorded fund or asset or any prohibited act shall promptly report such matter
to the MTR Compliance Officer or MTR’s outside counsel.


 


E.                                      Foreign Transactions and Payments


 


Having due regard for the responsibilities relating
to international operations, it is the Company’s policy that all employees and
agents comply with the ethical standards and applicable legal requirements of
the Foreign Corrupt Practices Act and of each foreign country in which business
is conducted.


 


The Foreign Corrupt Practices Act makes it a
criminal offense for a United States company or agent acting on its behalf to
pay anything of value to any foreign government official to influence any
official action in securing, retaining, or directing business. This prohibition
applies to bribes, kick-backs or like payments made directly to such foreign
officials or indirectly through seemingly legitimate payments such as
commissions or consulting fees paid to overseas agents or representatives.


 


F.                                      Political Campaign Contributions


 


Political campaign contributions include direct
expenditures or contributions, in cash or property, to candidates for
nomination or election to public office or to political parties, as well as
indirect assistance or support such as the furnishing of goods, services or
equipment, or other political fund-raising events. No funds or assets of the
Company shall be used for political campaign contributions without the approval
of the Chairman of the Board.


 


No political campaign contributions shall be made
by the Company in cash or by any other means whereby the amount or origin of
the contribution cannot be readily established by reference to the documents
and records of the Company. All contributions shall be made to the candidates
authorized campaign committee, or to a political party, or to other recipients
who may legally receive such contributions and all reporting requirements of
the state or local jurisdictions shall be complied with.  Each contribution shall be clearly recorded
on the Company’s books as a political campaign contribution or its equivalent
and shall not be deducted for federal, state or 1ocal income tax purposes
unless authorized under applicable law.


 


The Foreign Corrupt Practices Act also prohibits
contributions to foreign political parties or candidates for foreign political
office for the purpose of influencing their actions to secure, retain or direct
business. The prohibition applies regardless of whether the contribution is
lawful under the laws of the country in which it is made. Accordingly, company
policy strictly prohibits any payments with corporate funds, to, or any use of
corporate assets for the benefit of, any foreign political party or candidate
for political office.


 


2

















 


III.           SUMMARY OF GENERAL OBLIGATIONS OF EMPLOYEES


 


Under this policy employees are responsible for:


 


·                  Full and immediate disclosure of any interest which they or members of
their immediate families have at the time of hire, or acquire during
employment, which create or appear to create a possible conflict with the
Company’s interests. In this connection, all new employees will be routinely
provided a copy of the MTR Conflicts of Interest Policy and will be required to
execute a signed acknowledgement of its receipt; and


 


·                  Taking any actions regarded by the company as being necessary to
eliminate or satisfactorily regulate a conflict of interest situation.


 


IV.           FAILURE TO COMPLY


 


Failure to comply with this policy and procedures
can result in disciplinary actions up to and including termination of
employment, and/or initiation of appropriate legal action.


 


V.            FURNISHING DISCLOSURE INFORMATION


 


With respect to any disclosure information
furnished by an employee in accordance with the Company’s Conflicts of Interest
Policy, the Company will endeavor to properly protect such information and
handle it on a strictly confidentia1 basis.


 


3

















 


EXHIBIT B


 


MTR GAMING GROUP, INC.


 


CODE OF ETHICS AND BUSINESS
CONDUCT CONFIRMATION STATEMENT


 


Date:


 


I,
                                  
hereby confirm the following statements to MTR Gaming Group, Inc. (“MTR”):


 


(1)                                  I am a director, officer, employee or consultant of MTR and/or one of
its subsidiaries.


 


(2)                                  I have read and I understand MTR’s Code of Ethics and Business Conduct
(the “Code”), including its Conflicts of Interest Policy.


 


(3)                                  There is no actual, potential or apparent conflict of interest between
myself or any of my immediate family members and MTR (or any of its
subsidiaries) that would violate the Code, except
                                                                                                  
                                                                                                     
                                                                    
                                                            
                                                                           
                                                      .


 


(4)                                  I understand that the Code and all amendments to the Code are available
for my review on MTR’s website and upon request from MTR’s Corporate Secretary.


 


 


	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  (Title)

  



 


1