Exhibit 10.9


 


EMPLOYMENT AGREEMENT


 


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


 


W I T N E S S E T H:


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


4.                                      DUTIES AND EXTENT OF SERVICES.


 


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


 


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


 


5.                                      COMPENSATION.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6.                                      FRINGE BENEFITS AND EXPENSES.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7.                                      NON-COMPETITION AND NON-SOLICITATION.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


8.                                      TERMINATION
OF EMPLOYMENT.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9.                                      CHANGE
IN CONTROL.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10.                               DISABILITY;
DEATH.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17.                               ARBITRATION.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


 


	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ Robert
  A. Blatt

  
	
   

  	
  Name:

  	
  Robert A.
  Blatt

  
	
   

  	
  Title:

  	
  Vice
  Chairman of the Board and

  
	
   

  	
   

  	
  Chairman of
  the Succession Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  \s\ Robert
  F. Griffin

  
	
   

  	
  Name:

  	
  Robert F.
  Griffin

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  16621
  Wycliffe Place

  
	
   

  	
   

  	
  Wildwood,
  MO. 63005

  
				



 


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