UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549




Form
10-K/A




Amendment
No. 2


(Mark
One)





x
            ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the fiscal year ended:
September 30, 2008




Or




 ̈
            TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934




For the transition period from
___________ to ___________




Commission
file number 000-28318




Multimedia
Games, Inc.


(Exact
name of Registrant as specified in its charter)




Texas
              74-2611034(State
      or other jurisdiction of
                incorporation
      or organization)
              (I.R.S.
      Employer
                Identification
      No.)206
      Wild Basin Road, Building B, Fourth Floor
                Austin,
      Texas
              78746(Address
      of principal executive offices)
              (Zip
      Code)




Registrant’s
telephone number, including area code:(512)
334-7500




Registrant’s website:www.multimediagames.com




Securities
Registered Pursuant to Section 12(b) of the Exchange Act:


None




Securities
Registered Pursuant to Section 12(g) of the Exchange Act:


Common
Stock, $0.01 par value


Preferred
Share Purchase Rights






Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes   ̈  
No  x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act. Yes   ̈  
No  x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes  x    
No   ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.




Large
      accelerated filer  ̈
              Accelerated
      filer x
              Non-accelerated
      filer  ̈









Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes   ̈    
No  x




The
aggregate market value of voting and non-voting common equity held by
nonaffiliates of the registrant computed by reference to the price at which
common equity was last sold as of the last business day of the registrant’s most
recently completed second fiscal quarter (March 31, 2008), was $121,717,728
(assuming, for this purpose, that only directors and officers are deemed
affiliates).




As of
January 16, 2009, the registrant had 26,642,942 outstanding shares of
common stock.






DOCUMENTS
INCORPORATED BY REFERENCE




None.







EXPLANATORY
NOTE




Multimedia
Games, Inc. (the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 2
on Form 10-K/A (this “Amendment”) to our Annual Report on Form 10-K for the
fiscal year ended September 30, 2008 (the “Original Report”), as filed
with the Securities and Exchange Commission on December 15, 2008 (the “Original
Filing Date”), as amended by Amendment No. 1 on Form 10-K/A as filed
with the Securities and Exchange Commission on January 29, 2009
(“Amendment No. 1”), for the purposes of:




§
            Correcting
      an error in Section 16(a) Beneficial Ownership Reporting Compliance in
      Item 10 of Part III of Amendment
  No. 1;




§
            Revising
      the number of times the Compensation Committee met in the fiscal year
      ended September 30, 2008 in Item 11 of Part III of
      Amendment No. 1;




§
            Modifying
      the discussion of potential bonuses for fiscal year 2009 in
      Item 11 of Part III of Amendment No. 1;
  and




§
            Revising
      the Beneficial Ownership Table included in Item 12 of Part III
      of Amendment No. 1.




As
required by Rule 12b-15 under the Securities Exchange
Act of 1934, as amended, we are filing new certifications by the
Company’s Principal Executive Officer and Principal Financial Officer under
Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits to this
Form 10-K/A under Item 15. Because no financial statements are
contained within this Amendment No. 2, we are not including certifications
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.




Except as
described above, this Amendment does not modify or update other disclosures in
the Original Report, including the nature and character of such disclosures, to
reflect events occurring after the filing date of the Original Report.
Accordingly, this Form 10-K/A should be read in conjunction with our
filings made with the Securities and Exchange Commission.




PART
III




ITEM 10.
Directors and Executive
Officers of the Registrant




Set forth
below is information regarding the executive officers and directors of the
Company as of January 16, 2009.




Name
              Age
              
              Positions and OfficesAnthony
      M. Sanfilippo
              50
              
              President,
      Chief Executive Officer and DirectorRandy
      S. Cieslewicz
              37
              
              Senior
      Vice President and Chief Financial OfficerPatrick
      J. Ramsey
              34
              
              Senior
      Vice President and Chief Operating OfficerVirginia
      E. Shanks
              47
              
              Senior
      Vice President and Chief Marketing OfficerUri
      L. Clinton
              36
              
              Senior
      Vice President, General Counsel, and Corporate
SecretaryMick
      D. Roemer
              56
              
              Senior
      Vice President of SalesMichael
      J. Maples, Sr. (1)(2)
              66
              
              Director,
      Non-Executive Chairman of the BoardRobert
      D. Repass (1)(2)
              48
              
              DirectorEmanuel
      R. Pearlman (1)(3)
              48
              
              DirectorNeil
      E. Jenkins (3)
              59
              
              DirectorJohn
      M. Winkelman (2)(3)
              62
              
              Director




(1)
            Member
      of the Nominating and Corporate Governance
  Committee.


(2)
            Member
      of the Audit Committee.


(3)
            Member
      of the Compensation Committee.






Anthony M.
Sanfilippo joined Multimedia Games as Chief Executive Officer in
June 2008. Mr. Sanfilippo brings to Multimedia Games more than
20 years' experience with Harrah's Entertainment, Inc. (Harrah’s), the
world's largest casino company and a provider of branded casino entertainment.
While at Harrah’s, Mr. Sanfilippo served as President of both the Western
Division (2003 – 2004) and the Central Division (1997 – 2002
and 2004 – 2007), overseeing the operations of more than two dozen
casino and casino-hotel destinations. Mr. Sanfilippo was also part of the
senior management team that led the successful integration of numerous gaming
companies acquired by Harrah's, including Jack Binion's Horseshoe Casinos, the
Grand Casino & Hotel brand, Players International, and Louisiana Downs
Racetrack. In addition to his duties as divisional President, Mr. Sanfilippo was
also President and Chief Operating Officer for Harrah's New Orleans and a member
of the Board of Directors of Jazz Casino Corporation prior to its acquisition by
Harrah's. Mr. Sanfilippo has directed tribal gaming operations in Arizona,
California and Kansas, and has held gaming licenses in most states that offer
legalized gambling.




-3-




Randy S.
Cieslewicz became our Chief Financial Officer in April 2007. On
December 1, 2008, Mr. Cieslewicz resigned from the Company effective
February 15, 2009. From May 2006 until April 2007,
Mr. Cieslewicz served as our Interim Chief Financial Officer.
Mr. Cieslewicz joined us in March 2002 as Vice President of Tax and
Budget and in July 2005, he became our Vice President of Tax, Budget, and
Corporate Compliance. Mr. Cieslewicz worked in public accounting
from 1994 through 2002, last serving as a Tax Manager for
BDO Seidman, LLP. Mr. Cieslewicz received his Bachelor of Business
Administration in Accounting from Sam Houston State
University.




Patrick J. Ramseybecame our Chief Operating Officer in September 2008. Previously,
Mr. Ramsey was employed as the Vice President and Executive Associate to
the Vice Chairman of Harrah’s Entertainment, Inc. from November 2007
through September 2008, where he worked on domestic and international
development, design and construction, and sports and entertainment. Prior to
joining the corporate office of Harrah’s Entertainment in Las Vegas,
Mr. Ramsey worked as the Vice President of Slot Operations, Slot
Performance, and Security Operations at Caesars Atlantic City
(May 2006 – November 2007). Mr. Ramsey has held several
other positions with Harrah’s Entertainment, Inc., including roles in the
Central Division headquarters based in Memphis
(November 2004 – May 2006) and at several of the Chicagoland
properties (June 2003 – November 2004). Mr. Ramsey
received a B.A. in Economics from Harvard University and an MBA from the
Kellogg School of Management at Northwestern University.




Virginia (Ginny)
E. Shanks joined us as Chief Marketing Officer in July 2008.
Ms. Shanks brings to Multimedia Games more than 25 years of marketing
experience in gaming entertainment, most recently as Senior Vice President of
Brand Management for Harrah's Entertainment, Inc., the world's largest casino
company and provider of branded casino entertainment. During her time with
Harrah's Entertainment, Ms. Shanks was responsible for maximizing the value
of the company's key strategic brands – Caesars, Harrah's, and Horseshoe
Casinos; the Total Rewards player loyalty program; and the World Series of
Poker. In addition to setting overall corporate brand strategy, Ms. Shanks
oversaw sports and entertainment marketing, strategic alliances, consumer
insights, public relations, and nationwide casino promotions. Ms. Shanks
holds a Bachelor of Science degree from University of Nevada-Reno.




Uri L. Clintonjoined us as General Counsel and Secretary in August 2008.
Mr. Clinton serves as chief legal counsel for all business operations,
corporate governance, regulatory compliance and licensing in the Legal Affairs
Department. Mr. Clinton's professional experience includes more than
10 years of business and legal experience including six years in the Law
Department at Harrah's Entertainment, Inc.
(August 2002 – August 2008), most recently serving as Vice
President of Legal Affairs for its Central Division. In that capacity and in
earlier positions, Mr. Clinton served as business operations and regulatory
compliance legal counsel for more than 13 casino/hotels located in seven
Native American and commercial gaming jurisdictions. Additionally,
Mr. Clinton served as lead counsel for several of Harrah's enterprise-wide
departments and initiatives, including its National Casino Marketing Air Charter
program, Risk Management Department, Corporate Diversity, and the
2004 integration of several Horseshoe branded casinos into the Harrah's
corporate structure. Mr. Clinton received a B.A. in Political Science from
the University of Nevada-Las Vegas in 1994, a Juris Doctorate from Gonzaga
University School of Law in 1997, and an MBA from the Vanderbilt University Owen
Graduate School of Management in 2007.




Mick D. Roemerbecame our Senior Vice President of Sales in January 2009, bringing
more than 25 years of gaming equipment sales and marketing experience to
the Company. Since 2007, Mr. Roemer has consulted with gaming
companies in the areas of game content, intellectual property, and sales and
marketing planning, and has worked in an advisory capacity with Multimedia Games
since May 2008 in support of the Company’s efforts to expand its
penetration into the Class III gaming market. Prior to 2007,
Mr. Roemer served as Senior Vice President of Sales, Marketing and Product
Development for Bally Technologies, contributing to Bally’s significant increase
in market share with gaming units shipped growing from fewer than
9,000 units in 2000 to more than 22,000 units in 2007.
Mr. Roemer also previously served as Vice President of Marketing for
International Gaming Technologies (IGT), Vice President of Sales for
Powerhouse/VLC and Senior Vice President and General Manager of Anchor Gaming.
Mr. Roemer holds a B.S. in Marketing from Oklahoma State
University.




-4-


Michael J.
Maples, Sr. has been a director of ours since August 2004 and has
served as Chairman of the Board since April 2006. Mr. Maples held
various management positions at Microsoft Corporation from April 1988 to
July 1995, including Executive Vice President of the Worldwide Products
Group. As a member of the Office of the President at Microsoft, Mr. Maples
reported directly to the Chairman. Previously, Mr. Maples served as
Director of Software Strategy for International Business Machines Corp.
Mr. Maples also currently serves on the boards of Motive, Inc., a service
management software company, Lexmark International, Inc., a laser and inkjet
printer company, and Sonic Corp., an operator and franchisor of drive-in
restaurants. Mr. Maples is currently a member of the Board of Visitors of
the Engineering School at the University of Oklahoma and the College of
Engineering Foundation Advisory Council at the University of Texas at Austin.
Mr. Maples received a B.S. in Electrical Engineering from the University of
Oklahoma and an MBA from Oklahoma City University.




Robert D.
Repasshas
been a director of ours since July 2002. In addition to his role as a
director, Mr. Repass serves as Chairman of our Audit Committee.
Mr. Repass was a managing partner in the Austin office of
PricewaterhouseCoopers from December 1997 to March 2000, and from
March 2000 until December 2001, Mr. Repass was a partner with
TL Ventures, a Philadelphia-based venture capital firm. From
January 2002 until March 2002, Mr. Repass was a private
consultant. Mr. Repass has also served as Vice President and Chief
Financial Officer of Motion Computing, Inc., a mobile computing and
wireless communication device company, since April 2002. From
January 2003 until December, 2005, Mr. Repass served on the Board
of Directors and as the Chairman of the Audit Committee of Bindview Development
Corporation, a software company. Mr. Repass has over 20 years of
public accounting, Securities and Exchange Commission and financial reporting
experience. Mr. Repass received a B.S. in Accounting from Virginia
Polytechnic Institute and State University.




John M. Winkelmanhas been a director of ours since August 2000. From 1999
to 2000, Mr. Winkelman was the Chief Executive Officer of Viejas
Casino and Turf Club, a casino owned and operated by the Viejas Tribe located in
San Diego County, California. From 1989 to 1999,
Mr. Winkelman was the Economic Development Advisor to the Viejas Tribal
Council. Mr. Winkelman has worked extensively with Native American
enterprises for the past 20 years, with a primary focus on tribal
gaming and related economic development. Mr. Winkelman received a B.A. in
Law and a Juris Doctor degree from Thomas Jefferson School of Law, formerly
Western State University.




Neil E.
Jenkins has been a director of ours since October 2006.
Since 2000, Mr. Jenkins has been an Executive Vice President and
Secretary and the General Counsel for Lawson Products, Inc., a publicly traded
industrial products company. From 1996 to 1999, Mr. Jenkins
owned an SCH Golf Franchise that specialized in tours to Scotland and
Ireland. Beginning in 1974, Mr. Jenkins began working in labor
relations for Bally Manufacturing Corporation, and continued in the legal
department, rising to the position of General Counsel, a capacity he served in
from 1985 to 1992. In 1993, Mr. Jenkins became a member
of Bally Gaming International’s Executive Team, where he helped coordinate
business development, legal, and licensing matters for Bally Manufacturing’s
gaming industry spin-off. Mr. Jenkins received a B.A. in Political Science
from Brown University, a Juris Doctor degree from Loyola University Chicago
School of Law, and a Master of Science degree in Financial Markets from the
Center for Law & Financial Markets at the Illinois Institute of
Technology.




Emanuel R.
Pearlman has been a director of ours since October 2006. He has more
than 20 years of experience in the investment community.
Mr. Pearlman is the founder and Chief Executive Officer of Liberation
Investment Group LLC, a New York-based investment management firm. Prior to
founding Liberation, Mr. Pearlman was the Chief Operating Officer of
Vornado Operating Corporation. For 14 years, Mr. Pearlman ran
Gemini Partners, which specialized in strategic block investing and financial
consulting. Mr. Pearlman’s experience in the gaming industry includesconsulting
to Jackpot Enterprises and to Bally Entertainment Corporation, where he advised
the companies on their business and financial activities. Mr. Pearlman
received a B.A. in Economics from Duke University, and an MBA from the Harvard
Graduate School of Business.




Each
director is elected annually and holds office until such director’s successor is
elected, or until such director’s death, resignation or removal from
office.




No family
relationship exists between any of our directors, Executive Officers or any
person nominated or chosen by us to become a director or Executive
Officer.




Section 16(a)
Beneficial Ownership Reporting Compliance




The
members of our Board of Directors, the executive officers, and persons who hold
more than 10% of our outstanding common stock are subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934
which requires them to file reports with respect to their ownership of the
common stock and their transactions in such common stock. Based upon the copies
of Section 16(a) reports which we prepared or for which we received from
such persons for their fiscal year 2008 transactions in the common stock
and their common stock holdings, we believe that all reporting requirements
under Section 16(a) for such fiscal year were met in a timely manner by our
directors, executive officers and greater than ten percent beneficial owners,
except Mr. Clinton filed a Form 4 on August 25, 2008
reporting a transaction that occurred on August 16, 2008.




-5-


Audit
Committee Composition and Audit Committee Financial Expert




Our Board
of Directors has appointed Messrs. Repass, Maples, and Winkelman as members of
the Audit Committee of the Board of Directors. All Audit Committee members are
“independent” as defined and required under the Nasdaq listing standards and the
rules and regulations of the Securities and Exchange Commission. All Audit
Committee members also possess the level of financial literacy required by all
applicable laws and regulations. The Board has determined that at least one
member of the Audit Committee, Mr. Repass, is an Audit Committee
“financial expert,” and that Mr. Repass is “independent” as defined by the
rules and regulations of the SEC.




Code
of Business Conduct and Ethics




We have
adopted a Code of Business Conduct and Ethics applicable to our officers,
directors and employees which includes a separate, additional Code of Ethics for
our principal executive officer, principal financial officer, principal
accounting officer, and controller. This code, including the separate,
additional code for our principal executive officer, principal financial
officer, principal accounting officer or controller is publicly available on our
website at http://ir.multimediagames.com/downloads.cfm. If the we make any
amendments to this code other than technical, administrative or other
non-substantive amendments, or grants any waivers, including implicit waivers,
from a provision of the code to our principal executive officer, principal
financial officer, principal accounting officer or controller, or other persons
performing similar functions that requires disclosure by law or Nasdaq listing
standard, we will disclose the nature of the amendment or waiver, its effective
date and to whom it applies on our website or in a report on Form 8-K filed with
the SEC.




ITEM 11.
Executive
Compensation




COMPENSATION
DISCUSSION AND ANALYSIS




INTRODUCTION




This
Compensation Discussion and Analysis provides information regarding the
following:




§
            The
      objectives of our executive compensation program, including the behaviors
      and results it is designed to encourage and
  reward;




§
            The
      roles and responsibilities of management and the Compensation Committee in
      the governance of our executive compensation
  program;




§
            The
      elements of our executive compensation program and its purposes;
      and




§
            The
      compensation decisions with respect to our fiscal year ended
      September 30, 2008.




Objectives
of the Executive Compensation Programs




The
objective of our executive compensation program is to align the compensation
paid to our executive officers with shareholder and customer interests (on both
a short-term and long-term basis); attract, retain and motivate highly qualified
executive talent; and provide appropriate rewards for achievement of business
objectives and growth in shareholder value. It is the Company’s objective that
executive compensation be directly related to the achievement of our planned
goals, and the enhancement of corporate and shareholder value. The Compensation
Committee recognizes that the industry sector in which we operate is both highly
competitive and is challenged by significant legal and regulatory uncertainty.
In addition, the technology-related experience and skills of our executive
officers have applications to many other industry sectors besides our own. As a
result, there is substantial demand for qualified, experienced executive
personnel of the type we need to achieve our objectives. The Compensation
Committee considers it crucial that the Company be assured of retaining and
rewarding our top caliber executives, who are essential to the attainment of our
ambitious long-term goals.




For these
reasons, the Compensation Committee believes the Company’s executive
compensation arrangements must remain competitive with those offered by other
companies of similar size, scope, performance levels and complexity of
operations.




-6-


For the
purposes of this Compensation Discussion and Analysis, the capitalized term
“Named Executive Officers” (or “NEOs”) refers to the executives who are named in
the Summary Compensation Table below. Included among the NEOs are Messrs.
Clifton E. Lind, Gary L. Loebig, P. Howard Chalmers and Scott A.
Zinnecker. Mr. Lind served as our President and Chief Executive Officer
until his resignation from such offices and as a director of the Company
effective March 31, 2008. Mr. Lind remained an employee of the
Company following his resignation as an executive officer and director of the
Company until his termination from the Company effective May 1, 2008.
Mr. Loebig served as our Interim President and Chief Executive Officer from
March 31, 2008, until the hiring of Mr. Sanfilippo, effective
June 15, 2008. Mr. Loebig remained an employee of the Company until
his resignation from the Company effective September 19, 2008. Mr. Chalmers
served as our Senior Vice President of Planning and Corporate Communications
until August 31, 2008 when his role and responsibilities were revised such that
he was no longer an executive officer; Mr. Chalmers remained an employee of
the Company until his termination effective December 31, 2008.
Mr. Zinnecker served in various roles with the Company until his
termination effective September 30, 2008; most recently, he held the
role of Executive Vice President and Acting Chief Operating
Officer.




The
Company entered into certain agreements with Messrs. Lind, Loebig, Chalmers and
Zinnecker upon the termination of their employment. Information regarding these
agreements is provided below in the section titled “Employment And Termination
Arrangements And Change-In-Control Benefits.”




Determining
Executive Compensation




Our
management and the Compensation Committee strive to maintain an executive
compensation program that is structured to provide the executive officers with a
total compensation package that, at expected levels of performance, is
competitive with those provided to other executives holding comparable positions
or having similar qualifications in other similarly situated organizations in
our industry and the general market. Both management and the Compensation
Committee are involved in the development, review and evaluation of our
executive compensation programs. The Compensation Committee has sole
responsibility for the approval of such programs. The roles and responsibilities
are described below.




Management.
Our management sets the strategic direction for the Company and strives to
design and maintain compensation programs that motivate behaviors among the
executive officers that are consistent with the Company’s strategic goals and
objectives. Each year, the Chief Executive Officer, with assistance from other
members of management, as appropriate, conducts a review process covering each
of the executive officers reporting to the Chief Executive Officer. This annual
review process focuses on an evaluation of overall Company performance and the
performance of each such executive officer, including an evaluation of
compensation levels delivered through each element of compensation (as described
below), competitive practices and trends, and specific compensation issues as
they arise. Based on the outcomes of this review process, the Chief Executive
Officer makes recommendations to the Compensation Committee regarding the
compensation of each of the executive officers reporting directly to him. This
recommendation typically provides information regarding adjustments, if any, to
base salaries, annual incentive bonus award payments, and equity-based incentive
awards.




During
fiscal year 2008, the Company successfully recruited several individuals to
join the Company in senior executive roles. The compensation arrangements with
these new Executive Officers are described below in the section titled
“Employment and Termination Arrangements and Change-In-Control Benefits.” The
Board of Directors believes the addition of these executives is critical to the
development and execution of strategic objectives that will guide the Company’s
future and support the creation of shareholder value.




Compensation
Committee. The Company’s Board of Directors established the Compensation
Committee in 1996 at the time of our initial public offering. The Compensation
Committee operates pursuant to a charter, which is available on the “Investor
Relations” page of the Company’s website at www.multimediagames.com. As stated
in the charter, the purpose of the Compensation Committee is to discharge the
Board’s responsibilities relating to compensation and benefits of the Company’s
executive officers and directors. The current members of the Compensation
Committee are Messrs. Jenkins (Chairman), Pearlman and Winkelman, who are each
“independent” directors, as required by Nasdaq Marketplace Rules. The
Compensation Committee convened seven times during fiscal year 2008 to discuss
Company compensation programs and issues. The Compensation Committee also took
action by written consent twice during the fiscal year ended
September 30, 2008.




The
Compensation Committee has overall responsibility for the approval of executive
and director compensation programs that are appropriate, consistent with the
Company’s compensation philosophy, and support the Company’s business goals and
objectives. Specifically, the Compensation Committee has authority and
responsibility for the review, evaluation and approval of the compensation
structure and levels for all of the executive officers. The Compensation
Committee also approves all employment, severance, or change-in-control
agreements, and special or supplemental benefits or provisions applicable to
executive officers. The Compensation Committee is also responsible for reviewing
and making periodic recommendations to the Board regarding the compensation of
directors.




-7-


Each
year, the Compensation Committee reviews the compensation recommendations
submitted by the Chief Executive Officer. In general, the Chief Executive
Officer’s recommendations consider the following:




§
            Performance
      versus stated individual and Company business goals and
      objectives;




§
            Internal
      equity (i.e., considering the pay for similar jobs and jobs at different
      levels within the Company) and the critical nature of each Executive
      Officer to the Company’s past and future
  success;




§
            The
      need to retain talent; and




§
            The
      compensation history of each Executive Officer, including the value and
      number of stock options awarded in prior
years.




The
Compensation Committee believes that input from management provides useful
information and perspective to assist the Committee with the determination of
its own views on compensation. Although the Compensation Committee receives
information and recommendations regarding the design and level of compensation
of the executive officers from management, the Compensation Committee makes the
final decisions as to the plan design and compensation levels for these
executives.




In making
decisions on each executive officer’s compensation, the Committee considers the
nature and scope of all elements of the executive officer’s total compensation
package, the executive officer’s responsibilities, and the competitive posture
of the executive officer’s current compensation. The Committee also evaluates
each executive officer’s performance through reviews of objective results (both
Company and individual results), reports from the Chief Executive Officer and
other senior management regarding the executive’s effectiveness in supporting
the Company’s key strategic, operational and financial goals and, in some cases,
personal observation.




With
respect to the compensation of the Chief Executive Officer, the Committee is
responsible for the periodic review and approval of his total compensation,
including annual incentive bonus awards and equity-based incentive compensation.
The Committee also develops annual performance goals and objectives, and
conducts an evaluation of the Chief Executive Officer’s performance relative to
these goals and objectives. The Committee considers and discusses the Chief
Executive Officer’s compensation in executive session without the Chief
Executive Officer present.




The
Compensation Committee has the sole authority to obtain advice from consultants,
legal counsel, accounting, or other advisors, as appropriate, to perform the
Committee’s duties and responsibilities. The Committee did not engage a
compensation consultant to assist with the evaluation or review of the
compensation programs for its executive officers for the fiscal year ended
September 30, 2008.






-8-


Elements
of Executive Compensation




Management
and the Compensation Committee strive to implement executive compensation
programs that are designed to attract and retain individuals who possess the
qualities necessary to successfully execute the Company’s business strategy, and
to support the Company’s long-term financial success and drive shareholder
value. The key elements of our executive compensation program are as
follows:




Element
                              Objectives and Basis
                              FormBase
      Salary
                              Provide
      base compensation that reflects each Executive Officer’s responsibilities,
      tenure and performance and is competitive for each role.
                              CashAnnual
      Incentive Bonus
                              Annual
      incentive to drive Company and individual performance.
                              CashEquity-Based
      Incentives
                              Long-term
      incentives to drive Company performance and align the Executive Officers’
      interests with shareholders’ interests; retain Executive Officers through
      vesting and potential wealth accumulation.
                              Stock
      optionsHealth
      and Welfare Benefits
                              Provide
      for the health and wellness of our Executive Officers.
                              Various
      plans (described below)Retirement
      and Savings Plan
                              Assist
      employees with retirement savings and capital accumulation on a
      tax-advantaged basis.
                              401(k)
      Plan, with Company matching contributions.Perquisites
                              On
      a very limited basis, support Company business interests.
                              Club
      membershipDiscretionary
      Bonuses and Awards
                              Attract
      top executive talent from outside the Company; retain Executive Officers
      through vesting and potential wealth accumulation; and recognize
      promotions and significant individual contributions to the
      Company.
                              Cash
      and stock optionsSeverance
      and Change-in-
                                Control
      Benefits
                              Provide
      financial security to Executive Officers and protect Company interests in
      the event of the termination of employment; attract and retain top
      executive talent.
                              Cash
      severance and acceleration of vesting of nonvested outstanding stock
      options




Cash
Compensation




The
Company believes that annual cash compensation should be paid commensurate with
attained performance. Accordingly, our cash compensation consists of fixed base
compensation, paid in the form of an annual base salary, and an annual incentive
bonus program that is designed to motivate and serve as a reward for the
Company’s overall performance. The Compensation Committee supports management’s
compensation philosophy of moderate fixed compensation with the potential for
significant bonuses for achieving performance-related goals. Base salary and
bonus award decisions are made as part of the Company’s structured annual review
process.




Base
Salary. Base salaries are paid to our executive officers to provide an
appropriate fixed component of compensation. The base salary paid to each
executive officer generally reflects the officer’s responsibilities, tenure,
individual job performance, measurable contribution to our success, special
circumstances, and pay levels of similar positions with comparable companies in
the industry. Management and the Compensation Committee review the base salary
of each executive officer, including the Chief Executive Officer, on an annual
basis. When reviewing each executive officer’s base salary, the Compensation
Committee considers the level of responsibility and complexity of the executive
officer’s job, whether individual performance in the prior year was particularly
strong or weak, how the executive officer’s salary compares to the salaries of
other Company executives, and salaries paid for the same or similar positions.
In addition to these annual reviews, management and the Committee may, at any
time, review the salary of an executive officer who has received a significant
promotion, whose responsibilities have been increased significantly, or who is
the object of competitive recruitment. Any adjustments are based on increases in
the cost of living, job performance of the executive officer over time, and the
expansion of duties and responsibilities, if any. No pre-determined weight or
emphasis is placed on any one of these factors.




-9-


The
following table summarizes the base salaries for each of the Named Executive
Officers during the fiscal year ended September 30, 2008:




Name
                Annual Base
                  Salary
                  Effective
                  10/01/2007
                Adjustments
                Annual Base
                  Salary
                  Effective
                  09/30/2008Anthony
      M. Sanfilippo (1)
                —
                —
                $450,000Gary
      L. Loebig (2)
                $194,250
                —
                —Clifton
      E. Lind (2)
                $450,000
                —
                —Randy
      S. Cieslewicz (3)
                $212,500
                $22,500
                  (+10.6%)
                $235,000P.
      Howard Chalmers (4)
                $189,000
                $(75,600)
                  (-40.0%)
                $113,400Scott
      A. Zinnecker (2)
                $189,000
                —
                —




(1)
            Mr. Sanfilippo
      was hired as President, Chief Executive Officer and a director the Company
      effective June 15, 2008. Additional details regarding the terms
      of his employment are provided
below.


(2)
            Messrs.
      Loebig, Lind and Zinnecker each terminated their employment with the
      Company on or before
  September 30, 2008.


(3)
            Mr. Cieslewicz
      received a market-based adjustment to his salary effective July 28, 2008.
      On December 1, 2008, Mr. Cieslewicz resigned from the
      Company effective
February 15, 2009.


(4)
            Effective
      August 31, 2008, the role and responsibilities of Mr. Chalmers were
      revised such that he was no longer an executive officer of the Company.
      Consistent with this change, his salary was reduced. He remained an
      employee of the Company until his termination effective
      December 31, 2008.




The base
salaries for each of the recently-hired executive officers (i.e., Messrs.
Sanfilippo, Ramsey, Clinton, Roemer, and Ms. Shanks) were the result of
negotiations between the Company and each individual. In each case, the Company
believes that the salaries are appropriate, competitive, and were necessary to
attract the caliber of executive-level talent that each of these individuals
possess. Specific salary levels were agreed to based upon each individual’s
salary level at their previous employers, the roles and positions each would be
assuming with Multimedia Games, and other career opportunities that they were
considering.




Annual Incentive
Bonus. The Company’s annual incentive bonus program is intended to
motivate the NEOs to achieve superior Company financial performance, recognize
and reward the executive officers for their contributions when superior annual
performance is achieved, and provide compensation opportunities which are
aligned with competitive practices. The program is designed so that the annual
incentive bonus can potentially be the largest component of cash compensation
only if the executive and the Company are able to meet or exceed
performance-related goals that, if attained, are expected to result in an
increase in overall company and shareholder value. Bonus award payments are
typically made in the first quarter of the fiscal year following the year in
which they were earned.




Historically
under our annual incentive bonus program, the NEOs did not have pre-set
performance goals or annual bonus targets, expressed as a percentage of base
salary. Rather, an annual incentive bonus pool was funded as a percentage of the
Company reported pre-tax income, which was the sole corporate measure of
performance for the funding of an incentive bonus pool. The bonus pool funding
percentage was developed and approved by the Board of Directors periodically,
based on the Company’s expected performance and an assessment of appropriate
awards the annual incentive bonus pool might generate given different
performance levels. If the Company’s performance resulted in the funding of the
annual incentive bonus pool, then the Chief Executive Officer would have
recommended to the Compensation Committee a bonus award amount for each of the
other NEOs. The Chief Executive Officer’s recommendations would have been based
on his assessment of each such NEOs contribution to the execution of the
Company’s business plans. The Compensation Committee would have considered the
Chief Executive Officer’s recommendations, and made changes to the recommended
award amounts, as appropriate. The Chief Executive Officer’s bonus award was
determined solely by the Compensation Committee based on its evaluation of his
performance.




-10-


With the
hiring of several new executive officers during fiscal year 2008, the
Company is implementing a new annual incentive approach. Under this approach,
each of the Executive Officers is assigned a target annual bonus opportunity,
expressed as a percentage of the executive’s annual base salary. Subject to the
achievement of pre-established performance targets, the Executives Officers may
earn an annual incentive bonus award above or below the bonus target
opportunity. The Compensation Committee determined that a target-based annual
incentive approach would allow for greater alignment between annual bonus awards
and Company performance than the previous approach. Specifically, the
Compensation Committee believes that the proposed target-based annual incentive
approach will facilitate the use of performance measures that are aligned with
the creation of shareholder value, and thus provide a direct incentive for
Executive Officers to perform.




We
anticipate the Compensation Committee will evaluate potential annual incentive
bonuses for fiscal year 2009 based on a number of factors, including but
not limited to, achievement of operational goals, the Company’s EBITDA
performance (EBITDA is defined as Earnings Before Interest, Taxes, Amortization,
Depreciation and Accretion of Contract Rights) and EBITDA less capital
expenditures, relative to predetermined targets.


For
fiscal year 2008, two NEOs earned bonuses. Pursuant to the terms of his
Employment Agreement dated May 29, 2008, Mr. Loebig was awarded a
bonus in the aggregate amount of $119,231 (consisting of $69,231 in
additional compensation related to his term as Interim Chief Executive Officer
and a $50,000 cash bonus at the completion of his term) in recognition of
his service as the Company’s Interim President and Chief Executive Officer. This
bonus was paid to Mr. Loebig on June 20, 2008. Mr. Sanfilippo
earned a bonus award of $181,731 in recognition of his service during
fiscal year 2008 under the terms of his employment agreement, which
provides him with a target bonus opportunity equal to 150% of his base
salary, and a maximum bonus opportunity of 300% of his base salary. For
fiscal year 2008, Mr. Sanfilippo's performance was evaluated based on the
following objectives set forth shortly after his employment with the Company:
(i) review the current profitability and future viability of each of the
Company's product lines; (ii) assess the Company's organizational
structure; (iii) establish relationships with stakeholders of the Company;
and (iv) review the Company's expense structure. The Board of Directors’
assessment of his performance following the completion of the year determined
that, in the aggregate, Mr. Sanfilippo met these objectives, and thus
awarded him a bonus award equal to 150% of the base salary he earned during
the fiscal year 2008. The bonus will be paid to Mr. Sanfilippo during
fiscal year 2009. These awards are reflected in the “Bonus” column in the
Summary Compensation Table.




Due to
the dynamic nature of the Company’s industry, which is driven by economic and
regulatory conditions, and customer preferences, the Company believes that the
periodic use of discretion in the determination of bonus award amounts is
appropriate and optimizes the overall value of the bonus program. This approach
facilitates teamwork and collaboration among the executive officers, and allows
them to not be limited to pre-established goals should operating conditions
change during the year.




Equity-Based
Incentives




We
provide our Executive Officers with long-term compensation in the form of
equity-based incentives, which are intended to align the interests of our
Executive Officers with the interest of the Company’s shareholders by supporting
the creation of long-term value for the organization, facilitate significant
long-term retention, and be consistent with competitive market practices. Over
time, it is the Compensation Committee’s intent that equity-based compensation
should represent a significant portion of each executive officer’s total
compensation, and the primary equity-based incentive vehicle we have used has
been stock options. Nonqualified and incentive stock options have been granted
to the Company’s executive officers and other employees. The Company expects to
continue to issue stock options to new employees as they are hired, as well as
to current employees as incentives from time to time. Our rationale for granting
stock options is as follows:




§
            We
      believe that stock options are highly effective at aligning the long-term
      interests of our Executive Officers with the interests of our
      shareholders;




§
            The
      grant of stock options to Executive Officers has been an essential
      ingredient to enabling us to achieve our growth and attain our business
      objectives; and




§
            We
      regularly face significant legal, regulatory and competitive challenges to
      our business that require extraordinary commitments of time and expertise
      by the Executive Officers, who have met these challenges and made these
      extraordinary commitments, largely because of the reward and incentive
      provided by the historical and prospective grant of stock
      options.




The
Compensation Committee periodically reviews the need to make grants of stock
options to the executive officers, typically based on recommendations from
management. When approving the grants of stock options, the Compensation
Committee considers the number and terms of options previously granted, industry
practices, the executive officer’s level of responsibility, and assumed
potential stock value in the future.




-11-


The
Company’s equity-based incentive awards are designed to comply with
Section 162(m) of the IRS code to allow tax deductibility of the awards.
Stock options are awarded under the Company’s stock plans – the 1996 Stock
Incentive Plan, the 2000, 2001, 2002, 2003 Stock Option Plans,
and an Ad Hoc Stock Option Plan. Our Board of Directors has also adopted a
2008 Employment Inducement Award Plan. Individual grants of options are
documented by stock option agreements which contain the specific terms and
provisions pertaining to each grant, including vesting, option term, exercise
price, and termination provisions. Options granted to the Executive Officers and
other employees generally vest over four years and expire seven years from the
date of grant. The exercise price of stock options granted to executive officers
is equal to the market value of a share of Company common stock on the date of
grant. Therefore, our executive officers will receive no benefit from the stock
options unless the value of a share of common stock exceeds the exercise
price.




Stock
option grants to Executive Officers and other employees have historically
consisted of a combination of incentive stock options, or ISOs,
and nonqualified stock options, or NQSOs. The use of ISOs has allowed
recipients to take advantage of certain tax benefits the ISOs afford under
Section 422 of the Internal Revenue Code (and any successor provision of
the Code having a similar intent).




During
the fiscal year ended September 30, 2008, the Compensation Committee
approved grants of stock options to Messrs. Loebig, Cieslewicz and
Zinnecker, consisting of a combination of ISOs and NQSOs. The options will
vest and become exercisable over four years. The Compensation Committee approved
these grants as an incentive to retain the services of these individuals during
a period of transition, to keep them engaged in the Company’s day-to-day
operations, and to contribute institutional knowledge which was valuable to the
new executive team as they developed a new strategy for the
Company.




Upon
commencement of their employment with the Company, the Compensation Committee
approved grants of stock options to Mr. Sanfilippo and the other
recently-hired Executive Officers (i.e., Messrs. Ramsey, Clinton, Roemer, and
Ms. Shanks). These grants were made to provide an immediate incentive for
these individuals to focus on the creation of shareholder value. In addition,
the Company believes the level of these equity awards were necessary to attract
these executives, and in some instances, replace certain equity opportunities
they had at their previous employers. Details of Mr. Sanfilippo’s stock
option grant are provided below in the section titled “Compensation of the Chief
Executive Officer.” Additional information is also provided in the section
titled “Employment and Termination Arrangements and Change-In-Control
Benefits.”




Other
than the stock option awards described above, none of the other Named Executive
Officers received grants of stock options or any other form of equity-based
incentives during the fiscal year ended
September 30, 2008.




The
Company does not currently maintain required levels of stock ownership by the
Executive Officers. The Company does have in place “Procedures and Guidelines
Governing Securities Trades by Company Personnel,” in order to comply with
federal and state securities laws governing (a) trading in Company
securities while in the possession of “material nonpublic information”
concerning the Company, and (b) tipping or disclosing material nonpublic
information to outsiders. In order to prevent even the appearance of improper
trading or tipping, the Company has adopted this policy for all of its
directors, officers and employees, venture capital and other entities (such as
trusts and corporations) over which such employees, officers or directors have
or share voting or investment control and specially designated outsiders who
have access to the Company’s material nonpublic information




Benefit
Programs and Perquisites




We
provide our executive officers with benefits that are intended to be a part of a
competitive total compensation package and that will permit us to attract and
retain highly-qualified executives. These benefits include health and welfare
benefits, a retirement and savings plan, and a perquisite limited to the Chief
Executive Officer. Each of these benefits is described below.




-12-


Health and
Welfare Benefits. The Company’s benefits program is designed to provide
employees (including the executive officers) and their families with security
and well being, and is an important part of the total compensation package.
These benefits are divided into the following major categories:




§
            Health
      Care Benefits – medical, dental and vision insurance
    coverage;




§
            Life
      and Disability Benefits – basic, optional life and accident insurance as
      well as short and long-term disability
coverage;




§
            Flexible
      Spending Accounts – health care and dependent care tax-free accounts;
      and




§
            Work
      Life Benefits – employee assistance with everyday issues, financial and
      legal issues, parenting, childcare, education and elder
    care.




The
Executive officers participate in these benefits programs on the same relative
basis as our other employees.




Retirement and
Savings. The Company maintains an employee retirement and savings plan
pursuant to Section 401(k) of the Internal Revenue Code, or the 401(k)
Plan. The purpose of the 401(k) Plan is to permit employees, including
executive officers, to accumulate funds for retirement on a tax-advantaged
basis. Specifically, the 401(k) Plan permits each eligible employee to
contribute on a pre-tax basis a portion of his compensation to the 401(k)
Plan (for calendar year 2008, the maximum amount of compensation that may be
contributed to the 401(k) Plan was $15,500). The Company makes a
matching contribution to the 401(k) Plan that is equal to 100% of the
first 3% of compensation contributed by employees and 50% of the
next 2% of compensation contributed by employees to
the 401(k) Plan.




The
Company does not maintain a tax-qualified defined benefit retirement plan. In
addition, the Company does not maintain any non qualified supplemental
retirement plans or deferred compensation plans for the executive
officers.




Perquisites.
The Company does not provide perquisites to executive officers, except for
monthly club membership dues that were paid on behalf of Mr. Lind during
his tenure as President and Chief Executive Officer. Two club memberships were
primarily used for business purposes, including sales and customer entertainment
and Board of Directors dinners. The value of this benefit to Mr. Lind in
the fiscal year ended September 30, 2008, is included in the “All
Other Compensation” column in the Summary Compensation Table.




Compensation
of the Chief Executive Officer




Mr. Sanfilippo
commenced employment with the Company as President and Chief Executive Officer,
effective June 15, 2008. In accordance with the terms of his
employment agreement (key terms of which are described below),
Mr. Sanfilippo receives an annual base salary of $450,000. In
addition, he has an opportunity to earn an annual bonus equal to 150% of his
base salary upon achievement of certain performance targets approved by the
Company’s Board of Directors, and up to a maximum of 300% of his base salary for
overachievement of such performance targets. As noted above, Mr. Sanfilippo
earned a bonus award of $181,731 in recognition of his service during the
fiscal year. Upon the execution of his employment agreement, Mr. Sanfilippo
was granted 1,300,000 stock options. The options became immediately exercisable,
but are subject to a vesting over four years in equal quarterly installments.
Mr. Sanfilippo’s total compensation package was determined as the result of
a negotiation process between Mr. Sanfilippo and the Compensation
Committee. The Compensation Committee believes the structure of the compensation
package, as well as the targeted and potential value of the package, provides a
competitive opportunity that is strongly aligned with shareholder
interests.
  Mr. Loebig
was appointed Interim President and Chief Executive Officer on
March 31, 2008, a position he held until the hiring of
Mr. Sanfilippo effective June 15, 2008. In connection with his
appointment to such offices, the Company entered into an Employment Agreement
with Mr. Loebig, which is described below in the section titled “Employment
and Termination Arrangements and Change-In-Control Benefits.” Pursuant to the
terms of Mr. Loebig’s Employment Agreement, he received a bonus award
of $119,231 (consisting of $69,231 in additional compensation related
to his term as Interim Chief Executive Officer and a $50,000 cash
bonus at the completion of his term) in recognition of his service during the
fiscal year. On July 14, 2008, Mr. Loebig was granted
80,000 stock options. The grant consisted of a combination of
23,643 ISOs and 56,357 NQSOs. One-fourth of the options will vest on
the first anniversary of the grant date; the remaining options will vest in
equal quarterly increments over the following three years.
  Mr. Lind
served as the Company’s President and Chief Executive Officer until his
resignation from such offices, effective March 31, 2008. He remained
an employee of the Company until his termination on May 1, 2008, at which time
he and the Company entered into certain agreements related to his termination.
Key terms of these agreements are described below. Mr. Lind’s annual base
salary was $450,000 for the period during which he was employed by the
Company in fiscal year 2008. Mr. Lind did not receive a bonus award for his
service during the fiscal year, nor did the Company grant options to him during
fiscal 2008.


-13-


EMPLOYMENT
AND TERMINATION ARRANGEMENTS AND CHANGE-IN-CONTROL BENEFITS




The
Company is party to employment agreements with a total of five current executive
officers, including Mr. Sanfilippo. In addition, we entered into certain
agreements with Messrs. Lind, Loebig, Chalmers and Zinnecker to define
certain arrangements regarding their terminations from the Company. The
following paragraphs provide summaries of the agreements with the Named
Executive Officers.




Agreements with
Anthony M. Sanfilippo. On June 15, 2008, the Company entered into
certain agreements with Mr. Sanfilippo, including an employment agreement
that sets forth certain terms and conditions relating to his employment as
President and Chief Executive Officer of the Company. Mr. Sanfilippo’s
employment agreement provides that he will receive an annual base salary
of $450,000, subject to covenants in the employment agreement and in an
Agreement Regarding Proprietary Developments, Confidential Information and
Non-Solicitation. The annual salary will be subject to an annual review by the
Board of Directors or Compensation Committee. In addition, he has an opportunity
to earn an annual bonus equal to 150% of his base salary upon achievement of
certain performance targets approved by the Company’s Board of Directors, and up
to a maximum of 300% of his base salary for overachievement of such performance
targets. The employment agreement also specifies that Mr. Sanfilippo will
be eligible to enroll in the Company’s benefit programs and vacation policies as
they are established from time-to-time for senior-level executive employees, or
be reimbursed for the cost to purchase comparable coverage at a benefit level
consistent with other senior-level executive employees. Mr. Sanfilippo will
also be reimbursed for the cost of co-payments under his current health and
medical benefit plans, and annual physical examinations for Mr. Sanfilippo
and his spouse.




For a
period of six months following the effective date of the employment agreement,
the Company paid expenses related to Mr. Sanfilippo’s commuting between
Austin, Texas (the Company’s home office location) and each of his home offices
in Germantown, Tennessee and Salt Lake City, Utah; as well reasonable costs of a
furnished executive apartment in Austin, Texas, car rental and other related and
reasonable expenses. The Company will pay for the reasonable moving expenses for
Mr. Sanfilippo’s relocation to Austin, Texas, excluding any costs
associated with buying or selling a home.




Upon the
execution of the employment agreement, Mr. Sanfilippo was granted 1,300,000
stock options. The options became immediately exercisable, but are subject to a
vesting over four years in equal quarterly installments. In addition, he agreed
to purchase 250,000 shares of the Company’s Common Stock pursuant to a Stock
Purchase Agreement, under which the shares were purchased at a price
of $4.68 per share, such price being the fair market value of each such
share on the effective date of the agreement.




In the
event of Mr. Sanfilippo’s death or disability, voluntary termination, or
termination for cause (each as defined within the employment agreement), he
shall not be entitled to receive any severance, other than accrued but unpaid
salary, vacation, vested benefits, and unreimbursed expenses. Further, the
Company’s other obligations under the employment agreement shall cease. In the
event of Mr. Sanfilippo’s termination without cause or his termination of
employment for good reason (each as defined within the employment agreement),
the Company: (i) shall pay Mr. Sanfilippo (a) in the event that the
termination occurs on or before June 15, 2009, one year of base salary
continuation and target bonus, or (b) in the event that the termination occurs
after June 15, 2009, two years of base salary continuation and two years of
target bonus; and (ii) if Mr. Sanfilippo elects to continue health coverage
under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company
will pay the premiums in an amount sufficient to maintain the level of health
benefits in effect on his last day of employment, for a period of up to one year
after the termination. The same termination benefits would apply in the event of
Mr. Sanfilippo’s termination without cause or his termination for good
reason, within one year following a Change of Control. In addition, the stock
options granted to Mr. Sanfilippo upon the commencement of his employment
with the Company would become fully vested in the event of his termination
without cause or his termination for good reason, within one year following a
Change of Control. The Company’s obligation to provide the severance benefits
set forth above is contingent upon Mr. Sanfilippo’s execution of a mutual
release of claims satisfactory to the Company.




Agreements with
Gary L. Loebig. Upon his resignation on September 19, 2008, the
Company entered into certain agreements with Mr. Loebig, including a
Termination of Employment Agreement and a Separation and Release Agreement. The
Termination of Employment Agreement provides for the termination of an
employment agreement between the Company and Mr. Loebig, dated May 29,
2008. That Employment Agreement outlined the terms and conditions of his
employment as the Company’s Interim President and Chief Executive Officer, roles
he held from March 31, 2008 until the hiring of Mr. Sanfilippo
effective June 15, 2008. Under the terms of the Employment Agreement,
Mr. Loebig’s salary was unchanged; however, he was entitled to receive a
bonus (the “Cash Bonus”) in the amount of $25,000 per month for the period
during which he held the titles of Interim President and Chief Executive
Officer. As described above, Mr. Loebig received payment of the Cash Bonus
pursuant to these terms.




-14-


The
Termination of Employment Agreement provided for the payment to Mr. Loebig
of one-half of the annual base salary defined in the employment agreement, as
well as any accrued but unpaid salary, vacation, vested benefits, and
unreimbursed expenses through the date of his termination.




The
Separation and Release Agreement also provides for the continuation of the terms
and provisions of Stock Option Agreements between the Company and
Mr. Loebig, in existence upon his termination. In the event of a Change of
Control, these stock option agreements provide for full vesting of all nonvested
stock options held by Mr. Loebig.




The
Company and Mr. Loebig also entered into a Consulting Agreement, under
which he will provide consulting services a minimum of one day per month and a
maximum of four days per month, at the request of the Company’s Chief Executive
Officer or the Company’s Board of Directors. The agreement will terminate on
September 19, 2009. In consideration for his consulting services,
Mr. Loebig will receive a fee in the amount of $3,200 per month. In
addition, he will continue his participation in the Company’s health care
benefit plans for himself and his spouse for the term of the
agreement.




Agreements with
Clifton E. Lind. Upon his resignation on May 1, 2008, the
Company entered into certain agreements with Mr. Lind, including a
Termination of Employment Agreement and a Separation and Release Agreement. The
Termination of Employment Agreement provides for the termination of an
employment agreement between the Company and Mr. Lind, dated September
9, 2004, as well as payment to Mr. Lind of any accrued but unpaid
salary, vacation, vested benefits, and unreimbursed expenses through the date of
his termination. The Separation and Release Agreement provided for the
termination of the severance provisions of Mr. Lind’s employment agreement
with the Company, as well as the reimbursement of up to an aggregate
of $7,500 for the fees and expenses of a single special counsel to
Mr. Lind, incurred in the course of negotiating the Separation and Release
Agreement, the Termination of Employment Agreement, and a Consulting
Agreement.




The
Separation and Release Agreement also provides for the continuation of the terms
and provisions of Stock Option Agreements between the Company and Mr. Lind,
in existence upon his termination. In the event of a Change of Control, these
stock option agreements provide for full vesting of all nonvested stock options
held by Mr. Lind.




The
Company and Mr. Lind also entered into a consulting agreement, under which
he will provide consulting services a minimum of four days per month and a
maximum of twelve days per month, at the request of the Company’s Chief
Executive Officer or the Company’s Board of Directors. The agreement will
terminate on May 31, 2011. In consideration for his consulting services,
Mr. Lind will receive fees in the amount of $30,000 per month for
the period May 2008 through October 2008; $25,000 per month for the
period November 2008 through April 2009; $22,500 per month for
the period May 2009 through October 2010; and $20,000 per month
for the period November 2010 through May 2011. In addition, he will
continue his participation in the Company’s health care benefit plans for
himself and his spouse for the term of the agreement.




Agreement with P.
Howard Chalmers. Effective August 31, 2008, the role and
responsibilities of Mr. Chalmers were revised such that he was no longer an
Executive Officer of the Company. Effective on that date, the Company entered
into an agreement with Mr. Chalmers, under which he agreed to a reduction
in the annual rate of his base salary from $189,000 to $113,400,
continuing through the earlier of (i) December 31, 2008 or, (ii) his
acceptance of other employment or consulting engagement requiring a majority of
his business time and attention with compensation at an annual rate aggregating
more than $150,000. The agreement also provided that he would continue to
be eligible for Company benefits consistent with those he received prior to the
agreement.




In
addition, the agreement established that beginning January 1, 2009,
Mr. Chalmers would provide consulting services to the Company as reasonably
requested for a period ending June 30, 2009. During that consulting
period, he would receive consulting fees at an hourly rate, or a project fees to
be determined for services actually rendered, but not receive salary, benefits,
or other compensation from the Company. The agreement also provides, in exchange
for the confirmation and execution of a general release of all claims against
the Company, for the continuation of the terms and provisions of Stock Option
Agreements between the Company and Mr. Chalmers in existence upon his
termination.




-15-


Mr. Chalmers
remained an employee of the Company until his termination effective December 31,
2008, and has subsequently commenced consulting services to the Company in
accordance with the terms of the agreement.




Agreements with
Scott A. Zinnecker.Upon his resignation on September 30, 2008,
the Company entered into certain agreements with Mr. Zinnecker, including a
Separation, Release and Indemnification Agreement. In consideration for his
execution of the agreement, Mr. Zinnecker received a severance payment of
$58,153.92, equal to four months of his annual base salary, less customary
payroll deductions, as well as any accrued but unpaid salary, vacation, vested
benefits, and unreimbursed expenses through the date of his termination. The
agreement also provides for the continuation of the terms and provisions of
Stock Option Agreements between the Company and Mr. Zinnecker in existence
upon his termination.




The
Company and Mr. Zinnecker also entered into a consulting agreement, under
which he will provide consulting services at the request of the Company’s Chief
Executive Officer or the Company’s Board of Directors. The agreement will
terminate on July 15, 2009. In consideration for his consulting services,
Mr. Zinnecker will receive a fee in the amount of $150 per hour for all
services provided upon the Company’s request. There is no minimum number of
hours required as part of the consulting agreement, and there are certain limits
as to the maximum days per month which Mr. Zinnecker may provide
services.




Agreements with
Virginia E. Shanks.On July 22, 2008, the Company entered into an
executive employment agreement with Ms. Shanks, which sets forth certain
terms and conditions relating to her employment as the Company’s Senior Vice
President and Chief Marketing Officer. Ms. Shanks‘ employment agreement
provides that she will receive an annual base salary of $250,000, subject
to covenants in the employment agreement and in an Agreement Regarding
Proprietary Developments, Confidential Information and Non-Solicitation. The
annual salary will be subject to an annual review by the Company’s Chief
Executive Officer. In addition, she has an opportunity to earn an annual bonus
equal to 60% of her base salary upon achievement of certain performance targets
approved by the Company’s Chief Executive Officer, and up to a maximum of 100%
of her base salary for overachievement of such performance targets. The
employment agreement also specifies that Ms. Shanks will be eligible to
enroll in the Company’s benefit programs and vacation policies as they are
established from time-to-time for senior-level executive employees.




Pursuant
to the employment agreement, on July 22, 2008 the Company granted
Ms. Shanks 250,000 stock options pursuant to the Company’s 2008 Employment
Inducement Award Plan. The options became immediately exercisable, but are
subject to vesting over four years. Specifically, one-sixteenth (1/16) of the
options vest on October 22, 2008, with the remaining options vesting
one-sixteenth (1/16) quarterly until fully vested.




Ms. Shanks
will serve as Vice President of Sales until her successor is chosen and
qualified or until her death, resignation, retirement, disqualification or
removal. If there is a Change of Control of the Company, Ms. Shanks may, in
certain circumstances, receive one year of base salary and one year of a target
bonus payment; provided, however, that if the Change of Control occurs after
July 22, 2009, Ms. Shanks would, in such circumstances, receive two
years of base salary and two years of target bonus payments. Ms. Shanks is
eligible to receive a gross-up payment in the event that any payment by the
Company to or for the benefit of Ms. Shanks is subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code.




Agreements with
Uri L. Clinton.On August 16, 2008, the Company entered into an
executive employment agreement with Mr. Clinton, which sets forth certain
terms and conditions relating to his employment as the Company’s General
Counsel. Mr. Clinton’s employment agreement provides that he will receive
an annual base salary of $250,000, subject to covenants in the employment
agreement and in an Agreement Regarding Proprietary Developments, Confidential
Information and Non-Solicitation. The annual salary will be subject to an annual
review by the Company’s Chief Executive Officer. In addition, he has an
opportunity to earn an annual bonus equal to 60% of his base salary upon
achievement of certain performance targets approved by the Company’s Chief
Executive Officer, and up to a maximum of 100% of his base salary for
overachievement of such performance targets. The employment agreement also
specifies that Mr. Clinton will be eligible to enroll in the Company’s
benefit programs and vacation policies as they are established from time-to-time
for senior-level executive employees.




Pursuant
to the employment agreement, on August 16, 2008 the Company granted
Mr. Clinton 250,000 stock options pursuant to the Company’s 2008 Employment
Inducement Award Plan. The options became immediately exercisable, but are
subject to vesting over four years. Specifically, one-sixteenth (1/16) of the
option vests on November 16, 2008, with the remaining options vesting
one-sixteenth (1/16) quarterly until fully vested.




Mr. Clinton
will serve as General Counsel until his successor is chosen and qualified or
until his death, resignation, retirement, disqualification or removal. If there
is a Change of Control of the Company, Mr. Clinton may, in certain
circumstances, receive one year of base salary and one year of a target bonus
payment; provided, however, that if the Change of Control occurs after August
16, 2009, Mr. Clinton would, in such circumstances, receive two years of
base salary and two years of target bonus payments. Mr. Clinton is eligible
to receive a gross-up payment in the event that any payment by the Company to or
for the benefit of Mr. Clinton is subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code.




-16-


Agreements with
Patrick R. Ramsey.On September 14, 2008, the Company entered into
an executive employment agreement with Mr. Ramsey, which sets forth certain
terms and conditions relating to his employment as the Company’s Senior Vice
President and Chief Operating Officer. Mr. Ramsey’s employment agreement
provides that he will receive an annual base salary of $300,000, subject to
covenants in the employment agreement and in an Agreement Regarding Proprietary
Developments, Confidential Information and Non-Solicitation. The annual salary
will be subject to an annual review by the Company’s Chief Executive Officer. In
addition, he has an opportunity to earn an annual bonus equal to 60% of his base
salary upon achievement of certain performance targets approved by the Company’s
Chief Executive Officer, and up to a maximum of 100% of his base salary for
overachievement of such performance targets. The employment agreement also
specifies that Mr. Ramsey will be eligible to enroll in the Company’s
benefit programs and vacation policies as they are established from time-to-time
for senior-level executive employees.




For a
period of six months following the effective date of the employment agreement,
the Company will pay expenses related to Mr. Ramsey’s commuting between
Austin, Texas (the Company’s home office location) and Las Vegas, Nevada; as
well reasonable costs of an apartment in Austin, Texas, car rental and other
related and reasonable expenses. The Company will pay for the reasonable moving
expenses for Mr. Ramsey’s relocation to Austin, Texas.




Pursuant
to the employment agreement, on September 14, 2008 the Company granted
Mr. Ramsey 300,000 stock options pursuant to the Company’s 2008 Employment
Inducement Award Plan. The options became immediately exercisable, but are
subject to vesting over four years. Specifically, one-fourth (1/4) of the
options vest on September 14, 2009 and the remaining options vest in equal
quarterly installments until fully vested.




Mr. Ramsey
will serve as Chief Operating Officer until his successor is chosen and
qualified or until his death, resignation, retirement, disqualification or
removal. If there is a Change of Control of the Company, Mr. Ramsey may, in
certain circumstances, receive one year of base salary and one year of a target
bonus payment; provided, however, that if the Change of Control occurs after
September 14, 2009, Mr. Ramsey would, in such circumstances, receive two
years of base salary and two years of target bonus payments. Mr. Ramsey is
eligible to receive a gross-up payment in the event that any payment by the
Company to or for the benefit of Mr. Ramsey is subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code.




Agreement with
Mick Roemer. On January 12, 2009, the Company entered into an
executive employment agreement with Mr. Roemer, which sets forth certain
terms and conditions relating to his employment as Senior Vice President of
Sales of the Company. Mr. Roemer’s employment agreement provides that he
will receive an annual base salary of $200,000, subject to covenants in the
employment agreement and in an Agreement Regarding Proprietary Developments,
Confidential Information and Non-Solicitation. The annual salary will be subject
to an annual review by the Company’s Chief Executive Officer. In addition, he is
entitled to receive a quarterly incentive bonus (the “Incentive Bonus“) upon the
achievement of new sales and new placement goals mutually agreed to by and
between Mr. Roemer and the Company’s Chief Executive Officer for each
quarter. The Incentive Bonus shall not exceed $100,000 in any individual twelve
(12) month period. In addition to the Incentive Bonus, Mr. Roemer has an
opportunity to earn an annual bonus equal to 60% of his base salary upon
achievement of certain performance targets approved by the Company’s Chief
Executive Officer, and up to a maximum of 100% of his base salary for
overachievement of such performance targets. The employment agreement also
specifies that Mr. Roemer will be eligible to enroll in the Company’s
benefit programs and vacation policies as they are established from time-to-time
for senior-level executive employees.




Pursuant
to the employment agreement, the Company granted Mr. Roemer 200,000 stock
options pursuant to the Company’s 2008 Employment Inducement Award Plan. The
options became immediately exercisable, but are subject to vesting over four
years. Specifically, one-fourth (1/4) of the options will vest on the first
anniversary of the grant date and the remaining options vest in equal quarterly
installments until fully vested.




Mr. Roemer
will serve as Senior Vice President of Sales until his successor is chosen and
qualified or until his death, resignation, retirement, disqualification or
removal. If there is a Change of Control of the Company, Mr. Roemer may, in
certain circumstances, receive one year of base salary and one year of a target
bonus payment; provided, however, that if the Change of Control occurs after
January 12, 2009, Mr. Roemer would, in such circumstances,
receive two years of base salary and two years of target bonus payments.
Mr. Roemer is eligible to receive a gross-up payment in the event that any
payment by the Company to or for the benefit of Mr. Roemer is subject to
the excise tax imposed by Section 4999 of the Internal Revenue
Code.




-17-


Change-in-Control
Benefits. Generally, the Company does not provide executive officers with
any special benefits that are triggered solely upon a change-in-control.
However, upon a change-in-control, virtually all of the Company’s outstanding
stock options, including those held by our executive officers, become fully
vested. Change-in-control generally refers to certain corporate transactions
involving the Company such as a merger or consolidation, sale of assets,
dissolution or the acquisition by any person of at least 51% of our voting
stock. The Compensation Committee believes that for senior executives, including
the Named Executive Officers, accelerated vesting of stock options in the event
of a change-in-control is generally appropriate because in some
change-in-control situations, equity of the target company is cancelled making
immediate acceleration necessary in order to preserve the value of the option
grants. In addition, the Company relies on long-term incentive awards to provide
our executive officers with the opportunity to accumulate substantial resources
to fund their retirement income, and the Compensation Committee believes that a
change in control event is an appropriate liquidation point for awards designed
for such purpose.




General Severance
Plan. In June 2007, the Company established the Multimedia Games,
Inc. Severance Plan for Select Employees (“Severance Plan”). Under this plan,
and other than for Mr. Sanfilippo and other executive officers with whom
the Company has employment agreements, it is at the discretion of the Plan
Administrator, and subject to approval by the Company’s Chief Executive Officer,
whether an executive officer, or any employee, would be entitled to receive any
cash severance benefits due to an involuntary termination of employment.
However, in no event may cash severance benefits exceed twice an executive
officer’s annual compensation (generally defined as base salary) for the
calendar year preceding the calendar year during which the executive officer
involuntarily terminated. The Severance Plan Administrator is the Company’s
Senior Vice President of Human Resources.




Under the
Severance Plan, there are no commitments for the Company to make severance
payments to any employee, including any of the Named Executive Officers. Any
payments made pursuant to the Plan are determined on a case-by-case basis. No
payments were made under the Severance Plan to any current or former executive
officers during the fiscal year ended
September 30, 2008.




Compliance with
Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code restricts deductibility of executive compensation paid to
our Chief Executive Officer and each of the four other most highly compensated
executive officers holding office at the end of any year to the extent such
compensation exceeds $1,000,000 for any of such officers in any year and
does not qualify for an exception under Section 162(m) or related
regulations. The Committee’s policy is to qualify its executive compensation for
deductibility under applicable tax laws to the extent practicable. Income
related to stock options granted under our equity compensation plans generally
qualifies for an exemption from these restrictions imposed by
Section 162(m). In the future, the Committee will continue to evaluate the advisability of
qualifying its executive compensation for full deductibility.






-18-


SUMMARY
COMPENSATION TABLE




The
following summary compensation table sets forth information concerning aggregate
compensation earned by or paid to (i) the individual serving as our Chief
Executive Officer during our 2008 fiscal year, (ii) the individuals
serving as our Chief Financial Officer during our 2008 fiscal year, and
(iii) our three other highly compensated executive officers who served in
such capacities during fiscal year 2008 but were not serving in such roles
as of September 30, 2008. We refer to these individuals as our “Named
Executive Officers.” Except for Mr. Sanfilippo, our Chief Executive
Officer, and Mr. Cieslewicz, our Chief Financial Officer, none of our
Executive Officers employed by us at the end of fiscal year 2008 received
compensation in excess of $100,000 during fiscal
year 2008.




Name and Principal Position
                        Fiscal
                          Year
                        Salary
                          ($)
                        Bonus
                          ($)
                        Stock
      Awards
                          ($)
                        Stock
                          Option
      Awards (1)
                          ($)
                        Non-Equity
                          Incentive
      Plan
                          Compensation
                          ($)
                        Change
      in
                          Pension
                          Value
      and
                          Non-Qualified
      Deferred Compensation Earnings
                          ($)
                        All
      Other
                          Compensation (2)
                          ($)
                        Total
                          ($)Anthony
      M. Sanfilippo (3)
                          President
      and Chief Executive Officer
                        2008
                        121,154
                        181,731
                        —
                        211,610
                        —
                        —
                        30,844
                        545,339Gary
      L. Loebig (4)
                        2008
                        194,250
                        119,231
                        —
                        63,265
                        —
                        —
                        31,832
                        408,578Former
      President and
                          Chief
      Executive Officer
                        2007
                        192,827
                        —
                        —
                        53,251
                        —
                        —
                        7,414
                        253,492Clifton
      E. Lind (5)
                        2008
                        275,192
                        —
                        —
                        —
                        —
                        —
                        119,383
                        394,575Former
      President and
                          Chief
      Executive Officer
                        2007
                        450,000
                        —
                        —
                        80,220
                        —
                        —
                        17,493
                        547,713Randy
      S. Cieslewicz (6)
                        2008
                        215,962
                        —
                        —
                        201,437
                        —
                        —
                        8,670
                        426,069Vice
      President and
                          Chief
      Financial Officer
                        2007
                        176,346
                        52,500
                        —
                        113,868
                        —
                        —
                        8,554
                        351,268P.
      Howard Chalmers
                        2008
                        182,505
                        —
                        —
                        23,896
                        —
                        —
                        7,331
                        213,732Former
      Senior Vice President of Planning and Corporate
    Communications
                        2007
                        187,616
                        —
                        —
                        56,707
                        —
                        —
                        7,625
                        251,948Scott
      A. Zinnecker (7)
                          Executive
      Vice President
                        2008
                        181,731
                        —
                        —
                        22,948
                        —
                        —
                        7,550
                        212,229




-19-




(1)
            Amounts
      disclosed in the “Option Awards” column relate to grants of stock options
      made under one or more of the Company’s stock option plans (See
      “Item 11. Executive Compensation”). With respect to each stock option
      grant, the amounts disclosed generally reflect the compensation cost that
      the Company recognized for financial accounting purposes in
      fiscal year 2008, in accordance with Statement of Financial
      Accounting Standards No. 123 (revised), “Share-Based Payment,” or
      SFAS 123(R). Generally, SFAS 123(R) requires the full grant-date
      fair value of a stock option award to be amortized and recognized as
      compensation cost over the service period that relates to the
      award.




(2)
            Amounts
      disclosed in the “All Other Compensation” column include the following
      Company contributions to the 401(k) Plan accounts of each Named
      Executive Officer for fiscal years 2008 and 2007, respectively:
      Mr. Sanfilippo, $4,154 and $0; Mr. Loebig, $10,448 and $7,414;
      Mr. Lind, $13,597 and $15,931; Mr. Cieslewicz, $8,640 and
      $8,554; Mr. Chalmers, $7,301 and $7,625; and Mr. Zinnecker,
      $7,280 (2008 only). Mr. Sanfilippo’s amount also includes
      relocation costs of $26,690. Amounts for Messrs. Loebig and Lind include
      payouts in respect of unused vacation of $21,354 and $101,674,
      respectively. Amounts for Messrs. Lind and Zinnecker include reimbursement
      for health club fees under the Company’s “Good Health” program of $138 and
      $240, respectively. Amounts for Messrs. Loebig. Lind, Cieslewicz, Chalmers
      and Zinnecker include a $30 gift card provided to all employees at
      Thanksgiving. The amount for Mr. Lind includes the Company’s direct
      payment and reimbursement for his payment of membership fees and costs
      related to business entertainment at certain clubs in the amount
      of $3,944.




(3)
            Mr. Sanfilippo
      commenced his employment with the Company effective June 15, 2008. In
      recognition of his service during fiscal year 2008, he was awarded a
      pro-rata bonus under the terms of his employment
  agreement.




(4)
            Mr. Loebig
      was awarded a bonus in recognition of his service as the Company’s Interim
      President and Chief Executive Officer. This bonus was paid to
      Mr. Loebig prior to his termination from the Company, effective
      September 18, 2008.




(5)
            Effective
      March 31, 2008, Mr. Lind resigned as President, Chief Executive
      Officer and a director of the Company and ceased to be an Executive
      Officer of the Company.




(6)
            Mr. Cieslewicz
      received three cash payments during fiscal year 2007, each in the amount
      of $17,500, in recognition of his efforts and service as the Company’s
      Interim Chief Financial Officer between May 2006 and April
      2007.




(7)
            Mr. Zinnecker
      was not a Named Executive Officer for the fiscal year ended
      September 30, 2007; as such, data is not provided for him for
      that fiscal year.






-20-


GRANTS
OF PLAN-BASED AWARDS IN FISCAL YEAR 2008




The
following table provides information regarding grants of plan-based awards made
to certain Named Executive Officers during the fiscal year ended
September 30, 2008.




Estimated
      Future Payouts Under
                  Equity
      Incentive Plan AwardsName
                Grant
                  Date
                Date
      AwardApproved
                Threshold
                  (#)
                Target
                  (#)
                Maximum
                  (#)
                All
      Other
                  Stock
      Awards: Number of Shares of Stock or Units
                  (#)
                All
      Other Option Awards: Number of Securities Underlying Options
                  (#)
                Exercise or
                  Base Price of
                  Options Awards
                  ($/Sh)
                Grant Date
                  Fair Value of
                  Stock
      and
                  Option Awards
                  ($) (1)Mr. Sanfilippo(2)
                6/15/08
                6/15/08
                —
                —
                —
                —
                1,300,000
                4.68
                2,900,300Mr. Loebig(3)
                7/14/08
                7/14/08
                —
                —
                —
                —
                23,643
                3.59
                39,5977/14/08
                7/14/08
                —
                —
                —
                —
                56,357
                3.59
                94,387Mr. Cieslewicz(3)
                7/14/08
                7/14/08
                —
                —
                —
                —
                15,000
                3.59
                25,1227/14/08
                7/14/08
                —
                —
                —
                —
                65,000
                3.59
                108,862P.
      Howard Chalmers
                —
                —
                —
                —
                —
                —
                —
                —
                —Mr. Zinnecker(3)
                7/14/08
                7/14/08
                —
                —
                —
                —
                40,000
                3.59
                66,992




(1)
            The
      amounts disclosed in the “Grant date fair value of stock and option
      awards” column were computed in accordance with
      SFAS 123(R).


(2)
            On
      June 15, 2008, the Board of Directors approved an award to
      Mr. Sanfilippo of 1,300,000 nonqualified stock options, or NQSOs, in
      connection with his appointment as the Company’s President and Chief
      Executive Officer. These awards were issued under the Company’s 2008
      Employment Inducement Award Plan. The options became immediately
      exercisable, but are subject to a vesting over four years in equal
      quarterly installments.


(3)
            These
      awards were issued under the Company’s 2002 Stock Option
    Plan.





-21-


OUTSTANDING
EQUITY AWARDS AT 2008 FISCAL YEAR-END




The
following table provides information concerning the current holdings of stock
options by the Named Executive Officers as of September 30, 2008. This
table includes unexercised and unvested option awards. Individual equity grants
are shown separately for each such Named Executive Officer.







Option
      AwardsName
                Grant
                  Date
                Number
      of
                  Securities
                  Underlying
                  Unexercised
                  Options
                  (#)
                  Exercisable
                  (1)
                Number
      of
                  Securities
                  Underlying
                  Unexercised
                  Options
                  (#)
                  Unexercisable
                  (1)
                Option
                  Exercise
                  Price
                  ($)
                  
                  (2)
                Option
                  Expiration
                  DateMr. Sanfilippo
                6/15/08
                1,300,000
                —
                4.6800
                6/15/18Total
                1,300,000
                —Mr. Loebig
                3/21/01
                20,000
                —
                2.3959
                3/21/113/21/01
                19,102
                —
                2.3959
                3/21/119/21/01
                8,436
                —
                3.7667
                9/21/119/21/01
                141,564
                —
                3.7667
                9/21/113/25/05
                37,500
                12,500
                7.6100
                3/25/157/14/08
                —
                23,643
                3.5900
                7/14/187/14/08
                —
                56,357
                3.5900
                7/14/18Total
                226,602
                92,500Mr. Lind
                5/29/00
                54,000
                —
                1.0000
                5/29/103/21/01
                133,024
                —
                2.3959
                3/21/119/21/01
                300,000
                —
                3.7667
                9/21/119/21/01
                30,000
                —
                3.7667
                9/21/119/24/02
                40,000
                —
                8.2750
                9/24/1211/13/02
                10,774
                —
                9.2800
                11/13/1211/13/02
                389,226
                —
                9.2800
                11/13/129/24/03
                40,000
                —
                16.8125
                9/24/13Total
                997,024
                —Mr. Cieslewicz
                1/24/02
                70,000
                —
                10.1500
                1/24/123/25/05
                3,125
                3,125
                7.6100
                3/25/158/4/05
                7,500
                3,750
                9.9700
                8/4/154/6/07
                3,304
                20,324
                11.7500
                4/6/174/6/07
                21,696
                54,676
                11.7500
                4/6/177/14/08
                —
                15,000
                3.5900
                7/14/187/14/08
                —
                65,000
                3.5900
                7/14/18Total
                105,625
                161,875Mr. Chalmers
                11/13/02
                32,322
                —
                9.2800
                11/13/1211/13/02
                78,150
                —
                9.2800
                11/13/1211/13/02
                2,026
                —
                9.2800
                11/13/1210/15/04
                1
                —
                12.0950
                10/15/1410/15/04
                19,999
                —
                12.0950
                10/15/143/25/05
                10,386
                6,250
                7.6100
                3/25/153/25/05
                8,364
                —
                7.6100
                3/25/15Total
                151,248
                6,250Mr. Zinnecker
                11/13/02
                32,322
                —
                9.2800
                11/13/1211/13/02
                117,678
                —
                9.2800
                11/13/123/25/05
                12,502
                6,250
                7.6100
                3/25/153/25/05
                6,248
                —
                7.6100
                3/25/157/14/08
                —
                40,000
                3.5900
                7/14/18Total
                168,750
                46,250




-22-




(1)
            Stock
      options are generally subject to ratable vesting over four years. Options
      granted to Mr. Sanfilippo are exercisable immediately but vest over
      four years in equal quarterly installments. Options to other NEOs listed
      above vest 25% on each of the first four anniversaries of their
      grant date.


(2)
            The
      option exercise price is equal to the closing share price of the Company’s
      stock on the day of grant.




OPTION
EXERCISES AND STOCK VESTED IN FISCAL YEAR 2008






The
following table provides information regarding stock options exercised during
the fiscal year ended September 30, 2008, including the number of
shares acquired upon exercise and the value (value of common stock in excess of
exercise price at date of exercise) realized, before payment of applicable
withholding tax.




Option
      AwardsName
                  Number of Shares
                    Acquired on Exercise
                    (#)
                  Value Realized
                    on
      Exercise
                    ($)Mr. Sanfilippo
                  —
                  —Mr. Loebig
                  —
                  —Mr. Lind
      (1)
                  37,500
                  227,779Mr. Cieslewicz
                  —
                  —Mr. Chalmers
                  —
                  —Mr. Zinnecker
                  —
                  —




(1)
            Reflects
      the exercise of stock options by Mr. Lind on
      November 6, 2007. The options had an exercise price of
      $1.2709 per share.




PENSION
BENEFITS IN FISCAL YEAR 2008




The
Company does not maintain a tax-qualified defined benefit retirement
plan.




NONQUALIFIED
DEFERRED COMPENSATION IN FISCAL YEAR 2008




The
Company does not maintain any non-qualified supplemental retirement plans or
deferred compensation plans for our executive officers.




POTENTIAL
TERMINATION PAYMENTS




This
section describes and quantifies potential payments that may be made or benefits
that may provided to each Named Executive Officer at, following, or in
connection with the resignation, severance, retirement, or other termination of
the Named Executive Officer or a Change of Control of the Company. For this
purpose, it is assumed that each of the foregoing events occurred on the last
day of the Company’s fiscal year ended September 30, 2008. The
determination of potential payments and benefits is based on specific factors
and assumptions which are further discussed below. Since these factors and
assumptions are subject to change, the payments and benefits that may actually
be made to a Named Executive Officer may differ
materially from the payments and benefits disclosed in this
section.




Mr. Chalmers
terminated his employment with the Company effective December 31, 2008. For
purposes of this disclosure (which assumes certain termination events occurred
on the last day of the Company’s fiscal year) and pursuant to the Company’s
General Severance Plan, Mr. Chalmers would, at the discretion of the Plan
Administrator, have been eligible to receive cash severance benefits not to
exceed twice his annual compensation (which was $113,400 as of
September 30, 2008) in the event of his Involuntary Termination
without Cause, or Voluntary Resignation for Good Reason, or his Termination
without Cause following a Change in Control. Details regarding actual
termination arrangements for Mr. Chalmers are provided in the section
titled “Employment And Termination Arrangements And Change-In-Control
Benefits.”




Potential
termination payment values are not provided for Messrs. Loebig, Lind and
Zinnecker, each of whom terminated their employment with the Company on or
before September 30, 2008; additional details regarding termination
arrangements for Messrs. Loebig, Lind and Zinnecker are provided in the section
titled “Employment And Termination Arrangements And Change-In-Control
Benefits.”




-23-




Anthony
M. Sanfilippo




Termination Event
                  Cash
                    Severance
                    ($)
                  Acceleration and
                    Other Benefits from
                    Stock
      Options (1)
                    ($)
                  Other
                    ($)
                  Total
                    ($)Retirement
                  —
                  —
                  —
                  —Death
      or Disability
                  —
                  —
                  —
                  —Voluntary
      Resignation
                  —
                  —
                  —
                  —Termination
      for Cause
                  —
                  —
                  —
                  —Involuntary
      Termination without Cause, or Voluntary Resignation for Good Reason (2)
                  1,125,000
                  —
                  —
                  1,125,000Change
      in Control without Termination
                  —
                  —
                  —
                  —Termination
      without Cause following a Change in Control (2)
                  1,125,000
                  —
                  —
                  1,125,000




(1)
            The
      amounts reflect the aggregate in-the-money value of all nonvested
      outstanding stock options, based on the Company’s closing share price
      of $4.33 on
September 30, 2008.


(2)
            Pursuant
      to Mr. Sanfilippo’s Employment Agreement (described in the section titled “Employment
      And Termination Arrangements And Change-In-Control Benefits”), in
      the event that the termination occurs on or before June 15, 2009, the
      Company would pay his one year of base salary continuation and target
      bonus; or in the event that the termination occurs after June 15, 2009,
      two years of base salary continuation and two years of target
      bonus.






Randy
S. Cieslewicz




Termination Event
                  Cash
                    Severance
                    ($)
                  Acceleration and
                    Other Benefits from
                    Stock
      Options (1)
                    ($)
                  Other
                    ($)
                  Total
                    ($)Retirement
                  —
                  —
                  —
                  —Death
      or Disability
                  —
                  59,200
                  —
                  59,200Voluntary
      Resignation
                  —
                  —
                  —
                  —Termination
      for Cause
                  —
                  —
                  —
                  —Involuntary
      Termination without Cause, or Voluntary Resignation for Good Reason (2)
                  235,000
                  59,200
                  —
                  294,200Change
      in Control without Termination
                  —
                  59,200
                  —
                  59,200Termination
      without Cause following a Change in Control (2)
                  235,000
                  59,200
                  —
                  294,200




(1)
            The
      amounts reflect the aggregate in-the-money value of all nonvested
      outstanding stock options, based on the Company’s closing share price
      of $4.33 on
September 30, 2008.


(2)
            Pursuant
      to the Company’s General Severance Plan, Mr. Cieslewicz would, at the
      discretion of the Plan Administrator, be eligible to receive cash
      severance benefits not to exceed twice his annual compensation. For
      purposes of this disclosure, the amounts reflect the lump sum payment
      equal to 12 months of his annual base salary of $235,000 as
      of September 30, 2008.




COMPENSATION
OF DIRECTORS




The
Company maintains a plan to compensate the members of its Board of Directors for
their services as directors, including serving on committees of the board. Under
the Director Compensation Plan, each of the Company’s directors
receives $37,500 per year, except for the Chairman of the Board,
who receives $75,000 per year. In addition, each director
receives $500 for each board meeting attended in person
and $250 for each board meeting attended by telephone. Directors also
receive the following amounts for serving on committees of the Board of
Directors:




Audit Committee.The members of the Audit Committee each receive an
additional $15,000 per year for serving on the Audit Committee, except for
the Chairman of the Audit Committee, who receives $25,000 per year for
serving on the Audit Committee as its chairman. Each Audit Committee member also
receives $400 for each Audit Committee meeting attended in person
and $200 for each Audit Committee meeting attended by
telephone.




-24-


Nominating and
Governance Committee. The members of the Nominating and Governance
Committee each receive an additional $7,500 per year for serving on the
Nominating and Governance Committee, except for the Chairman of the Nominating
and Governance Committee, who receives $15,000 per year for serving on the
Nominating and Governance Committee as its chairman. Each Nominating and
Governance Committee member also receives $400 for each Nominating and
Governance Committee meeting attended in person and $200 for each
Nominating and Governance Committee meeting attended by telephone.




Compensation
Committee. The members of the Compensation Committee each
receive $5,000 per year for serving on the Compensation Committee, except
for the Chairman of the Compensation Committee, who receives $10,000 per
year. Each Compensation Committee member also receives $400 for each
Compensation Committee meeting attended in person and $200 for each
Compensation Committee meeting attended by telephone. Effective as of September
8, 2008, the annual fee for serving on the Compensation Committee was increased
to $15,000, except for the Chairman, who will receive $25,000 per
year.




Other Committees
of the Board of Directors. The members of any other committee of the
Board of Directors which may be established from time to time, each receive an
additional $5,000 per year for serving on any such committee, except for
the chairman of any such committee, who receives $10,000 per year for
serving as chairman. Each member of any such committee also receives $400
for each meeting of such committee attended in person and $200 for each
meeting of such committee attended by telephone.




In
general, each sitting outside director will receive an option grant on an annual
basis for 10,000 shares of common stock that will vest six months from the
date of grant, subject to restrictions which prevent the sale of such shares.
These restrictions on the sale of the underlying shares lapse with respect
to 25% of the shares annually.




Our
Articles of Incorporation limit the personal liability of our directors for
breaches by them of their fiduciary duties. Our bylaws require us to indemnify
our directors to the fullest extent permitted by Texas law. We have entered into
indemnification agreements with two of our directors, and intend to enter such
agreements in the near future with the remaining directors and with our Interim
Chief Executive Officer and Chief Financial Officer.




The
following table provides a summary of total compensation paid to the Company’s
outside directors during the fiscal year ended
September 30, 2008.




Name
                
                Fees
      Earned or
                  Paid
      in Cash (1)
                  ($)
                Stock
                  Awards
                  ($)
                Option
                  Awards
      (2)
                  ($)
                All
      Other
                  Compensation
                  ($)
                Total
                  ($)Neil
      E. Jenkins
                
                67,300
                –
                43,378
                –
                110,678Michael
      J. Maples, Sr. (3)
                
                108,600
                –
                43,378
                –
                151,978Emanuel
      R. Pearlman
                
                51,600
                –
                43,378
                –
                94,978Robert
      D. Repass
                
                81,500
                –
                43,378
                –
                124,878John
      M. Winkelman
                
                90,400
                –
                43,378
                –
                133,778




(1)
            Reflects
      the amount of cash compensation earned by directors, including annual
      retainers for Board of Directors and committee service, and meeting
      fees.


(2)
            Represents
      the dollar amount recognized for financial statement reporting purposes
      with respect to the grant date fair value of option grants made to each
      director during the fiscal year ended September 30, 2008. The
      fair value was estimated using the Black-Scholes option pricing model in
      accordance with SFAS 123R.


(3)
            Mr. Maples
      serves as the Company’s non-executive Chairman of the Board of
      Directors




Compensation
      Committee Interlocks and Insider
Participation




During
the fiscal year ended September 30, 2008, the Compensation Committee
of our Board of Directors consisted of Mr. Winkelman and
Mr. Mr. Pearlman. Neither of these individuals has served at any time
as an officer or employee of the Company or is an Executive Officer at any
company where an Executive Officer of the Company serves on the Compensation
Committee.




-25-


COMPENSATION
COMMITTEE REPORT




We, the
Compensation Committee of the Board of Directors, have reviewed and discussed
the foregoing Compensation Discussion and Analysis with the management of the
Company. Based on such review and discussion, we are of the opinion that the
executive compensation policies and plans provide appropriate compensation to
properly align the Company’s performance and the interests of its shareholders
through the use of competitive and equitable executive compensation in a
balanced and reasonable manner, for both the short and long-term. Accordingly,
we have recommended to the Board of Directors that the foregoing Compensation
Discussion and Analysis be included in the Company’s Annual Report on
Form 10-K for the year ended September 30, 2008, and in the proxy
statement relating to the Company’s 2009 Annual Meeting of
Shareholders.




Submitted
by the Compensation Committee of the Board of Directors:




COMPENSATION
COMMITTEE


Neil E.
Jenkins (Chairman)


Emanuel
R. Pearlman


John M.
Winkelman








-26-


ITEM 12.
Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder
Matters






Security
Ownership of Management and Certain Beneficial Owners




The
following table sets forth information known to us with respect to the
beneficial ownership of our common stock as of January 16, 2009 by
(i) each person known by us to own beneficially more than 5% of
the outstanding shares of our common stock, (ii) each director,
(iii) each Named Executive Officer, and (iv) all of our directors and
executive officers as a group:




Beneficial
      Owner(1)
                Number
      of Shares
                  Beneficially Owned
                Percent
      of Class(2)Royce
      & Associates, LLC
                2,111,338(3)
                7.9%Baupost
      Group LLC/MA
                2,037,552(4)
                7.6%Dolphin
      Limited Partnership III, L.P.
                1,907,935(5)
                7.1%Dimensional
      Fund Advisors, Inc.
                1,731,572(6)
                6.5%Epoch
      Investment Partners, Inc.
                1,708,560(7)
                6.4%Magnetar
      Capital Partners LP
                1,690,537(8)
                6.3%PAR
      Investment Partners, L.P.
                1,455,356(9)
                5.5%Scoggin
      Worldwide Fund, Ltd.
                1,436,275(10)
                5.4%Barclays
      Global Investors, NA.
                1,430,637(11)
                5.4%Anthony
      M. Sanfilippo
                1,600,000(12)
                5.7%Randy
      Cieslewicz
                118,825(13)
                *Clifton
      E. Lind
                997,024(14)
                3.7%Gary
      L. Loebig
                227,602(15)
                *P.
      Howard Chalmers
                151,248(16)
                *Scott
      Zinnecker
                168,750(17)
                *Michael
      J. Maples, Sr.
                97,500(18)
                *Robert
      D. Repass
                192,500(19)
                *John
      M. Winkelman
                240,000(20)
                *Neil
      E. Jenkins
                20,000(21)
                *Emanuel
      R. Pearlman
                43,891(22)All
      executive officers and directors as a group (15 persons)
                4,867,340(23)
                15.6%


*
              Represents
      beneficial ownership of less than one
percent.




(1)
            Unless
      otherwise noted, the address for all officers and directors is the address
      of our principal executive offices at 206 Wild Basin, Building B,
      Fourth Floor, Austin, Texas 78746.




(2)
            Percentages
      of ownership are based on 26,642,942 shares of common stock outstanding on
      January 16, 2009. Shares of common stock subject to stock
      options which are currently exercisable or will become exercisable within
      60 days after January 16, 2009, are deemed outstanding for
      computing the percentage for the person or group holding such options, but
      are not deemed outstanding for computing the percentage for any other
      person or group.




(3)
            Pursuant
      to Schedule 13G/A dated February 4, 2008, filed with the Securities and
      Exchange Commission, Royce & Associates, LLC reported that as of
      December 31, 2007, it had sole voting power over 2,111,338 shares and sole
      dispositive power over 2,111,338 shares and that its address is 1414
      Avenue of the Americas, New York, New York
  10019.




(4)
            Pursuant
      to Schedule 13G/A dated February 12, 2008, filed with the Securities and
      Exchange Commission, Baupost Group, LLC/MMA reported that as of December
      31, 2007, it had sole voting power over 2,037,552 shares and sole
      dispositive power of 2,037,552 shares and that its address is 10 St. James
      Avenue, Suite 1700, Boston, Massachusetts,
  02116.




(5)
            Pursuant
      to Schedule 13D/A dated January 8, 2009, filed with the Securities and
      Exchange Commission, Dolphin Limited Partnership III, L.P. reported that
      as of December 26, 2008, it and certain related entities had shared voting
      power over 1,907,935 shares and shared dispositive power over 1,907,935
      shares and that its address is 156 W. 56th Street, Suite 1203, New York,
      New York 10019.




(6)
            Pursuant
      to Schedule 13G/A dated February 6, 2008, filed with the Securities and
      Exchange Commission, Dimensional Fund Advisors, Inc. reported that as of
      December 31, 2007, it had sole voting power over 1,731,572 shares and sole
      dispositive power over 1,731,572 shares and that its address is 1299 Ocean
      Avenue, Santa Monica, California
90401.




(7)
            Pursuant
      to Schedule 13G dated February 14, 2008, filed with the Securities and
      Exchange Commission, Epoch Investment Partners, Inc. reported that as of
      December 31, 2007 it and certain related entities had shared voting power
      over 1,708,560 shares and shared dispositive power of 1,708,560 shares and
      that its address is 640 5th Avenue, 18th Floor, New York, New York
      10019.




(8)
            Pursuant
      to Schedule 13G/A dated February 13, 2008, filed with the Securities and
      Exchange Commission, Magnetar Capital Partners LP reported that as of
      December 31, 2007 it and certain related entities had shared voting power
      over 1,690,537 shares and shared dispositive power of 1,690,537 shares and
      that its address is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois
      60201.




-27-




(9)
            Pursuant
      to Schedule 13G/A dated February 14, 2008, filed with the Securities and
      Exchange Commission, PAR Investment Partners, L.P. reported that as of
      December 31, 2007, it had sole voting power over 1,455,356 shares and sole
      dispositive power of 1,455,356 shares and that its address is One
      International Place, Suite 2401, Boston, Massachusetts
    02110.




(10)
            Pursuant
      to Schedule 13G dated June 26, 2008 filed with the Securities and Exchange
      Commission, Scoggin Worldwide Fund, Ltd. reported that as of June 16,
      2008, it had sole voting power over 1,436,275 shares and sole dispositive
      power over 1,436,275 shares and that its address was 3rd Floor, Harbour
      Centre; P.O. Box 1348; George Town, Grandy Cayman, Cayman
      Islands.




(11)
            Pursuant
      to Schedule 13G dated February 5, 2008 filed with the Securities and
      Exchange Commission, Barclays Global Investors, NA. reported that as of
      December 31, 2007, it had sole voting power over 1,430,637 shares and sole
      dispositive power over 1,430,637shares and that its address was 45 Fremont
      Street, San Francisco,
California 94105.




(12)
            Consists
      of (i) 300,000 shares owned by Mr. Sanfilippo, and (ii) 1,300,000 shares
      issuable upon the exercise of stock options that are currently
      exercisable.




(13)
            Consists
      of (i) 13,200 shares owned by Mr. Cieslewicz, and (ii) 105,625 shares
      issuable upon the exercise of stock options that are currently
      exercisable.




(14)
            Consists
      of 997,024 shares issuable upon the exercise of options that are currently
      exercisable. Mr. Lind is no longer an employee of the Company and he
      has declined to disclose any information to the Company regarding his
      ownership of shares of Company common
stock.




(15)
            Consists
      of (i) 1,000 shares owned by Mr. Loebig, and (ii) 226,602 shares issuable
      upon the exercise of stock options that are currently
      exercisable.




(16)
            Consists
      of 151,248 shares issuable upon the exercise of stock options that are
      currently exercisable.




(17)
            Consists
      of 168,750 shares issuable upon the exercise of stock options that are
      currently exercisable.




(18)
            Consists
      of (i) 30,000 shares owned by Mr. Maples, and (ii) 67,500 shares issuable
      upon the exercise of stock options that are currently
      exercisable.




(19)
            Consists
      of 192,500 shares issuable upon the exercise of stock options that are
      currently exercisable.




(20)
            Consists
      of (i) 20,000 shares owned by Mr. Winkelman, and (ii) 220,000
      shares issuable upon the exercise of stock options that are currently
      exercisable.




(21)
            Consists
      of 20,000 shares issuable upon the exercise of stock options that are
      currently exercisable.




(22)
            Pursuant
      to Schedule 13D/A filed with the Securities and Exchange Commission on
      January 14, 2009, Mr. Pearlman’s interest consists of (i) 3,931
      shares owned by Liberation Investment Group, LLC, (ii) 19,960 shares
      owned by Beach Lane Opportunity, LLC, and (iii) 20,000 shares
      issuable upon the exercise of stock options.  Mr. Pearlman is
      the Chief Executive Officer and majority member of Liberation Investment
      Group, LLC and managing member of Beach Lane Opportunity, LLC, and may be
      deemed to share voting and dispositive power over the shares held by each
      of Liberation Investment Group, LLC and its related entities and Beach
      Lane Opportunity, LLC.




(23)
            Consists
      of (i) 374,200 shares owned, (ii) 23,891 shares owned
      indirectly, and (iii) 4,469,249 shares issuable upon the exercise of
      stock options that are currently exercisable. The number of shares
      beneficially owned by all executive officers and directors as a group does
      not include what Mr. Lind may own directly or indirectly. Items
      (i) and (ii) do not include what Mr. Lind may directly or
      indirectly own. Mr. Lind is no longer an employee of the Company and he
      has declined to disclose any information to the Company regarding his
      ownership of shares of Company common
stock.




For
information about the Company’s securities authorized for issuance under equity
compensation plans, see “Item 5. Market for Registrant’s Common Equity and
Related Stock Matters” and further descriptions of the Company’s equity
compensation plans in “PART IV – Item 15. Financial Statements –
Note 9. Stockholders’ Equity” on the Company’s Form 10-K.




-28-




PART
IV
  Item
15. Exhibits and Financial
Statements and Schedules.
  3. Exhibits


Exhibit
      No.
              Description of
      Exhibit
  31.1
              Certification
      of the Chief Executive Officer, pursuant to Section 302 of theSarbanes-Oxley
      Act of 2002
  31.2
              Certification
      of the Chief Financial Officer, pursuant to Section 302 of theSarbanes-Oxley
      Act of 2002
    -29-




SIGNATURES






Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.




MULTIMEDIA
      GAMES, INC.(Registrant)By:
                          /s/
                          ADAM
      D. CHIBIBAdam
      D. ChibibChief
      Financial
Officer




Dated:
March 6, 2009




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.




/s/
                                                                  ANTHONY
      M. SANFILIPPO
                                                                  
                                                                  Chief
      Executive Officer and Director
                                                                  
                                                                  March
      6, 2009Anthony
      M. Sanfilippo
                                                                  
                                                                  (Principal
      Executive Officer)/s/
                                                                  ADAM
      D. CHIBIB
                                                                  
                                                                  Chief
      Financial Officer
                                                                  
                                                                  March
      6, 2009Adam
      D. Chibib
                                                                  
                                                                  (Principal
      Financial Officerand
      Principal Accounting Officer)/s/
                                                                  MICHAEL
      J. MAPLES
                                                                  
                                                                  Chairman
      of the Board and Director
                                                                  
                                                                  March
      6, 2009Michael
      J. Maples/s/
                                                                  ROBERT
      D. REPASS
                                                                  
                                                                  Director
                                                                  
                                                                  March
      6, 2009Robert
      D. Repass/s/
                                                                  JOHN
      M. WINKELMAN
                                                                  
                                                                  Director
                                                                  
                                                                  March
      6, 2009John
      M. Winkelman/s/
                                                                  NEIL
      E. JENKINS
                                                                  
                                                                  Director
                                                                  
                                                                  March
      6, 2009Neil
      E. Jenkins/s/
                                                                  EMANUEL
      R. PEARLMAN
                                                                  
                                                                  Director
                                                                  
                                                                  March
      6, 2009Emanuel
      R. Pearlman







-30-




EXHIBIT
INDEX






Exhibit
      No.
            Description of
      Exhibit




31.1
            Certification
      of the Chief Executive Officer, pursuant to Section 302 of theSarbanes-Oxley
      Act of 2002




31.2
            Certification
      of the Chief Financial Officer, pursuant to Section 302 of theSarbanes-Oxley
      Act of 2002









-31-