Exhibit 10.9


 


SECOND AMENDMENT TO EMPLOYMENT AGREEMENT


 


This SECOND
AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), dated as of the 15th day of October, 2008, by and between MTR
Gaming Group, Inc., a Delaware corporation having its principal office at
State Route 2 South, Chester, West Virginia 26034, together with all of its
subsidiaries whether now existing or hereafter formed or acquired
(collectively, the “Company”), and Edson R. Arneault, One Riverside Drive, New
Cumberland, West Virginia (the “Executive”).


 


WHEREAS, the
Executive is employed by the Company in the capacity of President and Chief
Executive Officer pursuant to an Employment Agreement between the Company and
the Executive dated as of October 18, 2006, as amended by that certain
First Amendment to Employment Agreement dated as of August 28, 2008
(collectively, the “Employment Agreement”);


 


WHEREAS, the
Executive and the Company are also parties to a Deferred Compensation Agreement
dated as of January 1, 1999, as amended (the “Deferred Compensation
Agreement”);


 


WHEREAS, the
Employment Agreement provides that the Period of Employment is scheduled to
expire on December 31, 2008 and the Executive has indicated that he does
not wish to continue employment after that date;


 


WHEREAS, the
Company has identified a replacement for the Executive and would like to engage
said replacement prior to December 31, 2008;


 


WHEREAS, the
Executive is willing to accommodate the Company’s plans by terminating the
Period of Employment on October 31, 2008 (the “Termination Date”);


 


WHEREAS, the
Employment Agreement provides for the payment by the Company to the Executive
of an Annual Bonus and also provides that the Executive shall have the right to
purchase from the Company the real and personal property described therein; and


 


WHEREAS, the
Company and the Executive have agreed that, (i) in consideration for the
Executive’s agreement to early termination of his employment and (ii) in
lieu of any and all payments that would otherwise become due and payable to the
Executive from and after the date hereof under the Employment Agreement (except
as expressly set forth herein), the Company will convey to the Executive the
real and personal property and make the payments described herein.


 


Now,
therefore, the parties, in reliance upon the mutual promises and covenants
herein contained, do hereby agree as follows:


 


1.                                      Recitals.  The recitals as set forth above are hereby
incorporated herein by reference as though more fully set forth.  Except as otherwise defined herein, capitalized
terms shall have the meaning set forth in the Employment Agreement.


 





















 


2.                                      Termination
Date.  The Period of Employment shall
terminate on the Termination Date and, upon the Termination Date, the Executive
shall cease to be employed by the Company.


 


3.                                      Payments &
Conveyances to the Executive.  In
lieu of any and all payments that would otherwise become due and payable to the
Executive from and after the date hereof under the Employment Agreement (except
as expressly set forth herein), the Company will convey to the Executive the
following real and personal property and make the following cash payments to
the Executive:


 


a.                                       The
house and real property located at One Riverside Drive, New Cumberland, West
Virginia, the furnishings contained therein, and the surrounding acreage
described in Schedule 4(j) of the Employment Agreement;


 


b.                                      The
furnishings contained in the Executive’s office at the Company’s headquarters;


 


c.                                       A
bonus payment in the gross amount of Four Hundred Thousand Dollars ($400,000.00),
less all applicable taxes required by law and authorized deductions;


 


d.                                      Compensation
and expense reimbursement pursuant to Sections 4(a), (e), (f), (g), (i) and
(j) of the Employment Agreement will continue to be paid to the Executive
through the Termination Date; and


 


e.                                       The
deferred amounts held in the Trust, together with the earnings thereon will be
paid to the Executive in the manner provided for in Section 7.


 


4.                                      The
Executive will be responsible for paying any taxes, interest, penalties or
other amounts due on the payment and benefits described in Section 3
(except for the employer’s portion of wage taxes due in relation to Section 3)
and shall indemnify the Company and hold it harmless for any taxes, interest,
penalties or other amounts that the Company becomes required to pay as a result
of not withholding the appropriate amounts from such payment and benefits.  Prior to or concurrently with the conveyance
by the Company to the Executive of the real and personal property described in Section 3,
the Executive shall deliver (or caused to be delivered to the Company) funds in
the amount of $598,500 for purposes of federal, state and local tax withholding
related to such conveyance.


 


5.                                      Premiums
under the Deferred Compensation Agreement. 
The Company shall pay the premiums on the insurance policies underlying
the Deferred Compensation Agreement as provided for in Schedule A of this
Amendment until the Executive reaches the age of sixty-five (65).


 


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6.                                      Maintenance
of One Riverside Drive.  During the
period prior to the conveyance by the Company to the Executive of the house
located at One Riverside Drive, the Company shall continue to maintain the
house in the manner previously provided in Section 4(h) of the
Employment Agreement and Executive shall be permitted to reside in the house
from the date hereof until the date of conveyance.  Further, if there is a casualty loss between
the date hereof and the date of conveyance, the Company shall assign to Executive
any insurance proceeds related to such casualty loss.


 


7.                                      Timing
of Payments.  The compensation and
expense reimbursement described in Sections 3(d) and Section 5 shall
be paid by the Company in accordance with its customary practice.  Subject to Section 8, below, the
conveyance of the real and personal property described in Sections 3(a) and
(b), the bonus payment described in Section 3(c), and the Trust amounts
described in Section 3(f) shall occur on May 1, 2009.


 


8.                                      Section 409A.  Because the parties hereto intend that any
payment under this Agreement shall be paid in compliance with Section 409A
of the Code (“Section 409A”) and all regulations, guidance and other
interpretative authority thereunder, such that there will be no adverse tax
consequences, interest or penalties as a result of such payments, the parties
hereby agree to modify the timing (but not the amount) of any payment hereunder
to the extent necessary to comply with Section 409A and avoid application
of any additional taxes, or any penalties or interest thereunder.    The provisions of this Section 8 shall
only apply if, and to the extent, required to comply with Section 409A in
a manner such that the Executive is not subject to additional taxes and/or
penalties under Section 409A.


 


9.                                      Termination
of Existing Employment Agreement. 
The Company and the Executive agree that the Employment Agreement as
well as any other prior written or oral agreements with respect to employment
shall terminate as of the Termination Date. 
Upon the termination of the Employment Agreement, neither party to the
Employment Agreement or any other prior written or oral agreements with respect
to the employment of the Executive shall have any further rights or
obligations, except that (a) the Company shall remain obligated to convey
the real and personal property, and to make the payments, described in Sections
3 and 5 of this Amendment, (b) the Executive shall continue to be bound by
the confidentiality provisions set forth in Section 6(a) of the
Employment Agreement, (c) the Executive shall remain entitled to receive
the benefits to the extent maintained and offered by the Company to which he
would otherwise be entitled to receive in the event of the expiration of the
Employment Agreement or termination other than for Cause pursuant to the
Employment Agreement in the absence of this Amendment, namely, those benefits
provided for under the Deferred Compensation Agreement, the Company’s
retirement plan, and the insurance policies as provided for in Schedule A of this
Amendment.


 


[Remainder of the Page Blank]


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Amendment as of the day and year
first above written.


 


 


	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  \s\ Edson R. Arneault

  	
   

  	
  \s\ Donald J. Duffy

  
	
  Edson R. Arneault

  	
   

  	
  Donald J. Duffy,  

  
	
   

  	
   

  	
  Chairman of the Compensation

  
	
   

  	
   

  	
  Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  \s\ LC Greenwood

  
	
   

  	
   

  	
  LC Greenwood,

  
	
   

  	
   

  	
  Member of the Compensation

  
	
   

  	
   

  	
  Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  \s\ Edson R. Arneault

  
	
   

  	
   

  	
  Edson R. Arneault

  
	
   

  	
   

  	
  President and Chief Executive

  
	
   

  	
   

  	
  Officer

  



 


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