Document:

Exhibit
10.1

EMPLOYMENT
AGREEMENT

AGREEMENT made
this 19th day of October, 2006, 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, WV (“Executive”).

WHEREAS, the
Executive has been employed by the Company in the capacity of President, Chief
Executive Officer and Chairman of the Company pursuant to an Employment
Agreement between the Company and the Executive dated September 1, 2001 as
amended by that certain First Amendment Agreement dated as of December 22, 2004
and by that certain Second Amendment Employment Agreement dated as of May 4,
2005 (collectively the “Existing Employment Agreement”); and

WHEREAS, the
parties wish to replace the Existing Employment Agreement by entering into this
Agreement;

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

1.           Termination of Existing Employment
Agreement.  Upon execution and
delivery of this Agreement, the Company and Executive agree that the Existing
Employment Agreement as well as any other prior written or oral agreements with
respect to employment shall terminate effective December 31, 2006 and as of
January 1, 2007 be replaced by this Agreement. 
Upon the termination of the Existing Employment Agreement on December
31, 2006 (“EEA Termination Date”), neither party to the Existing 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 thereunder,
except for obligations that have accrued but not been paid as of the EEA
Termination Date (which amounts shall be paid into the Rabbi Trust by May 1,
2007, including but not limited to the amounts owed under the annual bonus and
long term bonus provisions); provided, however, that this Agreement shall not
affect the separate Deferred Compensation Agreement by and between the Company
and Executive dated as of January 1, 1991, as amended by that certain Amendment
to Deferred Compensation Agreement dated May 4, 2005 (and executed by the
Compensation Committee on May 13, 2005) and a Second Amendment to Deferred
Compensation Agreement dated October 3, 2006. 

2.           Term.  The Company hereby agrees to employ
Executive, and Executive agrees to serve the Company, in the capacity of
President and Chief Executive Officer of the Company for a two-year period
commencing on January 1, 2007 (the “Employment Date”) and ending on December
31, 2008 (such period, subject to earlier termination as provided herein, being
referred to as the “Period of Employment”).

3.           Duties and Services.  During the Period of Employment, Executive
agrees to serve the Company as President and Chief Executive Officer, as well
as President, Chief Executive Officer, and Chairman of Mountaineer Park, Inc,
Speakeasy Gaming of Las Vegas, Inc., Speakeasy Gaming of Reno, Inc., Speakeasy
Gaming of Fremont, Inc., MTR-Harness, Inc., Speakeasy Fremont Street Experience
Operating Company,  Jackson Racing, Inc.,
Presque Isle Downs, Inc. (it being understood that upon appointment of a new
President and CEO of that entity in accordance with Pennsylvania gaming law,
Executive will serve as Vice President), as well as Vice President of Scioto
Downs, Inc., and in such other offices and directorships of the Company and of
its subsidiaries and related companies (collectively, “Affiliates”) to which he
may be elected or appointed, and to perform such other reasonable and
appropriate duties as may 

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be requested of him by
the board of directors of the Company (the “Board of Director”), in accordance
with the terms herein set forth.  In
performance of his duties, Executive shall be subject to the direction of the
Board of Directors.  Excluding periods of
vacation and sick leave to which Executive is entitled, Executive shall devote
his full time, energy and skill during regular business hours to the business
and affairs of the Company and its affiliates and to the promotion of their
interests.

4.           Compensation.

(a)          Base
Salary.  The base salary of the Executive
for his services pursuant to the terms of this Agreement shall be $1,140,000
per year, effective January 1, 2007, and shall be payable in equal bi-monthly
installments, or on such other terms as may mutually be agreed upon by the
Company and Executive.

(b)         Annual
Bonus.  Executive will be entitled to
receive a semi-annual bonus of $50,000. 
Executive will also be eligible to receive an annual bonus (“Annual
Bonus”) equivalent to a minimum of 75% of Executive’s Base Salary and up to a
200% of Executive’s base salary.  The
Company’s Compensation Committee will make its recommendation regarding the
amount of the Annual Bonus to the Company’s Board of Directors based on its
determination as to the achievement of budgets and performance criteria
established by the Compensation Committee and approved by the Board of
Directors during the first quarter of the applicable fiscal period which
criteria may include, but shall not be limited to:

         (i)  actual  EBITDA compared to budgeted EBITDA;

      (ii)  actual
E.P.S. compared to budgeted E.P.S.;

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   (iii)  stock
price performance;

  (iv)  revenue
performance;

     (v)  planned
expansion as budgeted;

  (vi)  budgeted
acquisition(s) of a gaming or racing asset(s);

 (vii)  passage of
legislation that benefits the Company’s gaming or racing assets;

 (viii) return on
equity; and

    (ix)  such
other criteria recommended by the Compensation Committee and approved by the
Board of Directors.

The Annual Bonus
shall be payable to Executive on May 1st of the calendar year following the
calendar year then completed, unless deferred under Section 4(c) of this
Agreement.

The budgets and
performances criteria used for the above analysis will be the budget approved
by the Board of Directors for the fiscal period in its first regularly
scheduled Board meeting for each year. 
The budget approved will be used as determining factor in setting
publicly disclosed guidance, should the Company determine to issue such
guidance.

The Compensation
Committee may recommend a higher annual bonus to the Company’s Board of
Directors based upon its determination that a higher bonus is appropriate based
upon exceptional performance.

( c)         Deferral
of Non-Deductible Amounts. 
Notwithstanding any provision to the contrary contained herein, to the
extent Executive’s total compensation for any calendar year would otherwise exceed
the amount the Company is permitted to deduct as compensation

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expense for federal
income tax purposes (the “Section 162 Maximum”) pursuant to Section 162 of the
Internal Revenue Code of 1986, as amended (the “Code”), Executive hereby elects
to defer the time for payment of any amounts above the Section 162 Maximum in a
manner that will not result in compensation exceeding the Section 162
Maximum.  In no event, however, shall
such an election result in or be construed as a waiver of the right to such compensation.  Executive’s right to receive such deferred
compensation (and, correspondingly, the Company’s deferred payment obligation)
shall be fully vested and shall be credited with investment earnings or losses.  The rate of investment earnings or losses on
such deferred compensation shall be equal to the rate of investment earnings or
losses of one or more stocks or mutual funds selected by the Company after
consultation with Executive and identified to Executive as such, which stocks
or mutual funds may be changed from time to time by the Company after
consultation with Executive.  While the
Company shall make reasonable efforts to act prudently in the selection of such
stocks or mutual funds taking into account Executive’s investment preference,
the Company shall not be responsible for the investment performance of any such
stock(s) and/or fund(s).

(d)         Deferred
Compensation Trust.  In order to
facilitate the payment of the Company’s deferred payment obligation, at the
time that the Company would otherwise make a payment to Executive but for the
Section 162 Maximum, the Company shall deposit an amount of cash equal to the
amount which is being deferred into a “rabbi trust”, to be known as the
Deferred Compensation Trust (the “Trust”), to be established by the Company
with an independent corporate trustee acceptable to the Company and
Executive.  The Trust shall be in
substantially the form attached hereto as Exhibit A.  Amount deferred pursuant to Section 4 (c) and
this Section (d), or deferred pursuant to any prior employment agreements and
the earnings 

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thereon, shall be paid to
the Executive six months following the Executive’s separation from
service.  It is understood and agreed by
the parties that (i) the Trust shall remain subject to the claims of the
Company’s general creditors; (ii) any income tax payable with respect to the
Trust shall be the sole obligation and responsibility of the Company (and shall
not reduce the assets in the Trust so long as the Trust remains a “grantor
trust” for federal income tax purposes); and (iii) the establishment of the
Trust shall not relieve the Company of its liability to pay amounts due under
this Agreement, except to the extent that payments are made by the Trust to the
Executive or his estate in accordance with the terms of this Agreement and the
Trust.

(e)          Health
Insurance.  Executive shall be entitled
at his election, but at the Company’s expense, either to participate in and
receive benefits under policies of health insurance maintained by the Company
for its employees, or reimbursement for premiums paid by the Executive for
comparable health insurance.

(f)          Benefit
and Fringe Benefits.  Executive shall
receive such employment fringe benefits and shall be entitled to participate in
other employee benefit plans, including without limitation any pension plan,
profit-sharing plan, savings plan, deferred compensation plan, stock option
plan, and life insurance made available by the Company now or in the future to
its executives as the Compensation Committee of the Board of Directors may
periodically award in its discretion, based on the Executive’s performance,
subject to and on a basis consistent with the terms, conditions and overall
administration of such Benefit Plans.

(g)         Expenses.  All travel and other expenses incident to the
rending of services by Executive hereunder shall be paid by the Company.  If any such expenses are paid in the first
instance by Executive, the Company shall reimburse him therefore on
presentation of the 

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appropriate documentation
required by the Code or Treasury Regulations promulgated thereunder, or
otherwise required under the Company’s policy with respect to such expenses.

(h)         The
Executive home will be used from time to time to promote, entertain, and as a
meeting place for Company business. 
Should Executive purchase the home and property during the Employment
Period, the Company will continue to provide personnel and equipment for the
regular maintenance of the Executive’s home during such Employment Period
consistent with the level provided during the time in which the Company owned
the residence.  Executive will compensate
the Company $2,000 per month for such services. 
Executive will have all other responsibilities as an owner, including
but not limited, making any major repairs and carrying adequate insurance on
the property.

(i.)          Vacation.  Executive shall be entitled to eight (8)
weeks paid vacation annually each calendar year, to be taken at time or times
mutually satisfactory to Executive and the Company.  Accrued vacation time not utilized by
Executive due to business commitments may be carried over the following year
(provided, however, that Executive shall not in any event utilize more than
eight weeks of vacation in any twelve month period) or paid to Executive at the
end of the year as additional compensation at Executive’s election.

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

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(k)          Until
September 1, 2008, Executive shall have the non-transferable right, exercisable
by the provision of written notice to the Board of Directors, (a) to purchase
the house and real property located at One Riverside Drive, New Cumberland,
West Virginia, and/or certain surrounding acreage acquired by the Company in
2004 (as described on Schedule 4(j), for a purchase price equal to the higher
of the book value reflected on the current financial statements and records of
the Company at the time of such notice or the fair market of such house, real
property, and surrounding acreage (as such fair market value is determined
pursuant to Section 7(g) of this Agreement) and/or (b) to purchase the
furnishings therein for a price equal to the then-depreciated book value.  The purchase shall be consummated as promptly
as practicable after provision of the notice, but in any event within six
months thereafter.  The purchase rights
created hereby shall (i) be subject to compliance with the Company’s Fifth Amended
and Restated Credit Agreement with Wells Fargo Bank, N.A. as agent bank, as
such agreement may be amended or restated from time to time prior to September
1, 2008, and thus shall not be deemed as an encumbrance or defect with respect
to the Company’s title to such property. 
Upon the consummation of the purchase by Executive contemplated by this
Section 4(k), the Company shall be released from the obligations under the
first three sentences of this Section 4(k), other than as provided under
Section 4(h) to this Agreement.

5.           Early
Termination.

(a)          Notwithstanding
the provisions of Section 2 hereof, Executive may be discharged by the Company
for Cause (as defined in Section 5(d) hereof), in which event the Period of
Employment hereunder shall cease and terminate and the Company shall have no
further obligations or duties under this Agreement, except for obligations
accrued under Section 4 at the date of termination.  In addition, the Period of 

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Employment shall cease
and terminate upon the earliest to occur of the following events:  (i) the death of Executive or (ii) at the
election of the Board of Directors (subject to the American With Disabilities
Act), the inability of Executive by reason of physical or mental disability to
continue the proper performance of his duties hereunder for a period of 10
consecutive days.  Upon termination of
the Period of Employment pursuant to the preceding sentence, the Company shall
continue to pay to Executive or his estate, as the case may be, the entire
compensation otherwise payable to him under Section 4(a) hereof for two years.

(b)         In
the event Executive is discharged by the Company other than for Cause (as
defined in Section 5(d) hereof), or other than pursuant to Section 5(a) hereof
by reason of physical or mental disability or death, executive shall have no
further obligations or duties under this Agreement; provided, however, that
Executive shall continue to be bound by the provisions of Section 6 hereof if
the Company performs its obligations under this Section 5(b).  In the event of termination of the Period of
Employment pursuant to the preceding sentence, the Company shall continue to
pay Executive the entire compensation otherwise payable to him under the
provisions of Section 4 (a), (b), (c) and (d) hereof for the otherwise
remaining Period of Employment without any duty on the part of  Executive to mitigate such payments;
provided, however, that if Executive should die prior to the end of the period,
the provisions of Section 5(a) hereof shall be applicable as though Executive’s
employment hereunder had not been so terminated.

(c)          Notwithstanding
Section 5(b) hereof, in the event that following a Change in Control (as
defined in Section 5(f) hereof) Executive is discharged by the Company 

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other than for Cause (as
defined in Section 5(d) hereof) or other than pursuant to Section 5(a) hereof
by reason of physical or mental disability, or Executive terminates employment
with the Company for Good Reason (as defined in Section 5(e) hereof), Executive
shall continue to be bound by the provisions of Section 6 hereof if the Company
performs its obligations under this Section 5(c).  In the event of termination of the Period of
Employment pursuant to the preceding sentence, the Company shall, in addition
to paying the obligations accrued under Section 4 at the date of termination,
pay Executive, within 30 days of such termination, a cash severance payment,
with no duty by Executive to mitigate such payment, in an amount equal to three
times the annual base salary payable to Executive under Section 4(a) on the day
before such termination; provided, however, that the amount of such severance
payment shall be capped to the extent necessary to avoid an excess parachute
payment that would trigger an excise tax.

(d)         For
purposes of this Section 5, the term “Cause” shall mean (i) conviction of a
felony, (ii) embezzlement or misappropriation of funds or property of the
Company or any of its Affiliates, (iii) Executive’s consistent refusal to
substantially perform, or willful misconduct in the substantial performance of,
his duties and obligations hereunder; or (iv) Executive’s engaging in activity
that the Board of Directors determines in its reasonable judgment could result
in the suspension or revocation of any video lottery, pari-mutuel, or other
gaming license or permit held by the Company or any of its subsidiaries.

(e)          For
purposes of this Section 5, the term “Good Reason” shall mean (i) the
assignment to Executive of any duties and responsibilities which in the
reasonable judgment of Executive are materially inconsistent in any respect
with Executive’s 

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position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3, or any other action by the
Company which in the reasonable judgment of Executive results in a substantial
diminishment in such position, authority, duties or responsibilities (provided,
however, that the assignment of tasks or responsibilities previously performed
by Executive to Executive’s subordinates shall not constitute Good Reason);
(ii) the Company’s requiring relocation of Executive, without his prior written
consent, to a place of employment other than Hancock County , West Virginia or
Las Vegas  Nevada, except for travel
reasonably required in the performance of Executive’s responsibilities (it
being understood that the Company’s obligation to provide Working Facilities
only at its corporate headquarters shall not constitute relocation for purposes
of determining Good Reason); or (iii) the Company’s failure to substantially
comply with the provisions of Section 4 of this Agreement.

(f)          For
purpose of this Section 5, the term “Change in Control” shall mean; (i) a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A, as in effect on the date hereof, under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”); (ii) any
person, including a “group” as such term used in Section 13(d)(3) of the
Exchange Act, becoming the beneficial owner, directly or indirectly, of 20% or
more of the combined voting power of the Company’s outstanding voting
securities other than a person who was an officer or director of the Company on
the date of this Agreement; or (iii) individuals who, as of the date hereof,
constitute the Board of Directors ceasing for any reason ton constitute at
least a majority of the Board of Directors; provided, however, that in the case
of a Change in Control pursuant to this Section 5(f)(iii), Executive may not
terminate this Agreement for Good 

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Reason unless Executive
does so by written notice within five (5) business days after Executive has
actual notice that such Change in Control has occurred.

(g)         Upon
the termination of the Executive’s Period of Employment pursuant to Section 2
or Section 5 (other than for Cause) hereof, the Executive shall have the right
to purchase from the Company for a price equal to the then-depreciated book
value (i) the furnishings in the Executive’s office a the Company’s
headquarters as well as in any working facilities contemplated by Section 4(j)
hereof; (ii) any residence then owned by the Company pursuant to Section 4(k)
hereof; and (iii) any passenger automobiles owned by the Company and generally used
by the Executive; provided, however, that Executive’s right pursuant to this
Section 5(g) shall not prevent the Company from selling any of such property
during the Period of Employment and thus shall not be deemed as an encumbrance
of defect with respect to the Company’s title to such property.  Further, with respect to any purchases
pursuant to this Section 5(g), the Executive shall have forty-five (45) days in
which to notify the Company of his intent to exercise such right, with closing
to occur within a reasonable time thereafter. 
Executive’s rights hereunder shall not be transferable.

6.           Confidentiality and
Non-Competition. 

(a)          The
Company and Executive acknowledge that the services to be performed by
Executive under this Agreement are unique and extraordinary and, as a result of
such employment, Executive will be in possession of confidential information
and trade secrets (collectively, “Confidential Material”) relating to the
business practices of the Company and its affiliates.  Executive agrees that he will not, directly
or indirectly, (i) disclose to any other person or entity either during or
after his employment by the 

 12
 

 

Company or (ii) use,
except during his employment by the Company in the business and for the benefit
of the Company or any of its affiliates, and Confidential Material acquired by
Executive during his employment by the Company, without the prior written
consent of the Company or otherwise than as required by law or any rule or
regulation of any federal or state authority. Upon termination of his
employment with the Company for any reason, Executive agrees to return to the
Company any tangible manifestations of Confidential Materials and all copies
thereof.  All programs, ideas, strategies,
approaches, practices or inventions created, developed, obtained or conceived
of by Executive prior to or during the term hereof by reason of his engagement
by the Company, shall be owned by and belong exclusively to the Company,
provided that they are related in any manner to its business or that of any of
its Affiliates.  Executive shall (i)
promptly disclose all such programs, ideas, strategies, approaches, practices,
inventions or business opportunities to the Company, and (ii) execute and
deliver to the Company, without additional compensation, such instruments as
the Company may require from time to time to evidence its ownership of any such
items.

(b)         Executive
agrees that during the term hereof, and for a period of one year from the
termination of Executive’s employment if for Cause (as defined in Section 5(d)
or if he resigns without Good Reason, he will not become a stockholder,
director, officer, employee or agent of or consultant to any corporation (other
than an Affiliate), or member of or consultant to any partnership or other entity,
or engage in any business as a sole proprietor or act as a consultant to any
business or entity that operates a gaming or pari-mutuel wagering business, in
each case which competes with any gaming business or gaming activity engaged
in, or known by Executive to be contemplated to be engaged 

 13
 

 

in, by the Company or any
of its Affiliates within ninety miles of any location (five miles in the case
of Nevada) in which the Company or any Affiliate does business or in which
Executive has knowledge that the Company or any of its Affiliates contemplates
doing business; provided, however, that competition shall not include the
ownership (solely as an investor and without any other participation in or
contact with the management of the business) of less than five percent (5%) of
the outstanding shares of stock of any corporation engaged in any such
business, which shares are regularly trades on a national securities exchange
or in an over-the-counter market. 
Executive agrees that during the non-compete period referred to in this
Section 6, neither Executive nor any person or enterprise controlled by
Executive will solicit for employment any person employed by the Company or any
of its Affiliates at, or at any time within three months prior to, the time of
the solicitation.

(c)          Executive
agrees that the remedy at law for any breach by him of this Section 6 will be
inadequate and that the Company shall be entitled to injunctive relief.  If any of the provisions of this Section 6 of
any part thereof are hereafter adjudicated by a court of competent jurisdiction
to be invalid or unenforceable, then such court is hereby requested to amend
such provision by deleting or amending the portion thus adjudicated to be
invalid or unenforceable.  Any such
deletion or amendment shall be deemed by the parties to apply only with respect
to the operation of such provision in the particular jurisdiction in which such
adjudication is made, so as to render such provision enforceable as so amended
in such jurisdiction.  Such deletion or amendment
shall not apply with respect to the operation of this Agreement in any other
jurisdiction or 

 14
 

 

geographic area and shall
not affect the remainder of the provision, which shall be given full effect,
without regard to the invalid portions.

7.           General.  This Agreement is further governed by the
following provisions:

(a)          Notices.  Any notices or other communication required
or permitted to be given hereunder shall be made in writing and shall be
delivered in person, by facsimile transmission or mailed by prepaid registered
or certified mail, return receipt requested, addressed to the parties at the
address stated above or to such other address as either party shall have
furnished in writing in accordance with this Section.  Such notices or communications shall be
effective upon delivery if delivered in person or by facsimile and either upon
actual receipt of three (3) days after mailing, whichever is earlier, if
delivered by mail.

(b)         Parties
In Interest.  This Agreement shall be
binding upon and inure to the benefit of Executive, and it shall be binding
upon and inure to the benefit of the Company and any corporation succeeding to
all or substantially all of the business and assets of the Company by merger,
consolidation, purchase of assets or otherwise.

(c)          Arbitration.  Any disputes arising under the terms of this
Agreement shall be settled by binding arbitration between the parties in
Hancock County, West Virginia in a proceeding held under the rules of the
American Arbitration Association.  In
such proceeding, each party shall choose one arbitrator and two so chosen shall
choose a third arbitrator.  The vote of
two of the arbitrators shall be sufficient to determine an award.

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(d)         Entire
Agreement.  Upon termination of the
Existing Employment Agreement as of the EEA Termination Date, this Agreement
will supersede and replace any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of Executive
by the Company and contain all of the covenants and agreements between the
parties with respect to such employment in any manner whatsoever.  Any modification of this Agreement will be
effective only if it is in writing signed by the party to be charged.

(e)          Governing
Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
giving effect to the choice of law or conflicts of law rules and laws of such
jurisdiction.

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

(g)         Fair
Market Determined by an Appraisal.  In
the event the Executive exercises his right, pursuant to Section 4(k), to
purchase the house and real property located at One Riverside Drive, New
Cumberland, West Virginia, and/or the surrounding acreage described on Schedule
4(j), the Company shall promptly appoint an appraiser to determine the value of
such real property.  If Executive
disagrees with the determinations of such appraiser, the Executive may appoint
his own appraiser.  In respect of those
items upon which the appraisers disagree, 

 16
 

 

they shall together
appoint a third appraiser, who shall determine items and shall render a written
report of his opinion with respect thereto. 
The Company and Executive agree the determination of the third appraiser
shall be final and binding on the parties and shall not be subject to further
review.  The values contained in such
written report shall be used to determine the market price of such house and
real property, and surrounding acreage for purposes of Section 4(j) of this
Agreement.  All appraisal costs shall be
paid by the Company.

(h)  Conformity
with Section 409A.  This Agreement is
intended to comply with Section 409A of the Code, including but not limited to,
paragraphs (2), (3) and (4) of Section 409A(a). 
Notwithstanding any provisions of this Agreement to the contrary, to the
extent of any conflict between the terms and conditions of this Agreement and
Section 409A, the requirements of Section 409A shall govern.

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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement 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

  
	
   

  	
   

  	
   

  

 

 18Exhibit 10.2

SECOND AMENDMENT

TO DEFERRED COMPENSATION
AGREEMENT

SECOND AMENDMENT dated
October 19, 2006 to Deferred Compensation Agreement by and between MTR Gaming
Group, Inc., a Delaware corporation (the 
“Company”), and Edson R. Arneault (the “Executive”).

W I T N E S S E T H :

WHEREAS, the Company and
the Executive are parties to a Deferred Compensation Agreement dated as of
January 1, 1999, as amended by that certain Amendment to Deferred Compensation
Agreement dated May 4, 2005 (collectively, the “Existing Deferred Compensation
Agreement”); and 

WHEREAS, the Executive
and the Company desire to amend the terms of the Existing Deferred Compensation
Agreement as provided herein.

NOW, THEREFORE, in
consideration of the premises and the mutual agreements hereinafter set forth,
the parties hereto hereby agree as follows:

1.                 The
recitals as set forth above are hereby incorporated herein by reference as
though more fully set forth.  Except to
the extent otherwise defined herein, capitalized terms shall have the meaning
ascribed to them in the Existing Deferred Compensation Agreement.

2.                 Section
2.04 of the Existing Deferred Compensation Agreement is hereby amended and
restated in its entirety as follows:

                          “In the event (i) Executive
resigns his employment for Good Reason, (ii) Executive’s employment is
terminated by the Company for any reason other than for Cause or by reason of
death, or (iii) the Term of this Agreement expires, the Company shall pay the
premiums for insurance policies underlying Executive’s Deferred Compensation
Agreement, as amended, until Executive reaches the age of sixty-five
(65).”   

3.                 Section
2.05 of the Existing Deferred Compensation Agreement is hereby amended and
restated in its entirety as follows:

                          “For purposes of this
Deferred Compensation Agreement, the terms “Cause” and “Good Reason” shall have
the meaning assigned to such terms in the Employment Agreement dated October 19,
2006 (and effective January 1, 2007) between the Company and the Executive.” 

 

4.                 Except
to the extent expressly amended herein, the terms and conditions of the
Existing Deferred Compensation Agreement shall govern.

5.                 This
Second Amendment may be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute one and the same
instrument, and this Second Amendment shall become effective on the effective
date of the Employment Agreement referred to in paragraph 3 above.

*                                        *                                         *

 2
 

 

IN WITNESS WHEREOF, the
parties hereto have executed this Second Amendment as of the date first above
written.

	
  

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Donald J. Duffy

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Donald J. Duffy

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman, Compensation Committee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ LC Greenwood

  
	
   

  	
   

  	
   

  	
  Name:

  	
  LC Greenwood

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Member, Compensation Committee

  
	
  /s/ Edson R.
  Arneault

  	
   

  	
   

  	
   

  	
   

  
	
  EDSON R.
  ARNEAULT

  	
   

  	
   

  	
   

  	
   

  

 

 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]