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Exhibit 10.9
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the "Agreement") is made this 15th day of August, 2007,
by and between MTR Gaming Group, Inc./Presque Isle
Downs, Inc. ("MTR/PIDI" or the "Company"), having an address
of State Route 2, South, Chester, West Virginia 26034, and Patrick
J. Arneault, having an address of c/o MTR Gaming Group, Inc.,
State Route 2 South, Chester, WV 26034 ("Executive").
WHEREAS,
Executive is currently an at-will employee of the Company serving
as Executive Vice President of Development; and
WHEREAS, the
Company wishes to continue to employ Executive in Executive's
current capacity and further wishes to enter into an agreement with
Executive in order to afford Executive certain long-term benefits
as well as to reflect the terms and conditions of Executive's
employment relationship to the Company:
NOW THEREFORE,
the parties, in reliance upon the mutual promises and covenants
herein contained, do hereby agree as follows:
1.
Term.
The Company hereby agrees to
employ Executive, and Executive agrees to serve the Company, in the
capacity indicated above for a two year period commencing on
January 1, 2007 (the "Employment Date"), and ending on
January 1, 2009 (such period, subject to earlier termination
as provided herein, being referred to as the "Period of
Employment"); provided
, however
, that Executive's employment hereunder may be
terminated by the Company at any time within ninety (90) days
after the date first written above in the Company's sole
discretion.
2.
Duties and
Services. During
the Period of Employment, Executive agrees to serve the Company as
its Executive Vice President of Development, and in such other
office of MTR/PIDI and/or its Affiliates to which Executive may be
elected or appointed, and to perform such other reasonable and
appropriate duties as may be requested of Executive by the
President and CEO of the Company (the "CEO"), in accordance with
the terms herein set forth. Executive shall devote such of his/her
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 as is required. Executive shall report
directly to and shall be subject to the direction of Edson R.
Arneault.
3.
Compensation.
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(a)
Base Salary.
The base salary of the
Executive for services pursuant to the terms of this Agreement
shall be $351,979.00 per year, payable in bi-monthly installments
or on such other terms as may mutually be agreed upon by the
Company and Executive. Executive's base salary shall be subject to
an automatic cost-of-living increase of five percent (5%) on the
first anniversary of this Agreement, and shall be subject to
periodic increase by the Company's Compensation Committee in its
sole discretion.
(b)
Discretionary Cash
Bonus. Executive
shall be entitled to periodic cash bonuses in the sole discretion
of the Company's Compensation Committee.
(c)
Benefit Plans 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 health
insurance, pension plan, profit-sharing plan, savings plan, life
insurance and disability insurance plans and the like made
available by the Company now or in the future to its executives as
the Company's Compensation Committee 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.
(d)
Long Term
Incentives. In
connection with this Agreement, on April 27, 2007 MTR Gaming
Group, Inc. issued to Executive non-qualified options to
purchase 20,000 shares of MTR's common stock. The exercise price of
those options was $16.27, the Nasdaq Official Close Price
of
the stock on the date of grant as evidenced by a
resolution of the Compensation Committee of MTR Gaming
Group, Inc., as disclosed to Executive on or about
April 27, 2007. Provided that this Agreement has not been
terminated pursuant to Section 2, Section 4(a), or
Section 4(b), and provided further that Executive shall not
have resigned his/her employment, then the options will vest on the
second anniversary of the Employment Date. This section 3(d)
is intended only to provide a summary of the terms of the options;
all of the terms and conditions will be set forth in a separate
Non-Qualified Incentive Stock Option Agreement ("NQSO") in a form
acceptable to the Company and Executive. In the event the
shareholders of MTR Gaming Group, Inc. approve that company's
2007 Stock Incentive Plan (the matter is scheduled to be voted upon
at the annual meeting of shareholders on June 19, 2007), and
provided that this Agreement shall not have been terminated, then
on a date chosen by the Compensation Committee of MTR Gaming
Group, Inc., the Company will cause MTR Gaming Group to issue
to Executive non-qualified options to purchase 20,000 shares of
MTR's common stock (the "Second Tranche"). The exercise price of
those options will be the Nasdaq Official Close Price of the stock
on the date of grant as evidenced by a resolution of the
Compensation Committee of MTR Gaming Group, Inc. Provided that
this Agreement has not been terminated pursuant to Section 2,
Section 4(a), or Section 4(b), and provided further that
Executive shall not have resigned his/her employment, then the
options will vest on the second anniversary of the Employment Date.
This section 3(d) is intended only to provide a summary of the
terms of the options; all of the terms and conditions will be set
forth in a separate Non-Qualified Incentive Stock Option Agreement
("NQSO") in a form acceptable to the Company and Executive. In the
event the shareholders do not approve the 2007 Stock Incentive
Plan, then the Company shall have no further obligation pursuant to
this Section 3(d) with respect to the Second
Tranche.
(e)
Automobile
Allowance. During
the Period of Employment, Executive shall be entitled to $600 per
month toward the lease or purchase, insurance and maintenance of an
automobile.
(f)
Vacation.
Executive shall be entitled
to four (4) weeks of paid vacation annually to be taken at a
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 to the following year (provided,
however, that Executive shall not in any event utilize more than
six 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.
(g)
Expenses.
All travel and other
expenses incident to the rendering of services by Executive
hereunder, including the expenses associated with gaming licensing
in any state in which the Company or one of its affiliates requests
Executive to become licensed, shall be paid by the Company. The
Company shall also provide Executive a Company cellular telephone,
or, at the Company's election, reimburse Executive for the cost of
a cellular phone and monthly service charges maintained by
Executive. If any such expenses are paid in the first instance by
Executive, the Company shall reimburse him/her therefore on
presentation of the appropriate documentation required by the
Internal Revenue Code of 1986, as amended (the "Code"), or Treasury
Regulations promulgated thereunder, or otherwise required under the
Company's policy with respect to such expenses.
(h)
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/her position and appropriate
for the performance of his/her duties.
4.
Early
Termination.
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