EXHIBIT 4.2
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT is entered into as of July 29,
1998 by and between MTR Gaming Group, Inc. a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxx (the "Optionee").
In consideration of the mutual promises hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in furtherance of the Company's intention to
provide an incentive to motivate the performance of certain of its employees,
the parties hereby agree as follows:
1. OPTION GRANT. The Company and the Optionee hereby agree to be
bound by the terms of this Agreement with respect to the grant made by the
Company's Board of Directors on May 28, 1992 of an option to purchase an
aggregate of 79,500 shares of the common stock, $.0001 par value per share,
of the Company ("Common Stock") at an exercise price of $1.06 per share,
being equal to 85% of the fair market value of such shares of Common Stock
on the date of such grant (the "Option"). This Option is not intended to
constitute an "incentive stock option" (within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended).
2. TERM; EXERCISE. This Option will expire on August 25, 1999,
subject to earlier termination as provided herein (the "Termination Date").
This Option is exercisable at anytime prior to the Termination Date except as
otherwise provided by the terms of this Option. In no event may a fraction
of a share of Common Stock be purchased under this Option. Notwithstanding
anything to the contrary in this Agreement, this Option may only be exercised
if the Optionee is employed by the Company at the time of such exercise.
3. NOTICE OF EXERCISE; PAYMENT. This Option shall be exercisable by
giving written notice to the Company at its principal office, presently Xxxxx
Xxxxx 0 Xxxxx, Xxxxxxx, Xxxx Xxxxxxxx, Xxxx.: Chief Financial Officer,
stating that the Optionee is exercising this Option, specifying the number of
shares being purchased and accompanied by payment in full of the aggregate
purchase price therefor: (a) in cash or by certified check; (b) with
previously acquired shares of Common Stock having an aggregate Fair Market
Value on the date of exercise equal to the aggregate exercise price of all
Options being exercised; (c) with any combination of cash, certified check or
shares of Common Stock having such value; or (d) any other form of legal
consideration that may be acceptable to the Board in its sole discretion.
4. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Notwithstanding the
foregoing, this Option shall not be exercisable by the Optionee unless: (a) a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the shares of Common Stock to be received
upon the exercise of the Option shall be effective and current at the time of
exercise; or (b) there is an exemption from the registration requirements under
the Securities Act for the issuance of the shares of Common Stock upon
exercise. The Optionee hereby represents and warrants to the Company, that:
(i) the shares of Common Stock to be
issued upon the exercise of this Option are being acquired by the Optionee
for the Optionee's own account, for investment only and not with a view to
the resale or distribution thereof; and (ii) any subsequent resale or
distribution of shares of Common Stock by the Optionee will be made only
pursuant to (x) a Registration Statement under the Securities Act which is
effective and current with respect to the shares of Common Stock being sold,
or (y) a specific exemption from the registration requirements of the
Securities Act, but in claiming such exemption, the Optionee shall, prior to
any offer of sale or sale of such shares of Common Stock, provide the Company
with a favorable written opinion of counsel satisfactory to the Company, in
form, substance and scope satisfactory to the Company, as to the
applicability of such exemption to the proposed sale or distribution. Such
representation and warranties shall also be deemed to be made by the Optionee
upon each exercise of this Option. Nothing herein shall be construed as
requiring the Company to register the shares subject to this Option under the
Securities Act.
5. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing herein shall confer upon
the Optionee any right to continue in the employ of the Company, any of its
Subsidiaries or a Parent, or interfere in any way with any right of the
Company, any Subsidiary or a Parent to terminate such employment at any time
for any reason whatsoever without liability to the Company, the Subsidiary or
Parent.
6. LEGENDS; STOP TRANSFER INSTRUCTIONS. The Company may affix
appropriate legends upon the certificates for shares of Common Stock issued
upon exercise of this Option and may issue such "stop transfer" instructions
to its transfer agent in respect of such shares as it determines, in its
discretion, to be necessary or appropriate to: (a) prevent a violation of, or
to perfect an exemption from, the registration requirements of the Securities
Act and any applicable state securities laws; or (b) implement the provisions
of any agreement between the Company and the Optionee with respect to such
shares of Common Stock.
7. TAXES. The Company may withhold cash and/or shares of Common
Stock to be issued to the Optionee in the amount which the Company determines
is necessary to satisfy its obligation to withhold taxes or other amounts
incurred by reason of the grant or exercise of this Option, its disposition
or the disposition of the underlying shares of Common Stock. Alternatively,
the Company may require the Optionee to pay the Company such amount in cash
promptly upon demand.
8. COMPLIANCE WITH APPLICABLE LAWS. The Optionee agrees to comply
with all applicable laws relating to the grant and exercise of the Option and
the disposition of the shares of Common Stock acquired upon exercise of the
Option, including without limitation, federal and state securities and "blue
sky" laws, and applicable prospectus delivery requirements.
9. TRANSFERABILITY. The Option is not transferable otherwise than by
will or the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee or the Optionee's legal
representatives.
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10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, any successor or assign of the
Company and to any Legal Representative of the Optionee.
11. RESTRICTION ON SALES. The Optionee agrees not to sell more than
25,000 shares of Common Stock issuable pursuant to this agreement in any
calendar week without the written consent of the Company.
12. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to the conflicts of law rules thereof.
13. VALIDITY. The invalidity, illegality or unenforceability of any
provision herein shall not affect the validity, legality or enforceability of
any other provision, all or which shall be valid, legal and enforceable to
the fullest extent permitted by applicable law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MTR GAMING GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Its: President
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OPTIONEE
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
(Name of Optionee)
30 Sembrado
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Xxxxxx Xxxxx Xxxxxxxxx, XX 00000
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(Address)
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(Social Security Number)
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