EXHIBIT 10(a)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of
September 27, 2010 (the “Effective Date”), by and between Churchill Downs
Incorporated, a Kentucky corporation (the “Company”), and Robert L. Evans
(“Executive”).

WHEREAS, the Company and Executive are parties to that certain employment
agreement, dated as of August 14, 2006, as amended by the First Amendment to
Employment Agreement dated November 25, 2008 (collectively, the “Prior
Employment Agreement”);

WHEREAS, the Company desires to continue Executive’s employment and to amend and
restate the Prior Employment Agreement to embody the terms of such continued
employment, and considers it to be in its best interests and in the best
interests of its stockholders to employ Executive during the Employment Term (as
defined in Section 1 below);

WHEREAS, Executive desires to accept such continued employment with the Company
and to amend and restate the Prior Employment Agreement; and

WHEREAS, Executive is willing to accept continued employment on the terms
hereinafter set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties hereby agree as follows:

1. Term of Employment. Unless terminated earlier in accordance with the
provisions of Section 7, Executive’s employment under this Agreement shall be
effective for a term commencing on the Effective Date and ending on August 14,
2016 (the “Employment Term”). Thereafter, the Employment Term shall be
automatically extended for subsequent one (1)-year periods unless written notice
to the contrary is given by either the Company or Executive at least ninety
(90) days prior to the expiration of the Employment Term or the expiration of
any subsequent one (1)-year extension thereof.

2. Position and Duties.

(a) As of the Effective Date, Executive shall continue to serve as the Chief
Executive Officer and President of the Company. In such position, Executive
shall report directly to the Board (as defined in Section 10(c)) and have such
authority, responsibilities, and duties customarily exercised by a person
holding such position. During the Employment Term, the Company shall cause
Executive to be nominated for election as a member of the Board as needed to
maintain Executive’s position on the Board.

(b) During the Employment Term, Executive will devote substantially all of his
business time and best efforts to the performance of his duties. Executive may:

(i) in addition to being a director of the Company and with the prior written
approval of the Chairman of the Board, serve as a director or trustee of: (x) up
to three (3) corporate or charitable entities; and (y) trade or other
associations related to the Company’s industry; and

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(ii) manage his personal investments;

to the extent that such activities do not materially inhibit or materially
interfere with the performance of Executive’s duties under this Agreement.

3. Base Salary. During the Employment Term, the Company shall pay Executive a
base salary (the “Base Salary”) at the annual rate of $550,000.00, payable in
regular installments in accordance with the Company’s usual payroll practices.
The Base Salary includes fees otherwise payable for his services for the Board.
The Board shall review and may consider for increase (but not decrease) at any
time Executive’s Base Salary in its sole discretion based on Executive’s
performance.

4. Incentive Compensation. Executive shall be eligible to participate in any
annual or long-term, cash or equity based, incentive plan or other arrangements
of the Company, as they exist from time-to-time. Executive shall be eligible to
participate in an annual performance bonus plan, with a target bonus for each
performance period of 100% of Base Salary.

5. Equity Grants. Executive shall retain all outstanding equity grants provided
in the Prior Employment Agreement, whether or not vested as of the Effective
Date, in accordance with the terms of the Prior Employment Agreement and
applicable plan documents and award agreements, and shall also receive the
following additional equity grants:

(a) Restricted Shares.

(i) As of the Effective Date, the Company shall grant Executive 45,000
Restricted Shares of Common Stock which shall vest as follows upon the Fair
Market Value (as defined in Section 10(m)) of a share of the Common Stock (as
defined in Section 10(g)) reaching the following prices for twenty
(20) consecutive trading days beginning on and after August 14, 2011; provided,
however, that such twenty (20)-trading day period occurs prior to a Termination
of Employment (as defined in Section 10(u)), but subject to Section 7(b) below:

 

20 Day Fair Market Value

at or Above

  

Shares Vesting

$**.**    15,000 $**.**    15,000 $**.***    15,000

 

*

Confidential information omitted and filed separately with the Securities and
Exchange Commission under a Confidential Treatment Request.

 

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(ii) As of the Effective Date, the Company shall grant Executive 81,250
Restricted Shares of Common Stock which shall vest for the applicable number of
Restricted Shares per the corresponding vesting date as listed on the schedule
below; provided, however, that such vesting date occurs prior to a Termination
of Employment, but subject to Section 7(b) below:

 

Vesting Date

  

Shares Vesting

September 30, 2011

   2,032

December 31,2011

   4,062

March 31, 2012

   4,063

June 30, 2012

   4,062

September 30, 2012

   4,063

December 31, 2012

   4,062

March 31, 2013

   4,063

June 30, 2013

   4,062

September 30, 2013

   4,063

December 31, 2013

   4,062

March 31, 2014

   4,063

June 30, 2014

   4,062

September 30, 2014

   4,063

December 31, 2014

   4,062

March 31, 2015

   4,063

June 30, 2015

   4,062

September 30, 2015

   4,063

December 31, 2015

   4,062

March 31, 2016

   4,063

June 30, 2016

   4,062

August 14, 2016

   2,031

(b) Stock Options. As of the Effective Date, the Company shall grant Executive
Options (as defined in Section 10(p)), with a term until no later than
November 14, 2016, to purchase 180,000 shares of Common Stock with a per share
exercise price equal to the Fair Market Value of a share of Common Stock as of
the date of grant. Such Options shall vest as follows:

 

Vesting Date

  

Number of Options to Vest

September 30, 2010

   7,500

December 31, 2010

   15,000

March 31, 2011

   15,000

June 30, 2011

   15,000

September 30, 2011

   15,000

December 31, 2011

   15,000

March 31, 2012

   15,000

June 30, 2012

   15,000

September 30, 2012

   15,000

December 31, 2012

   15,000

March 31, 2013

   15,000

June 30, 2013

   15,000

August 14, 2013

   7,500

 

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(c) Change in Control. In the event of a Change in Control during the Employment
Term, Executive shall receive accelerated vesting of: (i) fifty percent (50%) of
the then-unvested Restricted Stock Units granted pursuant to the Prior
Employment Agreement, (ii) fifty percent (50%) of the then-unvested Restricted
Shares granted pursuant to Subsections 5(a)(i) and (ii) above and the Prior
Employment Agreement, and (iii) fifty percent (50%) of the then-unvested Options
granted pursuant to Section 5(b) above. The Restricted Stock Units, Restricted
Shares and Stock Options that are subject to accelerated vesting pursuant to
this Section 5(c) shall be taken pro-rata from each then-unvested tranche of the
applicable award, and the remaining portion of each tranche shall vest according
to the original terms of the applicable award agreement, subject to potential
accelerated vesting pursuant to Section 7(c) below.

6. Other Benefits.

(a) Retirement Benefits. During the Employment Term, Executive shall be provided
with the opportunity to participate in the Company’s qualified 401(k) profit
sharing plan and non-qualified deferred compensation plan, as may exist from
time-to-time, in each case, in accordance with the terms of such plans.

(b) Welfare Benefits. During the Employment Term, Executive shall be provided
with the opportunity to participate in the Company’s medical plan and other
employee welfare benefit plans on a comparable basis as such benefits are
generally provided by the Company from time-to-time to the Company’s other
senior executives, in each case, in accordance with the terms of such plans.

(c) Perquisites. During the Employment Term, Executive shall be provided with
the opportunity to receive or participate in perquisites on a comparable basis
as such perquisites are generally provided by the Company from time-to-time to
the Company’s other senior executives, subject to the following:

(i) Transportation benefit – Executive will be entitled to transportation, via
car service or other comparable arrangement, in connection with the performance
of his duties hereunder (including but not limited to transportation between his
primary residence and the Main Office (as defined in Section 10(o)), which will
be in lieu of the Company’s standard cash automobile subsidy provided to senior
executives. To the extent this benefit is taxable income to Executive, he will
receive a Tax Gross-Up Payment (as defined in Section 10(t)); and

(ii) Attorney fees – The Company will pay reasonable attorneys’ fees and related
expenses incurred by Executive in connection with the negotiation and review of
this Agreement up to a maximum of $5,000.

(iii) Indemnification Agreement. The July 18, 2006 Indemnification Agreement
between the parties, or any subsequent indemnification agreement between the
parties that provides no fewer protections for Executive, shall remain in full
force and effect during the Employment Term.

(d) Reimbursement of Business Expenses. During the Employment Term, all
reasonable business expenses incurred by Executive in the performance of his
duties hereunder shall be reimbursed by the Company upon receipt of
documentation of such expenses in a form

 

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reasonably acceptable to the Company, and otherwise in accordance with the
Company’s expense reimbursement policies. Pursuant to the terms of this
Section 6(d), the Company shall pay for the reasonable expenses of Executive’s
wife when she travels with him on the Company’s business. Any reimbursement
payment shall be made no later than the end of Executive’s taxable year
following the taxable year in which the expense is incurred.

7. Termination. Notwithstanding any other provision of this Agreement:

(a) For Cause by the Company or Voluntary Resignation by Executive Without Good
Reason. If Executive is terminated by the Company for Cause (as defined in
Section 10(d)) or if Executive voluntarily resigns without Good Reason (as
defined in Section 10(n)), Executive shall be entitled to receive as soon as
reasonably practicable after his date of termination or such earlier time as may
be required by applicable statute or regulation: (i) his earned but unpaid Base
Salary through the date of termination; (ii) payment in respect of any vacation
days accrued but unused through the date of termination, to the extent provided
by Company policy; (iii) reimbursement for all business expenses properly
incurred in accordance with Company policy prior to the date of termination and
not yet reimbursed by the Company; and (iv) subject to Section 7(g), any earned
but unpaid annual bonus in respect of any of the Company’s fiscal years
preceding the fiscal year in which the termination occurs (provided, however,
that if Executive’s termination is by the Company for Cause and such event(s)
and/or action(s) that constitute Cause are materially and demonstrably injurious
to the business or reputation of the Company, then no payment will be made
pursuant to this clause (iv)) (the aggregate benefits payable pursuant to
clauses (i), (ii), (iii) and (iv) hereafter referred to as the “Accrued
Obligations”); and except as provided herein he shall have no further rights to
any compensation (including any Base Salary or annual bonus, if any) or any
other benefits under this Agreement. All equity-based awards shall be treated as
set forth under the terms of the Prior Employment Agreement, this Agreement and
the applicable plan or agreement. All other accrued and vested benefits, if any,
due Executive following Executive’s Termination of Employment pursuant to this
Section 7(a) shall be determined and provided or paid in accordance with the
plans, policies, and practices of the Company; provided such benefits shall be
provided or paid no later than the later of (A) sixty (60) days following
Executive’s date of termination or (B) the date provided under the applicable
plan, policy or practice of the Company covering such benefits.

(b) Without Cause by the Company or Voluntary Resignation by Executive for Good
Reason. If Executive is terminated by the Company other than for Cause,
Disability (as defined in Section 10(i)) or death, or if Executive voluntarily
resigns for Good Reason, Executive shall receive: (i) the Accrued Obligations;
and (ii) subject to Section 7(g), (A) cash payments equal to the product of 1.5
times the sum of (x) Executive’s Base Salary plus (y) Executive’s target bonus
for the year of the Termination of Employment, payable in equal installments
over the 18 months following Termination of Employment, (B) treatment of all
equity-based awards per the terms of the Prior Employment Agreement, this
Agreement and the applicable plan or agreement; provided, however, that vesting
of any equity awards granted pursuant to Section 5 of this Agreement and the
Prior Employment Agreement (including Restricted Shares vesting upon achievement
of certain stock price targets) shall be calculated through the end of the
calendar quarter in which Termination of Employment occurs, and (C) the
continuation of medical benefits through the end of the calendar quarter in
which Termination of Employment occurs; provided, however, that such benefit
shall be reduced or eliminated to the

 

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extent Executive receives similar benefits from a subsequent employer. Except as
provided herein, Executive shall have no further rights to any compensation
(including any Base Salary) or any other benefits under this Agreement. All
other accrued and vested benefits, if any, due Executive following Termination
of Employment pursuant to this Section 7(b) shall be determined and provided or
paid in accordance with the plans, policies and practices of the Company;
provided such benefits shall be provided or paid no later than the later of
(A) sixty (60) days following Executive’s date of termination or (B) the date
provided under the applicable plan, policy or practice of the Company covering
such benefits.

(c) Termination following a Change in Control. If, during the 2-year period
following a Change in Control (as defined in Section 10(e)), Executive is
terminated by the Company other than for Cause, Disability or death, or if
Executive voluntarily resigns for Good Reason, Executive shall receive: (i) the
Accrued Obligations; and (ii) subject to Section 7(g), (A) the benefits set
forth in Section 7(b)(ii) (with any payments due pursuant to clause (A) of
Section 7(b)(ii) payable in a lump sum on the sixtieth (60th) day following such
Termination of Employment), (B) full accelerated vesting of (x) any
then-unvested Restricted Stock Units granted pursuant to the Prior Employment
Agreement, (y) any then-unvested Restricted Shares granted pursuant to
Subsections 5(a)(i) and (ii) above and the Prior Employment Agreement, and
(z) any then-unvested Stock Options granted pursuant to Section 5(b) above, and
(C) a Tax Gross-Up Payment for purposes of Code Section 280G.

(d) Death. Following a Termination of Employment for death, Executive’s estate
shall be entitled to receive: (i) the Accrued Obligations; and (ii) subject to
Section 7(g), (A) a pro-rata bonus, if any, for the year of death, based on the
target bonus for which Executive was eligible for such year, and paid when
bonuses under such applicable bonus plans are normally paid, (B) (x) with
respect to the Restricted Stock award described in Section 5(a)(ii) above
(granting 81,250 restricted shares), vesting in any shares that otherwise would
have vested over the 18 months following the date of termination pursuant to
Executive’s continued employment with the Company and (y) treatment of all other
equity-based awards per the terms of the Prior Employment Agreement, this
Agreement and the applicable plan or agreement, (C) all other benefits and
payments per the applicable plan or program, and (D) life insurance benefits
paid per such applicable plans. Except as provided herein, Executive’s estate
shall have no further rights to any compensation (including any Base Salary) or
any other benefits under this Agreement. All other accrued and vested benefits,
if any, due Executive following a Termination of Employment for death shall be
determined in accordance with the plans, policies, and practices of the Company.

(e) Disability. Following a Termination of Employment for Disability, Executive
shall be entitled to receive: (i) the Accrued Obligations; and (ii) subject to
Section 7(g), (A) a pro-rata bonus, if any, for the year of Termination of
Employment, based on the target bonus for which Executive was eligible for such
year, and paid when bonuses under the applicable bonus plans are normally paid,
(B) (x) with respect to the Restricted Stock award described in Section 5(a)(ii)
above (granting 81,250 restricted shares), vesting in any shares that otherwise
would have vested over the 18 months following the date of termination pursuant
to Executive’s continued employment with the Company and (y) treatment of all
other equity-based awards per the terms of the Prior Employment Agreement, this
Agreement and the applicable plan or agreement, (C) all other benefits and
payments per the applicable plan or program, and (D) short-term and long-term
disability benefits per the applicable plans. Except as provided

 

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herein, Executive shall have no further rights to any compensation (including
any Base Salary) or any other benefits under this Agreement. All other accrued
and vested benefits, if any, due Executive following a Termination of Employment
for Disability shall be determined in accordance with the plans, policies, and
practices of the Company.

(f) No Mitigation or Offset. In no event shall the benefits set forth in this
Section 7 be subject to mitigation or offset.

(g) Release. Notwithstanding any other provision of this Agreement to the
contrary, Executive acknowledges and agrees that any and all payments to which
Executive is entitled under this Section 7, which are described as being subject
to this Section 7(g) are conditioned upon and shall not be payable unless
(A) Executive, or, if applicable, his or his estate’s personal representative,
executes a general release and waiver, in such reasonable and customary form as
shall be prepared by the Company, of all claims Executive may have against the
Company and its directors, officers, subsidiaries and affiliates, except as to
(i) matters covered by provisions of this Agreement that expressly survive the
termination of this Agreement and (ii) rights to which Executive is entitled by
virtue of his participation in the employee benefit plans, policies and
arrangements of the Company, within the minimum time period required under
applicable state and federal laws, or if no such period, ten business days
following the date of Executive’s termination, and (B) Executive, or, if
applicable, his or his estate’s personal representative, has not revoked such
release agreement within the time permitted under applicable law. Payments
subject to this Section 7(g) shall commence or be made, as applicable, on the
sixtieth (60th) day after the Termination of Employment, with any payments
scheduled to occur between the Termination of Employment and such sixtieth
(60th) day provided on such day.

8. Covenants.

(a) Confidentiality. Executive agrees that Executive will not at any time during
Executive’s employment with the Company or thereafter, except in performance of
Executive’s obligations to the Company hereunder, disclose, either directly or
indirectly, any Confidential Information (as hereinafter defined) that Executive
may learn by reason of his association with the Company. The term “Confidential
Information” shall mean any past, present, or future confidential or secret
plans, programs, documents, agreements, internal management reports, financial
information, or other material relating to the business, strategies, services,
or activities of the Company, including, without limitation, information with
respect to the Company’s operations, processes, products, inventions, business
practices, finances, principals, vendors, suppliers, customers, potential
customers, marketing methods, costs, prices, contractual relationships,
including leases, regulatory status, compensation paid to employees, or other
terms of employment, and trade secrets, market reports, customer investigations,
customer lists, and other similar information that is proprietary information of
the Company; provided, however, the term “Confidential Information” shall not
include any of the above forms of information which has become public knowledge,
unless such Confidential Information became public knowledge due to any act or
acts by Executive or his representative(s) in violation of this Agreement.
Notwithstanding the foregoing, Executive may disclose such Confidential
Information when required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the
Company and/or its affiliates, as the case may be, or by any administrative body
or legislative body (including a committee thereof) with jurisdiction to order
Executive to divulge, disclose or make accessible such information;

 

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provided, further, that in the event that Executive is ordered by any such court
or other government agency, administrative body, or legislative body to disclose
any Confidential Information, Executive shall (i) promptly notify the Company of
such order, (ii) at the reasonable written request of the Company, diligently
contest such order at the sole expense of the Company as expenses occur, and
(iii) at the reasonable written request of the Company, seek to obtain, at the
sole expense of the Company, such confidential treatment as may be available
under applicable laws for any information disclosed under such order.

(b) Non-Compete. During the Employment Term and for two (2) years immediately
following a Termination of Employment for any reason, Executive shall not,
without the prior written consent of the Company, participate or engage in,
directly or indirectly (as an owner, partner, employee, officer, director,
independent contractor, consultant, advisor or in any other capacity calling for
the rendition of services, advice, or acts of management, operation or control)
any business for a Competitor (as defined below). The term “Competitor” shall
mean any entity whose principal business involves the operation of a pari-mutuel
or casino gaming or advance deposit wagering business.

(c) Non-Solicit. During the Employment Term and for two (2) years immediately
following a Termination of Employment for any reason, Executive shall not,
without the prior written consent of the Company, solicit or induce any
then-existing employee of the Company or any of its subsidiaries to leave
employment with the Company or any of its subsidiaries or contact any
then-existing customer or vendor under contract with the Company or any of its
subsidiaries for the purpose of obtaining business similar to that engaged in,
or received (as appropriate), by the Company.

(d) Cooperation. Executive agrees that during the Employment Term or following a
Termination of Employment for any reason, Executive shall, upon reasonable
advance notice, assist and cooperate with the Company with regard to any
investigation or litigation related to a matter or project in which Executive
was involved during Executive’s employment. The Company shall reimburse
Executive for all reasonable and necessary expenses related to Executive’s
services under this Section 8(d) (i.e., travel, lodging, meals, telephone and
overnight courier) within ten (10) business days of Executive submitting to the
Company appropriate receipts and expense statements.

(e) Survivability. The duties and obligations of Executive pursuant to this
Section 8 shall survive the termination of this Agreement and Executive’s
Termination of Employment for any reason.

(f) Remedies. Executive acknowledges that the protections of the Company set
forth in this Section 8 are fair and reasonable. Executive agrees that remedies
at law for a breach or threatened breach of the provisions of this Section 8
would be inadequate and, therefore, the Company shall be entitled, in addition
to any other available remedies, without posting a bond, to equitable relief in
the form of specific performance, temporary restraining order, temporary or
permanent injunction, or any other equitable remedy that may be then available.

(g) Limitation. If the duration, scope, or nature of any restriction on business
activity covered by any provision of Section 8(b) or (c) above is in excess of
what is valid and enforceable under applicable law, such restriction shall be
construed to limit duration, scope or

 

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activity to an extent that is valid and enforceable, with such extent to be the
maximum extent possible under applicable law. For each of Section 8(b) and
(c) above, Executive hereby acknowledges that such Section shall be given the
construction which renders its provisions valid and enforceable to the maximum
extent, not exceeding its express terms, possible under applicable law.

9. Miscellaneous.

(a) Resolution of Disputes and Reimbursement of Legal Costs. Except as otherwise
provided in Section 8, the Company and Executive agree that any controversy or
claim arising out of or relating to this Agreement or the breach thereof shall
be settled by arbitration administered by the American Arbitration Association
in accordance with its Commercial Arbitration Rules then in effect. Venue for
any arbitration pursuant to this Agreement will lie in Louisville, Kentucky. Any
award entered by the arbitrator(s) shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. Each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys’ fees
and expenses) and shall share the fees of the American Arbitration Association
and the arbitrator(s), if applicable, equally.

(b) Governing Law. This Agreement will be governed by, and interpreted in
accordance with, the laws of the Commonwealth of Kentucky applicable to
agreements made and to be wholly performed within the Commonwealth of Kentucky,
without regard to the conflict of laws provisions of any jurisdiction which
would cause the application of any law other than that of the Commonwealth of
Kentucky.

(c) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto.
Sections 7 and 8 of this Agreement shall survive the termination of Executive’s
employment with the Company, except as otherwise specifically stated therein.

(d) Neutral Interpretation. This Agreement constitutes the product of the
negotiation of the parties hereto and the enforcement of this Agreement shall be
interpreted in a neutral manner, and not more strongly for or against any party
based upon the source of the draftsmanship of the Agreement. Each party has been
provided ample time and opportunity to review and negotiate the terms of this
Agreement and consult with legal counsel regarding the Agreement.

(e) No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

(f) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

 

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(g) Successors.

(i) This Agreement is personal to Executive and shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. The Company shall require any successor
(whether direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation, or otherwise) to all or a
substantial portion of its business and/or assets, by agreement in form and
substance reasonably satisfactory to Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform this Agreement if no such succession had
taken place. Regardless of whether such an agreement is executed, this Agreement
shall be binding upon any successor of the Company and such successor shall be
deemed the “Company” for purposes of this Agreement.

(h) Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally, if delivered by
overnight courier service, if sent by facsimile transmission or if mailed by
United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses or sent via facsimile to the respective
facsimile numbers, as the case may be, as set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt; provided, however, that (i) notices sent by personal delivery or
overnight courier shall be deemed given when delivered; (ii) notices sent by
facsimile transmission shall be deemed given upon the sender’s receipt of
confirmation of complete transmission, and (iii) notices sent by United States
registered mail shall be deemed given two days after the date of deposit in the
United States mail.

If to the Company, to:

Churchill Downs Incorporated

Attn: General Counsel

700 Central Avenue

Louisville, KY 40208

With a copy to:

Vedder Price P.C.

Attn: Michael A. Nemeroff, Esq.

222 North LaSalle Street

Chicago, IL 60601

Facsimile: (312) 609-5005

 

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If to Executive, to such address as shall most currently appear on the records
of the Company.

(i) Withholding. The Company may withhold from any amounts payable under this
Agreement such Taxes (as defined in Section 10(s)) as may be required to be
withheld pursuant to any applicable law or regulation.

(j) Counterparts and Signatures. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. Signatures delivered by
facsimile or PDF file shall constitute original signatures.

(k) Code Section 409A. It is intended that any amounts payable under this
Agreement and the Company’s and Executive’s exercise of authority or discretion
hereunder shall comply with Code Section 409A (including the Treasury
regulations and other published guidance relating thereto) so as not to subject
Executive to the payment of any interest or additional tax imposed under Code
Section 409A. To the extent any amount payable under this Agreement would
trigger the additional tax imposed by Code Section 409A, the Agreement shall be
modified to avoid such additional tax.

10. Definitions.

(a) “Agreement” – see the recitals to this Agreement.

(b) “Base Salary” – see Section 3.

(c) “Board” means the Board of Directors of the Company.

(d) “Cause” for termination by the Company of Executive’s employment with the
Company means any of the following:

(i) the willful and continued failure of Executive to perform substantially his
duties to the Company (other than any such failure resulting from incapacity due
to disability), after a written demand to cure such failure (the “Demand to
Cure”) is delivered to Executive by the Chairman of the Board which specifically
identifies the manner in which the Board believes that Executive has not
substantially performed his duties;

(ii) Executive’s conviction of, or plea of guilty or no contest to (A) a felony
or (B) a misdemeanor involving dishonesty or moral turpitude; or

(iii) the willful engaging by Executive in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the business or reputation of
the Company.

For purposes of this definition, no act or failure to act, on the part of
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon specific authority given pursuant to a resolution duly
adopted by the Board or upon instructions of the Chairman of the Board or based
upon the advice of counsel of the Company which Executive honestly believes is
within such counsel’s

 

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competence shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company. The Company
shall give written notice to Executive of the termination for Cause. Such notice
shall state in detail the particular act or acts or the failure or failures to
act that constitute the grounds on which the Cause termination is based and such
notice shall be given within six (6) months of the occurrence of, or, if later,
the Company’s actual knowledge of, the act or acts or the failure or failures to
act which constitute the grounds for Cause. Executive shall have sixty (60) days
upon receipt of the Demand to Cure in which to cure such conduct, to the extent
such cure is possible.

(e) “Change in Control” means the first to occur of the following events:

(i) the acquisition, directly or indirectly, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the “Exchange Act”) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50%
of either the then outstanding voting securities of the Company (the
“Outstanding Company Common Stock”) or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control: (w) any acquisition directly from the
Company, (x) any acquisition by the Company or any of its subsidiaries, (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(z) any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this definition;

(ii) individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the Effective Date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

(iii) consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Corporate Transaction”), in each
case, unless, immediately following such Corporate Transaction, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction
beneficially own, directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person

 

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(excluding any corporation resulting from such Corporate Transaction or employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Corporate Transaction) beneficially owns, directly or indirectly, 50%
or more of, respectively, the then-Outstanding Company Common Stock resulting
from such Corporate Transaction or the Outstanding Company Voting Securities
resulting from such Corporate Transaction, except to the extent that such
ownership existed prior to the Corporate Transaction, and (C) at least a
majority of the members of the Board resulting from the Corporate Transaction
were members of the Incumbent Board at the time of the execution of the initial
plan or action of the Board providing for such Corporate Transaction; or

(iv) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

(f) “Code” means the Internal Revenue Code of 1986, as amended from
time-to-time.

(g) “Common Stock” means the common stock, no par value, of the Company.

(h) “Company” – see the recitals to this Agreement.

(i) “Disability” means that Executive becomes “disabled” within the meaning of
Section 409A(a)(2)(C) of the Code or any successor provision and the applicable
regulations thereunder.

(j) “Employment Term” – see Section 1.

(k) “Exchange Act” means the Securities Exchange Act of 1934.

(l) “Executive” – see recitals to this Agreement.

(m) “Fair Market Value” means, as of any date, (i) the closing price of the
Common Stock on such date reported on The NASDAQ Stock Market (or, if no sale of
the Common Stock was reported for such date, on the next preceding date on which
such a sale of such security was reported), (ii) if the Common Stock is not
listed on The NASDAQ Stock Market, but is listed on a national securities
exchange, the closing price of the Common Stock on such date reported by such
exchange, (or, if no sale of the Common Stock was reported for such date, on the
next preceding date on which such a sale of such security was reported),
(iii) if the Common Stock is not listed on The NASDAQ Stock Market or any
national securities exchange, the average of the high bid and low asked
quotations for the Common Stock on such date in the over-the-counter market (or,
if no quotation of the Common Stock was reported for such date, on the next
preceding date on which such quotation of such security was reported), or
(iv) if there is no public market for the Common Stock, the fair market value of
the Common Stock determined by the Board in good faith exercise of its
discretion; provided, however, such determination shall be made in a manner
consistent with Code Section 409A and official guidance thereunder.

 

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(n) “Good Reason” for termination by Executive of Executive’s employment means
the occurrence (without Executive’s express written consent) of any one of the
following acts by the Company or failures by the Company to act:

(i) the assignment to Executive of any duties inconsistent in any material
respect with the position of President and Chief Executive Officer (including
status, office, title and reporting requirements), or the authority, duties or
responsibilities of the President and Chief Executive Officer, or any other
diminution in any material respect in such position, authority, duties or
responsibilities unless agreed to by Executive;

(ii) the Company’s requiring Executive to be based at, or perform his principal
functions at, any office or location other than a location within 35 miles of
the Main Office unless such other location is closer to Executive’s then-primary
residence than the Main Office;

(iii) a reduction in Base Salary;

(iv) a reduction in Executive’s welfare benefits plans, qualified retirement
plan, or paid time off benefit unless other senior executives suffer a
comparable reduction;

(v) any purported termination of Executive’s employment under this Agreement by
the Company other than for Cause, death or Disability; and

(vi) the Company’s notice to Executive of non-renewal of the Agreement, or
failure of the parties to reach mutually agreeable revised extension terms
within 60 days following a party’s notice of non-renewal of the Agreement.

Prior to Executive’s right to terminate this Agreement, he shall give written
notice to the Company of his intention to terminate his employment on account of
a Good Reason. Such notice shall state in detail the particular act or acts or
the failure or failures to act that constitute the grounds on which Executive’s
Good Reason termination is based and such notice shall be given within six
(6) months of the occurrence of the act or acts or the failure or failures to
act which constitute the grounds for Good Reason. The Company shall have sixty
(60) days upon receipt of the notice in which to cure such conduct, to the
extent such cure is possible.

(o) “Main Office” means 700 Central Avenue, Louisville, Kentucky.

(p) “Option” means an option to purchase shares of Common Stock.

(q) “Restricted Shares” see Section 5(a).

(r) “Restricted Stock Unit” means the right to receive a share of Common Stock
after a Termination of Employment, with such right subject to a risk of
forfeiture or other restrictions that will lapse upon the achievement of one or
more goals, such as the completion of service by Executive or achievement of
certain performance objectives. Due to Code Section 409A, it is expected that
any shares of Common Stock received per a Restricted Stock Unit shall be
received six (6) months after a Termination of Employment.

(s) “Taxes” means the incremental United States federal, state and local income,
excise and other taxes payable by Executive with respect to any applicable item
of income.

 

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(t) “Tax Gross-Up Payment” means an amount payable to Executive such that, after
payment of Taxes on such amount, there remains a balance sufficient to pay the
Taxes being reimbursed, which amount shall be payable in a lump sum to Executive
not later than the end of the taxable year of Executive next following the
taxable year of Executive in which the related Taxes were remitted. The amount
of Taxes eligible for reimbursement in one taxable year of Executive shall not
affect the amount of Taxes eligible for reimbursement in another taxable year of
Executive.

(u) “Termination of Employment” means a termination by the Company or by
Executive of Executive’s employment with the Company.

11. Section 409A. Notwithstanding the foregoing, to the extent required in order
to avoid accelerated taxation and/or tax penalties under Code Section 409A and
the rules and regulations thereunder (“Section 409A”), if Executive is a
“specified employee” (as defined under Section 409A) as of the date of his
“separation from service” (as defined under Section 409) from the Company, then
any payment of benefits scheduled to be paid by the Company to Executive during
the first six (6) month period following the date of a termination of employment
hereunder shall not be paid until the earlier of (a) the expiration of the six
(6) month period measured from the date of Executive’s “separation from service”
and (b) the date of Executive’s death. All payments and benefits that are
delayed pursuant to the immediately preceding sentence shall be paid to
Executive in a lump sum as soon as practicable following the expiration of such
period (or if earlier, upon Executive’s death) but in no event later than thirty
(30) days following such period. To the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A, no amount or
benefit that is payable upon a termination of employment or services from the
Company shall be payable unless such termination also meets the requirements of
a “separation from service” under Section 409A. In addition, the parties shall
cooperate fully with one another to ensure compliance with Section 409A,
including, without limitation, adopting amendments to arrangements subject to
Section 409A and operating such arrangements in compliance with Section 409A.

[Signature page follows.]

 

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

 

ROBERT L. EVANS

/s/ Robert L. Evans

CHURCHILL DOWNS INCORPORATED By:  

/s/ Leonard S. Coleman, Jr.

 

Leonard S. Coleman, Jr.

Chairman, Compensation Committee

of the Board of Directors

 

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