Vernon Niven's Offer Letter accepted

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    10-Q

     

    


    September
      8, 2006

    


    Mr.
      Vernon Niven III

    1310
      Quiet Cove Lane

    Gulf
      Breeze, FL 32563

     

    Dear
      Vernon:

     

    I
      am
      pleased to offer you the position of Executive Vice President technology
      initiatives, as a Churchill Downs Incorporated (CDI) employee, reporting
      directly to our CEO, Bob Evans. Your responsibilities will be similar to those
      of other CDI business unit leaders. Your start date will be Monday, September
      11, 2006.

     

    Your
      base
      salary will be $11,538.46 bi-weekly. You will be eligible to participate in
      a
      cash bonus plan beginning for calendar year 2007, which is payable in March
      2008
      and is based on objectives mutually agreed upon between you and our CEO, and
      approved by the Compensation Committee of the Board of Directors. The target
      bonus for this position is 60% of base pay. In calendar year 2007 (paid out
      in
      March 2008) your target bonus award is up to $180,000.

    


    In
      this
      role, you may also be eligible for Long Term Incentives based on achievement
      of
      certain performance goals and vesting criteria as described in Exhibit A
      (attached). The Long Term Incentive payments are intended to be in the form
      of
      Company stock but require Board of Director and shareholder approval. Should
      Company stock not be available at the time of payment (based on the performance
      and vesting criteria in Exhibit A), the Long Term Incentives will be paid in
      cash. Should there be a change in control, defined as an acquisition by any
      individual, entity or group, with at least 51% of the voting control of CDI
      or
      CDI’s technology initiative, the remaining unforfeited Long Term Incentives as
      outlined in Exhibit A will vest at 50% of the scheduled value, paid in the
      year
      that the incentive otherwise would have been paid by Churchill Downs
      Incorporated.

        

    You
      will
      be provided relocation assistance similar to that offered to other senior CDI
      executives of comparable level, once your relocation destination has been
      mutually agreed upon. Relocation Today, Inc. will administer and manage your
      relocation.

    


    We
      will
      forward to you separately a summary of the customary fringe benefits you will
      be
      entitled to, including health insurance, life insurance, 401(k), Employee Stock
      Purchase Plan, Deferred Compensation Plan, and our executive severance policy.
      Please refer to the benefits summary for a description of the benefit,
      corresponding employee contribution and eligibility dates.

    


    Your
      employment with Churchill Downs Incorporated is "at will" and it can be
      terminated with or without cause, and with or without notice, at any time,
      at
      the option of either Churchill Downs Incorporated or yourself. 

     

    
      
      

      
        

      

    

     

    Return to 10-Q

     

    Vernon
      Niven III

    September
      8, 2006

    Page
      2

    


    


    Should
      your employment be terminated by the Company without “just cause” as defined
      below, the Company will convey the following:

    


    


    
      	a.  	
              pay
                through the month in which the severance occurs and severance pay
                and
                benefits per the Executive Severance
                Policy,

            


    

    
      	b.  	
              pay
                a pro rata annual bonus for the year in which your termination occurs
                based on the bonus target,

            


    

    
      	c.  	
              pay
                the balance of any long term incentive awards, if any, earned through
                your
                termination date but not yet paid,

            


    

    
      	d.  	
              pay
                20% of the then remaining unforfeited Long Term Incentives ( payable
                only
                if executive has completed one year of continuous service)
                

            


    

    


    “Just
      cause” shall mean [i] failure to perform substantially your duties after written
      demand for substantial performance improvement, or [ii] engaging in illegal
      conduct or gross misconduct which, in the sole direction of the Company, is
      injurious to the business or reputation of the Company.

    


    You
      agree
      that for a period of two years from the date you cease to be an employee of
      CDI
      or any subsidiary of CDI, regardless of the reason for no longer being an
      employee, you will not directly or indirectly:

    


    
      	-  	
              solicit
                any customers or prospective customers of CDI for the purpose of
                selling
                them products or services that compete with those of
                CDI;

            


    

    
      	-  	
              solicit
                or recruit in any form, as employees, contractors, sub-contractors,
                consultants or other capacity in which such individuals provide services
                of material business value, any employees or ex-employees of CDI,
                unless
                such ex-employees’ employment with CDI has been terminated for at least
                two years; 

            


    

    
      	-  	
              disclose
                to any third parties or use to your own benefit, directly or indirectly,
                any confidential or proprietary information or knowledge of CDI;
                and

            


    

    
      	-  	
              work
                with or for a competitor of CDI or yourself which would potentially
                subject CDI trade secrets or confidential information to
                misuse.

            


    

    


    Furthermore,
      you agree that any intellectual property developed while an employee of CDI
      is
      the sole exclusive property of CDI, including but not limited to any business
      processes, product or service designs, software code, and other such knowledge
      regardless of its form of expression, including such knowledge developed by
      contractors employed by you on CDI’s behalf.

    


    While
      you
      are employed by CDI, you agree to devote 100% of your business efforts to CDI
      and not to accept employment or otherwise engage with any third-parties whereby
      your obligations to such third-parties inhibit in any way your performance
      in
      discharging your CDI responsibilities.

    
       

      
        
        

        
          

        

      

       

      Return to 10-Q

       

    

    Vernon
      Niven III

    September
      8, 2006

    Page
      3

    


    Our
      employment offer is contingent upon a successful background check and submission
      of satisfactory proof of your identity and legal authorization to work in the
      United States. If you fail to submit this proof, federal law prohibits us from
      hiring you. As an Officer of Churchill Downs Incorporated, this employment
      agreement is also subject to the approval of the Board of
      Directors.

    


    Vernon,
      we are excited about the prospect of you joining us during this most exciting
      period for our Company. Please call me at 502-636-4836 as soon as you have
      had
      the opportunity to review the contents of this letter so I may promptly address
      any concerns you may have.

    


    If
      you
      agree with and accept the terms of this offer of employment, please sign the
      letter and return it to me. We are confident your employment with Churchill
      Downs Incorporated will prove mutually beneficial, and we look forward to having
      you join the team.

    


    Sincerely,

    


    /s/
      Chuck
      Kenyon

    Chuck
      Kenyon

    Vice
      President Human Resources

    Churchill
      Downs Incorporated

    


     

    Accepted
      by: 

     

     

    /s/
      Vernon Niven      Sept.
      12, 2006

     

     

    Vernon
      Niven III      Date

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


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