Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is made and entered into as of September 27,
2007 (“Employment Agreement”), between CHURCHILL DOWNS INCORPORATED, a Kentucky
corporation (“Company”) and William E. Mudd (“Mudd”).

 

1.                                       Employment.  Pursuant to this Employment Agreement, the
Company shall employ Mudd, and Mudd shall accept employment, in the capacity of
Executive Vice President and Chief Financial Officer of the Company, reporting
to the President and Chief Executive Officer of the Company, except, where
applicable, reporting to the Board of Directors or a committee thereof.  Mudd and the Company hereby agree that
October 15, 2007 is the date on which Mudd’s employment shall begin (the “Effective
Date”).  Mudd shall exert his best efforts
and devote his full time and attention to the business and affairs of the
Company.  Mudd shall have all powers and
responsibilities attendant to the position of Chief Financial Officer assigned
to him or delegated to him by the Company’s President and CEO (the “CEO”).  The duties and responsibilities of said
position may be described in a position description mutually acceptable to him
and the CEO; provided that said position shall, in any case, include (i) those
normal and customary duties associated with a position of Chief Financial
Officer (managing the day to day activities of the finance department to
include SEC filings, regulatory reporting, external audit, financial
compliance, risk management, capital structure management, strategic planning,
business planning, business forecasting and budgeting, management reporting,
treasury management, shareholder value management, investor relations, tax
management, capital investment analysis and advising the Board of Directors on
governance issues) and (ii) serving on the Executive Leadership team.

 

2.                                       Compensation
and Perquisites.

 

A.            Salary.  As compensation for the services rendered by
Mudd hereunder, the Company shall pay to Mudd a base salary (“base salary”) of
$290,000 a year, payable in accordance with the Company’s standard payroll
procedures.  The base salary shall be
prorated in 2007 based upon the proportion of the year remaining as of the
Effective Date.  Salary adjustments, if
any, shall be made, in the discretion of the Compensation Committee of the
Board of Directors, at any time but will normally occur in April of each year
in accordance with standard Company policy and in no event may Mudd’s base
salary be reduced below the annualized base salary paid in the preceding year,
unless such reductions are made for other senior executive officers and the
chief executive officer of the Company.

 

B.            Expenses.  The Company will reimburse Mudd for all
reasonable and necessary travel and other out-of-pocket expenses incurred by
him in the performance of his duties. 
The Company will pay Mudd’s reasonable travel and entertainment expenses
and other reasonable expenses incurred on behalf of the Company’s
business.  Mudd shall present to the
Company on a timely basis from time to time an itemized account of such
expenses in such form as may be required by the Company.  The reimbursement of such expenses shall be
subject to the customary policies of the Company.

 

1

 

C.            Automobile.  The Company will provide Mudd with an
automobile allowance of $900 per month so long as similar benefits are provided
to other members of the Executive Leadership team.  The Company may terminate such benefits at
its discretion.

 

D.            Dues.  The Company will pay for Mudd’s dues (excluding
any initiation fee) for any one country club so long as similar benefits are
provided to other members of the Executive Leadership team.  The Company may terminate such benefits at
its discretion.

 

E.             Moving Expenses.  The Company will pay to Mudd his reasonable
moving expenses actually incurred (the “Relocation Expenses”) which include but
are not limited to, transportation costs, cost of relocating household goods,
temporary housing, sales expenses relating to home (including any commissions
due to any real estate agent in connection with the sale or purchase of a
house), living allowances and the gross up of such expenses to cover tax
liability incurred by him in connection with his relocation to Louisville,
Kentucky.  Mudd shall present to the Company
an itemized account of such expenses. 
The Company and Mudd each agrees to use all reasonable efforts to keep
such Relocation Expenses at or below $150,000; provided that the Company
remains responsible for all Relocation Expenses in excess of $150,000 in
accordance with the first sentence of this Paragraph.  Mudd represents to the Company that he
intends to place his Pennsylvania home for sale as soon as reasonably
practicable and to relocate himself and his family in a newly purchased home in
the Louisville area as soon as reasonably practicable.  The Company represents that it intends to use
the Buyer Value Option “BVO” Program to assist in Mudd’s relocation.  Relocation Today will manage Mudd’s total
relocation in conjunction with the Company’s Human Resources Department.  Mudd will be required to sign a relocation
payback agreement (attached hereto as Exhibit A).

 

F.             Cash Signing
Bonus:  Mudd shall receive a cash
signing bonus of $100,000, within thirty (30) days of the Effective Date.  Mudd agrees that that if he terminates
employment within twelve (12) months of the Effective Date he will repay the
cash signing bonus on a daily calendar pro-rated basis [(365 minus number of days since the Effective Date) divided by 365 multiplied by
$100,000)].

 

G.              Equity Signing
Grant:  Mudd shall receive, under the
Company’s 2007 Omnibus Stock Incentive Plan, an initial stock grant of 2,500
shares of restricted stock, which will vest in three (3) years (measured from
the Effective Date) and 4,500 stock options, which will vest ratably over three
(3) years (measured from the Effective Date). 
These grants shall be subject to and on a basis consistent with the
terms and conditions and overall administration of such plan.  The Company and Mudd shall execute the standard
restricted stock grant agreement and stock option agreement in effect at the
time of the grant.

 

All payments and other compensation to Mudd shall be subject to
applicable withholding.

 

2

 

3.                                       Employee Benefits.

 

A.            Employee Stock Purchase Plan.  Mudd shall be entitled to participate in the
Churchill Downs Incorporated 2000 Employee Stock Purchase Plan, subject to and
on a basis consistent with the terms, conditions and overall administration of
such plan.

 

B.            Long Term
Incentive Plan.  Mudd shall be
entitled to participate in the Company’s 2007 Long Term Incentive Plan (“LTI”)
subject to and on a basis consistent with the terms and conditions and overall
administration of such plan.  Mudd’s
award shall be based on achievement of certain performance goals and vesting
criteria as approved by the Compensation Committee of the Board of
Directors.  Mudd’s LTI target award will
be $3.0 million with terms similar to those at his level.  LTI payments may be in the form of cash or
Company stock and may require Compensation Committee and Board of Director
approval.

 

C.            Medical, Dental,
Vision and Life Insurance.  Mudd will
be eligible to participate in the Company’s medical, dental, vision, disability
and life insurance plans on the same basis as generally offered to other
executives of the Company from time to time. 
Mudd acknowledges receipt of a summary of those benefits.

 

D.            Incentive
Compensation Plan.  Mudd shall be
entitled to participate in the Company’s (1997) Incentive Compensation Plan, as
amended and restated effective March 1, 2005 (the “ICP”), subject to and on a
basis consistent with the terms, conditions and overall administration of such
plan.  For purposes of participation in
the ICP, Mudd’s Target Award (as defined therein) for calendar year 2008 shall
be set at sixty percent (60%) of base salary. 
The bonus award for calendar year 2008 performance will be paid in March
2009.  Mudd shall not participate in, or
be eligible for an award under, the ICP for calendar year 2007.  The ICP may be modified, adjusted and changed
from time to time at the discretion of the Company.

 

E.             Section
401(k) Retirement Plan.  Mudd shall be
entitled to participate in the Company’s Section 401(k) Retirement Plan,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plan.

 

F.             Other Plans and
Programs.  Mudd will be eligible to
participate in all other plans and programs offered to executives of the
Company, subject to and on a basis consistent with the terms, conditions and
overall administrative requirements of such plans, including, without
limitation, the Deferred Compensation Plan, the 125 Flex Plan, Executive
Supplemental Long Term Disability Insurance; provided that, in some instances,
Mudd will not be able to participate in such plans until he has completed the
required term of employment as required under the terms of such plans.

 

4.                                       Vacation.  Mudd shall be awarded paid time off (PTO)
consistent with the Company’s established policy as amended from time to time.

 

3

 

5.                                       Termination of
Employment.  The Company
may terminate Mudd’s employment at any time, for any reason.

 

A.                                   By Company
(except for termination for Cause), or Mudd for Good Reason.  In the event Mudd is terminated by the
Company, without Cause or in the event of Mudd’s termination of employment for
Good Reason, the Company shall pay or otherwise provide to Mudd the following
amounts and benefits (the “Termination Benefits”):

 

(i)            the
Company shall pay Mudd a severance benefit in accordance with the Company’s
Executive Severance Policy as it may exist from time to time and at the time he
incurs an employment termination eligible for payment under such plan; provided
that if such termination occurs within eighteen (18) months of the Effective
Date, the severance benefit shall equal twenty-four (24) months of base salary
at the base salary then in effect (unless a reduction in base salary is the
basis for Mudd’s termination of employment for Good Reason, in which case the
base salary in effect immediately prior to such reduction),

 

(ii)           the
Company shall pay Mudd a pro rated annual bonus for the year in which Mudd’s
termination occurs based, at a minimum, on the Target Award (as defined in the
ICP), subject to the Company’s accomplishment of the Threshold Company Goal
under the ICP for such year.  Such amount
shall be payable at the time and in the manner stipulated in the said ICP,

 

(iii)          the
Company shall pay Mudd the balance of any annual or long-term incentive awards,
if any, earned (but not yet paid) as of the date of employment termination,
subject to the terms of the applicable plan or program,

 

(iv)          any
equity based award shall be governed by the applicable plan or program (except
as set forth in item (v) below),

 

(v)           the
Compensation Committee of the Board of Directors shall terminate any
restrictions applicable to the restricted stock and stock options granted to
Mudd pursuant to Paragraph 2G above, to the effect that there shall be no “Restriction
Period” applicable to such shares as of the date of employment termination.

 

(vi)          the
Company shall permit Mudd to continue to participate in all other employee
benefits programs in which Mudd participated at the time of employment
termination, in each case from the date of employment termination until the six
(6) month anniversary thereof, with the exception of the Company’s Section
401(k) Retirement Plan, the 2005 Churchill Downs Incorporated Deferred
Compensation Plan, the Churchill Downs Incorporated 2000 Employee Stock
Purchase Plan, the Company’s 125 Flex Plan and the Company’s Life and
Disability Insurance programs;  provided
however, that the Company’s obligations under this subparagraph (vi) shall be
reduced or eliminated (including, without limitation, as required by the COBRA
continuation coverage provisions applicable to the Company health care plan) to
the extent Mudd receives similar coverage and benefits under plans and programs
of a subsequent employer.

 

In consideration of the
receipt of the payments and benefits of this Paragraph 5(A), and as a condition
thereto, Mudd specifically agrees to execute the Company’s standard employee 

 

4

 

release
and waiver agreement (as modified if necessary to be consistent with the terms
of this Employment Agreement) at the time of employment termination, whereby
the employee releases and waives any and all claims and causes of action of any
kind or nature whatsoever, whether known or unknown and whether or not
specifically mentioned, which may exist or might be claimed to exist at or
prior to the date of employment termination , including without limitation any
future injuries, losses or damages not known or anticipated at the time of
employment  termination  but which may later develop or become
discovered (including the effects or consequences thereof) and which are
attributable to such claims.  This
release and waiver agreement includes any claims which might exist as of the
date of execution of the agreement, and shall conform in all respects to
requirements for a valid and enforceable release and waiver of claims under the
Age Discrimination in Employment Act (“ADEA”).

 

B.                                     By Company - -
(for Cause).  In the
event Mudd is terminated by the Company for Cause, the Company shall be
obligated to pay Mudd’s then base salary only through the end of the month
during which such termination occurs, plus such other sums as are payable under
this Employment Agreement and which shall have accrued through the end of such
month.

For purposes of this Agreement, the term “Cause”
means:

 

(i)            the continued failure of Mudd to perform substantially
his duties hereunder (other than any such failure resulting from incapacity due
to disability) after written demand for substantial performance improvement is
delivered by the Company that specifically identifies the manner in which the
Company believes Mudd has not substantially performed his duties,

(ii)           Mudd’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  engaging by Mudd in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the business or
reputation of the Company.

 

The Company shall give written notice to Mudd 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 ground on which the termination for Cause is based.  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.  Mudd shall have sixty (60)
days upon receipt of then notice in which to cure such conduct, to the extent
such cure is possible.

 

C.                                     Termination
following a Change in Control.  In the event Mudd is terminated by the
Company within twenty-four (24) months following a Change in Control other than
for Cause, disability or death, or if Mudd voluntarily resigns for Good Reason
within such twenty-four (24) month period, Mudd shall receive the benefits
described in Paragraph 5(A), provided that the severance benefit described in
Paragraph 5(A)(i) shall equal twenty-four (24) months of base salary at the
base salary then in effect (unless a reduction in base salary is the basis for
Mudd’s termination of employment for Good Reason, in which case the base salary
in effect immediately prior to such reduction).

 

5

 

For purposes of this Agreement, the term “Change in
Control” means the first to occur of the following events:

(i)            the acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of 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”);

(ii)           individuals who, as
of the Effective Date of this Agreement, constitute the Board of Directors of
the Company (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 of this Agreement 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, (i) 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 Company 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, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such entity resulting from such Corporate
Transaction) beneficially owns, directly or indirectly, 20% 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 (iii) at least a majority of
the members of the Board of Directors of the Company 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.

 

6

 

In
addition and anything to the contrary contained herein notwithstanding, if the
Company enters into an agreement or series of agreements or the Board of
Directors adopts a resolution that results in the occurrence of any of the
foregoing events, and the employment of Mudd is terminated after the entering
into of such agreement or series of agreements or the adoption of such
resolution, then, upon the termination of Mudd’s employment, a Change in
Control shall be deemed to have retroactively occurred on the date of entering
into of the earliest of such agreements or the adoption of such resolution.

Notwithstanding
the foregoing, actions taken in compliance with that certain Stockholder’s
Agreement dated as of September 8, 2000, among the Company, Duchossois
Industries, Inc. and subsequent signatories thereto, as amended from time to time,
shall not be deemed a Change in Control.

D.            Voluntary
Termination by Mudd.  Mudd may at any
time resign from his position after giving the Company not less than thirty
(30) days prior written notice of the effective date of his resignation.  Any such resignation shall not be deemed to
be a material breach by Mudd of this Employment Agreement and, except as
contemplated by Paragraph 5(E), Mudd shall not be entitled to receive the
severance payment contemplated by Paragraph 5(A).  Termination by Mudd within the first twelve
(12) months of employment under this Paragraph 5(D) (but not Paragraph 5(E))
will result in the pro-rated repayment of the cash signing bonus, and within
the first twenty-four (24) months of employment the repayment of relocation expenses
as outlined in the relocation payback agreement referred to in Section 2.E
above.  It is further agreed that upon
such resignation, except for (i) obligations of either party to the other which
have accrued through the date of Mudd’s resignation and (ii) the obligations of
Paragraph 6, Mudd and the Company shall be and remain fully and finally
released from all further and future obligations of performance under this
Employment Agreement.

 

E.             Termination by Mudd for Good Reason.  Mudd may, in his sole discretion, terminate
his employment with the Company for Good Reason, as defined herein; provided
such termination of employment must occur within two (2) years following the
initial existence of one or more of the following conditions (without the consent
of Mudd), each of which shall constitute and be defined as “Good Reason”:  (i) a material diminution of base
compensation, (ii) a material diminution of authority, duties or
responsibilities, (iii) a material diminution in the authority, duties, or
responsibilities of the individual to whom he is required to report, including
a requirement that he report to the Chief Executive Officer of the Company,
(iv) a material diminution in the budget over which he retains authority, (v) a
material change in the geographic location at which he must perform his
services, or (vi) any other action or inaction that constitutes a material
breach of this Employment Agreement. 
Prior to exercising his right to terminate employment for Good Reason,
Mudd shall, within ninety (90) days of the initial occurrence of the condition
described in items (i) through (vi) above which constitutes Good Reason, give
written notice to the Company of the existence of such condition.  Upon receipt of such notice the Company shall
have thirty (30) days in which to remedy such condition and not be required to
pay the amount.

6.                                       Other
Conditions of Employment.  Mudd
agrees that for a period of two (2) years from the date he ceases to be an
employee of the Company or any subsidiary of the Company, regardless of the
reason for no longer being an employee, he will not directly or indirectly:

 

7

 

(i)            solicit any customers or prospective customers of Company
for the purpose of selling them products or services that compete with those of
Company,

 

(ii)           solicit any Company sponsors, media
rights holders, or any other entity that pays Company money in exchange for use
of its tangible or intangible assets,

(iii)          solicit or recruit in any form, as employees, contractors,
subcontractors, consultants or other capacity in which such individuals
provided services of material business value, any employees or ex-employees of
Company,

(iv)          disclose to any third parties or use to his own benefit,
directly or indirectly, any confidential or proprietary information or
knowledge of Company, or

(v)           work with or for a competitor of Company, or for himself,
in any manner which would potentially subject Company trade secrets of
confidential information to disclosure and/or misuse.

7.                                       Gross Up
Payment.  In the event the Company
terminates Mudd without Cause or upon Mudd’s termination of employment for Good
Reason and, in either case, all Termination Benefits paid or provided to Mudd
pursuant to the Employment Agreement and under all other plans and programs of
the Company (the “Aggregate Payment”) is determined to constitute a Parachute
Payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code, as amended, the Company shall pay to Mudd, prior to the time of any
excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise
Tax”) is payable with respect to such Aggregate Payment, an additional amount
which, after the imposition of all federal, state and local income and excise
taxes thereon, is equal to the Excise Tax on the Aggregate Payment.  The determination of whether the Aggregate
Payment constitutes a Parachute Payment and, if so, the amount to be paid to
Mudd and the time of payment shall be made by an independent auditor (the “Auditor”)
jointly selected by the Company and Mudd and paid for by the Company.  The Auditor shall be a nationally recognized
United States public accounting firm which has not acted in any way on behalf
of the Company.  If the Company and Mudd
cannot agree on the firm to serve as the Auditor, then Mudd and the Company
shall each select one accounting firm and those firms shall jointly select the
accounting firm to serve as the Auditor. 
Such payment shall be made to Mudd as soon as practicable after the
amount thereof has been determined, but in no later than the end of the year
following the year in which the underlying taxes are paid.

 

8.                                       Notices.  All notices, requests, demands and other
communications provided for by this Employment Agreement shall be in writing
and shall be sufficiently given if and when mailed in the continental United
States by registered or certified mail or personally delivered to the party
entitled thereto at the address stated below or to such changed address as the
addressee may have given by a similar notice:

 

To the Company:                                                                                                    Churchill Downs
Incorporated

Attn: Vice President Human Resources

700 Central Avenue

Louisville, Kentucky 40208

 

8

 

To Mudd:                                                                                                                                          William E. Mudd

2520 Lockleigh Road

Jamison, PA 18929

 

9.                                       Amendment or
Modification; Waiver.  No
provision of this Employment Agreement may be amended, modified or waived
unless such amendment, modification or waiver shall be authorized by the Board
of Directors and shall be agreed to in writing, signed by Mudd and by the Chief
Executive Officer.  Except as otherwise
specifically provided in this Employment Agreement, no waiver by either party
hereto of any breach by the other party thereto of any condition or provision
of this Employment Agreement to be performed by such other party shall be
deemed a waiver of a subsequent breach of such condition or provision or a
waiver of a similar or dissimilar provision or condition at the same or at any
prior or subsequent time.

 

10.                                 Severability.  In the event that any provision or portion of
this Employment Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions and portions of this Employment
Agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.

 

11.                                 Applicable Law.  This Employment Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of Kentucky.

 

12.                                 Obligation to
Mitigate; No Right of Offset.  In the event of any termination of
employment, Mudd shall be under no obligation to seek other employment and,
except as specifically provided herein, there shall be no offset against
amounts due to Mudd under this Employment Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain or
for claims the Company may have against him.

 

13.                                 Expenses.  In the event the Company does not comply with
its obligations under this Employment Agreement or causes or attempts to cause litigation
seeking to have this Employment Agreement declared unenforceable, then, in such
event, the Company irrevocably authorizes Mudd to retain counsel of his choice
at the sole expense of the Company to represent Mudd in connection with the
initiation or defense of any litigation or other legal action in connection
with the enforcement of the terms of this Employment Agreement.  All expenses shall be fully paid by the
Company if Mudd prevails in the final, binding, non-appealable outcome of the
litigation or other legal action.  The
Company agrees to reimburse Mudd for his expenses under this Paragraph 13 on a
monthly basis upon presentation by Mudd of a statement prepared by such counsel
up to a maximum aggregate amount of $250,000. 
Mudd agrees to repay all reimbursed expenses and the Company’s legal
costs under this Paragraph 13 in the event the Company prevails in the final,
binding, non-appealable outcome of the litigation or other legal action, such
amount to be repaid in full within ninety (90) days thereafter.

 

14.                                 Background
Check.  Mudd agrees that this
Employment Agreement is contingent upon a successful background check and
submission of satisfactory proof to work in the United States.  Failure to submit this proof prohibits
Company from hiring Mudd.  This
Employment Agreement is also subject to the approval of the Company’s Board of
Directors.

 

9

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date and year first above written.

 

 

	
  CHURCHILL
  DOWNS INCORPORATED

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert L. Evans

  
	
   

  	
  Robert
  L. Evans, President and

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  /s/ William E. Mudd

  
	
   

  	
  William E. Mudd

  

 

10

 

EMPLOYMENT AGREEMENT

(William E. Mudd)

(Effective October 15, 2007)

 

Exhibit A

 

 

 

[Relocation Payback Agreement]

 

 

11Exhibit
10.2

Exhibit
A of the Employment Agreement

 

 

EMPLOYEE RELOCATION
EXPENSE AGREEMENT

EXECUTIVE RELOCATION
PROGRAM FOR CHURCHILL DOWNS INCORPORATED

 

Churchill Downs Incorporated (the “Company”) has, or will, pay or
reimburse William E. Mudd , or third party vendors for certain expenses reasonably and necessarily
incurred by you, or by the Company on your behalf, in connection with
relocating you and/or your immediate family (the “Relocation Payments”). This agreement is not an employment contract.  Nothing in this Agreement is intended to
alter your status as an at-will employee.  In consideration of the Relocation Payments, you
agree:

 

For purposes of this Agreement, Relocation Payments include any
payments or reimbursements made to you or on your behalf in connection with
relocating you and your family.  Mudd’s
relocation payments include, but are not limited to, any payments or
reimbursements associated with: 
relocation allowance; tax gross-up; moving and storing household goods;
selling your former home and purchasing a new home; home search trips; travel
to your new location; temporary housing; return trips home; school and home
search services and similar payments.

 

You are not eligible for relocation payments for expenses paid or
reimbursed by another company or source, and you agree to repay to the Company
any such relocation payments made by the Company.  In addition, you agree to notify the Company
if you or any of your household members is receiving, or is eligible to
receive, any relocation assistance from any other company or source so that the
relocation payments made to you can be coordinated with the payments from the
other company or source.  Failure to so
notify the Company may result in your forfeiture of all relocation payments not
yet made.

 

If, before the expiration of 24 months after the “effective date” of
your employment agreement you voluntarily terminate your employment you agree
to repay to the Company the relocation payments made to you or on your
behalf.  Such repayment must be made
within 30 days following your termination as follows:

 

	
  Length of Employment

  	
   

  	
  Percent or Expense to be Repaid

  	
   

  
	
  Less than one
  year

  	
   

  	
  100 

  	
  %

  
	
  One to two years

  	
   

  	
  50

  	
  %

  

 

If you do not make the repayment required under paragraphs 2 and/or 3,
and the Company resorts to litigation to obtain such repayment, you will be
liable to the Company for all of the Company’s litigation costs and expenses,
including attorneys’ fees and interest at the highest legal rate, unless the
Company does not prevail in such litigation.

 

 

By signing below, you understand that
this Agreement is a legally enforceable contract between yourself and Churchill
Downs Incorporated.  However, nothing in
this Agreement is intended to alter your status as an at-will employee.

 

	
   

  	
  Dated:

  	
  10/1/2007

  	
   

  	
  /s/ William E. Mudd

  
	
   

  	
   

  	
  Employee
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  William E. Mudd

  
	
   

  	
   

  	
  Printed Name

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]