Document:

Mellon Financial Corporation Long-Term Profit Incentive Plan (2004)

 Exhibit 10.1 
  
 As Approved at the 2004 Annual Meeting 
  
 MELLON FINANCIAL CORPORATION 
 LONG-TERM PROFIT INCENTIVE PLAN (2004) 
  
 I. Purposes

  
 The purposes of this Long-Term Profit Incentive Plan (2004), as amended and
restated, are to promote the growth and profitability of Mellon Financial Corporation (“Corporation”) and its Affiliates, to provide officers and other employees of the Corporation and its Affiliates with the incentive to achieve long-term
corporate objectives, to attract and retain officers and other employees of outstanding competence, and to provide such officers and employees with an equity interest in the Corporation. 
  
 II. Definitions 
  
 The following terms shall have the meanings shown: 
  
 2.1 “Affiliate” shall mean any corporation, limited partnership or other organization in which the Corporation owns, directly or indirectly, 50% or more of the
voting power. 
  
 2.2 “Award” shall mean Options, SARs, Performance
Units, Restricted Stock, Deferred Share Awards, Deferred Cash Incentive Awards and Other Stock-Based Awards, as defined in and granted under the Plan. 
  
 2.3 “Board of Directors” shall mean the Board of Directors of the Corporation. 
  
 2.4 “Change in Control Event” shall mean any of the following events: 
  
 (a) The occurrence with respect to the Corporation of a “control
transaction”, as such term is defined in Section 2542 of the Pennsylvania Business Corporation Law of 1988, as of August 15, 1989; or 
  
 (b) Approval by the stockholders of the Corporation of (i) any consolidation or merger of the Corporation where either (x) the holders of voting stock of
the Corporation immediately before the merger or consolidation will not own more than 50% of the voting shares of the continuing or surviving corporation immediately after such merger or consolidation or (y) the Incumbent Directors immediately
before the merger or consolidation will not hold more than 50% (rounded to the next whole person) of the seats on the board of directors of the continuing or surviving corporation, or (ii) any sale, lease or exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the assets of the Corporation; or 
  
 (c) A change of 25% (rounded to the next whole person) in the membership of the Board of Directors within a 12-month period, unless the election or
nomination for election by stockholders of each new director within such period (i) was approved by the vote of 85% 

 (rounded to the next whole person) of the directors then still in office who were in office at the beginning of the
12-month period and (ii) was not as a result of an actual or threatened election with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board of Directors. As used in this
Section 2.4, the term “Incumbent Director” means as of any time a director of the Corporation (x) who has been a member of the Board of Directors continuously for at least 12 months or (y) whose election or nomination as a director within
such period met the requirements of clauses (i) and (ii) of the preceding sentence. 
  
 2.5 “Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be
construed also to refer to any successor sections. 
  
 2.6 “Committee”
shall mean the Human Resources Committee of the Board of Directors, or any successor committee. 
  
 2.7 “Common Stock” shall mean Common Stock of the Corporation. 
  
 2.8 “Corporation” shall mean Mellon Financial Corporation and any successor. 
  
 2.9 “Deferred Cash Incentive Award” shall mean an Award granted pursuant to Article VII of the Plan. 
  
 2.10 “Deferred Share Award” shall mean an Award granted pursuant to Article VIII,
Section 8.7, of the Plan. 
  
 2.11 “Fair Market Value” shall mean the
closing price of a share of Common Stock in the New York Stock Exchange Composite Transactions on the relevant date, or, if no sale shall have been made on such exchange on that date, the closing price in the New York Stock Exchange Composite
Transactions on the last preceding day on which there was a sale. 
  
 2.12
“Incentive Stock Option” shall mean an option qualifying under Section 422 of the Code granted by the Corporation. 
  
 2.13 “Options” shall mean rights to purchase shares of Common Stock granted pursuant to Article IV of the Plan. 
  
 2.14 “Other Stock-Based Award” means an Award granted pursuant to Article IX of the
Plan. 
  
 2.15 “Participant” shall mean an eligible employee who is
granted an Award under the Plan. 
  
 2.16 “Performance Goals” shall mean
goals established by the Committee in compliance with Section 162(m) of the Code covering a performance period set by the Committee and based on the attainment or maintenance of, or changes in, levels of performance with respect to one or more of
the following objective business criteria: earnings or earnings per share; total return to shareholders; return on equity, assets or investment; pre-tax margins; revenues; expenses; stock price; investment performance of funds or accounts under
management; market share; charge-offs; 
  

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 or non-performing assets. Performance Goals based on such business criteria may be based on absolute levels of
performance or on performance as compared to an index, peer group or other benchmark. Performance Goals shall be established by the Committee in connection with the grant of Performance Units and Deferred Cash Incentive Awards and may be established
in connection with the grant of Restricted Stock, Deferred Share Awards or Other Stock-Based Awards. Performance Goals may be applicable to an individual, a business unit or to the Corporation as a whole and need not be the same for each of the
foregoing types of Awards or for each individual receiving the same type of Award. The Committee may retain the discretion to reduce (but not to increase) the portion of any Award which will be earned based on achieving Performance Goals.

  
 2.17 “Performance Units” shall mean units granted pursuant to
Article VI of the Plan. 
  
 2.18 “Plan” shall mean the Mellon Financial
Corporation Long-Term Profit Incentive Plan (2004), as amended and restated, formerly known as the Long-Term Profit Incentive Plan (1996) and prior to that the Long-Term Profit Incentive Plan (1981). 
  
 2.19 “Reload Option Rights” and “Reload Options” shall have the meanings
set forth in Article IV of the Plan. 
  
 2.20 “Restricted Stock” shall
mean any share of Common Stock granted pursuant to Article VIII of the Plan. 
  
 2.21 “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended from time to time, or any successor rule. 
  
 2.22 “SAR” shall mean any stock appreciation right granted pursuant to Article V of
the Plan. 
  
 III General 
  
 3.1 Administration. 
  
 (a) The Plan shall be administered by the Committee, each member of which shall at the time of any action under the Plan be
(i) a “non-employee director” as then defined under Rule 16b-3 and (ii) an “outside director” as then defined under Section 162(m) of the Code. 
  
 (b) The Committee shall have the authority in its sole discretion from time to time: (i) to designate the employees eligible
to participate in the Plan; (ii) to grant Awards under the Plan; (iii) to prescribe such limitations, restrictions and conditions upon any such Award as the Committee shall deem appropriate; and (iv) to interpret the Plan, to adopt, amend and
rescind rules and regulations relating to the Plan, and to make all other determinations and take all other action necessary or advisable for the implementation and administration of the Plan. A majority of the Committee shall constitute a quorum,
and the action of a majority of members of the Committee present at any meeting at which a quorum is present, or acts unanimously adopted in writing without the holding of a meeting, shall be the acts of the Committee. 
  

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 (c) All actions of the Committee shall be final, conclusive and binding upon the Participant. No member
of the Committee shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. 
  
 3.2 Eligibility. The Committee may grant Awards under the Plan to any employee of the Corporation or any of its Affiliates. In granting such Awards and determining their
form and amount, the Committee shall give consideration to the functions and responsibilities of the employee, his or her potential contributions to profitability and to the sound growth of the Corporation and such other factors as the Committee may
deem relevant. 
  
 3.3 Effective and Expiration Dates of Plan. The amended and
restated Plan shall become effective on the date approved by the holders of a majority of the shares present or represented and entitled to vote at the 2004 Annual Meeting of Shareholders of the Corporation. No Award shall be granted after December
31, 2013, except that Reload Options may be granted pursuant to Reload Option Rights then outstanding. 
  
 3.4 Aggregate and Individual Limitations on Awards. 
  
 (a) The aggregate number of shares of Common Stock reserved for issue under the Plan on and after April 20, 2004 shall not exceed 52,973,082 shares, subject to adjustments pursuant to Section 10.7. No more than
4,276,057 shares of Common Stock may be issued as Restricted Stock, Deferred Share Awards, Performance Units or Other Stock-Based Awards on and after April 20, 2004. Shares of Common Stock which may satisfy Awards granted under the Plan may be
either authorized and unissued shares of Common Stock or authorized and issued shares of Common Stock held in the Corporation’s treasury or issued and outstanding shares of Common Stock held by any employee stock benefit trust established by
the Corporation. 
  
 (b) For purposes of paragraph (a) of this
Section 3.4, shares of Common Stock that are actually issued upon exercise of an Option shall be counted against the total number of shares reserved for issuance, except that when Options are exercised by the delivery of shares of Common Stock the
charge against the shares reserved for issuance shall be limited to the net new shares of Common Stock issued. In addition to shares of Common Stock actually issued pursuant to the exercise of Options, there shall be deemed to have been issued under
the Plan a number of shares of Common Stock equal to (i) the number of shares issued pursuant to SARs which shall have been exercised pursuant to the Plan, (ii) the number of Performance Units which shall have been paid in shares of Common Stock
pursuant to the Plan, (iii) the number of shares subject to Restricted Stock and Deferred Share Awards which shall have been granted pursuant to the Plan and (iv) the number of shares actually issued pursuant to an Other Stock-Based Award. For
purposes of paragraph (a) of this Section 3.4, the payment of a Deferred Cash Incentive Award shall not be deemed to result in the issuance of any shares of Common Stock in addition to those issued pursuant to the exercise of the related Option.

  
 (c) For purposes of paragraph (a) of this Section 3.4, any
shares of Common Stock subject to an Option which for any reason either terminates unexercised or expires, except by 
  

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 reason of the exercise of a related SAR, shall again be available for issuance under the Plan. In addition to the shares
authorized by Section 3.4(a), any shares of Restricted Stock granted under this Plan or any shares of Common Stock covered by a Deferred Share Award or Other Stock-Based Award which are surrendered or forfeited to the Corporation (including shares
subject to Awards outstanding as of April 20, 2004), shall again be available for issuance under the Plan. 
  
 (d) The maximum number of shares of Common Stock available for grants of Options or SARs to any one Participant under the Plan during a calendar year
shall not exceed 4,000,000 shares. The limitation in the preceding sentence shall be interpreted and applied in a manner consistent with Section 162(m) of the Code. To the extent consistent with Section 162(m) of the Code, a Reload Option (A) shall
be deemed to have been granted at the same time as the original underlying Option grant and (B) shall not be deemed to increase the number of shares covered by the original underlying Option. 
  
 3.5 Cancellation and Reissuance of Options. The Committee will not permit the repricing of
Options by any method, including by cancellation and reissuance. 
  
 IV.
Options 
  
 4.1 Grant. The Committee may from time to time, subject to the
provisions of the Plan, in its discretion grant Options to Participants to purchase for cash or shares of Common Stock the number of shares of Common Stock allotted by the Committee. In the discretion of the Committee, any Options or portions
thereof granted pursuant to this Plan may be designated as Incentive Stock Options. The aggregate Fair Market Value (determined as of the time the Incentive Stock Option is granted) of Common Stock and any other stock of the Corporation or any
parent, subsidiary or affiliate corporation with respect to which such Incentive Stock Options are exercisable for the first time by a Participant in any calendar year under all plans of the Corporation, its subsidiaries and affiliates shall not
exceed $100,000 or such sum as may from time to time be permitted under Section 422 of the Code. The Committee shall also have the authority, in its discretion, to award reload option rights (“Reload Option Rights”) in conjunction with the
grant of Options with the effect described in Section 4.7. Reload Option Rights may be awarded either at the time an Option is granted or, except in the case of Incentive Stock Options, at any time thereafter during the term of the Option.

  
 4.2 Option Agreements. The grant of any Option shall be evidenced by a written
“Stock Option Agreement” executed by the Corporation, stating the number of shares of Common Stock subject to the Option evidenced thereby and such other terms and conditions of the Option as the Committee may from time to time determine.

  
 4.3 Option Price. The option price for the Common Stock covered by any Option
granted under the Plan shall in no case be less than 100% of the Fair Market Value of said Common Stock on the date of grant. Except as otherwise provided in the Stock Option Agreement, the option price of an Option may be paid in whole or in part
by delivery to the Corporation of a number of shares of Common Stock having a Fair Market Value on the date of exercise equal to the option price or portion thereof to be paid; provided, however, that no shares may be delivered 
  

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 in payment of the option price of an Option unless such shares, or an equivalent number of shares, shall have been held
by the Participant (or other person entitled to exercise the Option) for at least six months prior to such delivery. If permitted by the Committee, delivery of shares in payment of the option price of an Option may be accomplished by the
Participant’s certification of ownership of the shares to be delivered, or the withholding of such shares by the Corporation from the shares issuable on exercise, in which case the number of shares issuable on exercise of the Option shall be
reduced by the number of shares certified but not actually delivered or withheld. 
  
 4.4 Term of Options. The term of each Option granted under the Plan shall be for such period as the Committee shall determine, but for not more than 10 years from the date of grant thereof. Each Option shall be subject to earlier
termination as provided in Sections 4.6 and 5.4 hereof. 
  
 4.5 Exercise of
Options. Each Option granted under the Plan shall be exercisable on such date or dates during the term thereof and for such number of shares of Common Stock as may be provided in the Stock Option Agreement evidencing its grant. Pursuant to the terms
of the Stock Option Agreement or otherwise, the Committee may change the date on which an outstanding Option becomes exercisable; provided, however, that an exercise date designated in a Stock Option Agreement may not be changed to a later date
without the consent of the holder of the Option. Notwithstanding any other provision of this Plan, unless expressly provided to the contrary in the applicable Stock Option Agreement, all Options granted under the Plan shall become fully exercisable
immediately and automatically upon the occurrence of a Change in Control Event. 
  
 4.6 Termination of Employment. Except as otherwise provided in the Stock Option Agreement: 
  
 (a) If termination of employment of a Participant occurs on or after age 55 and the Participant is credited with at least five years of employment with
the Corporation or an Affiliate, the Participant shall have the right to exercise his or her Options within the period of two years after such termination, to the extent such Options were exercisable at the time of such termination; provided,
however, that such post-termination exercise period may be extended by action of the Committee for up to the full term of such Options. 
  
 (b) If a Participant shall die while employed by the Corporation or an Affiliate or within a period following termination of employment during which the
Option remains exercisable under paragraphs (a), (c) or (d) of this Section 4.6, his or her Options may be exercised to the extent exercisable by the Participant at the time of his or her death within a period of two years from the date of death by
the executor or administrator of the Participant’s estate or by the person or persons to whom the Participant shall have transferred such right by will or by the laws of descent and distribution. 
  
 (c) If termination of employment of a Participant is by reason of the
disability of the Participant covered by a long-term disability plan of the Corporation or an Affiliate then in 
  

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 effect, the Participant shall have the right to exercise his or her Options within the period of two years after the date
of termination of employment, to the extent such Options were exercisable at the time of termination of employment. 
  
 (d) In the event the employment of a Participant is terminated by the Corporation or an Affiliate without cause within two years after the occurrence of a
Change in Control Event, the Participant shall have the right to exercise his or her Options within one year after the date such termination occurred, to the extent such Options were exercisable at the time of such termination of employment. For
purposes of this paragraph, “without cause” shall mean any termination of employment where it cannot be shown that the employee has (i) willfully failed to perform his or her employment duties for the Corporation or an Affiliate, (ii)
willfully engaged in conduct that is materially injurious to the Corporation or an Affiliate, monetarily or otherwise, or (iii) committed acts that constitute a felony under applicable federal or state law or constitute common law fraud. For
purposes of this paragraph, no act or failure to act on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by him or her not in good faith and without reasonable belief that his or her action or
omission was in the best interest of the Corporation or Affiliate. 
  
 (e) In the event all employment of a Participant with the Corporation or an Affiliate is terminated for any reason other than as stated in the preceding paragraphs (a) - (d), his or her Options shall terminate upon such termination of
employment. 
  
 (f) Notwithstanding the foregoing, in no event
shall an Option granted hereunder be exercisable after the expiration of its term. 
  
 4.7 Reload Option Rights. Reload Option Rights if awarded with respect to an Option shall entitle the original grantee of the Option (and unless otherwise determined by the Committee, in its discretion, only such original grantee), upon
exercise of the Option or any portion thereof through delivery, withholding or certification of ownership of shares of Common Stock, automatically to be granted on the date of such exercise an additional Option (a “Reload Option”) (i) for
that number of shares of Common Stock not greater than the number of shares delivered or certified by the Participant or withheld by the Corporation in payment of the option price of the original Option and any withholding taxes related thereto,
(ii) having an option price not less than 100% of the Fair Market Value of the Common Stock covered by the Reload Option on the date of grant of such Reload Option, (iii) having an expiration date not later than the expiration date of the original
Option so exercised and (iv) otherwise having terms permissible for the grant of an Option under the Plan. Subject to the preceding sentence and the other provisions of the Plan, Reload Option Rights and Reload Options shall have such terms and be
subject to such restrictions and conditions, if any, as shall be determined, in its discretion, by the Committee. In granting Reload Option Rights, the Committee, may, in its discretion, provide for successive Reload Option grants upon the exercise
of Reload Options granted hereunder. Unless otherwise determined by the Committee, in its discretion, Reload Option Rights shall entitle the Participant to be granted Reload Options only if the underlying Option to which they relate is exercised by
the Participant during employment with the Corporation or any of its Affiliates. Except as otherwise specifically provided herein or required by the context, the term Option as used in this Plan shall include Reload Options granted hereunder.

  

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 V. SARs 
  
 5.1 Grant. SARs may be granted by the Committee as stand-alone SARs or in tandem with all or any part of any Option granted under the Plan. SARs which are granted in
tandem with an Option may be granted either at the time of the grant of such Option or, except in the case of an Incentive Stock Option, at any time thereafter during the term of such Option. 
  
 5.2 SAR Agreements. The grant of any SAR shall be evidenced by the related Stock Option
Agreement or by a written “Stock Appreciation Rights Agreement” executed by the Corporation, stating the number of shares of Common Stock covered by the SAR, the base price of a stand-alone SAR and such other terms and conditions of the
SAR as the Committee may from time to time determine. The base price for stand-alone SARs (the “base price”) shall be such price as the Committee, in its sole discretion, shall determine but shall not be less than 100% of the Fair Market
Value per share of the Common Stock covered by the stand-alone SAR on the date of grant. 
  
 5.3 Payment. SARs shall entitle the Participant upon exercise to receive the amount by which the Fair Market Value of a share of Common Stock on the date of exercise exceeds the option price of any tandem Option or
the base price of a stand-alone SAR, multiplied by the number of shares in respect of which the SAR shall have been exercised. In the sole discretion of the Committee, the Corporation may pay all or any part of its obligation arising out of a SAR
exercise in (i) cash, (ii) shares of Common Stock or (iii) cash and shares of Common Stock. Payment shall be made by the Corporation as soon as practicable after the date of exercise. 
  
 5.4 Exercise of Tandem Award. If SARs are granted in tandem with an Option (i) the SARs shall be exercisable at such time or times and to
such extent, but only to such extent, that the related Option shall be exercisable, (ii) the exercise of the related Option shall cause a share for share reduction in the number of SARs which were granted in tandem with the Option; and (iii) the
payment of SARs shall cause a share for share reduction in the number of shares covered by such Option. 
  
 5.5 Term and Exercise of Stand-Alone SARs. The term of any stand-alone SAR granted under the Plan shall be for such period as the Committee shall determine, but for not more than 10 years from the date of grant
thereof. Each stand-alone SAR shall be subject to earlier termination as provided in Section 5.6 hereof. Each stand-alone SAR granted under the Plan shall be exercisable on such date or dates during the term thereof and for such number of shares of
Common Stock as may be provided in the Stock Appreciation Rights Agreement evidencing its grant. Pursuant to the terms of the Stock Appreciation Rights Agreement or otherwise, the Committee may change the date on which an outstanding stand-alone SAR
becomes exercisable; provided, however, that an exercise date designated in a Stock Appreciation Rights Agreement may not be changed to a later date without the consent of the Participant. Notwithstanding any other provision of this Plan, unless
expressly provided to the contrary in the applicable Stock Appreciation Rights Agreement, all stand-alone SARs granted under the Plan shall become fully exercisable immediately and automatically upon the occurrence of a Change in Control Event.

  

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 5.6 Termination of Employment. Except as otherwise provided in the Stock Appreciation Rights Agreement: 
  
 (a) If termination of employment of a Participant occurs on or after age 55
and the Participant is credited with at least five years of employment with the Corporation or an Affiliate, the Participant shall have the right to exercise his or her stand-alone SARs within the period of two years after such termination, to the
extent such SARs were exercisable at the time of termination; provided, however, that such post-termination exercise period may be extended by action of the Committee for up to the full term of such SARs. 
  
 (b) If a Participant shall die while employed by the Corporation or an
Affiliate thereof or within a period following termination of employment during which the SARs remain exercisable under paragraphs (a), (c) or (d) of this Section 5.6, his or her stand-alone SARs may be exercised to the extent exercisable by the
Participant at the time of his or her death within a period of two years from the date of death by the executor or administrator of the Participant’s estate or by the person or persons to whom the Participant shall have transferred such right
by will or by the laws of descent and distribution. 
  
 (c) If
termination of employment of a Participant is by reason of the disability of the Participant covered by a long-term disability plan of the Corporation or an Affiliate then in effect, the Participant shall have the right to exercise his or her
stand-alone SARs within the period of two years after the date of termination of employment, to the extent such SARs were exercisable at the time of termination of employment. 
  
 (d) In the event all employment of a Participant with the Corporation or an Affiliate is terminated without cause within two
years after the occurrence of a Change in Control Event, the Participant shall have the right to exercise his or her stand-alone SARs within one year after the date such termination occurred, to the extent such stand-alone SARs were exercisable at
the time of such termination of employment. For purposes of this paragraph, “without cause” shall have the meaning provided in Section 4.6(d). 
  
 (e) In the event all employment of a Participant with the Corporation or an Affiliate is terminated for any reason other than as stated in the preceding
paragraphs (a) - (d), his or her stand-alone SARs shall terminate upon such termination of employment. 
  
 (f) Notwithstanding the foregoing, in no event shall a stand-alone SAR granted hereunder be exercisable after the expiration of its term. 
  
 VI. Performance Units 
  
 6.1 Grant. The Committee may from time to time grant one or more Performance Units to eligible employees. Performance Units shall represent
the right of a Participant to receive shares of Common Stock or cash at a future date upon the achievement of Performance Goals which are established by the Committee. 
  

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 6.2 Performance Unit Agreements. The grant of any Performance Unit shall be evidenced by a written “Performance Unit
Agreement”, executed by the Corporation stating the amount of cash and/or number of shares of Common Stock covered by the Performance Unit and such other terms and conditions of the Performance Unit as the Committee may determine, including the
performance period to be covered by the award and the Performance Goals to be achieved. 
  
 6.3 Payment. After the completion of a performance period, performance during such period shall be measured against the Performance Goals set by the Committee. If the Performance Goals are met or exceeded, the Committee shall certify that
fact in writing in the Committee minutes or elsewhere and certify the amount to be paid to the Participant under the Performance Unit. In the sole discretion of the Committee, the Corporation may pay all or any part of its obligation under the
Performance Unit in (i) cash, (ii) shares of Common Stock or (iii) cash and shares of Common Stock. Payment shall be made by the Corporation as soon as practicable after the certification of achievement of the Performance Goals. 
  
 6.4 Termination of Employment. To be entitled to receive payment under a Performance Unit, a
Participant must remain in the employment of the Corporation or an Affiliate through the end of the applicable performance period; except that this limitation shall not apply where a Participant’s employment is terminated by the Corporation or
an Affiliate without cause (as defined in Section 4.6(d)) following the occurrence of a Change in Control Event. 
  
 6.5 Maximum Cash Payment. The maximum amount that may be paid in cash or in Fair Market Value of Common Stock (to be valued no later than three days after the date the
Committee certifies the achievement of the Performance Goals) under all Performance Units paid to any one Participant during a calendar year shall in no event exceed $1,000,000. 
  
 VII. Deferred Cash Incentive Awards 
  
 7.1 Granting of Deferred Cash Incentive Awards. Deferred Cash Incentive Awards, as hereafter described, may be granted in conjunction with all or any part of any Option
(other than an Incentive Stock Option) granted under the Plan, either at the time of the grant of such Option or at any time thereafter during the term of such Option. 
  
 7.2 Deferred Cash Incentive Agreements. Deferred Cash Incentive Awards shall entitle the holder of an Option to receive from the Corporation
an amount of cash equal to the aggregate exercise price of all Options exercised by such Participant in accordance with the terms of a written “Deferred Cash Incentive Agreement” executed by the Corporation. Deferred Cash Incentive
Agreements shall specify the conditions under which Deferred Cash Incentive Awards become payable, the conditions under which Deferred Cash Incentive Awards are forfeited and any other terms and conditions as the Committee may from time to time
determine. Under no circumstances may a Deferred Cash Incentive Award be applied to any purpose other than the payment of the exercise price of a properly exercised related Option. 
  

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 7.3 Pre-established Performance Goals. 
  
 (a) Except in the event of (i) death, (ii) disability of the Participant covered by a long-term disability plan of the
Corporation or an Affiliate then in effect or (iii) the occurrence of a Change in Control Event, any Deferred Cash Incentive Award shall only be earned and become payable if the Corporation achieves Performance Goals which are established for a
calendar year or longer period by the Committee. After the completion of a performance period, performance during such period shall be measured against the Performance Goals set by the Committee. If the Performance Goals are met or exceeded, the
Committee shall certify that fact in writing in the Committee minutes or elsewhere. 
  
 (b) The amount payable to a Participant upon achieving the Performance Goals set by the Committee for the Deferred Cash Incentive Award shall be equal to the option price of the related Option, which shall be the Fair
Market Value of the shares of Common Stock subject to the Option on the date the Option is granted. No individual may in any calendar year receive payment of Deferred Cash Incentive Awards with respect to Options for more than 3,000,000 shares of
Common Stock. 
  
 VIII. Restricted Stock 
  
 8.1 Award of Restricted Stock. The Committee may from time to time, subject to the
provisions of the Plan and such other terms and conditions as it may prescribe, grant one or more shares of Restricted Stock to eligible employees. In the discretion of the Committee, shares of Restricted Stock may be granted alone, in addition to
or in tandem with other Awards granted under the Plan and/or cash awards made outside of the Plan. 
  
 8.2 Restricted Stock Agreements. Each award of Restricted Stock under the Plan shall be evidenced by a written Restricted Stock Agreement executed by the Corporation in such form as the Committee shall prescribe from
time to time in accordance with the Plan. 
  
 8.3 Restrictions. Shares of
Restricted Stock issued to a Participant may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, for such period as the Committee shall determine, beginning on
the date on which the Award is granted (the “Restricted Period”). The Committee may also impose such other restrictions and conditions on the shares or the release of the restrictions thereon as it deems appropriate, including the
achievement of Performance Goals established by the Committee. In determining the Restricted Period of an Award, the Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded shares on
specified dates following the date of such Award or all at once. 
  
 8.4 Stock
Certificate. As soon as practicable following the making of an award, the Restricted Stock shall be registered in the Participant’s name in certificate or book-entry form. If a certificate is issued, it shall bear an appropriate legend
referring to the restrictions and it shall be held by the Corporation on behalf of the Participant until the restrictions are satisfied. If the 
  

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 shares are registered in book-entry form, the restrictions shall be placed on the book-entry registration. Except for the
transfer restrictions, and subject to such other restrictions, if any, as determined by the Committee, the Participant shall have all other rights of a holder of shares of Common Stock, including the right to receive dividends paid with respect to
the Restricted Stock and the right to vote such shares. As soon as is practicable following the date on which transfer restrictions on any shares lapse, the Corporation shall deliver to the Participant the certificates for such shares or shall cause
the shares to be registered in the Participant’s name in book-entry form, in either case with the restrictions removed, provided that the Participant shall have complied with all conditions for delivery of such shares contained in the
Restricted Stock Agreement or otherwise reasonably required by the Corporation. 
  
 8.5 Termination of Employment. 
  
 (a) Unless expressly
provided to the contrary in the applicable Restricted Stock Agreement, all restrictions placed upon Restricted Stock shall lapse immediately upon (i) termination of the Participant’s employment with the Corporation or an Affiliate if, and only
if, such termination is by reason of the Participant’s death, the disability of the Participant covered by a long-term disability plan of the Corporation or an Affiliate then in effect or (except where Performance Goals have been set for the
Award) if such termination occurs on or after age 55 and the Participant is credited with at least five years of employment with the Corporation or an Affiliate or (ii) the occurrence of a Change in Control Event. In addition, the Committee may in
its discretion allow restrictions on Restricted Stock to lapse prior to the date specified in a Restricted Stock Agreement. 
  
 (b) Except as otherwise provided in the Restricted Stock Agreement, upon the effective date of a termination for any reason not specified in paragraph (a)
of this Section 8.5, all shares then subject to restrictions immediately shall be forfeited to the Corporation without consideration or further action being required of the Corporation. For purposes of this paragraph (b), the effective date of a
Participant’s termination shall be the date upon which such Participant ceases to be on the payroll of the Corporation or an Affiliate, and employment shall extend through the end of any salary continuance period pursuant to displacement or
severance arrangements with the Corporation or an Affiliate. A Participant will not be considered to be on the payroll of the Corporation or an Affiliate for time periods during which the Participant is receiving retirement or pension plan payments
from the Corporation or an Affiliate. 
  
 8.6 Maximum Award. No individual
Participant may in any one calendar year receive payment of Restricted Stock and/or Deferred Share Awards (where Performance Goals have been set for the Award) covering more than 400,000 shares of Common Stock. 
  
 8.7 Deferred Share Awards. 
  
 (a) A Deferred Share Award shall entitle the Participant to receive from the Corporation a number of shares of Common Stock
on a deferred payment date specified by the Participant. Participants shall be entitled to elect a Deferred Share Award as permitted by the Committee (a “Deferred Share Award Election”). 
  

 12 

 (b) Except as otherwise provided by the Committee, a Deferred Share Award Election (i) may be offered
only with respect to a potential Restricted Stock Award or an outstanding Restricted Stock Award with at least one year to derestriction, (ii) shall have derestriction conditions identical as nearly as practicable to those of the Restricted Stock
Award, (iii) shall specify a payment commencement date and form, which may occur no earlier than January 1 of the year following termination of employment on or after age 55 with five credited years of employment with the Corporation or an Affiliate
and no later than January 1 of the year following age 70, in one lump sum payment or in equal annual payments over 5 or 10 years; provided, however, that payment following derestriction of the Award upon a termination of employment prior to age 55
or on or after age 55 with less than five years of credited employment with the Corporation or an Affiliate shall be made in a lump sum payment no later than March 1 of the year following such termination of employment. 
  
 (c) Except as otherwise provided by the Committee, a Deferred Share Award
shall entitle the Participant to receive dividend equivalents payable no earlier than the date payment is elected for the Deferred Share Award. Dividend equivalents shall be calculated on the number of shares covered by the Deferred Share Award as
soon as practicable after the date dividends are payable on the Common Stock. 
  
 (d) A Deferred Share Award shall be evidenced by a written Deferred Share Award Agreement executed by the Corporation in such form as the Committee shall prescribe from time to time in accordance with the Plan.

  
 IX. Other Stock-Based Awards. 
  
 9.1 Terms of Other Stock-Based Awards. The Committee shall have the authority in its
discretion to grant to eligible employees such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Common Stock as deemed by the Committee to be consistent with
the purposes of the Plan, including, without limitation, purchase rights, shares awarded without restrictions or conditions, or securities or other rights convertible or exchangeable into shares of Common Stock. The Committee shall determine the
terms and conditions, if any, of any Other Stock-Based Awards made under the Plan. In the discretion of the Committee, such Other Stock-Based Awards, including shares of Common Stock, or other types of Awards authorized under the Plan, may be used
in connection with, or to satisfy obligations of the Corporation or an Affiliate to eligible employees under, other compensation or incentive plans, programs or arrangements of the Corporation or an Affiliate. Other Stock-Based Awards may be granted
alone, in addition to or in tandem with other Awards granted under the Plan and/or awards made outside of the Plan. 
  
 9.2 Maximum Award Performance-Based Award. The compensation payable to a Participant upon achieving any Performance Goals set by the Committee for an Other Stock-Based
Award shall be equal to the dollar amount of any cash and the Fair Market Value on the date of payment of each share of Common Stock payable pursuant to the Award. No individual Participant may receive payment of Other Stock-Based Awards (where
Performance Goals have been set for the Award) exceeding $5,000,000 in any one calendar year. 
  

 13 

 X. Miscellaneous 
  
 10.1 General Restriction. Each Award under the Plan shall be subject to the requirement that, if at any time the Committee shall determine that any listing or
registration of the shares of Common Stock or any consent or approval of any governmental body, or any other agreement or consent is necessary or desirable as a condition of the granting of an Award or issuance of Common Stock or cash in
satisfaction thereof, such Award may not be consummated unless such requirement is satisfied in a manner acceptable to the Committee. 
  
 10.2 Non-Assignability. No Award under the Plan shall be assignable or transferable by a Participant, except by will or by the laws of descent and distribution or by such
other means as the Committee may approve from time to time. During the life of the Participant, such Award shall be exercisable only by such Participant or by such other persons as the Committee may approve from time to time. 
  
 10.3 Withholding Taxes. Whenever the Corporation proposes or is required to issue or transfer
shares of Common Stock under the Plan, the Corporation shall have the right to require the Participant to remit to the Corporation an amount sufficient to satisfy any federal, state, local or other withholding tax requirements prior to the delivery
of any certificate or book-entry registration for such shares. If authorized by the Committee, a Participant may elect to have any such withholding obligation satisfied in whole or in part by the Corporation withholding full shares of Common Stock
from the shares the Participant would otherwise receive and crediting them against the withholding obligation at their Fair Market Value on the date that the amount of tax to be withheld is determined. Any additional amount required to be withheld
shall be paid by the Participant to the Corporation in cash. The Corporation may require that the Participant have owned an equivalent number of shares of Common Stock for a reasonable period of time. Whenever under the Plan payments are to be made
in cash, such payments shall be net of an amount sufficient to satisfy any federal, state, local or other withholding tax requirements. 
  
 10.4 No Right to Employment. Nothing in the Plan or in any agreement entered into pursuant to it shall confer upon any Participant the right to continue in the employment
of the Corporation or an Affiliate or affect any right which the Corporation or an Affiliate may have to terminate the employment of such Participant. 
  
 10.5 Non-Uniform Determinations. The Committee’s determinations under the Plan (including without limitation its determinations of the employees to receive Awards,
the form, amount and timing of such Awards, the terms and provisions of such Awards and the establishment of Performance Goals and performance periods) need not be uniform and may be made by it selectively among employees who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. 
  
 10.6 No Rights as Shareholders. Participants as such shall have no rights as shareholders of the Corporation, except as provided in Section 8.4, unless and until shares of Common Stock are registered in their name.

  

 14 

 10.7 Adjustments of Stock. If there is any change in the Common Stock by reason of any stock split, stock dividend,
spin-off, split-up, spin-out, recapitalization, merger, consolidation, reorganization, combination or exchange of shares, or any other similar transaction, the number and kind of shares available for grant under the Plan or subject to or granted
pursuant to an Award and the price thereof, or other numeric limitations under the Plan, as applicable, shall be appropriately adjusted by the Committee or the Board. 
  
 10.8 Amendment or Termination of the Plan. The Committee or the Board may at any time terminate the Plan or any part thereof and may from
time to time amend the Plan as it may deem advisable. Any such action of the Committee or the Board may be taken without the approval of the Corporation’s shareholders, but only to the extent that such shareholder approval is not required by
applicable law or regulation, including specifically Rule 16b-3, or the rules of any stock exchange on which the Common Stock is listed. The termination or amendment of the Plan shall not, without the consent of the Participant, adversely affect
such Participant’s rights under an Award previously granted. 
  
 10.9 Awards
to Foreign Nationals and Employees Outside the United States. To the extent the Committee deems it necessary, appropriate or desirable to comply with foreign law or practice and to further the purpose of the Plan, the Committee may, without amending
the Plan, (i) establish special rules applicable to Awards granted to Participants who are foreign nationals, are employed outside the United States, or both, including rules that differ from those set forth in this Plan, and (ii) grant Awards to
such Participants in accordance with those rules. 
  
 10.10 Previously Granted
Awards. Awards outstanding on the effective date of this amended and restated Plan shall continue to be governed by and construed in accordance with the Plan as in effect on the date of grant of the Award; except that outstanding Deferred Cash
Incentive Awards shall be subject to the limitations of Section 7.3(a) and (b) of the Plan and, to the extent required by Section 162(m) of the Code, a grant of a Reload Option shall be subject to the limitation of Section 3.4(d) of the Plan.

  
 April 2004 
  

 15Employment Agreement - Patrick J. Bagley

 Exhibit 10.1 
  
 EMPLOYMENT AND NON-COMPETE AGREEMENT 
  

DOVER MOTORSPORTS, INC. 
  
 AND 
  
 PATRICK J. BAGLEY 
  
 THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Patrick J. Bagley (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Executive is currently employed by the Company or an affiliate
thereof in an executive position; and 
  
 WHEREAS, the Executive
has, in the course of his employment, developed relationships with employees and customers of the Company, and learned valuable and sensitive information concerning the Company’s operations, policies and procedures; and 
  
 WHEREAS, the Executive has, in the course of his employment, been exposed to
valuable and sensitive Company reports, files, memoranda, records, software, and other property; and 
  
 WHEREAS, the Company recognizes that the solicitation of its employees and customers, and the use or disclosure of the policies, procedures, information,
documents, and property of the Company would be damaging to the Company’s interests; and 
  
 WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and 
  
 WHEREAS, the Company has determined that it is in the best interests of the
Company and its shareholders for the Company to agree to provide benefits under the circumstances described below to the Executive and other executives who agree to such an agreement. 

 NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties
hereto agree as follows: 
  
 Section 1 
 Definitions 
  
 “Announcement” shall mean a press release issued by the Company announcing the signing of an agreement whereby the Company will be acquired by
or merge with any other entity or a tender offer for the shares of the Company stock will be initiated. 
  
 “Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not
public. 
  
 “Cause” shall mean a unanimous determination
by the Board that the Executive has been convicted of a felony, has embezzled from, or committed fraud against, the Company which embezzlement or fraud has a material adverse financial impact on the Company or gross insubordination which has
continued after written notice of such from the Board which determination is upheld by a final, non-appealable arbitration award pursuant to Section 6. 
  
 “Change in Control” shall mean the earlier to occur of (a) ten (10) days following the closing of a tender offer for the Company’s stock
following the Announcement or (b) the closing of a merger or similar transaction (“Transaction”) of the Company and any other entity; provided, however, a Transaction the result of which is the shareholders of the Company’s voting
securities immediately prior to the Transaction own, directly or indirectly in substantially the same proportion, at least 60% of the voting securities of the survivor of such Transaction immediately following such Transaction shall not be a Change
in Control. 
  
 “Change in Control Fee” shall mean $250,
000. 
  
 “Code” shall mean the Internal Revenue Code of
1986, as amended. 
  
 “Company Information” shall mean
(i) confidential information including, without limitation, information received from third parties under confidential conditions, (ii) information subject to the Company’s and its affiliates’ attorney-client or work-product privilege; and
(iii) other technical, business, legal or financial information (including, without limitation, customer lists), the use or disclosure of which might reasonably be construed to be contrary to the Company’s and its affiliates’ interests.

  
 “Date of Termination” shall mean the date on which
the Executive’s employment is terminated. 
  
 “Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company. 
  
 “Extension Period” shall mean the 24 month period following the Change in Control. 
  
 “Good Reason” shall mean a (i) reduction in title, responsibilities, administrative support or support services,
(ii) relocation of Executive’s office, (iii) travel at a level that exceeds the travel requirements before the Change in Control, (iv) any breach by the Company of its obligations hereunder, (v) any breach by the purchaser under a merger or
acquisition agreement pursuant to which the Change in Control takes place relating to employee benefits or directors’ and officers’ insurance or indemnification provisions, or (vi) any reason whatsoever two months after the Change in
Control. 
  

 2 

 “Monthly Amount” shall be an amount equal to one-twelfth of the sum of (a) the Executive’s
then current annual base salary (excluding any incentive or bonus), and (b) the amount of any cash bonus awarded to the Executive for the then most recently concluded fiscal year of the Company. 
  
 “Non-Compete Monthly Amount” shall mean the portion of the Monthly
Amount which is paid in consideration of the Executive’s agreement to the restrictions and other provisions of Section 7, with the remainder of the Monthly Amount and other benefits under this Agreement paid after the Employment Period to be
treated as severance. Executive’s Non-Compete Monthly Amount shall be calculated by multiplying the Monthly Amount by fifty percent. 
  
 “Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates. 
  
 “SERP” shall mean any and all supplemental retirement plans in
which the Executive participates (including, but not limited to, any benefit restoration plan(s) maintained by the Company from time to time). 
  
 Section 2 
 Term of Agreement

  
 This Agreement shall be effective as of the Effective Date
but shall automatically terminate if no Announcement occurs within two (2) years of the Effective Date or if the Executive’s employment is terminated prior to an Announcement. Renewal of this Agreement for successive two (2) year terms shall
require approval of the Company’s Compensation and Stock Incentive Committee. 
  
 Section 3 
 Benefits 
  
 (a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

  
 (b) During the Extension Period, the Company shall pay to the
Executive the Monthly Amount, payable on the first day of each month, prorated for partial months. 
  
 (c) If the Executive’s employment is terminated during the Extension Period, then, 
  
 (i) within five business days after the Date of Termination, the Company shall pay to the Executive (or if the Executive
dies, to the estate of the Executive) in cash all accrued but unpaid salary, earned but unpaid bonuses, and accrued but unused vacation in accordance with Company policies; 
  

 3 

 (ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive)
the Monthly Amount on the first day of each month during the remainder of the Extension Period; 
  
 (iii) the Company shall pay to the Executive (or if the Executive dies, to his beneficiary, if any, under the Retirement Plan) a lump sum amount equal to
the value of the monthly benefit under (x) the Retirement Plan and (y) the SERP, that the Executive or his beneficiary, if any, under the Retirement Plan would have received (1) for payments of the Monthly Amount had Executive been an employee while
receiving such payments, and (2) for payment of the Change of Control Fee had such amount been treated as a normal bonus for pension accrual purposes (giving credit for all purposes, including, but not limited to, accrual of benefits, vesting, age
and years of service and making the determination without regard to compensation or benefit limitations prescribed by federal law or regulation), which payment shall be paid within 10 days of the Date of Termination and calculated by Buck
Consultants (or such other consultant as may be agreed upon) using the actuarial assumptions under the Retirement Plan and the discount rate which would be utilized for purposes of funding a Plan termination; 
  
 (iv) on the Date of Termination the Company shall transfer title and
ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company. 
  
 (d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

  
 (i) The Executive and, as applicable, the Executive’s
covered dependents shall be entitled to all health, welfare, and fringe benefits provided by the Company to its key employees generally or to the Executive on an individual or group basis (including, but not limited to, any life, accident, health,
hospitalization or long-term disability insurance, maintained from time to time by the Company), whether maintained pursuant to a plan, policy or other arrangement (written or unwritten), as if the Executive were still employed during such period,
at the same level of benefits and at the same dollar cost to the Executive as is available generally to comparable employees of the Company (but in no instances shall such benefits be at a level less than as in effect on the date of the Change in
Control). If the Company reasonably determines that the coverage required under this Section would cause a welfare plan sponsored by the Company to violate any provision of the Code prohibiting discrimination in favor of highly compensated employees
or key employees, or if any benefits described in this Section cannot be provided (or the Company determines that it does not wish to provide such benefits) pursuant to the appropriate plan or program maintained for employees of the Company, the
Company shall provide such benefits outside such plan or program at no additional cost (on an after tax basis) to the Executive or, if the parties shall so agree, the Company will pay to the Executive the cash equivalent thereof. The health benefits
provided in accordance with this Section shall be secondary to any comparable benefits provided by another employer if and only if the Executive chooses to be covered by such other employee plan. 
  
 (ii) Executive shall receive continued payment of professional and
organizational dues and fees as in effect prior the Change in Control. 
  

 4 

 (e) (i) If all, or any portion, of the payments and benefits provided under this Agreement, if any,
either alone or together with other payments and benefits which the Executive receives or is entitled to receive from the Company, would constitute an excess “parachute payment” within the meaning of Section 280G of the Code (whether or
not under an existing plan, arrangement, or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then, in addition to
any other benefits to which the Executive is entitled under this Agreement or otherwise, the Executive shall be paid an amount in cash equal to the sum of the excise taxes payable by the Executive by reason of receiving Parachute Payments plus the
amount necessary to place the Executive in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including,
without limitation, any payments under this Section) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-Up”). Any Parachute Gross-Up otherwise required by this Section shall not be made later
than the time of the corresponding payment or benefit hereunder giving rise to the underlying Section 4999 excise tax, even if the payment of the excise tax is not required under the Code until a later time. 
  
 (ii) Subject to the provisions of Section 3(d) and except as may otherwise be
agreed to by the Company and the Executive, the amount or amounts (if any) payable under this Section 3 shall be as conclusively determined by the KPMG LLP, or such other firm as mutually agreed to by the Company and the Executive (“Independent
Tax Counsel”), whose determination or determinations shall be final and binding on all parties. The Executive shall agree to utilize such determination or determinations, as applicable, in filing all of the Executive’s tax returns with
respect to the excise tax imposed by Section 4999 of the Code, if any. If such Independent Tax Counsel fails or refuses to make the required determinations for any reason, then such determinations shall be made by a comparable firm or group of
national reputation to which the parties reasonably mutually agreed. All fees and expenses of the Independent Tax Counsel or its replacement shall be paid by the Company. 
  
 (iii) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination
by the Independent Tax Counsel hereunder, it is possible that Parachute Gross-Up payments, if any, which will not have been made by the Company, should have been made, together with any interest, penalties or taxes of any kind thereon, consistent
with the calculations required to be made hereunder (an “Underpayment”). The Company shall pay all such Underpayments to or for the benefit of the Executive. The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment within ten (10) business days after the Executive is informed in writing of such claim. The Company shall notify the Executive within ten (10)
business days of receipt of the Executive notice that the Company (x) will pay the Underpayment and do so on or before the date due, or (y) that it desires to contest such claim. The Executive will cooperate with the Company in any such contest;
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Furthermore, the Company’s control of the 
  

 5 

 contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive
shall be entitled, at Executive’s expense, to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
  
 (iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

  
 (v) The foregoing provisions of this subsection (f) shall
similarly apply to any benefit provided elsewhere in this Agreement where it is expressly provided that the benefit is to be provided on an after tax basis. 
  
 (f) In the event of the Executive’s termination of employment under this Agreement, the Executive shall be under no obligation to seek other
employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment. 
  
 In the event that Executive’s employment is terminated by the Company for Cause (and Executive was not capable of
voluntarily terminating for Good Reason at or prior to such time) or if Executive voluntarily terminates without Good Reason, the Company shall remain obligated to pay the Non-Compete Monthly Amount but shall not be obligated to pay the balance of
the Monthly Amount. Executive is free to terminate his employment for Good Reason. 
  
 Section 4 
 Employment 
  
 Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension
Period. During the Employment Period: 
  
 (i) The Executive shall
perform services consistent with his past practices, 
  
 (ii) The
Executive shall not be required to relocate or travel in excess of past practices, 
  
 (iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control. 
  
 (iv) The Executive shall not be required to devote more time to Company business than he did prior to the Change in Control
and may continue director or officer positions with other private or public entities that do not violate Section 7. 
  
 (v) The Executive’s expenses shall be reimbursed consistent with past practices, and 
  
 (vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid
vacation. 
  

 6 

 No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the
Company to offset payments otherwise owing to the Executive under this Agreement. 
  
 Section 5 
 Source of Payments 
  
 All payments provided for in this Agreement shall be paid in cash from the general funds of the Company; provided, however,
that such payments shall be reduced by the amount of any payments made to the Executive or his dependents, beneficiaries or estate from any trust or special or separate fund established by the Company to assure such payments. The Company shall not
be required to establish a special or separate fund or other segregation of assets to assure such payments. 
  
 Section 6 
 Litigation Expenses and Arbitration 
  
 In addition to the Company’s other obligations under this Agreement, the
Company shall pay all legal fees and expenses incurred in a legal proceeding (including arbitration) by the Executive in seeking to obtain or enforce any right or benefit provided by this Agreement (including, without limitation, any rights to a tax
gross-up). Such payments are to be made within five days after the Executive’s request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require; provided, however, that if the Executive
institutes a proceeding and the judge or other decision-maker presiding over the proceeding affirmatively finds that the Executive has failed to prevail substantially, he shall pay his own costs and expenses (and, if applicable, return any amounts
theretofore paid on his behalf under this Section 6. 
  
 All
disputes with respect to the subject matter of this Agreement and the enforcement of rights hereunder shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association (the “AAA”). Each party
hereto shall designate one arbitrator (who need not be impartial) within fifteen (15) days after notice of the dispute. The two arbitrators so designated shall endeavor to designate promptly a third, neutral arbitrator. If the two arbitrators have
not designated the third arbitrator by the fifteenth (15th) day following the designation of the second arbitrator,
or if a second arbitrator has not been designated by the (15th) day following the designation of the first, either
Party may request the AAA to designate the remaining arbitrator(s). The third arbitrator shall take an oath of neutrality. The arbitrators shall not be bound by judicial formalities and may abstain from following the strict rules of evidence and
shall interpret this Agreement as an honorable engagement and not merely as a legal obligation. The arbitrators shall have the power to render equitable relief as may be available in accordance with applicable law. Unless otherwise agreed by the
parties, any such arbitration shall take place in such City within the United States as Executive may designate, and shall be conducted in accordance with the Rules of the AAA. The determination reached in such arbitration shall be final and binding
on both parties without any right of appeal or further dispute. The arbitrators’ award may be confirmed in, and judgment upon the award entered by, any federal or state court having jurisdiction over the parties. 
  

 7 

 Section 7 
 Restrictive Covenants 
  
 (a) Within a reasonable period of time following his termination of employment, the Executive shall return to the Company all Company Information, reports, files, memoranda, records, credit cards, cardkey passes, door and file keys,
computer access codes, and other property which the Executive has received, prepared, or helped to prepare in connection with his employment with the Company, except as provided in Section 3. The Executive acknowledges that in the course of
employment with the Company, he has acquired Company Information and that such Company Information has been disclosed to him in confidence and for the Company’s use only. The Executive agrees that, during the Extension Period, he (i) will keep
such Company Information confidential at all times, (ii) will not disclose or communicate Company Information to any third party, and (iii) will not make use of Company Information on his own behalf or on behalf of any third party. The Executive
further acknowledges and agrees that the Company’s remedy in the form of monetary damages for any breach by him of any of the provisions of this Section may be inadequate and that, in addition to any monetary damages for such breach, the
Company shall be entitled to institute and maintain any appropriate proceeding or proceedings, including an action for specific performance and/or injunction. 
  

(b) Executive agrees not to, during the Extension Period, within the Territory, directly or indirectly, individually or on behalf of persons not now
parties to this Agreement, or as a director, officer, principal, agent, executive, or in any other capacity or relationship, engage in the motorsports business (except as a passive investor holding not more than 3% of the equity of such business),
or aid or endeavor to assist any business or legal entity, that is in the motorsports business and that competes with the Company anywhere in the Territory. The Territory shall consist of the entire State of Delaware and a 100-mile radius around the
Company’s facilities in Dover, Delaware, Nashville, Tennessee, Madison, Illinois, Memphis, Tennessee, Long Beach, California, and any other facilities which may be acquired or developed by the Company prior to the Change of Control. The Company
and Executive acknowledge the reasonableness of this covenant not to compete and the reasonableness of the geographic area and duration of time which are a part of said covenant. 
  
 (c) Unless waived in writing by the Company, Executive further agrees that he will not, directly or indirectly, during the
Extension Period, solicit the trade or patronage of any of the customers of the Company, regardless of the location of such customers of the Company with respect to any services, products, or other matters in which the Company is active. 

 
 (d) Unless waived in writing by the Company, Executive further agrees that
he will not, directly or indirectly, during the Extension Period, solicit or attempt to entice away from the Company any director, agent or employee of the Company. 
  
 (e) Executive acknowledges that the Company has no adequate remedy at law and would be irreparably harmed if Executive
breaches or threatens to breach any of the provisions of this Section and, therefore, agrees that the Company shall be entitled to injunctive relief to prevent any such breach or threatened breach thereof and to specific performance of the terms of
this Section (in addition to any other legal or equitable remedy the Company may have, including if so determined by arbitration, that the Company is not obligated to pay to the Executive (or the 
  

 8 

 Executive is required to repay to the Company) a portion or all of the Non-Compete Monthly Amount; provided, however, in
all instances the Company shall continue to pay to Executive the Non-Compete Monthly Amount unless and until all appeals have been exhausted or the time for such has expired). Executive further agrees that Executive shall not, in any equity
proceeding relating to the enforcement of this Section, raise the defense that the Company has an adequate remedy at law. Nothing in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity
that it may have under and in respect of this Agreement or any other agreement. 
  
 (f) The Executive agrees to pay to the Company any outstanding amounts owed to the Company; provided, however, that no breach or alleged breach of this subsection (f) or any other provision of this Section shall
constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owed to the Executive under this Agreement. 
  
 Section 8 
 Severability

  
 If, for any reason, any one or more of the provisions or
part of a provision contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement not
held so invalid, illegal or unenforceable, and each other provision or part of a provision shall to the fullest extent consistent with law continue in full force and effect. 
  
 Section 9 
 Amendment, Termination, or Modification 
  
 Except
as provided below, this Agreement may not be terminated, modified or amended other than by an instrument in writing signed by the parties hereto. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any
estoppel against the enforcement of any provision of this Agreement, except by written instrument signed by the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 
  
 Section 10 
 Consolidation, Merger, or Sale of Assets; Assignability 
  
 The Company shall require (a) any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company and (b) the parent entity owning or controlling such successor expressly to assume and agree to perform under the terms of this Agreement in the same manner and to the same extent that the Company and its
affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement).
Except as provided herein, the Executive’s rights hereunder shall not be assignable. 
  

 9 

 Section 11 
 Tax Withholding 
  
 The
Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling. 
  
 Section 12 
 Entire Understanding 
  
 This Agreement contains
the entire understanding between the Company and the Executive with respect to the subject matter hereof and supersedes any prior agreement between the Company and the Executive regarding non-compete provisions, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the Executive of any kind elsewhere provided and not expressly dealt with in this Agreement. 
  

Section 13 
 Binding Agreement

  
 This Agreement shall be binding upon, and shall inure to
the benefit of, the Executive and the Company and their respective permitted successors and assigns. 
  
 Section 14 
 Employment Status 
  
 Nothing herein contained shall be deemed to create an employment agreement
between the Company and the Executive providing for the employment of the Executive by the Company for any fixed period of time prior to a Change in Control. The Executive’s employment with the Company is terminable at will by the Company or
Executive and each shall have the right to terminate Executive’s employment with the Company at any time, with or without Cause, subject to the Company’s obligation to provide any benefits required hereunder. There are no other agreements
or understandings between the Company and the Executive which guarantee continued employment to the Executive or guarantee any level of compensation, including incentive or bonus payments, to the Executive. 
  
 Section 15 
 No Attachment 
  
 Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect. 
  

 10 

 Section 16 
 Notices 
  
 All notices,
requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given if delivered or mailed, postage prepaid, first class as follows: 
  
 (a) to the Company, at its Dover, Delaware address 
  
 (b) to the Executive, at the address maintained by the Company for the
Executive for payroll purposes; 
  
 or to such address as either
party shall have previously specified in writing to the other. 
  
 Section 17 
 Revocation and Executive Acknowledgments 
  
 The Executive acknowledges that he has read and understands the provisions of this Agreement. The Executive further
acknowledges that he has been given an opportunity for his legal counsel to review this Agreement and that the provisions of this Agreement are reasonable and that he has received a copy of this Agreement. 
  
 Section 18 
 Headings of No Effect 
  
 The section headings contained in this Agreement are included solely for convenience of reference and shall not in any way affect the meaning or interpretation of any of the provisions of this Agreement. 

 
 Section 19 
 Applicable Law 
  
 This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware. 
  
 Section 20 
 Counterparts 
  
 This Agreement may be executed in
two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument. 
  

 11 

 IN WITNESS WHEREOF, the Company through its officer duly authorized, and the Executive both intending to
be legally bound have duly executed and delivered this Agreement, to be effective as of the Effective Date. 
  

	
	 Dover Motorsports, Inc.

	
	 /S/ Denis McGlynn

	 Its

	
	 EXECUTIVE

	
	 /S/ Patrick J. Bagley

  

 12

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