Document:

Document

Exhibit 10.1

 

FIRST AMENDMENT
TO
MASTER AGREEMENT TO RESOLVE JCCP No. 4861 PRIVATE PARTY CLAIMS 
This First Amendment to Master Agreement to Resolve JCCP No. 4861 Private Party Claims (this “Amendment”), dated as of July 15, 2022 (the “First Amendment Date”), is entered into by and between (i) Defendant Southern California Gas Company, (ii) Defendant Sempra Energy, and (iii) the plaintiff law firms listed on the signature pages hereto under the heading “Plaintiffs’ Counsel” (each individual law firm, a “Plaintiffs’ Counsel Firm,” and such firms collectively “Plaintiffs’ Counsel”) on behalf of their respective Eligible Plaintiffs. Defendants and Plaintiffs’ Counsel, on behalf of all Eligible Plaintiffs they represent, are referred to herein collectively as the “Parties” and individually as a “Party.”
RECITALS
WHEREAS, on September 26, 2021, the Parties executed and delivered that certain Master Agreement to Resolve JCCP No. 4861 Private Party Claims (the “Agreement”), a copy of which is attached to this Amendment as Exhibit A;
WHEREAS, pursuant to Section 9.2 of the Agreement, the Agreement may be amended by a written instrument signed by each of the Parties;
WHEREAS, the Parties desire to (i) amend and clarify any ambiguity surrounding the timing of the payment of the Final Settlement Amount following the CP Satisfaction Date, the satisfaction of the Conditions Precedent and any waiver by Defendants of the Conditions Precedent, and (ii) allow sufficient time for the Conditions Precedent set forth in Section 4.1 of the Agreement, as amended by this Amendment, to be satisfied; and
WHEREAS, the Parties have determined it is in the mutual interest of each Party to the Agreement to amend and clarify certain terms of the Agreement as set forth in this Amendment.
NOW, THEREFORE, for consideration duly received, the adequacy, receipt and sufficiency of which each Party hereby acknowledges, the Parties agree as follows:
AGREEMENT
1.1Undefined Terms.  Any undefined capitalized terms used in this Amendment and not otherwise defined shall have the meaning ascribed to such terms in the Agreement.
1.2Amendments to the Agreement.
(a)The definition of CP Satisfaction Date Deadline at Section 2.12 of the Agreement is hereby amended to replace the phrase “June 1, 2022” with “August 15, 2022 at 6:00 p.m. Pacific Daylight Time”.
(b)The definition of Termination Date at Section 2.46 of the Agreement is hereby amended to replace the phrase “the forty fifth (45th) day after the CP Satisfaction Date Deadline” with “August 22, 2022 at 6:00 p.m. Pacific Daylight Time”.
(c)Section 4.1(ii) of the Agreement is hereby amended to replace the phrase “the Court has approved, directly or through a duly appointed special master or referee, all Settling Minors’ Compromise Petitions with respect to all such Minor Eligible Plaintiffs” with “Plaintiffs shall have filed with the Court petitions for approval of the Settling Minors’ Compromises with respect to all such Minor Eligible Plaintiffs together with proposed orders approving such Settling Minors’ Compromises”.
(d)Section 4.1(xi) of the Agreement is hereby amended to replace the entire sentence with “Proposed orders of dismissal for the dismissals contemplated by Section 5.3 shall have been filed with the Court 
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pursuant to a stipulation and/or a request for the issuance of an OSC Re: Dismissal filed by the Defendants in accordance with a process suggested by the Court”.
(e)The first sentence of Section 4.2 of the Agreement is hereby amended and replaced in its entirety with the following: “In exchange for the good and valuable consideration and terms set forth in this Agreement, subject to the satisfaction, or waiver by Defendants (in Defendants’ sole and absolute discretion), of the Conditions Precedent, Defendants agree to pay an amount equal to the Maximum Settlement Amount less the Reduction (which Reduction is calculated pursuant to Section 2.39 and Section 5.11) (such amount, the “Final Settlement Amount”).”  
(f)The first sentence of Section 4.4 of the Agreement is hereby amended and replaced in its entirety with the following:
Upon either (i) the satisfaction of the Conditions Precedent on or prior to the CP Satisfaction Date Deadline or (ii) the waiver by Defendants (in Defendants’ sole and absolute discretion) of the Conditions Precedent on or prior to the Termination Date, Defendants shall, subject to Section 5.11 with respect to the Section 5.11 Adjustment relating to Minor Additional Plaintiffs, transfer no later than August 30, 2022 ninety three percent (93%) of the Final Settlement Amount (calculated as of August 15, 2022) in immediately available funds to a trust intended to be treated as a qualified settlement fund established pursuant to § 468B of the Internal Revenue Code of 1986, as amended, and United States Treasury Regulation § 1.468B-1 et seq (the “QSF Account”).
(g)The first sentence of Section 4.5 is hereby amended and replaced in its entirety with the following:  “In accordance with Case Management Order No.6 (“CMO 6”) issued in the JCCP, Defendants shall withhold seven percent (7%) of the Final Settlement Amount (calculated as of August 15, 2022) in order to pay the assessments for the “Fee Fund” and “Cost Fund” established in accordance with CMO 6 (the “CMO 6 Withholding”).”
(h)A new Section 5.11 of the Agreement shall be added to the Agreement and shall read as follows:
“5.11    Additional Plaintiffs.  The Parties agree that Plaintiffs’ Counsel shall use best efforts to obtain from all individuals who filed a complaint after September 1, 2021 and no later than July 10, 2022, and excluding any complaint filed on behalf of a plaintiff currently listed on the July 12, 2022 Draft Attachment E , which such individuals are listed on Attachment I to this Agreement (each an “Additional Plaintiff” and collectively, the “Additional Plaintiffs”), fully executed Individual Releases prior to August 15, 2022.  If a fully executed Individual Release from an Additional Plaintiff is submitted in accordance with Section 6.3 prior to August 15, 2022 and the Final Settlement Amount is paid in accordance with Section 4.1, the Parties agree that (i) each Additional Plaintiff’s Individual Release shall be released to Defendants together with all other Individual Releases in accordance with Section 4.3, (ii) the amount of the Reduction, as calculated in accordance with Sections 2.39 and 4.2, subject to the remaining provisions of this Section 5.11 with respect to Minor Additional Plaintiffs, will be further reduced by an amount equal to (A) $50,000 multiplied by (B) the total number of Additional Plaintiffs who have delivered Individual Releases in accordance with this Section 5.11, and (iii) all Additional Plaintiffs whose Individual Releases are released to Defendants will be deemed Eligible Plaintiffs for all purposes under this Agreement following Defendants’ payment of the Final Settlement Amount (such calculation, the “Section 5.11 Adjustment”).  Notwithstanding the foregoing provisions of this Section 5.11, or anything in Section 4.4, or any other provision of the Agreement to the contrary, with respect to that portion of the Section 5.11 Adjustment (if any) with respect to Additional Plaintiffs who are minors (each such minor a “Minor Additional Plaintiff”), the Section 5.11 Adjustment of the Final Settlement Amount with respect to such Minor Additional Plaintiff shall be calculated and paid as follows:  (1) only Minor Additional Plaintiffs whom the Court has approved, directly or through a duly appointed special master or referee, all Settling Minors’ Compromise Petitions with respect to all such Minor Additional Plaintiffs, and whom have executed Individual Releases in accordance with this Section 5.11, in each case, on or before October 1, 2022, shall be eligible for the Section 5.11 Adjustment; and (2) the Section 5.11 Adjustment with respect to such Minor Additional Plaintiffs who meet the criteria in Section 5.11(1) shall be paid by Defendants on October 5, 2022, subject to the CMO 6 Withholding requirements set forth in Section 4.5.  Defendants shall have no obligation to make any additional payments with respect to 
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Minor Additional Plaintiffs who do not meet each of the criteria set forth in Section 5.11(1) on or before October 1, 2022.  If a fully executed Individual Release from an Additional Plaintiff is submitted in accordance with this Section 5.11 but the Agreement is terminated in accordance with Section 4.6, such Individual Release shall be deemed null and void together with all other Individual Releases.  Within fourteen (14) days of the transfer of the Section 5.11 Adjustment with respect to any Minor Additional Plaintiffs, Plaintiffs’ Counsel shall file with the Court executed requests for dismissal with prejudice of all Claims of the Releasors in their entirety against Defendants.  Plaintiffs’ Counsel shall take all necessary steps to work with the Court to ensure prompt entry of such dismissals.  
With respect to the calculation of the total Reduction pursuant to Section 2.39 as modified by the Section 5.11 Adjustment described above, and by way of example only, if there are only 35,000 Eligible Plaintiffs identified on Updated Attachment E, and if only 34,500 Eligible Plaintiffs execute and deliver an Individual Release, and if there are ten (10) Settling EN Plaintiffs identified pursuant to Section 5.8, then the amount of the Reduction calculated pursuant to Section 2.39 shall equal: ($50,000 x 717) + ($50,000 x 500) – ($50,000 x 10) = $60,350,000.  The Reduction is then further modified by the Section 5.11 Adjustment described in Section 5.11 as follows: if there are twenty (20) Additional Plaintiffs who are not minors who deliver Individual Releases in accordance with this Section 5.11, then the amount of the Reduction shall be further reduced as follows $60,350,000 - ($50,000 x 20) = $59,350,000.  In addition, if seven (7) Minor Additional Plaintiffs meet each of the criteria set forth in Section 5.11(1) on or before October 1, 2022, then the amount of the Reduction shall be further reduced as follows $59,350,00 – ($50,000 x 7) = $59,000,000, which $59,000,000 will be the Reduction amount used to calculate the Final Settlement Amount for all purposes of this Agreement, and Defendants shall make the final Section 5.11 Adjustment payment of $350,000 to the QSF Account on October 5, 2022. 
(i)Section 9.14 of the Agreement is hereby amended to add the following at the end of the Section:
“No later than August 15, 2022, Plaintiffs’ Counsel agrees to deliver to Defendants a complete update to the report previously delivered Defendants in accordance with Section 6.6, which such updated report shall be current as of August 10, 2022. From and after the CP Satisfaction Date, Plaintiffs’ Counsel further agrees to use best efforts to finalize all dismissals and releases including, without limitation, the approval of all Settling Minors’ Compromises.”
(j)Section 9.15 of the Agreement is hereby amended to add “Attachment I – Additional Plaintiffs” as the last sentence of the Section.
(k)The Agreement is hereby amended to add the Attachment I – Additional Plaintiffs that is attached to this Amendment as an attachment to the Agreement.
1.3Plaintiffs’ Counsel Representations.  Plaintiffs’ Counsel represent and warrant that collectively they represent at least eighty (80) percent of Eligible Plaintiffs, and that they have the authority under Case Management Order No. 2 to enter into this Amendment.  This Amendment has been duly authorized, executed and delivered by or on behalf of themselves.  Upon execution and delivery, this Amendment constitutes the legal, valid, and binding obligation of the Plaintiffs’ Counsel, enforceable against such persons in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally, by rules of professional responsibility in applicable jurisdictions governing the professional conduct of individual lawyers of Plaintiffs’ Counsel reflected on the signature page(s) of this Amendment, and by general equitable principles. 
1.4Defendants’ Representations. This Amendment has been duly authorized, executed, and delivered by or on behalf of the Defendants. Upon execution and delivery, this Amendment constitutes the legal, valid, and binding obligation of such Defendants, enforceable against such Defendants in accordance with its 
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terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and by general equitable principles. 
1.5Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the state of California. 
1.6Waiver of Inconsistent Provisions of Law; Severability. To the fullest extent permitted by applicable law, each Party waives any provision of law (including the common law) that renders any provision of this Amendment invalid, illegal, or unenforceable in any respect. If any provision of this Amendment is held to be unenforceable, this Amendment shall be considered divisible, and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Amendment shall remain in full force and effect.
1.7Amendments and Alterations; Agreement Remains In Full Force and Effect. This Amendment may not be altered, amended, waived, modified or otherwise changed in any respect or particular whatsoever, except by a writing duly executed by authorized representatives of the Parties. In the event of any conflict between the terms of the Agreement (prior the execution of this Amendment) and the terms of this Amendment, the terms of this Amendment shall prevail. All the provisions of this Amendment shall be deemed fully incorporated into the Agreement and made a part thereof. Except as specifically set forth in this Amendment, the terms and provisions of the Agreement shall remain unmodified and in full force and effect.
1.8Headings. The headings used herein are intended for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Amendment.
1.9Entire Agreement and Construction. The Agreement (as amended by this Amendment) constitutes the entire agreement between the Parties and supersede all other prior or contemporaneous agreements and understandings between the Parties, whether written or oral, with respect to such extension. This Amendment may be amended or modified only by a written instrument executed by the Parties. The Parties understand and agree that each and every term and condition of this Amendment has been mutually negotiated, prepared and drafted, and if at any time the Parties desire or are required to interpret or construe any such term or condition or any agreement or instrument subject thereto, no consideration shall be given to the issue of which Party actually prepared, drafted or requested any term or condition.
1.10Electronic Signatures and Counterparts. This Amendment to the extent signed and delivered electronically or by facsimile, shall be treated in all manner and respects as an original amendment to the Agreement, and shall be considered to have the same binding legal effect as if it were the original signed version thereof, delivered in person.  This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.  
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the First Amendment Date.
DEFENDANTS:
									
	SOUTHERN CALIFORNIA GAS COMPANY		SEMPRA ENERGY
			
	/s/ David J. Barrett		/s/ Peter R. Wall
	Name: David J. Barrett		Name: Peter R. Wall
	Title: VP & General Counsel		Title: Senior Vice President, Controller & CAO
	Date: July 14, 2022		Date: July 14, 2022

APPROVED AS TO FORM AND CONTENT ONLY:

									
	O'MELVENY & MYERS LLP		MORGAN, LEWIS & BOCKIUS LLP
			
	/s/ Sabrina H Strong		/s/ James J. Dragna
	Name: Sabrina H Strong		Name: James J. Dragna
	Title: Partner		Title: Attorney
	Date: July 15, 2022		Date: July 15, 2022

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[Signature Page to First Amendment]

									
	PLAINTIFFS' COUNSEL:		
			
			
			
			
	/s/ Brian Panish		/s/ Raymond P. Boucher
	Name: Brian Panish		Name: Raymond P. Boucher
	Date: 07/14/2022		Date: 07/15/2022
	Panish, Shea & Boyle LLP (on its own behalf and 		Boucher LLP
	on behalf of Kenneth T. Haan & Associates)		Raymond Boucher, Esq. (ray@boucher.la)
	Brian Panish, Esq. (panish@psblaw.com)		Maria Weitz, Esq. (weitz@boucher.la)
	Jesse Creed, Esq. (creed@psblaw.com)		21600 Oxnard Street, Suite 600
	11111 Santa Monica Boulevard, Suite 700		Woodland Hills, CA 91367
	Los Angeles, CA 90025		Phone: (818) 340-5400
	Phone: (310) 477-1700		Fax: (818) 340-5401
	Fax: (310) 477-1699		
			
			
			
	/s/ Patricia K. Oliver		/s/ Paul R. Kiesel
	Name: Patricia K. Oliver		Name: Paul R. Kiesel
	Date: 7/14/2022		Date: 07/14/2022
	Parris Law Firm (on its own behalf and on behalf		Kiesel Law LLP (on its own behalf and on behalf
	of Kenneth T. Haan & Associates)		of Keosian Law LLP)
	R. Rex Parris, Esq. (rrparris@parrislawyers.com)		Paul Kiesel, Esq.
	43364 10th Street West 		Mariana McConell, Esq. 
	Lancaster, CA 93534		8648 Wilshire Blvd.
	Phone: (661) 949-2595		Beverly Hills, CA 90211
	Fax: (661) 949-7524		Phone: (310) 854.4444
			Fax: (619) 525-7672
			
			
			
	/s/ Robin L. Greenwald		/s/ Frank Petosa
	Name: Robin L. Greenwald		Name: Frank Petosa
	Date: 07/15/2022		Date: 7/14/2022
	Weitz & Luxenberg, P.C.		Morgan & Morgan (on its own behalf and on
	Robin Greenwald, Esq.		behalf of Kenneth T. Haan & Associates)
	(rgreenwald@weitzlux.com)		Frank Petosa, Esq. (fpetosa@forthepeople.com)
	1880 Century Park East, Suite 700		8151 Peters Road, 4th Floor
	Los Angeles, CA 90067		Plantation, FL 33324
	Phone: (310) 247-0921		Phone: (954) 318-0268
	Fax: (310) 786-9927		Fax: (954) 327-3018

[Signature Page to First Amendment]

									
			
			
			
			
	/s/ Roland Tellis		/s/ Gary A. Praglin
	Name: Roland Tellis		Name: Gary A. Praglin
	Date: 07/14/2022		Date: 07/14/2022
	Baron & Budd P.C.		Cotchett, Pitre & McCarthy LLP
	Roland Tellis, Esq. (rtellis@baronbudd.com)		Frank Pitre, Esq. (fpitre@cpmlegal.com)
	15910 Ventura Blvd., Suite 1600		Gray Praglin, Esq. (gpraglin@cpmlegal.com)
	Encino, CA 91436		2716 Ocean Park Boulevard, Suite 3088
	Phone: (818) 839-2333		Santa Monica, CA 90405
	Phone: (818) 986-9698		Phone: (310) 392-2008
			Fax: (310) 392-0111
			
			
			
			
	/s/ Andrew Jacobson		/s/ Alan Schimmel
	Name: Andrew Jacobson		Name: Alan Schimmel
	Date: 07/15/2022		Date: 07/15/2022
	Engstrom, Lipscomb & Lack		Schimmel & Parks
	Walter Lack, Esq. (wlack@elllaw.com)		Alan Schimmel, Esq.
	10100 Santa Monica Boulevard, 12th Floor		(aischimmel@spattorneys.com)
	Los Angeles, CA 90067		15303 Ventura Boulevard, Suite 650
	Phone: (310) 552-3800		Sherman Oaks, CA 91403
	Fax: (310) 552-9434		
			
			
			
			
			
	/s/ James Frantz		
	Name: James Frantz		
	Date: 07/15/2022		
	Frantz Law Group, APLC		
	James Frantz, Esq. (jpf@frantzlawgroup.com)		
	2029 Century Park East, Suite 400		
	Los Angeles, CA 90067		
	Phone: (323) 425-8138		
	Fax: (619) 525-7672		

[Signature Page to First Amendment]

ATTACHMENT I – ADDITIONAL PLAINTIFFS
												
	Plaintiff Name	Name of Complaint	Case No.	Filing Date of Complaint
	Afaryan, Roy	Afaryan	22STCV18777	6/7/2022
	Ajefmian, Raffi	Afaryan	22STCV18777	6/7/2022
	Ajemian, Andre	Afaryan	22STCV18777	6/7/2022
	Akhoain, Andrew	Afaryan	22STCV18777	6/7/2022
	Akhoain,Christian	Afaryan	22STCV18777	6/7/2022
	Barrios, Andrew	Afaryan	22STCV18777	6/7/2022
	Chavez, Nathan	Afaryan	22STCV18777	6/7/2022
	Choudhary, Dev	Afaryan	22STCV18777	6/7/2022
	Choudhary, Tara	Afaryan	22STCV18777	6/7/2022
	Davydov, Edward	Parraz	22STCV07391	3/1/2022
	Debiasse, Eleanor	Afaryan	22STCV18777	6/7/2022
	Debiasse, Miller	Afaryan	22STCV18777	6/7/2022
	DeFrank, Antonio	Afaryan	22STCV18777	6/7/2022
	Eagle, Richard	Afaryan	22STCV18777	6/7/2022
	Eagle, Zachary	Afaryan	22STCV18777	6/7/2022
	Eghrari, Monireh	Eghrari	21STCV43848	12/1/2021
	Eshraghi, Desiree	Parraz	22STCV07391	3/1/2022
	Estrada, Natalie	Afaryan	22STCV18777	6/7/2022
	Estrada, Sofia	Afaryan	22STCV18777	6/7/2022
	Foroughi, Emma	Parraz	22STCV07391	3/1/2022
	Grodzen, Brandon	Parraz	22STCV07391	3/1/2022
	Guzman, Adrianna	Afaryan	22STCV18777	6/7/2022
	Jackson, Alexander	Afaryan	22STCV18777	6/7/2022
	Judice, Bernardo	Afaryan	22STCV18777	6/7/2022
	Judice, Luanna	Afaryan	22STCV18777	6/7/2022
	Judice, Maria	Afaryan	22STCV18777	6/7/2022
	Kaplan, Kyle	Parraz	22STCV07391	3/1/2022
	Khatchik, Andre	Parraz	22STCV07391	3/1/2022
	Kisch, William	Parraz	22STCV07391	3/1/2022
	Kubler, Daniel	Afaryan	22STCV18777	6/7/2022
	Kwon, Madison	Kwon	21STCV40079	11/1/2021
	Levine, Rachel	Levine, Rachel	22STCV18448	6/6/2022
	Lind, Rebecca	Afaryan	22STCV18777	6/7/2022
	Mitchell, Zachary	Afaryan	22STCV18777	6/7/2022
	O'Rourke, Eion	Afaryan	22STCV18777	6/7/2022
	O'Rourke, Greyson	Afaryan	22STCV18777	6/7/2022
	Parraz, Patrick J.	Parraz	22STCV07391	3/1/2022
	Perceleanu, Audrey	Afaryan	22STCV18777	6/7/2022
	Piskoulian, Angelina	Afaryan	22STCV18777	6/7/2022
	Piskoulian, David	Afaryan	22STCV18777	6/7/2022
	Piskoulian, Juliana	Afaryan	22STCV18777	6/7/2022
	Skeggs, Abigail	Afaryan	22STCV18777	6/7/2022
	Skeggs, Quinten	Afaryan	22STCV18777	6/7/2022
	Stefano, Nicholas	Afaryan	22STCV18777	6/7/2022
	Whelan, Brenna	Parraz	22STCV07391	3/1/2022

Attachment I

Exhibit A to the First Amendment
Copy of Master Agreement to Resolve JCCP No. 4861 Private Party Claims 
[See attached] 

Exhibit ADocument

CHURCHILL DOWNS INCORPORATED
2022 EXECUTIVE ANNUAL INCENTIVE PLAN
Effective as of January 1, 2022
1.PURPOSE
The Churchill Downs Incorporated 2022 Executive Annual Incentive Plan (the “Plan”), as set forth herein, sets forth the terms and conditions pursuant to which certain cash bonuses may be payable to certain key executives of the Company.  The purpose of the Plan, as herein stated, is to provide performance-based cash bonus compensation for Participants based on the attainment of one or more performance goals or targets that are determined by the Compensation Committee to be related to the success of the Company, and that are established from time to time by the Compensation Committee, as part of an integrated compensation program.  
2.DEFINITIONS
The following words and phrases as used herein shall have the following meanings, unless a different meaning is plainly required by the context:  
(a)“Board” or “Board of Directors” shall mean the board of directors of the Company.
(b)“Bonus Formula” shall mean the formula pursuant to which bonuses payable to Participants for each Performance Period are determined, based on the extent to which the performance goal or goals set forth therein have been achieved during the Performance Period, which formula can be revised at the discretion of the Compensation Committee.   
(c)“Compensation Committee” shall mean the Compensation Committee of the Board of Directors, or such other committee established by the Board, in any case consisting exclusively of two or more members of the Board, to act as the administration committee with respect to the Plan.
(d)“Company” shall mean Churchill Downs Incorporated or any successor or successors thereto.
(e)“Designated Beneficiary” shall mean the person, if any, specified in writing by the Participant to receive any payments due to the Participant in the event of the Participant’s death.  In the event no person is specified by the Participant, the Participant’s estate shall be deemed to be the Designated Beneficiary.  
(f)“Effective Date” shall mean January 1, 2022. 
(g)“Participant” shall mean each executive officer of the Company, as the Compensation Committee shall select from time to time to participate in the Plan for a particular Performance Period.
(h)“Performance-Based Bonus” shall mean the cash bonus payable to a Participant under Section 6(a).  
(i)“Performance Period” shall mean a calendar year or any other period (not to exceed a year) commencing on or after January 1, 2022, with respect to which a Bonus Formula is established.  
3.PARTICIPATION

Each executive officer of the Company, as the Compensation Committee shall select from time to time to participate in the Plan for a particular Performance Period shall be a Participant in the Plan for that Performance Period.  
4.TERM OF PLAN
The Plan shall be in effect as of the Effective Date and shall continue until terminated by the Board of Directors.    
5.BONUS ENTITLEMENT
A Participant shall be entitled to receive a bonus with respect to a Performance Period in accordance with the provisions of Section 6 of the Plan only after certification in writing by the Compensation Committee that the performance goals, consistent with the provisions of Section 6, and as set forth in the Bonus Formula applicable for such Performance Period, have been satisfied.  Unless a different payment date is established by the Compensation Committee with respect to a Performance Period, the bonus payment with respect to a Performance Period shall be payable to the Participant on or before March 15 of the year following the end of such Performance Period.  Except as may be otherwise provided by the Compensation Committee, in its discretion, or as otherwise required in any written employment or separation agreement between the Company and the Participant, no bonus payment shall be made to any Participant who is not employed by the Company as of the date of such payment.
6.DETERMINATION OF PERFORMANCE-BASED COMPENSATION BONUS 
(a)Performance-Based Bonus.  Each Participant, or the Designated Beneficiary of a deceased Participant, shall be entitled to a bonus with respect to a Performance Period that is equal to the amount determined by reference to the Bonus Formula applicable for such Performance Period; provided, however, that any bonus payment may be increased, decreased, or eliminated at the discretion of the Compensation Committee, as provided in Section 6(c) below.  
(b)Performance Goals.  The bonus payable to a Participant for a Performance Period shall be derived from the Bonus Formula for that Performance Period depending on the attainment of one or more performance goals or targets as are specified for the Bonus Formula, which performance goals or targets may be based on one or more of the following business criteria (which may be determined for these purposes either by reference to the Company as a whole or by reference to any one or more of its subsidiaries, operating divisions or other operating units):  stock price; total shareholder returns; sales or revenues, whether in general, by type of product or service, or by type of customer; gross earnings; pretax income; operating income; earnings before interest and/or taxes; earnings before interest, taxes, depreciation, and/or amortization; operating cash flow; free cash flow; net income; earnings per share; return measures, including pre-tax or after-tax, before or after depreciation and amortization: return on assets, capital, investment, equity, sales or revenue;  economic profit; economic value added; cost reductions and savings; productivity; market share; racing handle; customer attendance measures; customer or employee satisfaction; financial ratios as provided in credit agreements of the Company and its affiliates; working capital targets, including net working capital, inventory, accounts payable, and accounts receivable measured in absolute terms or as turnover metrics (e.g., relative to sales or cost of goods sold, including number of days); completion of acquisitions of business or companies; completion of divestitures and asset sales; achievement of specified legislative or regulatory outcomes; completion of other material projects; any variation or combination of the preceding business criteria, or such other goals as the Compensation Committee 

may determine whether or not listed herein.  The foregoing performance goals may be stated in absolute terms or may be expressed relative to performance in a specified prior period or to the performance of other specified enterprises.  In addition, the Compensation Committee may utilize as an additional performance measure the attainment by a Participant of one or more personal objectives and/or goals that the Compensation Committee deems appropriate, including, but not limited to, implementation of Company policies, negotiation of significant corporate transactions, development of long-term business goals or strategic plans for the Company, or the exercise of specific areas of managerial responsibility.  A Performance-Based Bonus potentially payable with respect to a Performance Period shall be considered to be a Performance-Based Bonus payable with respect to the calendar year within which such Performance Period ends.   In establishing the Bonus Formula or determining the achievement of a performance goal, the Compensation Committee may provide that achievement of the applicable performance goals may be amended or adjusted to include or exclude components of any performance goals, including, without limitation, foreign exchange gains and losses, asset write-downs, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles. Performance goals and the determination of the Bonus Formula shall be subject to such other special rules and conditions as the Compensation Committee may establish at any time.   In addition, equitable adjustments will be made to any performance goal related to Company stock (e.g., earnings per share) to reflect changes in corporate capitalization, including, without limitation, stock splits and reorganizations.  
(c)Committee Discretion.  Notwithstanding the determination of a Participant’s bonus or bonuses under the provisions of this Section 6 (without regard to this Section 6(c)), the Compensation Committee may, at its sole discretion and at any time prior to the time a particular bonus is paid, increase or decrease the amount of or totally eliminate any such bonus or bonuses to the extent the Compensation Committee determines that such increase, decrease, or elimination is appropriate under such facts and circumstances as the Compensation Committee deems relevant.     
7.PLAN ADMINISTRATION COMMITTEE  
(a)Powers.  The Compensation Committee shall have the power and duty to do all things necessary or convenient to effect the intent and purposes of the Plan and not inconsistent with any of the provisions hereof, whether or not such powers and duties are specifically set forth herein, and, by way of amplification and not limitation of the foregoing, the Compensation Committee shall have the power to:
(i)provide rules and regulations for the management, operation and administration of the Plan, and, from time to time, to amend or supplement such rules and regulations;
(ii)construe the Plan, which construction, as long as made in good faith, shall be final and conclusive upon all parties hereto; and
(iii)correct any defect, supply any omission, or reconcile any inconsistency in the Plan in such manner and to such extent as it shall deem expedient to carry the 

same into effect, and it shall be the sole and final judge of when such action shall be appropriate.  
The resolution of any questions with respect to payments and entitlements pursuant to the provisions of the Plan shall be determined by the Compensation Committee, and all such determinations shall be final and conclusive.
(b)Indemnity.  No member of the Compensation Committee shall be directly or indirectly responsible or under any liability by reason of any action or default by him as a member of the Compensation Committee, or the exercise of or failure to exercise any power or discretion as such member.  No member of the Compensation Committee shall be liable in any way for the acts or defaults of any other member of the Compensation Committee, or any of its advisors, agents or representatives.  The Company shall indemnify and save harmless each member of the Compensation Committee against any and all expenses and liabilities arising out of his or her own membership on the Compensation Committee.
(c)Participant Information.  The Company shall furnish to the Compensation Committee in writing all information required by the Compensation Committee to exercise its powers and duties in administration of the Plan.  Such information shall be conclusive for all purposes of the Plan and the Compensation Committee shall be entitled to rely thereon without any investigation thereof; provided, however, that the Compensation Committee may correct any errors discovered in any such information.
8.EFFECTIVE DATE, TERMINATION AND AMENDMENT
(a)Effective Date of the Plan.  The Plan shall be effective as of the Effective Date.    
(b)Amendment and Termination of the Plan.  The Plan may be terminated or revoked by the Board at any time and amended by the Board from time to time, provided that neither the termination, revocation or amendment of the Plan may, without the written approval of the Participant, reduce the amount of a bonus payment that has been determined by the Compensation Committee to be due and payable, but has not yet been paid.    
9.MISCELLANEOUS PROVISIONS 
(a)Unsecured Creditor Status.  A Participant entitled to a bonus payment hereunder shall rely solely upon the unsecured promise of the Company, as set forth herein, for the payment thereof, and nothing herein contained shall be construed to give to or vest in a Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatever owned by the Company, or in which the Company may have any right, title, or interest, now or at any time in the future.  
(b)Other Company Plans.  It is agreed and understood that any benefits under this Plan are in addition to any and all benefits to which a Participant may otherwise be entitled under any other contract, arrangement, or voluntary pension, profit sharing or other compensation plan of the Company, whether funded or unfunded, and that this Plan shall not affect or impair the rights or obligations of the Company or a Participant under any other such contract, arrangement, or voluntary pension, profit sharing or other compensation plan, including any other bonus plan or arrangement as may currently be in place or as may be established hereafter.  
(c)Separability.  If any term or condition of the Plan shall be invalid or unenforceable to any extent or in any application, then the remainder of the Plan, with the exception of such 

invalid or unenforceable provision, shall not be affected thereby, and shall continue in effect and application to its fullest extent.
(d)Continued Employment.  Neither the establishment of the Plan, any provisions of the Plan, nor any action of the Compensation Committee shall be held or construed to confer upon any Participant the right to a continuation of employment by the Company.  The Company reserves the right to dismiss any employee (including a Participant), or otherwise deal with any employee (including a Participant) to the same extent as though the Plan had not been adopted.
(e)Incapacity.  If the Compensation Committee determines that a Participant or Designated Beneficiary is unable to care for his affairs because of illness or accident, or is a minor, any benefit due such Participant or Designated Beneficiary under the Plan may be paid to his spouse, child, parent, or any other person deemed by the Compensation Committee to have incurred expense for such Participant or Designated Beneficiary (including a duly appointed guardian, committee, or other legal representative), and any such payment shall be a complete discharge of the Company’s obligation hereunder.
(f)Governing Law.  The Plan shall be construed, administered, and enforced according to the laws of the Commonwealth of Kentucky, except to the extent that such laws are preempted by the Federal laws of the United States of America.   This Plan and the payments hereunder are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, to the maximum extent possible and shall be construed and interpreted accordingly. 
(g)Withholding.  The Participant or the Designated Beneficiary shall make appropriate arrangements with the Company for satisfaction of any federal, state or local income tax withholding requirements and Social Security or other tax requirements applicable to the accrual or payment of benefits under the Plan.  If no other arrangements are made, the Company may provide, at its discretion, for any withholding and tax payments as may be required. 
IN WITNESS WHEREOF, and as evidence of the adoption of the Plan, the Company has caused this document to be signed by a duly authorized officer this 29th day of July, 2022.  

						
	CHURCHILL DOWNS INCORPORATED
		
		
	By:	/s/Katherine Armstrong
	Its:	SVP of Human Resources

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