CHURCHILL DOWNS INC
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT --WILLIAM E. MUDD
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<TYPE>EX-10.(AAA)
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<FILENAME>dex10aaa.htm
<DESCRIPTION>FIRST AMENDMENT TO EMPLOYMENT AGREEMENT --WILLIAM E. MUDD
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10 (aaa) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>FIRST AMENDMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>TO </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EMPLOYMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:3px;line-height:95%; vertical-align:top"><FONT FACE="Times New Roman"
SIZE="2">This First Amendment to Employment Agreement dated and effective as of December&nbsp;19</FONT><FONT FACE="Times New Roman" SIZE="1"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2">, 2008 (this &#147;<U>Amendment</U>&#148;), amends
that certain Employment Agreement, dated as of September&nbsp;27, 2007 (the &#147;<U>Original Agreement</U>&#148;) by and between Churchill Downs Incorporated, a Kentucky corporation (the &#147;<U>Company</U>&#148;), and William E. Mudd
(&#147;<U>Employee</U>&#148;), subject to the approval of the Board (as defined below). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Original Agreement. </FONT></P> <P
STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><U>RECITALS </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. WHEREAS,
Section&nbsp;409A of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), places certain restrictions, among other things, as to the timing of distributions from nonqualified deferred compensation plans and arrangements; and
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. WHEREAS, the Board of Directors of the Company (the &#147;Board&#148;) desires to amend the Original Agreement to comply with
Section&nbsp;409A of the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the mutual promises set forth herein, the parties hereto hereby agree
as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. Section&nbsp;2.B. of the Original Agreement shall be amended by adding following to the end of the fourth sentence:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;; provided the reimbursement of such expenses is made no later than the end of Mudd&#146;s taxable year following the taxable year in
which the expense is incurred&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. The first sentence of Section&nbsp;5.A. of the Original Agreement shall be amended by inserting the
following clause between &#147;following&#148; and &#147;(the &#147;Termination Benefits&#148;)&#148;: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;subject to Mudd&#146;s
execution of a Company standard release agreement within the minimum time period required under applicable federal and state laws, or if no such period, ten business days following the date of such termination and to the extent there has not been a
revocation of such release agreement within the time permitted under applicable law&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. The following provision shall be added as a
separate paragraph to Section&nbsp;5.A. of the Original Agreement immediately preceding the release paragraph: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;Subject to
Section&nbsp;15 and expiration of the 7-day revocation period following the signing of the release, Mudd shall be paid the Termination Benefits (other than the benefits set forth in Section&nbsp;5.A.vi) in a lump sum as soon as practicable following
the termination date, but in no event later than sixty (60)&nbsp;days following </FONT>
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<FONT FACE="Times New Roman" SIZE="2">the termination date. Notwithstanding the foregoing and any provision in this Agreement to the contrary, in any case where the first and last days of the
applicable release and non-revocability periods are in two separate taxable years, to the extent necessary to avoid the imposition of any additional taxes under Section&nbsp;409A (as defined below), any payments required to be made to Mudd under
this Agreement shall be made in the later tax year, as soon as practicable, but in no event later than thirty (30)&nbsp;days, following the conclusion of the applicable release and non-revocability period.&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. The following clause shall be added to the end of the first sentence of Section&nbsp;7 of the Original Agreement: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;, which amount shall be payable in a lump sum upon the same terms and conditions as the Termination Benefits&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5. The following shall be added as a new Section&nbsp;15 at the end of the Original Agreement: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Section 409A</U>. Notwithstanding the foregoing, to the extent required in order to avoid accelerated taxation and/or tax penalties under
Section&nbsp;409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder (&#147;Section 409A&#148;), if Mudd is a &#147;specified employee&#148; (as defined under Section&nbsp;409A) as of the date of his
&#147;separation from service&#148; (as defined under Section&nbsp;409) from the Company, then any payment of benefits scheduled to be paid by the Company to Mudd during the first six (6)&nbsp;month period following the date of a termination of
employment hereunder shall not be paid until the earlier of (a)&nbsp;the expiration of the six (6)&nbsp;month period measured from the date of Mudd&#146;s &#147;separation from service&#148; and (b)&nbsp;the date of Mudd&#146;s death. All payments
and benefits that are delayed pursuant to the immediately preceding sentence shall be paid to Mudd in a lump sum as soon as practicable following the expiration of such period (or if earlier, upon Mudd&#146;s death) but in no event later than thirty
(30)&nbsp;days following such period. To the extent required in order to avoid accelerated taxation and/or tax penalties under Section&nbsp;409A, no amount or benefit that is payable upon a termination of Mudd&#146;s employment or services from the
Company shall be payable unless such termination also meets the requirements of a &#147;separation from service&#148; under Section&nbsp;409A. In addition, the parties shall cooperate fully with one another to ensure compliance with
Section&nbsp;409A, including, without limitation, adopting amendments to arrangements subject to Section&nbsp;409A and operating such arrangements in compliance with Section&nbsp;409A.&#148; </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">CHURCHILL DOWNS INCORPORATED</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Charles G. Kenyon</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Charles G. Kenyon</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">VP Human Resources</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ William E. Mudd</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">William E. Mudd</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Executive Vice President and Chief Financial Officer</FONT></TD></TR>
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