THE CHURCHILL DOWNS INCORPORATED
AMENDED AND RESTATED
DEFERRED COMPENSATION PLAN
FOR EMPLOYEES AND DIRECTORS
April 1, 1999
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ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.01 Title. This Plan shall be known as the Churchill Downs Incorporated
Amended and Restated Deferred Compensation Plan for Employees and Directors
(hereinafter referred to as the "Plan").
1.02 Purpose. The purpose of the Plan is to permit certain members of
management or highly compensated employees and Directors of the Company to defer
income pre-tax without regard to the limits imposed by the Internal Revenue Code
on tax-qualified savings and retirement plans. The Plan constitutes an unfunded
"top hat" arrangement under Title I of ERISA as well as for income tax purposes.
1.03 Effective Date. The effective date of this Plan shall be
April 1, 1999.
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ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
2.01 Annual Deferral Amount. "Annual Deferral Amount" shall mean that
portion of a Participant's income to be paid during a Plan Year that a
Participant elects to have and is deferred in a Plan Year. In the event of a
Participant's Termination of Service prior to the end of a Plan Year, such
year's Annual Deferral Amount shall be the actual amount deferred and withheld
prior to such event.
2.02 Beneficiary. "Beneficiary" shall mean the person or persons or the
estate of a Participant entitled to receive any benefits under this Plan in the
event of the Participant's death.
2.03 Board. "Board" shall mean the Board of Directors of the Company.
2.04 Bookkeeping Account Balance. "Bookkeeping Account Balance" shall
mean with respect to a Participant the sum of (i) Deferred Compensation, plus
(ii) Company Contributions, plus (iii) interest credited in accordance with all
the applicable interest crediting provisions of this Plan, less (iv) all
distributions. This account shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of the amounts
to be paid to a Participant pursuant to this Plan.
2.05 Code. "Code" shall mean the Internal Revenue Code of 1986, as may
be amended from time to time.
2.06 Committee. "Committee" means the Compensation Committee of the
Board of Directors.
2.07 Company. "Company" shall mean Churchill Downs Incorporated and any
subsidiary or affiliated companies that adopt the Plan, with the Company's
approval.
2.08 Company Contribution. "Company Contribution" shall mean the
amounts credited to the Participant's Bookkeeping Account Balance under Section
4.02 of the Plan.
2.09 Crediting Rate. "Crediting Rate" shall mean, starting January 1,
1999 and for each month thereafter, an interest rate equal to the Prime Rate
listed in the Money Rates section of The Wall Street Journal on the first
business day of the applicable month, plus 100 basis points.
2.10 Deferred Compensation. "Deferred Compensation" shall mean the sum
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of all of a Participant's Annual Deferral Amounts.
2.11 Director. "Director shall mean a member of the Board of Directors
of the Company.
2.12 Director Compensation. "Director Compensation" shall mean the
retainer and meeting fees paid by the Company to Directors.
2.13 Disabled. "Disabled" shall mean for an Employee Total and Permanent
Disability under the terms of the Company's long-term disability plan in effect
at the time of such determination of Disability.
2.14 Election Date. "Election Date" shall mean the date established by
the Committee as the date before which an Employee or Director must submit a
valid Election Form to the Plan Administrator. The applicable Election Dates can
be no later than the following: (a) 30 days after adoption of the Plan for
Employees and Directors who are eligible to participate at the time the Plan is
adopted, (b) 30 days after a newly eligible Employee or Director is notified of
the right to participate in the Plan, or (c) December 15 prior to an applicable
Plan Year if (a) or (b) above do not apply.
2.15 Election Form. "Election Form" shall mean the form established from
time to time by the Committee that an Employee or Director completes, signs and
returns to the Plan Administrator to make an election under the Plan.
2.16 Employee. "Employee" shall mean any member of management or highly
compensated employee who is eligible to participate in the Plan.
2.17 Employee Compensation. "Compensation" shall have the same meaning
as provided in the Qualified Plan (without regard to any limitations imposed by
the Code and without regard to any deferrals made under the terms of this Plan).
2.18 Participant. "Participant" shall mean an Employee or Director who
has Deferred Compensation pursuant to the terms of this Plan, and whose
Bookkeeping Account balance has not yet been fully distributed.
2.19 Plan. "Plan" shall mean the Churchill Downs Incorporated Deferred
Compensation Plan for Employees and Directors as described in this instrument
and as amended from time to time.
2.20 Plan Administrator. "Plan Administrator" shall mean the Vice
President of Human Resources of the Company.
2.21 Plan Year. "Plan Year" shall mean a calendar year.
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2.22 Qualified Plan. "Qualified Plan" shall mean the Churchill Downs
Incorporated Profit Sharing Plan as in effect at the date of the adoption of
this Plan and as amended from time to time.
2.23 Termination of Service. "Termination of Service" or similar
expression shall mean the termination of the Participant's employment as an
employee of the Company (and any division, subsidiary or affiliate thereof) or,
if applicable, termination of service as a Director. A Disabled Participant
shall be deemed to have terminated employment for purposes of this Plan.
2.24 Unforeseeable Financial Emergency. "Unforeseeable Financial
Emergency" shall mean an unanticipated emergency that is caused by an event
beyond the control of the Participant that would result in severe financial
hardship to the Participant resulting from (i) a sudden and unexpected illness
or accident of the Participant or a dependent of the Participant, (ii) a loss of
the Participant's property due to casualty, or (iii) such other extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant, all as determined in the sole discretion of the Committee.
2.25 Valuation Date. "Valuation Date" shall mean the last day of
each month.
2.26 Gender and Number. Wherever the context so requires, masculine
pronouns include the feminine and singular words shall include the plural.
2.27 Titles. Titles of the Articles of this Plan are included for ease
of reference only and are not to be used for the purpose of construing any
portion or provision of this Plan document.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 Eligibility. The Committee shall determine in its sole discretion,
which Employees shall be eligible to participate in the Plan. All Directors
shall be eligible for participation.
3.02 Participation. An Employee or Director, after having been selected
for participation by the Committee, shall, as a condition to participation,
complete and return to the Plan Administrator a duly executed Election Form no
later than the applicable Election Date. A Bookkeeping Account will be
established for each Participant at the time an Election Form is received by the
Plan Administrator.
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ARTICLE IV
PARTICIPANT DEFERRALS OF COMPENSATION
AND COMPANY MATCHING CONTRIBUTIONS
4.01 Employee Compensation. Each Employee who participates in the Plan
may have a percentage of Employee Compensation deferred in accordance with the
terms and conditions of this Plan. The percentage to be deferred each pay period
under this section shall be any whole percentage from 1% to 15% of Employee
Compensation, offset by amounts actually deferred in the applicable pay period
to the Company's Qualified Plan.
4.02 Company Contribution. With respect to amounts contributed under
Section 4.01, the Company shall add an amount equal to the excess, if any, of
4.02(a) over 4.02(b) as follows:
4.02(a) The amount equal to the matching contribution the Company
would make to the Qualified Plan based on the
Participant's Compensation for such pay period if the
Participant made a contribution to the Qualified Plan in
the amount of (1) the contributions under Section 4.01
above, plus (2) the actual contributions to the Qualified
Plan for that pay period.
4.02(b) The amount equal to the Company's actual matching
contribution to the Qualified Plan for such pay period.
4.03 Employee Annual Incentive Awards. Each Employee who participates in
the Plan may have up to 100% of his annual incentive award deferred in
accordance with the terms and conditions of this Plan. There shall be no Company
Contribution with respect to the deferral of annual incentive awards.
4.04 Director Compensation. Each Director who participates in the Plan
may have up to 100% of his Compensation deferred under the terms and conditions
of this plan. There shall be no Company Contributions with respect to the
deferral of Director Compensation.
4.05 Vesting. A Participant shall be fully vested at all times in his or
her Deferred Compensation plus interest thereon. Vesting in Company
Contributions plus interest thereon shall occur at the same time and at the same
rate as vesting occurs for Company matching contributions to the Qualified Plan.
4.06 Duration of Election Form. A Participant's Election Form shall
remain in
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effect until modified or terminated as provided in Section 4.07. Future
deferrals will be terminated automatically for any Participant who is deemed (by
the Committee) to no longer be eligible for participation in the Plan.
4.07 Election to Modify or Terminate Future Contributions. A Participant
who desires to modify or terminate the amount of future Compensation being
deferred under the Plan must notify the Plan Administrator in writing on an
Election Form provided by the Plan Administrator. Elections to decrease or
terminate deferrals of future Compensation shall become effective as soon as
administratively possible. Elections to increase deferrals of future
Compensation shall become effective on January 1 of the next Plan Year.
4.08 Rollover Contributions. A Participant may request a roll over to
the Plan contributions previously made by, or on behalf of, the Participant to
another deferred compensation plan which qualified as an unfunded "top hat"
arrangement under Title I of ERISA as well as for income tax purposes. The
Compensation Committee, in its sole discretion, may elect to accept such roll
over amounts from other deferred compensation plans.
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ARTICLE V
DEFERRAL ACCOUNT AND CREDITING RATE
5.01 Bookkeeping Account. Compensation deferred by a Participant under
Sections 4.01, 4.03, and 4.04 herein and Company Contributions under Section
4.02 shall be credited to a Bookkeeping Account maintained for each Participant.
Distributions pursuant to Articles VI and VII shall be debited against the
Participant's Bookkeeping Account.
5.02 Interest. Prior to any distribution of a Participant's Bookkeeping
Account Balance under Article VI herein, an amount equal to the Crediting Rate
shall be credited and compounded monthly to a Participant's Bookkeeping Account
Balance on each Valuation Date. For purposes of this paragraph, a Participant's
Annual Deferral Amount and Company Contributions will be treated as though they
were made in two installments: (a) half at the beginning of the applicable
month, and (b) half at the end of the applicable month. Subsequent to the
commencement of installment distributions under Article VI herein, the interest
credited to a Participant's Bookkeeping Account Balance shall be equal to the
average (mean) crediting rate for the 12 months immediately prior to the
Participant's first distribution hereunder.
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ARTICLE VI
DISTRIBUTION
6.01 Distribution of Bookkeeping Account Balance. Distribution of the
value of a Participant's Bookkeeping Account Balance shall be in a lump sum or
in 60 equal monthly installments as specified on the Participant's Election
Form. If a payment form is not specified on an Election Form, a Participant's
Bookkeeping Account Balance shall be distributed as a lump sum. The selection of
a lump sum or installment payments must be made on a Participant's initial
Election Form and cannot be changed for future contributions and earnings
thereon.
6.02 Form of Distribution. All distributions of a Participant's
Bookkeeping Account shall be made in cash only.
6.03 Timing of Distribution. Distributions shall commence, or be paid in
a lump sum if so elected, as soon as administratively feasible after the earlier
of the date indicated on the Participant's Deferral Election Form or the
Participant's Termination of Service.
6.04 Death Prior to Distribution. In the event of a Participant's death
prior to the commencement of any distribution of payments hereunder, an amount
equal to the Participant's Bookkeeping Account Balance shall be paid to the
Participant's Beneficiary in a lump sum within 90 days after the Participant's
death.
6.05 Death of a Participant Subsequent to Commencement of Installment
Payments. In the event of the death of a Participant subsequent to commencement
of installment payments hereunder but prior to completion of such payments, the
installments shall continue and shall be paid to the designated Beneficiary as
if the Participant had survived.
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ARTICLE VII
UNFORESEEABLE FINANCIAL EMERGENCY
7.01 Unforeseeable Financial Emergency. At the request of a Participant
or at the request of any of the Participant's Beneficiaries after the
Participant's death, the Plan Administrator may, in its sole discretion,
accelerate and pay all or part of the value of a Participant's Bookkeeping
Account Balance in the event of an unforeseeable Financial Emergency. An
accelerated distribution must be limited to only that amount necessary to
relieve the financial emergency.
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ARTICLE VIII
BENEFICIARY
8.01 Beneficiary Designation. A Participant shall designate a
Beneficiary to receive benefits under the Plan on the Beneficiary Designation
Form provided by the Plan Administrator. If more than one Beneficiary is named,
the share and/or precedence of each Beneficiary shall be indicated. A
Participant shall have the right to change the Beneficiary by submitting to the
Plan Administrator a new Beneficiary Designation Form.
8.02 Proper Beneficiary. If the Plan Administrator has any doubt as to
the proper Beneficiary to receive payments hereunder, the Plan Administrator
shall have the right to withhold such payments until the matter is finally
adjudicated. However, any payment made by the Plan Administrator, in good faith
and in accordance with this Plan, shall fully discharge the Company from all
further obligations with respect to that payment.
8.03 Minor or Incompetent Beneficiary. In making any payments to or for
the benefit of any minor or an incompetent Beneficiary, the Plan Administrator,
in its sole and absolute discretion, may make a distribution to a legal or
natural guardian or other relative of a minor or court appointed committee of
such incompetent. Alternatively, it may make a payment to any adult with whom
the minor or incompetent temporarily or permanently resides. The receipt by a
guardian, committee, relative or other person shall be a complete discharge to
the Company. Neither the Company nor the Plan Administrator shall have any
responsibility to see to the proper application of any payments so made.
8.04 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Section 8.01 above, or if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
9.01 Majority Vote. All resolutions or other actions taken by the
Committee shall be by vote of a majority of those present at a meeting at which
a majority of the members are present, or in writing by all the members at the
time in office if they act without a meeting.
9.02 Finality of Determination. Subject to the Plan, the Committee
shall, from time to time, establish rules, forms and procedures for the
administration of the Plan. Except as herein otherwise expressly provided, the
Committee shall have the exclusive right to interpret the Plan and to decide any
and all matters arising thereunder or in connection with the administration of
the Plan, and it shall endeavor to act, whether by general rules or by
particular decisions, so as not to discriminate in favor of or against any
person. The decisions, actions and records of the Committee shall be conclusive
and binding upon the Company and all persons having or claiming to have any
right or interest in or under the Plan, and cannot be overruled by a court of
law unless arbitrary or capricious.
9.03 Certificates and Reports. The members of the Committee and the
officers and directors of the Company shall be entitled to rely on all
certificates and reports made by any duly appointed accountants, and on all
opinions given by any duly appointed legal counsel, which legal counsel may be
counsel for the Company.
9.04 Indemnification and Exculpation. The Company shall indemnify and
hold harmless each current and former member of the Committee and each current
and former member of the Board in accordance with the bylaws of the Company.
9.05 Expenses. The expenses of administering the Plan shall be borne by
the Company.
9.06 FICA and Other Taxes. For each Plan Year in which an Annual
Deferral Amount is being withheld or a Company Contribution becomes vested, the
Company shall ratably withhold from that portion of the Participant's salary
that is not being deferred, the Participant's share of FICA and other employment
taxes.
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ARTICLE X
CLAIMS PROCEDURE
10.01 Written Claim. Benefits shall be paid in accordance with the
provisions of this Plan. The Participant, or a designated recipient or any other
person claiming through the Participant shall make a written request for
benefits under this Plan. This written claim shall be mailed or delivered to the
Plan Administrator. Such claim shall be reviewed by the Plan Administrator or a
delegate.
10.02 Denied Claim. If the claim is denied, in full or in part, the Plan
Administrator shall provide a written notice within ninety (90) days setting
forth the specific reasons for denial, and any additional material or
information necessary to perfect the claim, and an explanation of why such
material or information is necessary, and appropriate information and
explanation of the steps to be taken if a review of the denial is desired.
10.03 Review Procedure. If the claim is denied and a review is desired,
the Participant (or Beneficiary) shall notify the Plan Administrator in writing
within sixty (60) days after receipt of the written notice of denial. In
requesting a review, the Participant or Beneficiary may request a review of
pertinent documents with regard to the benefits created under this agreement,
may submit any written issues and comments, may request an extension of time for
such written submission of issues and comments, and may request that a hearing
be held, but the decision to hold a hearing shall be within the sole discretion
of the Committee.
10.04 Committee Review. The decision on the review of the denied claim
shall be rendered by the Committee within sixty (60) days after the receipt of
the request for review (if no hearing is held) or within sixty (60) days after
the hearing if one is held. The decision shall be written and shall state the
specific reasons for the decision including reference to specific provisions of
this Plan on which the decision is based.
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ARTICLE XI
NATURE OF COMPANY'S OBLIGATION
11.01 Company's Obligation. The Company's obligations under this Plan
shall be an unfunded and unsecured promise to pay. The Company shall not be
obligated under any circumstances to fund its financial obligations under this
Plan.
11.02 Creditor Status. Any assets which the Company may acquire or set
aside to help cover its financial liabilities are and must remain general assets
of the Company subject to the claims of its creditors. Neither the Company nor
this Plan gives a Participant or Beneficiary any beneficial ownership interest
in any asset of the Company. All rights of ownership in any such assets are and
remain in the Company. All Plan Participants and Beneficiaries shall be
unsecured general creditors of the Company.
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ARTICLE XII
MISCELLANEOUS
12.01 Written Notice. Any notice which shall be or may be given under
the Plan shall be in writing and shall be mailed by United States mail, postage
prepaid. If notice is to be given to the Company, such notice shall be addressed
to the Plan Administrator at Churchill Downs Incorporated. If notice is to be
given to the Participant, such notice shall be sent to the Participant's last
known address.
12.02 Change of Address. Any party may, from time to time, change the
address to which notices shall be mailed by giving written notice of such new
address.
12.03 Merger, Consolidation or Acquisition. The Plan shall be binding
upon the Company, its assigns, and any successor to the Company which shall
succeed to substantially all of its assets and business through merger,
acquisition or consolidation, and upon a Participant, a Beneficiary, assigns,
heirs, executors and administrators.
12.04 Amendment and Termination. The Company retains the sole and
unilateral right to terminate, amend, modify, or supplement this Plan, in whole
or part, at any time. However, no Company action under this right shall reduce
the Bookkeeping Account Balance of any Participant or Beneficiary not yet in
payment status or reduce benefits that are in payment status.
12.05 Employment. This Plan does not provide a contract of employment
between the Company and the Participant.
12.06 Non-transferability. Except insofar as prohibited by applicable
law, no sale, transfer, alienation, assignment, pledge, collateralization or
attachment of any benefits under this Plan shall be valid or recognized by the
Company. Neither the Participant, spouse, or designated Beneficiary shall have
any power to hypothecate, mortgage, commute, modify, or otherwise encumber in
advance of any of the benefits payable hereunder, nor shall any of said benefits
be subject to seizure for the payment of any debts, judgments, alimony
maintenance, owed by the Participant or Beneficiary, or be transferable by
operation of law in the event of bankruptcy, insolvency, or otherwise.
12.07 Legal Fees. All reasonable legal fees incurred by any Participant
(or former Participant or Beneficiary) to successfully enforce valid rights
under this Plan shall be paid by the Company in addition to sums due under this
Plan.
12.08 Tax Withholding. The Company may withhold from a payment any
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federal, state, or local taxes required by law to be withheld with respect to
such payment and such sum as the Company may reasonably estimate as necessary to
cover any taxes for which the Company may be liable and which may be assessed
with regard to such payment.
12.09 Acceleration of Payment. The Company reserves the right to
accelerate the payment of any benefits payable under this Plan at any time
without the consent of the Participant, the Participant's estate, a Beneficiary
or any other person claiming through the Participant.
12.10 Applicable Law. This Plan shall be governed by the laws of the
Commonwealth of Kentucky.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer on this ________ day of
_________________, 1999, effective as of the 1st day of __________________,
1999.
CHURCHILL DOWNS INCORPORATED
By:/s/Thomas H. Meeker
- ---------------------------------------
Thomas H. Meeker
President and Chief Executive Officer
ATTEST:
By:_____________________________________
[SEAL]
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