UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITY
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): July 18, 2006
(Exact
name of registrant as specified in its charter)
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Kentucky
(State
of incorporation)
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0-1469
(Commission
file number)
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61-0156015
(IRS
Employer Identification No.)
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700
Central Avenue, Louisville, Kentucky 40208
(Address
of principal executive offices)
(Zip
Code)
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(502) 636-4400
(Registrant’s
telephone number, including area
code)
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Check
the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (18
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement.
Amendment
of Thomas H. Meeker’s Employment Agreement
On
July 18, 2006, Thomas H. Meeker, the President and Chief Executive
Officer of Churchill Downs Incorporated (the “Company”), and the Company entered
into a First Amendment (the “Amendment”) to his Employment Agreement, as Amended
and Restated as of December 31, 2005 (the “Amended and Restated Employment
Agreement”).
Pursuant
to the Amendment, Mr. Meeker will serve in the capacity of management
advisor and be available upon the reasonable request of the Company’s President
and Chief Executive Officer or his designee for advice and assistance regarding
strategic and industry-related matters and such other matters as may be
requested, effective as of August 14, 2006. Mr. Meeker will continue
to receive the financial benefits under his Amended and Restated Employment
Agreement. Mr. Meeker will further be entitled to a 2006 bonus without any
pro-ration due to diminished responsibilities. The bonus will otherwise be
calculable in accordance with the terms of the Company’s Incentive Compensation
Plan. Under the Amendment, Mr. Meeker will receive reimbursement for office
space for a period of 24 months in an amount not to exceed $1,200 per month.
The
Company will convey the furniture and equipment in his office to him.
Mr. Meeker will also receive a membership for two to Churchill Downs
Racetrack’s Turf Club as long as he or his wife is alive.
The
above
summary of the Amendment is qualified in its entirety by reference to the full
text of the Amendment, a copy of which is attached as Exhibit 10.1 to this
Current Report on Form 8-K, and the full text of Mr. Meeker’s Amended and
Restated Employment Agreement, a copy of which is attached as Exhibit 10.1
to the Company’s Form 8-K , filed by the Company on January 5, 2006, SEC
File No. 000-01469, each of which is incorporated by reference into this
Item 1.01.
Robert L.
Evans Employment Agreement
On
July
18, 2006, the Company entered into an employment agreement (the “Employment
Agreement”) with Robert L. Evans, who will replace Mr. Meeker as
President and Chief Executive Officer of the Company, and serve as a member
of
the Board of Directors of the Company (the “Board”), effective August 14,
2006. The Employment Agreement was approved by the Board. A description of
the
terms and conditions of the Employment Agreement is contained in Item 5.02
of this Form 8-K.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Effective
August 14, 2006, Mr. Meeker will resign from his position as President
and Chief Executive Officer of the Company and will resign as a member of the
Board. Mr. Meeker will continue as an employee in an advisory capacity
until the expiration of his Amended and Restated Employment Agreement, as
amended by the Amendment. Concurrent with receipt of Mr. Meeker’s
resignation, the Board named Mr. Evans as the new President and Chief
Executive Officer of the Company, and elected him to the Board as of
August 14, 2006.
Robert L.
Evans, Age 53
Mr. Evans
serves as the President of Tenlane Farm LLC, which he founded in 2004. From
2001
to 2004, he was Co-Founder & Managing Director of Symphony Technology
Group, a strategic holding company that invests in software and services
companies. Mr. Evans was President and Chief Operating Officer of Aspect
Development Inc., which was acquired by i2 Technologies in 2000. Prior
experience includes Managing Partner, Americas Supply Chain Practice at
Accenture Ltd. from 1993 to 1999, and Vice President, Customer Support at Mazda
Motor of America Inc. from 1990 to 1993.
The
Employment Agreement has an initial term of employment for three years, with
automatic one-year extensions (unless either party provides a written notice
not
to extend the term of employment at least 90 days prior to the then-current
expiration date). The Employment Agreement provides for earlier termination
under certain circumstances.
2
The
Employment Agreement provides for an annual base salary of $450,000, with
reviews for potential increase at the discretion of the Board. Mr. Evans will
be
first eligible to participate in the annual performance bonus plan for the
performance period commencing January 1, 2007, with his initial target
bonus opportunity for such period to be 75% of his base salary.
The
Employment Agreement further provides that Mr. Evans will receive the
following equity-based awards: (i) 65,000 restricted stock units representing
shares of the Company’s common stock, vesting quarterly over five (5) years,
with Mr. Evans entitled to receive the shares underlying the units (along with
a
cash payment equal to accumulated dividend equivalents beginning with the lapse
of forfeiture, plus interest at a 3% annual rate) six (6) months after
termination of employment; (ii) 90,000 restricted shares of the Company’s
common stock, with vesting contingent upon the Company’s common stock reaching
certain closing prices on Nasdaq for twenty (20) consecutive trading days;
(iii)
65,000 restricted shares of the Company’s common stock, vesting quarterly over
five (5) years, and contingent upon the Company’s common stock reaching a
certain closing price on Nasdaq for ten (10) consecutive trading days; and
(iv)
a stock option, vesting quarterly over three (3) years, to purchase an aggregate
of 130,000 shares of the Company’s common stock, with an exercise price equal to
the fair market value of a share of the Company’s common stock on the date of
grant.
In
the
event of a “change in control,” as defined in the Employment Agreement, during
Mr. Evans’ employment with the Company, he shall receive accelerated vesting of:
(i) fifty percent (50%) of the then-unvested restricted stock units granted
pursuant to the Employment Agreement,; (ii) fifty percent (50%) of the
then-unvested restricted shares granted pursuant to the Employment Agreement;
and (iii) fifty percent (50%) of the then-unvested stock options granted
pursuant to the Employment Agreement. The restricted stock units, restricted
shares and stock options that are subject to this accelerated vesting shall
be
taken pro-rata from each then-unvested tranche of the applicable award, and
the
remaining portion of each tranche shall vest according to the original terms
of
the applicable award agreement.
Mr. Evans
will be: (i) eligible to participate in any annual or long-term cash or
equity-based incentive plan or other arrangements of the Company, as exist
from
time to time; (ii) provided the opportunity to participate in the Company’s
qualified 401(k) profit-sharing plan and non-qualified deferred compensation
plan; and (iii) entitled to participation in the Company’s employee benefit
plans, programs and arrangements, and perquisite programs and arrangements,
if
any, on the same basis as generally provided to other similarly situated
executives of the Company. In addition, Mr. Evans will receive a special ground
transportation benefit as well as reimbursement of his attorney fees related
to
his entering into the Employment Agreement.
If
Mr. Evans’ employment is terminated by the Company other than for “cause,”
“disability,” or death, or if he resigns for “good reason” (as each term is
defined in the Employment Agreement), then Mr. Evans is entitled to the
following: (i) salary continuation through the end of the calendar quarter
in which termination of employment occurs; (ii) treatment of all equity-based
awards per the terms of the applicable plan or agreement; provided, however,
that vesting of any equity awards granted pursuant to the Employment Agreement
shall be calculated through the end of the calendar quarter in which termination
of employment occurs; and (iii) continuation of medical benefits through
the end of the calendar quarter in which termination of employment occurs;
provided, however, that such medical benefit shall be reduced or eliminated
to
the extent Mr. Evans receives similar benefits from a subsequent
employer.
If,
during the two-year period following a “change of control,” as defined in the
Employment Agreement, Mr. Evans is terminated by the Company other than for
“cause,” “disability,” or death, or if he resigns for “good reason,” then Mr.
Evans shall receive: (i) the same benefits just described above, and
(ii) full accelerated vesting of any then-unvested equity awards granted
pursuant to the Employment Agreement. In addition, if, following such a
termination, Mr. Evans’ benefits and payments constitute a parachute
payment under Section 280(G)(b)(2) of the Internal Revenue Code, which
would subject him to an excise tax under Section 4999 of the Internal
Revenue Code, Mr. Evans will be entitled to receive an additional tax
gross-up payment from the Company in an amount which, after imposition of all
federal, state and local income and excise taxes, is equal to the excise tax
on
all such payments received by Mr. Evans.
3
Under
his
Employment Agreement, Mr. Evans is bound by perpetual confidentiality and
proprietary information covenants and, during his employment and for a two
(2)
year period thereafter, is prohibited from competing with the Company,
soliciting or hiring its employees, or soliciting the Company’s customers or
vendors for the purpose of obtaining or receiving the same business as the
Company.
Item
8.01. Other Events.
On
July
19, 2006, the Company issued a press release, a copy of which is attached as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by
reference into this Item 8.01.
Item
9.01. Financial Statements and Exhibits.
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(c)
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Exhibits
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10.1
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First
Amendment to Employment Agreement as Amended and Restated as of
December 31, 2005 between Churchill Downs Incorporated and
Thomas H. Meeker
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| 99.1 |
Press
Release issued by Churchill Downs Incorporated, dated July 19,
2006
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto,
duly authorized.
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CHURCHILL
DOWNS INCORPORATED
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July 19,
2006
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/s/Michael E. Miller
Michael
E. Miller
Executive
Vice President and Chief Financial Officer
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