UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) of the
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): January 4,
2006
(Exact
name of registrant as specified in its charter)
|
Kentucky
|
0-1469
|
61-0156015
|
|
(State
or other jurisdiction of incorporation or organization)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
700
Central Avenue, Louisville, Kentucky 40208
(Address
of principal executive offices)
(Zip
Code)
(502)
636-4400
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
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:
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Page
1
CHURCHILL
DOWNS INCORPORATED
INDEX
|
Item
1.01.
|
Entry
Into a Material Definitive Agreement.
|
|
On
January 4, 2006, Churchill Downs Incorporated (the “Company”) entered into
an amended and restated employment agreement (the “Amended Agreement”)
with Thomas H. Meeker, President and Chief Executive Officer of the
Company. The Amended Agreement amends and restates Mr. Meeker’s employment
agreement dated March 13, 2003. The Amended Agreement is filed with
this
report as Exhibit 10.1 and the material changes are described
below.
Term
The
Amended Agreement clarifies that Mr. Meeker’s employment agreement expires
on March 13, 2007.
Severance
Benefit
If
Mr. Meeker is terminated without cause, or due to death or disability,
or
is constructively discharged, the Company is required to pay the
following
severance benefits: (i) one year of base salary; (ii) pro rated bonus
for
the year in which the termination occurs; (iii) an amount equal to
the
greater of the Target Bonus as defined under the Incentive Compensation
Plan or the highest annual bonus Mr. Meeker received within the last
three
years; (iv) the balance of any annual or long-term cash incentive
awards,
if any, earned (but not yet paid) for the year in which termination
occurs; (v) the acceleration of any outstanding stock options or
restricted stock grants; (vi) continued participation in employee
benefits
for one year; (vii) assignment of a $250,000 life insurance policy
to him;
and (viii) the inclusion of the Target Bonus for the calculation
of Mr.
Meeker’s Supplemental Benefit Plan benefit and credit for length of
service through October 1, 2007.
Retention
Benefit
In
the event that Mr. Meeker remains employed by the Company through
the term
of his employment agreement, he will receive a retention benefit
equal to
the severance benefit.
Retirement
and Change of Control
The
retirement and change of control provisions contained in Mr. Meeker’s
original employment agreement have been deleted.
Section
409A
The
Amended Agreement makes certain technical changes in accordance with,
and
necessary to comply with, the new holding periods for deferred
compensation under Section 409A of the Internal Revenue Code. In
the event
that Mr. Meeker’s severance benefits are delayed in order to avoid the
imposition of taxes under Section 409A, he will receive an additional
payment in an amount equal to one-half percent (0.5%) monthly simple
interest on the payments delayed.
The
Amended Agreement also updates the description of the Supplemental
Benefit
Plan.
|
|
|
Item
9.01
|
Financial
Statements and Exhibits
|
|
(c) Exhibits
10.1
Employment Agreement as Amended and Restated as of December 31, 2005
between Churchill Downs Incorporated and Thomas H.
Meeker.
|
Page
2
SIGNATURES
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 hereunto
duly authorized.
|
CHURCHILL
DOWNS INCORPORATED
|
|
|
January
5, 2006
|
/s/ Michael E. Miller |
|
Michael
E. Miller
Executive
Vice President and Chief Financial
Officer
|
Page
3
EMPLOYMENT
AGREEMENT
AS
AMENDED AND RESTATED
AS
OF
DECEMBER 31, 2005
THIS
EMPLOYMENT AGREEMENT is
entered
into as of March 13, 2003
and
as amended and restated as of December 31, 2005
between
CHURCHILL DOWNS INCORPORATED, a Kentucky corporation ("Company"), and THOMAS
H.
MEEKER (the "Executive”).
WHEREAS,
the Board of Directors of Churchill Downs Incorporated (the “Board"),
determined
that it is in the best interest of the Company and its shareholders, to retain
the Executive as its President and Chief Executive Officer; and
WHEREAS,
the Executive is currently willing and competent to serve the Company as
its
President and Chief Executive Officer under the terms and conditions of this
Employment Agreement (the “Agreement”);
and
WHEREAS,
the Executive is currently a member of the Board and has agreed to resign
as a
member of the Board if requested to do so with the expectation that, upon
such
resignation, the Executive would then be designated a Director Emeritus;
and
WHEREAS,
the Company and the Executive agree that it is in the best interest of the
Company and its shareholders to amend the Agreement to provide for the effective
and efficient transition of the Company's management.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Employment.
The
Company hereby employs the Executive, and the Executive hereby accepts
employment, in the capacity of President and Chief Executive Officer of the
Company. Subject to the general direction, approval and control of the Board,
the Executive shall exert his best efforts and devote his full time and
attention to the business and affairs of the Company. The Executive shall
be in
complete charge of the operation of the Company, shall have all powers and
responsibilities as provided in the Company's current bylaws attendant to
the
position of President and Chief Executive Officer, and shall have full authority
and responsibility for formulating and executing the business policies and
managing and supervising the business of the Company in all respects. At
all
times
during
the Term (as
hereinafter
defined)
the
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with those held, exercised and assigned
on
the date this Agreement was first executed. The Executive’s office shall be
located at the Company’s headquarters in Louisville, Kentucky. Further, at no
time during the term or any renewal term shall the Executive’s office be located
more than 35 miles from 700 Central Avenue, Louisville, Kentucky.
2. Term.
This
Employment
Agreement shall commence on March 13, 2003, and shall expire on March 13,
2007,
unless terminated earlier as herein provided (the "Term").
3. Compensation
and Perquisites.
During
the Term:
A. Base
Salary.
As
compensation for the services rendered by
the
Executive hereunder, the Company shall pay to the Executive a base salary
of
$500,580 a year (effective for 2005 and 2006), payable in arrears in
semi-monthly installments (the “Base Salary”). Base Salary adjustments, if any,
shall be made, in the discretion of the Board of Directors, at any time,
but in
no event may the Executive's Base Salary be reduced below that paid in the
preceding year. All payments or other compensation to the Executive shall
be
subject to appropriate withholding.
B. Incentive
Compensation.
In
addition to any other compensation provided under this Agreement, the Executive
shall be entitled to participate in any Company sponsored annual or long-term,
cash or equity based, incentive plan or other such arrangement, now in existence
or hereafter created, made available to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions
and
overall administration of such plans and arrangements. The plans currently
in
existence include: The Incentive Compensation Plan, Restricted
Stock
Option Plan and the Deferred Compensation Plan. The Company may, from time
to
time, amend the provisions of these plans prospectively.
C.
Travel
and Entertainment Expenses.
The
Company shall reimburse the Executive for all reasonable and necessary travel
and other out-of-pocket expenses incurred by him in the performance of his
duties. The Company shall pay the Executive's reasonable travel and
entertainment expenses and other reasonable expenses incurred on behalf of
the
Company's business. The Company also shall pay for such expenses for the
Executive's wife when she travels with him on the Company's business. The
Executive shall present to the Company on a timely basis an itemized account
of
such expenses in such form as may be required by the Company and the
reimbursement of such expenses shall be subject to the customary policies
of the
Company.
D. Supplemental
Benefit Plan.
The
Company shall provide the Executive various retirement benefits under the
provisions of the Company’s Supplemental Benefit Plan as described in Exhibit A
attached hereto. The Company may, from time to time, amend the Supplemental
Benefit Plan prospectively.
E.
Automobile.
The
Company shall provide the Executive with an automobile and shall pay for
maintenance, repairs, insurance and all operating costs incident
thereto.
2
F.
Life
Insurance.
The
Company shall provide the Executive a $250,000 life insurance policy with
a
reputable and responsible insurance company acceptable to the Company and
the
Executive, with all premiums being paid by the Company.
G.
Dues.
The
Company shall pay for the Executive's dues for one country club and for all
appropriate professional or business associations to which he may
belong.
4. Other
Employee Benefits.
A.
Welfare
Benefit Plans.
During
the
Term,
the Executive and/or the Executive’s family, as the case may be, shall be
eligible to participate in and shall receive all benefits under all welfare
benefit plans, practices, policies and programs provided by the Company
(including, without limitation, disability, group life, accidental death)
to the
extent applicable generally to other executives of the Company.
B. Profit
Sharing Plan.
During
the
Term,
the Executive shall be entitled to participate in the Company’s 401(k) Profit
Sharing Plan or any other similar plan, program, policy or practice generally
made available to other executives of the Company.
C. Health
Insurance.
During
the
Term,
the Company shall provide the Executive and his wife, as the case may be,
major
medical and health insurance coverage consistent with that provided to other
employees of the Company. All premiums shall be paid by the
Company.
D. Vacation.
The
Executive shall be awarded paid time off (PTO) consistent with the Company’s
then established policy. The Executive shall consult with the Chairman of
the
Board prior to scheduling PTO days.
5. Termination
of Employment.
A. Termination
for Cause.
The
Company may terminate the Executive’s employment during the
Term for
cause. For purposes of this Agreement, “Cause” shall mean: (i) the willful and
continued failure of the Executive to perform substantially the duties of
president and chief executive officer (other than any such failure resulting
from incapacity due to disability), after a written demand for substantial
performance improvement is delivered to the Executive by the Chairman of
the
Board which specifically identifies the manner in which the Board believes
that
the Executive has not substantially performed the duties of president and
chief
executive officer, or (ii) the willful engaging by the Executive in illegal
conduct or gross misconduct which is materially and demonstrably injurious
to
the business or reputation of the Company. For purposes of this paragraph,
no
act or failure to act, on the part of the Executive, shall be considered
“willful” unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive’s action or omission was
in the best interests of the Company. Any act, or failure to act, based upon
specific authority given pursuant to a resolution duly adopted by the Board
or
upon instructions of the Chairman of the Board or based upon the advice of
counsel of the Company which the Executive honestly believes is within such
counsel’s competence shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
In the event the Company terminates the Executive for cause, he shall be
entitled to receive:
3
(1) Base
Salary through the date of termination;
(2) The
balance of any annual or long term awards, if any, earned but not yet paid
pursuant to any Long Term Incentive Compensation Plan maintained by the Company
in which the Executive participated at the time of his termination subject
to
and payable in accordance with the Plan and the customary practices of the
Company for other executives; and
(3) Any
other
benefits or payments due to the Executive under and subject to applicable
plans
or programs maintained by the Company in which the Executive participated
at the
time of termination, including without limitation, any benefits due under
the
Supplemental Benefit Plan.
B. Termination
Without Cause,
By
Constructive Termination or Due to Death, Disability or
Retirement.
(1) Termination
Without Cause.
The
Company may terminate the Executive’s employment with the Company, other than
due
to
death, disability (as provided under Paragraph 5.B.(2)) or Cause and such
termination shall be deemed a termination “without cause.”
(2) Termination
Due to Disability.
If the
Executive shall become disabled (as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations thereunder)
during the Term, he shall be entitled to the payment of his Base Salary and
benefits being paid or provided at the time of the commencement of such
disability and such shall continue for the duration of such disability but
in no
event for a period longer than six (6) consecutive months or an aggregate
of six
(6) months in any 12-month period. If such disability continues for a period
of
six (6) consecutive months, the Company, at its option, may thereafter, upon
written notice to the Executive or his personal representative, terminate
his
employment.
(3) Constructive
Termination.
The
Executive may, in his sole discretion, terminate his employment with the
Company
by virtue of the Company’s Constructive Termination of his employment.
For
purposes of the Agreement, “Constructive Termination” shall mean: (i) The
assignment to the Executive of any duties inconsistent in any material respect
with those of the president and chief executive officer (including status,
office, title and reporting requirements), or the authority, duties or
responsibilities as contemplated by Paragraph 1 of this Agreement, or any
other
diminution in any material respect in such position, authority, duties or
responsibilities unless agreed to by the Executive; (ii) the Company’s requiring
the Executive to be based at any office or location other than as provided
in
Paragraph 1 hereof; (iii) reduction of Base Salary or material reduction
of
other compensation or perquisites described in Paragraph 3; (iv) a reduction
in
the Executive’s Other Employee Benefits including incentive opportunities,
benefits or perquisites described in Paragraph 4 unless other senior executives
suffer a comparable reduction; and (v) any purported termination of the
Executive’s employment under this Agreement by the Company other than due to
death, disability (as provided under Paragraph 5.B.(2)) or Cause.
Prior
to the Executive’s right to terminate this Agreement, he shall give written
notice to the Company of his intention to terminate his employment on account
of
a Constructive Termination. Such notice shall state in detail the particular
act
or acts of the failure or failures to act that constitute the grounds on
which
the Executive’s Constructive Termination is based and such notice shall be given
within six (6) months of the occurrence of the act or acts or the failure
or
failures to act which constitute the grounds for the Constructive Termination.
The Company shall have sixty (60) days upon receipt of the notice in which
to
cure such conduct, to the extent such cure is possible.
4
(4) Accrued
But Unpaid Benefits Due Upon Termination Without Cause, Constructive Termination
or Termination Due to Death, Disability or Retirement.
In the
event the Executive's employment is terminated by the Company without Cause,
by
the Executive by reason of Constructive Termination or due to death, disability
(as provided under Paragraph 5.B.(2)) or in the event the Executive's Retirement
Date (as defined in the Company's Supplemental Benefit Plan) occurs during
the
Term, the Executive (or his estate or his beneficiaries, as the case may
be),
shall be entitled to receive the following accrued but unpaid benefits ("Accrued
But Unpaid Benefits"):
a. Base
Salary through the date of termination;
b. All
accrued vacation or PTO pay due to the Executive; and
c. Any
other
benefits or payments due to the Executive under and subject to applicable
plans
or programs maintained by the Company in which the Executive participated
at the
time of termination; provided, however, that this provision shall not result
in
any duplicative benefits or payments otherwise provided for
hereunder.
(5) Severance
Benefits Due Upon Termination Without Cause,
Constructive Termination
or
Termination Due to Death, Disability, or Retirement.
In the
event the Executive’s employment is terminated by the Company without Cause, due
to Disability or death, in
the
event there is a Constructive Termination,
in
the
event the Executive's Retirement Date (as defined under the Supplemental
Benefit
Plan) occurs during the Term,
the
Executive shall be entitled to the following benefits and payments (the
“Severance Benefits”) (the estimated value of such Severance Benefits is
outlined in Exhibit B attached hereto):
5
a. Base
Salary, at the annual
rate in
effect on the date of termination of the Executive’s employment (or in the event
a reduction in Base Salary is the basis for a Constructive Termination, then
the
Base Salary in effect immediately prior to such reduction), payable in
a lump
sum;
b. Any
pro
rata annual bonus for the year in which the Executive’s termination occurs,
based, at a minimum, on the Target Bonus (as defined in an Incentive
Compensation Plan maintained by the Company at that time) but calculated
as
provided for in the Plan and subject to and payable in accordance with the
Plan
and the customary practices of the Company for other executives;
c. An
amount
equal to the
greater of (i) any Target Bonus amount for the year in which the termination
occurs or (ii)
the
highest annual bonus paid to the Executive within the past three years of
employment with the Company,
which
shall be payable in
a lump
sum;
d. The
balance of any annual or long-term cash incentive awards, if any, earned
(but
not yet paid)
for the
year in which the termination occurs
subject
to and pursuant to the terms of the applicable plan or program maintained
by the
Company and in which the Executive participated at the time of the
termination;
e. Any
outstanding stock option, restricted stock or other similar equity based
award
shall become
fully vested and exercisable immediately prior to the time of the termination
and otherwise shall be
governed by the applicable plan or agreement maintained by the
Company;
f. Continued
participation in the other employee benefits described in Paragraph 4.4 above
in
which the Executive participated in
immediately prior to his termination date until
the
first anniversary of
the date
of termination
and
assignment to the Executive of the life insurance policy described in Paragraph
3.F (subject to and in accordance with the terms of such policy);
provided however, that the Company’s obligation under this Paragraph 5.B.(5).f
shall be reduced or eliminated, as applicable, to the extent that the Executive
receives similar coverage and/or benefits under the plans and programs of
a
subsequent employer; and provided, further, that if the Executive is precluded,
by operation of law, from continuing his participation in any employee benefit
plan or program as provided in this Paragraph 5.B.(5).f, he shall be provided
with the after-tax economic equivalent of the benefits provided under the
plan
or program in which he is unable to participate;
g. Any
other
benefit or perquisite made available to him by the Company as of the date
of
termination with such benefit or perquisite continuing to be provided to
the
Executive until
the
first anniversary
of the date of termination
subject
to the terms and conditions thereof;
6
h. Subject
to the
terms and conditions of
the
Supplemental Benefit Plan, for purposes of determining the Executive’s Monthly
Retirement Income (as defined under the Supplemental Benefit Plan) under
such
plan, the Executive shall be credited with additional months of employment
service through October 1, 2007.
Additionally, the amount that the Executive is entitled to pursuant to Paragraph
5.B.(5).c above shall be treated as the "highest incentive compensation award,"
for purposes of determining his “Average Monthly Earnings” under the
Supplemental Benefit Plan to the extent that it would result in a greater
amount
of the benefits payable to the Executive under such plan; and
(6) Gross
Up Payment.
In the
event any
of
the Severance
Benefits made or provided to the Executive under this Paragraph 6 or
under
any of the other
plans and programs of the Company (the “Aggregate Payment”) is determined to
constitute a Parachute Payment, as such term is defined in Section 280G(b)(2)
of
the Code,
as
amended, the Company shall pay to the Executive, prior to the time any excise
tax imposed by section 4999 of the Code
(the
“Excise Tax”) is payable with respect to such Aggregate Payment, an additional
amount which, after the imposition of all federal, state and local income
and
excise taxes thereon, is equal to the Excise Tax on the Aggregate Payment.
The
determination of whether the Aggregate Payment constitutes a Parachute Payment
and, if so, the amount to be paid to the Executive and the time of payment
pursuant to this Paragraph 5.B
shall
be made by an independent auditor (the “Auditor”) jointly selected by the
Company and the Executive and paid by the Company. The Auditor shall be a
nationally recognized United States public accounting firm which has not
acted
in any way on behalf of the Company. If the Executive and Company cannot
agree
on the firm to serve as the Auditor, then the Executive and the Company shall
each select one accounting firm and those firms shall jointly select the
accounting firm to serve as the Auditor.
C. No
Obligation to Mitigate; No Right to Offset.
In the
event of any termination of employment under this
Paragraph 5, the Executive shall be under no obligation to seek other employment
and, except as specifically provided herein, there shall be no offset against
amounts due to the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain or for any claims
the Company may have against the Executive except claims for breach or violation
of Paragraphs 9 or 10 of this Agreement.
D. Nature
of Severance Benefits.
All
Severance Benefits due and payable under this Agreement are considered to
be
reasonable by the Company and are not in the nature of a penalty.
E. Exclusivity
of Severance Benefits.
Upon the
termination of the Executive’s employment, he shall not be entitled to any other
severance or other payments or severance or other benefits from the Company,
other than as provided under the terms of this Agreement. Nor shall the
Executive have any right to any payments by the Company on account of any
claim
by him of wrongful termination, including claims under any federal, state
or
local human and civil rights or labor laws, other than the payments and benefits
provided under this Agreement, it being the intention of the parties that
such
payments and benefits shall be the Executive’s sole and exclusive
remedy.
7
F. Section
409A.
Notwithstanding any provision to the contrary contained herein, to
the
extent necessary to avoid the imposition of any excise taxes under Section
409A
of the Code, none of the payments or benefits provided hereunder (including,
but
not limited to, the assignment of the life insurance policy as provided under
Paragraph 5.B.(5).f and any benefit payable under the Supplemental Benefit
Plan)
shall be paid prior to the expiration of the six (6) month period following
the
Executive's "separation from service" (as defined under Section 409A of the
Code) from the Company. In
the
event that the Severance Benefits payable under Paragraphs 5.B.(5).a, b or
c are
delayed pursuant to the proceding sentence, the Executive shall also be entitled
to receive an additional payment in an amount equal to one-half percent (0.5%)
monthly simple interest on the value of the payments that are subject to
such
delay calculated from the date of the Executive's "separation from service"
to
the date such Severance Benefits are paid, which interest payment shall be
payable at the time such delayed payments are paid.
6. Retention
Payment.
In the
event that Executive remains in the employ of the Company through March 13,
2007, then effective as of such date, the Executive shall be entitled to
receive
the benefits that he would have been entitled to receive in the event he
had
been terminated by the Company without Cause (hereinafter referred to as
the
"Retention Payment").
7. Release
of Claims.
As a
condition of the Executive’s entitlement to Severance Benefits or
the
Retention Payment under
this Agreement, the Executive shall, on the date of his termination
or, if
later, March 13, 2007,
execute
a release of claims substantially in the form set forth in Exhibit C, attached
hereto.
8. Termination
at Will.
Notwithstanding anything herein to the contrary, the Executive’s employment with
the Company is terminable at will with or without Cause or notice; provided,
however, that a termination of the Executive’s employment shall be governed by
the terms and conditions of this Agreement.
9. Restrictive
Covenants.
For and
in consideration of the compensation and benefits to be provided by the Company
hereunder, and further in consideration of the Executive’s exposure to and
knowledge of the proprietary information of the Company, the Executive agrees
that he shall not, during the Term and for a period of two (2) years following
any termination of employment, engage in any of the activities or take any
action inconsistent with the provisions set forth below.
A. Non
Competition.
For any
reason, without the express written approval of the Board of Directors of
the
Company, the Executive shall not, directly or indirectly, own, manage, operate,
join, control, be employed by, or participate in the ownership, management,
operation or control of or be connected or associated in any manner, including,
but not limited to, holding the positions of officer, director, manager,
shareholder, consultant, independent contractor, employee, partner, or investor,
with any Competing Enterprise; provided, however, that the Executive may
invest
in stocks, bonds, or other securities of any corporation or other entity
(but
without participating in the business thereof) if such stocks, bonds, or
other
securities are listed for trading on a national stock exchange and the
Executive’s investment does not exceed 5% of the issued and outstanding shares
of capital stock, or in the case of bonds or other securities, 5% of the
aggregate principal amount thereof issued and outstanding. “Competing Enterprise
“ shall mean and be limited to any entity whose principal business involves
the
operation of a pari-mutuel or casino gaming business within the continental
United States.
8
B. Non
Solicitation.
For any
reason, without the express written approval of the Board of Directors of
the
Company, the Executive shall not (i) directly or indirectly, in on or a series
of transactions, recruit, solicit or otherwise induce or influence any employee
of the Company to terminate his or her employment with the Company or, (ii)
employ or seek to employ or cause any Competing Enterprise to employ or seek
to
employ any employee of the Company.
10. Confidential
Information.
At no
time shall the Executive divulge or furnish to anyone (other than the Company
or
any persons employed by or designated by the Company) any knowledge or
information of any type whatsoever of a confidential or proprietary nature
obtained by the Executive during his employment with the Company, including,
without limitation, all types of trade secrets, contractual information or
non-public financial or other information regarding the Company.
11. Attorneys'
Fees.
In the
event any person or entity causes or attempts to cause the Company to refuse
to
comply with its obligations under this Agreement, or may cause or attempt
to
cause the Company to institute litigation seeking to have this Agreement
declared unenforceable, or take, or attempt to take, any action to deny the
Executive the benefits intended under this Agreement, then, in such event,
the
Company irrevocably authorizes the Executive to retain counsel of his choice
at
the sole expense of the Company to represent the Executive in connection
with
the initiation or defense of any litigation or other legal action in connection
with the enforcement of the terms of this Agreement. All expenses shall be
fully
paid by the Company if the Executive prevails in the final, binding,
non-appealable outcome of the litigation or other legal action. The Company
agrees to reimburse the Executive for his expenses under this Paragraph
11
on a
regular basis upon presentation by the Executive of a statement prepared
by such
counsel in accordance with the customary practices, up to a maximum aggregate
amount of $500,000. The Executive agrees to repay all reimbursed expenses
under
this Paragraph 11
in the
event the Company prevails in the final, binding, non-appealable outcome
of the
litigation or other legal action. Notwithstanding the foregoing, the Company
shall reimburse the Executive for any legal fees incurred in connection with
the
negotiation of this Agreement up to an amount not to exceed
$5,000.00.
9
12. Successors;
Binding Agreement.
A. To
the
Company.
The
Company may assign this Agreement and shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business and/or assets of the Company, by agreement
in
form and substance reasonably satisfactory to the Executive, to expressly
assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken
place.
B. To
the
Executive.
This
Agreement is personal to the Executive and may not be assigned by the Executive.
All rights of the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees. If
the
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless other otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee designated by the Executive
and
communicated to the Company or, if there be no such designee, to the Executive's
estate.
13. Notices.
All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be sufficiently given if and when
mailed
in the continental United States by registered or certified mail or personally
delivered to the party entitled thereto at the address stated below or to
such
changed address as the addressee may have given by a similar
notice:
To
the
Company: Churchill
Downs Incorporated
Attention:
General Counsel
700
Central Avenue
Louisville,
Kentucky 40208
To
the
Executive: Thomas
H.
Meeker
1110
Red
Fox Road
Louisville,
Kentucky 40205
14. Amendment
or Modification; Waiver.
No
provision of this Agreement may be amended, modified or waived unless such
amendment, modification or waiver shall be authorized by the Board of Directors
of the Company or any authorized committee of the Board of Directors and
shall
be agreed to in writing, and signed by the Executive and by a duly authorized
officer of the Company. Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by
such
other party shall be deemed a waiver of a subsequent breach of such condition
or
provision or a waiver of a similar or dissimilar provision or condition at
the
same or at any prior or subsequent time.
10
15. Severability.
In the
event that any provision or portion of this Agreement shall be determined
to be
invalid or unenforceable for any reason, the remaining provisions and portions
of this agreement shall be unaffected thereby and shall remain in full force
and
effect to the fullest extent permitted by law.
16. Survival.
The
respective rights and obligations of the parties to this Agreement shall
survive
any termination of the Executive’s employment to the extent necessary to the
intended preservation of such rights and obligations.
17. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
Commonwealth of Kentucky. The parties agree that any litigation involving
this
Agreement shall be brought in Jefferson County, Kentucky Circuit Court or
the
United States District Court, Western District of Kentucky and hereby waive
any
objection to the jurisdiction or venue of such courts.
IN
WITNESS WHEREOF, the parties have executed this Agreement the day and year
first
above written.
CHURCHILL
DOWNS INCORPORATED "EXECUTIVE"
By:_____/s/
William C. Carstanjen_________ ___/s/
Thomas H. Meeker________________
William
C. Carstanjen Thomas
H.
Meeker
Executive
Vice President, General
Counsel
and Chief Development Officer
11
Exhibits
to Exhibit 10.1, other than Exhibit A and Exhibit B, have
been intentionally omitted because they are not material. The registrant
agrees to furnish such omitted exhibits supplementally to the Commission
upon
request.
EXHIBIT
A
The
Company maintains a 2005 Amended and Restated Supplemental Benefit Plan as
of
January 1, 2005 (the "Plan") in which Mr. Meeker is currently the only
participant. The Plan provides that if a participant remains in the employ
of
the Company until age 55 or becomes totally and permanently disabled, the
participant will be paid a monthly benefit equal to 45% of the "highest average
monthly earnings," as defined in the Plan, prior to the time of disability
or
age 55, reduced by certain other benefits as set forth in the Plan. Benefits
commence at retirement on or after attainment of age 55, and continue as
a 50%
joint and survivor annuity. The benefit payable under the Plan is increased
by
1% for each year Mr. Meeker remains in the employment of the Company after
age
55, to a maximum benefit of 55% of the highest average monthly earnings at
age
65. The Plan further provides that the monthly benefit will be reduced by
[a]
50% of the primary insurance amount under social security payable to a
participant determined as of the later of the participant's retirement date
or
attainment of age 62; and [b] 100% of the participant's monthly benefit
calculated in the form of a 50% joint and survivor annuity under the Company's
terminated Pension Plan.
|
EXHIBIT
B
|
|||||||||||||||||
|
T.
Meeker Severance and SERP (Retirement) Benefits
|
|||||||||||||||||
|
Date
of Separation May 31, 2006
|
|||||||||||||||||
|
Severance
Benefits:
|
Total
|
SERP
Benefits:
|
Monthly
|
Annual
|
|||||||||||||
|
Base
Salary
|
Payable
in lump sum 6 months
|
N/A
|
$500,580
|
Base
Salary
|
$41,715
|
$500,580
|
|||||||||||
|
from
date of separation
|
Bonus
(Target)
|
41,715
|
500,580
|
||||||||||||||
|
Target
Bonus
|
Payable
in lump sum 6 months
|
Total
Covered Compensation
|
83,430
|
1,001,160
|
|||||||||||||
|
from
date of separation
|
N/A
|
500,580
|
Factor
|
54%
|
54%
|
||||||||||||
|
Pro-Rated
Bonus
|
Payable
in lump sum 6 months
|
Target
Benefit
|
45,052
|
540,626
|
|||||||||||||
|
from
date of separation
|
N/A
|
208,575
|
Less:
|
||||||||||||||
|
Medical
Insurance
|
Monthly
for 12 months following
|
50%
of Social Security (est.)
|
(1,000)
|
(12,000)
|
|||||||||||||
|
date
of separation (est.)
|
$687
|
8,244
|
Qualified
Plan Offset (est.)
|
(3,333)
|
(40,000)
|
||||||||||||
|
Life
Insurance
|
Monthly
for 12 months following
|
Total
SERP Payment Due From Company
|
$40,719
|
$488,626
|
|||||||||||||
|
date
of separation (est.)
|
481
|
5,777
|
|||||||||||||||
|
Auto
Allowance
|
Monthly
for 12 months following
|
||||||||||||||||
|
date
of separation (est.)
|
900
|
10,800
|
|||||||||||||||
|
Club
Dues
|
Monthly
for 12 months following
|
||||||||||||||||
|
date
of separation (est.)
|
340
|
4,080
|
|||||||||||||||
|
Interest
on Deferred Payments
|
Calculated
at 6% simple interest
|
||||||||||||||||
|
from
date of separation to date of payment
|
N/A
|
36,000
|
|||||||||||||||
|
Other
Perquisites
|
2,500
|
||||||||||||||||
|
Total
of Severance Payments
|
$1,277,136
|
||||||||||||||||
|
The
above sets forth the estimated severance benefits to be paid to
T. Meeker
assuming
|
|||||||||||||||||
|
a
separation from service as of May 31, 2006. Should
this date vary, then the amount due for pro-
|
|||||||||||||||||
|
rated
ICP will necessarily change. All amounts designated by (est)
represent those benefits due or
|
|||||||||||||||||
|
offsets
to the SERP calculation which are estimated at this time. Actual
amounts
will vary, but such
|
|||||||||||||||||
|
variances
should not be significant.
|
|||||||||||||||||
|
The
initial SERP payment will be a lump sum equal to 6 months of benefits,
and
thereafter will be
|
|||||||||||||||||
|
paid
monthly as set forth above.
|
|||||||||||||||||
|
In
addition to the amounts shown hereon, T. Meeker will also receive
a cash
payment for any
|
|||||||||||||||||
|
unused
PTO
days, as well as a $250,000 life insurance policy on his
life.
|
|||||||||||||||||