Return to 10-Q
CHURCHILL DOWNS
INCORPORATED
RESTRICTED STOCK UNITS
AGREEMENT
65,000
UNITS
THIS RESTRICTED
STOCK UNITS AGREEMENT (the “Agreement”) is made as of
the 18th day of July, 2006 by and between Robert L. Evans (the
“Executive”), and Churchill Downs Incorporated (the
“Company”), a Kentucky corporation with its principal
place of business at 700 Central Avenue, Louisville, Kentucky
40208.
WITNESSETH:
WHEREAS, the
Company, has identified the Executive as the successor to the
current President and Chief Executive Officer who is stepping down
from such office effective August 14, 2006;
WHEREAS, the
Company has entered into an employment agreement between the
Company and the Executive pursuant to which the Executive will
become the President and Chief Executive Officer of the Company
effective August 14, 2006 (the “Employment
Agreement”);
WHEREAS, under
the terms of the Employment Agreement, and as a material inducement
to enter into the Employment Agreement, the Executive is to receive
certain grants of equity compensation as a consequence of his
employment by the Company;
WHEREAS, the
Compensation Committee (the “Committee”) of the Board
of Directors of the Company at its meeting on July 12, 2006
authorized and directed the Company to make an award to the
Executive of units entitling the Executive to receive shares of the
Company’s Common Stock (hereinafter defined) upon the
expiration of six months following the Executive’s
termination of employment with the Company under the terms and
conditions set forth in this Agreement; and
WHEREAS, the
parties desire to enter into this Agreement to set forth the terms
and conditions of such award.
NOW, THEREFORE,
in consideration of the foregoing and the mutual undertakings
herein contained, and for other good and valuable consideration,
the mutuality, receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
Grant of Units
. Subject to the further terms,
conditions and restrictions contained in this Agreement, in
consideration for services to be performed by the Executive as an
employee of the Company and its subsidiaries, as of the date of
this Agreement, the Company grants to the Executive 65,000
restricted stock units (“Restricted Stock Units”)
having the characteristics, and entitling the Executive to the
benefits, hereinafter described. Each Restricted Stock Unit
represents an unfunded contractual right of the Executive to
receive from the Company one share of the Company’s Common
Stock upon the Executive’s termination of employment with the
Company, subject to the other terms and conditions of this
Agreement. As long as the Units remain unvested and forfeitable per
Section 6 of this Agreement, such Units shall be deemed to be,
and are referred to in this Agreement as, the “Restricted
Units”.
2.
Right to Receive Common
Stock . The Executive
shall have no rights of a shareholder with respect to the
Company’s Common Stock as a result of the Units. The
Executive shall not be a shareholder unless and until the Executive
receives a certificate for shares of Common Stock to which the
Executive becomes entitled hereunder. Upon the expiration of six
months following the Executive’s termination of employment
with the Company (or upon the Executive’s earlier death
following such termination), the Executive (or the
Executive’s representative as the case may be) shall be
entitled to receive one share of Common Stock for each Unit granted
hereunder which is not a Restricted Unit and which has not
previously been forfeited pursuant to Section 5 (including a
forfeiture resulting from such employment termination). At the time
the Executive receives a share of Common Stock, and for each such
share of Common Stock received by the Executive, the Executive
shall also receive (a) a cash payment from the Company equal to
each cash dividend declared and paid by the Company on a single
share of Common Stock from and after the date on which the Unit
which entitles the Executive to such share of Common Stock became
non-forfeitable under Section 6 hereof, plus (b) a cash payment
equivalent to simple interest on each amount determined in clause
(a) at the annual rate of three (3%) percent for the period elapsed
from the date such dividend was paid on such share of Common Stock
to the time the payment under clause (a) is made to the
Executive.
3.
Adjustments in Restricted
Units .
(a) In the event of any change in the outstanding
Common Stock by reason of a stock dividend or distribution (or
distribution on Common Stock of any security convertible into
securities of the Company), recapitalization, merger,
consolidation, split-up, combination, subdivision,
reclassification, exchange of shares or the like, the Committee
shall make equitable adjustments in the Restricted Units so that
the shares of Common Stock represented by such Units represent the
same percentage of the Company’s equity as was the case
immediately prior to such change. Any new, additional or different
securities to which the Executive shall be entitled in respect of
Restricted Units by reason of such adjustment shall be subject to
the same terms, conditions and restrictions as the Units so
adjusted.
(b) In the event Company merges, consolidates or
effects a share exchange with another entity, or all or a
substantial portion of Company’s assets or outstanding
capital stock are acquired (whether by merger, purchase or
otherwise) by another entity (any such entity being hereafter
referred to as the “Successor”) each share of Company
Common Stock represented by a Restricted Stock Unit shall
automatically be converted into and replaced by shares of common
stock, or such other class of securities having rights and
preferences no less favorable than Company’s Common Stock, of
the Successor, and the number of shares represented by a Restricted
Stock Unit shall be correspondingly adjusted, so that Executive
shall have the right to that number of shares of common stock of
the Successor that have a value equal, as of the date of the
merger, conversion or acquisition, to the value, as of the date of
the merger, conversion or acquisition, of the shares of Company
Common Stock represented by the Restricted Stock Units.
4.
Restrictions
. The Units, and all rights with
respect to such Units, may not be sold, assigned, transferred,
exchanged, pledged, hypothecated or otherwise encumbered or
disposed of and shall
