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EXHIBIT 99
CHURCHILL DOWNS INCORPORATED
2000 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Plan is to provide eligible
employees of the Company, and of any Parent or Subsidiary corporation which the
Company's Board of Directors has designated as a Participating Employer in the
Plan, an opportunity to acquire a proprietary interest in the Company through
the purchase of the Company's common stock on a payroll or other compensation
deduction basis. It is believed that participation in the ownership of the
Company will be to the mutual benefit of the eligible employees and the Company.
The Company intends for the Plan to qualify as an "employee stock purchase plan"
under Code Section 423, and the Plan shall be so construed. Any term not
expressly defined in the Plan but defined in the Code for purposes of Code
Section 423 shall have the same definition herein.
2. DEFINITIONS.
A. "ACCOUNT" means the funds accumulated with respect to an
individual Participant as a result of deductions from the Participant's
pay for the purpose of purchasing Stock under the Plan. The funds
allocated to a Participant's Account shall remain the Participant's
property at all times.
B. "BASE PAY" means regular straight time earnings, excluding
payments for overtime, bonuses, incentive compensation and other
special payments.
C. "BUSINESS DAY" means a day when any national securities
exchange is open if the Stock is then listed on such exchange, or, if
not listed, the day when the over-the-counter market is open.
D. "BOARD" means the Company's Board of Directors.
E. "CODE" means the Internal Revenue Code of 1986, as
amended.
F. "COMMITTEE" means the Compensation Committee of the Board.
G. "COMPANY" means Churchill Downs Incorporated, a Kentucky
corporation, 700 Central Avenue, Louisville, Kentucky 40208.
H. "ELIGIBLE EMPLOYEE" means any person, including any
officer or director, who satisfies the following three requirements:
[i] who has been employed by a Participating Employer for at least one
(1) year; [ii] whose customary weekly employment with the Participating
Employer is at least twenty-one (21) hours; and [iii] whose customary
calendar year employment exceeds five (5) months. The term "Eligible
Employee" does not include any person who is not an employee, including
more-than-2% partners in a partnership, more-than-2% shareholders in a
Subchapter S corporation, sole proprietors, independent contractors,
non-employee directors and other individuals who are not employees.
I. "EXCHANGE ACT" means the Securities Exchange Act of 1934.
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J. "FAIR MARKET VALUE" means, as of the Business Day
preceding the measurement date: [i] if the Stock is traded on the
over-the-counter market, the closing high bid quotation for the Stock
in the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System; [ii] if the Stock is
listed on a national securities exchange, the closing sales price of
the Stock on the Composite Tape; and [ii] if the Stock is neither
traded on the over-the-counter market nor listed on a national
securities exchange, such value as the Committee shall in good faith
determine.
K. "PARENT" means, as defined in Code Section 424(e), any
corporation, other than the Company, in an unbroken chain of
corporations ending with the Company, if at the time of the granting of
an option under the Plan, each of the corporations other than the
Company own stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
L. "PARTICIPANT" means an Eligible Employee who elects to
participate in the Plan.
M. "PARTICIPATING EMPLOYER" means the Company and any Parent
or Subsidiary which the Board has authorized to participate in the Plan
as to its Eligible Employees.
N. "PLAN" means the Churchill Downs Incorporated 2000
Employee Stock Purchase Plan, as set forth herein and as amended from
time to time.
O. "PLAN YEAR" means the twelve (12) consecutive month period
beginning each August 1.
P. "STOCK" means the Company's no par value common stock.
Q. "SUBSIDIARY" means, as defined in Code Section 424(f), any
corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting
of an option under the Plan, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock of one
of the other corporations in such chain.
3. ADMINISTRATION. The Plan shall be administered by Committee.
Any vacancy occurring in the membership of the Committee shall be filled by
appointment by the Board. The Committee shall have full power and authority to
construe, interpret, and administer the Plan and may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem proper and
in the best interests of the Company.
4. EFFECTIVE DATE AND DURATION OF THE PLAN. The effective date of
the Plan is August 1, 2000, subject to ratification of the Plan, within twelve
(12) months before or after the date the Plan is adopted by the Board, by the
holders of a majority of all the shares of Stock which are voted in person or by
proxy at a duly held stockholders' meeting. The Plan shall terminate upon
issuance of all shares authorized to be issued under the Plan unless terminated
sooner by the Committee pursuant to Section 13.
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5. ELIGIBILITY AND PARTICIPATION. All Eligible Employees of a
Participating Employer may participate in the Plan, subject to the limitations
set forth in Section 7. Participation is voluntary. To become a Participant, an
Eligible Employee must complete an authorization form for a payroll deduction
available from the Committee and deliver it to the Committee on or before the
last Business Day of July of each year. Payroll deductions shall commence on the
Participant's first pay date of August following delivery of the completed
payroll deduction authorization form to the Committee, and shall continue each
Plan Year until altered or terminated as provided in Sections 6, 8 and 9.
6. PAYROLL DEDUCTIONS.
A. PERCENTAGE OF COMPENSATION. Each Eligible Employee
electing to participate in the Plan shall indicate on the payroll
deduction form the percentage of the Eligible Employee's Base Pay to be
withheld. Such percentage shall not be greater than five percent (5%)
nor less than one-half percent (.5%). Payroll deductions are made on an
after-tax basis each payroll period during the Plan Year.
B. ACCOUNTS. Payroll deductions from a Participant shall be
credited to the Participant's Account. Amounts shall remain in a
Participant's Account until used to purchase shares pursuant to Section
8 hereof or paid out pursuant to Sections 8 or 9. A Participant may not
make separate cash payments into the Account. No interest or earnings
on the Account will be credited to any Participant. Compensation
deductions received or held by the Committee under the Plan shall be
used only for the purposes specified in the Plan.
C. CHANGES TO PAYROLL DEDUCTION AUTHORIZATION. Participants
may change their payroll deduction authorization as of the beginning of
each Plan Year and may also make one (1) mid-Plan Year change to the
percentage of payroll deductions authorized by delivery of a new
payroll deduction authorization form to the Committee. The change shall
become effective as soon as administratively practicable and shall
continue each Plan Year until again altered pursuant to this section or
terminated pursuant to Sections 6, 8 or 9.
7. GRANT OF OPTIONS.
A. NUMBER OF SHARES OPTIONED. On the first Business Day in
each Plan Year, each individual who is a Participant on such day shall
be granted an option to purchase as many full shares of Stock as the
Participant can purchase with the compensation deductions credited to
the Participant's Account during the Plan Year, less any required
employment or other tax required to be withheld as a result of the
exercise of the option, up to a maximum of five hundred (500) shares.
B. LIMITATION ON AMOUNT OF GRANT. Notwithstanding the
foregoing, no participant shall be granted an option to the extent that
the option would permit the Participant's rights to purchase stock
under the Plan and all employee stock purchase plans of the
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Company and its Parent and Subsidiaries (if any) to accrue at a rate
which exceeds $25,000 of the fair market value of such stock
(determined at the time the option is granted) for each calendar year
in which the option is outstanding at any time. This section shall be
applied by use of all rules and definitions of terms which are
applicable for purposes of Code Section 423(b)(8), it being the intent
that this section shall cause the Plan to comply with the requirements
of such section of the Code.
C. 5% SHAREHOLDERS. Anything herein to the contrary
notwithstanding, no Participant shall be granted an option if the
Participant would own, immediately after the grant of the option, stock
possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company or of any Parent or
Subsidiary. The rules of Code Section 424(d) shall apply in determining
stock ownership and stock which the Participant may purchase under
outstanding options shall be treated as stock owned by the Participant.
D. OPTION PRICE. The option price per share shall be 85% of
the lower of the Fair Market Value per share of the Stock on the first
or last Business Day in the Plan Year (rounded up to the next whole
dime).
8. EXERCISE OF OPTIONS.
A. DATE OF EXERCISE. Unless a Participant gives written
notice to the Committee as provided in Section 8.B, the Participant's
option for the Plan Year is deemed exercised automatically at the close
of the last Business Day of the Plan Year for as many full shares of
Stock as can be purchased with funds in the Participant's Account on
that date.
B. PARTICIPANT NOTICE TO CHANGE AMOUNT OF EXERCISE. By
delivering a written notice to the Committee at least two (2) Business
Days before the end of the Plan Year, a Participant may decide not to
exercise the Participant's option for the Plan Year or to exercise the
option for some lesser number of shares. If more than one written
notice is delivered by a Participant, the last notice shall control.
C. DISPOSITION OF ACCOUNT. Funds in a Participant's Account
(less any required withholding tax) will be used to pay the option
price upon exercise of the Participant's option, and the Company shall
deliver to each Participant certificates representing any Stock
purchased as soon as administratively practicable after the end of the
Plan Year. Any amount in a Participant's Account at the end of the Plan
Year will be paid to Participant (without interest) as soon as
administratively practicable after the end of the Plan Year.
D. EXERCISES CAUSING LOSS OF COMPENSATION DEDUCTION. No part
of an option may be exercised to the extent the exercise would cause
the Participant to have compensation from the Company and its
affiliated companies for any year in excess of $1 million and that is
nondeductible by the Company and its affiliated companies pursuant to
Code Section 162(m).
E. LAPSE OF OPTIONS. All unexercised options shall lapse on
the earlier of: [i] the end of the Plan Year; [ii] termination of
participation; or [iii] termination of the Plan.
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9. TERMINATION OF PARTICIPATION.
A. TERMINATION BY PARTICIPANT. A Participant may at any time
terminate participation by giving written notice of such termination to
the Committee and electing to either:
[1] leave any funds in the Participant's Account
in which event the Participant's option will be deemed
exercised at the end of the Plan Year pursuant to Section 8.A
and any amounts remaining after such exercise will be paid to
the Participant (without interest); or
[2] receive any funds in the Participant's Account.
Participants who change their payroll deduction authorization to zero
pursuant to Section 6.C shall be deemed to have terminated participation in the
Plan and will be deemed to have elected a disposition of the Participant's
Account in accordance with Section 9.A[1] unless the Participant notifies the
Committee in writing at least two (2) Business Days before the end of the Plan
Year that the Participant elects to receive the funds in the Participant's
Account.
Upon termination of participation, all further payroll deductions from
such Participant shall cease and all amounts in the Participant's Account which
are not used to purchase Stock shall be paid to the Participant (without
interest) as soon as administratively practicable.
B. CHANGE IN EMPLOYEE STATUS. If, on or before the last
Business Day of the Plan Year, a Participant ceases to be an Eligible
Employee for any reason, including death, disability, resignation,
retirement or dismissal, the Participant's participation in the Plan
shall cease and any outstanding options shall lapse in full on the day
the Participant's status as an Eligible Employee ceases. Upon lapse,
all further payroll deductions shall cease, and all amounts credited to
the Participant's Account and not used to purchase Stock shall be paid
to the Participant (without interest) as soon as administratively
practicable following such lapse.
C. LEAVES OF ABSENCE. The employment relationship of a
Participant with a Participating Employer will be treated as continuing
intact while the Participant is on military, sick leave or other bona
fide leave of absence for a period not to exceed ninety (90) days, or
for a longer period, provided that the Participant's right to
reemployment with the Participating Employer is guaranteed either by
statute or by contract. Where the period of leave exceeds ninety (90)
days and where the Participant's right to reemployment is not
guaranteed either by statute or contract, the employment relationship
will be deemed to have terminated on the 91st day of such leave.
D. LIMITATION ON WITHDRAWALS FROM ACCOUNT. A Participant may
not withdraw any amount in the Participant's Account except pursuant to
Sections 8.C, 9.A or 9.B.
E. REINSTATEMENT OF PARTICIPATION. A Participant whose
participation in the Plan terminates may not elect to participate in
the Plan again until the next Plan Year. In
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addition, no Participant who is an officer or director of the Company
or a Participating Employer (as contemplated by Rule 16b-3 of the
Exchange Act, or any successor rule or regulation) may participate in
the Plan again for at least six (6) months after termination of
participation.
10. STOCK RESERVED FOR PLAN.
A. NUMBER AND TYPE OF SHARES. A total of Sixty-eight
Thousand, Five Hundred Eighty-One (68,581) shares of authorized but
unissued shares of Stock are reserved for issuance under the Plan,
subject to adjustment upon changes in capitalization of the Company as
provided in Section 10.C. If any option shall lapse or terminate for
any reason as to any shares, such shares of Stock shall again become
available under the Plan.
B. PRORATION OF AVAILABLE SHARES. Notwithstanding anything
herein to the contrary, if the total number of shares which would
otherwise have been acquired under the Plan on any date exceeds the
number of shares of Stock then available under the Plan, then the
Committee may make such pro rata allocation of the shares remaining
available in such practicable manner as it shall determine to be fair
and equitable. The payroll deductions to be made pursuant to the
Participant authorizations shall be reduced accordingly and the
Committee shall give written notice of such reduction to each affected
Participant. Any payroll deductions in a Participant's Account not used
to purchase Stock shall be paid (without interest) to such Participant.
C. ADJUSTMENT PROVISION. If there is any change in the
number of outstanding shares of Stock by reason of any stock dividend,
stock split-up or similar transaction, the number of shares of Stock
then remaining available for issuance and the number of shares subject
to any outstanding options shall be correspondingly changed, without
change in the aggregate option price. Additionally, equitable
adjustments shall be made in options to reflect any other changes in
the Stock, including changes resulting from a combination of
outstanding shares or other recapitalization, reorganization, sale,
merger, consolidation or similar transaction. The establishment of the
Plan shall not affect the Company's right to make adjustments,
reclassifications, reorganizations or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell
or otherwise transfer all or any part of its business or assets.
D. DELIVERY OF SHARES. A Participant shall have no interest
in, or rights of a shareholder to, any shares of Stock covered by an
option until shares have been issued to the Participant. Stock to be
delivered to a Participant pursuant to the exercise of an option shall
be issued in the name of the Participant, or, if the Participant so
directs by written notice delivered to the Committee, in the names of
the Participant and one other person designated in the notice, as joint
tenants with rights of survivorship, to the extent permitted by
applicable law.
E. RESTRICTIVE LEGENDS.
[1] FAILURE TO SATISFY HOLDING PERIOD REQUIREMENTS.
Certificates
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representing shares of Stock issued pursuant to the Plan shall
bear a restrictive legend stating that the shares represented
thereby may not be transferred before the expiration of two (2)
years from the date of grant of the option and one (1) year
from the date of transfer of the Stock to the Participant,
unless the Participant notifies the Company of the
Participant's intention to dispose of the Stock. Upon receipt
of such notice by the Committee, the Participant is free to
dispose of the Stock.
[2] INSIDERS. Certificates representing shares of Stock
issued pursuant to the Plan to any director or officer of the
Company or a Participating Employer within the meaning of
Section 16 of the Exchange Act shall bear a restrictive legend
stating that the shares represented thereby may not be
transferred before the expiration of six (6) months from the
date of the issuance of shares of Stock to the Participant.
[3] OTHER LEGENDS. The Company shall be entitled to place
any other legends on certificates for shares of Stock issued
hereunder which it deems appropriate to effectuate the terms
of the Plan or to comply with any applicable law.
11. TRANSFERABILITY. Neither compensation deductions credited to a
Participant's Account nor any rights with regard to participation in the Plan,
exercise of any option or the right to receives shares of Stock under the Plan
may be assigned, transferred, pledged, or otherwise disposed of in any way by a
Participant other than by will or the laws of descent and distribution. Any such
attempted assignment, transfer, pledge, or other disposition shall be without
effect. An option granted under the Plan is exercisable during the Participant's
lifetime only by the Participant.
12. DESIGNATION OF BENEFICIARIES. A Participant may deliver to the
Committee a written designation (on a prescribed form) of a beneficiary or
beneficiaries who are to receive any Stock and cash payable to the Participant
but not delivered to the Participant because of the Participant's death before
such delivery. Such designation may be changed or revoked by delivery of written
notice to the Committee. Upon the death of a Participant and upon receipt by the
Committee of proof deemed adequate by it of the identity and existence of a
beneficiary or beneficiaries validly designated by such Participant, the Company
shall issue and deliver such Stock and pay such cash to such beneficiary or
beneficiaries. In the absence of the Company's receipt of such proof, or if the
Participant fails to designate any beneficiary who is living at the time of the
Participant's death, the Company shall issue and deliver such Stock and pay such
cash to the executor or administrator of the estate of such Participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Committee), the Company, if and as the Committee may direct in its discretion,
shall issue and deliver such Stock and pay such cash to the spouse and/or any
one or more dependents or relatives of such Participant, or if no such spouse,
dependent or relative is known to the Committee, then to such other person or
persons as the Committee may designate in its discretion.
13. AMENDMENT AND TERMINATION. The Plan may be amended or
terminated by the
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Committee at any time. Any amendment of the Plan requires approval by the
Company's stockholders within twelve (12) months after such amendment's adoption
by the Committee if it increases the total number of shares of Stock available
for issuance under the Plan, or changes the class of corporations eligible to
become Participating Employers or the class of persons eligible to receive
options under the Plan, or if the Committee otherwise deems such approval
necessary or advisable for purposes of complying with Rule 16b-3 of the Exchange
Act, or any successor rule or regulation, or other applicable law. Such
stockholder approval shall mean approval by holders of a majority of all the
shares of the Stock which are voted in person or by proxy at a duly held
stockholders' meeting. No amendment may be adopted which would adversely affect
any rights acquired by any person hereunder before the effective date of the
amendment, unless the amendment is necessary for the Company to obtain a ruling
it may request from the Internal Revenue Service with respect to the Plan, or
necessary for the plan to conform to the requirements of Code Section 423 or any
other applicable law.
14. NOTICES. Any notice or other communication by any person to
the Committee shall be deemed to have been duly given when actually received by
a member of the Committee, or when actually received by the Company addressed as
follows:
Churchill Downs Incorporated
700 Central Avenue
Louisville, Kentucky 40208
Attention: Board of Directors, Compensation Committee
Any notice or other communication or any delivery of Stock or cash to
any person (other than the Committee) under or in connection with the Plan shall
be deemed to have been duly given or made when deposited in the United States
mails, postage prepaid, addressed to such person at the address last shown for
such person in the records of the Committee or any Participating Employer.
15. TAX WITHHOLDING. The Participating Employer shall have the
right to withhold from each Participant's compensation an amount equal to all
federal, state and local taxes which the Participating Employer is required by
law to withhold as a result of the Participant's participation in the Plan or
disposition of shares of Stock issued under the Plan to the extent such taxes
are not deducted from the Participant's Account.
16. NONGUARANTEE OF EMPLOYMENT. No provision of the Plan shall be
construed as giving any person any right he would not otherwise have to become
or remain an employee of a Participating Employer, or any other right not
expressly created by such provision.
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17. GOVERNING LAW. The Plan shall be governed by the laws of the
Commonwealth of Kentucky and any applicable federal laws.
Dated this 16th day of March, 2000.
CHURCHILL DOWNS INCORPORATED
BY: /s/ REBECCA C. REED
TITLE: SECRETARY
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