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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): April 21, 1998
CHURCHILL DOWNS INCORPORATED
(Exact name of registrant as specified in its charter)
KENTUCKY 0-01469 61-0156015
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
700 CENTRAL AVENUE, LOUISVILLE, KENTUCKY 40208
(Address of principal executive offices)
(502) 636-4400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 21, 1998, Churchill Downs Incorporated (the "Company")
acquired Racing Corporation of America ("RCA") pursuant to a Stock Purchase
Agreement dated as of March 28, 1998 (the "Stock Purchase Agreement"), by
and between the Company and TVI Corp. ("TVI"), and an Agreement and Plan of
Merger dated as of April 17, 1998, by and among TVI, RCA, the Company, and
RCA Acquisition Company ("RCA Acquisition"), a wholly-owned subsidiary of
the Company (the "Acquisition"). The Acquisition was completed through the
merger of RCA Acquisition with and into RCA. Prior to completion of the
Acquisition, RCA was a wholly owned subsidiary of TVI. The assets of RCA
consist primarily of the shares of stock of Ellis Park Race Course, Inc., a
Kentucky corporation whose primary asset is Ellis Park Race Course in
Henderson, Kentucky, and the Kentucky Horse Center, a training facility
located in Lexington, Kentucky. The Company intends to continue to operate
Ellis Park Race Course and the Kentucky Horse Center at the same locations
and under the same names.
The Company agreed to pay TVI an aggregate of Twenty-Two Million
Dollars ($22,000,000) for the shares of RCA, payable as follows: [1] the
issuance to TVI of 200,000 shares of the common capital stock of the
Company valued at $4,850,000, based upon the closing price of the Company's
common stock of $24.25 per share as agreed upon by the parties based on a
review of recent trading activity as reported on the Nasdaq Small Cap
Market (adjusted to reflect the 2 for 1 stock split of the Company declared
on March 19, 1998); and [2] $17,150,000 in cash. The Company paid the cash
portion of the purchase price from working capital and a draw on its
existing credit facility with PNC Bank, Kentucky. The shares of the common
stock of the Company issued to TVI are subject to registration rights as
set forth in the Stock Purchase Agreement. The Company agreed in the Stock
Purchase Agreement that, at the regular meeting of the Board of Directors
of the Company in June of 1998, Daniel Harrington, President of TVI, will
be nominated to serve as a director of the Company.
In addition to the consideration paid at closing of the Acquisition,
in the event that gaming (whether full casino, slot machine or video
lottery based) generally or at licensed horse racing facilities is
legalized in the Commonwealth of Kentucky, the Company agreed to cause RCA
to exploit its facilities for such gaming to the extent feasible and
permitted by law. If such events occur on or before December 31, 2006, the
Company will pay a royalty fee to TVI for concurrent ten year periods
commencing from the date that such permitted gaming becomes fully
operational at Ellis Park Race Course and/or the Kentucky Horse Center. If
gaming is legalized in the calendar year 2007, the royalty fee period will
be reduced to nine years from the date that such permitted gaming becomes
fully operational with the decline in the length of the royalty period
continuing proportionately thereafter through calendar year 2015 if gaming
is thereafter authorized in succeeding years, with a royalty period of one
year from the date that gaming becomes fully operational if gaming is
legalized in calendar year 2015. No royalty will be payable if gaming is
legalized after December 31, 2015. The royalty fee will be based upon 50%
of earnings before interest and taxes of the gaming operations at Ellis
Park Race Course and at the Kentucky Horse Center, calculated after all
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normal operating expenses associated with such gaming and pre-opening
expenses related to the development of such gaming operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
A. Financial Statements of Businesses Acquired.
To be filed by amendment on or about July 5, 1998.
B. Pro Forma Financial Information.
To be filed by amendment on or about July 5, 1998.
C. Exhibits
2.1 Stock Purchase Agreement dated as of March 28, 1998 by and
between Churchill Downs Incorporated and TVI Corp.
2.2 Agreement and Plan of Merger dated as of April 17, 1998 by
and among TVI Corp., Racing Corporation of America,
Churchill Downs Incorporated and RCA Acquisition Company.
99 Press release issued on April 21, 1998 by Churchill Downs
Incorporated.
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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
(Registrant)
By: /S/ THOMAS H. MEEKER
Thomas H. Meeker, President
Date: April 28, 1998
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