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EXHIBIT 2.3
AGREEMENT AND PLAN OF MERGER
AND
AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement" or "Plan") is made and entered effective as of
the 22nd day of April, 1999, by and among CHURCHILL DOWNS INCORPORATED, a
Kentucky corporation ("Buyer"), CHURCHILL DOWNS MANAGEMENT COMPANY, a Kentucky
corporation ("CDMC"), CR ACQUISITION CORP., a Florida corporation ("CR
Acquisition"), TP ACQUISITION CORP., a Florida corporation ("TP Acquisition"),
CALDER RACE COURSE, INC., a Florida corporation ("Calder"), TROPICAL PARK, INC.,
a Florida corporation ("Tropical"), and KE ACQUISITION CORP., a Delaware
corporation and the sole shareholder of each of Calder and Tropical
("Shareholder"). Buyer is the sole shareholder of CDMC, and CDMC is the sole
shareholder of each of CR Acquisition and TP Acquisition. Calder and Tropical
are sometimes referred to herein as the "Companies" and individually as a
"Company."
RECITALS
A. Buyer and Shareholder are parties to a Stock Purchase Agreement and
Joint Escrow Instructions dated as of January 21, 1999, as amended to date (the
"Stock Purchase Agreement") under which Buyer has agreed to purchase, and Seller
has agreed to sell, subject to the terms and conditions of the Stock Purchase
Agreement, all 667,440 of the issued and outstanding common shares, $.25 par
value per share, of Calder (the "Calder Shares"), and all 195 of the issued and
outstanding common shares, with no par value per share, of Tropical (the
"Tropical Shares") (the Calder Shares and the Tropical Shares are sometimes
referred to herein collectively as the "Shares").
B. Buyer and Shareholder desire to enter into this Plan to provide for
the Buyer's acquisition of the Companies and all of the issued and outstanding
shares of capital stock thereof, pursuant to the Stock Purchase Agreement as
hereby amended, through the merger of CR Acquisition with and into Calder and
the merger of TP Acquisition with and into Tropical, in lieu of the direct
acquisition of the Shares by Buyer from Shareholder pursuant to the Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and undertakings herein contained, the parties hereby agree as
follows:
ARTICLE 1
THE MERGERS
A. THE MERGERS. Upon the terms and subject to the conditions set forth
in the Stock Purchase Agreement and this Plan, and in accordance with the
Florida Business Corporation Act (the "FBCA"), at the Effective Time (as
hereinafter defined), CR Acquisition shall be merged with and into Calder (the
"Calder Merger") and TP Acquisition shall be merged with and into
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Tropical (the "Tropical Merger") in accordance with the FBCA (collectively, the
"Mergers"), whereupon the separate existence of CR Acquisition shall cease and
Calder shall continue as the surviving corporation of the Calder Merger (the
"Calder Surviving Corporation") and the separate existence of TP Acquisition
shall cease and Tropical shall continue as the surviving corporation of the
Tropical Merger (the "Tropical Surviving Corporation") (such surviving
corporations are sometimes referred to herein as the "Surviving Corporations").
B. ARTICLES OF MERGER. Upon the terms and subject to conditions set
forth in the Stock Purchase Agreement and this Plan (and in order to consummate
the Closing under the Stock Purchase Agreement), Articles of Merger for the
Calder Merger shall be duly prepared and executed by CR Acquisition and Calder
in the form attached as EXHIBIT A hereto and Articles of Merger for the Tropical
Merger shall be duly prepared and executed by TP Acquisition and Tropical in the
form attached as EXHIBIT B hereto, and thereafter delivered to the Secretary of
State of the State of Florida for filing on the Closing Date under the Stock
Purchase Agreement and as provided in the FBCA. The Mergers shall become
effective upon filing with the Florida Secretary of State of the Calder Articles
of Merger and the Tropical Articles of Merger or at such time and date
thereafter as provided in such Articles of Merger (the "Effective Time"). The
date on which the Effective Time occurs shall be the "Effective Date".
C. MERGER CONSIDERATION; PURCHASE PRICE; ALLOCATION OF MERGER
CONSIDERATION. The parties agree that the "Purchase Price" under the Stock
Purchase Agreement shall be calculated and paid as provided in the Stock
Purchase Agreement, subject to adjustment as provided in the Stock Purchase
Agreement, and that such Purchase Price is also referred to herein as the
"Merger Consideration". The "Cash Balance" under the Stock Purchase Agreement
shall be deposited in "Escrow" by Buyer as and when provided under the Stock
Purchase Agreement including Section 2.2.2 thereof.
The parties acknowledge that the allocation of Merger Consideration between
the Mergers as provided in Section 2(A) below (the 55%--45% allocation) is
preliminarily due to certain related concerns being considered by the parties.
Accordingly, the parties hereto agree that such allocation of the Merger
Consideration is subject to adjustment for a period of sixty (60) days following
the Effective Time by mutual written agreement of Buyer and Shareholder, and
that any such subsequently agreed allocation shall thereupon constitute the
allocation of the Merger Consideration between the Mergers under this Agreement.
Buyer and Shareholder shall endeavor in good faith to agree upon an adjusted
allocation during such 60 day period, but if such agreement does not occur
during such period then the allocation provided in Section 2(A) below shall
constitute the allocation of the Merger Consideration between the Mergers under
this Agreement.
ARTICLE 2.
CONVERSION OF SHARES
A. CONVERSION OF SHARES. At the Effective Time, by virtue of the Mergers
and without any action on the part of the parties hereto:
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1. All of the outstanding shares of capital stock of Calder
shall be converted in the aggregate into the right to receive aggregate
consideration equal to fifty-five percent (55%) of the Merger
Consideration, and all of the outstanding shares of capital stock of
Tropical shall be converted in the aggregate into the right to receive
aggregate consideration equal to forty-five percent (45%) of the Merger
Consideration, payable as provided in the Stock Purchase Agreement; and the
outstanding shares of capital stock of each of Calder and Tropical shall
thereupon be automatically cancelled and extinguished; PROVIDED, HOWEVER,
that such allocation of the Merger Consideration shall be subject to
adjustment following the Effective Time as provided in the second paragraph
of Section 1(C) above;
2. All of the outstanding shares of capital stock of CR
Acquisition shall thereupon be converted in the aggregate into 667,440
shares of the common stock of the Calder Surviving Corporation, $0.25 par
value per share, and all of the outstanding shares of capital stock of TP
Acquisition shall thereupon be converted in the aggregate into 195 shares
of the common stock of the Tropical Surviving Corporation, $0.01 par value
per share.
B. ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATIONS; AMENDMENT TO
PAR VALUE OF TROPICAL SHARES. The articles of incorporation of Calder in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Calder Surviving Corporation and the articles of incorporation of
Tropical in effect immediately prior to the Effective Time shall be the articles
of incorporation of the Tropical Surviving Corporation, PROVIDED, HOWEVER, that
Article III of the Tropical Surviving Corporation's Articles of Incorporation
shall be amended as reflected in Exhibit B hereto to change the par value of
Tropical's capital stock from no par value to $0.01 par value per share.
C. BYLAWS OF SURVIVING CORPORATION. The Bylaws of Calder in effect
immediately prior to the Effective Time shall be the Bylaws of the Calder
Surviving Corporation, and the Bylaws of Tropical in effect immediately prior to
the Effective Time shall be the Bylaws of the Tropical Surviving Corporation.
D. DIRECTORS AND OFFICERS OF SURVIVING CORPORATIONS. From and after the
Effective Time, the respective directors and officers of the Calder Surviving
Corporation and the Tropical Surviving Corporation shall be as set forth in the
respective Articles of Merger attached as Exhibits A and B hereto, in each case
until their respective successors are duly elected or appointed and qualify in
the manner provided in the respective Articles of Incorporation and Bylaws of
the Surviving Corporations and as otherwise provided by applicable law.
ARTICLE 3.
GENERAL PROVISIONS
A. LAW AND SECTION HEADINGS. This Plan shall be construed and interpreted
in accordance with the laws of the State of Florida. Section headings are used
in this Plan for convenience only and are to be ignored in the construction of
the terms of this Plan.
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B. MODIFICATIONS. The parties hereto may amend, modify or supplement this
Plan in such manner as may be agreed by them in writing.
C. AMENDMENT. This Plan shall constitute an amendment to the Stock
Purchase Agreement, and the Stock Purchase Agreement and this Plan shall be
construed together in a manner consistent with the intent of the parties
reflected herein and therein. Without limitation of the foregoing, the
consummation of this Plan and the effectiveness of the Mergers shall satisfy the
obligations of the parties under the Stock Purchase Agreement concerning the
assignment of the Shares to Buyer at Closing and payment of the Purchase Price,
subject, however, to the remainder of the Stock Purchase Agreement. The Buyer
and Shareholder hereby reaffirm and ratify the Stock Purchase Agreement, as so
amended in its entirety. The Shareholder's and the Buyer's respective
representations, warranties, and covenants in this Agreement shall be deemed to
be part of the Stock Purchase Agreement and subject to the applicable provisions
thereof, including indemnification provisions. The Shareholder's representations
and warranties herein shall be deemed to constitute part of Section 7.17 of the
Stock Purchase Agreement.
ARTICLE 4.
CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
A. AUTHORIZATION, ETC. Each party to this Agreement hereby represents and
warrants, to the other parties hereto, that: such representing party has the
full corporate power and authority to enter into this Agreement and the
agreements and documents contemplated hereby to which such party is or will
become a party and perform its respective obligations hereunder and thereunder;
that the execution, delivery and performance of this Agreement (including
consummation of the Mergers) by such party and all other agreements and
transactions contemplated hereby to which such party is or will become a party
have been duly authorized by the Board of Directors and shareholders of such
party (other than the shareholders of Buyer) (including all approvals required
under the FBCA for the Mergers) and no other corporate or other proceedings on
its part is necessary to authorize this Agreement and the transactions
contemplated hereby; and that upon execution and delivery of this Agreement,
this Agreement shall constitute the legal, valid and binding obligation of such
party, enforceable against such party in accordance with its terms.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Plan to be executed
by their duly authorized officers as of the date first above written.
"SHAREHOLDER"
CHURCHILL DOWNS MANAGEMENT KE ACQUISITION CORP.
COMPANY
By: /S/ JEFFREY M. SMITH By: /S/ K. NISHIKAWA
Name: JEFFREY M. SMITH Name: KAORU NISHIKAWA
Title: PRESIDENT Title: PRESIDENT
"BUYER"
CR ACQUISITION CORP. CHURCHILL DOWNS
INCORPORATED
By: /S/ REBECCA C. REED By: /S/ ROBERT L. DECKER
Name: REBECCA C. REED Name: ROBERT L. DECKER
Title: PRESIDENT Title: EXECUTIVE V.P. AND CFO
TP ACQUISITION CORP. CALDER RACE COURSE, INC.
By: /S/ REBECCA C. REED By: /S/ C. KENNETH DUNN
Name: REBECCA C. REED Name: C. KENNETH DUNN
Title: PRESIDENT Title: PRESIDENT
TROPICAL PARK, INC.
By: /S/ C. KENNETH DUNN
Name: C. KENNETH DUNN
Title: PRESIDENT
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EXHIBIT A
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ARTICLES OF MERGER
OF
CR ACQUISITION CORP., a Florida corporation
INTO
CALDER RACE COURSE, INC., a Florida corporation
Pursuant to the provisions of Section 607.1101 and Section 607.1105 of
the Florida Business Corporation Act, CR ACQUISITION CORP., a Florida
corporation ("Acquisition"), and CALDER RACE COURSE, INC., a Florida corporation
("Calder" or the "Surviving Corporation"), hereby adopt the following Articles
of Merger for the purpose of merging Acquisition with and into the Surviving
Corporation (the "Merger"). All of the outstanding shares of common stock of
Acquisition are held by Churchill Downs Management Company, a Kentucky
corporation ("Parent"). The Parent, Acquisition, Calder, the sole shareholder of
Calder and certain other parties are parties to an Agreement and Plan of Merger
and Amendment to Stock Purchase Agreement dated April 22, 1999 (the "Merger
Agreement") pursuant to which the parties have prepared and caused to be filed
these Articles of Merger.
FIRST: The plan of merger for the Merger (the "Plan of Merger"),
pursuant to Section 607.1101 of the Florida Business Corporation Act (the
"FBCA"), is as set forth in these Articles of Merger, including Exhibit A
hereto, which Exhibit is incorporated herein and constitutes part of these
Articles of Merger.
SECOND: The Merger shall be effective upon the filing of these Articles
of Merger with the Secretary of State of the State of Florida (the "Effective
Time"). At the Effective Time, by virtue of the Merger and without any action on
the part of Calder, Acquisition or Parent or other parties to the Merger
Agreement, (i) Acquisition shall be merged with and into the Surviving
Corporation, with the Surviving Corporation being the surviving corporation of
the
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Merger and the separate existence of Acquisition shall thereupon cease, (ii) all
of the shares of capital stock of Calder outstanding immediately prior to the
Effective Time shall be automatically cancelled and converted at the Effective
Time into the right to receive an aggregate cash payment in the amount as
provided in Exhibit A hereto, and (iii) all of the outstanding shares of capital
stock of Acquisition shall be converted in the aggregate into 667,440 shares of
common stock of the Surviving Corporation, $0.25 par value per share, whereupon
Parent shall thereby become the sole shareholder of the Surviving Corporation.
The Merger shall have the effects set forth in Section 607.1106 of the FBCA, and
all property, rights, privileges, policies and franchises of each of Calder and
Acquisition shall vest in the Surviving Corporation and all debts, liabilities
and duties of each of Calder and Acquisition shall become the debts, liabilities
and duties of the Surviving Corporation.
THIRD: The Articles of Incorporation of Calder as in effect immediately
prior to the Effective Time shall continue in full force and effect as the
Articles of Incorporation of the Surviving Corporation upon and following the
Effective Time until thereafter amended in accordance with applicable law.
FOURTH: The Bylaws of Calder as in effect immediately prior to the
Effective Time shall continue in full force and effect as the Bylaws of the
Surviving Corporation upon and following the Effective Time, until thereafter
amended in accordance with applicable law.
FIFTH: From and after the Effective Time, the respective directors and
officers of the Surviving Corporation shall be as set forth in Exhibit B hereto,
in each case until their respective successors are duly elected or appointed and
qualify in the manner provided in the Articles of Incorporation and Bylaws of
the Surviving Corporations and as otherwise provided by applicable law.
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SIXTH: The Plan of Merger was approved by the sole Director and the sole
shareholder of Acquisition as of April 22, 1999, and by the Board of Directors
and sole shareholder of Calder as of April 22, 1999.
* * * * *
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IN WITNESS WHEREOF, each of Acquisition and Calder have caused these
Articles of Merger to be signed in their respective corporate names and on their
behalf by an authorized officer, as of this 23rd day of April, 1999.
CR ACQUISITION CORP.
By:______________________________
Name:____________________________
Title:___________________________
CALDER RACE COURSE, INC.
By:______________________________
Name:____________________________
Title:___________________________
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EXHIBIT A
CONVERSION OF SHARES
At the Effective Time, pursuant to these Articles of Merger and the
Merger Agreement, the outstanding shares of capital stock of Calder shall be
converted into the right to receive an aggregate cash payment of Forty-Seven
Million Three Hundred Thousand Dollars ($47,300,000) to be thereupon delivered
and paid as provided and subject to the terms set forth in the Merger Agreement.
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EXHIBIT B
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
OFFICERS
NAME OFFICE
Thomas H. Meeker Chairman
C. Kenneth Dunn President
Randell E. Soth Vice President and General Manager
Robert Decker Vice President and Treasurer
Michael Abes Assistant Secretary
Rebecca C. Reed Secretary
Vicki L. Baumgardner Assistant Treasurer
DIRECTORS
NAME
Robert L. Decker
C. Kenneth Dunn
Thomas H. Meeker
Rebecca C. Reed
Jeffrey M. Smith
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EXHIBIT B
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ARTICLES OF MERGER
OF
TP ACQUISITION CORP., A FLORIDA CORPORATION
INTO
TROPICAL PARK, INC., A FLORIDA CORPORATION
Pursuant to the provisions of Section 607.1101 and Section 607.1105 of
the Florida Business Corporation Act, TP ACQUISITION CORP., a Florida
corporation ("Acquisition"), and TROPICAL PARK, INC., a Florida corporation
("Tropical" or the "Surviving Corporation"), hereby adopt the following Articles
of Merger for the purpose of merging Acquisition with and into the Surviving
Corporation (the "Merger"). All of the outstanding shares of common stock of
Acquisition are held by Churchill Downs Management Company, a Kentucky
corporation ("Parent"). The Parent, Acquisition, Tropical, the sole shareholder
of Tropical and certain other parties are parties to an Agreement and Plan of
Merger and Amendment to Stock Purchase Agreement dated April 22, 1999 (the
"Merger Agreement") pursuant to which the parties have prepared and caused to be
filed these Articles of Merger.
FIRST: The plan of merger for the Merger (the "Plan of Merger"),
pursuant to Section 607.1101 of the Florida Business Corporation Act (the
"FBCA"), is as set forth in these Articles of Merger, including Exhibit A
hereto, which Exhibit is incorporated herein and constitutes part of these
Articles of Merger.
SECOND: The Merger shall be effective upon the filing of these Articles
of Merger with the Secretary of State of the State of Florida (the "Effective
Time"). At the Effective Time, by virtue of the Merger and without any action on
the part of Tropical, Acquisition or Parent or other parties to the Merger
Agreement, (i) Acquisition shall be merged with and into the Surviving
Corporation, with the Surviving Corporation being the surviving corporation of
the
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Merger and the separate existence of Acquisition shall thereupon cease, (ii) all
of the shares of capital stock of Tropical outstanding immediately prior to the
Effective Time shall be automatically cancelled and converted at the Effective
Time into the right to receive an aggregate cash payment in the amount as
provided in EXHIBIT A hereto, and (iii) all of the outstanding shares of capital
stock of Acquisition shall be converted in the aggregate into 195 shares of
common stock of the Surviving Corporation, $0.01 par value per share, whereupon
Parent shall thereby become the sole shareholder of the Surviving Corporation.
The Merger shall have the effects set forth in Section 607.1106 of the FBCA, and
all property, rights, privileges, policies and franchises of each of Tropical
and Acquisition shall vest in the Surviving Corporation and all debts,
liabilities and duties of each of Tropical and Acquisition shall become the
debts, liabilities and duties of the Surviving Corporation.
THIRD: The Articles of Incorporation of Tropical as in effect
immediately prior to the Effective Time shall continue in full force and effect
as the Articles of Incorporation of the Surviving Corporation upon and following
the Effective Time until thereafter amended in accordance with applicable law;
PROVIDED, HOWEVER, that THE PAR VALUE OF THE CAPITAL STOCK OF THE SURVIVING
CORPORATION AS SET FORTH IN ARTICLE III OF THE SURVIVING CORPORATION'S ARTICLES
OF INCORPORATION SHALL BE AND HEREBY IS CHANGED FROM NO PAR VALUE TO $0.01 PAR
VALUE PER SHARE, AND SUCH ARTICLE III IS HEREBY AMENDED ACCORDINGLY.
FOURTH: The Bylaws of Tropical as in effect immediately prior to the
Effective Time shall continue in full force and effect as the Bylaws of the
Surviving Corporation upon and following the Effective Time, until thereafter
amended in accordance with applicable law.
FIFTH: From and after the Effective Time, the respective directors and
officers of the Surviving Corporation shall be as set forth in EXHIBIT B hereto,
in each case until their respective
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successors are duly elected or appointed and qualify in the manner provided in
the Articles of Incorporation and Bylaws of the Surviving Corporations and as
otherwise provided by applicable law.
SIXTH: The Plan of Merger was approved by the sole Director and the
sole shareholder of Acquisition as of April 22, 1999, and by the Board of
Directors and sole shareholder of Tropical as of April 22, 1999.
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IN WITNESS WHEREOF, each of Acquisition and Tropical have caused these
Articles of Merger to be signed in their respective corporate names and on their
behalf by an authorized officer, as of this 23rd day of April, 1999.
TP ACQUISITION CORP.
By:______________________________
Name:____________________________
Title:___________________________
TROPICAL PARK, INC.
By:______________________________
Name:____________________________
Title:___________________________
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EXHIBIT A
CONVERSION OF SHARES
At the Effective Time, pursuant to these Articles of Merger and the Merger
Agreement, the outstanding shares of capital stock of Tropical shall be
converted into the right to receive an aggregate cash payment of Thirty-Eight
Million Seven Hundred Thousand Dollars ($38,700,000) to be thereupon delivered
and paid as provided and subject to the terms set forth in the Merger Agreement.
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EXHIBIT B
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
OFFICERS
Name Office
Thomas H. Meeker Chairman
C. Kenneth Dunn President
Randell E. Soth Vice President and General Manager
Robert Decker Vice President and Treasurer
Michael Abes Assistant Secretary
Rebecca C. Reed Secretary
Vicki L.Baumgardner Assistant Treasurer
DIRECTORS
Name
Robert L. Decker
C. Kenneth Dunn
Thomas H. Meeker
Rebecca C. Reed
Jeffrey M. Smith