EXHIBIT 10(hh)

CHURCHILL DOWNS INCORPORATED

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (“Agreement”) is made as of the 27th day of
September, 2010, between Churchill Downs Incorporated, a Kentucky corporation,
with its principal place of business at 700 Central Avenue, Louisville, Kentucky
40208 (“Company”), and Robert S. Evans (“Executive”).

WHEREAS, Company and Executive are parties to that certain employment agreement
dated as of August 14, 2006, as amended by the First Amendment to Employment
Agreement dated November 25, 2008 (collectively, the “Prior Employment
Agreement”);

WHEREAS, Company and Executive have entered into the Amended and Restated
Employment Agreement of even date herewith (the “Employment Agreement”);

WHEREAS, under the terms of the Employment Agreement the Executive is to receive
certain grants of equity compensation as a consequence of his employment by
Company;

WHEREAS, Company maintains the Churchill Downs Incorporated 2007 Omnibus Stock
Incentive Plan (the “Plan”) which was approved by shareholders of the Company at
the 2007 Annual Meeting of Shareholders on June 28, 2007;

WHEREAS, the Plan provides for the granting of options to purchase shares of
Company’s common stock, no par value per share in accordance with the terms and
provisions thereof and the Executive is a person eligible for participation
under the Plan;

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors
of Company at its meeting on September 23, 2010 authorized and directed Company
to make an award of options to the Executive 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. DEFINITIONS.

 

  a. “Board” means Company’s Board of Directors.

 

  b. “Change in Control” shall have the meaning ascribed to such term in the
Employment Agreement.

 

  c. “Code” means the Internal Revenue Code of 1986, as amended.

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  d. “Common Stock” means Company’s common stock, no par value, or the common
stock or securities of a Successor that have been substituted therefore pursuant
to Section 10.

 

  e. “Company” means Churchill Downs Incorporated, a Kentucky corporation, with
its principal place of business at 700 Central Avenue, Louisville, Kentucky
40208.

 

  f. “Disability” has the meaning ascribed to such term in the Employment
Agreement.

 

  g. “Employment Agreement” has the meaning set forth in the recitals above.

 

  h. “Option Price” means the price to be paid for Common Stock upon the
exercise of an option, in accordance with Section 3.

 

  i. “Executive’s Representative” means the personal representative of
Executive’s estate, and after final settlement of Executive’s estate, the
successor or successors entitled thereto by law.

 

  j. “Subsidiary” means any corporation that at the time an option is granted
under the Plan qualifies as a subsidiary of Company as defined by Code
Section 424(f).

 

  k. “Successor” means the entity surviving a merger or consolidation with
Company, or the entity that acquires all or a substantial portion of Company’s
assets or outstanding capital stock (whether by merger, purchase or otherwise).

 

2. GRANT OF NON-QUALIFIED STOCK OPTION. Company hereby grants to the Executive
the right and option to purchase from Company an aggregate of 180,000 shares of
Common Stock (the “Options”), which Options are not intended to constitute an
incentive stock option under Code §422.

 

3. OPTION PRICE. The price to be paid for the Common Stock upon exercise of the
Options is $35.19 (closing price of Company’s Common Stock as of the close of
business on September 27, 2010).

 

4. OPTION EXPIRATION. The Options shall expire, and cease to be exercisable, at
the earlier of the following times:

 

  a. November 14, 2016; or

 

  b. ninety (90) days after Executive’s Termination of Employment (as defined in
the Employment Agreement).

 

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5. VESTING OF OPTIONS.

 

  a. Vesting Period. No part of the Options may be exercised unless and until
such Options or part thereof shall have become vested based upon the continuous
employment of Executive after September 27, 2010. The Option shall vest and
become exercisable over a three (3) year period as follows:

 

Number of Options to Vest

  

Vesting Date

7,500

   September 30, 2010

15,000

   December 31, 2010

15,000

   March 31, 2011

15,000

   June 30, 2011

15,000

   September 30, 2011

15,000

   December 31, 2011

15,000

   March 31, 2012

15,000

   June 30, 2012

15,000

   September 30, 2012

15,000

   December 31, 2012

15,000

   March 31, 2013

15,000

   June 30, 2013

7,500

   August 14, 2013

In the event the Executive’s employment is terminated other than for Cause (as
defined in the Employment Agreement), Disability (as defined in the Employment
Agreement) or death, or if the Executive resigns for Good Reason (as defined in
the Employment Agreement) for purposes of determining the vesting of Options
under this Section 5, the Executive’s employment shall be considered to have
continued until the last day of the calendar quarter in which his Termination of
Employment occurs.

 

  b. Acceleration of Option Vesting. In the event of a Change in Control (as
defined in the Employment Agreement) during the Employment Term (as defined in
the Employment Agreement), fifty percent (50%) of the Options that shall not
have theretofore become vested and non-forfeitable under Section 5(a) above,
shall become vested and non-forfeitable immediately upon the occurrence of such
Change in Control. The options that are subject to accelerated vesting pursuant
to this Section 5(b) shall be taken pro rata from each tranche of then un-vested
options and the remaining portion of such tranche shall vest according to the
terms of this Agreement. If, during the 2-year period following such Change in
Control during the Employment Term, (i) the Executive is terminated by Company
other than for Cause (as defined in the Employment Agreement), Disability or
death, or (ii) if the Executive voluntarily resigns for Good Reason all Options
shall become non-forfeitable as of the date of such Termination of Employment
and shall not be forfeited as a result of such termination.

 

6.

EXERCISE OF OPTIONS. To exercise an Option, Executive shall deliver to Company,
or to a broker-dealer in the Common Stock with the original copy to Company, the
following: [i] seven (7) day prior written notice specifying the number of
shares as to which the Option is being exercised and, if determined by counsel
for Company to be necessary, representing that such shares are being acquired
for investment purposes only

 

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  and not for purpose of resale or distribution; and [ii] payment by Executive,
or the broker-dealer, of the Option Price for such shares in cash, or if the
Committee in its discretion agrees to so accept, by delivery to Company of other
Common Stock owned by Executive, or in some combination of cash and Common Stock
acceptable to the Committee. At the expiration of the seven (7) day notice
period, and provided that all conditions precedent contained in this Agreement
are satisfied, Company shall, without transfer or issuance tax or other
incidental expenses to Executive, deliver to Executive, at the offices of
Company, a certificate or certificates for the Common Stock. If Executive fails
to accept delivery of the Common Stock, Executive’s right to exercise the
applicable portion of the Options shall terminate. The Options may be exercised
in whole or in part at any time before its expiration. If payment of the Option
Price is made in Common Stock, the value of the Common Stock used for payment of
the Option Price shall be the fair market value of the Common Stock on the
business day preceding the day written notice of exercise is delivered to
Company. The fair market value of Common Stock shall be the closing price for
the Common Stock in the over-the-counter market, as reported by the National
Association of Securities Dealers Automated Quotation System, on the business
day immediately preceding the date of grant. The Option Price shall be subject
to adjustments in accordance with the provisions of Section 10.

 

7. NONTRANSFERABILITY. The Options are not transferable other than by will or by
the laws of descent and distribution. During Executive’s lifetime, the Options
are exercisable only by Executive, and after Executive’s death, to the extent
exercisable by Executive on the date of Executive’s death, by Executive’s
Representative at any time before expiration of said Options. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of an Option or
levy or attachment or similar process not specifically permitted herein, shall
be null and void and without effect.

 

8. INVESTMENT REPRESENTATION. Upon demand by the Committee for such a
representation, Executive or Executive’s Representative shall deliver to the
Committee at the time of exercise a written representation that the shares to be
acquired upon exercise of the Options are to be acquired for investment and not
for resale or distribution. Upon such demand, delivery of such representation
before delivery of Common Stock shall be a condition precedent to the right of
Executive or Executive’s Representative to purchase Common Stock.

 

9. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The grant and exercise of Options
and the obligation of Company to sell and deliver shares under the Options shall
be subject to all applicable federal and state laws, rules and regulations and
to such approvals by any government or regulatory agency as may be required.
Company shall not be required to issue or deliver certificates for shares of
Common Stock before [i] the listing of such shares on any stock exchange or
over-the-counter market, such as NASDAQ, on which the Common Stock may then be
listed or traded, and [ii] the completion of any registration or qualification
of any governmental body which Company shall, in it sole discretion, determine
to be necessary or advisable.

 

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10. ADJUSTMENTS IN OPTIONS.

 

  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 Company), recapitalization, merger,
consolidation, split-up, combination, subdivision, reclassification, exchange of
shares or the like, the Committee shall make equitable adjustments in the
Options so that the Options represent the same percentage of 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 the Options by
reason of such adjustment shall be deemed to be subject to the same terms,
conditions and restrictions of the Options 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 of the Options shall automatically be converted into and
replaced by options for 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 subject to the Options and the
purchase price per share upon exercise of the Options shall be correspondingly
adjusted, so that Executive shall have the right to purchase [a] 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 Common Stock of Company
theretofore subject to Executive’s Options, [b] for a purchase price per share
that, when multiplied by the number of shares of common stock of the Successor
subject to the Options, shall equal the aggregate exercise price at which
Executive could have acquired all of the shares of Common Stock of Company
theretofore optioned by Executive.

 

11. TAX WITHHOLDING. Company shall have the right to: [i] withhold from any
payment due to Executive or Executive’s Representative; or [ii] require the
Executive or the Executive’s Representative to remit to Company; or [iii] retain
cash or Common Stock otherwise deliverable to Executive or Executive’s
Representative, in an amount sufficient to satisfy applicable tax withholding
requirements resulting from the grant or exercise of the Options pursuant to
this Agreement.

 

12. NO RIGHTS AS SHAREHOLDER. Executive or Executive’s Representative shall have
no rights as a shareholder with respect to Common Stock subject to the Options
before the date of transfer to Executive of a certificate for such shares.

 

13. NO RIGHTS TO CONTINUED EMPLOYMENT. Nothing contained in this Agreement nor
any award herewith shall confer upon Executive any right with respect to
continuance of employment by Company or Subsidiary nor interfere with the right
of Company or Subsidiary to terminate Executive’s employment.

 

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14. NOTICES. Notices shall be deemed delivered if delivered personally or if
sent by registered or certified mail to Company at its principal place of
business, as set forth above, and to Executive at the address set forth above,
or at such other address as either party may hereafter designate in writing to
the other.

 

15. SEVERABILITY. The invalidity or unenforceability of any provision of the
Agreement shall not affect the validity and enforceability of the remaining
provisions of the Agreement, and such invalid or unenforceable provision shall
be stricken to the extent necessary to preserve the validity and enforceability
of the Agreement with the parties agreeing in such event to make all reasonable
efforts to replace such invalid or unenforceable provision with a valid
provision that will place the parties in approximately the same economic
position as contemplated hereunder.

 

16. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their heirs, personal representatives, successors and
assigns. Executive accepts the award of Options hereunder subject to all of the
terms and conditions of this Agreement. Executive hereby agrees to accept as
binding, conclusive and final all reasonable decisions and interpretations of
the Committee upon any questions arising under this Agreement, including without
limitation, the interpretation of the terms, conditions and restrictions
applicable to the Options granted hereunder and the terms and conditions of this
Agreement.

 

17. GOVERNING LAW; JURISDICTION: SERVICE OF PROCESS. This Agreement shall be
governed by the laws of the Commonwealth of Kentucky. Executive consents to the
exclusive jurisdiction of the courts of the Commonwealth of Kentucky and of any
federal court located in Jefferson County, Kentucky in connection with any
action or proceeding arising out of or relating to this Agreement, any document
or instrument delivered pursuant to or in connection with this Agreement, or any
breach of this Agreement or any such document or instrument.

 

18. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof.

 

19. AMENDMENT. This Agreement may not be amended, modified or supplemented
except with the consent of the Committee and by written instrument duly executed
by the Executive and Company.

 

20. COUNTERPARTS AND SIGNATURES. This Agreement may be signed in counterparts,
each of which shall be an original, with the effect as if the signatures thereto
and hereto were upon the same instrument. Signatures conveyed by facsimile or
PDF file shall constitute original signatures.

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IN WITNESS WHEREOF, Company and the Executive have executed and delivered this
Agreement as of the date first above written.

 

CHURCHILL DOWNS INCORPORATED By:  

/s/ Leonard Coleman

  Leonard Coleman,   Chair of the Compensation Committee of the Board of
Directors (Authorized Representative) EXECUTIVE: By:  

/s/ Robert L. Evans

 

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