CHURCHILL DOWNS INCORPORATED
2004 RESTRICTED STOCK PLAN, AS AMENDED
 
1.  PURPOSE OF PLAN
 
The Churchill Downs Incorporated 2004 Restricted Stock Plan (the “Plan”) is
established by Churchill Downs Incorporated (the “Company”) to aid the Company
and its subsidiaries in securing and retaining directors and key employees of
outstanding ability and to provide additional motivation to such directors and
employees to exert their best efforts on behalf of the Company and its
subsidiaries. The Company expects that it will benefit from the added interest
that such directors and employees will have in the welfare of the Company as a
result of their ownership or increased ownership of the Company’s Common Stock.
 
2.  STOCK SUBJECT TO THE PLAN
 
The shares that may be awarded under the Plan shall be the Common Stock, no par
value, of the Company. The maximum number of shares of Common Stock that may be
awarded hereunder (subject to any adjustments as provided below) shall not in
the aggregate exceed three hundred fifteen thousand (315,000) shares. Shares
that are forfeited as a result of a participant’s termination of employment or
service as a director or withheld to satisfy applicable tax requirements shall
again become available for award under the Plan.
 
3.  ADMINISTRATION
 
The Plan shall be administered by those members, not less than two, of the
Compensation Committee of the Board of Directors, each of whom is a
“non-employee director” as defined in Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
“Committee”).
 
The Committee shall have full power and authority, in its sole discretion
subject to the provisions of the Plan, and the sole authority, to (i) award
shares under the Plan; (ii) consistent with the Plan, determine the provisions
of the shares to be awarded and the restrictions and other terms and conditions
applicable to each award of shares under the Plan; (iii) construe and interpret
the Plan and the instruments evidencing the restrictions imposed upon stock
awarded under the Plan and the shares awarded under the Plan; (iv) adopt, amend
and rescind rules and regulations for the administration of the Plan; and (v)
generally administer the Plan and make all determinations in connection
therewith that may be necessary or advisable in the Committee’s sole discretion,
and all such actions of the Committee shall be binding upon all participants.
Committee decisions and selections shall be made by a majority of its members
present at a meeting at which a quorum is present, and shall be final, binding
and conclusive upon all persons. Any decision or selection reduced to writing
and signed by all of the members of the Committee shall be as fully effective as
if it had been made at a meeting duly held. The officers of the Company shall
cause the Company to perform its obligations under the Plan in accordance with
the determinations of the Committee. The Committee’s construction,
interpretation and administration of the Plan, including the terms and
conditions of shares awarded under the Plan, its determinations with respect to
such awards and its selection of eligible directors and employees to whom such
awards are made, need not be uniform and may be made selectively among
participants under the Plan and directors and employees (whether or not such
persons are similarly situated).
 
4.  ELIGIBILITY
 
Directors and key employees, including officers, of the Company and its
subsidiaries who are from time to time responsible for the management, growth
and protection of the business of the Company and its subsidiaries shall be
eligible for awards of stock under the Plan. The directors and employees who
shall receive awards under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares to be awarded to
each such director and employee selected. Members of the Committee shall not be
precluded from receiving awards under the Plan during their service on the
Committee. Directors and employees selected by the Committee to receive awards
of stock hereunder are hereinafter referred to as “Eligible Recipients”
 
5.  RIGHTS WITH RESPECT TO SHARES
 
Subject to the terms, conditions and restrictions contained in the Plan and in
the instrument under which an award is made by the Committee, an Eligible
Recipient to whom an award of Common Stock is made hereunder shall have, after
delivery to the Company or its designee of a certificate or certificates for
such stock to be held in escrow on such Eligible Recipient’s behalf, all rights
of ownership with respect to such stock, including, without limitation, the
right to vote the same, receive any dividends paid thereon and purchase any
securities pursuant to that certain Rights Agreement dated as of March 19, 1998,
between the Company and National City Bank (as successor Rights Agent to The
Fifth Third Bank), as amended, and as the same may be amended, modified or
supplemented from time to time.
 
6.  INVESTMENT REPRESENTATION
 
If the shares of Common Stock that have been awarded to an Eligible Recipient
pursuant to the terms of the Plan are not registered under the Securities Act of
1933, as amended, pursuant to an effective registration statement, such Eligible
Recipient , if the Committee shall deem it advisable, may be required to
represent and agree in writing (i) that any shares of Common Stock acquired by
employee pursuant to the Plan will not be sold except pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or pursuant
to an exemption from registration under such Act, and (ii) that such director or
employee has acquired such shares of Common Stock for the participant’s own
account and not with a view to the distribution thereof.
 
7.  CASH BONUSES
 
If the Committee so determines in its sole and exclusive discretion, the Company
may make a cash payment or payments to an Eligible Recipient in connection with
an award of Common Stock hereunder, the lapse of restrictions imposed thereon or
the payment by the Eligible Recipient of any taxes related thereto.
 
8.  RESTRICTIONS
 
(a)  Terms, Conditions and Restrictions. In addition to such other terms,
conditions and restrictions as may be imposed by the Committee and contained in
the instrument under which awards of Common Stock are made pursuant to the Plan,
(i) no Common Stock so awarded shall be restricted for a period (the
“Restriction Period”) of less than six months or more than ten years unless
otherwise specified by the Committee; and (ii) except as provided in paragraph
(e) below, an Eligible Recipient of the award who is an employee of the Company
shall remain in the employ of the Company or its subsidiaries during the
Restriction Period or otherwise forfeit all right, title and interest in and to
the shares subject to such restrictions.
 
(b)  Transferability Restriction. No share awarded under the Plan shall be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period applicable thereto.
 
(c)  Agreements; Stock Legend. As a condition to the grant of an award under the
Plan, each Eligible Recipient shall execute and deliver to the Company an
agreement in form and substance satisfactory to the Committee reflecting the
conditions and restrictions imposed upon the Common Stock awarded. Certificates
for shares of Common Stock delivered pursuant to such awards may, if the
Committee so determines, bear a legend referring to the restrictions and the
instruments to which such awards are subject.
 
(d)  Additional Conditions. In the agreement evidencing awards or otherwise, the
Committee may impose such other and additional terms, conditions and
restrictions upon the award as it, in its sole discretion, deems appropriate,
including, without limitation: (i) that the Company shall have the right to
deduct from payments of any kind due to the Eligible Recipient any federal,
state or local taxes of any kind required by law to be withheld with respect to
the shares awarded or the payment of related cash bonuses; and (ii) that the
Eligible Recipient enter into a covenant not to compete with the business of the
Company and its subsidiaries during the period of the Eligible Recipient’s
employment or service as a director, as the case may be, and for a reasonable
time thereafter.
 
(e)  Lapse of Restrictions. The restrictions imposed under paragraph (a) above
shall terminate with respect to the shares of Common Stock to which they apply
on the earliest to occur of the following, except no restrictions shall lapse
less than six months from the date of award in the event of (i), (ii), (iii) and
(iv) below, unless otherwise specified by the Committee:
 
(i)  The expiration of the Restriction Period;
 
(ii)  The retirement of an Eligible Recipient who is an employee at or after age
60;
 
(iii)  The Eligible Recipient’s total and permanent disability;
 
(iv)  The Eligible Recipient’s death;
 
(v)  A Change in Control (as defined below) of the Company; or
 
(vi)      The acceleration of the termination of such restrictions on such terms
and conditions as the Committee may establish in its sole discretion. 
 
Certificates for shares of Common Stock with respect to which restrictions have
lapsed as provided above shall, upon lapse thereof, be released from escrow and
delivered to the Eligible Recipient, or, in the event of the Eligible
Recipient’s death, to the Eligible Recipients’ personal representative. Any
stock legend referring to the restrictions imposed hereunder shall thereupon be
removed.
 
(f)  Change in Control. For purposes of the Plan, a “Change of Control” shall
mean the first to occur of the following events:
 
(i)  the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the
then-outstanding voting securities of the Company (the “Outstanding Company
Common Stock”) or the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”);
 
(ii)  individuals who, as of the date of adoption of the Plan, constitute the
Board of Directors of the Company (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that any individual becoming a director subsequent to the date of adoption of
the Plan whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors; or
 
(iii)  consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another entity (a “Corporate Transaction”), in each
case, unless, immediately following such Corporate Transaction, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction
beneficially own, directly or indirectly, more than 60% of, respectively, the
then-outstanding shares of Common Stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the Company resulting from such Corporate
Transaction (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any employee benefit
plan (or related trust) of the Company or such entity resulting from such
Corporate Transaction) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then Outstanding Company Common Stock resulting from such
Corporate Transaction or the Outstanding Company Voting Securities resulting
from such Corporate Transaction, except to the extent that such ownership
existed prior to the Corporate Transaction, and (iii) at least a majority of the
members of the Board of Directors of the Company resulting from the Corporate
Transaction were members of the Incumbent Board at the time of the execution of
the initial plan or action of the Board of Directors providing for such
Corporate Transaction; or
 
(iv)  approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
 
Notwithstanding the foregoing, actions taken in compliance with that certain
Stockholder’s Agreement dated as of September 8, 2000, among the Company,
Duchossois Industries, Inc. and subsequent signatories thereto, as amended,
modified or supplemented from time to time, shall not be deemed a Change in
Control.
 
In addition, if the Company enters into an agreement or series of agreements or
the Board of Directors of the Company adopts a resolution that results in the
occurrence of any of the foregoing events, and the employment of an Eligible
Recipient who is an employee or the service of an Eligible Recipient who is a
director is terminated after the entering into of such agreement or series of
agreements or the adoption of such resolution, then, upon the termination of
such Eligible Recipient’s employment or service as a director, as the case may
be, a Change of Control shall be deemed to have retroactively occurred on the
date of entering into of the earliest of such agreements or the adoption of such
resolution.
 
9.  CHANGES IN CAPITAL
 
If the outstanding Common Stock of the Company subject to the Plan shall at any
time be changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation or other
corporate reorganization, an appropriate adjustment shall be made in the number
and kind of shares that have been awarded pursuant to the Plan and are subject
to restrictions imposed by the Plan and that may thereafter be awarded
hereunder.
 
10.  MISCELLANEOUS
 
(a)  No Right to Receive Award. Nothing in the Plan shall be construed to give
any director or employee of the Company or a subsidiary of the Company any right
to receive an award under the Plan.
 
(b)  Additional Shares Received with Respect to Restricted Stock. Any shares of
Common Stock or other securities of the Company received by an Eligible
Recipient as a stock dividend on, or as a result of stock splits, combinations,
exchanges of shares, reorganizations, mergers, consolidations or otherwise with
respect to, shares of Common Stock received pursuant to an award hereunder shall
have the same status, be subject to the same restrictions and bear the same
legend, if any, as the shares received pursuant to the original award.
 
(c)  No Effect on Employment Rights, Etc. Nothing in the Plan or in the
instruments evidencing the grant of an award hereunder shall in any manner be
construed to limit in any way the right of the Company or a subsidiary of the
Company to terminate any person’s employment or the right of the shareholders to
remove any director at any time, or give any right to any person to be or remain
employed by, or to serve as a director of, the Company or a subsidiary of the
Company.
 
11.  EFFECTIVE DATE OF PLAN
 
The Plan shall become effective when approved by the Board of Directors of the
Company, subject to approval by the shareholders of the Company at its 2004
annual shareholders’ meeting or a special meeting duly called and held.
 
12.  AMENDMENTS
 
The Plan may be amended at any time or from time to time by the Committee;
provided, however, that no such amendment shall, without the further approval of
the Board of Directors:
 
(i)  Except as provided in paragraph 9 of the Plan, increase the maximum number
of shares reserved for purposes of the Plan;
 
(ii)  Extend the duration of the Plan;
 
(iii)  Materially increase the benefits accruing to participants under the Plan;
or
 
(iv)  Modify the eligibility requirements of paragraph 4 of the Plan.
 
Neither shall any amendment or alteration impair the rights of any participant
during the Restriction Period without such participant’s consent. Amendments to
the Plan may be subject to approval by the shareholders of the Company pursuant
to applicable federal or state securities laws or rules adopted by NASDAQ or any
other stock exchange on which shares of the Company’s Common Stock may be listed
from time to time.

13.  DURATION, SUSPENSION AND TERMINATION
 
The Plan shall terminate and no further stock shall be awarded hereunder after
January 1, 2014. In addition, the Committee may suspend or terminate the Plan at
any time prior thereto. The suspension or termination of the Plan shall not,
however, affect any restriction previously imposed or restricted stock awarded
pursuant to the Plan.
 
14.  COMPLIANCE WITH SECTION 16(B)
 
The Plan is intended to comply with all applicable conditions of Rule 16b-3 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended. All transactions involving the Company’s executive officers are subject
to such conditions, regardless of whether the conditions are expressly set forth
in the Plan. Any provision of the Plan that is contrary to a condition of Rule
16b-3 shall not apply to executive officers of the Company.
 
15.  SEVERABILITY
 
The invalidity or unenforceability of any provision of the Plan or any stock
awarded hereunder shall not affect the validity and enforceability of the
remaining provisions of the Plan and any stock awarded hereunder. The invalid or
unenforceable provision shall be stricken to the extent necessary to preserve
the validity and enforceability of the Plan and the stock awarded hereunder.
 
16.  GOVERNING LAW
 
The Plan shall be governed by the laws of the Commonwealth of Kentucky.