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                       AMENDMENT NO. 2 TO RIGHTS AGREEMENT
          Amendment No. 2 to Rights  Agreements,  dated as of June 23, 2000, by
and  between  CHURCHILL  DOWNS   INCORPORATED,   a  Kentucky   corporation  (the
"Company"),  and FIFTH THIRD BANK, as Rights Agent (the "Rights Agent").

          WHEREAS,  the Board of  Directors  of the Company has  authorized  the
execution  and delivery by the Company of an Agreement  and Plan of Merger dated
of as of June 23,  2000 by and among  the  Company,  A.  Acquisition  Corp.,  an
Illinois  corporation  and a direct or indirect  wholly owned  subsidiary of the
Company ("A Sub"), A. Management  Acquisition Corp., an Illinois corporation and
a direct or indirect  wholly  owned  subsidiary  of the  Company ("A  Management
Sub"),  T. Club  Acquisition  Corp.,  an  Illinois  corporation  and a direct or
indirect  wholly  owned  subsidiary  of the Company  ("T Club  Sub"),  Arlington
International Racecourse,  Inc., an Illinois corporation ("A Corp."), Arlington
Management Services,  Inc., an Illinois corporation ("A Management Corp."), Turf
Club of Illinois,  Inc.,  an Illinois  corporation  ("T Club"),  and  Duchossois
Industries,  Inc.,  an  Illinois  corporation  ("D  Corp.")  and  in  connection
therewith  the Board has  determined in good faith that certain  amendments  set
forth to the Rights Agreement dated as of March 19, 1998 between the Company and
Bank of Louisville  as the initial  Rights Agent,  as heretofore  amended,  (the
"Rights  Agreement")  are  desirable  and,  pursuant to Section 26 of the Rights
Agreement has duly authorized such  amendments to the Rights  Agreement.  A duly
authorized  officer of the Company has executed and delivered this Amendment No.
2 to Rights Agreement (the "Amendment").

          WHEREAS,  Fifth Third Bank has  succeeded  the Bank of  Louisville  as
Rights Agent.

          NOW THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereby  agree as
follows:

          1.    CERTAIN DEFINITIONS.  For  purposes  of  this  Amendment,  terms
which are capitalized but not defined herein and which are defined in the Rights
Agreement shall have the meanings ascribed to them in the Rights Agreement.

          2.    AMENDMENT TO SECTION 1 OF THE RIGHTS AGREEMENT. Section 1 of the
Rights Agreement is hereby amended to add the following definitions:

          "A Corp." shall mean  Arlington  International  Racecourse,  Inc.,  an
Illinois corporation.

          "A Sub" shall mean A. Acquisition Corp, an Illinois  corporation and a
direct or indirect wholly owned subsidiary of the Company.

          "A Management Corp." shall mean Arlington Management  Services,  Inc.,
an Illinois corporation.

          "A  Management  Sub"  shall mean A. Management  Acquisition  Corp,  an
Illinois  corporation  and a direct or indirect  wholly owned  subsidiary of the
Company.



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          "D  Corp."  shall  mean  Duchossois  Industries,   Inc.,  an  Illinois
corporation.

          "D Corp.  Shareholders" shall mean the record and beneficial owners of
the shares of voting securities of D Corp.

          "Mergers"  shall mean the  merger of A Sub with and into A Corp.,  the
merger of A Management Sub with and into A Management  Corp. and the merger of T
Club Sub with and into T Club pursuant to the Merger Agreement.

          "Merger  Agreement"  shall mean the Agreement and Plan of Merger dated
as of June 23, 2000 by and among the Company,  A Sub, A  Management  Sub, T Club
Sub, A Corp., A Management Corp., T Club and D Corp., as the same may be amended
from time to time in accordance with its terms.

          "T Club" shall mean Turf Club of Illinois, Inc., an Illinois
          corporation.

          "T Club Sub" shall mean T. Club Acquisition Corp., an
          Illinois corporation and a direct or indirect wholly owned
          subsidiary of the Company.

          "Voting  Agreement"  shall mean the Voting  Agreement dated as of June
23, 2000 by and among D. Corp.,  Richard L. Duchossois and certain  Directors of
the Company.

          3.     RESTATEMENT  OF THE  DEFINITION OF "ACQUIRING  PERSON".     The
definition of "Acquiring  Person" set forth in Section 1 of the Rights Agreement
is hereby deleted in its entirety and replaced with the following definition:

          "ACQUIRING PERSON" shall mean a Person who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then  outstanding  but shall not include (a)
the Company,  any  Subsidiary of the Company,  any employee  benefit plan of the
Company or of any of its  Subsidiaries,  or any Person holding Common Shares for
or pursuant to the terms of such  employee  benefit plan, or (b) any such Person
who has become and is such a Beneficial  Owner solely  because (i) of any change
in aggregate  number of Common Shares  outstanding  since the last date on which
such  Person  acquired  Beneficial  Ownership  of any  Common  Shares or (ii) it
acquired  such  Beneficial   Ownership  in  the  good  faith  belief  that  such
acquisition would not (A) cause such Beneficial Ownership to equal or exceed 15%
of the Common  Shares then  outstanding  and such Person relied in good faith in
computing the percentage of its  Beneficial  Ownership on publicly filed reports
or documents of the Company which are inaccurate or out of date or (B) otherwise
cause a  Distribution  Date or the  adjustment  provided for in Section 11(a) to
occur.  Notwithstanding clause (b)(ii) of the prior sentence, if any Person that
is not an  Acquiring  Person  due to such  clause  (b)(ii)  does not  reduce its
percentage  of  Beneficial  Ownership  of Common  Shares to less than 15% by the
Close of Business on the fifth  Business  Day after notice from the Company (the
date of notice being the first day) that such Person's  Beneficial  Ownership of
Common Shares so equals or exceeds 15%,  such Person  shall,  at the end of such
five Business Day period,  become an Acquiring  Person (and such clause  (b)(ii)
shall no longer  apply to such  Person).  For purposes of this  definition,  the
determination


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whether any Person acted in "good faith" shall be conclusively determined by the
Board of Directors of the Company.  Notwithstanding  the foregoing,  (i) D Corp.
shall only be an  Acquiring  Person  when D Corp.,  alone or  together  with all
Affiliates and Associates of D Corp., shall be the Beneficial Owner of more than
31% of the Common  Shares then  outstanding  (after  including the Common Shares
acquired, or subject to acquisition,  by D Corp. under or pursuant to the Merger
Agreement)  plus the Common Shares subject to the Voting  Agreement and (ii) a D
Corp. Shareholder shall only become an "Acquiring Person" when D Corp. and the D
Corp.  Shareholders,  alone or together with all  Affiliates and Associates of D
Corp. and the D Corp.  Shareholders,  shall be the Beneficial Owner of more than
31% of the Common  Shares then  outstanding  (after  including the Common Shares
acquired, or subject to acquisition,  by D Corp. under or pursuant to the Merger
Agreement) plus the Common Shares subject to the Voting Agreement (the foregoing
sentence  referred to herein as the "D Corp.  Exclusion").  The  percentages set
forth in the immediately  preceding  sentence as the D Corp.  Exclusion shall be
automatically  reduced  from time to time,  but in no event to less than 15%, to
that percentage of the then outstanding Common Shares Beneficially Owned by such
Person,  alone or together with all  Affiliates and Associates of such Person as
determined  pursuant to the  immediately  preceding  sentence,  but only if such
percentage  is less than the  percentage of the then  outstanding  Common Shares
Beneficially  Owned by such Person,  alone or together with all  Affiliates  and
Associates of such person, as of the effective time of the Mergers.

          4.     ADDITION  OF  SECTION  33  OF  RIGHTS  AGREEMENT.    The Rights
Agreements  is hereby  amended to add  thereto  Section  33,  which reads in its
entirety as follows:

          Section  33. The Merger  Agreement.  Notwithstanding  anything in this
Rights Agreement to the contrary,  and subject to the scope and applicability of
the D Corp.  Exclusion,  no Distribution  Date shall be deemed to have occurred,
neither D Corp.  nor any D Corp.  Shareholder or any Affiliate or Associate of D
Corp.  shall be deemed to have become an Acquiring Person or have any obligation
under this Rights  Agreement,  and no holder of any Rights  Certificate shall be
entitled to exercise the Rights  evidenced  thereby under, or be entitled to any
rights or benefits  pursuant to, this Rights Agreement in each case by reason of
(a)  the  approval,  execution  or  delivery  of the  Merger  Agreement,  or (b)
consummation of any of the transactions contemplated thereby, including, without
limitation, the Mergers.

          5.     EFFECTIVENESS.   The Amendment  shall be  effective  as of June
23,  2000 as  if  executed  by both  parties on such date.  Except as  expressly
amended by this Amendment,  the Rights  Agreement shall remain in full force and
effect.

          6.     GOVERNING  LAW.   This  Amendment   shall   be  deemed  to be a
contract  under the laws of the  Commonwealth  of Kentucky  and for all purposes
shall be governed by, construed and enforced in accordance with the laws of such
State  applicable  to contracts to be made and  performed  entirely  within such
State.

          7.     COUNTERPARTS.   This  Amendment  may  be executed in any number
of counterparts and each of such  counterparts  shall for all purposes be deemed
to be an original,  and all such counterparts shall together  constitute but one
and the same instrument.

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          8.     SEVERABILITY.   If any term, provision, covenant or restriction
of this  Amendment  is  held  by a court  of  competent  jurisdiction  or  other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and  restrictions  of this Amendment shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

          9.     DESCRIPTIVE  HEADINGS.   Descriptive  headings  of  the several
Sections of this  Amendment  are  inserted  for  convenience  only and shall not
control or affect the meaning or  construction  of any of the provisions of this
Amendment.


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          IN WITNESS  WHEREOF,  the parties hereto have caused this Amendment to
be duly executed as of the day and year first above written.

                                  CHURCHILL DOWNS INCORPORATED


                                  By:   /S/ ROBERT L. DECKER
                                  Title: Robert L. Decker, Executive Vice
                                         President and Chief Financial Officer


FIFTH THIRD BANK, as Rights Agent


By:      /S/ GEOFFREY D. ANDERSON
Title:   Assistant Vice President




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