RESTATED BYLAWS OF

                          CHURCHILL DOWNS INCORPORATED


                                    ARTICLE I


                                 OFFICE AND SEAL

                  SECTION 1. OFFICES. The principal office of the Corporation in
the State of  Kentucky  shall be  located  at 700  Central  Avenue,  Louisville,
Kentucky. The Corporation may have such other offices,  either within or without
the State of Kentucky,  as the business of the Corporation may require from time
to time.

                  SECTION 2. THE  CORPORATE  SEAL.  The Seal of the  Corporation
shall be circular in form, mounted upon a metal die suitable for impressing same
upon  paper,  and along the upper  periphery  of the seal shall  appear the word
"Churchill Downs" and along the lower periphery thereof the word "Kentucky". The
center of the seal shall contain the word "Incorporated".


                                   ARTICLE II

                     STOCKHOLDERS MEETINGS AND RECORD DATES

                  SECTION 1. ANNUAL  MEETING.  The date of the annual meeting of
the stockholders  for the purpose of electing  directors and for the transaction
of such other  business as may come before the meeting shall be  established  by
the Board of Directors,  but shall not be later than 180 days  following the end
of the Corporation's fiscal year. If the election of Directors shall not be held
on the day designated for any annual meeting, or at any adjournment thereof, the
Board of Directors  shall cause the election to be held at a special  meeting of
the stockholders to be held as soon thereafter as may be convenient.

                  SECTION 2. SPECIAL   MEETINGS. Special  meetings of the 
stockholders may  be called by holders of not less  than 662/3%  of all  shares
entitled to vote at the meeting, or by a majority of the members of the Board of
Directors.

                  SECTION  3.  PLACE OF  MEETING.  The  Board of  Directors  may
designate  any place  within or without  the State of  Kentucky  as the place of
meeting for any annual  meeting of  stockholders,  or any place either within or
without the State of  Kentucky  as the place of meeting for any special  meeting
called by the Board of Directors.

                  If no designation  is made, or if a special  meeting be called
by other  than the  Board  of  Directors,  the  place  of  meeting  shall be the
principal office of the Corporation in the State of Kentucky.

                  SECTION 4.  NOTICE OF  MEETINGS.  Written  notice  stating the
place,  day and hour of the  meeting  and,  in case of a  special  meeting,  the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) nor more than  sixty  (60) days  before  the date of the  meeting,
either  personally or by mail, by or at the direction of the  President,  or the
Secretary, or the officer or persons

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calling the  meeting,  to each  stockholder  of record  entitled to vote at such
meeting.  If mailed,  such notice shall be deemed to be delivered when deposited
in the United States mail in a sealed  envelope  addressed to the stockholder at
his  address as it appears on the records of the  Corporation,  with first class
postage thereon prepaid.

                  SECTION 5. RECORD DATE. The Corporation's record date shall be
fixed by the Board of Directors for the  determination of stockholders  entitled
to notice of or to vote at a meeting of stockholders,  or stockholders  entitled
to receive any  distribution.  When a determination of stockholders  entitled to
vote at any  meeting of  stockholders  has been made as  provided  herein,  such
determination shall apply to any adjournment thereof.

                  SECTION 6. VOTING LISTS AND SHARE LEDGER.  The Secretary shall
prepare a complete list of the stockholders  entitled to vote at any meeting, or
any adjournment thereof, arranged in alphabetical order, with the address of and
the number of shares held by each stockholder,  which list shall be produced and
kept  open  at the  meeting  and  shall  be  subject  to the  inspection  of any
stockholder  during the  meeting.  The original  share ledger or stock  transfer
book, or a duplicate  thereof kept in this State,  shall be PRIMA FACIE evidence
as to the  stockholders  entitled to examine  such list or share ledger or stock
transfer  book,  or  the  stockholders  entitled  to  vote  at  any  meeting  of
stockholders or to receive any dividend.

                  SECTION  7.  QUORUM.  A  majority  of the  outstanding  shares
entitled to vote,  represented in person or by proxy,  shall constitute a quorum
at any meeting of  stockholders.  The  stockholders  present at a duly organized
meeting can continue to do business at any  adjourned  meeting,  notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.

                  SECTION  8.  PROXIES.  At  all  meetings  of  stockholders,  a
stockholder  may vote by proxy.  An  appointment of a proxy shall be executed in
writing by the  stockholder or by his duly  authorized  attorney-in-fact  and be
filed  with  the  Secretary  of the  Corporation  before  or at the  time of the
meeting.

                  SECTION 9. NATURE OF BUSINESS. At any meeting of stockholders,
only such  business  shall be conducted  as shall have been  brought  before the
meeting by or at the  direction of the Board of Directors or by any  stockholder
who complies with the procedures set forth in this Section 9.

                  No business may be transacted at any meeting of  stockholders,
other than  business  that is either (a)  specified in the notice of meeting (or
any supplement  thereto) given by or at the direction of the Board of Directors,
(b) otherwise  properly brought before such meeting of stockholders by or at the
direction of the Board of Directors, or (c) in the case of any annual meeting of
stockholders or a special meeting called for the purpose of electing  directors,
otherwise  properly  brought before such meeting by any stockholder (i) who is a
stockholder  of record on the date of the giving of the notice  provided  for in
this  Section 9 and on the record  date for the  determination  of  stockholders
entitled to vote at such meeting of stockholders  and (ii) who complies with the
notice procedures set forth in this Section 9.

                  In addition to any other applicable requirements, for business
to  be  properly  brought  before  any  annual  meeting  of  stockholders  by  a
stockholder,  or for a nomination of a person to serve as a Director, to be made
by a  stockholder,  such  stockholder  must have given timely notice  thereof in
proper written form to the Secretary.

                  To be timely, a stockholder's  notice to the Secretary must be
delivered or mailed to and be received at the principal executive offices of the
Corporation (a) in the case of the annual meeting of

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stockholders,  not less than  ninety(90)  nor more than one  hundred  and twenty
(120) days prior to the  anniversary  date of the immediately  preceding  annual
meeting of stockholders;  PROVIDED,  HOWEVER,  that in the event that the annual
meeting of stockholders is called for a date that is not within thirty (30) days
before or after such anniversary date, notice by the stockholder, in order to be
timely,  must be so  received  not later than the close of business on the tenth
(10th) day following  the day on which notice of the date of the annual  meeting
of stockholders was mailed or public  disclosure of the date of such meeting was
made,  whichever  first  occurs;  and (b) in the case of a  special  meeting  of
stockholders  called for the purpose of electing  directors,  not later than the
close of business on the tenth (10th) day  following  the day on which notice of
the date of the special meeting of stockholders was mailed or public  disclosure
of the date of such meeting was made, whichever first occurs.

                  To be in proper  written form, a  stockholder's  notice to the
Secretary  must  set  forth  as to  each  matter  (including  nominations)  such
stockholder  proposes to bring  before the meeting of  stockholders  (a) a brief
description  of the  business  desired to be brought  before the meeting and the
reasons for  conducting  the  business at the  meeting,  (b) the name and record
address  of such  stockholder,  (c) the class or series  and number of shares of
capital stock of the  Corporation  which are owned  beneficially or of record by
such  stockholder as of the record date for the meeting (if such date shall then
have been made publicly available and shall have occurred) and as of the date of
such notice,  (d) a description of all  arrangements or  understandings  between
such  stockholder  and any other  person or persons  (including  their names) in
connection  with the  proposal  of such  business  by such  stockholder  and any
material  interest of such  stockholder in such business,  (e) as to each person
whom the  stockholder  proposes to nominate  for  election as a director (i) the
name,  age,  business  address and residence  address of the person and (ii) the
class or series and number of shares of capital stock of the  Corporation  which
are owned  beneficially or of record by the person as of the record date for the
meeting  (if such date shall then have been made  publicly  available  and shall
have  occurred)  and as of the date of such  notice,  (f) any other  information
which would be required to be  disclosed in a proxy  statement or other  filings
required  to be made in  connection  with the  solicitations  of proxies for the
proposal (including,  if applicable,  with respect to the election of directors)
pursuant to Section 14 of the Securities  Exchange Act of 1934, as amended,  and
the  rules and  regulations  promulgated  thereunder  if such  stockholder  were
engaged in such  solicitation,  and (g) a  representation  that such stockholder
intends to appear in person or by proxy at the  meeting  to bring such  business
before  the  meeting.  Any  notice  concerning  the  nomination  of a person for
election as a director must be accompanied by a written  consent of the proposed
nominee to being named as a nominee and to serve as a director if elected.

         No business  shall be  conducted  and no person  shall be eligible  for
election  as a Director  at any  annual  meeting  of  stockholders  or a special
meeting of  stockholders  called for the  purpose of electing  directors  except
business or  nominations  brought  before such  meeting in  accordance  with the
procedures set forth in this Section 9; PROVIDED,  HOWEVER,  that, once business
has been properly brought before the meeting in accordance with such procedures,
nothing  in this  Section  9 shall  be  deemed  to  preclude  discussion  by any
stockholder of any such business. If the chairman of the meeting of stockholders
determines  that business was not properly  brought  before such  meeting,  or a
nomination  was not properly  made, as the case may be, in  accordance  with the
foregoing  procedures,  the chairman  shall  declare to the meeting that (a) the
business was not properly brought before the meeting and such business shall not
be  transacted,  or, if  applicable,  (b) the  nomination was defective and such
defective nomination shall be disregarded.



                                 Page 44 of 195

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                                   ARTICLE III

                                    DIRECTORS

                  SECTION 1. GENERAL POWERS.  The business  and affairs of the 
Corporation shall be managed by a Board of Directors.

                  SECTION 2. NUMBER AND  TENURE.  The Board of  Directors  shall
consist of thirteen (13) members but the number may be increased or decreased by
amendment of this Bylaw.  The  Directors  shall be divided  into three  classes,
consisting  of four (4) Class I Directors,  four (4) Class II Directors and five
(5) Class III Directors. Each director shall hold office for a term of three (3)
years or until his  successor  shall have been  elected  and  qualifies  for the
office,  whichever period is longer. Except for any individual who is serving as
Chairman of the Board of Directors at the time of  nomination  of  directors,  a
person shall not be qualified for election as a Director unless he shall be less
than seventy-two (72) years of age on the date of election.  Each Director other
than the  Chairman of the Board of Directors  shall  become a Director  Emeritus
upon expiration of his current term following the date the Director is no longer
qualified for election as a Director due to age.  Directors  Emeritus may attend
all regular and special meetings of the Board of Directors and shall serve in an
advisory capacity without a vote in Board actions.

                  SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw, immediately after,
and at the same  place as,  the annual  meeting  of  stockholders.  The Board of
Directors  may provide,  by  resolution,  the time and place,  either  within or
without the State of Kentucky,  for the holding of additional  regular  meetings
without other notice than such resolution.

                  SECTION 4. SPECIAL MEETINGS.  Special meetings of the Board of
Directors may be called by or at the request of the  President,  the Chairman of
the Board or the  majority  of the Board of  Directors.  The  person or  persons
authorized to call special meetings of the Board of Directors may fix any place,
either  within or without  the State of  Kentucky,  as the place for holding any
special meeting of the Board of Directors.

                  SECTION 5. NOTICE.  Notice of any special meeting of the Board
of  Directors  shall  be given  by  notice  delivered  personally,  by mail,  by
telegraph or by telephone.  If mailed,  such notice shall be given at least five
(5) days  prior  thereto  and such  mailed  notice  shall be deemed to have been
delivered  upon the earlier of receipt or five (5) days after it is deposited in
the United  States  mail in a sealed  envelope  so  addressed,  with first class
postage thereon prepaid.  If notice is given by telegram,  it shall be delivered
at least  twenty-four  (24) hours prior to the special meeting and such telegram
notice shall be deemed to have been  delivered when the telegram is delivered to
the telegraph company. Personal notice and notice by telephone shall be given at
least  twenty-four  (24) hours prior to the special  meeting and shall be deemed
delivered  upon  receipt.  Any Director  may waive  notice of any  meeting.  The
attendance of a Director at any meeting  shall  constitute a waiver of notice of
such meeting,  except when a Director  attends a meeting for the express purpose
of  objecting  to the  transaction  of any  business  because the meeting is not
lawfully  called or convened.  Neither the business to be transacted at, nor the
purpose of, any  regular or special  meeting of the Board of  Directors  need be
specified in the notice or waiver of notice of such meeting.

                  SECTION 6. QUORUM.  A majority of the Board of Directors shall
constitute a quorum for the  transaction of business at any meeting of the Board
of Directors, provided that if less than a majority of the Directors are present
at said  meeting,  a majority of the  Directors  present may adjourn the meeting
from

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time to time without further notice.

                  SECTION 7. MANNER OF ACTING. The act  of the majority of  the
Directors present at a meeting at which a quorum is present shall be the act of 
the Board of Directors.

                  SECTION 8.  VACANCIES.  Any vacancy  occurring in the Board of
Directors may be filled by the  affirmative  vote of a majority of the remaining
Directors  though  less  than a quorum  of the Board of  Directors.  A  Director
elected  to fill a vacancy  shall  serve  until the next  annual  meeting of the
stockholders.

                  SECTION 9. INFORMAL  ACTION.  Any action required or permitted
to be taken of the Board of  Directors  or of a committee  of the Board,  may be
taken without a meeting if a consent, in writing,  setting forth action so taken
shall be signed by all of the Directors, or all of the members of the committee,
as the  case  may  be.  Members  of the  Board  of  Directors  or any  committee
designated by the Board may  participate in a meeting of such Board or committee
by means of conference telephone or similar communications equipment whereby all
persons participating in the meeting can hear or speak to each other at the same
time.  Participation  in a meeting  pursuant to this  section  shall  constitute
presence in person at the meeting.

                  SECTION 10.  NOMINATION  OF  DIRECTORS.  Only  persons who are
nominated in accordance with the procedures set forth in Section 9 of Article II
of these Bylaws shall be eligible for election as Directors of the  Corporation,
except as may be otherwise  provided in the Restated  Articles of  Incorporation
with respect to the right of holders of preferred  stock of the  Corporation  to
nominate and elect a specified number of Directors in certain circumstances.

                                   ARTICLE IV

                             COMMITTEES OF THE BOARD

                  SECTION  1.  COMMITTEES.  The Board of  Directors  shall  have
authority  to  establish  such  committees  as  it  may  consider  necessary  or
convenient for the conduct of its business.  All committees so established shall
keep minutes of every meeting thereof and such minutes shall be submitted at the
next regular meeting of the Board of Directors at which a quorum is present, and
any  action  taken by the Board  with  respect  thereto  shall be entered in the
minutes of the Board.  Each committee so  established  shall elect a Chairman of
the  committee.  On all  committees  where  the  Chairman  of the  Board  is not
appointed as a voting member,  the Chairman of the Board shall be an ex officio,
nonvoting member of that committee.

                  SECTION 2. THE  EXECUTIVE  COMMITTEE.  The Board of  Directors
shall  appoint and  establish an Executive  Committee  composed of up to six (6)
Directors who shall be appointed by the Board annually.  The Executive Committee
shall have and may exercise  when the Board of Directors is not in session,  all
of the  authority  of the Board of  Directors  that may  lawfully be  delegated;
provided,  however,  the Executive  Committee  shall not have the power to enter
into any employment  agreement with an officer of the  Corporation,  without the
specific  approval and  ratification  of the Board of  Directors.  A majority in
membership of the Executive Committee shall constitute a quorum.

                  SECTION 3. THE AUDIT  COMMITTEE.  The Board of Directors shall
appoint and establish an Audit  Committee  composed of up to four (4) Directors,
none of whom shall be officers,  who shall be  appointed by the Board  annually.
The Audit  Committee  shall make an  examination  every  twelve  months into the
affairs of the Corporation and report the results of such examination in writing
to the Board of

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Directors  at the next  regular  meeting  thereafter.  Such  report  shall state
whether the  Corporation  is in sound  condition and whether  adequate  internal
audit  controls  and   procedures   are  being   maintained  and  shall  include
recommendations  to the Board of Directors  regarding such changes in the manner
of doing  business  or  conducting  the affairs of the  Corporation  as shall be
deemed advisable.

                  SECTION 4. THE COMPENSATION COMMITTEE.  The Board of Directors
shall appoint and establish a Compensation  Committee to be composed of four (4)
Directors  who shall be  appointed  by the Board  annually.  Each  member of the
Compensation Committee shall be a director who is not, during the one year prior
to service or during such service, granted or awarded equity securities pursuant
to any executive  compensation plan of the Company.  It shall be the duty of the
Compensation Committee to administer the Company's Supplemental Benefit Plan[s],
the  Company's  Incentive  Compensation  Plan[s],  the  Company's  Stock  Option
Plan[s],  any executive  compensation plan and any shareholder approved employee
stock purchase or thrift plan, including without limitation, matters relating to
the amendment,  administration,  interpretation,  employee  eligibility  for and
participation  in, and termination of, the foregoing  plans. It shall further be
the duty of the Compensation Committee to review annually the salary paid to the
President and Chief  Executive  Officer of the Company and to exercise any other
authorities relating to compensation that the Board may lawfully delegate to it;
provided,  however, the Compensation Committee shall not have the power to enter
into any  employment  agreement  with an  officer  of the  Company  without  the
specific approval and ratification of the Board of Directors.

                  SECTION 5. THE RACING COMMITTEE.  The Board of Directors shall
appoint  and  establish  a Racing  Committee  to be  composed  of up to four (4)
Directors  who shall be appointed by the Board  annually.  The Racing  Committee
shall  be  responsible  for  and  shall  have  the  authority  to  obligate  the
Corporation with respect to matters  concerning the Corporation's  contracts and
relations with horsemen,  jockeys and others providing  services relating to the
conduct of horse  racing,  including  the  authority  to  approve  and cause the
Corporation  to enter into contracts with  organizations  representing  horsemen
and/or commit to provide benefits or services by the Corporation to horsemen and
others.

                  SECTION  6.  NOTICE  OF  COMMITTEE  MEETINGS.  Notice  of  all
meetings  by the  committees  established  in this  Article  shall  be  given in
accordance with the special meeting notice section,  Article III,  Section 5, of
these Bylaws.

                                    ARTICLE V

                                    OFFICERS

                  SECTION 1. CLASSES. The officers of the Corporation shall be a
Chairman of the Board, a President,  one or more Vice Presidents, a Secretary, a
Treasurer and such other officers and agents as may be provided by the Board and
elected in accordance  with the  provisions of this Article.  Any of the offices
may be combined in one person in  accordance  with the  provisions  of law.  The
Chairman  of the Board of  Directors  shall be a member of the Board but none of
the other officers is required to be a member of the Board.

                  SECTION 2.  ELECTION  AND TERM OF OFFICE.  The officers of the
Corporation  shall be elected  annually by the Board of  Directors  at the first
meeting  of the Board held after each  annual  meeting of  stockholders.  If the
election of officers  shall not be held at such meeting,  such election shall be
held as soon  thereafter as  convenient.  Vacancies may be filled or new offices
created and filled at any meeting of the Board of Directors.  Each officer shall
hold office until his successor shall have been duly

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elected and shall have  qualified or until his death or until he shall resign or
shall have been removed from office in the manner hereinafter provided.

                  SECTION  3.  REMOVAL.  Any  officer  elected  by the  Board of
Directors  may be removed by the  President  whenever in his  judgment  the best
interest of the Corporation  would be served thereby,  but such removal shall be
without  prejudice to the contract rights,  if any, of the person so removed and
shall be subject  always to  supervision  and control of the Board of Directors.
Election  or  appointment  of an  officer  or agent  shall not of itself  create
contractual rights.

                  SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall call to order and preside at all  stockholders'  meetings and at
all meetings of the Board of Directors. He shall perform such other duties as he
may be authorized to perform by the Board of Directors.

                  SECTION  5.  PRESIDENT.  The  President  shall  be  the  chief
executive  officer of the Corporation and as such shall in general supervise and
control all of the business  operations and affairs of the  Corporation.  In the
absence of the Chairman of the Board of Directors,  or in the event of the death
or  incapacity of the  Chairman,  the President  shall perform the duties of the
Chairman  until a successor  Chairman is elected or until the  incapacity of the
Chairman terminates.  The President shall have full power to employ and cause to
be employed and to discharge  and cause to be  discharged  all  employees of the
Corporation,  subject  always  to  supervision  and  control  of  the  Board  of
Directors.  When authorized so to do by the Board of Directors, he shall execute
contracts  and other  documents  for and in behalf  of the  Corporation.  Unless
otherwise ordered by the Board of Directors, the President shall have full power
and  authority  on  behalf of the  Corporation  to  attend,  act and vote at any
meeting of stockholders  of any  corporation in which this  Corporation may hold
stock.  He shall perform such other duties as may be specified in the Bylaws and
such other duties as he may be authorized to perform by the Board of Directors.

                  SECTION 6. EXECUTIVE VICE PRESIDENT.  In the case of the death
of the  President or in the event of his  inability to act, the  Executive  Vice
President designated by the Board shall perform the duties of the President and,
when so acting,  shall have all the powers of and be subject to all restrictions
upon the President. The Executive Vice President shall perform such other duties
as from  time to time  may be  assigned  by the  President  or by the  Board  of
Directors.

                  SECTION 7. TREASURER. The Treasurer, subject to the control of
the Board of  Directors,  and together  with the  President,  shall have general
supervision of the finances of the  Corporation.  He shall have care and custody
of and be responsible for all moneys due and payable to the Corporation from any
source whatsoever and deposit such moneys in the name of the Corporation in such
banks,  trust companies or other depositories as shall be selected in accordance
with the provisions of these Bylaws.  The Treasurer  shall have the care of, and
be responsible for all securities,  evidences of value and corporate instruments
of  the  Corporation,  and  shall  supervise  the  officers  and  other  persons
authorized  to bank,  handle and  disburse  its funds,  informing  himself as to
whether  all  deposits  are or have  been duly  made and all  expenditures  duly
authorized  and evidenced by proper  receipts and vouchers.  He shall cause full
and accurate books to be kept, showing the transactions of the Corporation,  its
accounts,  assets, liabilities and financial condition, which shall at all times
be open to the inspection of any Director,  and he shall make due reports to the
Board of Directors and the stockholders,  and such statements and reports as are
required of him by law.  Subject to the Board of  Directors,  he shall have such
other powers and duties as are incident to his office and not inconsistent  with
the Bylaws, or as may be assigned to him at any time by the Board.

                  SECTION 8. SECRETARY. The Secretary shall attend all meetings 
of the Board of Directors,  make a record of the business transacted  and


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record same in one or more  books kept for that  purpose.  The  Secretary  shall
see that the  StockTransfer  Agent  of the  Corporation  keeps  proper  records
of all  transfers, cancellations  and reissues of  stock of  the Corporation and
shall keep a list of the stockholders of the Corporation in alphabetical  order
showing  the  Post  Office  address  and  number  of  shares owned by each. The 
Secretary shall also keep and  have custody of the seal of the Corporation  and 
when so  directed  and authorized  by the Board of  Directors shall  affix  such
seal to  instruments requiring same. The  Secretary  shall  be  responsible for
authenticating records of the  Corporation  and shall perform such other duties
as may be specified in the Bylaws or as he may be authorized to perform  by  the
Board of Directors.

                  SECTION  9.  VICE  PRESIDENTS.  There may be  additional  Vice
Presidents   elected   by  the  Board  of   Directors   who   shall   have  such
responsibilities,  powers and duties as from time to time may be assigned by the
President or by the Board of Directors.

                                   ARTICLE VI


                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

                  SECTION 1.  CONTRACTS AND  AGREEMENTS.  The Board of Directors
may  authorize  any  officer or  officers,  agent or  agents,  to enter into any
contract or agreement or execute and deliver any  instruments in the name of and
on behalf of the  Corporation,  and such authority may be general or confined to
specific instances.

                 SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation, and no evidences of indebtedness shall be issued in its name unless
authorized  by  a  resolution of  the  Board of Directors. Such authority may be
general or confined to specific instances.

                  SECTION 3. CHECKS,  DRAFTS, ORDERS, ETC. All checks, drafts or
other orders for the payment of money,  notes or other evidences of indebtedness
issued  in the  name of the  Corporation  shall be  signed  by such  officer  or
officers,  agent or agents,  of the Corporation and in such manner as shall from
time to time be determined by resolution of the Board of Directors.

                  SECTION  4.  DEPOSITS.   All  funds  of  the  Corporation  not
otherwise  employed  shall be  deposited  from time to time to the credit of the
Corporation in such banks,  trust companies,  or other depositories as the Board
of Directors may select.

                                   ARTICLE VII

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

                  SECTION 1. CERTIFICATES FOR SHARES.  Certificates representing
shares  of the  Corporation  shall be in such form as may be  determined  by the
Board of Directors.  Such certificates  shall be signed by the President or Vice
President and by the Secretary or an assistant  Secretary and may be sealed with
the seal of the Corporation of a facsimile thereof. All certificates surrendered
to the Corporation for transfer shall be canceled,  and no new certificate shall
be issued until the former  certificate for all like number of shares shall have
been  surrendered  and  cancelled,  except that in case of a lost,  destroyed or
mutilated  certificate,  a new one may be issued  therefor  upon such  terms and
indemnity to the Corporation as the Board of Directors may prescribe.


                                 Page 49 of 195

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                  SECTION  2.  TRANSFER  OF  SHARES.  Transfer  of shares of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof or by his attorney  authorized by power of attorney duly executed
and  filed  with  the  Secretary  of  the  Corporation,  and  on  surrender  for
cancellation of the certificate for such shares. The person in whose name shares
stand on the books of the Corporation  shall be deemed the owner thereof for all
purposes as regards the Corporation.

                                  ARTICLE VIII

                                   FISCAL YEAR

                  The fiscal year of the Corporation  shall begin on the 1st day
of January and end on the 31st day of December.

                                   ARTICLE IX

                                WAIVER OF NOTICE

                  Whenever  any  notice  is  required  to  be  given  under  the
provisions  of  these  Bylaws,  or  under  the  provisions  of the  Articles  of
Incorporation,  or under the provisions of the corporation  laws of the State of
Kentucky,  waiver thereof in writing, signed by the person, or persons, entitled
to such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.

                                    ARTICLE X

                    INDEMNIFICATIONR OF OFFICERS AND DIRECTORS

                  The Corporation  shall  indemnify and may advance  expenses to
all Directors,  officers,  employees,  or agents of the  Corporation,  and their
executors, administrators or heirs, who are, were or are threatened to be made a
defendant or respondent to any threatened,  pending or completed action, suit or
proceedings (whether civil, criminal, administrative or investigative) by reason
of the fact  that he is or was a  Director,  officer,  employee  or agent of the
Corporation, or while a Director, officer, employee or agent of the Corporation,
is or was serving the  Corporation  or any other legal entity in any capacity at
the request of the Corporation (hereafter a "Proceeding"), to the fullest extent
that is expressly  permitted or required by the statutes of the  Commonwealth of
Kentucky and all other applicable law.

                  In addition to the foregoing, the Corporation shall, by action
of the Board of Directors,  have the power to indemnify and to advance  expenses
to all Directors, officers, employees or agents of the Corporation who are, were
or are  threatened to be made a defendant or respondent  to any  Proceeding,  in
such amounts,  on such terms and  conditions,  and based upon such  standards of
conduct as the Board of  Directors  may deem to be in the best  interests of the
Corporation.

                                   ARTICLE XI

                                 FIDELITY BONDS

                  The Board of  Directors  shall have  authority  to require the
execution of fidelity bonds by all or any of the officers,  agents and employees
of the  Corporation in such amount as the Board may  determine.  The cost of any
such bond shall be paid by the Corporation as an operating expense.

                                 Page 50 of 195

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                                   ARTICLE XII

                               AMENDMENT OF BYLAWS

                  The Board of  Directors  may  alter,  amend or  rescind  these
Bylaws,  subject  to the right of the  stockholders  to  repeal  or modify  such
actions.


                                 Page 51 of 195
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