AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                         OF CHURCHILL DOWNS INCORPORATED

                                    ARTICLE I

                                      NAME


              The name of the corporation shall be Churchill Downs
                                 Incorporated.

                                   ARTICLE II


                               PURPOSE AND POWERS


         The nature of the business to be conducted by the  corporation  and its
objects  and  purposes  shall  be the  improvement  of  livestock,  particularly
thoroughbred  horses,  by  giving  exhibitions  of  contests  of speed and races
between horses for premiums,  purses and other awards. In the furtherance and in
the accomplishment of the objects and purposes enumerated, the corporation shall
have the power to establish,  maintain,  purchase or otherwise  acquire suitable
race  tracks  located in or  without  the  Commonwealth  of  Kentucky,  with all
necessary  buildings and  improvements  and land for the purpose of establishing
race tracks; to give or conduct on said race tracks public  exhibitions of speed
or races between horses for premiums,  purses and other awards made up from fees
or  otherwise,  and to charge the public for  admission  thereto and to the said
race tracks;  to engage in the  registering  of bets on  exhibitions of speed or
races at paid race tracks and  premises in such manner as may be  authorized  or
permitted by law; to operate  restaurant,  cafes,  lunch counters and stands for
the sale of food and other refreshments to persons on said premises; to purchase
and hold title to such real estate as may be necessary or deemed to be necessary
to fully carry out the several purposes for which the corporation is formed;  to
borrow money and give security therefor; to acquire,  hold, mortgage,  pledge or
dispose of the shares, bonds,  securities and other evidences of indebtedness of
any domestic or foreign corporation and the securities issued by the corporation
and the  securities  issued  by the  United  States  or by the  Commonwealth  of
Kentucky or any governmental  subdivision  thereof to adopt through its Board of
Directors  a  corporate  seal and to alter name at the  pleasure of the Board of
Directors;  to make bylaws through its Board of Directors not inconsistent  with
the law; and to transact any or all lawful business for which  corporations  may
be incorporated.

         The corporation  shall have the power to purchase shares of the capital
stock of the  corporation  to the extent of unreserved and  unrestricted  earned
surplus and capital surplus of the corporation.

                                   ARTICLE III


                                    DURATION


         The corporation shall have perpetual existence.

                                 Page 30 of 195

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                                   ARTICLE IV


                           REGISTERED OFFICE AND AGENT


         Until  otherwise  designated  as provided by law, the location and Post
Office address of the  registered  office of the  corporation  and its principal
place of business shall be:

                               700 Central Avenue
                           Louisville, Kentucky 40208

                                    ARTICLE V


                                REGISTERED AGENT


         Until otherwise designated as provided by law, the name and Post Office
address of the authorized  agent of the  corporation  upon whom process shall be
served shall be:

                              Alexander M. Waldrop
                               700 Central Avenue
                           Louisville, Kentucky 40208

                                   ARTICLE VI


                                 DEBT LIMITATION


         There  shall  be no limit  on the  amount  of  indebtedness  which  the
corporation may incur.

                                   ARTICLE VII


                                  CAPITAL STOCK


         The  corporation  shall be  authorized  to issue  20,000,000  shares of
common  stock of no par  value  (the  "Common  Stock"),  and  250,000  shares of
preferred stock of no par value in such series and with such rights, preferences
and  limitations,  including  voting  rights,  as the  Board  of  Directors  may
determine (the "Preferred Stock").

         A. THE COMMON STOCK. Shares of the Common Stock may be issued from time
to time as the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.


                                 Page 31 of 195

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         B.       THE PREFERRED STOCK.


                  1.  Shares of the  Preferred  Stock may be issued from time to
time in one or more series as may from time to time be  determined  by the Board
of Directors of the corporation. Each series shall be distinctly designated. All
shares  of any one  series  of the  Preferred  Stock  shall  be  alike  in every
particular,  except that there may be different  dates from which  dividends (if
any) thereon shall be cumulative, if made cumulative.  The relative preferences,
participating,  optional  and other  special  rights of each  such  series,  and
limitations  thereof,  if any, may differ from those of any and all other series
at any time  outstanding.  The Board of Directors of the  corporation  is hereby
expressly granted authority to fix by resolution or resolutions adopted prior to
the issuance of any shares of each particular series of the Preferred Stock, the
designation,  relative  preferences,  participating,  optional and other special
rights and limitations  thereof,  if any, of such series,  including but without
limiting the generality of the foregoing, the following:

                      [a]    The distinctive designation of, and the number of 
shares of the Preferred Stock which shall  constitute  the series,  which number
may be  increased  (except asotherwise  fixed by the  Board of  Directors)  or 
decreased  (but not below the number of shares  thereof then  outstanding)  fro
time to time by action of the Board of Directors;

                      [b]    The rate and times at which, and the terms and
conditions upon which dividends, if any, on shares of the series may be paid,
the extent of preference or  relation,  if any, of such  dividend to the
dividends  payable on any othe class or classes of stock of the corporation,
or on any series of the Preferred Stock  or of any  other  class of stock of the
corporation, and whether such dividends shall be cumulative or non-cumulative;

                      [c]    The right, if any, of the holders of shares of the
series to convert the same into, or exchange  the same for,  shares of any othe
class or classes of stock of the corporation,  or of  any  series  of the
Preferred Stock and  the  terms and conditions of such conversion or exchange;

                      [d]    Whether shares of the series shall be subject to
redemption and the redemption price or prices and the time or times at which,
and the terms and conditions upon which shares of the series may be redeemed;

                      [e]    The rights, if any, of the holders of shares of the
series upon voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding up of the corporation;

                      [f]    The terms of the sinking fund or redemption or
purchase account, if any, to be provided for shares of the series; and 

                      [g]    The voting powers, if any, of the holders of shares
of the series which may, without limiting the generality of the foregoing,
include the right, voting as a series by itself or  together with  other  series
of the Preferred Stock as a class,  to vote more or less than one vote per share

                                 Page 32 of 195

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on any or all matters voted upon by the stockholders  and to elect one or more 
directors of the  corporation in the event  there shall have been a default in 
the  payment of  dividends on any one or more series of the Preferred Stock or 
under such other circumstances and upon such conditions as the Board of
Directors may fix.

         C.       OTHER PROVISIONS.
                  1. The relative  preferences,  rights and  limitations of each
Series of Preferred Stock in relation to the preferences, rights and limitations
of each other series of Preferred  Stock shall,  in each case,  be as fixed from
time to time by the Board of Directors in the resolution or resolutions  adopted
pursuant to  authority  granted in this Article VII, and the consent by class or
series vote or otherwise,  of the holders of the Preferred  Stock of such of the
series of the Preferred Stock as are from time to time outstanding  shall not be
required  for the  issuance  by the Board of  Directors  of any other  series of
Preferred Stock whether the preferences and rights of such other series shall be
fixed by the  Board  of  Directors  as  senior  to,  or on a  parity  with,  the
preferences and rights of such  outstanding  series,  or any of them;  provided,
however,  that  the  Board  of  Directors  may  provide  in such  resolution  or
resolutions  adopted  with  respect  to any series of  Preferred  Stock that the
consent of the holders of a majority  (or such  greater  proportion  as shall be
therein fixed) of the outstanding  shares of such series voting thereon shall be
required for the issuance of any or all other Series of Preferred Stock.

                  2.  Subject  to  the  provisions  of  Subparagraph  1 of  this
Paragraph C, shares of any series of Preferred  Stock may be issued from time to
time as the Board of Directors  shall  determine  and on such terms and for such
consideration as shall be fixed by the Board of Directors.

                                  ARTICLE VIII

                          VOTING RIGHTS OF COMMON STOCK

         In stockholders' meetings each holder of Common Stock shall be entitled
to one vote for each share of Common Stock  standing in his name on the books of
the corporation, except that in the election of directors, each holder of Common
Stock shall have as many votes as results from  multiplying the number of shares
held by him by the number of directors to be elected.  Such votes may be divided
among the total  number of  directors  to be  elected or  distributed  among any
lesser number in such proportion as the holder may determine.

         The  presence in person or by proxy of the holders of a majority of the
outstanding  Common Stock of the  corporation  shall  constitute a quorum at all
stockholders' meetings.

                                   ARTICLE IX

                                PREEMPTIVE RIGHTS

         No holder of any shares of Common Stock of the corporation, whether now
or  hereafter  authorized,  issued  or  outstanding,  shall  be  entitled  to  a
preemptive   right  to  acquire   unissued  or  treasury  shares  or  securities
convertible  into such  shares or  carrying a right to  subscribe  to or acquire
shares or any rights or options to purchase shares of the corporation.

                                 Page 33 of 195

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                                    ARTICLE X

                                    DIRECTORS

         The  business  and  affairs of the  corporation  shall be managed by or
under the direction of a Board of Directors consisting of not less than nine (9)
nor more than  twenty-five  (25) directors,  the exact number of directors to be
determined  by  affirmative  vote of a majority of the entire Board of Directors
except that at the time this new Articles X is adopted,  the number of directors
shall be fixed at  seventeen  (17).  The  directors  shall be divided into three
classes,  designated  Class I, Class II and Class III. Each class shall consist,
as  nearly  as  possible,   of  one-third  of  the  total  number  of  directors
constituting the entire Board of Directors.

         At  the  1984  annual  meeting  of  stockholders,  the  seventeen  (17)
directors  elected  will  not be  elected  to a  specific  class  of  directors.
Following the 1984 annual meeting of  stockholders,  the Board of Directors will
initially  determine  which  directors  will be designated and serve as Class I,
Class II and Class III directors,  respectively.  Upon such determination by the
Board of Directors,  Class I directors  shall serve for a one-year term expiring
in 1985.  Class II directors for a two-year term expiring in 1986, and Class III
directors  for a three-year  term expiring in 1987.  At each  succeeding  annual
meeting of Stockholders  beginning in 1985, successors to the class of directors
whose term  expires at that annual  meeting  shall be elected  for a  three-year
term. If the number of directors is changed,  any increase or decrease  shall be
apportioned  among the classes so as to maintain the number of directors in each
class as nearly  equal as  possible,  and any  additional  director of any class
elected to fill a vacancy  resulting  from an  increase in such class shall hold
office for a term that shall coincide with the remaining term of that class, but
in no case will a decrease  in the number of  directors  shorten the term of any
incumbent director. A director shall hold office until the annual meeting of the
year in which his term  expires  and until his  successor  shall be elected  and
shall  qualify,  subject,  however,  to prior  death,  resignation,  retirement,
disqualification  or removal from office.  Any vacancy on the Board of Directors
that  results  from an  increase in the number of  directors  may be filled by a
majority  of the  Board of  Directors  then in  office,  and any  other  vacancy
occurring in the Board of Directors may be filled by a majority of the directors
then in office,  although less than a quorum,  or by a sole remaining  director.
Any  director  elected to fill a vacancy not  resulting  from an increase in the
number  of  directors  shall  have  the  same  remaining  term  as  that  of his
predecessor

         Notwithstanding the foregoing,  whenever the holders of any one or more
classes or series of Preferred  Stock issued by the  corporation  shall have the
right,  voting separately by class or series, to elect directors at an annual or
special  meeting of  stockholders,  the  election,  term of  office,  filling of
vacancies  and other  features  of such  directorships  shall be governed by the
terms of these Articles of Incorporation  applicable thereto, and such directors
so elected  shall not be divided into classes  pursuant to this Article X unless
expressly provided by such terms.

         Any  director  or the entire  Board of  Directors  may be removed  from
office  without  cause by the  affirmative  vote of eighty  percent (80%) of the
votes  entitled  to be cast by the  holders  of all then  outstanding  shares of
voting stock of the  corporation,  voting together as a single class;  PROVIDED,
HOWEVER,  that no individual director shall be removed without cause (unless the
Board of Directors or the class of directors of which he is a member be removed)
in case the votes  cast  against  such  removal  would be  sufficient,  if voted
cumulatively for such director,  to elect him to the class of directors of which
he is a member.

                                 Page 34 of 195

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         Notwithstanding  any other provision of these Articles or the bylaws of
the  corporation  and  notwithstanding  the  fact  that a lesser  percentage  or
separate class vote may be specified by law, these Articles or the bylaws of the
corporation, the affirmative vote of the holders of not less than eighty percent
(80%) of the votes  entitled to be cast by the  holders of all then  outstanding
shares of voting stock of the  corporation,  voting  together as a single class,
shall be required to amend or repeal, or adopt any provisions inconsistent with,
this  Article  X,  unless  such  action  has  been  previously   approved  by  a
three-fourths vote of the whole Board of Directors.

                                   ARTICLE XI

                        ELIMINATION OF DIRECTOR LIABILITY

         No  director  of the  corporation  shall be  personally  liable  to the
corporation or its  stockholders for monetary damages for a breach of his duties
as a director except for liability:

                  [a]      For any transaction in which the director's  personal
                           financial  interest is in conflict with the financial
                           interest of the corporation or its stockholders;

                  [b]      For  acts or  omissions  not in good  faith  or which
                           involve  intentional  misconduct  or are known to the
                           director to be a violation of law;

                  [c]      For distributions made in violation of the Kentucky
                           Revised Statutes; or

                  [d]      For any transaction  from which the director  derives
                           an improper personal benefit.

         If the  Kentucky  Revised  Statutes are amended  after  approval by the
stockholders of this Article to authorize  corporate action further  eliminating
or limiting  the  personal  liability  of  directors,  then the  liability  of a
director of the corporation shall be eliminated or limited to the fullest extent
permitted  by the  Kentucky  Revised  Statutes,  as so  amended.  Any  repeal or
modification of this Article XI by the stockholders of the corporation shall not
adversely  affect  any right or  protection  of a  director  of the  corporation
existing at the time of such repeal or modification.

                                   ARTICLE XII

                         SPECIAL MEETING OF SHAREHOLDERS

  Special meetings of the shareholders of the corporation may be called only by:

                  [a]      The Board of Directors; or

                  [b]      The holders of not less than sixty-six and two-thirds
                           percent  (66  2/3%) of all  shares  entitled  to cast
                           votes on any issue  proposed to be  considered at the
                           proposed  special meeting upon such holders  signing,
                           dating and delivering to the corporation's  Secretary
                           one  or  more   written   demands  for  the  meeting,
                           including  a  description  of the purpose or purposes
                           for which the meeting is to be held.

                                 Page 35 of 195


<PAGE>

               SERIES DESIGNATION FOR SERIES 1998 PREFERRED STOCK

         I. DESIGNATION AND NUMBER OF SHARES. This series of the Preferred Stock
shall be designated as "Series 1998 Preferred Stock" (the "Series 1998 Preferred
Stock").  The number of shares  initially  issuable as the Series 1998 Preferred
Stock shall be 9,000;  PROVIDED,  HOWEVER,  that,  if more than a total of 9,000
shares of Series 1998  Preferred  Stock shall be issuable  upon the  exercise of
Rights (the "Rights")  issued pursuant to the Rights Agreement dated as of March
19, 1998,  between the Corporation and Bank of Louisville,  as Rights Agent (the
"Rights Agreement"),  the Board of Directors of the Corporation,  shall, if then
permitted by the Kentucky  Business  Corporation  Act,  direct by  resolution or
resolutions  that Articles of Amendment of the Articles of  Incorporation of the
Corporation  be  properly  executed  and filed  with the  Secretary  of State of
Kentucky  providing  for the  total  number of shares  issuable  as Series  1998
Preferred   Stock  to  be  increased   (to  the  extent  that  the  Articles  of
Incorporation  then permit) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of such Rights.

         II.      DIVIDENDS OR DISTRIBUTIONS.

                  (a) Subject to the prior and superior rights of the holders of
shares of any other series of Preferred Stock or other class of capital stock of
the  Corporation  ranking  prior and  superior  to the  shares  of  Series  1998
Preferred  Stock with respect to dividends,  the holders of shares of the Series
1998 Preferred  Stock shall be entitled to receive,  when, as and if declared by
the Board of Directors,  out of the assets of the Corporation  legally available
therefor,  (i) annual  dividends  payable in cash on January 15 of each year, or
such other dates as the Board of  Directors  of the  Corporation  shall  approve
(each such date being referred to herein as an "Annual  Dividend Payment Date"),
commencing on the first Annual Dividend Payment Date after the first issuance of
a share or a fraction of a share of Series 1998 Preferred  Stock,  in the amount
of $.01 per whole share  (rounded to the nearest  cent),  less the amount of all
cash  dividends  declared on the Series  1998  Preferred  Stock  pursuant to the
following  clause (ii) since the immediately  preceding  Annual Dividend Payment
Date or, with respect to the first Annual Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series 1998 Preferred Stock (the
total of which  shall not, in any event,  be less than zero) and (ii)  dividends
payable  in cash on the  payment  date for each cash  dividend  declared  on the
Common Stock in an amount per whole share (rounded to the nearest cent) equal to
the  Formula  Number  (as  hereinafter  defined)  then in effect  times the cash
dividends  then to be paid on each share of Common  Stock.  In addition,  if the
Corporation  shall pay any dividend or make any distribution on the Common Stock
payable in assets,  securities or other forms of non-cash  consideration  (other
than dividends or distributions solely in shares of Common Stock), then, in each
such case, the Corporation shall  simultaneously pay or make on each outstanding
whole share of Series 1998 Preferred  Stock a dividend or  distribution  in like
kind  equal  to the  Formula  Number  then in  effect  times  such  dividend  or
distribution  on each share of the Common  Stock.  As used herein,  the "Formula
Number" shall be 1,000; PROVIDED,  HOWEVER, that, if at any time after March 19,
1998, excluding, however, the two-for-one stock split or stock dividend declared
by the Corporation on March 19, 1998, the  Corporation  shall (x) declare or pay
any dividend on the Common  Stock  payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock,  (y) subdivide (by a
stock split or otherwise) the  outstanding  shares of Common Stock into a larger
number of shares of Common  Stock or (z)  combine  (by a reverse  stock split or
otherwise)  the  outstanding  shares of Common  Stock  into a smaller  number of
shares of Common Stock,  then, in each such event,  the Formula  Number shall be
adjusted to a number  determined  by  multiplying  the Formula  Number in effect
immediately  prior to such event by a fraction,  the  numerator  of which is the
number of shares of Common  Stock that are  outstanding  immediately  after such
event and the  denominator  of which is the  number of shares  of  Common  Stock
that are outstanding immediately prior to such event (and rounding the result to
the nearest  whole number);  and,  PROVIDED FURTHER, that, if at  any time after
March 19, 1998, the Corporation shall issue any shares of its capital stock in a
merger, share exchange, reclassification, or change of the outstanding shares of
Common  Stock,   then,  in  each  such  event,   the  Formula  Number  shall  be
appropriately adjusted to reflect such merger, share exchange,  reclassification
or change so that each share of  Preferred  Stock  continues  to be the economic
equivalent  of a Formula  Number of shares of Common Stock prior to such merger,
share exchange, reclassification or change.

                                 page 36 of 195

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                  (b) The  Corporation  shall declare a dividend or distribution
on the Series 1998  Preferred  Stock as provided  in Section  II(a)  immediately
prior to or at the same time it  declares  a  dividend  or  distribution  on the
Common Stock (other than a dividend or  distribution  solely in shares of Common
Stock); PROVIDED, HOWEVER, that, in the event no dividend or distribution (other
than a  dividend  or  distribution  in shares of Common  Stock)  shall have been
declared  on the Common  Stock  during the period  between  any Annual  Dividend
Payment Date and the next subsequent Annual Dividend Payment Date, a dividend of
$.01 per share on the Series 1998 Preferred Stock shall  nevertheless be payable
on such subsequent  Annual Dividend Payment Date. The Board of Directors may fix
a record  date for the  determination  of  holders  of  shares  of  Series  1998
Preferred Stock entitled to receive a dividend or distribution declared thereon,
which  record  date shall be the same as the record  date for any  corresponding
dividend or distribution on the Common Stock.

                  (c)  Dividends  shall  begin to accrue  and be  cumulative  on
outstanding  shares of Series  1998  Preferred  Stock  from and after the Annual
Dividend  Payment Date next  preceding the date of original issue of such shares
of Series 1998 Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
that are  originally  issued  after the  record  date for the  determination  of
holders of shares of Series 1998  Preferred  Stock entitled to receive an annual
dividend and on or prior to the next  succeeding  Annual  Dividend  Payment Date
shall  begin to accrue and be  cumulative  from and after such  Annual  Dividend
Payment Date. Notwithstanding the foregoing,  dividends on shares of Series 1998
Preferred  Stock that are  originally  issued  prior to the record  date for the
determination  of holders of shares of Series 1998  Preferred  Stock entitled to
receive an annual  dividend on the first Annual  Dividend  Payment Date shall be
calculated  as if cumulative  from and after the last day of the fiscal  quarter
next preceding the date of original issuance of such shares.  Accrued but unpaid
dividends  shall not bear interest.  Dividends paid on the shares of Series 1998
Preferred Stock in an amount less than the total amount of such dividends at the
time  accrued  and  payable  on such  shares  shall be  allocated  pro rata on a
share-by-share  basis among all such shares at the time outstanding and entitled
to receive such dividends.

                  (d) So long as any shares of the Series 1998  Preferred  Stock
are outstanding,  no dividends or other distributions shall be declared, paid or
distributed,  or set aside for  payment or  distribution,  on the Common  Stock,
unless, in each case, the dividend required by this Section II to be declared on
the Series 1998 Preferred Stock shall have been declared and paid.

                  (e) The holders of the shares of Series 1998  Preferred  Stock
shall not be entitled to receive any dividends or other distributions, except as
provided herein.

          III.    VOTING RIGHTS. The holders of shares of Series 1998  Preferred
 Stock shall have the following voting rights:

                  (a) Each  holder  of  Series  1998  Preferred  Stock  shall be
entitled to a number of votes equal to the  Formula  Number then in effect,  for
each whole share of Series 1998 Preferred Stock held of record on each matter on
which  holders of the Common  Stock or  shareholders  generally  are entitled to
vote, multiplied  by the  maximum  number of votes per share  which any  holder 
of the Common  Stock or  shareholders  generally  then have with respect to such
matter (assuming any holding  period or other  requirement  to vote a greater
number of shares is satisfied).

                              page 37 of 195

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                  (b) Except as otherwise  provided herein or by applicable law,
the holders of shares of Series 1998  Preferred  Stock and the holders of shares
of Common  Stock  shall vote  together as one voting  group for the  election of
directors of the  Corporation  and on all other  matters  submitted to a vote of
shareholders of the Corporation.

                   (c) If, at the time of any annual meeting of shareholders for
the election of directors,  the equivalent of two annual  dividends  (whether or
not  consecutive)  payable on any share or shares of Series 1998 Preferred Stock
are in default,  the number of directors  constituting the Board of Directors of
the  Corporation  shall be increased by two. In addition to voting together with
the  holders  of  Common  Stock  for the  election  of  other  directors  of the
Corporation,  the holders of record of the Series 1998 Preferred  Stock,  voting
separately  as a voting group to the  exclusion of the holders of Common  Stock,
shall be entitled at said meeting of shareholders (and at each subsequent annual
meeting of  shareholders),  unless all  dividends  in arrears  have been paid or
declared and set apart for payment  prior  thereto,  to vote for the election of
two directors of the Corporation, the holders of any Series 1998 Preferred Stock
being  entitled  to cast a number  of votes  per  whole  share  of  Series  1998
Preferred  Stock equal to the Formula  Number.  Until the default in payments of
all  dividends  that  permitted  the election of said  directors  shall cease to
exist,  any  director  who  shall  have  been so  elected  pursuant  to the next
preceding  sentence  may be removed at any time,  either with or without  cause,
only by the  affirmative  vote of the  holders  of the  shares  of  Series  1998
Preferred  Stock  at the  time  entitled  to cast  such  number  of votes as are
required by law for the  election of any such  director at a special  meeting of
such holders  called for that purpose,  and any vacancy  thereby  created may be
filled only by the vote of such holders. If and when such default shall cease to
exist,  the holders of the Series 1998 Preferred  Stock shall be divested of the
foregoing  special voting rights,  subject to revesting in the event of each and
every subsequent like default in payments of dividends.  Upon the termination of
the foregoing special voting rights,  the terms of office of all persons who may
have been  elected  directors  pursuant  to said  special  voting  rights  shall
forthwith  terminate to the extent permitted by law, and the number of directors
constituting  the Board of Directors  shall be reduced by two. The voting rights
granted by this Section  III(c) shall be in addition to any other voting  rights
granted to the holders of the Series 1998 Preferred Stock in this Section III.

                  (d) Except as provided herein,  in Section XI or by applicable
law,  holders of Series 1998 Preferred Stock shall have no special voting rights
and their consent shall not be required  (except to the extent they are entitled
to vote with holders of Common  Stock as set forth  herein) for  authorizing  or
taking any corporate action.

         IV.      CERTAIN RESTRICTIONS.
                  (a)  Whenever   annual   dividends   or  other   dividends  or
distributions  payable on the Series 1998 Preferred Stock as provided in Section
II are in arrears,  thereafter  and until all accrued and unpaid  dividends  and
distributions, whether or not declared, on shares of Series 1998 Preferred Stock
outstanding shall have been paid in full, the Corporation shall not

                           (i)     declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise  acquire for  consideration
any shares of stock  ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series 1998 Preferred Stock;

                                 page 38 of 195

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                           (ii)    declare or pay dividends on or make any other
distributions on any shares of stock  ranking  on a  parity  (either  as  to
dividends or upon liquidation,dissolution or winding up)  with the Series  1998 
Preferred  Stock,  except dividends  paid ratably on the Series 1998  Preferred 
Stock and all such parity stock on which dividends  are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;

                           (iii)     redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon  liquidation,  dissolution  or winding up) with the  Series l998 Preferred 
Stock;  PROVIDED  that  the  Corporation  may at any  time  redeem, purchase or 
otherwise  acquire shares of an  such parity stock in  exchange  for shares  of 
any stock of the  Corporation  ranking  junior (either as to dividends or upon 
dissolution,  liquidation or winding up) to the Series 1998 Preferred Stock; or

                           (iv)     purchase  or  otherwise  acquire  for  
consideration any shares of Series 1998 Preferred Stock, or any shares of stock 
ranking on a parity with the Series 1998 Preferred  Stock,  except in accordance
with a purchase offer made in writing or by publication  (as determined by the 
Board of Directors) to all holders of such shares upon such terms as the Board  
of  Directors,  after  consideration  of the respective  annual  dividend rates
and other relative  rights and preferences ofthe respective series and classes,
shall determine in good faith will result in fair and equitable treatment among 
the respective series or classes.

                  (b) The  Corporation  shall not permit any  subsidiary  of the
Corporation  to purchase or otherwise  acquire for  consideration  any shares of
stock of the Corporation  unless the Corporation  could,  under paragraph (a) of
this Section IV,  purchase or otherwise  acquire such shares at such time and in
such manner.

         V.       LIQUIDATION RIGHTS. Upon the liquidation, dissolution or wind-
ing up of the Corporation,  whether voluntary or involuntary,  no distribution 
shall be made  (a) to the  holders  of shares  of stock  ranking  junior (either
as to dividends or upon  liquidation,  dissolution  or winding up) to the Series
1998 Preferred  Stock,  unless,  prior thereto,  the holders of shares of Series
1998 Preferred  Stock shall have  received an amount  equal to the accrued  and 
unpaid dividends and  distributions  thereon,  whether or not declared,  to the
date of such payment, plus an amount equal to the greater of (i) $.01 per whole
share or (ii) an  aggregate  amount per share equal to the Formula  Number then
in effect times the  aggregate  amount to be  distributed  per share to  holder
of Common Stock or (b) to the holders of stock ranking on a parity (either as to
dividends or upon  liquidation,  dissolution or winding up) with the Series 1998
Preferred Stock, except  distributions made ratably on the Series 1998 Preferred
Stock and all other such  parity  stock in  proportion  to the total  amounts to
which  the  holders of  all  such shares  are  entitled  upon such  liquidation,
dissolution  or winding up.

         VI.  CONSOLIDATION,  MERGER,  ETC. In case the Corporation  shall enter
into any consolidation, merger, share exchange, combination or other transaction
in which the shares of Common  Stock are  exchanged  for or  changed  into other
stock or  securities,  cash or any other  property,  then, in any such case, the
then outstanding shares of Series 1998 Preferred Stock shall at the same time be
similarly  exchanged  or  changed  into an amount per whole  share  equal to the
Formula Number then in effect times the aggregate  amount of stock,  securities,
cash or any other property  (payable in kind), as the case may be, into which or
for which each share of Common Stock is exchanged or changed.  In the event both
this Section VI and Section II appear to apply to a transaction, this Section VI
will control.

                                 Page 39 of 195
                                


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         VII.     NO REDEMPTION; NO SINKING FUND.

                  (a) The shares of Series  1998  Preferred  Stock  shall not be
subject  to  redemption  by the  Corporation  or at the  option of any holder of
Series  1998  Preferred  Stock;  PROVIDED,  HOWEVER,  that the  Corporation  may
purchase or otherwise acquire  outstanding shares of Series 1998 Preferred Stock
in the open market or by offer to any holder or holders of shares of Series 1998
Preferred Stock.

                  (b) The shares of Series  1998  Preferred  Stock  shall not be
subject to or entitled to the operation of a retirement or sinking fund.

         VIII. RANKING. The Series 1998 Preferred Stock shall rank junior to all
other  series  of  Preferred  Stock  of the  Corporation,  unless  the  Board of
Directors  shall  specifically   determine   otherwise  in  fixing  the  powers,
preferences  and relative,  participating,  optional and other special rights of
the shares of such series and the  qualifications,  limitations and restrictions
thereof.

         IX.  FRACTIONAL  SHARES.  The  Series  1998  Preferred  Stock  shall be
issuable upon exercise of the Rights issued pursuant to the Rights  Agreement in
whole shares or in any fraction of a share that is one-thousandth (1/1,000) of a
share or any integral  multiple of such fraction which shall entitle the holder,
in proportion to such holder's fractional shares, to receive dividends, exercise
voting rights,  participate in  distributions  and have the benefit of all other
rights of holders of Series 1998 Preferred Stock. In lieu of fractional  shares,
the Corporation, prior to the first issuance of a share or a fraction of a share
of Series 1998 Preferred Stock, may elect (a) to make a cash payment as provided
in the Rights  Agreement  for  fractions  of a share  other than  one-thousandth
(1/1,000) of a share or any integral multiple thereof or (b) to issue depository
receipts evidencing such authorized fraction of a share of Series 1998 Preferred
Stock  pursuant  to an  appropriate  agreement  between  the  Corporation  and a
depository  selected by the  Corporation;  PROVIDED  that such  agreement  shall
provide that the holders of such depository  receipts shall have all the rights,
privileges  and  preferences to which they are entitled as holders of the Series
1998 Preferred Stock.

         X.  REACQUIRED  SHARES.  Any  shares of  Series  1998  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and canceled promptly after the acquisition  thereof.  All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock,  without par value,  of the  Corporation,  undesignated  as to
series, and may thereafter be reissued as part of a new series of such Preferred
Stock as permitted by law.

         XI.   AMENDMENT.   None  of  the  powers,   preferences  and  relative,
participating,  optional and other special  rights of the Series 1998  Preferred
Stock as provided herein or in the Articles of Incorporation shall be amended in
any  manner  that  would  alter or change  the  powers,  preferences,  rights or
privileges  of the holders of Series 1998  Preferred  Stock so as to affect such
holders  adversely  without  the  affirmative  vote of the  holders  of at least
66-2/3% of the outstanding  shares of Series 1998 Preferred  Stock,  voting as a
separate voting group; PROVIDED, HOWEVER, that no such amendment approved by the
holders of at least 66-2/3% of the  outstanding  shares of Series 1998 Preferred
Stock shall be deemed to apply to the powers, preferences,  rights or privileges
of any holder of shares of Series 1998 Preferred  Stock  originally  issued upon
exercise of a Right after the time of such approval without the approval of such
holder.


                                 Page 40 of 195

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 It is  hereby  certified  that on this date I am the duly  elected  and
qualified Senior Vice President,  Administration,  General Counsel and Secretary
of Churchill  Downs  Incorporated  and that on the 18th day of June,  1998,  the
foregoing  Restated Articles of Incorporation of the corporation were amended to
amend  provisions  of the  foregoing  Article VII thereto,  in the manner as set
forth in the  Certificate  delivered  herewith and that the  foregoing  Restated
Articles of Incorporation were approved by action of the Board of Directors.

                                   CHURCHILL DOWNS INCORPORATED


                                   \S\ ALEXANDER M. WALDROP
                                   ------------------------
                                   Alexander M. Waldrop, Senior Vice President,
                                   Administration, General Counsel and Secretary




                                 Page 41 of 195
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