CHURCHILL DOWNS INCORPORATED EXECUTIVE SEVERANCE POLICY (Amended Effective as of November 12, 2008)

1.

Purpose . The Churchill Downs Incorporated Executive Severance Policy (the “Policy”) is established effective November 13, 2003, to provide Executives and Other Key Employees (both as defined below) of Churchill Downs Incorporated or its wholly-owned subsidiaries (collectively, the “Company”) who are in a position to contribute materially to the success of the Company and its affiliates with severance income while they seek alternative employment if they are involuntarily separated from employment due to elimination of their positions or duties. “Elimination of their positions or duties” means elimination for lack of work, cost containment, a general reduction in force, or other reasons unrelated to job performance under circumstances that constitute or result in a “separation from service” under Section 409A (“Job Elimination”). “Elimination of their positions or duties” specifically excludes, without limitation, termination of employment for cause or otherwise due to job performance or other job-related matters. As a condition for such severance income and other benefits under this Policy, the Executive or Other Key Employee shall release the Company from any and all actions, suits, proceedings, claims and demands related to employment by the Company and to the termination by signing a waiver and release document in a form provided by the Company. Such document shall include a statement that benefits under this Policy are conditioned upon the Company’s receipt of a signed release.

2.

Administration . The Vice President Human Resources of the Company, as agent of the Company, has complete discretion and authority with respect to the administration and application of the Policy, except as expressly limited by the terms of the Policy; provided however, that approval must be obtained from the Compensation Committee of the Board of Directors of the Company (the “Committee”) in order to authorize severance outside of the terms of this Policy to the employees covered by this Policy in the context of the elimination of a position or duties.

3.

Participation . The Committee shall select the Executives and Other Key Employees who are eligible for severance under this Policy (the “Participants”). Participants who are eligible for severance under this Policy are listed by job title on Exhibit A , which is attached hereto and incorporated by reference. Notwithstanding the foregoing sentence, an Executive or Other Key Employee who is entitled to severance benefits pursuant to a separate written agreement with the Company shall not be eligible for severance under this Policy whether or not his or her specific position is listed on Exhibit A . A Participant shall not be eligible for Severance Pay if a Successor Employer (as defined below) offers him/her a job that (a) has a base salary that is no more than 10% less than the Participant’s then current base salary, (b) is located within fifty miles of the Participant’s then current place of employment from a Successor Employer and (c) commences within thirty days following his or her termination of employment by the Company, whether or not the participant accepts the employment offer. “Successor Employer” means any business

organization that acquires (through merger, consolidation, reorganization, transfer of stock or assets, or otherwise) either (i) all or substantially all of the business or assets of the Company, or a division or subsidiary of the Company; or a business unit of the Company, including Hoosier Park, L.P., or (ii) the facility where the Participant usually works.

4.

Definitions .

a.

“Base salary” means the fixed compensation (excluding bonuses and other benefits) paid to an employee regularly each pay period for performing assigned job responsibilities. The base salary, or base salary rate, of a Participant shall be determined as of the date of termination of employment.

b.

“Code” shall mean the Internal Revenue Code of 1986, as amended, including any regulations or guidance promulgated thereunder.

c.

“Executive” means an employee of the Company with the title of vice president or higher.

d.

“Other Key Employee” means an employee who is not an Executive but is determined by the Committee to be in a position to contribute materially to the success of the Company.

e.

“Release” means a general release and waiver of claims against the Company, in a form to be provided by the Company.”

f.

“Section 409A” shall mean Section 409A of the Code.

g.

“Severance Benefits” means the benefits set forth in Sections 5 and 6 of this Policy.

h.

“Severance Pay” means the amount payable pursuant to Section 5 of this Policy.

i.

“Years of Service” means the total of all full years of service and any partial years of service in which the Participant worked at least 6 months beginning with the Participant’s first day of employment with the Company.

5.

Severance Pay Any Participant whose employment with the Company is terminated by the Company due to Job Elimination shall be eligible for Severance Pay hereunder provided the Participant has been employed by the Company for a minimum of 12 months; and provided further that the Participant has returned a signed Release to the Committee within the minimum time period required under applicable state and federal laws, or if no such period, within five business days, and has not revoked the Release within the minimum time permitted under applicable state and federal laws.

a.

Amount of Severance Pay . The amount of Severance Pay for which a Participant is eligible hereunder shall be determined in accordance with his or her status as an

Executive or Other Key employee and his or her Years of Service with the Company, as follows:

i.

Chief Executive Officer : The Chief Executive Officer of the Company is entitled to severance benefits pursuant to a separate written agreement between the Company and the Chief Executive Officer and shall not be eligible for severance under this Policy.

ii.

Executive Vice President : An executive vice president shall be eligible for Severance Pay equal to four (4) weeks of base salary for each Year of Service with the Company. The minimum Severance Pay for an executive vice president shall be sixteen (16) weeks of base salary and the maximum Severance Pay for an executive vice president shall be fifty-two (52) weeks of base salary.

iii.

Corporate Senior Vice Presidents or Track President : A corporate senior vice president or track president shall be eligible for Severance Pay equal to three (3) weeks of base salary for each Year of Service with the Company. The minimum Severance Pay for a corporate senior vice president or track president shall be twelve (12) weeks of base salary and the maximum Severance Pay for a corporate senior vice president shall be twenty-six (26) weeks of base salary.

iv.

Corporate or Unit Vice President or Other Key Employee : A corporate or unit vice president or Other Key Employee shall be eligible for Severance Pay equal to two (2) weeks of base salary for each Year of Service with the Company. The minimum Severance Pay for corporate or unit vice presidents or Other Key Employees shall be two (2) weeks of base salary and the maximum Severance Pay for a corporate or unit vice president shall be twenty-six (26) weeks of base salary.

b.

Method and Timing of Payment . Severance Pay shall be paid to an eligible Participant in a single cash sum as soon as practicable, but in no event later than 60 days, following the later of (i) the expiration of the applicable revocation period following the signing of the Release by the Participant or (ii) the Participant’s termination date with the Company; provided, however, that in no event shall such Severance Pay be paid later than the March 15th of the year following the year in which such termination occurs, but conditioned on the Company receiving a signed Release that has not been revoked within the time provided herein or in the Release. Notwithstanding the foregoing and any provision in this Policy to the contrary, to the extent Severance Pay is “deferred compensation” for purposes of Section 409A for an eligible Participant, such Severance Pay shall be paid to such Participant in a single cash sum as soon as practicable, but in no event later than 60 days, following the Participant’s date of “separation from service” (within the meaning of Section 409A) with the Company, but conditioned on the Company receiving a signed Release that has

not been revoked within the time provided herein or in the Release and in any case where the first and last days of the applicable release and non-revocability periods are in two separate tax years, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, Severance Pay shall be made in the later tax year.

c.

Death of Participant . If a Participant dies after signing the release and prior to receiving Severance Pay to which he or she is entitled pursuant to the Policy, payment shall be made to the beneficiary designated by the Participant to the Company or, in the event of no designation of beneficiary, then to the estate of the deceased Participant.

d.

Section 409A . Notwithstanding any provision to the contrary, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, if a Participant is a “specified employee” (as defined under Section 409A) as of the date of his “separation from service” (as defined under Section 409) from the Company, then the Separation Pay shall not be paid until the earlier of (a) the expiration of the six (6) month period measured from the date of the Participant’s “separation from service” and (b) the date of the Participant’s death. All payments and benefits that are delayed pursuant to the immediately preceding sentence shall be paid to the Participant in a lump sum as soon as practicable following the expiration of such period (or if earlier, upon the Participant’s death) but in no event later than thirty (30) days following such period. To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, no amount or benefit that is payable or to be provided upon a termination of employment from the Company pursuant to this Policy shall be payable or provided unless such termination also meets the requirements of a “separation from service” under Section 409A. The Participant shall cooperate fully with the Company to ensure compliance with Section 409A including, without limitation, adopting amendments to arrangements subject to Section 409A and operating such arrangements in compliance with Section 409A.

6.

Outplacement Services . The Company shall provide standard outplacement services at the expense of the Company, but not to exceed in total an amount equal to $8,000, from an established outplacement firm selected by the Company. In order to receive outplacement services, the Participant must begin utilizing the services within thirty (30) days of the Participant’s date of termination of employment with the Company and such services shall not extend beyond the earlier of (i) the last day of the second taxable year following the taxable year i