TO: D.W. Bernauer

FROM: C.E. Knupp, Plan Administrator

DATE: August 22, 2002

SUBJECT: Select Senior Executive Retiree Medical Expense Plan

The Select Senior Executive Retiree Medical Expense Plan (the "Plan") was adopted in 1988 to provide an allowance for the reimbursement of medical expenses or individual insurance premiums to certain executives who do not qualify for regular retiree coverage under the Walgreen Major Medical Plan. The eligibility threshold was set at that time at a total years of service plus age of 75. A review of our Company’s executive retirement history suggests that a lower age and service requirement would be appropriate, and a reduction in the eligibility threshold to 72 is recommended.

It is also recommended that the Plan be modified to eliminate eligibility for any person hired after December 31, 2001. This reflects the identical change made to the Walgreen Major Medical Plan.

These changes, if approved, will be effective as of August 1, 2002. The Plan document authorizes the Company's Chief Executive Officer to amend the Plan by written instrument. If you approve the proposed changes, please so indicate by signing and dating below, and this document will serve as the written instrument amending the Plan.

Amendments approved as proposed.

/s/ David W. Bernauer        August 26, 2002

D.W. Bernauer, Chief Executive Officer

Walgreen Co.

Nonemployee Director Stock Plan

(Conformed Copy – November 1, 1996 Plan, as amended through July 10, 2002)

Contents

Page

WALGREEN CO.

NONEMPLOYEE DIRECTOR STOCK PLAN

Article 1. Establishment, Purpose, and Duration

  1.1 Establishment of the Plan. Walgreen Co. hereby establishes an incentive compensation plan to be known as the "Walgreen Co. Nonemployee Director Stock Plan" (the "Plan"), as set forth in this document. The Plan provides for the grant of Shares to Nonemployee Directors and for the acquisition of Deferred Stock Units by Nonemployee Directors, subject to the terms and provisions set forth herein.

Upon approval by the Board of Directors of the Company, the Plan shall become effective as of November 1, 1996 (the "Effective Date"), and shall remain in effect as provided in Section 1.3 herein.

This plan is intended as a replacement for certain compensation arrangements for Nonemployee Directors in effect prior to the Effective Date, including the Walgreen Co. Retirement Plan for Outside Directors (the "Prior Program"). The Prior Program will continue to apply in the future only with respect to compensation earned by Nonemployee Directors for periods of service prior to November 1, 1996.

  1.2 Purpose of the Plan. The purpose of the Plan is to promote the achievement of long-term objectives of the Company by linking the personal interests of Nonemployee Directors to those of the Company's shareholders and to attract and retain Nonemployee Directors of outstanding competence.

  1.3 Duration of the Plan. The Plan shall commence on November 1, 1996 and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 9.

Article 2. Definitions

Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the defined meaning is intended, the initial letter of the word is capitalized:

1. "Annual Retainer" means the annual base compensation received by a Nonemployee Director for service on the Board.
2. "Award" means, individually or collectively, an award under this Plan of Shares or Deferred Stock Units.
3. "Board" or "Board of Directors" means the Board of Directors of the Company.
4. "Code" means the Internal Revenue Code of 1986, as amended from time to time.
5. "Committee" means the Compensation Committee of the Board of Directors of the Company.
6. "Committee Fees" means compensation received by a Nonemployee Director for service on one or more Board committees.
7. "Company" means Walgreen Co., an Illinois corporation, together with any and all Subsidiaries, and any successor thereto as provided in Section 10.6.
8. "Decreased Value" means the depreciation in the worth of a Deferred Stock Unit from the date of award up to and including the Valuation Date, as determined by the Committee pursuant to a Valuation.
9. "Deferred Cash Compensation Account" means an account established pursuant to Section 7.5 to provide for the deferral of the cash component of Annual Retainers, Committee Fees, and Meeting Fees.
10. "Deferred Stock Unit" or "Unit" means an Award acquired by a Participant as a measure of participation under the Plan, and having a value which changes in direct relation to changes in the value of Shares, as determined pursuant to a Valuation.
11. "Director" means any individual who is a member of the Board of Directors of the Company.
12. "Employee" means any common law employee of the Company or of the Company's Subsidiaries. For purposes of the Plan, an individual whose only employment relationship with the Company is as a Director, shall not be deemed to be an Employee.
13. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.
14. "Fair Market Value" shall mean the closing price on the New York Stock Exchange on the relevant date, or ( if there were no sales on such date) on the last trading date preceding the relevant date.
15. "Increased Value" means the appreciation in the worth of a Deferred Stock Unit from the date of award up to and including the Valuation Date, as determined by the Committee pursuant to a Valuation.
16. "Initial Value" means the value of a Deferred Stock Unit on the date of award, as determined in accordance with the provisions of the Plan.
17. "Meeting Fees" means compensation received by a Nonemployee Director for meetings attended in relation to Board service.
18. "Nonemployee Director" means any individual who is a member of the Board of Directors of the Company, but who is not otherwise an Employee of the Company.
19. "Participant" means a Nonemployee Director of the Company who has an outstanding Award granted under the Plan.
20. "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d).
21. "Shares" means the shares of Common Stock of the Company, par value $.3125.
22. "Subsidiary" means any corporation in which the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which the Company owns at least fifty percent (50%) of the combined equity thereof.
23. "Valuation" means an evaluation of the worth of a Deferred Stock Unit based on changes in the Fair Market Value of the Shares, as determined by the Committee pursuant to the Plan.
24. "Valuation Date" means the date on which Deferred Stock Units are valued pursuant to the Plan.  

Article 3. Administration

 3.1 The Compensation Committee. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company, subject to the restrictions set forth in the Plan.

  3.2 Administration by the Committee. The Committee shall have the full power, discretion, and authority to interpret and administer the Plan in a manner which is consistent with the Plan's provisions. However, in no event shall the Committee have the power to determine Plan eligibility, or to determine the number, the value, the vesting period, or the timing of Awards to be made under the Plan (all such determinations being automatic pursuant to the provisions of the Plan).

  3.3 Decisions Binding. All determinations and decisions made by the Committee pursuant to the Plan, and all related orders or resolutions of the Committee shall be final, conclusive, and binding on all persons, including the Company, its shareholders, Employees, Nonemployee Directors, Participants, and their estates and beneficiaries.

Article 4. Participation

  4.1 Participation. Persons eligible to participate in the Plan are limited to Nonemployee Directors who are serving on the Board on the date of each scheduled Award under the Plan.

Article 5. Annual Equity Grants for Nonemployee Directors

  5.1 Annual Equity Grants. Commencing November   1, 2002, and on each November   1 thereafter, each Nonemployee Director shall receive an annual equity grant of shares, with said number of shares equal to the number determined by dividing eighty thousand dollars ($80,000) by the Fair Market Value of a share on November   1 of the relevant year, or a proportionate share of such grant based on full months of service as a Nonemployee Director since the prior November   1. In lieu of issuing fractional shares, the Company shall round to the nearest full share.

  5.2 Timing of Payout. The certificates for the Shares shall be issued as soon as administratively possible following November 1 each year.

  5.3 Biennial Review. The Committee shall conduct an annual review of the appropriateness of the equity Awards granted pursuant to this Article 5. In the event the Committee determines that an adjustment in the amount of equity Awards pursuant to this Article 5 is appropriate, the Committee shall make a recommendation to the Board for an appropriate amendment.

Article 6. Retainer Share Payments

 6.1 Portion of Retainers Paid in Shares. During the term of this Plan, Nonemployee Directors shall receive fifty percent (50%) of their Annual Retainer in the form of Shares.

  6.2 Number of Shares Paid. The number of Shares to be issued pursuant to Section 6.1 will be determined on a quarterly basis and shall equal the portion of the Annual Retainer being paid in the form of Shares, divided by the Fair Market Value of a Share on the first trading day of the fiscal quarter. In lieu of issuing fractional Shares, the Company shall round to the nearest full share.

  6.3 Timing of Payout. The certificates for the Shares shall be issued as soon as administratively possible following the beginning of the calendar quarter that begins within each fiscal quarter.

Article 7. Annual Deferral Opportunity

  7.1 Deferral of Retainers, Committee Fees, and Meeting Fees. During the term of this Plan, any Nonemployee Director may elect to receive all or a portion of the cash component of his or her Annual Retainer, Committee Fees, or Meeting Fees in the form of Deferred Stock Units or to have such amounts placed in a Deferred Cash Compensation Account. During the term of this Plan, any Nonemployee Director may also elect to receive all or a portion of the share component of his or her Annual Retainer in the form of Deferred Stock Units. An election to receive Deferred Stock Units or to defer amounts into the Deferred Cash Compensation Account pursuant to this Section 7.1 shall be subject to the provisions of this Article 7.

  7.2 Election. An election to receive all or a portion of a Nonemployee Director's Annual Retainer, Committee Fees, or Meeting Fees in the form of Deferred Stock Units or to defer amounts into the Deferred Cash Compensation Account, as provided in Section 7.1, shall be made by December 1 for all payments to be made in the succeeding calendar year. New Nonemployee Directors shall make their election with respect to their initial retainer upon their original election to the Board. Each such election may pertain to more than one (1) calendar year of scheduled payments. Deferral elections may be made only in ten percent (10%) increments.

  7.3 Number of Deferred Stock Units. The number of Deferred Stock Units to be granted in connection with an election pursuant to Section 7.2 shall equal the portion of the Annual Retainer, Committee Fees, and Meeting Fees being deferred into Deferred Stock Units, divided by the Fair Market Value of a Share on the date of the scheduled payment of the amount deferred.

  7.4 Vesting of Deferred Stock Units. Subject to the terms of this Plan, all Deferred Stock Units acquired under this Article 7 shall vest one hundred percent (100%) upon the acquisition of such Deferred Stock Units.

  7.5 Deferred Cash Compensation Account. All amounts deferred into the Deferred Cash Compensation Account in connection with an election pursuant to Section 7.2 shall accrue interest on a monthly basis at a monthly compounding rate equal to one hundred twenty percent (120%) of the applicable federal midterm rate (as determined under Internal Revenue Code Section 1274(d) and the regulations thereunder) until the Participant's termination of service on the board.

  7.6 Vesting of Deferred Cash Compensation Account. Subject to the terms of this Plan, all amounts deferred into the Deferred Cash Compensation Account under this Article 7 shall vest one hundred percent (100%) upon the deferral of amounts into the Deferred Cash Compensation Account. All interest earned in the Deferred Cash Compensation Account pursuant to Section 7.5 shall vest one hundred percent (100%) as such interest is earned.

  7.7 Payout of Deferred Cash Compensation Account. Except as provided otherwise in this Plan, the payout of the Deferred Cash Compensation Account shall be made in two (2) equal cash payments. The first payment shall be made within thirty (30) days following the participant's termination of service on the Board. The second payment shall be made one (1) year after the Participant's first payment. The second payment shall accrue interest from the Participant's termination of service on the Board on a monthly basis at a monthly compounding rate equal to the prime lending rate of interest in effect as of the first business day of that month (as quoted by the Company's then current lending bank financing service for commercial borrowings). The accrued interest shall be paid with the second payment under this Section 7.7.

Article 8. Deferred Stock Units

  8.1 Value of Deferred Stock Units . Each Deferred Stock Unit shall have an Initial Value that is equal to the Fair Market Value determined for purposes of Section 7.3. Subsequent to such date of award or acquisition, the value of each Deferred Stock Unit shall change in direct relationship to changes in the value of a Share as determined pursuant to a Valuation.

  8.2 Dividend Equivalents. Dividend equivalents shall be earned on Deferred Stock Units provided under this Plan. Such dividend equivalents shall be converted into an equivalent amount of Deferred Stock Units based upon the Valuation of a Deferred Stock Unit on the date the dividend equivalents are converted into Deferred Stock Units. The converted Deferred Stock Units will be fully vested upon conversion.

  8.3 Amount of Payout. Except as provided otherwise in this plan, the payout of the Initial Value combined with the Increased Value or the Decreased Value of the vested Deferred Stock Units shall be made in two cash payments. The first payment shall be made within thirty (30) days following the Participant's termination of service on the Board. The second installment shall be made one year after the Participant's first payment.

  8.4 Timing of Payout. Except as provided otherwise in this plan, the amount payable to a participant shall be the aggregate Initial Value combined with the Increased Value or Decreased Value of the Participant's vested Deferred Stock Units, if any, on the date that the Participant terminates his/her service on the Board. Fifty percent of this amount shall be paid as the first cash payment pursuant to Section 8.3. The remainder of this amount including accrued interest shall be paid as the second payment. Interest shall accrue on a monthly basis at a monthly compounding rate equal to the prime lending rate of interest in effect as of the first business day of that month (as quoted by the Company's then current lending bank financing source for commercial borrowings).

  8.5 Deferred Stock Unit Account. A Deferred Stock Unit Account (the "Account") shall be established and maintained by the Company for each Participant that receives Deferred Stock Units under the Plan. As the value of each Deferred Stock Unit changes pursuant to Section 8.1, the Account established on behalf of each Participant shall be adjusted accordingly. Each Account shall be the record of the Deferred Stock Units granted to the Participant under Article 7 of the Plan on each applicable grant date, is maintained solely for accounting purposes, and shall not require a segregation of any Company assets.

  8.6 Quarterly Reports. Participants with Deferred Stock Units shall receive quarterly reports providing detailed information about their Accounts and changes in their Accounts during the preceding quarter.

Article 9. Amendment, Modification, and Termination

  9.1 Amendment, Modification, and Termination. The Board may terminate, amend, or modify the Plan at any time and from time to time.

  9.2 Awards Previously Granted. Unless required by law, no termination, amendment, or modification of the Plan shall in any material manner adversely affect any Award previously provided under the Plan, without the written consent of the Participant holding the Award.

Article 10. Miscellaneous

10.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

10.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

10.3 Benefit Transfers. The interests of any Participant or beneficiary entitled to payments hereunder shall not be subject to attachment or garnishment or other legal process by any creditor of any such Participant or beneficiary nor shall any such Participant or beneficiary have any right to alienate, anticipate, commute, pledge, encumber, or assign any of the benefits or rights which he or she may expect to receive, contingently or otherwise under this Plan except as may be required by the tax withholding provisions of the Code or of a state's income tax act. Notwithstanding the foregoing, amounts payable with respect to a Participant hereunder may be paid as follows:

1. Payments with respect to a disabled or incapacitated person may be paid to such person's legal representative for such person's benefit, to a custodian under the Uniform Gifts or Transfers to Minors Act of any state, or to a relative or friend of such person for such person's benefit; and
   
2. Transfers by the Participant to a grantor trust established pursuant to Sections 674, 675, 676, and 677 of the Internal Revenue Code of 1986 for the benefit of the participant or a person or persons who are members of his or her immediate family (or for the benefit of their descendants) shall be recognized and given effect, provided that any such transfer has not been disclaimed prior to the payment, and the trustee of such trust certifies to the Committee that such transfer occurred without any payment of consideration for such transfer.

10.4 Beneficiary Designation. Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in the event of his or her death. Each designation will revoke all prior designations by the same Participant, shall be in a form as provided in Appendix A hereto, and will be effective only when filed by the Participant in writing with the Board during his or her lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.

10.5 No Right of Nomination. Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any Director for reelection by the Company's shareholders.

10.6 Shares Available. The Shares delivered under the Plan shall be either treasury shares or Shares which have been reacquired by the Company, including shares purchased in the open market.

10.7 Stock Splits/Stock Dividends. In the event of any change in the outstanding Shares of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of Shares, or the like, the aggregate number of and class of Shares and Deferred Stock Units awarded hereunder may be appropriately adjusted by the Committee, whose determination shall be conclusive.

10.8 Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

10.9 Requirements of Law. The granting of Awards under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

10.10 Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the internal, substantive laws of the State of Illinois.

AMENDMENT TO EMPLOYMENT CONTRACT OF L. D. JORNDT:

Pursuant to the authority and direction of the Board of Directors of Walgreen Co., upon execution by the respective parties of the following Consulting and Non-Competition Agreement, the terms and conditions of such Agreement shall carry out certain terms of, shall serve as an amendment to, and shall ultimately supersede the Employment Agreement between L. Daniel Jorndt and Walgreen Co. dated October, 1988 (as amended):

CONSULTING AND NON-COMPETITION AGREEMENT

THIS AGREEMENT, dated this 10th day of October, 2002, by and between WALGREEN CO., an Illinois corporation (the "Company"), and L. Daniel Jorndt of Northbrook, Illinois (the "Consultant").

WITNESSETH:

WHEREAS, the Consultant has been continuously in the employ of the Company since 1963 and is presently serving as Chairman of the Board of the Company;

WHEREAS, the Company desires that, if the Consultant remains in its employ until his Retirement Date (defined below), the Consultant shall during the ensuing three years be available to the Company for advice and counsel as reasonably requested; and

WHEREAS, upon the terms and conditions hereinafter set forth, the Consultant is willing to enter into this Agreement:

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements of the parties herein contained, it is hereby agreed as follows:

1. Retirement Date . The term "Retirement Date," as used in this Agreement, means the "pay through date" as shall be designated on the Company’s payroll records.

2. Employment through Retirement Date . Until his Retirement Date, the Consultant shall continue in the employ of the Company, and he shall devote substantially his entire business time and attention to the business and affairs of the Company and its subsidiaries and shall perform such duties as reasonably may be assigned by the Board of Directors.

3. Consulting Period Duties . The Consultant agrees that, for a period of three years from and after his Retirement Date (the "Consulting Period"), he will be available at reasonable times and upon reasonable notice by the Company for consultation with the Company’s Board of Directors, the Company’s Chief Executive Officer and/or other senior personnel of the Company and for performing special services for the Company that are commensurate with the Consultant’s experience and skills.

4. Consulting Period Compensation . As compensation for such services and for the Consultant’s compliance with the other terms and conditions of this Agreement, the Company agrees to pay to the Consultant a sum equal in the aggregate to 150% of the annualized rate of base salary applicable to the Consultant immediately prior to his Retirement Date, to be paid in equal monthly installments over the 36-month Consulting Period. The Consultant shall also be entitled to the use of office space and administrative assistance during the Consulting Period, for purposes of performing consulting services hereunder, for purposes of handling residual Company business relating to his former role as Chairman, and for purposes of conducting reasonable personal business. In addition, the Company shall reimburse the Consultant for all reasonable travel and other business expenses incurred by the Consultant in connection with performance of the services under this Agreement, in accordance with the Company’s business expense reimbursement policies and procedures.

5. Employee/Retiree Benefits . Following the Retirement Date, the Consultant shall no longer serve as an employee of the Company, and, as such, he shall no longer be eligible to participate as an employee in the employee benefit plans and programs of the Company. Nevertheless, neither his consultant status nor the compensation to be provided under this Agreement shall alter the benefits to which the Consultant may be entitled as a retiree under any Company benefit plan or program.

6. Restrictive Covenants . During the Consulting Period, the Consultant shall continue to be subject to all confidentiality and related obligations to which he has been subject as an executive of the Company. The Consultant further agrees that, during the Consulting Period and for 12 months thereafter:

1. he will not, directly or indirectly, whether as principal, agent, partner, officer, director, employee, consultant, stockholder of in excess of 1/2 of 1% of the outstanding stock, or member, engage in any business or activity which, in the opinion of the Board of Directors of the Company, shall be competitive with or adverse to the interests of any business conducted by the Company or any of its subsidiaries, except with the prior written consent of the Board of Directors of the Company; and
   
2. he will not, directly or indirectly, either on his own behalf or on behalf of any other person, firm or corporation, employ, or attempt to employ or assist anyone else in attempting to employ any person who is at such time or who was within the six-month period immediately prior to such time in the employ of the Company or any subsidiary of the Company.

The Consultant acknowledges and agrees that the Company would be damaged irreparably if any provision under this Section 6 were breached by him, and money damages would be an inadequate remedy for any such nonperformance or breach. Accordingly, the Company, in order to protect its interests, may pursue, in addition to other rights and remedies existing in its favor, an injunction or injunctions to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically.

7. Early Termination of Agreement . This Agreement shall terminate prior to the commencement of the Consulting Period if, prior to the Consultant's Retirement Date, he shall voluntarily leave the employ of the Company or shall be discharged from his employment for any reason that would fall within the definition of "Cause" under the Employment Agreement between the Consultant and the Company dated October, 1988 (as amended) (the "Employment Agreement"). In such event, the parties obligations under this Agreement shall not go into effect; provided that the Consultant’s obligations under Section 6 hereof shall still apply and shall remain in effect for what would have been the full Consulting Period and for 12 months thereafter. This Agreement may also be terminated under the following circumstances:

1. The Company may terminate this Agreement during the Consulting Period if the Consultant materially breaches his obligations hereunder, in which case the Company’s obligations under Section 4 hereof shall cease as of the effective date of termination, and the Consultant’s obligations under Section 6 hereof shall remain in effect for what would have been the duration of the Consulting Period and for 12 months thereafter.
   
2. If, before or after his Retirement Date, the Consultant should by reason of physical disability be unable to perform his duties hereunder, the Company shall be obligated to commence, or complete, as may be applicable, the payments specified in Section 4 hereof; provided that the Consultant shall be obligated to resume such duties if he recovers from such disability prior to the end of the Consulting Period.
   
3. If, before or after his Retirement Date, the Consultant should die, the Company shall thereafter be obligated to commence, or complete, as may be applicable, payments to the beneficiary of the Consultant, hereinafter named, in sums equal to one-half of the amounts which the Consultant would have received, if living, as specified in Section 4 hereof.
   
4. If the Company affirmatively discontinues this consulting arrangement for any reason other than those covered in the remainder of this Section 7, then the Consultant shall be entitled to be paid the remainder of the payments specified in Section 4 hereof, in one lump sum, without discount.

8. Independent Contractor Relationship . The Consultant understands and agrees that, during the Consulting Period, he shall serve as an independent contractor of the Company, the Company will not withhold any income or other taxes from the amounts paid to the Consultant hereunder, and the Consultant is responsible for paying his own income, social security, Medicare and other applicable taxes.

9. Integration . This Agreement is in full satisfaction of the Company’s obligations concerning this consulting arrangement under the Employment Agreement or otherwise, and this Agreement supersedes the Employment Agreement as of the date the Consultant ceases to serve as Chairman of the Company. This Agreement also supersedes any other prior understandings and agreements between the parties concerning the subject matter hereof. This Agreement may not be changed or terminated orally, and no change, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by the party against whom the same is sought to be enforced.

10. Assignability; Binding Effect . The Consultant may not assign or delegate this Agreement or any of his rights or obligations under this Agreement without the prior written consent of the Company. Subject to the preceding sentence, this agreement shall be binding upon the parties hereto and the corporate successors and assigns of the Company.

11. Governing Law . This Agreement shall be interpreted according to the laws of the State of Illinois.

IN WITNESS WHEREOF, the parties have duly executed this agreement the day and year first above written.

WALGREEN CO.

By: /s/ Dana I. Green                                   /s/ L. Daniel Jorndt

           Dana I. Green, Vice President          L. Daniel Jorndt

Attest:

/s/ Julian A. Oettinger

Julian A. Oettinger, Secretary

BENEFICIARY DESIGNATION

The undersigned L. Daniel Jorndt, as the Consultant in the attached Agreement, hereby designates _____________________________________ as his beneficiary under the provisions of Section 7(c) thereof. The undersigned further reserves the right to change beneficiaries or successor beneficiaries from time to time during the term of the Agreement.

Dated this ______ day of ____________________, 2002.

__________________________

L. Daniel Jorndt

SHARE WALGREENS

WALGREEN CO.

STOCK PURCHASE/OPTION PLAN

June 19, 1992

SHARE WALGREENS

WALGREEN CO.

STOCK PURCHASE/OPTION PLAN

TABLE OF CONTENTS

SHARE WALGREENS

WALGREEN CO.

STOCK PURCHASE/OPTION PLAN

ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION

1.1 Establishment of the Plan . Walgreen Co., an Illinois corporation (hereinafter referred to as the "Company") pursuant to authorization by the Board of Directors, hereby establishes an incentive compensation plan to be known as the "Share Walgreens Walgreen Co. Stock Purchase/Option Plan" (hereinafter referred to as the "Plan"), as set forth in this document. The Plan permits the grant of Options to eligible Employees of the Company upon the purchase of Plan Shares.

Subject to approval of appropriate regulatory authorities, the Plan shall become effective as of October 1, 1992 (the "Effective Date"), and shall remain in effect as provided in Section 1.3 herein.

1.2 Purpose of the Plan . The purpose of the Plan is to promote the success, and enhance the value, of the Company by linking the personal interests of Participants to those of Company shareholders, and by providing Participants with an incentive for outstanding performance.

The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants upon whose judgment, interest, and special effort the successful conduct of its operation largely is dependent.

1.3 Duration of the Plan . The Plan shall commence on the Effective Date, as described in Section 1.1 herein, and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 12 herein, until all Shares subject to it shall have been purchased or acquired according to the Plan's provisions. In the absence of an amendment adopted by the Board to extend the Plan, the Plan shall end on September 30, 20___.

ARTICLE 2. DEFINITIONS

Wherever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

(a) "Award Agreement" means an agreement to be entered into by and between the Company and each Participant, setting forth the terms and provisions applicable to each purchase of Plan Shares under this Plan, and of the corresponding grant of Options.

(b) "Board" or "Board of Directors" means the Board of Directors of the Company.

(c) "Base Salary" means annualized base rate of pay in effect on the last day of the calendar month preceding the beginning of the applicable Window Period, before reduction for amounts deferred pursuant to any plan of the Company, exclusive of any commissions, bonuses, incentive compensation, special fees or awards, allowances, or amounts designated by the Company as payment toward or reimbursement of expenses. Determinations of Base Salary shall be made by the Committee in its sole discretion.

(d) "Change in Control" shall mean:

(i) The acquisition, other than from the Company, by an individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of either the then outstanding Shares or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors, but excluding, for this purpose, any such acquisition by the Company, or any of its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than fifty percent (50%) of, respectively, the then outstanding Shares of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of Directors is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Shares and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding Shares of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors, as the case may be; or

(ii) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a Director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iii) Approval by the Shareholders of the Company of a reorganization, merger, or consolidation, in each case, with respect to which all or substantially all the individuals and entities who were the respective beneficial owners of the Shares and voting securities of the Company immediately prior to such reorganization, merger, or consolidation do not, following such reorganization, merger, or consolidation, beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding Shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of Directors, as the case may be, of the corporation resulting from such reorganization, merger, or consolidation, or a complete liquidation or dissolution of the Company or of the sale or other disposition of all or substantially all of the assets of the Company.

(e) "Code" means the Internal Revenue Code of 1986, as amended from time to time.

(f) "Committee" means the Compensation Committee of the Board of Directors.

(g) "Company" means Walgreen Co., an Illinois corporation, or any successor thereto as provided in Article 15 herein.

(h) "Cycle" means the four (4) year period designated by the Board, during which four (4) Window Periods shall occur, provided however, in the event less than four (4) years remain under the Plan, the Committee shall make any necessary adjustment to the Cycle.

(i) "Director" means any individual who is a member of the Board of Directors of the Company.

(j) "Disability" shall mean total and permanent disability as determined by the Committee.

(k) "Disqualifying Termination" for the purposes of this Plan shall be determined by the Plan Administrator, and shall mean a termination of employment for: (i) an act or acts of dishonesty committed by a Participant; or (ii) violations by a Participant of the policies and procedures of the Company applicable to the Participant's employment or job category which are: (A) grossly negligent; or (B) willful and deliberate.

(l) "Employee" means any employee of the Company, provided that no Director of the Company shall be eligible to participant under the Plan.

(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.

(n) "Fair Market Value" means the closing price on the New York Stock Exchange for Shares on the relevant date, or (if there were no sales on such date) the closing price for Shares on the New York Stock Exchange immediately preceding the relevant date.

(o) "Fully Paid" means a Participant has satisfied the full purchase price for the Plan Shares by either (i) paying cash in one lump sum to the Plan Administrator or; (ii) by paying in full, as determined by the Plan Administrator, all outstanding loan indebtedness incurred by the Participant through any loan program maintained by the Company.

(p) "Option" means an option to purchase Shares granted under Article 7 herein. It is intended that Options under this Plan shall be Nonqualified Stock Options for federal income tax purposes.

(q) "Option Price" means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee.

(r) "Participant" means an Employee of the Company who has purchased Plan Shares and who has outstanding an Option granted under the Plan.

(s) "Plan Administrator" means the individual or committee designated by the Compensation Committee to administer this Plan; or the Compensation Committee if no such designation has been made.

(t) "Plan Shares" means Shares purchased by Participants pursuant to the terms of Article 6 herein.

(u) "Retirement" means, for the purposes of this Plan, termination of employment from the Company in good standing, as determined by the Committee, and after having attained at least age 55 and 10 years of continuous service.

(v) "Shares" means the shares of common stock of the Company.

(w) "Window Period" means the time period designated by the Board, during which eligible Participants may purchase Plan Shares, pursuant to the terms of Article 6 herein. The initial Window Period shall begin October 1, 1992, and end October 30, 1992. Subsequent Window Periods shall last approximately thirty (30) days each, and shall occur at times designated by the Board.

ARTICLE 3. ADMINISTRATION

3.1 The Committee . The Plan shall be administered by the Committee, or by a Plan Administrator appointed by the Committee. The Plan Administrator shall be appointed from time to time by, and shall serve at the discretion of the Committee.

3.2 Authority of the Committee . The Committee shall have the power to establish performance measures which will govern the number of Options available in connection with purchases of Plan Shares, to determine the degree to which the predesignated performance measures are attained by the Company, to determine the terms and conditions applicable to purchases of Plan Shares and grants of Options in a manner consistent with the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan; to establish, amend, or waive rules and regulations for the Plan's administration; and (subject to the provisions of Article 12 herein) to amend the terms and conditions of any outstanding Plan Share or Option to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan. The Committee may delegate its authority as identified hereunder to a Plan Administrator or such other persons as it may deem appropriate.

3.3 Decisions Binding . All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders or resolutions of the Board of Directors shall be final, conclusive, and binding on all Participants.

ARTICLE 4. SHARES SUBJECT TO THE PLAN

4.1 Number of Shares . Subject to adjustment as provided in Section 4.3 herein, the total number of Shares available for purchase as Plan Shares and for grant under Options pursuant to the Plan may not exceed five million (5,000,000). These five million (5,000,000) Shares may be either authorized but unissued, or reacquired Shares.

The following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan:

(a) The sale of Plan Shares shall reduce the Shares available for purchase and/or grant under the Plan by the number of Shares sold.

(b) Unless and until an Option is canceled, lapses, expires, or terminates, it shall be counted against the authorized pool of Shares.

4.2 Lapsed Awards . If any Plan Share purchase or Option grant under this Plan is canceled, terminates, expires, or lapses for any reason, any Plan Shares and/or any Shares subject to such Option shall again be available for purchase and/or grant under the Plan.

4.3 Adjustments in Authorized Shares . In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of the Company affecting the Shares, such adjustment shall be made in the number and class of Shares which may be purchased or delivered under the Plan, and in the number and class of and/or price of outstanding Plan Shares and Shares subject to outstanding Options granted under the Plan, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; and provided that the number of Plan Shares and the Shares subject to any Option shall always be a whole number.

ARTICLE 5. ELIGIBILITY AND PARTICIPATION

5.1 Eligibility . The Committee shall have the discretion to determine eligibility for participation in this Plan from among Employees who satisfy both of the following requirements:

(a) Classification as a pharmacist, a store manager, or an Employee employed in a position within salary grade twelve (12) through seventeen (17) or their equivalent, as determined by the Committee; and

(b) During the two (2) years prior to the Window Period during which the Employee would be given the opportunity to purchase Plan Shares, the Employee was employed with the Company in a position listed in (a) above, and worked for the Company for at least one thousand (1,000) hours during each of such years, as determined by the Committee.

5.2 Actual Participation . Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, those who shall be given the opportunity to purchase Plan Shares during each Window Period, and shall determine the nature and amount of such opportunity. Each Participant's eligibility for grants of Options pursuant to Article 7 herein shall be contingent upon the Participant purchasing Plan Shares, as set forth in Article 6 herein.

Participation in any one Cycle shall be limited solely to the Window Period designated by the Committee, during which the Participant shall be entitled to purchase Plan Shares. No Employee shall have the right to be selected as a Participant, or, having been so selected, to be selected as a Participant in another Cycle. However, the Committee shall have the authority to select eligible Employees for participation during more than one Cycle.

ARTICLE 6. PURCHASES OF PLAN SHARES

6.1 Plan Share Purchases . Each individual who is identified by the Committee as eligible to participate during a designated Window Period shall have the opportunity to purchase Plan Shares during such Window Period. Each Plan Share purchased by a Participant under this Plan shall entitle the Participant to be granted an Option to purchase a specified number of Shares under Option, as set forth in Article 7 herein. Purchases of Shares by Participants other than pursuant to this Plan shall not entitle Participants to receive Option grants under Article 7 herein.

6.2 Maximum Plan Share Purchases . The maximum number of Plan Shares which may be purchased by a Participant during a Window Period shall be determined as a function of a specified percentage of the Participant's Base Salary, and of the timing of the Window Period within a Cycle. For this purpose, the aggregate Fair Market Value of all Plan Shares which may be purchased by a Participant during a Window Period shall be calculated as follows:

All Plan Share purchases shall occur during the applicable Window Period. The Fair Market Value of the Plan Shares purchased shall be determined pursuant to the provisions of Section 6.3 herein.

Each Participant shall be entitled to purchase Plan Shares only during the Window Period designated as applicable to that Participant by the Committee. No Participant shall be permitted to purchase Plan Shares during more than one (1) Window Period in any Cycle.

6.3 Purchase Price . The price of each Plan Share purchased under this Plan shall equal the Fair Market Value of a Share on the last day of the Window Period.

6.4 Procedure for Purchasing Plan Shares . A Participant who desires to purchase Plan Shares shall notify the Plan Administrator, in writing, of the number of Plan Shares to be purchased, and of the desired manner of paying for the Plan Shares. Subject to Section 6.2 and applicable rules and regulations of the United States Securities and Exchange Commission, the Plan Administrator shall cause to be issued from the Company or shall purchase, on behalf of the Participant, the number of Plan Shares indicated by the Participant, within thirty (30) days after receipt of such notice. The Plan Administrator shall establish an account in the name of each Participant, for the purpose of administering the Plan Shares purchased by each Participant. The Plan Administrator shall have the discretion to establish rules and procedures for purchasing Plan Shares on behalf of Participants, and for administering the Plan Share accounts of Participants.

In addition, the Plan Administrator shall provide each Participant who purchases Plan Shares with an Award Agreement, setting forth the terms and provisions applicable to the Plan Shares purchased, and the Options granted to the Participant in connection with the purchase of Plan Shares. Subject to the terms of the Plan, and to the conditions placed on each Plan Share purchase opportunity, each Participant shall satisfy the purchase price for Plan Shares by paying cash in one lump sum to the Plan Administrator.

6.5 Holding Period for Plan Shares . Subject to the terms of this Plan, all Plan Shares which have been purchased shall be delivered upon the later of (i) two (2) years from the date of purchase, or (ii) at the time the Shares are Fully Paid. However, to the extent that a Plan Share is Fully Paid prior to the end of the two (2) year holding period, and subject to the Option forfeiture provisions set forth in Article 8 herein, a Participant who is an Employee at the time of the requested transfer, shall be entitled to sell or otherwise transfer or convey the Plan Shares (the Plan Administrator shall have sole discretion to determine the extent to which a Plan Share is Fully Paid during the two (2) year holding period).

Participants desiring to sell, transfer, or otherwise convey a Fully Paid Plan Share prior to the end of the two (2) year holding period shall submit a request in writing to the Plan Administrator for delivery of a Share certificate representing such Plan Share. Such request shall be accompanied by the Participant's Award Agreement, representing the grant of Options in connection with the purchase of the Plan Share. If the Plan Administrator determines that the Plan Share is Fully Paid, then the Plan Administrator shall deliver to the Participant a fully executed Share certificate, representing such Plan Share, and shall document in the Award Agreement of the Participant the corresponding change in Option forfeiture requirements of the Plan (as set forth in Article 8 herein).

In the event that prior to the end of the two (2) year holding period, a Participant's employment with the Company terminates, the terms of Article 9 herein shall govern the treatment of outstanding Plan Shares.

6.6 Voting Rights . During the two (2) year holding period described in Section 6.5 herein and until such Shares are transferred and/or sold, Participants who have purchased Plan Shares shall be entitled to exercise full voting rights with respect to such Plan Shares.

6.7 Dividends and Other Distributions . During the two (2) year holding period described in Section 6.5 herein, Participants who have purchased Plan Shares shall be entitled to receive all dividends and other distributions paid with respect to such Plan Shares while they are so held, provided that any such distribution or dividends may be subject to the terms of any outstanding purchase loan programs. If any such dividends or distributions are paid in Shares, the Shares shall be converted into additional Plan Shares, and shall be subject to the same restrictions on transferability and forfeitability as the Plan Shares with respect to which they were paid.

6.8 Award Agreement . Each purchase of Plan Shares shall be evidenced by an Award Agreement, setting forth relevant terms and provisions applicable to the Plan Shares and to the corresponding grant of Options.

ARTICLE 7. STOCK OPTIONS

7.1 Option Grants . Subject to the terms and provisions of the Plan, Options shall be granted to Participants upon the purchase of Plan Shares. The number of Options to be granted in connection with each purchase of Plan Shares shall be a function of the degree to which the Company attains preestablished performance goals.

The Board's or the Committee's determination with respect to the degree of achievement of the preestablished performance goals shall govern the number of Shares under Option which shall be granted in connection with each Plan Share purchased. The minimum number of Shares to be granted under Option in connection with the purchase of each Plan Share shall be one (1), and the maximum number shall be three (3).

The multiple selected by the Board or the Committee shall apply to all Plan Share purchases during the applicable Cycle. Prior to the beginning of the relevant Window Period, the multiple shall be communicated to all Employees who are eligible to participate during such Window Period.

7.2 Option Price . The Option Price for each Option granted under this Plan shall equal the lesser of:

(a) The average of the Fair Market Values of a Share on each of the first five (5) trading days during the applicable Window Period; or

(b) The average of the Fair Market Values of a Share on each of the last five (5) trading days during such Window Period.

Notwithstanding the above, in no event shall the price be fifteen percent (15%) lower than the Fair Market Value on the last trading day of the Window Period.

7.3 Duration of Options . Each Option shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no Option shall be exercisable later than ten (10) years from the date from which the Option was granted.

7.4 Exercise of Options . Options granted under the Plan shall be exercisable at such times and shall be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant.

7.5 Payment . Options shall be exercised by the delivery of a written notice of exercise to the Plan Administrator, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

The Option Price upon exercise of any Option shall be payable to the Company in full either: (a) in cash or its equivalent, or (b) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price.

The Committee also may allow cashless exercise as permitted under Federal Reserve Board's Regulation T, subject to applicable legal restrictions, or by any other means which the Committee determines to be consistent with the Plan's purpose and applicable law.

As soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver to the Participant, in the Participant's name, Share certificates in an appropriate amount, based upon the number of Shares purchased under the Option(s).

7.6 Restrictions on Share Transferability . The Committee shall impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan, as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws, under the requirements of any Stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

7.7 Nontransferability of Options . No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. During a Participant's lifetime all Options granted to a Participant under the Plan shall be exercisable only by such Participant, except as set forth in Section 7.9 herein.

7.8 No Rights as a Shareholder . Prior to the purchase of Shares pursuant to an Option, a Participant shall not have the rights of a shareholder with respect to such Shares.

7.9 Exercise of Options With Respect to Incapacitated Participants . If a Participant, who has met the holding period described in Section 6.5 herein or has completed of five (5) years continuous employment subsequent to the purchase of Plan Shares, is under a legal disability or in the Committee's opinion incapacitated in any way so as to be unable to manage his or her financial affairs, the Committee may allow such Participant's legal representative to exercise the Participant's Options on behalf of the Participant. Actions taken pursuant to this Section by the Committee shall discharge all liabilities under the Plan.

ARTICLE 8. PREMATURE DISPOSITION OF PLAN SHARES

In the event a Plan Participant sells, transfers or otherwise conveys a Plan Share (other than by reason of death, in which case Section 9.1 herein governs treatment of Plan Shares and Options) prior to the end of the two (2) year holding period described in Section 6.5 herein, the right to exercise the Options granted in connection with the purchase of such Plan Share shall be contingent upon the Participant's completion of five (5) years continuous employment subsequent to the purchase of such Plan Share.

ARTICLE 9. TERMINATION OF EMPLOYMENT

9.1 Termination by Reason of Death, Disability, or Retirement . In the event the employment of a Participant is terminated by reason of death, Disability, or Retirement, the following provisions shall apply:

(a) Treatment of Plan Shares . If the Participant's death, Disability, or Retirement occurs during the two (2) year holding period described in Section 6.5 herein, the Participant will be credited with all Plan Shares which are Fully Paid as of the date of employment termination (in the case of Disability, the Plan Administrator shall determine the date that employment is deemed to have terminated). If, at the time of employment termination, the Participant has not Fully Paid all outstanding Plan Shares purchased, the number of Plan Shares which shall be deemed Fully Paid shall be determined at the sole discretion of the Plan Administrator. Notwithstanding this provision, the Plan Administrator shall have the authority to permit, on a case-by-case basis, accelerated payment of the outstanding balance of partially paid Plan Shares, upon such terms as the Plan Administrator shall determine.

Unless the unpaid balance of partially paid Plan Shares is remitted to the Company upon the terms established by the Plan Administrator, all outstanding Plan Shares which are not Fully Paid as of the date of employment termination, shall be forfeited to the Company, and shall once again become available for purchase and/or grant under the Plan.

If a Participant's death, Disability, or Retirement occurs after the delivery of Plan Shares to him or her, such Plan Shares shall not be affected by the employment termination.

(b) Treatment of Stock Options . In the event the employment of a Participant is terminated by reason of death, Disability, or Retirement, all outstanding Options granted to the Participant, corresponding to Plan Shares paid for prior to the Participant's death, Disability, or Retirement or pursuant to subpara-
graph (a) above, shall not be forfeitable pursuant to Article 8 and shall remain exercisable at any time prior to their expiration date, or for one (1) year after the date of death, Disability, or Retirement, whichever period is shorter, by the Participant or by such person or persons that have acquired the Participant's rights under the Option by will or by the laws of descent and distribution. The Committee, in its sole discretion, shall have the right to extend the period of the exercise of such options to a date not to exceed sixty (60) months after the effective date of employment termination. The Plan Administrator shall, in all cases, determine the date of employment termination.

(c) Amounts Subject to Dispute . If at the time of a Participant's death, the Plan Administrator is unable to determine what person, persons, or entity is entitled to exercise Options on behalf of the Participant, the Plan Administrator shall not be required to implement any directions to exercise such Options or deliver Plan Shares to any such person, persons, or entity during the pendency of such dispute. Neither the Plan Administrator, the Committee, or the Company shall be responsible for a failure to implement such exercise instructions or to deliver such Plan Shares during the pendency of such dispute, notwithstanding the fact that such Plan Shares or Options may diminish in value or expire during the pendency of such dispute.

9.2 Voluntary Termination . In the event a Participant voluntarily terminates employment with the Company for other than death, Disability, or Retirement, the following provisions shall apply:

(a) Treatment of Plan Shares . If the Participant's employment termination occurs during the two (2) year holding period described in Section 6.5 herein, the Participant will be credited with all Plan Shares which are Fully Paid as of the date of employment termination. The number of Plan Shares which are Fully Paid for as of such date shall be determined according to the guidelines set forth in Section 9.1(a) herein.

Plan Shares which have been delivered to a Participant prior to employment termination shall not be affected by this provision.

(b) Treatment of Stock Options . Upon a voluntary termination, a Participant shall forfeit all Options for which the requirements of Article 8 have not been met. However, the Committee, in its sole discretion, shall have the right to immediately vest all or any portion of such Options, subject to such terms as the Committee deems appropriate.

Options for which the requirements of Article 8 have been met may be exercised by the Participant within the period beginning on the effective date of employment termination, and ending three (3) months after such date. The Committee, in its sole discretion, shall have the right to extend the period of the exercise of such options to a date not to exceed sixty (60) months after the effective date of employment termination.

9.3 Involuntary Termination . In the event a Participant's employment is terminated by the Company, the following provisions shall apply:

(a) Treatment of Plan Shares . If the Participant's employment termination occurs during the two (2) year holding period described in Section 6.5 herein, the Participant will be credited with all Plan Shares which are Fully Paid as of the date of employment termination. The number of Plan Shares which are Fully Paid as of such date shall be determined according to the guidelines set forth in Section 9.1(a) herein.

Plan Shares which have been delivered to a Participant prior to employment termination shall not be affected by this provision.

(b) Treatment of Stock Options . Upon an involuntary termination, a Participant shall forfeit all Options for which the requirements of Article 8 have not been met. However, the Committee, in its sole discretion, shall have the right to immediately vest all or any portion of such Options, subject to such terms as the Committee deems appropriate.

Options for which the requirements of Article 8 have been met may be exercised by the Participant within the period beginning on the effective date of employment termination, and ending three (3) months after such date. The Committee, in its sole discretion, shall have the right to extend the period of the exercise of such options to a date not to exceed sixty (60) months after the effective date of employment termination.

9.4 Disqualifying Termination . In the event a Participant's employment is ended by reason of a Disqualifying Termination, the following provisions shall apply:

(a) Treatment of Plan Shares . If the Participant's employment termination occurs during the two (2) year holding period described in Section 6.5 herein, the Participant will be credited with all Plan Shares which are Fully Paid as of the date of employment termination. The number of Plan Shares which are Fully Paid as of such date shall be determined according to the guidelines set forth in Section 9.1(a) herein.

Plan Shares which have been delivered to a Participant prior to employment termination shall not be affected by this provision.

(b) Treatment of Stock Options . All outstanding Options, held by the Participant shall immediately be forfeited to the Company, and no additional exercise period shall be allowed.

ARTICLE 10. RIGHTS OF EMPLOYEES

Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.

ARTICLE 11. CHANGE IN CONTROL

Upon the occurrence of a Change in Control, the following provisions shall apply:

(a) Any and all Options granted hereunder shall become immediately exercisable (and shall remain exercisable throughout their entire term);

(b) The Company shall deliver all Plan Shares which are Fully Paid as of the effective date of the Change in Control (the Plan Administrator shall have the authority to determine the number of Plan Shares which are Fully Paid as of such date, and to establish procedures for the delivery of such Shares to Participants), and all remaining Plan Shares shall be forfeited to the Company; and

(c) Subject to Article 1 herein, the Committee shall have the authority to make any modifications to the Plan Shares and Options as are determined by the Committee to be appropriate before the effective date of the Change in Control.

ARTICLE 12. AMENDMENT, MODIFICATION, AND TERMINATION

12.1 Amendment, Modification, and Termination . With the approval of the Board, at any time and from time to time, the Committee may terminate, amend, or modify the Plan.

12.2 Awards Previously Granted . No termination, amendment, or modification of the Plan shall adversely affect in any material way any Plan Share or Option previously granted under the Plan, without the written consent of the Participant holding such Plan Share or Option.

ARTICLE 13. WITHHOLDING

13.1 Tax Withholding . The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of this Plan.

13.2 Share Withholding . With respect to withholding required upon the exercise of Options, upon the purchase of Plan Shares, or upon any other taxable event hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing, signed by the Participant, and comply with all procedures established by the Committee for Share withholding.

In addition, subject to the approval of the Committee, Participants may satisfy the tax withholding obligation arising as a result of any taxable event occurring hereunder, by remitting to the Plan Administrator previously held Shares having an aggregate Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction; provided, however, that any Shares which are so tendered must have been beneficially owned by the Participant for at least six (6) months prior to the date of their tender.

ARTICLE 14. INDEMNIFICATION

Each person who is or shall have been a member of the Committee, the Board, or the Plan Administrator, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken in good faith or any good faith failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Articles of Incorporation of By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

ARTICLE 15. SUCCESSORS

All obligations of the Company under the Plan, with respect to Plan Shares purchased and Options granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

ARTICLE 16. LEGAL CONSTRUCTION

16.1 Gender and Number . Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

16.2 Severability . In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

16.3 Requirements of Law . The purchase of Plan Shares, the granting of Options, and the issuance of Shares under the Plan, shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

16.4 Governing Law . To the extent not preempted by Federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Illinois.

AMENDMENTS TO THE

WALGREEN CO. STOCK PURCHASE/OPTION PLAN

(SHARE WALGREENS)

WHEREAS, under Section 12.1 of the Walgreen Co. Stock Purchase/Option Plan (the "Plan") this Company reserved the right to amend the Plan at any time without prior approval of its shareholders, and

WHEREAS, the Board of Directors of the Company deem it desirable to amend the Plan in certain respects, and

WHEREAS, a form of amendment entitled

    the WALGREEN CO. STOCK PURCHASE/OPTION PLAN AMENDMENT NO. 1

has this day been presented to this meeting,

NOW, THEREFORE, BE IT RESOLVED that the form of Amendment No. 1 this day presented to this meeting be, and it hereby is, approved and said Amendment No. 1 be and it is hereby adopted effective October 9, 1996, as follows:

I

Section 5.1(a) of the Plan shall be amended to read as follows:

(a)  Classification as a pharmacist, a store manager, or an Employee employed in a position within salary grade ten (10) through seventeen (17) or their equivalent, as determined by the Committee; and

II

In all respects, except as otherwise set forth, the Plan shall remain in force and effect.

*********

I, Julian A. Oettinger, Secretary of Walgreen Co., an Illinois corporation, hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the Board of Directors of said Corporation at a meeting duly and lawfully called and held on the _____ day of ______________, 1996, at which a majority of the Board was present and said Resolution has not been amended, altered, or repealed and is now in full force, virtue, and effect.

I hereunder set my hand this 23 day of October, 1996.

Julian A. Oettinger

AMENDMENT TO THE

WALGREEN CO. STOCK PURCHASE/OPTION PLAN

(SHARE WALGREENS)

WHEREAS, under Section 12.1 of the Walgreen Co. Stock Purchase/Option Plan (the "Plan"), this Company reserved the right to amend the Plan at any time without prior approval of its shareholders, and

WHEREAS, the Board of Directors of the Company deem it desirable to amend the Plan in certain respects, and

WHEREAS, a form of amendment entitled

the WALGREEN CO. STOCK PURCHASE/OPTION PLAN AMENDMENT NO. 2

has this day been presented to this meeting,

NOW, THEREFORE, BE IT RESOLVED that the form of Amendment No. 2 this day presented to this meeting be, and it hereby is, approved and said Amendment No. 2 be and it is hereby adopted effective April 12, 2000, as follows:

I

Section 5.1(b) of the Plan shall be amended to read as follows:

(b) During the three (3) months prior to the Window Period during which the Employee would be given the opportunity to purchase Plan shares, the Employee was employed with the Company in a position listed in (a) above, and has a current 12 or 52 week average of at least 20 hours.

II

In all respects, except as otherwise set forth, the Plan shall remain in force and effect.

*********

I, Julian A. Oettinger, Secretary of Walgreen Co., an Illinois corporation, hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the Board of Directors of said corporation at a meeting duly and lawfully called and held on the 12th day of April, 2000, at which a majority of the Board was present and said Resolution has not been amended, altered, or repealed and is now in full force, virtue, and effect.

I hereunder set my hand this 13 day of April, 2000.

Julian A. Oettinger

RESOLUTIONS AMENDING

WALGREEN CO. STOCK PURCHASE/OPTION PLAN

(SHARE WALGREENS)

WHEREAS, under Section 12.1 of SHARE WALGREENS WALGREEN CO. STOCK PURCHASE/OPTION PLAN (the "Plan"), this Company reserved the right to amend the Plan, and

WHEREAS, the Board of Directors has determined that certain changes are desirable, including changes that would extend the term of the Plan and clarify the definition of employment status, and

WHEREAS, the Board of Directors of the Company deems it desirable to authorize the officers and agents of the Company to take certain actions pursuant to such changes, and

WHEREAS, a form of amendment entitled

WALGREEN CO. STOCK PURCHASE/OPTION PLAN

Amendment No. 3

has this day been presented to this meeting,

NOW, THEREFORE, be it resolved that the form of Amendment No. 3 of the Plan this day presented to this meeting be and is hereby approved, and that said amendment be and is hereby adopted effective as of the dates indicated in I through IV below, and

FURTHER RESOLVES, that the proper officers of the Company be, and hereby are, authorized and directed to take all such action and sign such documents as they deem necessary in order to implement these amendments on a timely basis.

I.

Section 1.3 of the Plan shall be amended, effective October 1, 2002, to read as follows:

"1.3 Duration of the Plan . The Plan shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 12 hereof, until all Shares subject to it shall have been purchased or acquired according to the Plan's provisions. In the absence of an amendment adopted by the Board to either terminate or extend the Plan, the Plan shall end on September 30, 2012."

II.

Paragraph (l) of Article 2 of the Plan shall be amended, effective October 1, 2000, to read as follows:

"(l) "Employee" means any person who is an employee of the Company in the common law sense and excludes any person for any period during which he or she is not so classified as an employee in the records of the Company, even if those records are subsequently determined to have been in error or the person is subsequently reclassified as an employee. For example, no person shall be considered to be an Employee for any period of time during which he or she: (i) is a leased employee; (ii) an independent contractor; or (iii) is otherwise not classified as an employee in the records of the Company. Notwithstanding the foregoing, no Director of the Company shall be eligible to participant in the Plan."

III.

Section 4.1 of the Plan shall be amended, effective October 1, 2002, to read as follows:

"4.1 Number of Shares . Subject to adjustment as provided in Section 4.3 hereof, the aggregate number of Shares available for purchase as Plan Shares and for grant under Options pursuant to the Plan shall be determined as follows:

(a) Prior to October 1, 2002 . No more than 40,000,000 shares may be made available for purchase as Plan Shares and for grant under Options pursuant to the Plan prior to October 1, 2002; and

(b) After September 30, 2002 . No more than 42,000,000 shares may be made available for purchase as Plan Shares and for grant under Options pursuant to the Plan after September 30, 2002.

In determining the number of Shares available for purchase or grant under the Plan: (i) the sale of Plan Shares shall reduce the Shares available for purchase or grant under the Plan by the number of Shares sold; and (ii) unless and until an Option is canceled, lapses, expires, or terminates, it shall be counted against the authorized pool of Shares."

IV.

Section 5.1(b) of the Plan shall be amended, effective September 30, 2001, to read as follows:

"(b) As of the first day of the Window Period during which the Employee would be given the opportunity to purchase Plan Shares, the Employee was employed by the Company in a position listed in (a) above, and has a normal work week of at least 20 hours."

BE IT FURTHER RESOLVED, that the Secretary or any Assistant Secretary of this Company be and hereby is directed to sign a copy of the form of amendment presented to this meeting for the purpose of identifying it and file such copy so identified with the papers relating to this meeting.

* * * * * *

I, Julian A. Oettinger, Secretary of Walgreen Co., an Illinois corporation, hereby certify that the foregoing is a true and correct copy of a resolution adopted by the Board of Directors of said Corporation at a meeting duly and lawfully called and held on the 11th day of July, 2001, at which a majority of the Board was present, and said resolution has not been amended, altered, or repealed and is now in full force, virtue, and effect.

I have hereunto set my hand this 11 day of July, 2001.

Secretary

Option 3000 Plan

Walgreen Co.

Contents

Walgreen Co. Option 3000 Plan

Article 1. Establishment, Objectives, and Duration

   1.1. Establishment of the Plan. Walgreen Co., an Illinois corporation (hereinafter referred to as the "Company"), hereby establishes an incentive compensation plan to be known as the "Walgreen Co. Option 3000 Plan" (hereinafter referred to as the "Plan"), as set forth in this document. The Plan permits the grant of Nonqualified Stock Options.

The Plan shall become effective as of May 1, 2000 (the "Effective Date") and shall remain in effect as provided in Section 1.3 hereof.

  1.2. Purpose of the Plan. The purpose of the Plan is to celebrate the opening by the Company of its 3000th store and the efforts of the Company’s Employees in the achievement of such milestone and to encourage its Employees to devote their continued efforts to the business and affairs of the Company.

  1.3. Duration of the Plan. The Plan shall commence on the Effective Date, as described in Section 1.1 hereof, and shall remain in effect until all the Options awarded during the Plan’s single grant cycle have either been exercised or have expired, as provided in further detail below.

Article 2. Definitions

Whenever used in the Plan, the following terms shall have the meanings set forth below. As an aid to interpretation, when such meanings are intended, the initial letter of the words defined below are ordinarily capitalized:

  2.1. "Board" or "Board of Directors" means the Board of Directors of the Company.

  2.2. "Change in Control" of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have occurred:

(a) Except as provided elsewhere in this Section 2.2, the acquisition, other than from the Company, by an individual, entity, or a group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), of Beneficial Ownership of twenty percent (20%) or more of either the then outstanding Shares or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors shall be considered a Change of Control. Notwithstanding the foregoing, any such acquisition by the Company, or any of its subsidiaries, or any employee benefit plan (or related trust) maintained by the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than fifty percent (50%) of, respectively, the then outstanding Shares of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of Directors is then Beneficially Owned, directly or indirectly, by the individuals and entities who were the Beneficial Owners, respectively, of the Shares and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding Shares of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of Directors, as the case may be; or

(b) A Change of Control shall occur if individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided that any individual becoming a Director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be deemed to be a member of the Incumbent Board; provided further that for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be excluded from such deemed Incumbent Board membership status; or

(c) The approval by the shareholders of the Company of a reorganization, merger, consolidation or a complete liquidation or dissolution of the Company or of the sale or other disposition of all or substantially all of the assets of the Company shall be considered a Change of Control; provided that, in the case of a reorganization, merger or consolidation, all or substantially all the individuals and entities who were the respective Beneficial Owners of the Shares and voting securities of the Company immediately prior to such reorganization, merger, or consolidation do not (following such reorganization, merger, or consolidation) Beneficially Own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding Shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of Directors, as the case may be, of the corporation resulting from such reorganization, merger, or consolidation.

For purposes of this Section, "Beneficial Owner," "Beneficial Ownership," or "Beneficially Own" shall have the meaning ascribed to such terms in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. For purposes of this Section, "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

  2.3. "Code" means the Internal Revenue Code of 1986, as amended from time to time.

  2.4. "Committee" means the Compensation Committee of the Board.

  2.5. "Company" means Walgreen Co., an Illinois corporation, as provided in Section 1.1, and shall include any successor thereto as provided in Article 13 herein.

  2.6. "Director" means any individual who is a member of the Board of Directors of the Company.

  2.7. "Disability" shall mean total and permanent disability as determined by the Committee.

  2.8. "Disqualifying Termination" for the purposes of this Plan shall be determined by the Committee, and shall mean a termination of employment for: (a) an act or acts of dishonesty committed by a Participant; (b) a violation of any of the anti-harassment policies or procedures of the Company; or (c) a violation of any of the other policies or procedures of the Company applicable to the Participant’s employment or job category which are either: (i) grossly negligent; or (ii) willful and deliberate.

  2.9. "Effective Date" shall have the meaning ascribed to such term in Section 1.1 hereof.

 2.10. "Employee" or "Employed" shall refer to any employee of the Company or its subsidiaries except for those employees in salary grades eighteen (18) through thirty-one (31), or their salary grade equivalents.

 2.11. "Nonqualified Stock Option" means an option to purchase Shares which is not intended to meet the requirements of Code Section 422.

 2.12. "Option" means an option to purchase Shares granted under Article 6 herein. It is intended that Options under this Plan shall be Nonqualified Stock Options for federal income tax purposes.

 2.13. "Option Price" means the price at which a Share may be purchased by a Participant pursuant to an Option.

 2.14. "Participant" means an Employee who has been selected to receive an Option or who has outstanding Option granted under the Plan.

 2.15. "Retirement" means, for the purposes of this Plan, termination of employment from the Company in good standing, as determined by the Committee, and after having attained at least age fifty-five (55) and ten (10) years of continuous service.

 2.16. "Shares" means the shares of common stock of the Company.

Article 3. Administration

   3.1. General . The Plan shall be administered by the Board’s Compensation Committee. The Committee may (to the extent not expressly prohibited by governing law, the Company’s Articles of Incorporation or the Company’s Bylaws) delegate administrative duties and may delegate any of its authority or responsibility hereunder to officers or Directors of the Company. To the extent that the Committee has delegated any of its authority and responsibility under the Plan, all applicable references to the Committee in the Plan shall include a reference to the person or persons to whom such authority or responsibility has been so delegated. The Committee may take action with regard to this Plan by majority vote, by written consent or through any other procedure ordinarily followed by such Committee in the exercise of its other duties on behalf of the Company or its Board.

  3.2. Authority of the Committee. Except as limited by law or by the Articles of Incorporation or Bylaws of the Company, and subject to the provisions herein, the Committee shall have full power to select Employees who shall participate in the Plan; determine the sizes and types of Options; determine the terms and conditions of Options in a manner consistent with the Plan; construe and interpret the Plan and any agreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and (subject to the provisions of Article 10 herein) amend the terms and conditions of any outstanding Option as provided in the Plan. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan. As permitted by law (and subject to Section 3.1 herein), the Committee may delegate its authority as identified herein. All of the powers, duties and authorities granted to the Board, the Committee or their delegates in this Section or elsewhere in the Plan shall be exercised by the Board, the Committee or such delegates, as the case may be, in the manner they deem appropriate in their sole discretion. An Employee shall only have or be entitled to Options and rights with respect to Options under this Plan if the Committee or its delegates decide in their discretion that such Employee is entitled to them.

  3.3. Decisions Binding. All determinations and decisions made by the Board, the Committee or their delegates pursuant to the provisions of the Plan and all related orders and resolutions of the Board or the Committee shall be final, conclusive and binding on all persons, including the Company, its shareholders, Directors, Employees, Participants, and their estates and beneficiaries. When making a determination or a calculation, the Committee or its delegates shall be entitled to rely on information supplied by the Company, an Employee, accountants, and other professionals including legal counsel for the Company.

If a participant has any questions or concerns regarding any issue or disagrees in any way with any decision of the Board, the Committee or their delegates hereunder, his or her sole recourse shall be file a claim or appeal with the Committee in care of the Company, pursuant to rules established by the Committee for this purpose. All decisions made by the Committee in accordance with such procedures shall be made by the Committee as it deems appropriate in its sole discretion. An Employee shall only have or be entitled to Options and rights with respect to Options under this Plan if the Committee decides in its discretion that such Employee is entitled to them. No legal action seeking Options or rights with respect to Options hereunder may be filed in any court unless the claimant has first exhausted all such procedural rights prior to commencing such action. Further, no such legal action may be commenced any later than three years after the earliest of: (i) the date of the termination of the employment of the participant whose benefits are the subject of such claim; (ii) the date the Employee was first entitled to exercise any Options hereunder; or (iv) the date the Employee is informed of the Committee’s decision on his or her claim or appeal, pursuant to this Section 3.3.

Article 4. Adjustments in Authorized Shares

In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Code Section 368) or any partial or complete liquidation of the Company, such adjustment shall be made in the number and class of Shares which are subject to outstanding Options granted pursuant to Section 6.1, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; provided, however, that the number of Shares subject to any Option shall always be a whole number.

Article 5. Eligibility and Participation

The Committee shall have the discretion to determine eligibility for participation in this Plan from among Employees who are employed by the Company on May 11, 2000. For purposes of this paragraph, a person otherwise satisfying the status as an Employee shall be deemed to be Employed as of such date even though on such date he or she was absent because of paid and unpaid disability leave, personal leave, family and medical leave. A person who has accepted an offer of employment as an Employee shall also be deemed to be employed for such purpose, provided he or she actually commences such employment with the Company.

Article 6. Stock Options

   6.1. Grant of Options. Subject to the terms and provisions of the Plan, persons who the Committee determines are Participants eligible to receive Option Grants hereunder pursuant to Article 5, shall be Granted Options in accordance with the following schedule:

The number of Shares with respect to which Options shall be granted by the Committee under the Plan shall be such number as is equal to the aggregate number of Shares with respect to which Options are granted to all Participants by the Committee by application of this schedule. For purposes of this Section a Participant’s "Service" shall be determined by the Committee in its sole discretion based upon the Company’s records and such determination, once made, shall be conclusive as to all persons.

  6.2. Option Price. The Option Price for each grant of an Option under this Plan shall be equal to the closing price of a Share on the New York Stock Exchange on May 11, 2000, as reported in the New York Stock Exchange Composite Transactions section of the Midwest edition of The Wall Street Journal or such other evidence of such trading price as the Committee may determine.

  6.3. Duration of Options. Each Option granted to a Participant which has not previously been exercised or expired by operation of the Plan shall expire on May 10, 2010.

  6.4. Exercise of Options. Options do not provide the Participant with any rights or interests until they vest and become exercisable. The Options will vest and become exercisable on May 11, 2003.

  6.5. Payment. Options granted under this Article 6 shall be exercised by the delivery of a written notice of exercise to the Company (on a form specified by the Company for this purpose), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

The Option Price upon exercise of any Option shall be payable to the Company in full cash or its equivalent.

Participants may also exercise an Option, subject to securities law restrictions, pursuant to a "cashless exercise" procedure, as permitted under the United States Federal Reserve Board’s Regulation T.

Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver to the Participant, in the Participant’s name, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s).

  6.6. Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

  6.7. Nontransferability of Options. No Option may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or, subject to Section 7.1, by the laws of descent and distribution. Further, all Options shall be exercisable during his or her lifetime only by such Participant. If any person entitled to Options under the Plan is under a legal disability or in the Committee’s opinion is incapacitated in any way so as to be unable to manage his or her financial affairs, the Committee may accept exercise directions from such person's legal representative for such person's benefit, from a custodian under the Uniform Gifts or Transfers to Minors Act of any state, or from a relative or friend of such person for such person's benefit.

  6.8. No Rights as a Shareholder. Prior to the purchase of Shares pursuant to an Option, a Participant shall not have the rights of a shareholder with respect to such Shares.

Article 7. Termination of Employment

   7.1. Termination by Reason of Death, Disability, or Retirement. In the event the employment of a Participant is terminated by reason of death, Disability, or Retirement, the following rules shall apply:

(a) Termination Prior to Vesting on May 11, 2003. If the Participant’s employment termination in accordance with this Section 7.1 occurs prior to the vesting of his or her Options, which is scheduled to occur for all such Participants on May 11, 2003, then his or her Options hereunder shall continue to vest as if such termination of employment had not occurred. Such Options shall be exercisable by the Participant or by such person or persons that have properly acquired the Participant’s rights under the Option at any time during the 12-month period beginning on the date such Options vest and ending on the first anniversary of such vesting date.

(b) Termination After Vesting on May 11, 2003. If the Participant’s employment termination in accordance with this Section 7.1 occurs on or after the vesting of his or her Options, which is scheduled to occur for all such Participants on May 11, 2003, then his or her Options hereunder shall remain exercisable at any time prior to the earlier of: (i) their expiration date; or (ii) the date which is 12 months after the Participant’s effective date of employment termination.

If at the time of a Participant’s death, the Committee believes it is unable to determine what person, persons, or entity is entitled to exercise Options on behalf of the Participant, the Committee shall not be required to implement any directions to exercise such Options to any such person, persons, or entity during the pendency of such dispute. Neither the Committee or the Company shall be responsible for a failure to implement such exercise instructions or to deliver such Plan Shares during the pendency of such dispute, notwithstanding the fact that such Plan Shares or Options may diminish in value or expire during the pendency of such dispute.

As provided in Section 6.7, no person other than a Participant may exercise any rights hereunder except pursuant to the laws of descent and distribution or as a representative of an incapacitated Participant.

  7.2. Other Terminations of Employment. Except as provided in Section 7.3, the following rules shall apply in the case of voluntary or involuntary terminations of employment not described in Section 7.1:

(a) Termination Prior to Vesting on May 11, 2003. If the Participant’s employment termination in accordance with this Section 7.2 occurs prior to the vesting of his or her Options, which is scheduled to occur for all such Participants on May 11, 2003, then his or her Options hereunder shall immediately be forfeited to the Company, and no additional vesting or exercise period shall be allowed.

(b) Termination After Vesting on May 11, 2003. If the Participant’s employment termination in accordance with this Section 7.2 occurs on or after the vesting of his or her Options, which is scheduled to occur for all such Participants on May 11, 2003, then his or her Options hereunder shall remain exercisable at any time prior to the earlier of: (i) their expiration date; or (ii) the date which is three months after the Participant’s effective date of employment termination.

  7.3. Disqualifying Termination. Upon a Participant’s Disqualifying Termination all outstanding Options, held by the Participant shall immediately be forfeited to the Company, and no additional exercise period shall be allowed.

Article 8. Rights of Employees

   8.1. Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.

  8.2. Participation. No Employee shall have the right to be selected to receive an Option under this Plan, or, having been so selected, to be selected to receive a future Option.

Article 9. Change in Control

   9.1. Treatment of Outstanding Options. Upon the occurrence of a Change in Control, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges, any and all Options granted hereunder shall become immediately exercisable, and shall remain exercisable throughout their entire term.

  9.2. Termination, Amendment, and Modifications of Change-in-Control Provisions. Notwithstanding any other provision of this Plan (but subject to the limitations of Section 10.2 hereof), the provisions of this Article 9 may not be terminated, amended, or modified on or after the date of a Change in Control to affect adversely any Award theretofore granted under the Plan without the prior written consent of the Participant with respect to said Participant’s outstanding Awards; provided, however, the Board may terminate, amend, or modify this Article 9 at any time and from time to time prior to the date of a Change in Control.

  9.3. Pooling of Interests Accounting. Notwithstanding any other provision of the Plan to the contrary, in the event that the consummation of a Change in Control is contingent on using pooling of interests accounting methodology, the Board may take any action necessary to preserve the use of pooling of interests accounting.

Article 10. Amendment, Modification, and Termination

10.1. Amendment, Modification, and Termination. Subject to the terms of the Plan, the Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part.

10.2. Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award. However, the Committee shall have the right to impose additional restrictions regarding the exercise of Option rights by a Participant whose salary Grade is increased to a salary Grade of 18 or above subsequent to May 11, 2000 to assure compliance with securities laws or other restrictions that may become applicable in such circumstances.

Article 11. Withholding

11.1. Tax Withholding . The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

11.2. Share Withholding. With respect to withholding required upon the exercise of Options, Participants may elect, subject to the approval of the Board, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a fair market value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Board, in its sole discretion, deems appropriate.

Article 12. Indemnification

The Committee, the Board and their delegates and each person who is or shall have been a member of the Committee, the Board, or an entity to whom authority is delegated hereunder shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken in good faith or any good faith failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

Article 13. Successors

All obligations of the Company under the Plan, with respect to Options granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

Article 14. Legal Construction

14.1. Gender and Number . Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

14.2. Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

14.3. Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

14.4. Governing Law. To the extent not preempted by federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the state of Illinois.