WALGREEN CO. LONG-TERM PERFORMANCE INCENTIVE PLAN

EMPLOYEE:   __________________

AWARD DATE:   __________________

TOTAL NUMBER OF RESTRICTED STOCK UNITS:  _________

VESTING DATE:  [Third anniversary of Award Date]

This document (referred to below as the “Agreement” or the “Award Agreement”) spells out the terms and conditions of the Restricted Stock Unit Award provided by Walgreen Co. , an Illinois corporation (the “Company”), to the individual employee designated above (the “Employee”) pursuant to the Walgreen Co. Long-Term Performance Incentive Plan and related plan documents (the “Plan”) on and as of the Award Date designated above.  Except as otherwise defined herein, capitalized terms used in this Agreement have the respective meanings set forth in the Plan.

The parties hereto agree as follows:

1.   Grant of Restricted Stock Units .  Pursuant to the approval and direction of the Compensation Committee of the Company’s Board of Directors (the “Committee”) under Sections 3.2, 5 and 6 of the Plan, the Company hereby grants to the Employee, the number of restricted stock units specified above (the “Restricted Stock Units”), subject to the terms and conditions of the Plan and this Agreement.

2.   Restrictions .  The Restricted Stock Units may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether voluntarily or involuntarily or by operation of law.  The Employee shall have no rights in the shares of Company common stock (the “Common Stock”) underlying the Restricted Stock Units until the termination of the applicable Period of Restriction (as defined in Section 4 below) or as otherwise provided in the Plan or this Agreement.  The Employee shall not have any voting rights with respect to the Restricted Stock Units.

3.   Restricted Stock Unit Account and Dividend Equivalents .  The Company shall maintain an account (the “Account”) on its books in the name of the Employee.  Such Account shall reflect the number of Restricted Stock Units awarded to the Employee as well as any additional Restricted Stock Units credited as a result of dividend equivalents, administered as follows:

(a)   The Account shall be for recordkeeping purposes only, and no assets or other amounts shall be set aside from the Company’s general assets with respect to such Account.

(b)   As of each record date with respect to which a cash dividend is to paid with respect to shares of Common Stock, the Company shall credit the Employee’s Account with an equivalent amount of Restricted Stock Units based upon the value of Common Stock on such date.

(c)   If dividends are paid in the form of shares of Common Stock rather than cash, then the Employee will be credited with one additional Restricted Stock Unit for each share of Common Stock that would have been received as a dividend had the Employee’s outstanding Restricted Stock Units been shares of Common Stock.

(d)   Additional Restricted Stock Units credited via dividend equivalents shall vest or be forfeited at the same time as the Restricted Stock Units to which they relate.

4.   Period of Restriction .  Subject to the provisions of the Plan and this Agreement, unless vested or forfeited earlier as described in Section 5, 6, 7 or 8 of this Agreement, as applicable, the Restricted Stock Units awarded hereunder shall become vested and settled as described in Section 9 below, as of the vesting date or dates indicated in the introduction to this Agreement.  The period prior to the vesting date with respect each Restricted Stock Unit is referred to as the “Period of Restriction.”

5.   Vesting upon Termination due to Disability or Death .  If, while the Restricted Stock Units are subject to a Period of Restriction, the Employee terminates employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) by reason of Disability (as defined in the Plan) or death, then any portion of the Restricted Stock Units subject to a Period of Restriction shall become fully vested as of the date of employment termination without regard to the Period of Restriction set forth in Section 4 of this Agreement.  The term “Subsidiary” is defined in the Plan and means a corporation with respect to which the Company directly or indirectly owns 50% or more of the voting power.

6.   Vesting upon Termination due to Retirement .  If, while the Restricted Stock Units are subject to a Period of Restriction, the Employee terminates employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) by reason of Retirement (as defined in the Plan), then a pro-rated portion of the Restricted Stock Units subject to a Period of Restriction shall become fully vested as of the date of employment termination without regard to the Period of Restriction set forth in Section 4 of this Agreement.  Such pro-rated portion shall equal the number of Restricted Stock Units, multiplied by a fraction equal to the number of full months completed between the Award Date and the Employee’s retirement date, divided by the number of full months from the Award Date through the Vesting Date.  The remaining Restricted Stock Units shall be forfeited as of the Employee’s termination of employment due to Retirement.

7.   Forfeiture upon Termination due to Reason other than Retirement, Disability or Death .  If, while the Restricted Stock Units are subject to a Period of Restriction, the Employee’s employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) terminates for a reason other than the Employee’s Retirement, Disability or death, then the Employee shall forfeit any portion of the Restricted Stock Units that is subject to a Period of Restriction on the date of such employment termination.

8.   Vesting upon Change in Control .  In the event of a “Change in Control” of the Company, as defined in Section 11.2 of the Plan, pursuant to Section 11.1 of the Plan the Restricted Stock Units shall cease to be subject to the Period of Restriction set forth in Section 4 of this Agreement.  To the extent the Restricted Stock Units are deemed deferred compensation subject to Internal Revenue Code Section 409A, a Change in Control shall not be deemed to have occurred for purposes of this Agreement unless the underlying transaction or transactions constitute a qualifying change in control in accordance with the definition set forth in Code Section 409A and the regulations issued thereunder.

9.   Settlement of Vested Restricted Stock Units .  Subject to the requirements of Sections 12 and 13 below, as promptly as practicable after Restricted Stock Units cease to be subject to a Period of Restriction in accordance with Section 4, 5, or 6 of this Agreement, the Company shall transfer to the Employee one share of Common Stock for each Restricted Stock Unit becoming vested at such time; provided, however, the Company may withhold shares otherwise transferable to the Employee to the extent necessary to satisfy withholding taxes in accordance with Section 12 below.  The Employee shall have no rights as a stockholder with respect to the Restricted Stock Units awarded hereunder prior to the date of issuance to the Employee of a certificate or certificates for such shares.  Certificates for the shares of Common Stock shall be issued and delivered to the Employee, the Employee’s legal representative, or a brokerage account for the benefit of the Employee, as the case may be, or such shares may be held in book entry form.  Restricted Stock Units payable under this Agreement are intended to be exempt from Internal Revenue Code Section 409A under the exemption for short-term deferrals.  Accordingly, Restricted Stock Units will be settled no later than the 15 ^th day of the third month following the later of (i) the end of the Employee’s taxable year in which the Restricted Stock Units cease to be subject to a Period of Restriction, or (ii) the end of the fiscal year of the Company in which the Restricted Stock Units cease to be subject to a Period of Restriction.

10.   Settlement Following Change in Control .  Notwithstanding any provision of this Agreement to the contrary, in connection with or after the occurrence of a Change in Control as defined in Section 11.2 of the Plan, the Company may, in its sole discretion, fulfill its obligation with respect to all or any portion of the Restricted Stock Units that cease to be subject to a Period of Restriction in accordance with Section 8 above, by:

(a)   delivery of (i) the number of shares of Common Stock that corresponds with the number of Restricted Stock Units that have ceased to be subject to a Period of Restriction or (ii) such other ownership interest as such shares of Common Stock that correspond with the vested Restricted Stock Units may be converted into by virtue of the Change in Control transaction in accordance with Section 9 above;

(b)   payment of cash in an amount equal to the fair market value of the Common Stock that corresponds with the number of vested Restricted Stock Units at that time; or

(c)   delivery of any combination of shares of Common Stock (or other converted ownership interest) and cash having an aggregate fair market value equal to the fair market value of the Common Stock that corresponds with the number of Restricted Stock Units that have become vested at that time.

11.   Adjustment in Capitalization .  In the event of any change in the Common Stock of the Company, the provisions of Section 10.2 of the Plan shall govern such that the number of Restricted Stock Units subject to this Agreement shall be equitably adjusted by the Committee.

12.   Tax Withholding .  Whenever a Period of Restriction applicable to the Employee’s rights to some or all of the Restricted Stock Units lapses as provided in Section 4, 5, 6 or 8 of this Agreement, the Company or its agent shall notify the Employee of the related amount of tax that must be withheld under applicable tax laws. Regardless of any action the Company, any Subsidiary of the Company, or the Employee’s employer takes with respect to any or all income tax, social security, payroll tax, payment on account or other tax-related withholding (“Tax”) that the Employee is required to bear pursuant to all applicable laws, the Employee hereby acknowledges and agrees that the ultimate liability for all Tax is and remains the responsibility of the Employee.

Prior to receipt of any shares that correspond to Restricted Stock Units that vest in accordance with this Agreement, the Employee shall pay or make adequate arrangements satisfactory to the Company and/or any Subsidiary of the Company to satisfy all withholding and payment on account obligations of the Company and/or any Subsidiary of the Company.  In this regard, the Employee authorizes the Company and/or any Subsidiary of the Company to withhold all applicable Tax legally payable by the Employee from the Employee’s wages or other cash compensation paid to the Employee by the Company and/or any Subsidiary of the Company or from the proceeds of the sale of shares.  Alternatively or in addition, the Company may sell or arrange for the sale of Common Stock that the Employee is due to acquire to satisfy the withholding obligation for Tax and/or withhold any Common Stock.  Finally, the Employee agrees to pay the Company or any Subsidiary of the Company any amount of any Tax that the Company or any Subsidiary of the Company may be required to withhold as a result of the Employee’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver Common Stock if the Employee fails to comply with its obligations in connection with the tax as described in this section.

The Company advises the Employee to consult his or her legal and/or tax advisors with respect to the tax consequences for the Employee under the Plan.

13.   Securities Laws .  This award is a private offer that may be accepted only by an individual who is an employee of the Company or a Subsidiary of the Company and who satisfies the eligibility requirements outlined in the Plan and the Committee’s administrative procedures.  If a Registration Statement under the Securities Act of 1933, as amended, is not in effect with respect to the shares of Common Stock to be issued pursuant to this Agreement, the Employee hereby represents that he or she is acquiring the shares of Common Stock for invest