WALGREEN CO. EXECUTIVE STOCK OPTION PLAN - STOCK OPTION AGREEMENT

This document (referred to below as this “Agreement” or this “Option Agreement”) spells out the terms and conditions of the stock option granted by Walgreen Co. , an Illinois corporation (the “Company”), to the individual employee designated above (the “Employee”) pursuant to the Walgreen Co. Executive Stock Option Plan (the “Plan”) on and as of the Date of Grant designated above.  Except as otherwise defined herein, capitalized terms used in this Option Agreement have the respective meanings set forth in the Plan.  The Plan, as in effect on the date of this Option Agreement and as it may be amended from time to time, is incorporated in this Option Agreement by reference, and all rights granted by this Option Agreement are subject to the terms and conditions of the Plan.

1.          Grant of Stock Option .  The Company hereby grants to the Optionee a stock option to purchase all or any part of the Number of Shares set forth above of Common Stock of the Company, par value $.078125 ("Common Stock"), at the Option Price set forth above, which is 100% of the fair market value of such Common Stock on the Date of Grant, in the manner and subject to the terms and conditions of the Plan and this Option Agreement.  This stock option is intended to be a "non-qualified stock option" and shall not be treated as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

2.          Vesting/Exercise/Expiration .  The Optionee may not exercise the stock option granted prior to the “Vesting Date” defined below, absent action by the Compensation Committee of the Board of Directors to waive or alter such restrictions.  Thereafter, except as hereinafter provided, the Optionee may exercise the stock option granted herein at any time and from time to time until the close of business on the Expiration Date set forth above.  The stock option granted herein may be exercised to purchase any number of whole shares of Common Stock, except that no purchase shall be for less than ten (10) full shares, or the remaining unexercised shares, if less.  This stock option is deemed to be "outstanding" until it has been exercised in full or expired pursuant to the terms of this Option Agreement.  For purposes of this Agreement, the Vesting Date is defined as follows:

One half of the Number of Shares subject to this stock option shall become vested as of the earlier of the date a new Chief Executive Officer begins employment with the Company and the six-month anniversary of the Date of Grant.  If the Optionee continues to serve as Chief Executive Officer beyond the six-month anniversary of the Date of Grant, then the other half of the Number of Shares subject to this stock option shall become vested over the course of the ensuing 12-month period of continued employment as Chief Executive Officer, as follows:  One twelfth of such remaining Number of Shares shall become vested as of the end of each full month following the six-month anniversary of the Date of Grant.  The foregoing is subject to ability of the Committee to waive or accelerate such vesting restrictions as provided above.

3.           Retirement .  If without having fully exercised this stock option, the Optionee retires, then the Optionee's right to exercise this stock option shall terminate upon the earlier of the Expiration Date or a date which is sixty (60) months following the Optionee's retirement.  For purposes of this section, retirement shall be defined as a cessation of employment or Board membership in good standing, and the applicable retirement date shall be defined as the later of the Optionees termination of employment or retirement from the Board of Directors.  Any portion of this stock option that is not vested as of the Optionee’s retirement date shall be forfeited, subject to ability of the Committee to waive or accelerate such vesting restrictions as provided above.

4.          Disability .  If, without having fully exercised this stock option, the Optionee's employment or Board membership with the Company is terminated due to total and permanent disability (as determined by the Compensation Committee of the Board of Directors or its designee), then the Optionee's right to exercise this stock option shall terminate upon the earlier of the Expiration Date or a date which is sixty (60) months following the date of termination of employment or Board membership.  Any portion of this stock option that is not vested at that time shall be forfeited, subject to ability of the Committee to waive or accelerate such vesting restrictions as provided above.

5.          Death .  If, without having fully exercised this stock option, the Optionee shall die while in the employ of the Company or while continuing to serve on the Board of Directors, then this stock option shall be exercisable by the executor or administrator of the Optionee's estate or by such person or persons who shall have acquired the Optionee's rights hereunder by bequest or inheritance or by reason of his death, for a period ending on the earlier of the Expiration Date or sixty (60) months following the date of the Optionee's death.  Any portion of this stock option that is not vested as of the Optionee’s death shall be forfeited, subject to ability of the Committee to waive or accelerate such vesting restrictions as provided above.

6.          Other Termination of Employment .  If, without having fully exercised this stock option, the Optionee ceases to serve as an employee or Board member for reasons other than the Optionee’s retirement (as defined in Section 3 above), death, or total and permanent disability (as defined in Section 4 above), then the Optionee's right to exercise this stock option shall terminate as of the later of the termination of his employment or Board membership, subject to the right