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                         DOMINICK'S SUPERMARKETS, INC.

                        RESTATED 1995 STOCK OPTION PLAN























                          As adopted October 28, 1996


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                               TABLE OF CONTENTS


<TABLE>
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                                                                            Page
<S>                                                                          <C>
1.   PURPOSE OF PLAN; ADMINISTRATION                                         
             1.1  Purpose ..................................................  1
             1.2  Administration ...........................................  1
             1.3  Participation ............................................  2
             1.4  Stock Subject to the Plan ................................  2
                                                   
2.   STOCK OPTIONS
             2.1  Option Price .............................................  3
             2.2  Option Period ............................................  4
             2.3  Exercise of Options ......................................  4
             2.4  Transferability of Options ...............................  5
             2.5  Limitation on Exercise of Incentive Stock Options ........  5
             2.6  Disqualifying Dispositions of Incentive Stock Options ....  5
             2.7  No Effect on Employment ..................................  6
             2.8  Conditions to Issuance of Stock Certificates .............  6
                
3.   OTHER PROVISIONS
             3.1  Sick Leave and Leaves of Absence .........................  7
             3.2  Termination of Employment ................................  7
             3.3  Issuance of Stock Certificates ...........................  7
             3.4  Terms and Conditions of Options and Restricted Stock .....  7
             3.5  Adjustments Upon Changes in Capitalization;                  
                   Merger and Consolidation ................................  8
             3.6  Rights of Participants and Beneficiaries .................  9
             3.7  Government Regulations ...................................  9
             3.8  Amendment and Termination ................................  9
             3.9  Time of Grant and Exercise of Options ....................  9
             3.10 Privileges of Stock Ownership; Non-Distributive              
                   Intent; Reports to Option Holders ....................... 10
             3.11 Legending Share Certificates ............................. 10
             3.12 Use of Proceeds .......................................... 10
             3.13 Changes in Capital Structure; No Impediment                  
                   to Corporate Transactions ............................... 11
             3.14 Effective Date of the Plan ............................... 11
             3.15 Termination .............................................. 11
             3.16 Governing Law ............................................ 11
             3.17 Effect of Plan Upon Options and Compensation Plans ....... 11

</TABLE>




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1. PURPOSE OF PLAN; ADMINISTRATION

     1.1 Purpose.

     The Dominick's Supermarkets, Inc. Restated 1995 Stock Option Plan
(hereinafter, the "Plan"), amending and restating the Dominick's Supermarkets,
Inc. 1995 Stock Option Plan, is hereby established to grant to officers and
other key employees of Dominick's Supermarkets, Inc. ("Supermarkets") or of its
parent or subsidiaries (as defined in Sections 424(e) and (f), respectively, of
the Internal Revenue Code of 1986, as amended (the "Code")), if any
(individually and collectively, the "Company"), a favorable opportunity to
acquire Common Stock, $.01 par value ("Common Stock"), of Supermarkets and,
thereby, to create an incentive for such persons to remain in the employ of or
provide services to the Company and to contribute to its success.

     The Company may grant under the Plan both incentive stock options within
the meaning of Section 422 of the Code ("Incentive Stock Options") and stock
options that do not qualify for treatment as Incentive Stock Options
("Nonstatutory Options").  Unless expressly provided to the contrary herein,
all references herein to "options" shall include both Incentive Stock Options
and Nonstatutory Options.

     1.2 Administration.

     The Plan shall be administered by a committee (the "Committee"), which
shall consist of the entire Board of Directors (the "Board") of Dominick's
Supermarkets, Inc. until such time as the Board shall, in its sole discretion,
appoint a committee of two or more independent non-employee members of the
Board, each of whom shall be a "non-employee director" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"), and, to the extent that options granted under the Plan are intended to
qualify as performance-based compensation under Section 162(m) of the Code
after the expiration of the transition period specified in Treasury Regulation
Section  1.162-27(f), an "outside director" for purposes of Section 162(m) of
the Code.  Appointment of Committee members shall be effective upon acceptance
of appointment.  Committee members may resign at any time by delivering written
notice to the Board.  Vacancies in the Committee may be filled by the Board.

     A majority of the members of the Committee shall constitute a quorum for
the purposes of the Plan.  Provided a quorum is present, the Committee may take
action by affirmative vote or consent of a majority of its members present at a
meeting.  Meetings may be held telephonically as long as all members are able
to hear one another, and a member of the Committee shall be deemed to be
present for this purpose if he or she is in simultaneous communication by
telephone with the other members who are able to hear one another.  In lieu of
action at a meeting, the Committee may act by written consent of a majority of
its members.


     Subject to the express provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan and all Stock Option
Agreements entered into pursuant hereto and to define the terms used therein,
to prescribe, adopt, amend and rescind rules and regulations relating to the
administration of the Plan and to make all other determinations necessary or
advisable for the administration of the Plan; provided, however, that the
Committee may delegate nondiscretionary administrative duties to such employees
of the Company as it deems proper except with respect to matters which under
Rule 16b-3 are required to be determined in the sole discretion of the
Committee; and, provided, further, in its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b-3
are required to be determined in the sole

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discretion of the Committee.  Subject to the express limitations of the
Plan, the Committee shall designate the individuals from among the class of
persons eligible to participate as provided in Section 1.3 who shall receive
options, whether an optionee will receive Incentive Stock Options or
Nonstatutory Options, or both, and the amount, price, restrictions and all
other terms and provisions of such options (which need not be identical).

     Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board.  All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company.  The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons.  The Committee, the Company and the
Company's officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons.  No members of the Committee or
Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, options and all
members of the Committee shall be fully protected by the Company in respect of
any such action, determination or interpretation.

     1.3 Participation.

     Officers and other key employees of the Company shall be eligible for
selection to participate in the Plan upon approval by the Committee.  An
individual who has been granted an option may, if otherwise eligible, be
granted additional options if the Committee shall so determine.  No person is
eligible to participate in the Plan by matter of right; only those eligible
persons who are selected by the Committee in its discretion shall participate
in the Plan.

     1.4 Stock Subject to the Plan.

     Subject to adjustment as provided in Section 3.5, the stock to be offered
under the Plan shall be shares of authorized but unissued Common Stock,
including any shares repurchased under the terms of the Plan or any Stock
Option Agreement (as defined in Section 3.4) entered into pursuant hereto.  The
cumulative aggregate number of shares of Common Stock to be issued under the
Plan shall not exceed 966,835, subject to adjustment as set forth in Section
3.5.  The maximum number of shares of Common Stock which may be subject to
options granted under the Plan to any individual in any calendar year shall not
exceed 500,000.

     If any option granted hereunder shall expire or terminate for any reason
without having been fully exercised, the unpurchased shares subject thereto
shall again be available for the purposes of the Plan.  For purposes of this
Section 1.4, where the exercise price of options is paid by means of the
grantee's surrender of previously owned shares of Common Stock, only the net
number of additional shares issued and which remain outstanding in connection
with such exercise shall be deemed "issued" for purposes of the Plan.

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2. STOCK OPTIONS

     2.1 Option Price.

     The exercise price of each Incentive Stock Option granted under the Plan
shall be determined by the Committee, but shall not be less than 100% of the
"Fair Market Value" (as defined below) of Common Stock on the date of grant.
If an Incentive Stock Option is granted to an employee who at the time such
option is granted owns (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of capital stock of
the Company, the option exercise price shall be at least 110% of the Fair
Market Value of Common Stock on the date of grant.  The exercise price of each
Nonstatutory Option shall be any amount determined by the Committee in its
discretion, with or without reference to the Fair Market Value of Common Stock.
The status of each option granted under the Plan as either an Incentive Stock
Option or a Nonstatutory Stock Option shall be determined by the Committee at
the time the Committee acts to grant the option, and shall be clearly
identified as such in the Stock Option Agreement relating thereto.

     "Fair Market Value" for purposes of the Plan shall mean:  (i) the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any, on the day previous to such date, or, if
shares were not traded on the day previous to such date, then on the next
preceding trading day during which a sale occurred; or (ii) if Common Stock is
not traded on an exchange but is quoted on NASDAQ or a successor quotation
system, (1) the last sales price (if Common Stock is then listed on the Nasdaq
Stock Market) or (2) the mean between the closing representative bid and asked
price (in all other cases) for Common Stock on the day prior to such date as
reported by NASDAQ or such successor quotation system; or (iii) if there is no
listing or trading of Common Stock either on a national exchange or
over-the-counter, that price determined in good faith by the Committee to be
the fair value per share of Common Stock, based upon such evidence as it deems
necessary or advisable.

     In the discretion of the Committee exercised at the time the option is
exercised, the exercise price of any option granted under the Plan shall be
paid in full in cash, by check or by the optionee's interest-bearing full
recourse promissory note (subject to any limitations of applicable state
corporations law) delivered at the time of exercise; provided, however, that in
the discretion of the Committee and upon receipt of all regulatory approvals,
the person exercising the option may deliver as payment in whole or in part of
such exercise price certificates for Common Stock of the Company (duly endorsed
or with duly executed stock powers attached), which shall be valued at its Fair
Market Value on the day of exercise of the option, or other property deemed
appropriate by the Committee; and, provided further, that subject to Section
422 of the Code so-called cashless exercises as permitted under applicable
rules and regulations of the Securities and Exchange Commission and the Federal
Reserve Board shall be permitted in the discretion of the Committee.
Without limiting the Committee's discretion in this regard, so-called
pyramiding, or consecutive book entry stock-for-stock exercises of options,
also is permitted in the Committee's discretion.

     Irrespective of the form of payment, the delivery of shares pursuant to
the exercise of an option shall be conditioned upon payment by the optionee to
the Company of amounts sufficient to enable the Company to pay all federal,
state, and local withholding taxes applicable, in the Company's judgment, to
the exercise.  In the discretion of the Committee, such payment to the Company
may be effected through (i) the Company's withholding from the number of shares
of 

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Common Stock that would otherwise be delivered to the optionee by the
Company on exercise of the option a number of shares of Common Stock equal in
value (as determined by the Fair Market Value of Common Stock on the date of
exercise) to the aggregate withholding taxes, (ii) payment by the optionee to
the Company of the aggregate withholding taxes in cash, (iii) withholding by
the Company from other amounts contemporaneously owed by the Company to the
optionee, or (iv) any combination of these three methods, as determined by the
Committee in its discretion.

     2.2 Option Period.

     (a) Each option and all rights or obligations thereunder shall expire on
such date as the Committee shall determine as set forth in the Stock Option
Agreement, but in no event shall any option granted hereunder expire prior to
the first to occur of the following events:

         (i) Except as required by Section 422(c)(6) of the Code, the 
expiration of ten years from the date the option was granted; or

        (ii) Except in the case of any optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of three months from
the date of the optionee's Termination of Employment (as defined in Section
3.2) for any reason other than such optionee's death unless the optionee dies
within said three-month period; or

       (iii) In the case of an optionee who is disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of six months from the date of
the Optionee's Termination of Employment by reason of such disability, unless
the Optionee dies within said six-month period; or

        (iv) The expiration of six months from the date of the optionee's death.

     (b) Subject to the provisions of Section 2.2(a), the Committee shall
provide, in the terms of each Stock Option Agreement, when the option subject
to such agreement expires and becomes unexercisable; and (without limiting the
generality of the foregoing) the Committee may provide in the Stock Option
Agreement that the option subject thereto expires 30 days following a
Termination of Employment for any reason other than death or disability or six
months following a Termination of Employment for disability or following an
optionee's death.

     (c) Outside Date for Exercise.  Notwithstanding any provision of this
Section 2.2, in no event shall any option granted under the Plan be exercised
after the expiration date of such option set forth in the applicable Stock
Option Agreement.


     2.3 Exercise of Options.

     Each option granted under the Plan shall become exercisable and the total
number of shares subject thereto shall be purchasable, in a lump sum or in such
installments, which need not be equal, as the Committee shall determine;
provided, however, that each option shall become exercisable in full no later
than five years after such option is granted, and each option shall become
exercisable as to at least 20% of the shares of Common Stock covered thereby on
each anniversary of the date such option is granted; and provided, further,
that if the holder of an 

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option shall not in any given installment period purchase all of the shares 
which such holder is entitled to purchase in such installment period, such 
holder's right to purchase any shares not purchased in such installment
period shall continue until the expiration or sooner termination of such
holder's option.  The Committee may, at any time after grant of the option and
from time to time, increase the number of shares purchasable in any
installment, subject to the total number of shares subject to the option and
the limitations set forth in Section 2.5.  At any time and from time to time
prior to the time when any exercisable option or exercisable portion thereof
becomes unexercisable under the Plan or the applicable Stock Option Agreement,
such option or portion thereof may be exercised in whole or in part; provided,
however, that the Committee may, by the terms of the option, require any
partial exercise to be with respect to a specified minimum number of shares. 
No option or installment thereof shall be exercisable except with respect to
whole shares.  Fractional share interests shall be disregarded, except that
they may be accumulated as provided above and except that if such a fractional
share interest constitutes the total shares of Common Stock remaining available
for purchase under an option at the time of exercise, the optionee shall be
entitled to receive on exercise a certified or bank cashier's check in an
amount equal to the Fair Market Value of such fractional share of stock.

     2.4 Transferability of Options.

     An option granted under the Plan shall, by its terms, be non-transferable
by the optionee other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined by the Code or
Title 1 of the Employee Retirement Income Security Act, or the rules
thereunder), and shall be exercisable during the optionee's lifetime only by
the optionee or by his or her guardian or legal representative.  More
particularly, but without limiting the generality of the immediately preceding
sentence, an option may not be assigned, transferred (except as provided in the
preceding sentence), pledged or hypothecated (whether by operation of law or
otherwise), and shall not be subject to execution, attachment or similar
process.  Any attempted assignment, transfer, pledge, hypothecation or other
disposition of any option contrary to the provisions of the Plan and the
applicable Stock Option Agreement, and any levy of any attachment or similar
process upon an option, shall be null and void, and otherwise without effect,
and the Committee may, in its sole discretion, upon the happening of any such
event, terminate such option forthwith.


     2.5 Limitation on Exercise of Incentive Stock Options.

     To the extent that the aggregate Fair Market Value (determined at the time
an option is granted) of the Common Stock with respect to which Incentive Stock
Options granted hereunder (and under all other incentive stock option plans of
the Company or any Parent Corporation or any Subsidiary) are exercisable for
the first time by an optionee in any calendar year under the Plan exceeds
$100,000, such options granted hereunder shall be treated as Nonstatutory
Options to the extent required by Section 422 of the Code.  The rule set forth
in the preceding sentence shall be applied by taking options into account in
the order in which they were granted.

     2.6 Disqualifying Dispositions of Incentive Stock Options.

     If Common Stock acquired upon exercise of any Incentive Stock Option is
disposed of in a disposition that, under Section 422 of the Code, disqualifies
the option holder from the application of Section 421(a) of the Code, the
holder of the Common Stock immediately before 

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<PAGE>   8

the disposition shall comply with any requirements imposed by the
Company in order to enable the Company to secure the related income tax
deduction to which it is entitled in such event.

     2.7 No Effect on Employment.

     Nothing in the Plan or in any Stock Option Agreement hereunder shall
confer upon any optionee any right to continue in the employ of Supermarkets,
any Parent Corporation or any Subsidiary or shall interfere with or restrict in
any way the rights, if any, of Supermarkets, any Parent Corporation or any
Subsidiary, which are hereby expressly reserved, to discharge any optionee at
any time for any reason whatsoever, with or without cause, subject to the terms
of any employment agreement.

     For purposes of the Plan, "Parent Corporation" shall mean any corporation
in an unbroken chain of corporations ending with the Company if each of the
corporations other than the Company then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.  For purposes of the Plan, "Subsidiary" shall mean
any corporation in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in the unbroken
chain then owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

     2.8 Conditions to Issuance of Stock Certificates.

     The Company shall not be required to issue or deliver any certificate or
certificates for shares of Common Stock purchased upon the exercise of any
option or portion thereof prior to fulfillment of all of the following
conditions:

     (a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;

     (b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body which the Committee or Board shall, in its absolute discretion, deem
necessary or advisable;

     (c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee or Board shall, in its absolute
discretion, determine to be necessary or advisable;

     (d) The lapse of such reasonable period of time following the exercise of
the option as the Committee or Board may establish from time to time solely for
reasons of administrative convenience; and

     (e) The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax.

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3.   OTHER PROVISIONS

     3.1 Sick Leave and Leaves of Absence.

     Unless otherwise provided in the Stock Option Agreement, and to the extent
permitted by Section 422 of the Code, an optionee's employment shall not be
deemed to terminate by reason of sick leave, military leave or other leave of
absence approved by the Company if the period of any such leave does not exceed
a period approved by the Company, or, if longer, if the optionee's right to
reemployment by the Company is guaranteed either contractually or by statute.
A Stock Option Agreement may contain such additional or different provisions
with respect to leave of absence as the Committee may approve, either at the
time of grant of an option or at a later time.

     3.2 Termination of Employment.

     For purposes of the Plan, "Termination of Employment" shall mean the time
when the employee-employer relationship between the optionee and Supermarkets,
any Subsidiary or any Parent Corporation is terminated for any reason,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (i) terminations
where there is a simultaneous reemployment or continuing employment of an
optionee by Supermarkets, any Subsidiary or any Parent Corporation, (ii) at the
discretion of the Committee, terminations which result in a temporary severance
of the employee-employer relationship, and (iii) at the discretion of the
Committee, terminations which are followed by the simultaneous establishment of
a consulting relationship by Supermarkets, a Subsidiary or any Parent
Corporation with the former employee.  Subject to Section 3.1, the Committee,
in its absolute discretion, shall determine the affect of all matters and
questions relating to Termination of Employment; provided, however, that, with
respect to Incentive Stock Options, a leave of absence or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the
then-applicable regulations and revenue rulings under said Section.


     3.3 Issuance of Stock Certificates.

     Upon exercise of an option, the Company shall deliver to the person
exercising such option a stock certificate evidencing the shares of Common
Stock acquired upon exercise.  Notwithstanding the foregoing, the Committee in
its discretion may require the Company to retain possession of any certificate
evidencing stock acquired upon exercise of an option which remains subject to
repurchase under the provisions of the Stock Option Agreement or any other
agreement signed by the optionee in order to facilitate such repurchase
provisions.

     3.4 Terms and Conditions of Options and Restricted Stock.

     Each option granted under the Plan shall be evidenced by a written Stock
Option Agreement ("Stock Option Agreement") between the option holder and the
Company providing that the option is subject to the terms and conditions of the
Plan and to such other terms and conditions not inconsistent therewith as the
Committee may deem appropriate in each case.

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<PAGE>   10



     3.5   Adjustments Upon Changes in Capitalization; Merger and
           Consolidation.

     If the outstanding shares of Common Stock are changed into, or exchanged
for cash or a different number or kind of shares or securities of the Company
or of another corporation through reorganization, merger, recapitalization,
reclassification, stock split-up, reverse stock split, stock dividend, stock
consolidation, stock combination, stock reclassification or similar
transaction, an appropriate adjustment shall be made by the Committee in the
number and kind of shares as to which options may be granted.  In the event of
such a change or exchange, other than for shares or securities of another
corporation or by reason of reorganization, the Committee shall also make a
corresponding adjustment changing the number or kind of shares and the exercise
price per share allocated to unexercised options or portions thereof, which
shall have been granted prior to any such change, shall likewise be made.  Any
such adjustment, however, shall be made without change in the total price
applicable to the unexercised portion of the option but with a corresponding
adjustment in the price for each share (except for any change in the aggregate
price resulting from rounding-off of share quantities or prices).

     In the event of a "spin-off" or other substantial distribution of assets
of the Company which has a material diminutive effect upon the Fair Market
Value of the Common Stock, the Committee shall make such an adjustment to the
exercise prices of options then outstanding under the Plan as the Committee
determines, in its discretion, is appropriate and equitable to reflect such
diminution.

     Where an adjustment under this Section 3.5 of the type described above is
made to an Incentive Stock Option, the adjustment will be made in a manner
which will not be considered a "modification" under the provisions of
subsection 424(b)(3) of the Code.


     In connection with the dissolution or liquidation of Supermarkets or a
partial liquidation involving 50% or more of the assets of Supermarkets, a
reorganization of Supermarkets in which another entity is the survivor, a
merger or reorganization of Supermarkets under which more than 50% of the
Common Stock outstanding prior to the merger or reorganization is converted
into cash or into another security, a sale of more than 50% of the Company's
assets, or a similar event that the Committee determines, in its discretion,
would materially alter the structure of Supermarkets or its ownership, the
Committee, upon 30 days prior written notice to the option holders, may, in its
discretion, do one or more of the following:  (i) shorten the period during
which options are exercisable (provided they remain exercisable for at least 30
days after the date the notice is given); (ii) accelerate any vesting schedule
to which an option is subject; (iii) arrange to have the surviving or successor
entity grant replacement options with appropriate adjustments in the number and
kind of securities and option prices; or (iv) cancel options upon payment to
the option holders in cash, with respect to each option to the extent then
exercisable (including any options as to which the exercise has been
accelerated as contemplated in clause (ii) above), of any amount that is the
equivalent of the Fair Market Value of the Common Stock (at the effective time
of the dissolution, liquidation, merger, reorganization, sale of other event)
or the fair market value of the option.  In the case of a change in corporate
control, the Committee may, in considering the advisability or the terms and
conditions of any acceleration of the exercisability of any option pursuant to
this Section 3.5, take into account the penalties that may result directly or
indirectly from such acceleration to either the Company or the option holder,
or both, under Section 280G of the Code, and may decide to limit such
acceleration to the extent necessary to avoid or mitigate such penalties or
their effects.

                                      8
<PAGE>   11


     No fractional share of Common Stock shall be issued under the Plan on
account of any adjustment under this Section 3.5.

     3.6 Rights of Participants and Beneficiaries.

     The Company shall pay all amounts payable hereunder only to the optionee
holder or beneficiaries entitled thereto pursuant to the Plan.  The Company
shall not be liable for the debts, contracts or engagements of any optionee or
his or her beneficiaries, and rights to cash payments under the Plan may not be
taken in execution by attachment or garnishment, or by any other legal or
equitable proceeding while in the hands of the Company.

     3.7 Government Regulations.

     The Plan, and the grant and exercise of options and the issuance and
delivery of shares of Common Stock under Options granted hereunder, shall be
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law) and
federal margin requirements and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith.  Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable
to assure compliance with all applicable legal requirements.  To the extent
permitted by applicable law, the Plan and options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

     3.8 Amendment and Termination.

     The Board or the Committee may at any time suspend, amend or terminate the
Plan and may, with the consent of the option holder, make such modifications of
the terms and conditions of such option holder's option as it shall deem
advisable; provided, however, that, without approval of the Company's
stockholders given within twelve months before or after the action by the
Committee, no action of the Committee may, except as provided in Section 3.5,
increase any limit imposed in Section 1.4 on the maximum number of shares which
may be issued on exercise of options, materially modify the eligibility
requirements of Section 1.3, reduce the minimum stock option exercise price
requirements of Section 2.1, extend the limit imposed in this Section 3.8 on
the period during which options may be granted or amend or modify the Plan in a
manner requiring stockholder approval under Rule 16b-3.  The amendment,
suspension or termination of the Plan shall not, without the consent of the
option holder affected thereby, alter or impair any rights or obligations under
any option theretofore granted under the Plan.  No option may be granted during
any period of suspension nor after termination of the Plan, and in no event may
any option be granted under the Plan after the expiration of ten years from the
date the Plan is adopted by the Board.

     3.9 Time of Grant and Exercise of Options.

     An option shall be deemed to be exercised when the Secretary of the
Company receives written notice from an option holder of such exercise, payment
of the purchase price determined pursuant to Section 2.1 of the Plan and set
forth in the Stock Option Agreement, and all representations, indemnifications
and documents reasonably requested by the Committee.


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<PAGE>   12



     3.10 Privileges of Stock Ownership; Non-Distributive Intent;
          Reports to Option Holders.

     A participant in the Plan shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock not actually issued to him.  Upon
exercise of an option at a time when there is not in effect under the
Securities Act of 1933, as amended, a Registration Statement relating to the
Common Stock issuable upon exercise or payment therefor and available for
delivery a Prospectus meeting the requirements of Section 10(a)(3) of said Act,
the optionee shall represent and warrant in writing to the Company that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof.  No shares shall be issued upon the exercise of any
option unless and until there shall have been full compliance with any
then-applicable requirements of the Securities and Exchange Commission and
other regulatory agencies having jurisdiction, and any exchanges upon which the
Common Stock may be listed.

     The Company shall furnish to each optionee under the Plan the Company's
annual report and such other periodic reports, if any, as are disseminated by
the Company in the ordinary course to its stockholders.


     3.11 Legending Share Certificates.

     In order to enforce any restrictions imposed upon Common Stock issued upon
exercise of an option granted under the Plan or to which such Common Stock may
be subject, the Committee may cause a legend or legends to be placed on any
share certificates representing such Common Stock, which legend or legends
shall make appropriate reference to such restrictions, including, but not
limited to, a restriction against sale of such Common Stock for any period of
time as may be required by applicable laws or regulations.  If any restriction
with respect to which a legend was placed on any certificate ceases to apply to
Common Stock represented by such certificate, the owner of the Common Stock
represented by such certificate may require the Company to cause the issuance
of a new certificate not bearing the legend.

     Additionally, and not by way of limitation, the Committee may impose such
restrictions on any Common Stock issued pursuant to the Plan as it may deem
advisable, including, without limitation, restrictions under the requirements
of any stock exchange upon which Common Stock is then traded.

     3.12 Use of Proceeds.

     Proceeds realized pursuant to the exercise of options under the Plan shall
constitute general funds of the Company.

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     3.13  Changes in Capital Structure; No Impediment to Corporate
           Transactions.

     The existence of outstanding options under the Plan shall not affect the
Company's right to effect adjustments, recapitalizations, reorganizations or
other changes in its or any other corporation's capital structure or business,
any merger or consolidation, any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the dissolution or
liquidation of the Company's or any other corporation's assets or business, or
any other corporate act, whether similar to the events described above or
otherwise.

     3.14  Effective Date of the Plan.

     The Plan shall be effective as of the date of its approval by the
stockholders of Supermarkets within twelve months after the date of the Board's
initial adoption of the Plan.  Options may be granted but not exercised prior
to stockholder approval of the Plan.  If any options are so granted and
stockholder approval shall not have been obtained within twelve months of the
date of adoption of this Plan by the Board of Directors, such options shall
terminate retroactively as of the date they were granted.

     3.15  Termination.

     The Plan shall terminate automatically as of the close of business on the
day preceding the tenth anniversary date of its adoption by the Board or
earlier as provided in Section 3.8.  Unless otherwise provided herein, the
termination of the Plan shall not affect the validity of any Stock Option
Agreement outstanding at the date of such termination.

     3.16  Governing Law.

     The Plan shall be governed by, and construed in accordance with the laws
of the State of Illinois (without giving effect to conflicts of law
principles).

     3.17  Effect of Plan Upon Options and Compensation Plans.

     The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company.  Nothing in the Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for employees of the Company or (ii) to grant or
assume options or other rights otherwise than under the Plan in connection with
any proper corporate purpose including but not by way of limitation, the grant
or assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, partnership, firm or association.

                                 *     *     *


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     I hereby certify that the foregoing Plan was duly adopted by Dominick's
Supermarkets, Inc. on October 28, 1996.

     Executed on this 28th day of October, 1996.




                                                /s/ Darren W. Karst
                                                -------------------------
                                                    Secretary



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