Document:

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                                                                     EXHIBIT 4.5

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                              KOHL'S CORPORATION

                                      AND

                             THE BANK OF NEW YORK,

                                    Trustee

                            _______________________

                         Second Supplemental Indenture

                           Dated as of March 8, 2001

                                      To

                                   Indenture

                         Dated as of December 1, 1995

                            _______________________

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<PAGE>

          SECOND SUPPLEMENTAL INDENTURE, dated as of March 8, 2001 (this "Second
Supplemental Indenture"), between Kohl's Corporation, a corporation duly
organized and existing under the laws of the State of Wisconsin (herein called
the "Company"), having its principal office at N56 W17000 Ridgewood Drive,
Menomonee Falls, Wisconsin 53051, and The Bank of New York, a New York banking
corporation, as Trustee (herein called the "Trustee") under the Indenture dated
as of December 1, 1995 between the Company and the Trustee (the "Original
Indenture").

                            Recitals of the Company

          The Company has executed and delivered the Original Indenture to the
Trustee to provide for the issuance from time to time of its unsecured
debentures, notes or other debt instruments (the "Securities"), to be issued in
one or more series as provided in the Indenture.

          Pursuant to the terms of the Original Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its 6.3% Notes due 2011 (herein called the "Notes"), in this Second
Supplemental Indenture.

          All things necessary to make this Second Supplemental Indenture a
valid agreement of the Company have been done.

          Now, Therefore, This Second Supplemental Indenture Witnesseth:

          For consideration, the adequacy and sufficiency of which are hereby
acknowledged by the parties hereto, each party agrees as follows, for the
benefit of the other parties and for the equal and proportionate benefit of all
Holders of the Notes, as follows:

                                  ARTICLE ONE

                                 DEFINED TERMS

          Section 101. Defined Terms . Except as otherwise expressly provided in
this Second Supplemental Indenture or in the form of Note or otherwise clearly
required by the context hereof or thereof, all capitalized terms used and not
defined herein or in said form of Note that are defined in the Original
Indenture shall have the meanings assigned to them in the Original Indenture.
The Original Indenture, as supplemented from time to time, including by this
Second Supplemental Indenture, is hereafter referred to as the "Indenture". For
all purposes of this Second Supplemental Indenture:

          "Closing Date" means March 8, 2001.

          "Commission" means the Securities and Exchange Commission.

          "Exchange Notes" means any securities of the Company containing terms
     identical to the Notes (except that such Exchange Notes shall be registered
     under the Securities Act and shall not include the restrictions on
     transfer) that are issued and
<PAGE>

     exchanged for the Notes pursuant to the Registration Rights Agreement and
     the Indenture.

          "Exchange Offer Registration Statement" means the Exchange Offer
     Registration Statement as defined in the Registration Rights Agreement.

          "Institutional Accredited Investor" means an institution that is an
     "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
     or (7) under the Securities Act.

          "Non-U.S. Person" means a person who is not a U.S. Person (as defined
     in Regulation S).

          "Notes" means any of the securities, as defined in the second
     paragraph of the recitals hereof, that are authenticated and delivered
     under the Indenture.  For all purposes of the Indenture, the term "Notes"
     shall include the Notes initially issued on the Closing Date, any Exchange
     Notes to be issued and exchanged for any Notes pursuant to the Registration
     Rights Agreement and the Indenture and any other Notes issued after the
     Closing Date under the Indenture.  For purposes of the Indenture, all Notes
     shall vote together as one series of Notes under the Indenture.

          "Private Placement Legend" has the meaning set forth in Section 601.

          "Registration Rights Agreement" means the Registration Rights
     Agreement, dated March 8, 2001, between the Company and Morgan Stanley &
     Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith, Incorporated and
     Lehman Brothers Inc. and certain permitted assigns specified therein.

          "Registration Statement" means the Registration Statement as defined
     and described in the Registration Rights Agreement.

          "Regulation S" means Regulation S under the Securities Act.

          "Restricted Security" means any Note bearing the Private Placement
     Legend.

          "Rule 144A" means Rule 144A under the Securities Act.

          "Securities Act" means the Securities Act of 1933, as amended from
     time to time.

          "Shelf Registration Statement" means the Shelf Registration Statement
     as defined in the Registration Rights Agreement.

                                  ARTICLE TWO

                              TERMS OF THE NOTES

          Section 201.  Establishment of the Notes.  There is hereby authorized
                        --------------------------

a series of Securities designated the 6.3% Notes due 2011, initially limited in
aggregate principal amount to
<PAGE>

$300,000,000 (except as provided in Section 2.3.2 of the Original Indenture, and
except that the Company may issue additional Notes of this Series).  The Notes
shall be substantially in the form set forth in Exhibit A hereto and shall
include the Private Placement Legend, until it is removed in accordance with
Section 601.

          Section 202. Terms of the Notes. The Stated Maturity of the Notes
                       ------------------
shall be March 1, 2011, and they shall bear interest at the rate of 6.3% per
annum, from March 8, 2001 or from the most recent interest payment date to which
interest has been paid or duly provided for, as the case may be, payable
semiannually (to holders of record of the Notes at the close of business on the
February 15 and August 15 immediately preceding the interest payment date) on
March 1 and September 1, commencing September 1, 2001 until payment of the
principal amount shall have been made or duly provided for.

          The principal of and interest on the Notes shall be payable at the
office or agency of the Trustee in New York, New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by wire transfer or by check mailed to the address of the
Person entitled thereto as such address shall appear in the list of
Securityholders.

          The Notes are redeemable prior to maturity as provided in Article Five
hereof and shall not have the benefit of a sinking fund.

          The Notes shall rank equal with all other unsecured and unsubordinated
debt of the Company.

          The Notes shall be subject to defeasance at the option of the Company
as provided in Sections 8.3 and 8.4 of the Original Indenture.

          Section 203. Denominations. The Notes shall be issued in denominations
                       -------------
of $100,000 and integral multiples of $1,000.

          Section 204. Form. Notes offered and sold in reliance on Rule 144A
                       ----
shall be issued initially in the form of one or more permanent global Notes in
registered form, substantially in the form set forth in Exhibit A (the "U.S.
Global Notes"), registered in the name of the nominee of The Depository Trust
Company (the "Depositary" or "DTC"), deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as provided in Section 2.4 of the Original Indenture. The aggregate
principal amount of the U.S. Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, in accordance with the instructions given by the
Holder thereof, as hereinafter provided.

          Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form substantially in the form set forth in Exhibit A
(the "Offshore Global Notes"), registered in the name of the nominee of the
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as provided in Section
2.4 of the Original Indenture.  The aggregate principal amount of the Offshore
Global
<PAGE>

Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.

          Notes offered and sold to Institutional Accredited Investors that are
not QIBs (excluding non-U.S. Persons) shall be issued in the form of permanent
certificated Notes in registered form substantially in the form set forth in
Exhibit A (the "Physical Notes").

          The U.S. Global Notes and the Offshore Global Notes are sometimes
referred to herein as the "Global Notes".

          The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.

                                 ARTICLE THREE

                                  AMENDMENTS

          Section 301. Article One of the Original Indenture shall be amended by
deleting the definition of "Officer" in Section 1.1 and replacing it in its
entirety with the following:

          "Officer" means the Chairman of the Board, the Chief Executive
          Officer, the Chief Operating Officer, the President, any Vice
          President, the Treasurer, the Secretary or the Controller of the
          Company."

                                 ARTICLE FOUR

                                  REDEMPTION

          Subject to the terms of Article Three of the Original Indenture, the
Company shall have the right to redeem the Notes, in whole or in part, from time
to time and at any time (such redemption, an "Optional Redemption", and the date
thereof, the "Optional Redemption Date") upon at least 30 days' notice mailed to
the registered address of each holder of the Notes, at a redemption price equal
to the sum of (A) the greater of (1) 100% of the principal amount of the Notes
to be redeemed or (2) the sum of the present values of the Remaining Scheduled
Payments thereon discounted to the Optional Redemption Date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at a rate
equal to the sum of the Treasury Rate plus twenty basis points, less the
Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest
Amount.

          "Applicable Accrued Interest Amount" means, at the Optional Redemption
Date, the amount of interest accrued and unpaid from the prior interest payment
date to the Optional Redemption Date on the Notes subject to the Optional
Redemption computed on the basis of a 360-day year of twelve 30-day months.
<PAGE>

          "Comparable Treasury Issue" means the United States Treasury security,
selected by a Reference Treasury Dealer appointed by the Company, as having a
maturity comparable to the remaining term of the Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes to be redeemed pursuant to the
Optional Redemption.

          "Comparable Treasury Price" means, with respect to the Optional
Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for
such Optional Redemption Date after excluding the highest and lowest of those
Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than
five Reference Treasury Dealer Quotations, the average of all quotations.

          "Reference Treasury Dealer" means any nationally recognized investment
banking firm that is a primary U.S. Government securities dealer.

          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Optional Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m.,
New York City time, on the third business day preceding such Optional Redemption
Date.

          "Remaining Scheduled Payments" means, for each Note to be redeemed,
the remaining scheduled payments of principal and interest on that Note that
would be due after the related Optional Redemption Date but for that Optional
Redemption.  If the Optional Redemption Date is not an interest payment date
with respect to that Note, the amount of the next succeeding scheduled interest
payment on that Note will be reduced by the amount of interest accrued on the
Note to the Optional Redemption Date.

          "Treasury Rate" means, with respect to the Optional Redemption Date
(if any), the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Optional Redemption Date.

                                 ARTICLE FIVE

                            ORIGINAL ISSUE OF NOTES

          Section 501. Notes in the aggregate principal amount of $300,000,000,
or in such additional principal amount as the Company may issue pursuant to
Section 201 of this Second Supplemental Indenture, may, upon execution of this
Second Supplemental Indenture, or from time to time thereafter, be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Notes upon a Company Order without
any further action by the Company.
<PAGE>

          Section 502. Exchange Notes. Exchange Notes may from time to time be
                       --------------
executed by the Company and delivered to the Trustee for authentication and the
Trustee shall thereupon authenticate and deliver said Exchange Notes, upon
cancellation of an equal amount of Restricted Securities tendered in exchange,
upon a Company Order without further action by the Company.

                                  ARTICLE SIX

                          SPECIAL TRANSFER PROVISIONS

          Section 601. Legend on Restricted Securities. Upon the transfer,
                       -------------------------------
exchange or replacement of Notes not bearing the private placement legend set
forth on the face of the Notes (the "Private Placement Legend"), the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of any Note bearing the Private Placement
Legend, the Registrar shall deliver only Notes that bear the Private Placement
Legend unless and until (i) such Note is exchanged for an Exchange Note or sold
in connection with an effective Registration Statement pursuant to the
Registration Rights Agreement, (ii) with respect to the Offshore Global Notes
(A) at least the 41st day after the Closing Date and (B) receipt by the Company
and the Trustee of a certificate substantially in the form of Appendix B hereto,
(iii) the circumstances contemplated by paragraph (b)(i)(x) or (d)(i) of Section
603 exist or (iv) there is delivered to the Registrar an opinion of counsel
acceptable to the Company and the Trustee to the effect that neither such legend
nor the related restrictions on transfer are required in order to maintain
compliance with the Securities Act.

          Section 602. Book-Entry Provisions for Global Notes (i) be registered
                       --------------------------------------
in the name of the Depositary for such Global Notes or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends, in addition to the Private Placement Legend, as set
forth on the face of the form of the Note.

          Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.

          (b)  Transfers of a Global Note shall be limited as specified in
Section 2.15.2 of the Original Indenture and the provisions of Section 603.
Interests of beneficial owners in Global Notes may be transferred in accordance
with the rules and procedures of the Depositary and the provisions of Section
603. In addition, Physical Notes shall be transferred to all beneficial owners
in exchange for their beneficial interests in the U.S. Global Notes or Offshore
Global Notes, as the case may be, as specified in Section 2.15.2 of the Original
Indenture.
<PAGE>

          (c)  Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in another
Global Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in such other Global Note and, accordingly, will thereafter
be subject to all transfer restrictions, if any, and other procedures applicable
to beneficial interests in such other Global Note for as long as it remains such
an interest.

          (d)  In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 602, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of such Global Note in an amount equal to
the principal amount of the beneficial interest in such Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Notes of like tenor and amount.

          (e)  In connection with the transfer of the U.S. Global Notes or the
Offshore Global Notes, in whole, to beneficial owners pursuant to paragraph (b)
of this Section 602, the U.S. Global Notes or Offshore Global Notes, as the case
may be, shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the U.S. Global Notes or Offshore Global Notes, as the
case may be, an equal aggregate principal amount of Physical Notes of authorized
denominations.

          (f)  Any Physical Note delivered in exchange for an interest in the
U.S. Global Notes pursuant to paragraph (b), (d) or (e) of this Section 602
shall, except as otherwise provided by Section 601, bear the Private Placement
Legend.

          (g)  The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.

          Section 603. (a) Transfers to QIBs. The following provisions shall
                           -----------------
apply with respect to the registration of any proposed transfer of a Note
constituting a Restricted Security to a qualified institutional buyer as defined
in Rule 144A (a "QIB"):

          (i)  If the Note to be transferred consists of (x) Physical Notes, the
     Registrar shall register the transfer if such transfer is being made by a
     proposed transferor who has checked the box provided for on the Note
     stating, or has otherwise advised the Company and the Registrar in writing,
     that the sale has been made in compliance with the provisions of Rule 144A
     to a transferee who has signed the certification provided for on the Note
     stating, or has otherwise advised the Company and the Registrar in writing,
     that it is purchasing the Note for its own account or an account with
     respect to which it exercises sole investment discretion and that it and
     any such account is a QIB within the meaning of Rule 144A, and is aware
     that the sale to it is being made in reliance on Rule 144A and acknowledges
     that it has received such information regarding the Company as it has
     requested pursuant to Rule 144A or has determined not to request such
     information
<PAGE>

     and that it is aware that the transferor is relying upon its foregoing
     representations in order to claim the exemption from registration provided
     by Rule 144A or (y) an interest in the U.S. Global Notes, the transfer of
     such interest may be effected through the book entry system maintained by
     the Depositary; and

          (ii) (a) If the proposed transferee is an Agent Member and the Notes
     to be transferred consist of Physical Notes which after transfer are to be
     evidenced by an interest in the U.S. Global Notes, upon receipt by the
     Registrar of instructions given in accordance with the Depositary's and the
     Registrar's procedures, the Registrar shall reflect on its books and
     records the date and an increase in the principal amount of the U.S. Global
     Notes in an amount equal to the principal amount of the Physical Notes to
     be transferred, and the Trustee shall cancel the Physical Notes so
     transferred and (b)(1) if the proposed transferor is an Agent Member
     holding a beneficial interest in the Offshore Global Notes, upon receipt by
     the Registrar of instructions in accordance with the Depositary's and the
     Registrar's procedures, the Registrar shall reflect on its books and
     records the date and a decrease in the principal amount of the Offshore
     Global Notes in an amount equal to the principal amount of the beneficial
     interest in the Offshore Global Notes to be transferred, and (b)(2) if the
     proposed transferee is an Agent Member, upon receipt by the Registrar of
     instructions given in accordance with the Depositary's and the Registrar's
     procedures, the Registrar shall reflect on its books and records the date
     and an increase in the principal amount of the U.S. Global Notes in an
     amount equal to the principal amount of the Offshore Global Notes to be
     transferred and the Trustee shall decrease the amount of the Offshore
     Global Notes.

          (b)  Transfers to Non-QIB Institutional Accredited Investors. The
               -------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons):

          (i)  The Registrar shall register the transfer of any Note, if (x) the
     requested transfer is after the time period referred to in Rule 144(k)
     under the Securities Act as in effect with respect to such transfer or (y)
     the proposed transferee has delivered to the Registrar (A) a certificate
     substantially in the form of Appendix A hereto and (B) an opinion of
     counsel acceptable to the Company that such transfer is in compliance with
     the Securities Act.

          (ii) If the proposed transferor is an Agent Member holding a
     beneficial interest in a Global Note, upon receipt by the Registrar of (x)
     the documents, if any, required by paragraph (i) above and (y) instructions
     given in accordance with the Depositary's and the Registrar's procedures,
     the Registrar shall reflect on its books and records the date and a
     decrease in the principal amount of the Global Note in an amount equal to
     the principal amount of the beneficial interest in the Global Note to be
     transferred, and the Company shall execute, and the Trustee shall
     authenticate and deliver, one or more Physical Notes of like tenor and
     amount.
<PAGE>

          (c)    Transfers of Interests in the Offshore Global Notes.  The
                 ---------------------------------------------------
following provisions shall apply with respect to any transfer of interests in
Offshore Global Notes:

          (i)    until the expiration of the 40-day distribution compliance
     period within the meaning of Rule 903 of Regulation S, any offer or sale of
     interests in the Offshore Global Note shall be made (a) outside the United
     States in compliance with Rule 903 or 904 under the Securities Act or to a
     QIB in compliance with Rule 144A and (b) in accordance with all applicable
     securities laws of the states of the United States or any other applicable
     jurisdiction;

          (ii)   prior to the removal of the Private Placement Legend from the
     Offshore Global Notes pursuant to Section 601, the Registrar shall refuse
     to register such transfer unless such transfer complies with Section
     603(c)(i); and

          (iii)  after such removal, the Registrar shall register the transfer
     of any such Note without requiring any additional certification.

          (d)    Transfers to Non-U.S. Persons at Any Time.  The following
                 -----------------------------------------
     provisions shall apply with respect to any transfer of a Restricted
     Security to a Non-U.S. Person:

          (i)    The Registrar shall register any proposed transfer to any Non-
     U.S. Person if (A) the Note to be transferred is a Physical Note or an
     interest in the U.S. Global Notes, and (B) the proposed transferor has
     delivered to the Registrar a certificate substantially in the form of
     Appendix B hereto and (C) the proposed transferee has delivered to the
     Registrar an opinion of counsel acceptable to the Company that such
     transfer is in compliance with the Securities Act.

          (ii)   (a) If the proposed transferor is an Agent Member holding a
     beneficial interest in the U.S. Global Notes, upon receipt by the Registrar
     of (x) the documents, required by paragraph (i) and (y) instructions in
     accordance with the Depositary's and the Registrar's procedures, the
     Registrar shall reflect on its books and records the date and a decrease in
     the principal amount of the U.S. Global Notes in an amount equal to the
     principal amount of the beneficial interest in the U.S. Global Notes to be
     transferred, and (b) if the proposed transferee is an Agent Member, upon
     receipt by the Registrar of instructions given in accordance with the
     Depositary's and the Registrar's procedures, the Registrar shall reflect on
     its books and records the date and an increase in the principal amount of
     the Offshore Global Notes in an amount equal to the principal amount of the
     Physical Notes or the U.S. Global Notes, as the case may be, to be
     transferred, and the Trustee shall cancel the Physical Note, if any, so
     transferred or decrease the amount of the U.S. Global Notes.

          Section 604. General.  By its acceptance of any Note bearing the
                       -------
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in the Indenture and in such
legend and agrees that it will transfer such Note only as provided in the
Indenture.
<PAGE>

          The Registrar shall not register the transfer of any Note unless such
transfer complies with the restrictions on transfer set forth in the Indenture.
The Registrar shall retain, in accordance with its customary procedures, copies
of all letters, notices and other written communications received pursuant to
this Section 604. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.

                                 ARTICLE SEVEN

                               SUNDRY PROVISIONS

          Section 701. No exchange of Notes for Exchange Notes pursuant to
Section 2.8 of the Original Indenture shall occur until a Registration Statement
shall have been declared effective by the Commission and any Notes that are
exchanged for Exchange Notes shall be canceled by the Trustee.

          Section 702. The Original Indenture, as supplemented by this Second
Supplemental Indenture, is in all respects ratified and confirmed, and this
Second Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
<PAGE>

          This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

          In Witness Whereof, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.

                                       KOHL'S CORPORATION

                                       By:  /s/ R. Lawrence Montgomery
                                          -------------------------------
                                          Name: R. Lawrence Montgomery
                                          Title Chief Executive Officer

                                       THE BANK OF NEW YORK,
                                           as Trustee

                                       By:  /s/ Barbara A. Bevelaqua
                                          -------------------------------
                                          Name: Barbara A. Bevelaqua
                                          Title Vice President
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                                [FORM OF NOTE]

[Each Global Security, whether or not an Exchange Note, shall bear the following
legend:  Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Kohl's
Corporation or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or to such other
entity or in such other name as is requested by an authorized representative of
DTC (and any payment hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]

[Any Global Security issued hereunder shall bear a legend in substantially the
following form:  This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depositary or a nominee of the Depositary.  This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary by a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such a successor Depositary.]

[Private Placement Legend:  THE NOTES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS.  NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPHS (a)(1), (2), (3) or (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE NOTES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR
904 OF REGULATION S, (2) AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER
<PAGE>

SUCH NOTE PRIOR TO THE DATE WHICH IS THE LATER OF (X) TWO YEARS (OR SUCH SHORTER
PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT) AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS NOTE) AND
THE LAST DATE ON WHICH KOHL'S CORPORATION OR ANY AFFILIATE OF KOHL'S CORPORATION
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION
TERMINATION DATE") EXCEPT (A) TO KOHL'S CORPORATION OR ANY SUBSIDIARY THEREOF,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A INSIDE THE UNITED STATES, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) OUTSIDE THE UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS IN AN OFFSHORE TRANSACTION WITHIN THE MEANING AND CONSISTENT WITH
THE TERMS AND CONDITIONS OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1),
(2), (3) or (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE NOTES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT KOHL'S CORPORATION, AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO KOHL'S
CORPORATION AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"UNITED STATES", "OFFSHORE TRANSACTION" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]

[Each Offshore Global Note shall bear the following legend:  PRIOR TO EXPIRATION
OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF

                                      A-2
<PAGE>

REGULATION S, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO A U.S. PERSON OR FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON.]

                                      A-3
<PAGE>

                              KOHL'S CORPORATION

                              6.3% Notes Due 2011

                                                             CUSIP No. _________
No. _____

                                                                       $
                                                                Principal Amount

          Kohl's Corporation, a corporation duly organized and existing under
the laws of the State of Wisconsin (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to [________] [Cede & Co.] or registered
assigns, the principal sum of       ($     ) on March 1, 2011, and to pay
interest thereon semiannually (to holders of record of the Notes at the close of
business on the February 15 and August 15 immediately preceding the interest
payment date) on March 1 and September 1 in each year, commencing September 1,
2001, at the rate of 6.3% per annum, until the principal hereof is paid or made
available for payment.

          The interest so payable, and punctually paid or duly provided for, on
any interest payment date, as provided in the Indenture, shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the February 15 or August 15 (whether or not a
business day), as the case may be, next preceding such interest payment date.
If the Company defaults in a payment of interest, it will pay the defaulted
interest plus, to the extent permitted by law, any interest payable on the
defaulted interest, to the persons who are Securityholders on a subsequent
special record date, determined in accordance with the Indenture.  The Company
may pay the defaulted interest in any other lawful manner.

          The statements set forth in the restrictive legend above are an
integral part of the terms of this Note and by acceptance hereof each holder of
this Note agrees to be subject to and bound by the terms and provisions set
forth in such legend.

          Payments of principal and interest on this Note will be made at the
office or agency of the Company maintained for that purpose in New York, New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
wire transfer or by check mailed on or prior to an interest payment date to the
address of the Person entitled thereto as such address shall appear in the list
of Securityholders.

          Any payment of this Note due on any day which is not a business day in
New York, New York need not be made on such day, but may be made on the next
succeeding business day with the same force and effect as if made on the due
date and no interest shall

                                      A-4
<PAGE>

accrue for the period from and after such date, unless such payment is a payment
at maturity or upon redemption, in which case interest shall accrue thereon at
the stated rate for such additional days.

          This Note is one of a duly authorized issue of securities of the
Company, designated 6.3% Notes due 2011 (the "Notes"), issued and to be issued
in one or more series under an Indenture, dated as of December 1, 1995, as
supplemented by the Second Supplemental Indenture, dated as of March 8, 2001
(the "Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered.  This Note is one of a series designated on the face hereof, issued
initially in the aggregate principal amount of $300,000,000.

          [INCLUDE IF SECURITY IS A GLOBAL NOTE -- This Note is a "book-entry"
Note and is being registered in the name of Cede & Co. as nominee of The
Depository Trust Company ("DTC"), a clearing agency. Subject to the terms of the
Indenture, this Note will be held by a clearing agency or its nominee, and
beneficial interests will be held by beneficial owners through the book-entry
facilities of such clearing agency or its nominee in minimum denominations of
$100,000 and integral multiples of $1,000. As long as this Note is registered in
the name of DTC or its nominee, the Trustee will make payments of principal of
and interest on this Note by wire transfer of immediately available funds to DTC
or its nominee. Notwithstanding the above, the final payment on this Note will
be made after due notice by the Trustee of the pendency of such payment and only
upon presentation and surrender of this Note at its principal corporate trust
office or such other offices or agencies appointed by the Trustee for that
purpose and such other locations provided in the Indenture.]

          The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of March 8, 2001.  In the event that (i)
the Company fails to file an Exchange Offer Registration Statement with respect
to the Notes with the Commission on or prior to the 135th calendar day following
the Closing Date, (ii) the Commission does not declare such Exchange Offer
Registration Statement effective on or prior to the 180th calendar day following
the Closing Date, (iii) the Exchange Offer is not consummated on or prior to the
45th calendar day following the effective date of the Exchange Offer
Registration Statement or (iv) if required, a Shelf Registration Statement with
respect to the Notes is not declared effective by the Commission on or prior to
the 210th calendar day following the Closing Date (each, a "Registration
Default"), the per annum interest rate borne by the Notes shall be increased by
one-quarter of one percent (0.25%) per annum from the end of the applicable
period giving rise to such Registration Default.  The interest rate borne by the
Notes will be increased by an additional one-quarter of one percent (0.25%) per
annum for each subsequent 90-day period (or portion thereof) during which any
such Registration Default continues up to a maximum aggregate increase in the
annual interest rate of one-half of one percent (0.50%) per annum.  Following
the cure of all Registration Defaults, the interest rate borne by the Notes
shall be reduced to the original interest rate borne by the Notes.  No increase
in the rate shall be payable

                                      A-5
<PAGE>

for any period during which a Shelf Registration is effective. All accrued
additional interest shall be paid to Holders by the Company in the same manner
as interest is paid pursuant to the Indenture. All terms used in this Note that
are defined in the Registration Rights Agreement shall have the meanings
assigned to them in the Registration Rights Agreement.

          The Notes do not have the benefit of any sinking fund obligations.

          Subject to the terms of Article Three of the Indenture, the Company
shall have the right to redeem the Notes, in whole or in part, from time to time
and at any time (such redemption, an "Optional Redemption", and the date
thereof, the "Optional Redemption Date") upon at least 30 days' notice mailed to
the registered address of each holder of the Notes, at a redemption price equal
to the sum of (A) the greater of (1) 100% of the principal amount of the Notes
to be redeemed or (2) the sum of the present values of the Remaining Scheduled
Payments thereon discounted to the Optional Redemption Date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at a rate
equal to the sum of the Treasury Rate plus twenty basis points, less the
Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest
Amount.

          "Applicable Accrued Interest Amount" means, at the Optional Redemption
Date, the amount of interest accrued and unpaid from the prior interest payment
date to the Optional Redemption Date on the Notes subject to the Optional
Redemption determined at the rate per annum, computed on the basis of a 360-day
year of twelve 30-day months.

          "Comparable Treasury Issue" means the United States Treasury security,
selected by a Reference Treasury Dealer appointed by the Company, as having a
maturity comparable to the remaining term of the Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes to be redeemed pursuant to the
Optional Redemption.

          "Comparable Treasury Price" means, with respect to the Optional
Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for
such Optional Redemption Date after excluding the highest and lowest of those
Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than
five Reference Treasury Dealer Quotations, the average of all quotations.

          "Reference Treasury Dealer" means any nationally recognized investment
banking firm that is a primary U.S. Government securities dealer.

          "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Optional Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m.,
New York City time, on the third business day preceding such Optional Redemption
Date.

                                      A-6
<PAGE>

          "Remaining Scheduled Payments" means, for each Note to be redeemed,
the remaining scheduled payments of principal and interest on that Note that
would be due after the related Optional Redemption Date but for that Optional
Redemption.  If the Optional Redemption Date is not an interest payment date
with respect to that Note, the amount of the next succeeding scheduled interest
payment on that Note will be reduced by the amount of interest accrued on the
Note to the Optional Redemption Date.

          "Treasury Rate" means, with respect to the Optional Redemption Date
(if any), the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Optional Redemption Date.

          If an Event of Default with respect to Notes of this series shall
occur and be continuing, the principal of all the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

          [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit
or withdrawal of an interest in this Note, including an exchange, transfer,
repurchase or conversion of this Note in part only, the Trustee, as custodian of
the Depositary, shall make an adjustment on its records to reflect such deposit
or withdrawal in accordance with the rules and procedures of the Depositary.]

          [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain
limitations in the Indenture, at any time when the Company is not subject to
Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended,
upon the request of a Holder of a Restricted Security, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Restricted Securities, or to a prospective purchaser of any such
security designated by any such Holder, to the extent required to permit
compliance by any such Holder with Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act").  "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto).]

          The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company under this Note and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain
conditions set forth in the Indenture, which provisions apply to this Note.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of at least 66% in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected.  The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the

                                      A-7
<PAGE>

Holders of all Securities of each series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
thereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

          No reference herein to the Indenture and provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.

          As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes of this series, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not
have received from the Holders of a majority in principal amount of Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity.  The foregoing shall not
apply to any suit instituted by the Holder of this Notes for the enforcement of
any payment of principal hereof or any interest hereon on or after the
respective due dates expressed herein.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Notes is registrable upon surrender of
this Note to the Registrar, for registration of transfer duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar attached hereto duly executed by the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new Notes,
and of like tenor, of authorized denominations and for the same aggregate
principal amount, shall be issued to the designated transferee or transferees.

          The Notes of this Series are issuable only in fully registered form
without coupons in denominations of $100,000 and any integral multiples of
$1,000.  As provided in the Indenture and subject to certain limitations therein
set forth, the Notes of this Series are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.

          No service charge shall be made for any such registration of transfer
or exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                                      A-8
<PAGE>

          Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company, or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Company, the
Trustee or any such agent shall be affected by notice to the contrary.

          Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.

          The Company shall furnish to any Holder of record of Notes, upon
written request and without charge, a copy of the Indenture.

          The Indenture and this Note each shall be governed by and construed in
accordance with the laws of the State of New York.

          Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

          All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

                                      A-9
<PAGE>

                                 ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

     TEN COM -- as tenants in common

     TEN ENT -- as tenants by the entireties

     JT TEN -- as joint tenants with right of survivorship and not as tenants in
common.

     UNIF GIFT MIN ACT -- ______________ Custodian _____________
                            (Cust)                     (Minor)

                          under the Uniform Gifts to Minors Act

                          ______________________________________
                                              (State)

Additional abbreviations may also be used though not in the above list.

                                     A-10
<PAGE>

     FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s), and
transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE

____________________________________

____________________________________

_______________________________________________________________________________

_______________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee

_______________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing

_______________________________________________________________________________
attorney to transfer said Security on the books of the Company, with full power
of substitution in the premises.

Date:_____

                                  _____________________________________________
                                  NOTICE: The signature to this assignment must
                                  correspond with the name as written upon the
                                  within instrument in ever particular, without
                                  alteration or enlargement, or any change
                                  whatsoever.

                    [THE FOLLOWING PROVISION TO BE INCLUDED
                      ON ALL NOTES THAT HAVE THE PRIVATE
                               PLACEMENT LEGEND]

          In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:

                                  [Check One]
                                   ---------

[_]   (a)  this Note is being transferred in compliance with the exemption from
           registration under the Securities Act of 1933, as amended, provided
           by Rule 144A thereunder.

                                       or
                                       --

                                     A-11
<PAGE>

[_]   (b)  this Note is being transferred other than in accordance with (a)
           above and documents are being furnished which comply with the
           conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 603 of the Indenture shall have
been satisfied.

Date:_______                      ______________________________________________
                                  NOTICE: The signature to this assignment must
                                  correspond with the name as written upon the
                                  face of the within-mentioned instrument in
                                  every particular, without alteration or any
                                  change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

          The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

Date:____                         ______________________________________________
                                  NOTICE: To be executed by an executive officer

                                     A-12
<PAGE>

          In Witness Whereof, the Company has caused this instrument to be duly
executed

Dated:                                                    KOHL'S CORPORATION

                                                          By:_________________
                                                              Name:
                                                              Title:

Attest:

____________________________________________
Name:
Title:

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION

This is one of the Securities of the Series
originated therein referred to in the
within-mentioned Indenture.

THE BANK OF NEW YORK,
as Trustee

By:_________________________________________
     Authorized Officer
<PAGE>

                                                                      APPENDIX A
                                                                      ----------

                           Form of Certificate to Be
                          Delivered in Connection with
                   Transfers to Non-QIB Accredited Investors
                   -----------------------------------------

                                                      ____________________, ____

The Bank of New York
101 Barclay Street 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration

                 Re: Kohl's Corporation (the "Company")
                 6.3% Notes due March 1, 2011, (the "Notes")_____
                 ------------------------------------------------

Ladies and Gentlemen:

          In connection with our proposed purchase of $_________ aggregate
principal amount of the 6.3% Notes due 2011 (the "Notes") of Kohl's Corporation,
a Wisconsin corporation ("Kohl's"), we confirm that:

          1.   We are an institutional "accredited investor" (as defined in Rule
     501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of
     1933, as amended (the "Securities Act")), purchasing for our own account or
     for the account of such an institutional "accredited investor," and we are
     acquiring the Notes for investment purposes and not with a view to, or for
     offer or sale in connection with, any distribution in violation of the
     Securities Act or other applicable securities law and we have such
     knowledge and experience in financial and business matters as to be capable
     of evaluating the merits and risks of our investment in the Notes, and we
     and any accounts for which we are acting are each able to bear the economic
     risk of our or its investment.

          2.   We understand and acknowledge that the Notes have not been
     registered under the Securities Act or any other applicable securities law
     and may not be offered, sold or otherwise transferred except in compliance
     with the registration requirements of the Securities Act or any other
     applicable securities law, or pursuant to an exemption therefrom, or in a
     transaction not subject thereto, and in each case in compliance with the
     conditions for transfer set forth below. We agree on our own behalf and on
     behalf of any investor account for which we are purchasing Notes to offer,
     sell or otherwise transfer such Notes prior to (x) the date which is two
     years (or such shorter period of time as permitted by Rule 144(k) under the
     Securities Act) after the later of the date of original issue and the last
     date on which Kohl's or any affiliate of Kohl's was the owner of such Notes
     (or any predecessor thereto) and (y) such later date, if any, as may be
     required by applicable law (the "Resale Restriction Termination Date") only
     (a) to Kohl's or any of Kohl's subsidiaries, (b) pursuant to a registration
     statement which has been declared
<PAGE>

     effective under the Securities Act, (c) for so long as the Notes are
     eligible for resale pursuant to Rule 144A under the Securities Act, to a
     person we reasonably believe is a "Qualified Institutional Buyer" within
     the meaning of Rule 144A (a "QIB") that purchases for its own account or
     for the account of a QIB and to whom notice is given that the transfer is
     being made in reliance on Rule 144A, (d) pursuant to offers and sales to
     non-U.S. persons in an offshore transaction within the meaning and
     consistent with the terms and conditions of Regulation S under the
     Securities Act, (e) to an institutional "accredited investor" within the
     meaning of subparagraph (a)(1), (2),(3) or (7) of Rule 501 under the
     Securities Act that is acquiring the Notes for its own account or for the
     account of such an institutional "accredited investor" for investment
     purposes and not with a view to, or for offer or sale in connection with,
     any distribution in violation of the Securities Act or (f) pursuant to any
     other available exemption from the registration requirements of the
     Securities Act, subject in each of the foregoing cases to any requirement
     of law that the disposition of our property or the property of such
     investor account or accounts be at all times within our or their control
     and to compliance with any applicable state or other securities laws. The
     foregoing restrictions on resale will not apply subsequent to the Resale
     Restriction Termination Date. If any resale or other transfer of the Notes
     is proposed to be made pursuant to clause (e) above prior to the Resale
     Restriction Termination Date, the transferor shall deliver to the trustee
     (the "Trustee") a letter from the transferee substantially in the form of
     this letter, which shall provide, among other things, that the transferee
     is a person or entity as defined in paragraph 1 of this letter and that it
     is acquiring such Notes for investment purposes and not for distribution in
     violation of the Securities Act. We acknowledge that the Company and the
     Trustee reserve the right prior to any offer, sale or other transfer of the
     Notes pursuant to clauses (d), (e) or (f) above prior to the Resale
     Restriction Termination Date to require the delivery of an opinion of
     counsel, certifications and/or other information satisfactory to Kohl's and
     the Trustee.

          3.  We are acquiring the Notes purchased by us for our own account or
     for one or more accounts as to each of which we exercise sole investment
     discretion.

          4.  You are entitled to rely upon this letter and you are irrevocably
     authorized to produce this letter or a copy hereof to any interested party
     in any administrative or legal proceeding or official inquiry with respect
     to the matters covered hereby.

                                      A-2
<PAGE>

                                         Very truly yours,

                                         By:      (Name of Purchaser)
                                            ---------------------------------

                                         Date:
                                              -------------------------------

          Upon transfer the Notes would be registered in the name of the new
beneficial owner as follows:

                                                    Taxpayer ID
     Name                     Address                  Number
     ----                     -------              -------------
<PAGE>

                                                                      APPENDIX B
                                                                      ----------

                    Form of Certificate to Be Delivered in
              Connection with Transfers Pursuant to Regulation S
              --------------------------------------------------
                                                                  ________, ____

Kohl's Corporation
c/o The Bank of New York
101 Barclay Street 21W
New York, New York 10286
Attention:  Corporate Trust Trustee Administration

                    Re:  Kohl's Corporation (the "Company")
                    6.3% Notes due 2011 (the "Notes")_____
                    --------------------------------------

Dear Sirs:

          In connection with our proposed sale of U.S.$__________________
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933 and, accordingly, we represent that:

          (1)  the offer of the Notes was not made to a person in the United
     States;

          (2)  at the time the buy order was originated, the transferee was
     outside the United States or we and any person acting on our behalf
     reasonably believed that the transferee was outside the United States;

          (3)  no directed selling efforts have been made by us in the United
     States in contravention of the requirements of Rule 903(b) or Rule 904(b)
     of Regulation S, as applicable; and

          (4)  the transaction is not part of a plan or scheme to evade the
     registration requirements of the U.S. Securities Act of 1933.

          You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.  Terms used in this certificate have the
meanings set forth in Regulation S.

                                               Very truly yours,

                                               [Name of Transferor]

                                               By:
                                                  --------------------------
                                                  Authorized Signature<PAGE>

                                                                    EXHIBIT 10.1

                              KOHL'S CORPORATION

                              AMENDED & RESTATED

                          DEFERRED COMPENSATION PLAN
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                <C>
ARTICLE I TITLE AND DEFINITIONS                                     1

   1.1  Title                                                       1

   1.2  Definitions                                                 1

ARTICLE II ELIGIBILITY AND PARTICIPATION                            5

   2.1  Eligibility                                                 5

   2.2  Participant                                                 5

ARTICLE III DEFERRAL ELECTIONS                                      5

   3.1  Elections to Defer Compensation                             5

   3.2  Investment Elections                                        6

ARTICLE IV ACCOUNTS AND TRUST FUNDING                               7

   4.1  Deferral Accounts                                           7

   4.2  Trust Funding                                               7

ARTICLE V DISTRIBUTION OF DEFERRED COMPENSATION                     8

   5.1  Distribution Due to Termination of Employment               8

   5.2  Early Distribution                                          9

   5.3  Programmed Early Distributions                              9

   5.4  Hardship Withdrawals                                        9

   5.5  Other Amounts                                              10

ARTICLE VI ADMINISTRATION                                          11

   6.1  Committee                                                  11

   6.2  Committee Action                                           11

   6.3  Powers and Duties of the Committee                         11

   6.4  Committee and Interpretation                               11
</TABLE>
<PAGE>

<TABLE>
<S>                                                               <C>
   6.5  Compensation and Expenses                                  12

   6.6  Liability                                                  12

   6.7  Quarterly Statements                                       12

   6.8  Disputes                                                   12

ARTICLE VII MISCELLANEOUS                                          13

   7.1  Unsecured General Creditor                                 13

   7.2  Restriction Against Assignment                             13

   7.3  Withholding                                                13

   7.4  Amendment, Modification, Suspension or Termination         13

   7.5  Governing Law                                              14

   7.6  Receipt or Release                                         14

   7.7  Payments on Behalf of Persons Under Incapacity             14

   7.8  No Continued Right to Employment                           14

   7.9  Information                                                14
</TABLE>

                                       3
<PAGE>

                               KOHL'S CORPORATION

                               AMENDED & RESTATED

                           DEFERRED COMPENSATION PLAN

           WHEREAS, Kohl's Department Stores, Inc. ("KDS") established the 1993
Non-Qualified Deferred Compensation Plan as amended; and

           WHEREAS, Kohl's Corporation desires to amend and restate the Kohl's
Corporation Deferred Compensation Plan as a master plan to permit certain of its
and its affiliate entities' senior management employees to provide supplemental
retirement income benefits through the deferral of salary, bonus and incentive
compensation; and

           WHEREAS, KDS, a subsidiary of Kohl's Corporation, desires to amend
and restate the 1993 Non-Qualified Deferred Compensation Plan, as amended, to
conform to the provisions of this Kohl's Corporation Deferred Compensation Plan;

           NOW, THEREFORE, Kohl's Corporation and KDS hereby adopt, amend and
restate, as the case may be, effective October 1, 1997, as follows:

                                    ARTICLE I

                              TITLE AND DEFINITIONS
                              ---------------------

           1.1. Title. This Plan shall be known as the Kohl's Corporation
                -----
Deferred Compensation Plan.

           1.2. Definitions.  Whenever the following words and phrases are used
                -----------
in this Plan, with the first

letter capitalized, they shall have the meaning specified below:

           a) "Account" or "Accounts" shall mean a Participant's Deferral
Account.

           b) "Base Salary" shall mean a Participant's annual base salary,
excluding Performance Bonuses, Equity Share Awards and all other remuneration
for services rendered to the Company.

           c) "Beneficiary" or "Beneficiaries" shall mean the person or persons,
including a trustee, personal representative or other fiduciary, last designated
in writing by a Participant in accordance with procedures established by the
Committee to receive the benefits specified hereunder in the event of the death
of a Participant. No beneficiary designation shall become effective until it is
filed with the Committee. Any designation shall be revocable at any time through
a written instrument filed by the Participant with the Committee with or without
the consent of the previous Beneficiary. If there is no such designation, then
the surviving spouse of the Participant shall be the Beneficiary. If there is no
surviving spouse to receive any benefits

<PAGE>

payable in accordance with the preceding sentence, the estate of the Participant
shall be the Beneficiary. In the event any amount is payable under the Plan to a
minor, then payment shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of the estate for the
minor is duly appointed and currently acting within sixty (60) days after the
date the amount becomes payable (or such extended period as the Committee
determines is reasonably necessary to allow such guardian to be appointed),
payment shall be deposited with the court having jurisdiction over the estate of
the minor. The Company may condition any payment hereunder on the receipt of
such release as the Company may request. Payment by the Company pursuant to any
unrevoked Beneficiary designation, or to the spouse or estate of the Participant
if no such designation exists, of all benefits owed hereunder shall terminate
any and all liability of Company.

           d) "Board of Directors" shall mean the Board of Directors of the
Company.

           e) "Code" shall mean the Internal Revenue Code of 1986, as amended.

           f) "Committee" shall mean the Committee appointed by the Board of the
Company to administer the Plan.

           g) "Company" shall mean Kohl's Corporation and any successor
corporations and each corporation which is an "affiliate" member of a controlled
group of corporations (within the meaning of Section 414(b) of the Code) of
which Kohl's Corporation is a component member, if the Board of the Company and
the Board of Directors of the applicable corporation provides that such
corporation shall participate in the Plan.

           h) "Compensation" shall mean Base Salary, Performance Bonuses, Equity
Share Awards and other compensation that the Participant is entitled to receive
for services rendered to the Company.

           i) "Competition with the Company" means that a Participant, directly
or indirectly, whether as a partner, officer, director, employee, manager,
consultant or otherwise, during the one (1) year period following the
Participant's Termination of Employment performs services for any organization
which is or owns or provides advice to a retail department or retail specialty
store selling goods competitive with the Company or any of its affiliates in any
area which is within five (5) miles of any retail store operated by the Company
or any of its affiliates.

           j) "Credit Rate" for each Fund shall mean an amount equal to the net
gain or loss on the assets deemed invested in each Fund by the Participant
during each month.

           k) "Declining Balance Method" is the method by which the Account is
to be distributed in installments (a "Distribution") to a Participant or his
beneficiary following the Termination of a Participant. According to the
Declining Balance Method, a Distribution will be equal to a portion of the
Account remaining undistributed immediately prior to the Distribution multiplied
by a fraction, the numerator of which shall be one (1) and the denominator of
which shall be the number of periods during which Distributions remain to be
paid, including the period for which

                                       2
<PAGE>

the Distribution is being computed. Section V below shall govern the duration of
each period and the number of periods over which amounts credited to Accounts
may be distributed.

           l) "Deferral Account" shall mean the bookkeeping account maintained
by the Committee for each Participant that is credited with amounts equal to (1)
the portion of the Compensation the Participant elects to defer; and (2) net
earnings and losses on such amount as provided herein; less (3) prior
withdrawals, forfeitures and expenses allocated by the Committee to the Deferral
Account of the Participant.

           m) "Dependent" shall mean an individual described in Section 152(a)
of the Code.

           n) "Disability," if the Participant is covered by an individual or
group long-term policy paid for by the Company, shall mean total disability as
defined in such policy without regard to any waiting period. If the Participant
is covered by both an individual and a group policy, Disability occurs under
this Plan when total disability occurs under either the individual or the group
policy, also without regard to any waiting period. If the Participant is not
covered by such a policy, Disability shall mean the Participant is suffering a
sickness, accident or injury which, in the judgment of a physician satisfactory
to the Committee, prevents the Participant from performing substantially all of
his/her normal duties for the Company. As a condition to any benefits, the
Committee may require the Participant to submit to such physical or mental
evaluations and tests as the Committee deems appropriate.

           o) "Distributable Amount" shall mean the amounts credited to the
Deferral Account of a Participant.

           p) "Early Distribution" (Unscheduled In-Service Withdrawal),
"Programmed Early Distribution" (Scheduled In-Service Withdrawals), and
"Hardship Withdrawals" shall be in-service withdrawals with different
applications. (See Article V, Sections 5.2, 5.3 and 5.4 respectively).

           q) "Effective Date" shall mean August 1, 1998, the effective date of
this amendment, restatement and adoption.

           r) "Eligible Employee" shall mean such management employees that are
actively employed by the Company on a full time basis as are designated by the
Board for participation in this Plan.

           s) "Equity Share Award" shall mean amounts payable to a Participant
under the terms of the Equity Incentive Plan of Kohl's Department Stores, Inc.,
the Management Incentive Plan of Kohl's Department Stores, Inc., and such other
incentive compensation arrangements as the Committee determines to be eligible
to be included as an Equity Share Award.

           t) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

           u) "Fund" or "Funds" shall mean one or more of the investment funds
selected by the Committee from time to time.

                                       3
<PAGE>

           v)  "Initial Election Period" for an Eligible Employee shall mean the
period from August 20, 1997 to September 30, 1997, or, if later, the thirty (30)
day period following the date the employee initially becomes an Eligible
Employee.

           w)  "Participant" shall mean any Eligible Employee who becomes a
Participant in accordance with Article II hereof.

           x)  "Payment Date" shall mean on March 31 (or such other date
determined by the Committee) of the Company's fiscal year which commences after
the date of a Participant's Termination of Employment.

           y)  "Performance Bonuses" shall mean the performance bonus earned
during a Plan Year, whether or not paid during such Plan Year as such
performance bonuses may be determined by the Company.

           z)  "Plan" shall mean the Kohl's Corporation Deferred Compensation
Plan set forth herein, as amended from time to time.

           aa) "Plan Year" shall mean the twelve (12) consecutive monthly
periods beginning on January 1 and ending on December 31 of each year, or such
shorter period beginning on the date an Eligible Employee becomes a Participant
and ending on the last day of the calendar year.

           bb) "Policy" shall mean any insurance policy purchased in connection
with this Plan.

           cc) "Reasonable Cause" shall mean any of the following with respect
to the Participant's position of employment with the Company:

                (i)   Gross negligence, fraud or willful violation of any law or
           significant Company policy committed in connection with the position
           of the Participant with the Company; or

                (ii)  Failure to substantially perform (for reasons other than
           Disability) the duties reasonably assigned or appropriate to the
           position of the Participant.

           dd)  "Retirement" shall mean:

                (i)   for employees hired before August 31, 1988, the date on
           which an employee attains age 65;

                (ii)  for employees hired after August 31, 1988, the later of
           the date on which an employee attains age 65 or the fifth anniversary
           of the employee's participation in the Company's retirement program;
           or

                (iii) such other ages and length of service the Committee shall
           from time to time determine to allow Participants to qualify for
           normal retirement under the Plan.

                                       4
<PAGE>

           ee) "Early Retirement" shall mean the date on which an employee has
been employed by the Company for ten (10) years on or after the employee attains
age 55.

           ff) "Termination of Employment" means the Participant ceases to be
actively employed by the Company for any reason on a full time basis.

                                   ARTICLE II

                          ELIGIBILITY AND PARTICIPATION

           2.1. Eligibility. The Board shall from time to time determine the
                -----------
employees of the Company that are Eligible Employees. The Committee shall
promptly notify each employee of the Company designated as an Eligible Employee
of his/her right to participate in the Plan. The designation of an employee of
the Company as an Eligible Employee for any Plan Year shall not confer upon such
employee a right to continue as an Eligible Employee in any other Plan Year.

           2.2. Participant. A Participant in the Kohl's Department Stores, Inc.
                -----------
1993 Deferred Compensation Plan immediately prior to the Effective Date shall
continue such participation as a Participant in this Plan. An employee of the
Company who was an Eligible Employee prior to the Effective Date, but not a
Participant, may become a Participant in accordance with rules established by
the Committee. An employee of the Company who becomes an Eligible Employee may
become a Participant in the Plan in accordance with rules established by the
Committee.

                                   ARTICLE III

                               DEFERRAL ELECTIONS

           3.1. Elections to Defer Compensation.
                -------------------------------

           a) General Rule. The amount of Compensation which an Eligible
Employee may elect to defer is Compensation earned on or after the effective
date of the election by the Eligible Employee to defer in accordance with this
Article III. The Eligible Employee shall generally be eligible to defer a
percentage or dollar amount of compensation which shall not exceed one hundred
percent (100%) of the Eligible Employee's Compensation, provided that the total
amount deferred by a Participant shall be limited in any calendar year, if
necessary, to an amount in excess of the amount required to satisfy social
security tax (including Medicare and any other applicable tax or similar
assessment), income tax and employee benefit plan withholding requirements as
determined by the Committee. The minimum deferral that may be made for any Plan
Year by an Eligible Employee shall not be less than Five Thousand Dollars
($5,000.00), provided, however, the minimum deferral for the Initial Election
Period for participation pursuant to 3.1 shall be prorated based on the number
of months of participation remaining in the calendar year.

           b) Initial Election Period. The Committee shall establish rules
regarding (i) the participation by employees of the Company who were not
Eligible Employees prior to the Effective Date; (ii) the participation of
employees of the Company who were Eligible Employees

                                       5
<PAGE>

prior to the Effective Date but were not Participants; and (iii) additional
deferrals of compensation by previous Participants.

           c) Annual Election. An employee's election during the Initial
Election Period to defer Base Salary shall be in effect for all Plan Years
unless on or before December 15th of the year prior to the applicable year the
Participant changes or terminates his/her election and such amended election
shall be applicable until amended or revoked as provided herein. An Eligible
Employee's election during the Initial Election Period to defer any other
Compensation shall be in effect only for the Plan Year to which such election
relates. Any subsequent election with respect to Compensation must be filed by
December 15th of the year prior to the year the Compensation is earned. The
failure to make an election with respect to any other Compensation earned during
the Plan Year shall result in no deferral of Compensation for such Plan Year.
The Committee shall from time to time promulgate rules applicable to elections
to defer Compensation.

           d) Duration of Compensation Deferral Election. An Eligible Employee's
initial election in accordance with this Plan shall be effective on the first
day of the first pay period beginning after such Initial Election Period. An
Eligible Employee's election after the Initial Election Period in accordance
with this Plan shall be effective on the first day of the Plan Year following
such election.

           3.2. Investment Elections.
                --------------------

           a) The Committee shall from time to time select types of investment
Funds and specific Funds available for investment designation by Participants
with respect to Deferral Accounts. The Committee shall notify Participants of
the type of Funds and the specific Funds selected from time to time. At the time
of making the deferral elections described in Section 3.1, each Participant
shall designate, on a form provided by the Committee, the types of investment
funds the Account of the Participant will be deemed to be invested in for
purposes of determining the Credit Rate to be credited to that Account. In
making the designation, a Participant may specify that all or any percentage of
his/her Deferral Account (in one percent (1%) or more whole percentage
increments) be deemed to be invested in one or more of the types of investment
funds selected by the Committee. Effective as of the end of any calendar month,
a Participant may change the designation made by filing an election, on a form
provided by the Committee, at least five (5) days prior to the end of such
month. Such change shall be effective as of the beginning of the next calendar
month. If a Participant fails to timely elect a type of Fund, he/she shall be
deemed to have elected the money market type of investment Fund or such other
Fund as the Committee may from time to time designate as the Fund to be employed
if no timely election is made. A Participant may make investment elections
either prior to or after Termination of Employment, or in the event of a
Participant's death, the Beneficiary designated by the Participant may make
investment elections.

                                       6
<PAGE>

           b) Although the Participant may designate the type of investment
Funds, the Committee shall not be bound to invest such amount in any specific
Fund and shall have no liability to Participants for failure to so invest. The
Committee shall select from time to time, in its sole discretion, commercially
available investment Funds of the investment types determined from time to time
by the Committee. The Committee may from time to time select alternate Funds in
addition to or in replacement of Funds previously selected. The Credit Rate of
each such commercially available investment fund shall be used to determine the
amount of earnings or losses to be credited to the Account of the Participant.

                                   ARTICLE IV

                           ACCOUNTS AND TRUST FUNDING

           4.1. Deferral Accounts. The Committee shall establish and maintain a
                -----------------
Deferral Account for each Participant under the Plan. Each Participant's
Deferral Account shall be further divided into separate subaccounts ("Investment
Fund Subaccounts"), each of which corresponds to an investment Fund selected by
the Participant. A Participant's Deferral Account shall be credited as follows:

           a) As of the last day of each month, the Committee shall credit the
Participant's Deferral Account with an amount equal to Compensation deferred by
the Participant during each pay period occurring in that month in accordance
with the deferral election of the Participant. Compensation that the Participant
has elected to be deemed to be invested in a certain type of Fund shall be
credited to the Investment Fund Subaccount as of the end of the month.

           b) As of the last day of each month, each Investment Fund Subaccount
of a Participant's Deferral Account shall be credited with earnings or losses in
an amount equal to that determined by multiplying the balance credited to such
Investment Fund Subaccount as of the last day of the preceding month by the
Credit Rate for the applicable month for the corresponding Fund in which the
amount is deemed invested.

           4.2. Trust Funding. The Company has created a Trust into which the
                -------------
Company shall deposit amounts equal to the amounts deferred by Participants. The
Company shall cause the Trust to be funded each month. The Company shall
contribute to the Trust an amount equal to the amount deferred by each
Participant for each month during the Plan Year.

           Although the principal of the Trust and any earnings thereon shall be
held separate and apart from other funds of Company and except as otherwise
provided herein, shall be used exclusively for the uses and purposes of Plan
Participants and beneficiaries as set forth therein, neither the Participants
nor their beneficiaries shall have any preferred claim on, or any beneficial
ownership in, any assets of the Trust prior to the time such assets are paid to
the Participants or beneficiaries as benefits and all amounts credited under
this Plan shall represent unsecured contractual rights of Plan Participants and
beneficiaries against the Company. Any assets held in the Trust will be subject
to the claims of general creditors of the Company under federal and state law in
the event of insolvency as defined in the Trust.

                                       7
<PAGE>

           Except as provided above and except for amounts forfeited by a
Participant hereunder, the assets of the Plan and Trust shall not inure to the
benefit of the Company other than in the case of insolvency as defined in the
Trust and the same shall be held for the purpose of providing benefits to
Participants and their beneficiaries and defraying reasonable expenses of
administering the Plan and Trust.

                                    ARTICLE V

                      DISTRIBUTION OF DEFERRED COMPENSATION

           5.1. Distribution Due to Termination of Employment. In the case of a
                ---------------------------------------------
Termination of Employment of a Participant, the Distributable Amount shall be
paid to the Participant (and after his/her death to his/her Beneficiary) in the
form of calendar quarterly installments over fifteen years (15) years beginning
on his/her Payment Date on the Declining Balance Method. Notwithstanding the
foregoing, a Participant described in the preceding sentence may elect one of
the following optional forms of distribution provided that his/her election is
filed with the Committee at least one (1) year prior to his/her Termination of
Employment:

                a) A lump sum distribution on the Participant's Payment Date; or

                b) Calendar quarterly installments over a period of whole years
           as selected by the Participant which is at least one (1) year but not
           more than fourteen (14) years beginning on the Participant's Payment
           Date on the Declining Balance Method.

Notwithstanding any election by a Participant, in the event (X) a Participant's
employment is terminated (i) voluntarily by the Participant (but not as a result
of Retirement or Early Retirement); or (ii) by the Company for Reasonable Cause,
(Y) the Participant engages in Competition with the Company following
Termination of Employment, or (Z) the Participant's Distributable Amount at any
time following Termination of Employment is not more than Twenty-Five Thousand
Dollars ($25,000.00), the Committee may determine that such Participant
Distributable Amount shall be paid in a lump-sum distribution.

                c) In the case of a Participant who dies while employed by the
           Company, the Company will pay the Participant such additional
           benefit, if any, as the Committee may from time to time determine to
           pay from insurance benefits as a result of the death of the
           Participant.

                d) In the event a Participant dies after his Termination of
Employment and still has a balance in his/her Deferral Account, the balance of
such Deferral Account shall continue to be paid in quarterly installments for
the remainder of the period as elected by the Participant to the Beneficiary
designated by the Participant.

                                       8
<PAGE>

           5.2. Early Distribution. A Participant shall be permitted to elect an
                ------------------
Early Distribution from his/her Deferral Account prior to the Payment Date,
subject to the following restrictions:

           a) The election to take an Early Distribution shall be made by
completing a form prescribed by and filed with the Committee prior to the end of
any calendar month.

           b) A Participant shall specify the amount the Participant has elected
for Early Distribution. The amount of the Early Distribution shall in all cases
not exceed ninety percent (90%) of the total Deferral Account as of the end of
the calendar month during which request is made. A Participant who elects an
Early Distribution shall permanently forfeit an amount equal to ten percent
(10%) of the amount elected for Early Distribution from such Participant's
Deferral Account. The Company shall have no obligations to the Participant or
his/her Beneficiary with respect to any forfeited amount.

           c) The amount described in subsection (b) above shall be paid in a
single cash lump sum as soon as practicable after the end of the calendar month
in which the Early Distribution election is made.

           d) If a Participant receives an Early Distribution, the Participant
will be ineligible to participate in the Plan for the balance of the Plan year
during which the Early Distribution occurs and for the following Plan Year.

           5.3. Programmed Early Distributions. A Participant shall be permitted
                ------------------------------
to elect a Programmed Early Distribution from his/her Deferral Account prior to
the Payment Date, subject to the following restrictions:

           a) The election to take a Programmed Early Distribution shall be made
by filing a form prescribed by and with the Committee prior to the end of any
calendar month;

           b) The amount of the Programmed Early Distribution shall be as
specified in the form filed with the Committee requesting such Distribution;

           c) The amount described in Subsection (b), above, shall be paid on
the date set forth in the notice filed with the Committee but in no event before
the end of the twenty-fourth (24th) month after such filing.

           d) If a Participant receives an Early Distribution, the Participant
will be ineligible to participate in the Plan for the balance of the Plan year
during which the Early Distribution occurs and for the following Plan Year.

           5.4. Hardship Withdrawals.
                --------------------

           a) Any Participant who has been determined by the Committee to have
incurred a "Financial Hardship" as defined herein may request and receive a
withdrawal of all or part of his/her Account balance.

                                       9
<PAGE>

           b) In the event a Participant desires to withdraw an amount as a
Financial Hardship withdrawal:

                1) The Participant shall deliver a request for such withdrawal
           to the Committee setting forth the amount requested and the factual
           basis for such hardship request. The request for withdrawal shall be
           in a form which complies with requirements, if any, established by
           the Committee.

                2) If the Participant's request for Financial Hardship
           withdrawal is approved by the Committee, the distribution shall be
           made on the last day of the month following such approval and the
           Participant shall be ineligible to participate in the Plan for the
           balance of the Plan Year.

                3) If the Participant's request for Financial Hardship
           withdrawal is denied by the Committee, in whole or in part, the
           Committee shall notify the Participant of such denial.

           c) "Financial Hardship" is defined as an immediate and significant
financial need of the Participant where such Participant lacks other available
resources. Notwithstanding the foregoing, only the following financial needs
shall be considered immediate and significant:

                1) Expenses incurred due to a sudden and unexpected illness or
           accident of the Participant or of a dependent of the Participant;

                2) Loss of the Participant's property due to casualty; or

                3) Such other similar, extraordinary and unforeseeable
           circumstances arising as a result of events beyond the control of the
           Participant.

           d) Notwithstanding the foregoing, a distribution will be considered
as necessary to satisfy an immediate and significant financial need of the
Participant only if such need has not and cannot be relieved:

                1) Through reimbursement or compensation by insurance or
           otherwise;

                2) By liquidation of the assets of the Participant, to the
           extent the liquidation of such assets would not itself cause severe
           financial hardship;

                3) Be cessation of deferrals under the Plan; or

                4) By borrowing funds from any source, to the extent such
           borrowing of funds would not itself cause severe financial hardship.

           5.5. Other Amounts. Any amounts not required to be paid to the
                -------------
Participants hereunder shall belong to the Company and no Participants shall
have any rights thereto.

                                       10
<PAGE>

                                   ARTICLE VI

                                 ADMINISTRATION

           6.1. Committee. The Committee shall be appointed by, and serve at the
                ---------
pleasure of, the Board. The number of members comprising the Committee shall be
determined by the Board from time to time. A member of the Committee may resign
by delivering a written notice of resignation to the Board. The Board may remove
any member. Vacancies in the membership of the Committee shall be filled
promptly by the Board.

           6.2. Committee Action. The Committee shall act at meetings by
                ----------------
affirmative vote of a majority of the members of the Committee. Any action
permitted to be taken at a meeting may be taken without a meeting if a written
consent to the action is signed by all members of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to
himself/herself as a Participant. The chairman or any other member or members of
the Committee designated by the chairman may execute any certificate or other
written direction on behalf of the Committee.

           6.3. Powers and Duties of the Committee. The Committee shall
                ----------------------------------
administer the Plan in accordance with its terms, and shall have all powers
necessary to accomplish its purposes including, but not by way of limitation,
the following:

           a) To select the types of investments and the Funds in accordance
with Section 3.2 hereof;

           b) To construe and interpret the provisions of this Plan;

           c) To compute the amount of benefits payable to Participants and
their Beneficiaries.

           d) To maintain all records that may be necessary for the
administration of the Plan;

           e) To provide for the disclosure of all information and the filing of
all reports and statements to Participants, Beneficiaries or governmental
agencies as shall be required by law;

           f) To make and publish rules, definitions and procedures for
administration of the Plan;

           g) To appoint a plan administrator or any other agent, and to
delegate to them such powers and duties in connection with the administration of
the Plan as the Committee may from time to time prescribe; and

           h) To take all actions necessary or in its best interests for the
administration of the Plan.

           6.4. Committee and Interpretation. The Committee shall have full
                ----------------------------
discretion to construe and interpret the terms and provisions of this Plan,
which interpretations or construction shall be final and binding on all parties
including, but not limited to, the Company and any Participant or Beneficiary.

                                       11
<PAGE>

           6.5. Compensation and Expenses.
                -------------------------

           a) The members of the Committee shall serve without compensation for
their services hereunder.

           b) The Committee is authorized at the expense of the Company to
employ such legal counsel as it may deem advisable to assist in the performance
of its duties hereunder. The Committee may require Participants to pay expenses
and fees incurred in connection with the administration of the Plan. To the
extent authorized by Company, expenses and fees in connection with the
administration of the Plan shall be paid by the Company.

           6.6. Liability. Neither the Committee nor any member of the Committee
                ---------
nor the Company nor any other person who is acting on behalf of the Committee or
the Company shall be liable for any act or failure to act hereunder except for
gross negligence or fraud. Such persons shall be indemnified and held harmless
against any and all claims, damages, liabilities, costs and expenses (including
attorneys' fees) arising by reason of any good faith error of omission or
commission with respect to any responsibility, duty or action hereunder.

           6.7. Quarterly Statements. The Committee, under procedures
                --------------------
established by it, shall provide a statement with respect to each Account of the
Participant on a quarterly basis.

           6.8. Disputes.
                --------

           a) An individual who believes that he/she is being denied a benefit
to which he/she is entitled under this Plan (hereinafter referred to as
"Claimant") may file a written request for such benefit with the Committee
setting forth his/her claim. The request must be addressed to the Chairman of
the Committee at its then principal place of business.

           b) Upon receipt of a claim, the Committee shall deliver a reply
within a ninety (90) day period after receipt of the claim. The Committee may,
however, extend the reply period for an additional ninety (90) days by notice to
the Claimant.

If the claim is denied in whole or in part, the Committee shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth: (i) the specified reason or reasons for such denial; and (ii)
appropriate information as to the procedure to be followed if the Claimant
wishes to submit the claim for review.

           c) Within sixty (60) days after the receipt by the Claimant of the
opinion of the Committee, the Claimant may request in writing that the Company
review the determination of the Committee. Such request must be addressed to the
secretary of the Company at its then principal place of business. The Claimant
or his/her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Company. If the Claimant does not request a review within such sixty (60)
day period, the Claimant shall be barred and estopped from challenging the
Committee's determination.

                                       12
<PAGE>

           d) Within ninety (90) days after the Company's receipt of a request
for review, after considering all materials presented by the Claimant, the
Company will inform the Participant in writing, in a manner calculated to be
understood by the Claimant, of its decision setting forth the specific reasons
for the decision. If special circumstances require that the ninety (90) day time
period be extended, the Company will so notify the Claimant and will render the
decision as soon as possible, but no later than one hundred eighty (180) days
after receipt of the request for review. The decision of the Company shall be
final, binding and conclusive upon Claimant.

                                   ARTICLE VII

                                  MISCELLANEOUS

           7.1. Unsecured General Creditor. Participants and their
                --------------------------
Beneficiaries, heirs, successors, and assigns shall have no legal or equitable
rights, claims or interest in any specific property or assets of the Company. No
assets of the Company shall be held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of the
Deferral Accounts shall remain the Company's assets and shall remain the general
unpledged and unrestricted assets of the Company. The Company's obligation under
the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors. It
is the intention of the Company that this Plan be unfunded for purposes of the
Code and for purposes of Title I of ERISA.

           7.2. Restriction Against Assignment. The Company shall pay all
                ------------------------------
amounts payable hereunder only to the person or persons designated according to
the Plan and not to any other person or corporation. No part of a Participant's
Accounts shall be liable for the debts, contracts, engagements of any
Participant, his/her Beneficiary, or successors in interest, nor shall a
Participant's Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner whatsoever.
If any Participant, Beneficiary or successor in interest is adjudicated bankrupt
or purports to anticipate, alienate, sell, transfer, commute, assign, pledge,
encumber, or charge any distribution or payment from the Plan, voluntarily or
involuntarily, the Committee, in its sole discretion, may cancel such
distribution or payment (or any part thereof) to or for the benefit of such
Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.

           7.3. Withholding. There shall be deducted from each payment made
                -----------
under the Plan or any other Compensation payable to the Participant (or
Beneficiary) all taxes which are required to be withheld by the Company in
respect to such payment or this Plan. The Company shall have the right to reduce
any payment (or Compensation) by the amount of cash sufficient to provide the
amount of said taxes.

           7.4. Amendment, Modification, Suspension or Termination. The Company
                --------------------------------------------------
may amend, modify, suspend or terminate the Plan in whole or in part, except
that no amendment, modification, suspension or termination shall have any
retroactive effect to reduce any amounts

                                       13
<PAGE>

allocated to a Participant's Account (neither the Policies themselves, nor the
death benefit shall be treated as allocated to any Account). In the event this
Plan is terminated, the amounts allocated to a Participant's Account shall be
distributed to the Participant or, in the event of his/her death, his/her
Beneficiary in a lump sum within thirty (30) days following the date of Plan
termination.

           7.5. Governing Law. This Plan shall be construed, governed and
                -------------
administered in accordance with the laws of the State of Wisconsin.

           7.6. Receipt or Release. Any payment to a Participant or the
                ------------------
Participant's Beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims against the
Committee and the Company. The Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

           7.7. Payments on Behalf of Persons Under Incapacity. In the event
                ----------------------------------------------
that any amount becomes payable under the Plan to a person who, in the sole
judgment of the Committee, is considered by reason of physical or mental
condition to be unable to give a valid receipt therefor, the Committee may
direct that such payment be made to any person found by the Committee, in its
sole judgment, to have assumed the care of such person.

           7.8. No Continued Right to Employment. The designation of a key
                --------------------------------
employee as an Eligible Employee under this Plan shall not be construed as
conferring upon such employee any right to remain employed by the Company or
obligate the Company to continue the employment of the employee or limit the
right of the Company to discipline the employee or terminate the employee's
employment. Termination of Employment of the Participant with the Company for
any reason, whether by action of the Company or employee, shall immediately
terminate the employee's participation in the Plan and all further obligations
of the Company under the Plan to the employee, except for obligations incurred
prior to Termination of Employment. In no event shall this Plan, by its terms or
implication, constitute an employment contract of any nature between the Company
and the employee.

           7.9. Information. Each person, whether a Participant, a duly
                -----------
designated beneficiary of a Participant, a guardian or any other person,
entitled to receive payment under the Plan shall provide the Committee with such
information or documents as the Committee may from time to time deem necessary
or in its best interests in administering the Plan.

                                       14

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