Document:

exhibit_10pt12.htm

EXHIBIT 10.12

    SAMPLE – Executive Plan –
Grades 18+

    

    

    WALGREEN
CO.

    EXECUTIVE
STOCK OPTION PLAN - STOCK OPTION AGREEMENT

    

    Employee
(the "Optionee"):  «First» «MI» «Last»

    Social
Security No.:  «SSN2»

    Date of
Grant:  «Grant_Date»

    Expiration
Date:  «Expiration_Date»

    Number of
Shares Optioned:  «Opts»

    Option
Price Per Share of Common Stock:  «OptPrice»

    

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

    

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

    

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

    

    3.          Retirement.  Subject
to the last sentence of this Section 3, if, without having fully exercised this
stock option, the Optionee retires, or is retired, from the employ of the
Company (or a subsidiary of the Company if the Optionee is then in the employ of
such subsidiary) then the Optionee's right to exercise this stock option shall
terminate upon the earlier of the Expiration Date or a date which is sixty (60)
months following the Optionee's retirement.  For purposes of this
section, retirement shall be defined as a cessation of employment, in good
standing, after the employee has attained fifty-five (55) years of age and has
completed at least ten (10) years of continuous service with the
Company.  The foregoing shall apply regardless of whether such
retirement occurs before or after the Vesting Date.  For purposes of
this Section 3, if the Optionee’s date of retirement (which is defined per
Company practices as his or her “paid-through date”) is less than 12 months
following the Date of Grant, then the maximum number of shares that may be
exercised pursuant to this Section 3 shall be equal to the total Number of
Shares referenced in Section 1 above, multiplied by the number of days between
the Date of Grant and the date of retirement, divided by 365; and the remaining
shares shall be forfeited.

    

    

    4.         Disability.  If,
without having fully exercised this stock option, the Optionee's employment with
the Company (or a subsidiary of the Company if the Optionee is then in the
employ of such subsidiary) is terminated due to total and permanent disability
(as determined by the Compensation Committee of the Board of Directors or its
designee), then the Optionee's right to exercise this stock option shall
terminate upon the earlier of the Expiration Date or a date which is sixty (60)
months following the date of termination of employment.  The Optionee
may exercise this stock option at any time between the Vesting Date and the date
the Optionee’s right to exercise this stock option expires.

    

    5.         Death.  If,
without having fully exercised this stock option, the Optionee shall die while
in the employ of the Company (or a subsidiary of the Company if the Optionee is
then in the employ of such subsidiary), then this stock option shall be
exercisable by the executor or administrator of the Optionee's estate or by such
person or persons who shall have acquired the Optionee's rights hereunder by
bequest or inheritance or by reason of his or her death, for a period ending on
the earlier of the Expiration Date or sixty (60) months following the date of
the Optionee's death.  This stock option may be exercised at any time
between the Vesting Date and the date the right to exercise this stock option
expires.

    

    6.         Other Termination of
Employment.  If, without having fully exercised this stock
option, the Optionee's employment with the Company (or a subsidiary of the
Company if the Optionee is then in the employ of such subsidiary) is terminated
for reasons other than the Optionee’s retirement (as defined in Section 3
above), death, or total and permanent disability (as defined in Section 4
above), then the Optionee's right to exercise this stock option shall terminate
as of the date of his or her termination of employment, subject to the right of
the Compensation Committee of the Board of Directors to extend the exercise
period of this stock option.

    

    7.         Disqualifying
Termination.  Notwithstanding any other provision of this
Option Agreement to the contrary, if without having fully exercised this stock
option, the Optionee’s employment with the Company (or a subsidiary of the
Company if the Optionee is then in the employ of such subsidiary) is terminated
for Cause, then the Optionee’s rights to exercise this stock option shall
terminate immediately.  For purposes of this Option Agreement, “Cause”
shall mean: (a) any act or acts of dishonesty committed by the Optionee; or (b)
any violation of the policies or procedures of the Company applicable to the
Optionee’s employment or job category which is either: (i) grossly negligent; or
(ii) willful and deliberate. The determination of
whether the Optionee’s employment has been terminated for Cause shall be within
the discretion of the Compensation Committee of the Board of Directors or its
designee.

    

    8.         Forfeiture of Outstanding
Options Following Termination of Employment.  Notwithstanding
the remainder of this Option Agreement, the Optionee’s remaining right, if any,
to exercise stock options covered by this Option Agreement shall immediately
terminate if and when the Optionee violates any post-employment obligation that
he or she may have to the Company, including but not limited to any
non-competition, non-solicitation, confidentiality, non-disparagement or other
restrictive covenant.

    

    9.         Limited
Transferability.  This stock option is nonassignable and not
transferable other than by beneficiary designation, by will or by the laws of
descent and distribution.  During the lifetime of the Optionee this
stock option and all rights granted hereunder shall be exercisable only by the
Optionee.  Notwithstanding the foregoing, transfers by the Optionee of
options shall be recognized and given effect if such options are transferred to
a grantor trust established pursuant to Sections 674, 675, 676 and 677 of the
Internal Revenue Code of 1986, as amended, for the benefit of the Optionee or a
person or persons who are members of the Optionee's immediate family (or for the
benefit of their descendants); provided that any such transfer has not been
disclaimed prior to the exercise of such options by the trustee of such trust,
and the trustee of such trust certifies to the Compensation Committee of the
Board of Directors or its designee that such transfer occurred without any
payment of consideration for such transfer.

    

    10.         Change in Common
Stock.  In the event of any change in Common Stock by reason of
any stock dividend, recapitalization, reorganization, split-up, merger,
consolidation, exchange of shares, or of any similar change affecting Common
Stock, the number of shares of Common Stock subject to this stock option and the
Option Price shall be equitably adjusted by the Compensation Committee of the
Board of Directors.

    

    11.         Exercise
Process.  This stock option may be exercised by giving written
notice to Walgreen Co., Attention: Finance Department, Corporate Offices, 200
Wilmot Road, MS 2261, Deerfield, Illinois 60015 (or such other address as may be
specified by the Company to the Optionee).  Alternatively, the Company
may designate one or more third parties to administer the stock option exercise
process and direct the Optionee accordingly.  Such notice (a) shall be
signed by the Optionee or (in the event of his or her death) the Optionee’s
legal representative, (b) shall specify the number of full shares then elected
to be purchased, and (c) shall be accompanied by payment in full of the Option
Price of the shares to be purchased.  Payment may be made in cash or
by check payable to the order of the Company, and such payment shall include any
tax withholding obligation, as set forth in Section 12
below.  Alternatively, the Company may allow for one or more of the
following methods of exercising stock options:

    

    a.          Payment
for shares as to which this stock option is being exercised and/or payment of
any federal, state, local or other tax withholding obligations may be made by
transfer to the Company of shares of Common Stock already owned by the Optionee,
or any combination of such shares and cash, having a fair market value
determined at the close of business on the date of stock option exercise equal
to, but not exceeding, the Option Price and/or the tax withholding obligation,
as the case may be.

    

    b.          The
Company may also allow for “same day sale” transactions pursuant to which a
third party (engaged by the Company or the Optionee) loans funds to the Optionee
to enable the Optionee to purchase the shares and pay any tax withholding
obligations, and then sells a sufficient number of the exercised shares on
behalf of the Optionee to enable the Optionee to repay the loan and any
fees.  The remaining shares and/or cash are then issued by the third
party to the Optionee.

    

    As
promptly as practicable after receipt of such notice and payment (including
payment with respect to any tax withholding obligations), the Company shall
cause to be issued and delivered to the Optionee or in the event of his or her
death to the Optionee’s legal representative, as the case may be, certificates
for the shares of Common Stock so purchased.  Alternatively, such
shares may be issued and held in book entry form.

    

    12.         Tax
Withholding.  The Company may make such provisions and take
such actions as it may deem necessary or appropriate for the withholding of any
Federal, state, local and other taxes required by law to be withheld with
respect to this stock option, including, but not limited to, deducting the
amount of any such withholding taxes from the amount to be paid hereunder,
whether in Common Stock or in cash, or from any other amount then or thereafter
payable to the Optionee, or requiring the Optionee, his or her beneficiary, or
legal representative to pay to the Company the amount required to be withheld or
to execute such documents as the Compensation Committee of the Board of
Directors or its designee deems necessary or desirable to enable the Company to
satisfy its withholding obligations.

    

    13.         Rights as
Shareholder.  The Optionee shall have no rights as a
shareholder of the Company with respect to the shares of Company Common Stock
subject to this Option Agreement until such time as the purchase price has been
paid and a certificate of stock for such shares has been issued to the
Optionee.  Except as provided in Section 10 above, no adjustment shall
be made for dividends or distributions or other rights with respect to such
shares for which the record date is prior to the date on which the Optionee
becomes the holder of record thereof.  Anything herein to the contrary
notwithstanding, if a law or any regulation of the Securities and Exchange
Commission or of any other body having jurisdiction shall require the Company or
the Optionee to take any action before shares of Common Stock can be delivered
to the Optionee hereunder, then the date of delivery of such shares may be
delayed accordingly.

    

    14.         No Guarantee of
Employment.  Nothing in this Option Agreement shall interfere
with or limit in any way the right of the Company or any of its subsidiaries to
terminate any Optionee's employment at any time, nor confer upon any employee
any right to continue in the employ of the Company or any of its
subsidiaries.  No employee shall have a right to be selected as an
Optionee.

    

    15.         Option Plan/Compensation
Committee.  This Option Agreement and the rights of the
Optionee hereunder are subject to all the terms and conditions of the Plan, as
the same may be amended from time to time, as well as to such rules and
regulations as the Compensation Committee of the Board of Directors may adopt
for administration of the Plan.  It is expressly understood that the
Compensation Committee is authorized to administer, construe, and make all
determinations necessary or appropriate for the administration of the Plan and
this Option Agreement, all of which shall be binding upon the
Optionee.  Any inconsistency between this Option Agreement and the
Plan shall be resolved in favor of the Plan.

    

    16.         Governing
Law.  Subject to Section 17 below, the stock option covered by
this Option Agreement, this Option Agreement and all determinations made and
actions taken pursuant thereto, to the extent otherwise not governed by the
Internal Revenue Code of 1986, as amended, or any other laws of the United
States, shall be governed by and construed in accordance with the laws of the
State of Illinois.

    

    17.         Conformity with Applicable
Law.  If any provision of this Option Agreement is determined
to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other provision
of this Option Agreement or the validity, legality or enforceability of such
provision in any other jurisdiction, but this Option Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

    

    18.         Successors.  This
Option Agreement shall be binding upon and inure to the benefit of any successor
or successors of the Company and any person or persons who shall, upon the death
of the Optionee, acquire any rights
hereunder.exhibit_10pt13.htm

    
EXHIBIT 10.13

      WALGREEN
CO.

      LONG-TERM
PERFORMANCE INCENTIVE PLAN

      

      RESTRICTED
STOCK UNIT AWARD AGREEMENT

      

      

      EMPLOYEE:  __________________

      

      AWARD DATE:  __________________

      

      TOTAL
NUMBER OF RESTRICTED STOCK UNITS:  _________

      

      VESTING
DATE:  [Third anniversary of Award Date]

      

      

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

      

      The
parties hereto agree as follows:

      

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

      

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

      

      13. Securities
Laws.  This award is a private offer that may be accepted only
by an individual who is an employee of the Company or a Subsidiary of the
Company and who satisfies the eligibility requirements outlined in the Plan and
the Committee’s administrative procedures.  If a Registration
Statement under the Securities Act of 1933, as amended, is not in effect with
respect to the shares of Common Stock to be issued pursuant to this Agreement,
the Employee hereby represents that he or she is acquiring the shares of Common
Stock for investment and with no present intention of selling or transferring
them and that he or she will not sell or otherwise transfer the shares except in
compliance with all applicable securities laws and requirements of any stock
exchange on which the shares of Common Stock may then be listed.

       

      14. No Employment or
Compensation Rights.  Participation in the Plan is subject to
all of the terms and conditions of the Plan and this Agreement.  This
Agreement shall not confer upon the Employee any right to continuation of
employment by the Company or its Subsidiaries, nor shall this Agreement
interfere in any way with the Company’s or its Subsidiaries’ right to terminate
Employee’s employment at any time.  Neither the Plan nor this
Agreement forms any part of any contract of employment between the Company or
any Subsidiary and the Employee, and neither the Plan nor this Agreement confers
on the Employee any legal or equitable rights (other than those related to the
Restricted Stock Unit award) against the Company or any Subsidiary or directly
or indirectly gives rise to any cause of action in law or in equity against the
Company or any Subsidiary.

       

      15. Plan Terms and Committee
Authority.  This Agreement and the rights of the Employee
hereunder are subject to all of the terms and conditions of the Plan, as it may
be amended from time to time, as well as to such rules and regulations as the
Committee may adopt for administration of the Plan.  It is expressly
understood that the Committee is authorized to administer, construe and make all
determinations necessary or appropriate for the administration of the Plan and
this Agreement, all of which shall be binding upon Employee.  Any
inconsistency between this Agreement and the Plan shall be resolved in favor of
the Plan.  The Employee hereby acknowledges receipt of a copy of the
Plan and this Agreement.

       

      16. Non-Competion,
Non-Solicitation and Confidentiality.  As a condition to the
receipt of this Restricted Stock Unit award, the Employee must agree to the
terms and conditions set forth in the Non-Competition, Non-Solicitation and
Confidentiality Agreement attached hereto as Exhibit A by executing that
Agreement.  Failure to execute and return the Non-Competition,
Non-Solicitation and Confidentiality Agreement within 120 days of the Award Date
shall constitute a decision by the Employee to decline to accept this Restricted
Stock Unit award.

       

      17. Amendment or Modification,
Waiver.  Except as set forth in the Plan, no provision of this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by the Employee and by a duly authorized officer of the
Company. No waiver of any condition or provision of this Agreement shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, any prior time or any subsequent time.

       

      18. Governing Law and
Jurisdiction.  This Agreement is governed by the substantive
and procedural laws of the state of Illinois.  The Employee and the
Company shall submit to the exclusive jurisdiction of, and venue in, the courts
in Illinois in any dispute relating to this Agreement.

       

      

       

      ****

       

      Please
sign the attached Exhibit A to confirm your agreement to be bound by the terms
and conditions set forth in Exhibit A, and to acknowledge your receipt of the
Plan and this Award Agreement and your acceptance of the Restricted Stock Unit
award issued hereunder.

       

      Date                                                           Very
truly yours,

      

       

      _____________________________________________

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      EXHIBIT
A

      

      WALGREEN
CO. NON- COMPETITION, NON- SOLICITATIONAND CONFIDENTIALITY
AGREEMENT

      

      This
Exhibit forms a part of the Restricted Stock Unit Award Agreement covering
Restricted Stock Units awarded to an employee of Walgreen Co. or one of its
subsidiary companies (hereinafter referred to as “Employee’’ and the
“Company”).

       

      WHEREAS,
the Company develops and/or uses valuable business, technical, proprietary,
customer and patient information it protects by limiting its disclosure and by
keeping it secret or confidential;

       

      WHEREAS,
Employee acknowledges that during the course of employment, he or she has or
will receive, contribute, or develop such confidential information;
and

       

      WHEREAS,
the Company desires to protect from its competitors such confidential
information and also desires to protect its legitimate business interests and
goodwill in maintaining its employee and customer relationships.

       

      NOW
THEREFORE, in consideration of the Restricted Stock Unit award issued to
Employee pursuant the Award Agreement to which this is attached as Exhibit A,
Employee agrees to the following:

       

      1.           Non-Disclosure
And Non-Use.  Employee agrees
not to disclose any Confidential Information, as defined below, to any person or
entity other than the Company, either during or after Employee’s employment,
without the Company’s prior written consent.  Employee further agrees
not to use any Confidential Information, either during or at any time after his
or her employment, without the Company’s prior written consent, except as may be
necessary to perform his or her job duties during employment with the
Company.

       

      Confidential
Information means information not generally known by the public about processes,
systems, products, services, including proposed products and services, business
information, know-how, or trade secrets of the Company.  Confidential
Information includes, but is not limited to, the following:

       

      (a)           Customer
records, identity of vendors, suppliers, or landlords, profit and performance
reports, prices, selling and pricing procedures and techniques, and financing
methods of the Company;

       

      (b)           Customer
lists and information pertaining to identities of the customers, their special
demands, and their past, current and anticipated requirements for the products
or services of the Company;

       

      (c)           Specifications,
procedures, policies, techniques, manuals, databases and all other information
pertaining to products or services of the Company, or of others for which the
Company has assumed an obligation of confidentiality;

       

      (d)           Business
or marketing plans, accounting records, financial statements and information,
and projections of the Company;

       

      (e)           Software
developed or used by the Company;

       

      (f)           Information
related to the Company’s retailing, distribution or administrative facilities;
and

       

      (g)           Any
other information identified or defined as confidential information by Company
policy.

       

      2.           Non-Competition
and Non-Solicitation.  In order to
protect the legitimate business interests and goodwill of the Company, and to
protect Confidential Information, Employee covenants and agrees that for the
entire period of his or her employment with the Company, and for one year after
the termination of such employment by either party for any reason, Employee will
not:

       

      (a)           contact
any Customer of the Company for the benefit of a Competing Business or interfere
with, or attempt to disrupt the relationship, contractual, or otherwise, between
the Company and any of its Customers.

      

      (b)           hire
employees of the Company.  This restriction includes without
limitation a prohibition on directly or indirectly employing, or knowingly
permitting any Person or business directly or indirectly controlled by Employee,
regardless of whether such Person or business is a Competing Business, from
employing, any person who is employed by the Company.  For the period
following the termination of Employee's employment with the Company, the term
"employee" means an individual employed by the Company as of the date of, or
within 90 days of, Employee's termination of employment.

      

      (c)           solicit
employees of the Company.  This restriction includes without
limitation a prohibition on directly or indirectly (i) interfering with, or
attempting to disrupt the relationship, contractual, or otherwise, between the
Company and any of its employees, and (ii) soliciting, inducing, or attempting
to induce employees of the Company to terminate employment with the
Company.

      

      (d)           compete
with the Company.  This restriction includes without limitation a
prohibition on directly or indirectly engaging or investing in, owning,
managing, operating, financing, controlling, participating in the ownership,
management, operation, financing or control of, or being associated or in any
manner connected with, any Competing Business, whether as a consultant,
independent contractor, agent, employee, officer, partner, director, shareholder
(except (i) limited partnership investments in private equity funds which may
invest in venture capital-backed companies (where Employee's investment
represents less than 1% percent ownership interest of any such company) or (ii)
investments of less than 1% ownership interest of the outstanding securities of
a corporation or other entity whose securities are listed on a stock exchange or
quotation system and such entity files periodic reports with the Securities and
Exchange Commission), distributor, representative, or otherwise, alone or in
association with any other Person(s).  Notwithstanding the foregoing,
Employee may render services for a Competing Business if:  such
service does not conflict with any other restrictions noted in this Paragraph 2;
the Competing Business is diversified, and Employee becomes employed in a part
of the business that is not in direct or indirect competition with Company; and,
prior to the Employee beginning employment with the Competing Business, the
Company receives written assurances satisfactory to the Company, from both the
Competing Business and Employee, that Employee will not render services directly
or indirectly in connection with any product, system, service, or process of any
person or organization which is the same as, comparable to, or competes directly
or indirectly with a product, system, service, or process of the
Company

      

      Employee
agrees that the restrictions contained in paragraphs 2(a), 2(b), and 2(c) have
no geographic limitation.  Employee agrees that the restrictions
contained in Paragraph 2(d) are geographically limited to (a) the entirety of
the United States and (b) any other country if the Company conducts business
within such country at any time during Employee's employment with the
Company.

      

      Employee
acknowledges that (i) the Company's business is and following the date hereof
will be national in scope, (ii) the Company's products and services are and
following the date hereof will be marketed throughout the United States and
(iii) the Company has competed and following the date hereof will compete with
other businesses that are or could be located in any part of the United
States.  Employee further covenants and agrees that restrictive
covenants contained in this Agreement are reasonable and necessary to protect
the legitimate business interests of the Company because of the nature and scope
of the Company's business.

      

      If a
court or arbitrator of competent jurisdiction determines that one or more of the
provisions of this Paragraph 2 are invalid, illegal, or unenforceable for
any reason, then such provision or provisions shall be deemed to be reduced in
scope or length, as the case may be, to the extent required to make this
Paragraph enforceable.  If Employee violates the provisions of this
Paragraph 2, the periods described therein shall be extended by that number
of days which equals the aggregate of all days during which at any time any such
violations occurred.

      

      For
purposes of this Paragraph 2, the following definitions shall
apply:

      

      (1)           “Competing
Business” means any business engaged in by the Company during the term of
Employee’s employment with the Company; provided that the foregoing shall only
apply to any Company business with respect to which Employee possesses
Confidential Information and is substantially engaged or provides substantial
support during Employee’s employment with the Company.

      

      (2)           “Customer”
means any patient or other customer or prospective customer of any Company
business unit with respect to which Employee is substantially engaged or
provides substantial support during Employee’s employment with the
Company.

      

      (3)           “Person”
means any individual, corporation, partnership, limited liability company or
other entity.

      

      For
purpose of this Agreement, Employee’s effective date of termination of
employment with the Company shall mean the later of: the Employee’s last day
worked for the Company, or the last date for which Employee receives
compensation for his or her services with the Company.

       

      3.           Non-Inducement.  Employee agrees
that during the term of his or her employment and for one year following the
Employee’s termination of employment, Employee will not directly or indirectly
assist or encourage any Person or entity in carrying out any activity that would
be prohibited by the provisions of this Agreement if such activity were carried
out by Employee.

       

      4.           Property.  Employee agrees
that upon leaving the employment of the Company, he or she will not take with
him or her any of the Company’s property, including Confidential Information and
trade secrets, regardless of the form in which it was held or acquired by
Employee, and will immediately return to the Company any and all documents,
notes, records, notebooks, mobile telephones, cellular telephones, computers,
PDAs (personal digital assistants), portable digital storage devices, and
similar repositories of or containing or relating to Confidential Information
and Company trade secrets, and including, but not limited to, all copies, notes
or abstracts thereof.

       

      5.           Consideration
and Acknowledgments.  Employee
acknowledges and agrees that the covenants described in Paragraphs 1 through 4
of this Agreement are essential terms, and the underlying restricted stock unit
award would not be provided by the Company in the absence of these
covenants.  Employee further acknowledges that these covenants are
supported by adequate consideration as set forth in this Agreement, that full
compliance with these covenants will not prevent Employee from earning a
livelihood following the termination of his or her employment, and that these
covenants do not place undue restraint on Employee and are not in conflict with
any public interest.  Employee further acknowledges and agrees that
Employee fully understands these covenants, has had full and complete
opportunity to discuss and resolve any ambiguities or uncertainties regarding
these covenants before signing this Agreement, that these covenants are
reasonable and enforceable in every respect, and has voluntarily agreed to
comply with these covenants for their stated term.  Employee agrees
that in the event he or she is offered employment with a Competing Business at
any time in the future, Employee shall immediately notify the Competing Business
of the existence of the covenants set forth in Paragraphs 1 through 4
above.

       

      6.           Enforcement
of This Agreement.  Employee
acknowledges that compliance with the covenants set forth in Paragraphs 1
through 4 of this Agreement is necessary to enable the Company to maintain its
competitive position, and that any actual or threatened breach of these
covenants will result in irreparable and continuing damage to the Company for
which there will be no adequate remedy at law.  In the event of any
actual or threatened breach of these covenants, the Company shall be entitled to
injunctive relief, including the right to a temporary restraining order, and
other relief, including damages, as may be proper along with the Company’s
attorneys’ fees and court costs.  The foregoing stipulated damages and
remedies of the Company are in addition to, and not to the exclusion of, any
other damages the Company may be able to prove.  In addition, if any
court shall at any time hold these covenants to be unenforceable or unreasonable
in scope, territory or period of time, then the scope, territory or period of
time of the covenants shall be that determined by the court to be
reasonable.  Employee consents to the jurisdiction of the Circuit
Court of Lake or Cook County, Illinois for purposes of the enforcement of this
agreement.

       

      7.           Severability.  If any phrase or
provision of this Agreement is declared invalid or unenforceable by a court of
competent jurisdiction, such phrase, clause or provision shall be deemed severed
from this Agreement, but will not affect the enforceability of any other
provisions of this Agreement, which shall otherwise remain in full force and
effect.  If any restriction or limitation in this Agreement is deemed
to be unreasonable, unenforceable or unduly restrictive by a court of competent
jurisdiction, it shall not be stricken in its entirety and held totally void and
unenforceable, but shall remain effective to the maximum extent permissible as
determined by said court.

       

      8.           Entire
Agreement.  This Agreement
represents the entire agreement between the parties and supersedes and renders
null and void all prior agreements, arrangements or communications between the
parties covering the same or similar subject matter, whether oral or
written.  In particular, to the extent Employee has signed more than
one version of this Agreement in connection with restricted stock unit awards
for multiple years, the latest of such executed Agreements shall
apply.  The terms of this Agreement may not be altered or modified
except by written agreement of Employee and the
Company.  Notwithstanding the foregoing, to the extent that, pursuant
to an employment contract or otherwise, Employee is currently or in the future
becomes subject to any similar obligations that are more restrictive in any
respects than Employee’s obligations under this Agreement, then the more
restrictive terms shall govern.

       

      9.           Notification.  Employee further
agrees that the Company may notify anyone later employing him or her of the
existence and provisions of this Agreement.

       

      10.           Successors
and Assigns.  This Agreement
shall be enforceable by the Company and its successors and permitted
assigns.

       

      11.           General.  Employee agrees
that:

       

      (a)           Waiver
of any of the provisions of this Agreement by the Company in any particular
instance shall not be deemed to be a waiver of any provision in any other
instance and/or of the Company’s other rights at law or under this
Agreement;

       

      (b)           The
provisions of this Agreement shall be considered severable;

       

      (c)           This
Agreement shall accrue to and be binding upon the Company and Employee;
and

       

      (d)           The
captions in this Agreement shall be for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

       

      12.           Governing
Law.  The law of the
State of Illinois shall govern this Agreement without regard to its choice of
law provisions.

       

      

      ***                    ***                    ***                    ***                    ***

      

      By my
signature below, I acknowledge receipt of the Restricted Stock Unit Agreement to
which this Agreement is attached as Exhibit A, and I and agree to the terms and
conditions expressed in this Non-Competition, Non-Solicitation and
Confidentiality Agreement.

       

      

       

      Employee
Name (Please
Print):                                                                           Employee
Signature:

       

      

      ________________________                                                                           _______________________

       

      

       

      Date:  ____________________

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