SECOND AMENDMENT
                                 TO
                      ACE HARDWARE CORPORATION
                   RESTATED OFFICER INCENTIVE PLAN

Pursuant to Section 5 of the Ace Hardware Corporation Restated
Officer Incentive Plan ("The Plan"), effective January 1, 2001, the
Company hereby amends the Plan as follows:

1.  Exhibit A is modified and restated to set forth the participants and tiers
    for the ST Plan and VA Plan for plan years commencing January 1, 2001 as
    set forth on Exhibit A (2001).

2.  Exhibits B and BB are modified and restated to set forth the multiplier
    matrix for the team portion of the short term goal, and the method of
    calculation for the retail portion of the short term goal, as set forth
    on Exhibit B (2001) and Exhibit BB (2001), respectively.

3.  Exhibit C is modified and restated and presents a financial model which
    supports the VA Plan, as set forth in Exhibit C (2001).

4.  Section 7 shall be amended by deleting the third and fourth paragraph of
    Subsection Performance Measure as amended by the First Amendment and
    substituting the following:

    Following is a presentation of ratios in effect as of January 1, 2001
    pertaining to the VA Plan.  These ratios may be adjusted from time to time
    by the Board (as set forth on Exhibit A).
       -Gross Patronage Dividend Threshold for actual RSC sales is 5.4 percent.
       -Permanent Sharing Ratio is 4.63 percent.

5.  This Second Amendment is effective January 1, 2001.

Except as specifically amended herein, the Plan and First Amendment
to the Plan shall remain in full force and effect as prior to this
Second Amendment.

Dated:  December 6, 2000                Ace Hardware Corporation
                                         a Delaware corporation


By:__HOWARD JUNG___________________    Chairman of the Board of
                                               Directors

                                                  and


By:__DAVID F. HODNIK_______________    President and CEO