GALLAGHER ARTHUR J & CO
AMENDMENT 2 TO NONQUALIFIED STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.27.2
<SEQUENCE>5
<FILENAME>dex10272.txt
<DESCRIPTION>AMENDMENT 2 TO NONQUALIFIED STOCK OPTION PLAN
<TEXT>
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                                                                 Exhibit 10.27.2

                            AMENDMENT NO. TWO TO THE
              ARTHUR J. GALLAGHER & CO. RESTATED 1988 NONQUALIFIED
                                STOCK OPTION PLAN

     THIS AMENDMENT NO. TWO to the ARTHUR J. GALLAGHER & CO. 1988 NONQUALIFIED
STOCK OPTION PLAN (as restated January 22, 1998), dated January 18, 2001, is
made by Arthur J. Gallagher & Co., a Delaware corporation (the "Company").

     WHEREAS, the Arthur J. Gallagher & Co. 1988 Nonqualified Stock Option Plan
(the "Plan") was adopted by the Company's Board of Directors and approved by the
Company's Stockholders in 1988; and

     WHEREAS, the Company's Board of Directors has determined that the Plan
should be amended to increase the number of shares of the Company's Common Stock
subject to the Plan by 3,200,000 from 27,400,000 to 30,600,000 shares.

      NOW, THEREFORE, in consideration of the foregoing and in order to reflect
the approval of the Board of Directors of the Company:

     1.  The first sentence of Paragraph 3 of the Plan is hereby amended in its
entirety to read as follows:

     "The shares that may be made subject to options under the Plan shall be
     shares of Common Stock of the Company, one dollar ($1.00) par value
     ("Common Stock"), and the total shares subject to option and issued
     pursuant to this Plan shall not exceed, in the aggregate, 30,600,000 shares
     of the Common Stock of the Company."

     2.  Except as expressly amended and supplemented by this Amendment, the
Plan is hereby ratified and confirmed in all respects.

     IN WITNESS WHEREOF, the Company has caused its President and Secretary to
execute this Amendment No. Two to the Restated Plan as of the 18th day of
January, 2001.

                                       ARTHUR J. GALLAGHER & CO.


                                       By: /s/ J. Patrick Gallagher, Jr.
                                           --------------------------------
                                           J. Patrick Gallagher, Jr.
                                           President

ATTEST:

/s/ Michael J. Cloherty
-----------------------------
Michael J. Cloherty
Secretary



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