Exhibit 10.3

THIRD AMENDMENT TO RIGHTS AGREEMENT

This Third Amendment, dated as of October 18, 2005 (this “Amendment”), to the
Rights Agreement, dated as of July 3, 1992, as amended and restated as of
September 24, 1997 and further amended as of May 22, 1998 and April 7, 2005 (the
“Rights Agreement”), is made between ShopKo Stores, Inc., a Wisconsin
corporation (the “Company”), and Wells Fargo Bank, N.A., as successor to Norwest
Bank Minnesota, National Association, a national banking association (the
“Rights Agent”).  Capitalized terms not otherwise defined herein have the
meaning given to such terms in the Rights Agreement.

WHEREAS, the Company, SKO Group Holding Corp., a Delaware corporation
(“Parent”), and SKO Acquisition Corp., a Wisconsin corporation and a
wholly-owned subsidiary of Parent (“Acquisition Sub”), have proposed to enter
into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which,
among other things, Acquisition Sub will be merged into the Company, with the
Company being the surviving corporation (the “Merger”), and each share of common
stock, par value $.01 per share, of the Company outstanding immediately prior to
the Effective Time (as defined in the Merger Agreement) (other than (i) shares
held in treasury by the Company or owned by Parent or Acquisition Sub, which
shares shall be cancelled pursuant to the terms of the Merger Agreement and (ii)
shares owned by a subsidiary of the Company, which shares shall be converted
into shares of the surviving corporation pursuant to the terms of the Merger
Agreement), will be converted into the right to receive cash as provided in the
Merger Agreement;

WHEREAS, the Company and the Rights Agent desire to amend the Rights Agreement
to provide that neither Parent nor Acquisition Sub shall be deemed an Acquiring
Person, no Distribution Date shall be deemed to occur, and no Rights will
otherwise become exercisable as a result of the execution and delivery of the
Merger Agreement, the public announcement of such execution and delivery or the
consummation of the transactions contemplated by the Merger Agreement, including
the Merger; and

WHEREAS, pursuant to its authority under Section 27 of the Rights Agreement, the
Board of Directors of the Company has authorized and approved this Amendment to
the Rights Agreement set forth herein as of the date hereof.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein
set forth in this Amendment, the parties hereby agree as follows:

1.

Section 34 of the Rights Agreement is hereby amended and restated in its
entirety to read as follows:

“SECTION 34.     CERTAIN EXCEPTIONS.  

Notwithstanding anything to the contrary contained herein, (i) none of SKO Group
Holding, Inc., a Delaware corporation (“Parent”), SKO Acquisition Corp., a
Wisconsin corporation (“Acquisition Sub”), nor any of their respective
Affiliates or Associates shall become an Acquiring Person and (ii) no
Distribution Date shall occur, in each case, as a result of the execution and
delivery of the Agreement and Plan of Merger, dated as of October 18, 2005, by
and among Parent, Acquisition Sub and the Company (as it may be amended from
time to time, the “Merger Agreement”), the public announcement of such execution
and delivery, the performance of the Merger Agreement, or the consummation of
the Merger (as defined in the Merger Agreement) or the other transactions
contemplated by the Merger Agreement.”

2.

This Amendment shall be deemed to be a contract made under the laws of the State
of Wisconsin and for all purposes shall be governed by and construed in
accordance with the laws thereof applicable to contracts to be made and
performed entirely within the State of Wisconsin.

3.

This Amendment shall be deemed effective immediately prior to the execution and
delivery of the Merger Agreement.  Except as otherwise amended hereby, the
Rights Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.  

4.

This Amendment may be executed in counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and both such counterparts
shall together constitute but one and the same instrument.

*  *  *  *  *  

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to the
Rights Agreement to be duly executed as of the day and year first above written.

SHOPKO STORES, INC.

By:

 /s/ Steven R. Andrews      

Name:  Steven R. Andrews

Title:

Senior Vice President

WELLS FARGO BANK, N.A.,

as Rights Agent

By:

 /s/ Corbin B. Connell          

Name:

Corbin B. Connell

Title:

Vice President