EXHIBIT 10.4

EXECUTIVE SEVERANCE AGREEMENT

                    THIS AGREEMENT is entered into as of the 15th day of
October, 2008 (the "Effective Date"), by and between SPARTAN STORES, INC., a
Michigan corporation ("Spartan Stores"), and CRAIG C. STURKEN ("Executive").

W I T N E S S E T H:

                    WHEREAS, Executive currently serves as a key employee of
Spartan Stores and/or its subsidiaries (the "Company") and his services and
knowledge are valuable to the Company in connection with the management of one
or more of the Company's principal operating facilities, divisions, or
subsidiaries; and

                    WHEREAS, Spartan Stores considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its shareholders; and

                    WHEREAS, the Board has determined that it is in the best
interests of Spartan Stores and its shareholders to secure Executive's continued
services and to ensure Executive's continued dedication and objectivity in the
event of any threat or occurrence of, or negotiation or other action that could
lead to, or create the possibility of, a Change in Control (as hereafter
defined) of Spartan Stores, without concern as to whether Executive might be
hindered or distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full attention and
dedication to Spartan Stores and/or its subsidiaries, the Board has authorized
Spartan Stores to enter into this Agreement.

                    NOW, THEREFORE, COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

1.

Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:

          (a)          "Board" means the Board of Directors of Spartan Stores.

          (b)          "Cause" means (1) the willful and continued failure by
Executive to substantially perform his duties with the Company (other than any
such failure resulting from Executive's incapacity due to physical or mental
injury or illness, or any such actual or anticipated failure resulting from
Executive's termination for Good Reason) after a demand for substantial
performance is delivered to Executive by the Board (which demand shall
specifically identify the manner in which the Board believes that Executive has
not substantially performed Executive's duties); or (2) the willful engaging by
Executive in gross misconduct materially and demonstrably injurious to the
Company. For purposes of this Section, no act or failure to act on the part of
Executive shall be considered "willful" unless done or omitted to be done by
Executive not in good faith and

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without reasonable belief that his action(s) or omission(s) was in the best
interests of the Company. Notwithstanding the foregoing, Executive shall not be
deemed to have been terminated for Cause unless and until the Company provides
Executive with a copy of a resolution adopted by an affirmative vote of not less
than two-thirds of the entire membership of the Board at a meeting of the Board
called and held for the purpose (after reasonable notice to Executive and an
opportunity for Executive, with counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive has been guilty of
conduct set forth in subsections (1) or (2) above, setting forth the particulars
in detail. A determination for Cause by the Board shall not be binding upon or
entitled to deference by any finder of fact in the event of a dispute, it being
the intent of the parties that such finder of fact shall make an independent
determination of whether the termination was for "Cause" as defined in (1) or
(2) above.

          (c)          "Change in Control" means:

          (1)          the acquisition by any individual, entity, or group (a
"Person"), including any "person" within the meaning of Sections 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 20% or more of either (i) the then outstanding shares
of common stock of Spartan Stores (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding securities of Spartan
Stores entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition by the Company,
(B) any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any Person controlled by the Company, (C) any
acquisition by any corporation pursuant to a reorganization, merger, or
consolidation involving the Company, if, immediately after such reorganization,
merger, or consolidation, each of the conditions described in clauses (i), (ii),
and (iii) of subsection (c)(3) shall be satisfied, or (D) any acquisition by the
Executive or any group of persons including the Executive; and provided further
that, for purposes of clause (A), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company) shall become the beneficial owner
of 20% or more of the Outstanding Company Common Stock or 20% or more of the
Outstanding Company Voting Securities by reason of an acquisition by the Company
and such Person shall, after such acquisition by the Company, become the
beneficial owner of any additional shares of the Outstanding Company Common
Stock or any additional Outstanding Company Voting Securities, such additional
beneficial ownership shall constitute a Change in Control;

          (2)          individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who becomes a
director of Spartan Stores subsequent to the date hereof whose election, or
nomination for election by

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the shareholders of Spartan Stores, was approved by the vote of at least
two-thirds of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of Spartan Stores in which
such person is named as a nominee for director, without objection to such
nomination) shall be deemed to have been a member of the Incumbent Board; and
provided further, that no individual who was initially elected as a director of
Spartan Stores as a result of an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or consents by or
on behalf of any Person other than the Board, shall be deemed to have been a
member of the Incumbent Board;

          (3)          approval by the shareholders of Spartan Stores of a
reorganization, merger, or consolidation unless, in any such case, immediately
after such reorganization, merger, or consolidation, (i) more than 50% of the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger, or consolidation and more than 50% of the combined
voting power of the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals or entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
reorganization, merger, or consolidation and in substantially the same
proportions relative to each other as their ownership, immediately prior to such
reorganization, merger, or consolidation, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no
Person (other than (A) the Company, any employee benefit plan (or related trust)
sponsored or maintained by the Company or the corporation resulting from such
reorganization, merger, or consolidation (or any corporation controlled by the
Company), or (B) any Person which beneficially owned, immediately prior to such
reorganization, merger, or consolidation, directly or indirectly, 20% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 20%
or more of the then outstanding shares of common stock of such corporation or
20% or more of the combined voting power of the then outstanding securities of
such corporation entitled to vote generally in the election of directors, and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger, or consolidation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such reorganization, merger, or
consolidation; or

          (4)          approval by the shareholders of Spartan Stores of (i) a
plan of complete liquidation or dissolution of Spartan Stores or (ii) the sale
or other disposition of all or substantially all of the assets of Spartan Stores
other than to a corporation with respect to which, immediately after such sale
or other disposition, (A) more than 50% of the then outstanding shares of common
stock

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thereof and more than 50% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or any
corporation controlled by the Company), or any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or indirectly, 20%
or more of the Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock thereof
or 20% or more of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors and (C) at least
a majority of the members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition.

          Notwithstanding anything contained in this Agreement to the contrary,
if Executive's employment is terminated prior to a Change in Control and
Executive reasonably demonstrates that such termination was at the request of or
in response to a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a "Third Party"), and who
subsequently effectuates a Change in Control, then for all purposes of this
Agreement, the date of a Change in Control shall mean the date immediately prior
to the date of such termination of Executive's employment.

          (d)          "Code" means the Internal Revenue Code of 1986, as
amended.

          (e)          "Common Stock" means the common stock of Spartan Stores,
no par value per share.

          (f)          "Date of Termination" means the effective date on which
Executive's employment by the Company terminates as specified in a Notice of
Termination by the Company or Executive, as the case may be, in a manner that
constitutes a "separation from service" as that term is defined by Section 409A
of the Code. Notwithstanding the previous sentence, (i) if the Executive's
employment is terminated for Disability, as defined in Section 1(g), then such
Date of Termination shall be no earlier than thirty (30) days following the date
on which a Notice of Termination is received, and (ii) if the Executive's
employment is terminated by the Company other than for Cause, then such Date of
Termination shall be no earlier than thirty (30) days following the date on
which a Notice of Termination is received.

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          (g)          "Disability" means Executive's failure to be available to
substantially perform his duties with the Company on a full-time basis for at
least one hundred eighty (180) consecutive days as a result of Executive's
incapacity due to mental or physical illness.

          (h)          "Good Reason" means, without Executive's express written
consent, the occurrence of any of the following events after or in connection
with a Change in Control:

          (1)          (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's position(s),
duties, responsibilities, or status with the Company immediately prior to such
Change in Control, (ii) a material adverse change in Executive's positions,
reporting responsibilities, titles or offices with the Company as in effect
immediately prior to such Change in Control, (iii) any removal or involuntary
termination of Executive by the Company otherwise than as expressly permitted by
this Agreement (including any purported termination of employment which is not
effected by a Notice of Termination), or (iv) any failure to re-elect Executive
to any position with the Company held by Executive immediately prior to such
Change in Control;

          (2)          a reduction by the Company in Executive's rate of annual
base salary as in effect immediately prior to such Change in Control or as the
same may be increased from time to time thereafter;

          (3)          any requirement of the Company that Executive (i) be
based anywhere other than the facility where Executive is located at the time of
the Change in Control or reasonably equivalent facilities within Kent County,
Michigan or (ii) engage in business travel to an extent substantially more
burdensome than the travel obligations of Executive immediately prior to such
Change in Control;

          (4)          the failure of the Company to continue the Company's
executive incentive plans or bonus plans in which Executive is participating
immediately prior to such Change in Control or a reduction of the Executive's
target incentive award opportunity under any such bonus plan, unless Executive
is permitted to participate in other plans providing Executive with
substantially comparable benefits or receives compensation as a substitute for
such plans providing Executive with a substantially equivalent economic benefit;

          (5)          the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which Executive is participating
immediately prior to such Change in Control, unless Executive is permitted to
participate in other plans providing Executive with substantially comparable
benefits or receives compensation as a substitute for such plans providing
Executive with a substantially equivalent after-tax economic benefit, or the
taking of any action by

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the Company which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any such plan, (ii) provide
Executive and Executive's dependents with welfare benefits (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs) in accordance with the most favorable plans, practices, programs,
and policies of the Company in effect for Executive immediately prior to such
Change in Control, (iii) provide other fringe benefits in accordance with the
most favorable plans, practices, programs, and policies of the Company in effect
for Executive immediately prior to such Change in Control, or (iv) provide
Executive with paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company as in effect for Executive
immediately prior to such Change in Control;

          (6)          the failure of the Company to pay any amounts owed
Executive as salary, bonus, deferred compensation or other compensation;

          (7)          the failure of Spartan Stores to obtain any assumption
agreement contemplated in Section 10(b);

          (8)          any purported termination of Executive's employment which
is not effected pursuant to a Notice of Termination which satisfies the
requirements of a Notice of Termination; or

          (9)          any other material breach by Spartan Stores of its
obligations under this Agreement.

          For purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive on the parties; except that an
isolated and insubstantial action taken in good faith and which is remedied by
the Company within ten (10) days after receipt of notice thereof given by
Executive shall not constitute Good Reason. Any event or condition described in
this Section 1(h) which occurs prior to a Change in Control, but which Executive
reasonably demonstrates was at the request of or in response to a Third Party
who effectuates a Change in Control or who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.

          Executive may not terminate the employment for Good Reason unless:

          (i)          Executive notifies the Board in writing, within sixty
(60) days after Executive becomes aware of the act or omission constituting Good
Reason that the act or omission in question constitutes Good Reason and
explaining why the Executive considers it to constitute Good Reason;

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          (ii)          the Company fails, within ten (10) days after notice
from Executive under (i) above, to revoke the action or correct the omission and
make the Executive whole; and

          (iii)          Executive gives notice of termination within thirty
(30) days after expiration of the ten (10) day period under (ii) above.

          Executive's failure to give notice as provided in (i) above will not
waive Executive's right to resign with Good Reason, provided that he follows the
above procedure, with regard to any subsequent act or omission constituting Good
Reason.

          Executive need not fulfill the above conditions a second time if the
Company repeats the act or omission constituting Good Reason.

          (i)          "Mandatory Retirement" means Executive's involuntary
retirement as required by a lawful Company policy requiring Executive to retire
at or after age sixty-five (65), but only if such policy is adopted by the
Company before a Change in Control and only if such policy was not adopted by
the Company at the request of or in response to a Third Party who subsequently
effectuates a Change in Control.

          (j)          "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive for any
reason (including a voluntary retirement) other than for Good Reason with Notice
of Termination, (3) as a result of Executive's death, (4) by the Company due to
Executive's Disability, unless within thirty (30) days after Notice of
Termination is provided to Executive, Executive shall have returned (or offered
to return, if not permitted by the Company to do so) to substantial performance
of Executive's duties on a full-time basis, or (5) as a result of Executive's
Mandatory Retirement.

          (k)          "Notice of Termination" means a written notice by the
Company or Executive, as the case may be, to the other, which (1) indicates the
specific reason for Executive's termination, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment, and (3) specifies the Date of
Termination. The failure by Executive or the Company to set forth in such notice
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude
Executive or the Company from asserting such fact or circumstance in enforcing
Executive's or the Company's rights hereunder.

          (l)          "SERP" means the Spartan Stores, Inc. Supplemental
Executive Retirement Plan, as amended from time to time.

          (m)          "Termination Period" means the period of time beginning
with a Change in Control and ending two (2) years following the later of (i) the
Change in Control or (ii) consummation of the transaction for which shareholder
approval triggered the Change in Control.

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2.

Term of Agreement. This Agreement shall commence on the Effective Date and shall
continue in effect until Spartan Stores has fulfilled all of its obligations
under this Agreement following any termination of Executive's employment with
the Company.

 

 

3.

Severance Benefits. If the employment of Executive with the Company shall
terminate during the Termination Period in a manner that constitutes a
"separation from service" as that term is defined by Section 409A of the Code,
other than by reason of a Nonqualifying Termination, then Executive shall
receive the following severance benefits as compensation for services rendered:

          (a)          Lump Sum Cash Payment. On the tenth (10th) business day
after the Date of Termination, Executive shall receive a lump sum cash payment
in an amount equal to the sum of the following:

          (1)          Executive's unpaid base salary from the Company through
the Date of Termination at the rate in effect (without taking into account any
reduction of base salary constituting Good Reason), just prior to the time a
Notice of Termination is given plus any benefit awards (including both the cash
and stock components) and bonus payments which pursuant to the terms of any
plans have been earned and become payable, to the extent not theretofore paid.

          (2)          A bonus will be paid under the Company's Annual Incentive
Plan or any successor plan ("Annual Plan") for the time Executive was employed
by the Company in the fiscal year of termination, in an amount equal to the
product of (i) the number of days Executive was employed by the Company prior to
the Date of Termination in the year of termination divided by the number of days
in the year, multiplied by (ii) 100% of the Executive's current year target
bonus (with such calculations to be made as though the target level has been
achieved for each Performance Goal (as defined in the Annual Plan)).

          (3)          An amount equal to two (2) times the sum of (i) the
higher of the Executive's annual rate of base salary from the Company in effect
on the Date of Termination or in effect on the day before the Change in Control;
and (ii) the higher of (A) the Executive's current year target bonus under the
Annual Plan (with such calculations to be made as though the target level has
been achieved for each performance goal (as defined in the Annual Plan)), or (B)
the current-year forecasted bonus under the Annual Plan as of the Date of
Termination.

          (b)          Benefits. The Company shall provide Executive with the
benefits, payments and reimbursements set forth in subsections (1) to (3) below.

          (1)          If the Date of Termination occurs before November 1,
2009, an amount equal to the COBRA continuation cost that the Company would have
paid to Executive under Section 5(a)(i) of the Employment Agreement between

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Executive and the Company. Reimbursement under this Section 3(b)(1) will be made
no later than thirty (30) days after Executive requests reimbursement, but in no
event after the year following that in which the Executive incurs such expense.

          (2)          For the period beginning on the Date of Termination and
ending on the earlier of (A) the end of the twelfth (12th) month after the Date
of Termination or (B) the date on which Executive receives a substantially equal
benefit from a new employer, the Company will continue the Executive's tax and
financial planning benefit, with reimbursement of any costs incurred by
Executive to obtain such benefits to be made to the Executive within thirty (30)
days after Executive requests reimbursement, but in no event after the end of
the year following that in which the Executive incurs such costs.

          (3)          For the period beginning on the Date of Termination and
ending on the earlier of (A) the end of the twenty-fourth (24th) month after the
Date of Termination or (B) the date on which Executive receives a substantially
equal benefit from a new employer, the Company will continue all of the
Executive's Company funded life insurance coverage, or, if the Company's life
insurance program does not permit such continued coverage, the Company will pay
the Executive's cost to replace such coverage, with reimbursement of any costs
incurred by Executive to replace such coverage to be made to the Executive
within thirty (30) days after Executive requests reimbursement, but in no event
after the end of the year following that in which the Executive incurs such
costs.

In addition to the payments called for by Section 3(b)(1), (2) and (3) the
Company shall make payments to Executive in the amount necessary to eliminate
the income tax cost to Executive resulting from any conversion of such benefits
from non-taxable employee benefits to taxable benefits, payments or
reimbursements. Such additional payments shall be made at the same time that the
Company reimburses the Executive under this Section 3(b).

          (c)          Outplacement Services. The Company will provide the
Executive with outplacement services through an outplacement services firm
selected by the Company with the Executive's approval, which shall not be
withheld if the firm selected is reputable, at a cost not to exceed an amount
equal to $25,000. The timing of outplacement services to be received shall be
determined by the Executive, provided that all costs under this subsection must
be incurred, and all applicable payments to the outplacement firm made, not
later than the last day of the second year following that in which the Date of
Termination occurred.

          (d)          Certain Reductions Disregarded. In computing the payments
under subsections (a) through (c) above, any reduction in Executive's base
salary, bonus or fringe benefits shall be disregarded if such reduction
constituted Good Reason as defined in this Agreement.

4.

Retirement Benefits.

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          (a)          The Executive is a participant in the SERP. If the
employment of Executive with the Company shall terminate during the Termination
Period in a manner that constitutes a "separation from service" as that term is
defined by Section 409A of the Code, other than by reason of a Nonqualifying
Termination, then Executive shall receive (as a lump sum, to be paid on the
tenth (10th) business day after the Date of Termination) an amount equal to the
difference between (i) the total amounts the Executive is eligible to receive as
of the Date of Termination under the Spartan Stores, Inc. Cash Balance Pension
Plan and any successor plan (the "Pension Plan") and the SERP (assuming election
by Executive of the lump sum payment options under the Pension Plan and SERP);
and (ii) the total amounts the Executive would have been eligible to receive
under the Pension Plan and SERP if the Executive were fully vested under the
Pension Plan and the Executive had received additional age and years of service
credits based on continued employment until the end of the twenty-fourth (24th)
month following the month in which the Date of Termination occurs.

          (b)          The payments to Executive under this Section 4 shall be
in addition to any payments under Section 3 of this Agreement and any payments
under the Pension Plan and SERP.

          (c)          In computing the payment under subsection (a) above, any
change to the SERP shall be disregarded if such change constituted Good Reason
as defined in this Agreement.

5.

Acceleration of Vesting Upon Change in Control. Effective at the time of a
Change in Control, all unvested stock options and stock previously issued to
Executive as to which rights of ownership are subject to forfeiture shall
immediately vest; all risk of forfeiture of the ownership of stock or stock
options and restrictions on the exercise of options shall lapse; and, Executive
shall be entitled to exercise any or all options, such that the underlying
shares will be considered outstanding at the time of the Change in Control.

 

 

6.

Delay in Payment to a Specified Employee. Notwithstanding any other timing
provision in this Agreement, if, at the time the payments would commence,
Executive is a "Specified Employee" as defined by Section 409A of the Code, then
no payment under this Agreement may be paid before the date that is six (6)
months after Executive's separation from service, except for payment of current
compensation under Section 3(a)(1) and the acceleration of vesting under Section
5. Payments to which Executive would otherwise have been entitled during that
six (6) months will be accumulated and paid on the first day after six (6)
months following the date of Executive's separation from service. All payments
that would otherwise be made more than six (6) months following the date of
Executive's separation from service will be made in accordance with the general
timing provisions described above.

 

 

7.

Certain Additional Payments by the Company. Anything in this Agreement to the
contrary notwithstanding, the Company shall make a Gross-Up Payment to Executive
as provided in this Section 7 if such a payment is called for by Section 7(a).
If application

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of the Excise Tax (as defined in Section 7(a)) can be avoided by reduction of up
to ten percent (10%) of the payments otherwise due to Executive under Sections 3
and 4, such reduction shall be made by first reducing the benefit under Section
3(c), then reducing if necessary the benefit under Section 3(b)(2), and finally
by reducing if necessary the payment under Section 3(a)(3) and then if necessary
to the payment under Section 4. If a reduction of up to ten percent (10%) of the
payments otherwise called for by Sections 3 and 4 as provided above is
insufficient to avoid the application of the Excise Tax, then there shall be no
reduction to the payments otherwise called for by Sections 3 and 4.

          (a)          Except as provided in the preceding paragraph, and
notwithstanding any other provisions of this Agreement, if any payments or
distributions by the Company to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise ("Payments")) trigger application of the excise tax imposed by
Section 4999 of the Code, or any successor Code provision (such excise tax,
together with any interest and penalties, are hereinafter collectively referred
to as the "Excise Tax"), or any interest or penalties are incurred by Executive
with respect to Excise Tax on such amount, then Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes) including, without limitation, any income
and employment taxes (and any interest and penalties imposed with respect
thereto) and any Excise Tax, imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments, it being the intent of this Section that the Executive shall be
held harmless from all Excise Tax and interest and penalties on Excise Tax.

          (b)          Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the public accounting firm that is retained by the Company as of the date
immediately prior to the Change in Control (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from Executive that
there has been a Payment, or such earlier time as is requested by the Company or
Executive (collectively, the "Determination"). In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity, or group
effecting the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the Determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7,
shall be paid by the Company to Executive within five (5) days of the receipt of
the Determination, but in no case later than the end of the year after that in
which Executive remits the Excise Tax, provided that in no event shall such
payment be made until six (6) months following Executive's separation from
service, if at the time of such separation from service the Executive is a
Specified Employee as defined by Section 409A of the Code. If the Accounting
Firm determines that no Excise Taxes are payable by Executive, it shall furnish
Executive with a written opinion that failure to

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report the Excise Tax on Executive's applicable federal income tax return would
not result in the imposition of a negligence or similar penalty. The
Determination by the Accounting Firm shall be binding upon the Company and
Executive; however, as a result of the uncertainty in the application of Section
4999 of the Code at the time of the Determination, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment") consistent with the calculations required to be made hereunder.
In the event that the Company exhausts its remedies pursuant to Section 7(c) and
Executive thereafter is required to make payment of any Excise Tax that
qualifies for a Gross-Up Payment in accordance with this Section 7, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive.

          (c)          Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten (10) business days after Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the thirty (30)
day period following the date on which Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall:

          (i)          give the Company any information reasonably requested by
the Company relating to such claim;

          (ii)          take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company;

          (iii)          cooperate with the Company in good faith in order
effectively to contest such claim; and

          (iv)          permit the Company to participate in any proceeding
relating to such claim;

provided, however, that the Company shall reimburse Executive for all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such contest
and payment of costs and expenses. Any reimbursement under this Section 7 must
be made within thirty (30) days after Executive requests reimbursement, but in
no event after the end of the year following that in which the Executive incurs
the expense. Without limitation on the foregoing provisions of this

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Section 7(c), the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings, and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
Determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided further, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income or employment tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided further, that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

          (d)          If, after the receipt by Executive of an amount advanced
by the Company pursuant to Section 7, Executive becomes entitled to receive, and
receives, any refund with respect to such claim, Executive shall (subject to the
Company's complying with the requirements of Section 7) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 7, a Determination is made
that Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
Determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

8.

Withholding Taxes. The Company may withhold from all payments due to Executive
(or his beneficiary or estate) hereunder all taxes which, by applicable federal,
state, local, or other law, the Company is required to withhold therefrom.

 

 

9.

Reimbursement of Expenses. If any contest or dispute shall arise under or
related to this Agreement involving termination of Executive's employment with
the Company or involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contest or dispute regardless of the result
thereof. The reimbursement of an eligible amount must be made within thirty (30)
days after Executive requests reimbursement, but in no event after the end of
the year following that in which the Executive incurs such expense.

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10.

Successors; Binding Agreement.

          (a)          This Agreement shall not be terminated by any merger or
consolidation of Spartan Stores whereby Spartan Stores is or is not the
surviving or resulting corporation or as a result of any transfer of all or
substantially all of the assets of Spartan Stores. In the event of any such
merger, consolidation, or transfer of assets, the provisions of this Agreement
shall be binding upon the surviving or resulting corporation or the person or
entity to which such assets are transferred.

          (b)          Spartan Stores agrees that concurrently with any merger,
consolidation or transfer of assets referred to in this Section 10, it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to Executive (or his beneficiary or estate), all of the
obligations of the Company hereunder. Failure of Spartan Stores to obtain such
assumption prior to the effectiveness of any such merger, consolidation, or
transfer of assets shall be a breach of this Agreement and shall constitute Good
Reason hereunder and shall entitle Executive to compensation and other benefits
from the Company in the same amount and on the same terms as Executive would be
entitled hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing, the date on which any such merger, consolidation, or
transfer becomes effective shall be deemed the date Good Reason occurs, and
shall be the Date of Termination if requested by Executive.

          (c)          This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.

11.

Notice. For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered or received by facsimile transmission or five (5)
days after deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed as follows:

 

 

 

If to the Executive:

 

 

 

 

Craig C. Sturken
3785 92nd Street SW
Byron Center, Michigan 49315

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If to Spartan Stores:

 

 

 

 

Spartan Stores, Inc.
850 76th Street, S.W.
P. O. Box 8700
Grand Rapids, Michigan 49518-8700
Attention: President and Chief Executive Officer

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

12.

Full Settlement; Resolution of Disputes.

          (a)          The Company's obligation to make any payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against Executive or others.
In no event shall Executive be obligated to seek other employment or take other
action by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not Executive obtains other employment.

          (b)          If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment then, until
there is a final, nonappealable, determination pursuant to arbitration declaring
that such termination was for Cause, that the determination by Executive of the
existence of Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to Executive and
his dependents or other beneficiaries, as the case may be, under Sections 3 and
4, the Company shall pay all amounts, and provide all benefits, to Executive and
his dependents or other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Sections 3 and 4 as though such
termination were by the Company without Cause or by Executive with Good Reason;
except that the Company shall not be required to pay any disputed amounts
pursuant to this Section 12 except upon receipt of an undertaking by or on
behalf of Executive to repay all such amounts to which Executive is ultimately
determined by the arbitrator not to be entitled.

          (c)          Arbitration. Any dispute or controversy under this
Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan,
in accordance with the rules of the American Arbitration Association then in
effect, except that Executive shall be entitled to seek specific performance of
his right to be paid pursuant to Section 12(b) during a dispute. Judgment may be
entered on the arbitration award in any court having jurisdiction. The Company
shall reimburse Executive for all reasonable costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 12(c). The
reimbursement of an eligible amount must be made within thirty (30) days after
Executive requests reimbursement, but in no event after the end of the year
following that in which the Executive incurred the expense.

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13.

Governing Law; Validity. The interpretation, construction and performance of
this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Michigan without regard to the principle
of conflicts of laws. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which other provisions shall remain in full force
and effect.

 

 

14.

Establishment of Trust. Upon written request by Executive and except as provided
below, immediately prior to a Change in Control, the Company shall establish and
maintain a Trust in the form attached as Exhibit A. Upon the occurrence of a
Change in Control the Company shall pay into the Trust the amounts called for
under Exhibit A, and shall thereafter make such additional payments as called
for under Exhibit A. No payment to the Trust by the Company shall reduce the
Company's obligations to make payments to Executive under this Agreement.
Notwithstanding these general rules, the Company's obligation to establish and
make payments to a Trust (but not the Company's obligation to make payment to
Executive when called for by this Agreement) is subject to the following:

 

 

 

(a)          Covered Employees. The Trust will not be established, maintained or
funded for a Covered Employee during a Restricted Period.

 

 

 

 

(i)          Covered Employee Defined. A Covered Employee is the Chief Executive
Officer of Spartan Stores or any member of a controlled group that includes
Spartan Stores (or any individual acting in that capacity) during the taxable
year, the four highest compensated officers of Spartan Stores for the taxable
year (in addition to the Chief Executive Officer), any other individuals subject
to Section 16(a) of the Securities Exchange Act of 1934 for the taxable year,
and any former employee of Spartan Stores or any member of a controlled group
that includes Spartan Stores who was a Covered Employee at the time of
termination of employment with Spartan Stores or that controlled group member.

 

 

 

 

 

(ii)          Restricted Period Defined. "Restricted Period" means: (1) any
period during which a single-employer defined benefit plan sponsored by the
Company is in at-risk status, as defined by Section 430(i) of the Code; (2) any
period during which the Company is in bankruptcy; and (3) the twelve (12) month
period beginning on the date which is six (6) months before the termination date
of a single-employer defined benefit plan sponsored by the Company, if, as of
the termination date, that plan is not sufficient for benefit liabilities as
determined under Section 4041 of the Employee Retirement Income Security Act of
1974, as amended.

 

 

 

(b)          Offshore Trust. The Trust may not be located outside the United
States unless substantially all of the services to which the payments under this
Agreement relates are performed in such jurisdiction.

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(c)          Employer's Financial Health. The Trust may not be established or
funded if such establishment or funding will result in inclusion of trust funds
in Executive's taxable income under Internal Revenue Code Section 409A(b)(2)
before such funds are paid to Executive.

 

 

15.

Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.

 

 

16.

Miscellaneous. No provision of this Agreement may be modified or waived unless
such modification is agreed to in writing and signed by Executive and by a duly
authorized officer of the Company, or such waiver is signed by the waiving
party. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Failure by Executive or the Company to insist upon strict
compliance with any provision of this Agreement or to assert any right Executive
or the Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement. The rights of, and benefits payable to, Executive, his estate, or his
beneficiaries pursuant to this Agreement are in addition to any rights of, or
benefits payable to, Executive, his estate, or his beneficiaries under any other
employee benefit plan or compensation program of the Company, except that no
benefits pursuant to any other employee plan or compensation program that become
payable or are paid in accordance with this Agreement shall be duplicated by
operation of this Agreement. No agreements or representations, oral or
otherwise, express or implied, with regard to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.

                    IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of Spartan Stores. Executive has
executed this Agreement as of the day and year first written above.

 

SPARTAN STORES, INC.

 

 

 

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By:

 

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Craig C. Sturken

 

Dennis Eidson

"Executive"

 

Its President and Chief Executive Officer

 

 

"Company"

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