Mr. David B. Clark
February 17, 1998
Page






                            Homeland Stores, Inc.
                              P.O. Box 25008
                      Oklahoma City, Oklahoma 73125

                           February 17, 1998




Mr. David B. Clark
518 Castlebridge Lane
Birmingham, AL 35242

Dear Dave:

          This letter confirms the terms of your employment with Homeland 
Stores, Inc. (the "Company").

          1.   Duties.  You will serve as the President and Chief Executive 
Officer of the Company and Homeland Holding Corporation ("Holding") commencing 
on February 16, 1998. You will devote all of your skill, knowledge and full
working time (reasonable vacation time and absence for sickness or disability 
excepted) solely and exclusively to the conscientious performance of your 
duties hereunder.

          2.   Base Salary.  As compensation for the duties to be performed 
by you under the terms of this letter agreement, the Company will pay you a 
base salary in the amount of $250,000 per annum, payable at the same time as
the Company pays salary to its other executive employees. The Company will 
review your base salary from time to time and, at the discretion of the Board 
of Directors, may increase your base salary based upon your performance and
other relevant factors.

          3.   Incentive Bonus.  While you are providing services pursuant to 
this letter, you will be given the opportunity to receive an annual bonus 
upon the attainment of such performance objectives as the Board of Directors
shall determine from time to time after consulting with you. The target amount 
for your annual bonus will be 75% of your base salary based on the 
satisfaction of such performance objectives.  Any bonus payable to you will 
be paid to you at the same time as bonuses are paid to other executives.

          4.   Relocation and Transition Matters.

               (a)  The Company will reimburse you up to a maximum aggregate 
amount of $45,000 for costs and expenses related to the sale of your residence 
in Birmingham and your relocation to and purchase of a residence in the 
Oklahoma City area, including the cost of moving all household goods and 
automobiles to the Oklahoma City area and the costs of purchasing a residence 
in the Oklahoma City area such as closing costs, real estate commissions and 
reasonable attorneys fees.  To the extent any payments made to you pursuant
to this subparagraph 4(a) are includable as compensation income to you for 
income tax purposes and are not otherwise deductible, the amount of such
payments shall be increased by the amount of the tax so that you will be 
"made whole" by such tax gross up to the maximum extent possible.

               (b)  The Company will provide you with a company car and a 
temporary Oklahoma City area residence for you while your family remains in
Birmingham for up to the earlier of six months or your acquisition of an 
Oklahoma City area residence.  In addition, during the time your family 
remains in Birmingham, the Company will reimburse you for travel expenses 
between Oklahoma City and Birmingham for up to two round trips per month.

               (c)  The Company will loan you up to $125,000 to be applied by 
you to repay your indebtedness to your former employer.  The loan will be 
evidenced by a promissory note, in the form of Exhibit A attached hereto.

          5.   Stock Options.  Upon commencement of your employment hereunder, 
you will be granted options to purchase 100,000 shares of common stock of 
Holding at an exercise price equal to the fair market value for the common
stock on February 17, 1998 ($5-1/2 per share).  The options will be granted 
pursuant to Holding's 1996 Stock Option Plan (the "Plan").  The Plan provides 
that if there is a change in control of Holding, all options shall be 
immediately exercisable.  As defined in the Plan and for purposes of this 
paragraph, the term "change in control" means (i) the earliest date a new 
shareholder or related group of new shareholders acquires beneficial ownership 
of 30% or more of the then issued and outstanding common stock, (ii) the date
on which Holding ceases to own all of the issued and outstanding capital stock 
of the Company or (iii) the date on which Holding or the Company disposes of 
50% or more of its assets.  In the event a change in control occurs before
June 1, 1998 (the "Determination Date"), whereby the acquiring party is a 
non-strategic, financial investor not primarily engaged in the retail or 
wholesale grocery business (a "Financial Acquiror"), the agreement between the
Company, Holding and such Financial Acquiror will provide that you will be 
entitled to exchange such options, in a tax-free exchange to the extent 
permitted by applicable law, for equity in such Financial Acquiror that would 
vest 50% on the first anniversary of such change in control and 50% on the
second anniversary of such change in control.  In the event a Financial 
Acquiror does not acquire control in a change in control of Holding prior to 
the Determination Date, you will be granted, on the Determination Date, 
additional options to purchase 30,000 shares of common stock of Holding at an
exercise price equal to the fair market value for the common stock as of the 
Determination Date.  Such additional options will also be granted pursuant to 
the Plan.

          6.   Employee Benefits.  While you are providing services pursuant 
to this letter agreement, you will be eligible to participate in the employee 
benefit plans and programs generally available to the Company's employees
(including, but not limited to, coverage under the Company's medical, dental, 
life and disability insurance plans and participation in the Company's 
qualified plans) as in effect from time to time on the same basis as the 
Company's other employees, subject to the terms and provisions of such plans
and programs.

          7.   Executive Perquisites.  You will be eligible to receive the 
perquisites and other personal benefits made available to the Company's senior 
executives from time to time.  You will be entitled to no less than three 
weeks paid vacation in each calendar year, which shall be taken at such times 
as are consistent with your responsibilities hereunder.

          8.   Expenses.  The Company will reimburse you for all reasonable 
expenses incurred by you in connection with your performance of services under 
this letter agreement in accordance with the Company's policies, practices and 
procedures.

          9.   Termination of Employment.  If the Company terminates your 
employment for any reason other than Cause or Disability, or if you shall 
terminate your employment on or after February 16, 1999 following

               (i)  the closing of a sale (a "Stock Sale") of at least 
           50% of the voting securities of the Company or Holding to a 
           Financial Acquiror,

              (ii)  the effective date of a merger (a "Merger") of Holding 
          with or into a Financial Acquiror immediately following which 
          the persons or entities who were the shareholders of Holding
          immediately prior to the merger, together with their affiliates, 
          own, directly or indirectly, less than 50% of the voting power of 
          all voting securities of the surviving or resulting entity,

             (iii)  the sale of all or substantially all of the Company's 
          assets (an "Asset Sale") to a Financial Acquiror, or

              (iv)  a Change of Control (as defined in the Amended and 
          Restated Revolving Credit Agreement dated as of April 21, 1995, 
          among National Bank of Canada, as agent, the Company and Holding)
          involving a Financial Acquiror  (a Stock Sale, a Merger, an Asset 
          Sale or such a Change of Control being referred to herein as a 
          "Trigger Event"),

the Company will pay you an amount equal to the sum of
               (i)  your Base Salary in effect immediately prior to a 
          Trigger Event, and

              (ii)  an amount equal to the product of (A) your target bonus 
          under the incentive bonus plan described in Section 3 of this 
          letter for the year in which your termination occurs and (B) a
          fraction, the numerator of which is the number of days during such 
          year prior to and including the date of your termination of 
          employment and the denominator of which is 365.

          The Company will pay you the cash amounts in a lump sum payment no 
later than 5 business days after the date your employment terminates or in 12 
approximately equal monthly installments, as directed by you at your option.  
Such amounts will not be subject to any offset, mitigation or other reduction 
as a result of your receiving salary or other benefits by reason of your 
securing other employment.

          The Company will also continue your coverage under the medical, 
dental, vision, life and disability insurance and other welfare benefits 
provided to its other executive employees (the "Welfare Benefit Arrangements") 
for a period of one year after the date your employment terminates; provided, 
however, that if the Company is unable to or chooses not to continue any such 
coverage for all or any portion of such period, it shall not be obligated to 
provide such coverage and shall instead pay you (within 15 days after such 
coverage is to cease) an amount equal to (A) the remainder of (x) 12 minus 
(y) the number of months that such coverage that is so provided times (B) the 
monthly amount it would have paid with respect to such coverage under the
applicable Welfare Benefit Arrangement.

          You will also have the option to purchase the automobile furnished 
to you by the Company during your employment at its fair market (wholesale) 
value.

          If the Company terminates your employment for Cause or due to your 
death or Disability, you will only be entitled to receive (i) your Base 
Salary earned through the date of such termination, (ii) all benefits due and 
owing through the date of such termination and (iii) the amount necessary to 
reimburse you for expenses incurred prior to the date of such termination for 
which the Company has agreed to reimburse you and, to the extent provided 
under the Company's generally applicable policies and procedures, any unused 
vacation time, plus (iv) if your employment terminates upon your death or 
Disability, your target bonus under the incentive bonus plan described in 
Section 3 of this letter for the portion of the incentive year that precedes 
the date of such termination, such target bonus to be a pro rata amount of 
the target bonus payable for the entire incentive year.

          As used herein, "Cause" means (i) your willful failure to perform 
substantially your duties as an officer and employee of the Company (other 
than due to physical or mental illness), (ii) your engaging in serious 
misconduct that is injurious to the Company, (iii) your having been convicted 
of, or entered a plea of nolo contendere to, a crime that constitutes a 
felony, or (iv) your unauthorized disclosure of confidential information 
(other than to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate governmental agency) that 
has resulted or is likely to result in material economic damage to the 
Company. Notwithstanding the foregoing, you shall not be deemed to have been 
terminated for Cause unless and until there is delivered to you a copy of a 
resolution duly adopted by the Company's Board of Directors, finding that the 
Company has "Cause" to terminate you as contemplated in this paragraph. As 
used herein,  "Disability" means that, as a result of your incapacity due to 
physical or mental illness, you have been absent from your duties to the 
Company on a substantially full-time basis for 180 days in any twelve-month 
period and within 30 days after the Company notifies you in writing that it 
intends to replace you, you shall not have returned to the performance of your 
duties on a full-time basis.

          10.  Representation to the Company.  By signing below, you represent 
to the Company that you are not restricted by or subject to any agreement or 
obligation that would be violated by your acceptance of this letter agreement 
or the performance of your duties hereunder.

          11.  Binding Effect.  This letter agreement shall be binding upon 
and inure to the benefit of your heirs and representatives and the successors 
and assigns of the Company, but neither this letter agreement nor any rights 
or obligations hereunder shall be assignable or otherwise subject to 
hypothecation by you (except by will or by operation of the laws of intestate 
succession) or by the Company, except that the Company may assign this 
Agreement to any successor (whether by merger, purchase or otherwise) to all 
or substantially all of the stock, assets or businesses of the Company, if 
such successor expressly agrees to assume the obligations of the Company 
hereunder. If you should die while any amounts would still be payable to you 
under this letter agreement if you had continued to live, all such amounts, 
unless otherwise provided herein, will be paid in accordance with the terms 
of this letter agreement to your personal or legal representatives, executors, 
administrators, heirs, distributees, devisees, legatees or estate, as the 
case may be.

          12.  Indemnification.  The Company agrees to indemnify you to the 
fullest extent permitted under its By laws as in effect from time to time.

          13.  General Provisions.  No provisions of this letter agreement 
may be modified, waived or discharged unless such modification, waiver or 
discharge is approved by the Company's Board of Directors and is agreed to in 
a writing signed by you and such Company officer as may be specifically 
designated by the Board.

          No agreements or representations, oral or other wise, express or 
implied, with respect to the subject matter hereof have been made by either 
party which are not set forth expressly in this letter agreement.  The 
invalidity or unenforceability of any one or more provisions of this letter 
agreement will not affect the validity or enforce ability of any other 
provision of this letter agreement, which will remain in full force and 
effect.  This letter agreement may be executed in one or more counterparts, 
each of which will be deemed to be an original but all of which together will 
constitute one and the same instrument.

          All amounts payable to you hereunder will be paid net of any and 
all applicable income or employment taxes required to be withheld therefrom 
under applicable Federal, State or local laws or regulations.

          The validity, interpretation, construction and performance of this 
letter agreement will be governed by the laws of the State of Oklahoma, 
without giving effect to its conflict of laws provisions.

          If the foregoing accurately sets forth the terms of your employment 
with the Company, please so indicate by signing below and returning one 
signed copy of this letter agreement to me.

                                   Sincerely,

                                   HOMELAND STORES, INC.


                                   John A. Shields, Chairman of the Board

ACCEPTED AND AGREED as
of this 17th day of February, 1998


David B. Clark


494611.v4

                                                            EXHIBIT A

                            PROMISSORY NOTE


$125,000.00                                  Oklahoma City, Oklahoma
                                             February 17, 1998



          FOR VALUE RECEIVED, the undersigned, David B. Clark (the 
"Executive"), hereby unconditionally promises to pay to the order of Homeland 
Stores, Inc., a Delaware corporation (the "Company"), at its offices, in 
lawful money of the United States of America, the principal amount of One
Hundred Twenty-Five Thousand and No/100 Dollars ($125,000.00), or, if less, 
the unpaid principal amount of the loan made by the Company (the "Loan") 
pursuant to Section 4(c) of that certain letter agreement dated February 17, 
1998, between the Company and the Executive (the "Agreement").  The interest 
on the Loan shall accrue at the federal funds rate as quoted in The Wall 
Street Journal for the close of business on February 13, 1998, and the amount
of accrued interest shall be added to the unpaid principal amount of the Loan 
on each anniversary date of this Promissory Note.  The principal amount of the 
Loan, together with all interest accrued thereon, shall be paid on the 
earliest to occur of (i) the Executive's termination of employment by the 
Company for Cause (as defined in the Agreement), (ii) the Executive's 
termination of employment by the Executive unless such termination by the 
Executive occurs on or after February 16, 1999 following a Trigger Event (as 
defined in the Agreement), or (iii) six months after the Executive's 
termination of employment without Cause by the Company or by reason of the 
Executive's death or Disability (as defined in the Agreement); provided,
however, that in the event (a) the Executive remains in continuous employment 
with the Company until February 16, 2001, or (b) the Executive terminates his 
employment on or after February 16, 1999 following a Trigger Event, the Loan,
including all interest accrued thereon, shall be forgiven in its entirety and 
this Promissory Note shall be deemed canceled and of no further force and 
effect.

          Default in payment when due and payable, upon acceleration or 
otherwise, of the principal of and interest on this Note shall constitute an 
"Event of Default" under the terms of this Note. "Default" means any event 
that is, or with the passage of time or the giving of notice or both would be, 
an Event of Default.  Upon the occurrence of an Event of Default, all amounts 
then remaining unpaid on this Note shall become, or may be declared by the 
Company to be, immediately due and payable.

          The Executive hereby agrees that the Company, at its option, may 
withhold from time to time from compensation or other amounts payable by the 
Company to the Executive, any amounts required to make payments of principal 
of and interest on this Note.  While any Default exists hereunder, the 
Company may set off all amounts herein promised to be paid against 
compensation or other amounts payable by the Company to the Executive.

          This Note is subject to optional prepayment in whole or in part at 
any time.

          All parties now and hereafter liable with respect to this Note, 
whether maker, principal, surety, guarantor, endorser or otherwise, hereby 
waive presentment, demand, protest and all other notices of any kind.  Such 
parties consent to any extension of time (whether one or more) of payment 
hereof or release of any party liable for the payment of this obligation.  
Any such extension or release may be made without notice to any such party 
and without discharging such party's liability hereunder.

          The Executive agrees that if, and as often as, this Note is placed 
in the hands of an attorney for collection or to defend or enforce any of the 
holder's rights hereunder, the Executive will pay to the holder its 
reasonable attorney's fees together with all court costs and other expenses 
of collection paid by such holder.

          THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN 
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF OKLAHOMA.


                                         _________________________________
                                         David B. Clark