<PAGE>

                                                                   EXHIBIT 10.35


                    EMPLOYMENT AND NONCOMPETITION AGREEMENT
                    ---------------------------------------


     THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is made and
entered into as of February 1, 2000 by and between Advance Stores Company,
Incorporated, a Virginia corporation (the "Company"), Advance Holding
Corporation, a Virginia corporation ("Holding"), and Lawrence P. Castellani (the
"Executive").

                             W I T N E S S E T H:

     A.  The Company and Holding desire to employ Executive as the Chief
Executive Officer and a Director of the Company and Holding on the terms and
conditions hereinafter set forth, and Executive is desirous of accepting said
employment.

     B.  The Company is engaged in the highly competitive business of marketing
and sale of automotive parts, accessories, and services.  During his continued
employment with the Company, Executive will have obligations relating to the
business operations of the Company.  Unless otherwise indicated, all references
to the "Company" in this Agreement shall include the business operations of the
Company.

     C.  Executive is recognized as a leading executive with significant
expertise in the retail industry.  Executive will develop in his role with the
Company industry experience and knowledge that will be greatly valued by the
Company and would be extremely valuable to competitors of the Company.

     D.  For purposes of this Agreement, "Confidential Information" means any
data or information with respect to the business conducted by the Company, that
is material to the Company's business operations and is not generally known by
the public, including business and trade secrets. To the extent consistent with
the foregoing definition, Confidential Information includes without limitation:
(a) reports, pricing, sales manuals and training manuals, selling, purchasing,
and pricing procedures, and financing methods of the Company, together with any
techniques utilized by the Company in designing, developing, testing or
marketing its products, designing stores, locating stores, product mix and
supplier information (including pricing, discounts and the like) or in
performing services for clients, customers and accounts of the Company; and (b)
the business plans and financial statements, reports and projections of the
Company. The Company has granted and will grant Executive access to and
knowledge of the Company's Confidential Information during the course of his
employment with the Company. Executive recognizes and acknowledges that the
Confidential Information which he has acquired and will acquire in the course of
his employment is utilized by the Company in all geographic areas in which the
Company does business. Further, the Confidential Information will also be
utilized in all geographic areas into which the Company expands its business.
Thus, Executive acknowledges that he will be a formidable competitor in all
areas where the Company conducts business. Executive also acknowledges that the
restrictive covenants in this Agreement serve to protect the Company's
investment in the Confidential Information.
<PAGE>

     E.  Each of Executive and the Company are sophisticated parties experienced
in business transactions of this type, and fully understand (i) the
ramifications of the noncompetition, non-solicitation and confidentiality
restrictions of this Agreement and (ii) that the laws of each state with respect
to the enforceability of such provisions vary. The parties are specifically
selecting the internal laws of the Commonwealth of Virginia to govern this
Agreement in order that it be enforceable against each of them.

     NOW, THEREFORE, in consideration of Executive's continued employment with
the Company, the mutual terms and conditions set forth below, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

     1.  Employment and Term.  Subject to the terms and conditions of this
         -------------------
Agreement, the Company agrees to employ Executive for a term commencing on
February 1, 2000 (the "Effective Date") and ending January 31, 2002 (the
"Initial Term") or such other date on which such employment shall terminate as
provided herein. The term of this Agreement and Executive's employment hereunder
will automatically be extended for an additional one-year period following the
expiration of the Initial Term and following each year of employment hereunder
after the Initial Term (each, a "Renewal Date"), without further action by
Executive or the Company unless written notice not to renew for an additional
one-year period is given by either the Company or Executive to the other not
less than sixty (60) days prior to the expiration of the Initial Term or any
Renewal Date, as applicable. In the event a notice not to renew is given by one
party to the other as provided in the immediately preceding sentence, then the
automatic extension of the term of this Agreement shall thereafter no longer be
of any further force or effect. Executive will carry out faithfully and to the
best of his abilities such duties and have such responsibilities as would
normally be carried out by the Chief Executive Officer and a Director of a
company, subject to the control of and in accordance with the directives and
policies of the Board of Directors of the Company. The employment of Executive
shall be on an exclusive basis, but Executive may be a passive investor or
otherwise have a passive interest in other businesses, partnerships and entities
so long as such other activities of Executive do not interfere with the
performance of his duties hereunder and so long as such other businesses,
partnerships and entities do not cause Executive to violate the non-competition,
non-solicitation, and confidentiality restrictions of this Agreement.

     2.  Compensation.
         ------------

         2.1  Salary.  The Company shall provide Executive with an annual
              ------
salary equal to $600,000 payable in equal monthly installments, or such other
schedule established by the Company, less required withholding. The annual
salary will be subject to annual increases upon review by the Board of
Directors. Any such reviews will be made after completion of the Company's
fiscal year, and shall be in the sole discretion of the Board of Directors;
provided, however, that the first such review shall occur in the first quarter
of 2001.

                                       2
<PAGE>

          2.2  Signing Bonus and Equity Package.  Upon execution of this
               --------------------------------
Agreement, Executive shall receive:

               (a)  A signing bonus of $3,272,700;

               (b)  Options to purchase up to 1,050,000 shares of Holding Class
A Common Stock concurrently herewith under the terms and conditions of a Stock
Option Agreement;

               (c)  Upon execution of a restricted stock agreement and payment
of the full cash purchase price therefor, 110,000 shares of Holding Class A
Common Stock valued at $16.82 per share; and

               (d)  The opportunity to purchase 75,000 additional shares of
Holding Class A Common Stock utilizing a promissory note for up to one-half of
the purchase price.

          2.3  Annual Option Grants.  Executive shall be eligible to receive an
               --------------------
annual grant of options to purchase Holding Common Stock, in an amount and on
terms consistent with grants historically made to the Company's and Holding's
senior management executives.

          2.4  Expenses.  Executive shall be reimbursed in accordance with the
               --------
policies of the Company as adopted by the Board from time to time for his
reasonable travel, entertainment, business, meeting and similar expenditures,
commensurate with his position with the Company, incurred for the benefit of the
Company and subject to approval of the Board. As an additional condition to the
reimbursement of such expenses by the Company to Executive, Executive shall
provide the Company with copies of all available invoices and receipts, and
otherwise account to the Company in sufficient detail and with adequate
documentation to allow the Company to confirm the business nature of the
expenses and claim an income tax deduction for such paid items, if such items
are deductible.

     3.   Bonus Program and Other Benefits.  Executive shall be eligible to
          --------------------------------
participate in a manner commensurate with other senior management executives of
the Company in all benefits or other programs generally available to such
executives to the extent such exist or are sponsored by the Company, at a level
consistent in overall terms with such bonus and benefit programs on the date
hereof provided, that the target bonus shall be no less than 100% of annual
salary. As of the date hereof the Company's bonus program would pay a target
bonus to Executive equal to 100% of his annual salary upon achievement of sales,
EBITDA and asset utilization targets established by the Board of Directors or
its Compensation Committee. Targets for the fiscal 2000 bonus (to be paid in
early 2001) are expected to be established within 60 days after the end of
Fiscal Year 1999. The opportunity to achieve a bonus in excess of the target
will be made available by the Company.

                                       3
<PAGE>

     4.   Termination of Employment.
          -------------------------

          4.1  Termination by the Company.  The Company may terminate
               --------------------------
Executive's employment upon the occurrence of any of the following:

               (a)  At the election of the Company for cause, immediately upon
written notice by the Company to Executive. For the purpose of this Section
4.1(a), "cause" for termination shall be deemed to exist in the event of: (A)
the engaging by Executive in conduct which is demonstrably and materially
injurious to the Company, including fraud, embezzlement or other material
illegal conduct, (B) the conviction of Executive of, or the entry of a pleading
of guilty or nolo contendere by Executive to, any crime involving moral
turpitude or any felony, (C) material breach by Executive of any of the terms of
this Agreement, which, if curable, is not cured by Executive within fourteen
(14) days of written notice by the Company to Executive of such breach or (D)
gross negligence or willful misconduct by Executive in the performance of his
duties, which, if curable, is not cured by Executive within fourteen (14) days
of written notice by the Company to Executive of such non-performance.

               (b)  Upon death or upon determination of disability of Executive.
As used in this Section 4, the term "disability" or "disabled" shall mean the
failure of Executive, due to a physical or mental disability, despite reasonable
accommodation made by the Company, for a period of 180 days, during any
consecutive 12-month period to substantially perform the services contemplated
under this Agreement.

               (c)  At the election of the Company at any time, without cause,
subject to the provisions of Section 4.4(a).

          4.2  Termination by Executive.  Executive may terminate his employment
               ------------------------
upon 30 days' written notice to the Company for any reason. If Executive
terminates his employment for "Good Reason" the termination shall be treated as
a termination under Section 4.1(c) for purposes of determining Executive's
benefits under this Agreement. For purposes of this Agreement, "Good Reason"
shall mean that, without Executive's express written consent, the occurrence of
any of the following circumstances:

               (a)  The assignment to Executive of any duties materially
inconsistent (except in the nature of a promotion) with the position in the
Company that he held immediately prior to the reassignment or a substantial
adverse alteration in the nature or status of his position or responsibilities
from those in effect immediately prior to the reassignment;

               (b)  A reduction by the Company in Executive's annual base salary
as in effect on the date hereof or as the same may be increased from time to
time;

               (c)  The Company's requiring Executive to be based more than 50
miles from the Company's office at which he was principally employed immediately
prior to the date of the relocation;

                                       4
<PAGE>

               (d)  A material breach by the Company of its duties under this
Agreement;

               (e)  The elimination or substantial reduction by the Company of
its incentive bonus program referred to in Section 3.

          4.3  Termination by Executive Upon a Change of Control.  In the event
               -------------------------------------------------
that (x) a Change of Control (as hereinafter defined) occurs and (y) at any time
prior to the first anniversary of such Change of Control a Triggering Event (as
hereinafter defined) shall occur, then unless Executive shall have given his
express written consent to the contrary, Executive may, upon 30 days' written
notice to the Company, terminate his employment hereunder.  For purposes of this
Section 4.3:

               (a) "Change of Control" means the occurrence of any one of the
following: (i) any transaction or series of transactions (as a result of a
tender offer, merger, consolidation or otherwise) that results in any person,
entity or group acting in concert, acquiring "beneficial ownership" (as defined
in rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the aggregate voting power of all classes of
common equity stock of Holding, excluding, however, such an acquisition by any
affiliates of Freeman Spogli & Co. LLC, Sears Roebuck & Co. and its affiliates,
or Ripplewood Partners, L.P. and its affiliates; or (ii) a merger or
consolidation of the Company or Holding, other than a merger or consolidation
which would result in the voting securities of Holding outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 50% of
the voting power represented by the voting securities of Holding or such entity
outstanding immediately after such merger or consolidation; or (iii) the
shareholders of Holding approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all, or substantially
all, of the Company's assets (other than in connection with a sale or
disposition to subsidiaries of the Company or in connection with a
reorganization or restructuring of the Company).

               (b)  "Triggering Event" means any of the following: (i) the
termination by the Company without cause of Executive's employment pursuant to
Section 4.1(c) hereof; or (ii) the termination of Executive's employment by
Executive for Good Reason pursuant to Section 4.2 hereof.

          4.4  Effect of Termination.
               ---------------------

               (a)  In the event Executive's employment is terminated without
cause or should Executive terminate his employment with Good Reason, (i) the
Company shall pay to Executive the then applicable salary payable to him under
Section 2 (in monthly installments, less required withholding) through the later
of (A) the remainder of the term of employment hereunder or (B) one year after
the effective date of termination; provided, however, that in the event that,
subsequent to termination, Executive engages in other employment, Executive
shall receive the difference, if any, between his salary with the Company and
his new salary, (ii)

                                       5
<PAGE>

Executive shall receive a pro rata portion of any bonus due to him with respect
to all periods prior to termination of employment and (iii) if possible under
the provisions of such plan, the Company shall continue Executive's medical
insurance coverage through the later of (A) the remainder of the term of this
Agreement or (B) until he engages in other employment. In the event Executive is
ineligible under such plan, the Company shall arrange to provide Executive with
substantially similar benefits until he engages in other employment.

               (b)  If Executive's employment is terminated by death or because
of disability pursuant to Section 4.1(b), the Company shall pay to the estate of
Executive or to Executive, as the case may be, one year's salary in 12 equal
monthly installments (less any amounts paid Executive under any disability plan
maintained by the Company), plus the pro rata portion of any bonus, if any,
payable for the portion of the fiscal year in which death or disability occurred
that Executive was still employed.

               (c)  If Executive is terminated for cause or if Executive
terminates his employment without Good Reason, Executive is entitled to no
salary or benefits beyond the effective date of termination and Executive shall
not be entitled to any bonus or incentive compensation payments whatsoever.

               (d)  If there occurs a Change of Control coupled with a
Triggering Event, Executive shall be entitled to the following:

                    (i)   Following the date of the Triggering Event, Executive
     shall be paid two cash payments each to be equal to Executive's annual base
     salary in effect on the date of the Triggering Event, the first of such
     payments to be paid within 30 days of the Triggering Event and the second
     of such payments to be paid on the first anniversary of the date of the
     Triggering Event, in each case subject to normal withholding;

                    (ii)  As of the date of the Triggering Event,
     notwithstanding the vesting schedule set forth in any stock option
     agreement pursuant to which Executive was granted options to purchase
     Holding Common Stock, all of such options shall thereupon become fully
     vested; and

                    (iii) For a one year period following the date of the
     Triggering Event, Executive shall be provided with employee benefits
     substantially identical to those to which Executive was entitled
     immediately prior to the Triggering Event, subject to any changes or
     modifications (including reductions or terminations) to the Company's
     employee benefit and welfare plans that are made generally for all of the
     Company's senior management executives.

     In the event that the benefits provided for in this Section 4.4(d) to be
paid Executive constitute "parachute payments" within the meaning of section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), and will be
subject to the excise tax imposed by Section 4999 of the Code, then Executive
shall receive (a) a payment from the Company

                                       6
<PAGE>

sufficient to pay such excise tax and (b) an additional payment from the Company
sufficient to pay the federal and state income tax arising from the payment made
under clause (a) of this sentence. Unless the Company and Executive otherwise
agree, the determination of Executive's excise tax liability and the federal and
state income tax resulting from the payment under clause (a) above shall be made
by the Company's independent accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Company and Executive for
all purposes. For purposes of making the calculations required by this Section
4.4(d), the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on interpretations of the Code for
which there is a "substantial authority" tax reporting position. The Company and
Executive shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make the determinations required
by this Section 4.4(d). The Company shall bear the expenses of the Accountants
under this Section 4.4(d).

     5.   Covenants.
          ---------

          5.1  Definitions.
               -----------

               (a)  The term "Person" shall mean any corporation, partnership,
joint venture, trust, sole proprietorship, limited liability company,
unincorporated business association, natural person, and any other entity that
may be treated as a person under applicable law.

               (b)  The term "Affiliate" shall mean an affiliate as such term is
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated thereunder, the "Exchange
Act").

               (c)  The term "Control" shall mean control as such term is
defined in Rule 12b-2 under the Exchange Act.

               (d)  The term "Prohibited Business" shall mean any Person that
sells or offers to sell automotive parts, accessories, or services in
competition with the automotive parts, accessories, or services sold or offered
to be sold by the Company (whether conducted by the Company or Holding or any
subsidiary or Affiliate of the Company, or any person, corporation, partnership,
trust or other organization or entity deriving title from the Company or
Holding). The term includes, but is not limited to Persons engaged in
competition with the Company as a chain of automotive parts and accessories
stores or chain of automotive service facilities, including any retail chain
offering other products and services that engages in a significant line of
business of offering automotive parts, accessories or services. Such a Person is
engaged in a significant line of business competitive with the Company if the
sale of automotive parts, accessories or services exceeds the lesser of 10% of
the revenues or $50 million in revenue of such Person. Nothing herein shall be
construed as prohibiting Executive from working for a Prohibited Business in any
division, subsidiary or aspect of that business that is not competitive with the
Company.

                                       7
<PAGE>

               (e)  The term "directly or indirectly carry on or participate in
a Prohibited Business" shall include Executive, directly or indirectly, doing
any of the following listed acts:

                    (i)   Whether or not for compensation, directly or
     indirectly engaging in any Prohibited Business, or any part thereof,
     whether as a director, officer, employee, consultant, adviser, independent
     contractor or otherwise, or assisting any other Person in such Person's
     conduct of a Prohibited Business, or any part thereof; or

                    (ii)  Holding legal or beneficial interest in any Person
     that is engaged in any Prohibited Business, or any part thereof, whether
     such interest is as an owner, investor, partner, creditor, joint venturer
     or otherwise; provided, however, that Executive may acquire and own up to
     two percent (2%) of the outstanding securities of any corporation which is
     a publicly traded reporting corporation under the Exchange Act; or

                    (iii) As agent or principal carrying on or engaging in any
     activities or negotiations with respect to the acquisition or the
     disposition of any Prohibited Business; or

                    (iv)  Giving advice to any other Person, firm or association
     engaging in any Prohibited Business; or

                    (v)   Lending or allowing his name or reputation to be used
     in or associated with any Prohibited Business; or

                    (vi)  Soliciting, diverting or attempting to divert from the
     Company any business constituting, or any customer of, or any supplier of,
     any part of the business conducted by the Company; or

                    (vii) Allowing his skill, knowledge or experience to be used
     in any Prohibited Business.

               (f)  The term "Covenant Period" shall mean the period extending
to the later of (i) __________, 2003 or (ii) the one year anniversary of the
effective date of termination of employment of Executive which includes the non-
renewal of the term of this Agreement by either party pursuant to Section 1.

          5.2  Agreement Not to Compete Nationally.  Executive acknowledges that
               -----------------------------------
the Company intends to extend its business operations throughout the United
States of America.  Therefore, during the Covenant Period, Executive agrees that
he shall not directly or indirectly carry on or participate in any Prohibited
Business anywhere within the United States of America.

                                       8
<PAGE>

          5.3  Agreement Not to Compete Where the Company Does Business.
               --------------------------------------------------------
Independent of the preceding provision, Executive agrees that, during the
Covenant Period, he shall not directly or indirectly carry on or participate in
a Prohibited Business which sells or offers to sell products or services (in
competition with the Company) within any county or city in which the Company,
during the Covenant Period, sells or offers to sell its products or services.

          5.4  Non-Recruitment.  Independent of the foregoing provisions,
               ---------------
Executive agrees that, during the Covenant Period, Executive shall not, directly
or indirectly, cause any person engaged or employed by the Company or its
Affiliates (whether part-time or full-time and whether as an officer, employee,
consultant, agent, adviser or independent contractor) (an "Employee") to
voluntarily leave the employ of or engagement with the Company or its
Affiliates, as the case may be, or to cease providing the services to or on
behalf of the Company or its Affiliates, as the case may be, then provided by
such Employee.  Executive further agrees that, during the same time period, he
will not in any manner seek to engage or employ any such Employee (whether or
not for compensation) as an officer, employee, consultant, agent, adviser or
independent contractor for any Person other than the Company.

          5.5  Non-Solicitation.  Independent of the foregoing provisions,
               ----------------
Executive agrees that, during the Covenant Period, Executive shall not, other
than in connection with his employment, directly or indirectly, sell or offer to
sell automotive parts, accessories, or services (or directly or indirectly carry
on or participate in a Prohibited Business that sells or offers to sell
automotive parts, accessories, or services) to any Person who is a customer of
the Company.  Executive also agrees that, during the Covenant Period, Executive
shall not, directly or indirectly, interfere, in any way, with the business
relationship between the Company or its Affiliates and any business which
supplies automotive parts, accessories, or services to the Company.

          5.6  Confidential Information.  This covenant is independent of, and
               ------------------------
in addition to, those set forth above.

               (a)  Executive hereby covenants and agrees that, during the
Covenant Period and at all times thereafter, he will not use or disclose any
Confidential Information, except for the benefit of the Company and to
authorized representatives of the Company or except as required by any
governmental or judicial authority; provided, however, that the foregoing
restrictions shall not apply to items that, through no fault of Executive's,
have entered the public domain.

               (b)  Executive acknowledges that all Confidential Information is
and shall remain the sole, exclusive and valuable property of the Company and
that Executive has and shall acquire no right, title or interest therein. Any
and all printed, typed, written or other material which Executive has or may
obtain with respect to Confidential Information (including without limitation
all copyrights therein) shall be and remain the exclusive property of the
Company, and any and all material (including any copies) shall, upon request of
the Company, be promptly delivered by Executive to the Company.

                                       9
<PAGE>

               (c)  Executive hereby assigns to the Company all right, title and
interest in and to any ideas, inventions, original works or authorship,
developments, improvements or trade secrets which Executive solely or jointly
have conceived or reduced to practice, or will conceive or reduce to practice,
or cause to be conceived or reduced to practice, during the Covenant Period.
All original works of authorship which are made by Executive (solely or jointly
with others) within the scope of Executive's services hereunder and which are
protectable by copyright are "works made for hire," as that term is defined in
the United States Copyright Act.

          5.7  Representation and Warranties.  Executive represents and warrants
               -----------------------------
to, and agrees with, the Company and its Affiliates that:

               (a)  Executive has carefully reviewed the restrictive covenants
contained in this Section 5 and considered all of its terms, and agrees that its
scope, duration and terms are reasonable; and

               (b)  This Agreement constitutes the legal, valid and binding
obligation of Executive enforceable in accordance with its terms.

          5.8  Scope and Reasonableness.  The parties agree that it is not their
               ------------------------
intention to violate any public policy or statutory or common law.  The parties
intend that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought.

     6.   Validity of Covenants. Executive agrees that the restrictive covenants
          ---------------------
contained in this Agreement are reasonably necessary to protect the legitimate
business and other interests of the Company, are reasonable with respect to time
and territory, and do not interfere with the interests of the public.

     7.   Specific Performance.  Executive acknowledges that it would be
          --------------------
impossible to determine the amount of damages that would result from any breach
of any of the provisions of this Agreement and that the remedy at law for any
breach, or threatened breach, of any of the provisions of this Agreement would
likely be inadequate and, accordingly, agrees that the Company and its
Affiliates shall, in addition to any other rights or remedies which they may
have, be entitled to seek such equitable and injunctive relief as may be
available from any court of competent jurisdiction to restrain Executive from
violating any of the provisions of this Agreement. In connection with any action
or proceeding for injunctive relief, Executive hereby waives the claim or
defense that a remedy at law alone is adequate and agrees, to the maximum extent
permitted by law, to have each provision of this Agreement specifically enforced
against him, without the necessity of posting bond or other security against
him, and consents to the entry of injunctive relief against him enjoining or
restraining any breach or threatened breach of this Agreement. If Executive
takes action in violation of a restrictive covenant set forth in Section 5 of
this Agreement, Executive acknowledges that the effective period for the
restrictive

                                       10
<PAGE>

covenants which are violated will be extended for a period of time equivalent to
the period of time during which Executive is in violation of the restrictive
covenants.

     8.   Notices.  Any and all notices, designations, consents, offers,
          -------
acceptances, or any other communications provided for herein shall be given in
writing and shall be deemed given if sent by registered or certified mail,
return receipt requested; or on the date actually received if sent by express
mail or other similar overnight delivery or if hand delivered or if sent via
facsimile, which shall be addressed:

          If to the Company:

               Advance Holding Corporation
               c/o Freeman Spogli & Co. Incorporated
               599 Lexington Avenue, Suite 1800
               New York, New York 10022
               Attention:  John M. Roth
               Telephone:  (212) 758-2555
               Fax:  (212) 758-7499

          With a copy to:

               Douglas W. Densmore, Esq.
               Flippin Densmore Morse Rutherford & Jessee
               300 First Campbell Square
               Drawer 1200
               Roanoke, Virginia 24066

          and

               Thomas A. Waldman, Esq.
               Riordan & McKinzie
               300 South Grand Avenue, 29/th/ Floor
               Los Angeles, California 90071
               Telephone: (213) 229-8434
               Telecopy:  (213) 229-8550

          If to Executive:

               Lawrence P. Castellani
               Advance Auto Parts
               5673 Airport Road
               Roanoke, VA 24012
               Telephone:  (540) 362-4911
               Fax:  (540) 561-1699


                                       11
<PAGE>

          With a copy to:

               Jim Wadsworth, Esq.
               Hodgson, Russ, Andrews, Woods & Goodyear, LLP
               One M&T Plaza, Suite 2000
               Buffalo, NY 14203-2391
               Telephone: _____________
               Fax: ___________________

or such other address as the parties may provide in writing from time to time.

     9.   Governing Law.  This Agreement shall be subject to and governed by the
          -------------
laws of the Commonwealth of Virginia.

     10.  Severability.   The restrictive covenants set forth in Section 5 are
          ------------
separate and independent contractual provisions.  The invalidity or
unenforceability of any particular restrictive covenant or any other provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision were omitted.

     11.  Successors and Assigns Binding Effect.  This Agreement shall be
          -------------------------------------
binding upon and inure to the benefit of the Company and Executive and their
respective heirs, legal representatives, executors, administrators, successors
and assigns, provided that Executive may not assign his rights or delegate his
obligations hereunder. The Company may assign its rights under the restrictive
covenants in Section 5 to any beneficial owner of 10% or more of the Company or
any other Affiliate.

     12.  No Waiver.  The failure by the Company or any Affiliate to enforce any
          ---------
of its rights hereunder shall not be deemed to be a waiver of such rights,
unless such waiver is in writing and signed by the waiving party, and, in the
case of any corporation, approved by its Board of Directors, or in the case of a
partnership, approved by the Board of Directors of its corporate general
partner.  Waiver of any one breach shall not be deemed to be a waiver of any
other breach of the same or any other provision hereof.

     13.  No Construction Against Any Party.  This Agreement was reviewed by
          ---------------------------------
legal counsel for each of Executive and the Company.  This Agreement is the
product of informed negotiations among Executive and the Company and if any part
of this Agreement is deemed to be unclear or ambiguous, it shall be construed as
if it were drafted jointly by all parties.  Moreover, Executive and the Company
each acknowledge that no party was in a superior bargaining position regarding
the substantive terms of this Agreement.

     14.  Disputes.  In the event of any dispute between the parties arising out
          --------
of this Agreement, the prevailing party shall be entitled to recover from the
nonprevailing party the

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<PAGE>

reasonable expenses of the prevailing party including, without limitation,
reasonable attorneys' fees.

     15.  Effectiveness.  This Agreement shall become effective upon the
          -------------
Effective Date.

     16.  Entire Agreement.
          ----------------

          (a)  This Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes any and all other
agreements, either oral or in writing, among the parties hereto with respect to
the subject matter hereof.

          (b)  This Agreement may not be changed orally, but may be amended,
revoked, changed or modified at any time by a written agreement executed by
Executive and the Company upon approval of the Board of Directors.

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<PAGE>

     IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year set forth above.

                         ADVANCE HOLDING CORPORATION


                         By: /s/ Jimmie L. Wade
                             -------------------------
                                 Jimmie L. Wade
                                 President & CAO


                         ADVANCE STORES COMPANY, INCORPORATED


                         By: /s/ Jimmie L. Wade
                             -------------------------
                                 Jimmie L. Wade
                                 President & CAO


                         EXECUTIVE:


                         /s/ Lawrence P. Castellani
                         -----------------------------
                             Lawrence P. Castellani

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