Exhibit 10(b)

                             EMPLOYMENT AGREEMENT



          THIS AGREEMENT is entered into as of June 11, 1998, between
JACOBSON STORES INC., a Michigan corporation, of Jackson, Michigan (the
"Company"), and PAUL W. GILBERT, of Jackson, Michigan ("Gilbert").

         THE PARTIES HEREBY AGREE that the Employment Agreement between them,
dated as of April 15, 1998 is restated, effective May 28, 1998, as follows:

          1. Employment and Term. The Company employs Gilbert as Vice Chairman
of the Board, and Gilbert agrees to serve in that capacity and/or in such
other capacity or capacities as the Board of Directors of the Company deems
advisable, for a term commencing April 15, 1998 and continuing through April
14, 2001, unless terminated sooner pursuant to the provisions of paragraph 5,
for the compensation and on the terms set forth herein. The term shall
automatically be extended for one additional year each April 15, beginning
April 15, 1999, unless either party gives the other party notice before April
15 that the term shall not be extended and unless terminated sooner pursuant
to the provisions of paragraph 5. For example, if one party gives notice on
April 14, 1999 that the term will not be extended, the term will end on April
14, 2001, unless terminated sooner pursuant to the provisions of paragraph 5.

          2. Compensation. Subject to the provisions of paragraph 5,
Gilbert's salary shall be Three Hundred Thousand Dollars ($300,000.00) per
year. Gilbert shall also participate in such plans and additional benefits as
may generally be available from time to time to other executive officers of
the Company.

          3. Deferred Compensation. Gilbert may determine that payment of any
part of Gilbert's salary for any year shall be deferred pursuant to, and on
the terms and conditions set forth in, the Jacobson Stores Inc. Deferred
Compensation Plan, as amended from time to time. If any part of Gilbert's
salary for a year is deferred, one-twelfth of such amount shall be deferred
each month during the year. Interest shall accrue on deferred compensation
from the last day of the month for which the compensation is deferred.
Neither Gilbert, his estate, his wife, nor any beneficiary shall have any
power to assign or encumber the right to receive deferred compensation, and
any attempted assignment or encumbrance thereof shall be null and void.

          4. Duties. Gilbert agrees, as long as his employment by the Company
continues, to devote his entire time and best efforts to furthering the
interests of the Company; to comply with all regulations and policies of the
Company; and to perform the duties requested by the Chief Executive Officer
or the Board of Directors of the Company.

          5. Termination. Gilbert's employment under this Agreement shall
terminate on the earliest to occur of the following: (i) immediately upon
Gilbert's death, (ii) at the Company's option, immediately when notice to
Gilbert of such termination is given after Gilbert's "Disability" (as defined
below), (iii) at the Company's option, immediately when notice to Gilbert of
such 



<PAGE>

termination is given on or after the occurrence of "Cause" (as defined
below) for termination of his employment under this Agreement, (iv) not less
than 30 days after notice of such termination is given to Gilbert by the
Company or not less than six months after notice of such termination is given
to the Company by Gilbert (unless the Company elects to have such termination
occur earlier), and (v) the end of the term as described in paragraph 1.
"Disability" means (1) if Gilbert is covered by a Company-provided disability
insurance policy, the definition of disability contained in, and entitling
Gilbert to benefits under, that policy, or (2) if Gilbert is not covered by
such a policy, Gilbert's inability, whether physical or mental, to perform
the normal duties of Gilbert's position for six consecutive months. "Cause"
means (1) Gilbert's continued failure either to (A) devote substantially full
time to Gilbert's employment duties (except because of Gilbert's illness or
Disability) or (B) make a good faith effort to perform Gilbert's employment
duties; (2) any other willful act or omission which Gilbert knew, or had
reason to know, would materially injure the Entity; (3) any breach by Gilbert
of the provisions of paragraph 7, or (4) Gilbert's conviction of a felony
involving dishonesty or fraud. Notice will be deemed to be given on the
earliest of (i) when delivered, or (ii) three business days after mailed by
certified or registered mail, postage prepaid, return receipt requested, or
(iii) one business day after sent by recognized overnight courier, if to
Gilbert, to Gilbert's address on the Company's corporate records, and if to
the Company, to the address of its principal executive offices. The following
events during the term of this Agreement shall have the following respective
effects on the obligations of the Company pursuant hereto:

                   (a) Death. If employment is terminated due to Gilbert's
death, the Company shall (i) continue to pay an amount equal to Gilbert's
salary, at the annual rate of his salary in effect immediately prior to his
death, from the date of his death until two years after the date of his
death, and (ii) pay the pro rata bonus, if any, that would have been payable
to Gilbert under any bonus plan in effect at the time of termination of
Gilbert's employment if Gilbert had been employed by the Company for the
entire year in which Gilbert's employment terminates, but based on the actual
number of days Gilbert was employed by the Company in that year and the
actual salary paid to Gilbert by the Company with respect to the period
through the date of termination. The Company may offset against the payments
described in this paragraph 5.(a) the proceeds of any life insurance policy
insuring Gilbert's life (i) that is acquired after January 31, 1996 and does
not replace insurance provided by the Company to Gilbert as of January 31,
1996, and (ii) that are paid to a beneficiary designated by Gilbert or to his
estate, if the Company paid the premiums with respect to such insurance. If
the Company makes such an offset with respect to payments under paragraph
5.(a)(i), the remaining amounts due pursuant to paragraph 5.(a)(i) shall be
paid in equal installments over the same period set forth in paragraph
5.(a)(i). In addition to payments pursuant to this paragraph 5.(a), the
Company will continue to maintain medical and hospitalization insurance with
the same spouse and dependent coverage and in the same amounts as the
insurance maintained by the Company immediately prior to his death, for five
years after the date of Gilbert's death. In addition, the principal amount of
split dollar life insurance currently maintained by the Company for Gilbert,
less the total premium payments made by the Company, shall be paid to
beneficiaries designated by Gilbert. Gilbert shall cooperate with the Company
in connection with its obtaining any additional life insurance on Gilbert's
life and any additional disability insurance with respect to Gilbert in
connection with the payments required by this paragraph 5.(a), paragraph
5.(b) or otherwise.

                                      2

<PAGE>

                   (b) Disability. If employment is terminated due to
Gilbert's Disability, the Company shall (i) continue to pay an amount equal
to Gilbert's salary, at the annual rate in effect immediately prior to the
date of his termination due to his Disability ("Termination Date"), from the
Termination Date until two years after the Termination Date, and after two
years after the Termination Date at one-half such annual rate until three
years after the Termination Date, and (ii) pay the pro rata bonus, if any,
that would have been payable to Gilbert under any bonus plan in effect at the
Termination Date if Gilbert had been employed by the Company for the entire
year in which Gilbert's employment terminates, but based on the actual number
of days Gilbert was employed by the Company in that year and the actual
salary paid to Gilbert by the Company with respect to the period through the
Termination Date. In addition, the Company will continue to maintain medical,
hospitalization and life insurance with the same coverage (including any
spouse and dependent coverage) and in the same amounts as the insurance
maintained by the Company immediately prior to his incapacity, for five years
after the Termination Date. The Company may offset against any of the
payments described in this paragraph 5.(b), disability benefits, if any, paid
under any insurance maintained by the Company. In addition, if Gilbert dies
at any time during the period payments are required under this paragraph
5.(b), the Company may offset against any of the payments described in this
paragraph 5.(b) the proceeds of any life insurance policy insuring Gilbert's
life (i) that is acquired after January 31, 1996 and does not replace
insurance provided by the Company to Gilbert as of January 31, 1996, and (ii)
that are paid to a beneficiary designated by Gilbert or to his estate, if the
Company paid the premiums with respect to such insurance. If the Company
makes such an offset with respect to payments under paragraph 5.(b)(i), the
remaining amounts due pursuant to paragraph 5.(b)(i) shall be paid in equal
installments over the same period set forth in paragraph 5.(b)(i). Gilbert
shall cooperate with the Company in connection with its obtaining any
additional life insurance on Gilbert's life and any additional disability
insurance with respect to Gilbert in connection with the payments required by
this paragraph 5.(b), paragraph 5.(a) or otherwise.

                   (c) Termination for Cause. If employment is terminated for
Cause, or if Gilbert resigns before the expiration of the term of this
Agreement, the Company shall have no obligation to pay any salary or any
other amount in lieu thereof for any period after the date of termination of
employment.

                   (d) Termination Without Cause. Except as otherwise provided
in paragraph 5.(e), if the Company terminates Gilbert's employment without
Cause before the expiration of the term of this Agreement (other than as a
result of Gilbert's death or Disability), the Company shall (i) continue to
pay an amount equal to Gilbert's salary, at the annual rate in effect
immediately prior to such termination of employment, and shall continue to
provide medical and hospitalization insurance with the same coverage
(including any spouse and dependent coverage) and in the same amounts as the
insurance maintained by the Company immediately prior to such termination of
employment, for the balance of the term of this Agreement, without regard to
any termination as a result of Gilbert's death, Disability, termination by
the Company for Cause, retirement, resignation or termination by the Company
without Cause, or one year, whichever is greater, and (ii) pay the pro rata
bonus, if any, that would have been payable to Gilbert under any bonus plan
in effect at the time of termination of Gilbert's employment if Gilbert had
been employed by the Company for the entire year in which Gilbert's
employment terminates, but based on the 

                                      3

<PAGE>

actual number of days Gilbert was employed by the Company in that year and
the actual salary paid to Gilbert by the Company with respect to the period
through the date of termination. In such event, Gilbert shall use reasonable
efforts to find new employment. Commencing one year after termination, the
Company's continuing payment obligation, if any, shall be reduced by the
amount of any other salary, consulting fees, or other compensation or
remuneration for services, however designated, received by Gilbert with
respect to any remaining part of the period covered by the Company's
obligation, and its continuing medical and hospitalization insurance
obligation shall be reduced by the amount of any other medical and
hospitalization insurance provided to Gilbert with respect to any remaining
part of such period.

                   (e) Change in Control.

                            (i) Right to Receive Benefits. Gilbert shall
          receive the severance benefits described in paragraph 5.(e)(ii) if
          (1) a "Change in Control" (as defined in paragraph 5.(e)(iii))
          occurs during the "Period" (as defined in paragraph 5.(e)(iv)), and
          (2) either (A) at any time during the period beginning 90 days
          before, and ending two years after, the Change in Control, Gilbert
          terminates his employment with the "Entity" (as defined in
          paragraph 5.(e)(vii)) for "Good Reason" (as defined in paragraph
          5.(e)(viii)) or the "Entity" terminates Gilbert's employment
          without Cause, or (B) at any time during the 3rd month after the
          Change in Control, Gilbert terminates his employment with the
          "Entity" for any reason or for no reason.

                           (ii) Severance Benefits. If Gilbert is entitled
          to severance benefits under paragraph 5.(e)(i), he will receive the
          following:

                                     (1) an amount equal to the annual salary
                   Gilbert was receiving immediately before the Change in
                   Control for the period (the "Time") from the date of such
                   termination through the later of (1) two years after the
                   date of such termination, and (2) the balance of the term
                   of this Agreement, without regard to any termination as a
                   result of Gilbert's death, Disability, termination by the
                   Company for Cause, retirement, resignation or termination
                   by the Company without Cause; and

                                     (2) a pro rata bonus for the year of such
                   termination equal to (1) the bonus paid or payable to
                   Gilbert with respect to the last full fiscal year of the
                   Company before the Change in Control (the "Bonus"),
                   multiplied by (2) a fraction, the numerator of which shall
                   be the number of days in the Company's fiscal year in
                   which such termination occurs through the date of such
                   termination, and the denominator of which shall be the
                   total number of days in the Company's fiscal year in which
                   such termination occurs; and

                                     (3) an amount equal to the Time (in
                   years and fractions of a partial year) multiplied by the
                   amount of the Bonus; and

                                     (4) a continuation during the Time of
                   (1) the medical, dental, life, disability,
                   hospitalization, optical and prescription drug benefits
                   Gilbert and Gilbert's 

                                      4

<PAGE>

                   dependents were receiving from the Company at the time of
                   the Change in Control (provided that if it is no longer
                   practical for the Company to furnish such benefits,
                   Gilbert will be reimbursed by the Company during the Time
                   for the cost to Gilbert of obtaining such benefits), (2)
                   the Company's obligations under the Split Dollar
                   Agreement, dated as of January 31, 1992, between the
                   Company and Gilbert, and (3) any automobile allowance or
                   benefits (including automobile insurance and maintenance
                   benefits), and continued use of any automobile, provided
                   to Gilbert by the Company at the time of the Change in
                   Control; and

                                     (5) If the total amount of all payments
                   of cash or property in the nature of compensation
                   contingent on a change in the ownership or effective
                   control of the Company or in the ownership of a
                   substantial portion of the Company's assets, including,
                   without limitation, the benefits provided pursuant to this
                   paragraph 5.(e)(ii) and payments relating to any stock
                   options or restricted stock that vest as a result of a
                   Change in Control, shall exceed the maximum amount that
                   may be paid to Gilbert and not be deemed a "parachute
                   payment" resulting in an excise tax to Gilbert and a loss
                   of compensation deduction to the Company, all within the
                   meaning of Section 280G of the Internal Revenue Code of
                   1986, as amended, or any successor provision, the Company
                   will pay to Gilbert (i) the amount of any excise tax
                   imposed on Gilbert under Section 4999 of the Internal
                   Revenue Code of 1986, as amended, or any successor
                   provision, as a result of any payments by the Company to
                   Gilbert pursuant to this paragraph 5.(e)(ii) and (ii) any
                   income tax imposed on Gilbert as a result of the payments
                   under this paragraph 5.(e)(ii)(5)). The benefits provided
                   in paragraphs 5.(e)(ii)(1), 5.(e)(ii)(2), 5.(e)(ii)(3) and
                   5.(e)(ii)(5) shall be paid to Gilbert in an undiscounted
                   lump sum within 10 business days after the date of such
                   termination. The Company may withhold from such payments
                   all federal, state, city and other taxes to the extent
                   such taxes are required to be withheld by applicable law.

                          (iii)  "Change in Control". For purposes of this
          Agreement, a "Change in Control" occurs on the first day any one or
          more of the following occurs:

                                     (1) any person (as such term is used in
                   Sections 13(d) and 14(d)(2) of the Securities Exchange Act
                   of 1934, as amended (the "Exchange Act")), together with
                   all affiliates and associates of such person (as such
                   terms are defined in Rule 12b-2 under the Exchange Act)
                   but excluding all "Excluded Persons" (as defined in
                   paragraph 5.(e)(v)), becomes the direct or indirect
                   beneficial owner (within the meaning of Rule 13d-3 under
                   the Exchange Act) of securities of the Company
                   representing (A) 40% or more of the combined voting power
                   of all of the Company's outstanding securities entitled to
                   vote generally in the election of the Company's directors,
                   or (B) 40% or more of the combined shares of the Company's
                   capital stock then outstanding, all except in connection
                   with any merger, consolidation, reorganization or share
                   exchange involving the Company;

                                      5

<PAGE>

                                     (2) the consummation of any merger,
                   consolidation, reorganization or share exchange involving
                   the Company, unless the holders of the Company's capital
                   stock outstanding immediately before such transaction own
                   more than 50% of the combined outstanding shares of
                   capital stock and have more than 50% of the combined
                   voting power in the surviving entity after such
                   transaction and they own such securities in substantially
                   the same proportions (relative to each other) as they
                   owned the Company's capital stock immediately before such
                   transaction;

                                     (3) the consummation of any sale or other
                   disposition (in one transaction or a series of related
                   transactions) of all, or substantially all, of the
                   Company's assets to a person whose acquisition of 40% or
                   more of the combined shares of the Company's capital stock
                   then outstanding would have caused a Change in Control
                   under paragraph 5.(e)(iii)(1)); or

                                     (4) the "Continuing Directors" (as
                   defined in paragraph 5.(e)(vi)) cease to be a majority of
                   the Company's directors.

          A determination by the Company's Continuing Directors (by
          resolution of at least a majority of the Continuing Directors) as
          to whether a Change in Control has occurred for purposes of this
          Agreement, the date on which it has occurred or both shall be
          conclusive for purposes of this Agreement.

                           (iv)  "Period". The period (the "Period") will begin
          on the date of this Agreement and end on the first to occur of (a)
          the end of the term of this Agreement, without regard to any
          termination as a result of Gilbert's death, Disability, termination
          by the Company for Cause, retirement, resignation or termination by
          the Company without Cause, (b) Gilbert's death, (c) Gilbert's
          Disability, and (d) 90 days after the termination of Gilbert's
          employment (voluntarily or involuntarily and with or without Cause
          or Good Reason) if (1) such termination occurs before a Change in
          Control, and (2) a Change in Control does not occur during such 90
          day period. Notwithstanding the foregoing, (1) if Gilbert becomes
          entitled to severance benefits under paragraph 5.(e)(i), the
          provisions of paragraph 5.(e)(ii) of this Agreement will continue
          until Gilbert's eligibility to receive severance benefits under
          this Agreement ceases and such provisions and the other provisions
          of this Agreement not limited by the Period, including, without
          limitation, paragraphs 5.(h), 7, 10 and 11 will survive the end of
          the Period.

                            (v) "Excluded Persons". For purposes of this
          Agreement, the "Excluded Persons" are (i) Gilbert, (ii) any "group"
          (as that term is used in Section 13(d) of the Exchange Act and the
          rules thereunder) that includes Gilbert or in which Gilbert is, or
          has agreed to become, an equity participant, (iii) any entity in
          which Gilbert is, or has agreed to become, an equity participant,
          (iv) the Company, (v) any subsidiary of the Company, (vi) any
          employee benefit plan of the Company or any subsidiary of the
          Company or the related trust, (vii) any entity to the extent it is
          holding capital stock of the Company for or pursuant to the terms
          of any employee benefit plan of the Company or any subsidiary of
          the Company, and (viii) any director or officer of the Company as
          of the date of this Agreement. For 

                                      6

<PAGE>

          purposes of this Agreement, Gilbert shall not be deemed an "equity
          participant" in any group or entity (i) in which Gilbert owns for
          investment purposes only no more than 5% of the stock of a
          publicly-traded entity whose stock is either listed on a national
          stock exchange or quoted in The Nasdaq National Market, if Gilbert
          is not otherwise affiliated with such group or entity, or (ii) if
          Gilbert's participation is fully-disclosed to, and approved by, the
          Company's Board of Directors and the Continuing Directors before
          the Change in Control occurs.

                           (vi) "Continuing Directors". For purposes of this
          Agreement, the "Continuing Directors" are the directors of the
          Company as of the date of this Agreement, and any person who
          subsequently becomes a director if such person is appointed to be a
          director by a majority of the Continuing Directors or if such
          person's initial nomination for election or initial election as a
          director is recommended or approved by a majority of the Continuing
          Directors.

                          (vii) "Entity". For purposes of this Agreement, the
          "Entity" shall mean both (1) the Company and, (2) in connection
          with a Change in Control defined in paragraph 5.(e)(iii)(2) or
          paragraph 5.(e)(iii)(3), the survivor of the merger, consolidation,
          reorganization or share exchange involving the Company and the
          buyer of all, or substantially all, of the Company's assets, if
          such additional entity described in this clause (2) (if other than
          the Company) has offered to employ Gilbert on such terms that would
          not constitute "Good Reason" for termination of Gilbert's
          employment if imposed by the Company. Therefore, for purposes of
          this paragraph 5.(e), Gilbert shall not be deemed to have
          terminated Gilbert's employment with the Entity for "Good Reason"
          and the "Entity" shall not be deemed to have terminated Gilbert's
          employment without Cause unless such actions are taken by all
          entities included within the definition of "Entity". In addition,
          for purposes of this paragraph 5.(e), Gilbert shall not be deemed
          to have terminated Gilbert's employment with the Entity for "Good
          Reason" and the "Entity" shall not be deemed to have terminated
          Gilbert's employment without Cause if (1) the survivor of the
          merger, consolidation, reorganization or share exchange involving
          the Company and the buyer of all, or substantially all, of the
          Company's assets has offered to employ Gilbert on such terms that
          would not constitute "Good Reason" for termination of Gilbert's
          employment if imposed by the Company, (2) Gilbert refuses such
          employment, and (3) the Company terminates Gilbert's employment for
          any reason or for no reason.

                         (viii) "Good Reason". Termination of Gilbert's
          employment for "Good Reason" means Gilbert's voluntary termination
          of employment with the Entity before or after a Change in Control
          as a result of (1) any change by the Entity (without Gilbert's
          consent) in Gilbert's title from Gilbert's title immediately before
          such Change in Control, (2) any decrease by the Entity (without
          Gilbert's consent) in Gilbert's compensation or incentives from
          Gilbert's compensation and incentives immediately before such
          Change in Control, except with respect to benefits covered by
          clause (3); provided that Gilbert's bonus shall not be deemed to
          have decreased if Gilbert has a substantially similar opportunity
          to earn a bonus as Gilbert did in the last full fiscal year before
          the Change in Control, (3) any decrease by the Entity (without
          Gilbert's consent) in Gilbert's benefits from Gilbert's benefits

                                      7

<PAGE>

          immediately before such Change in Control, unless such decrease is
          applied in the same manner to all executive officers of the Entity,
          (4) a substantial change by the Entity (without Gilbert's consent)
          in Gilbert's duties or responsibilities from Gilbert's duties and
          responsibilities immediately before such Change in Control, (5) any
          requirement by the Entity (to which Gilbert does not consent) that
          Gilbert change Gilbert's primary place of business to be outside
          the metropolitan Jackson area, (6) Gilbert's removal from, or
          failure to be elected to, the Entity's Board of Directors or the
          Entity's failure to nominate Gilbert for election to the Entity's
          Board of Directors, or (7) if the Change in Control results in a
          new entity being a successor to the Company's business, the failure
          of the new entity to assume expressly in writing the Company's
          obligations under this Agreement and under any written employment
          agreement between Gilbert and the Company in effect immediately
          before the Change in Control. "Good Reason" will not include
          Gilbert's death, Disability or Retirement (as defined below), or
          Gilbert's resignation other than as provided in the preceding
          sentence. For purposes of this Agreement, "Retirement" means
          Gilbert's retirement from the Entity in accordance with the
          Entity's normal policies.

                   (f) Split Dollar Life Insurance. If Gilbert's employment
by the Company is terminated for any reason except Gilbert's death, the split
dollar life insurance policy referred to in paragraph 5.(a) shall be disposed
of in accordance with the terms of a certain Split Dollar Agreement dated
January 31, 1992 between the parties, as the same may be amended from time to
time.

                   (g) Transfer of Insurance Policies. If Gilbert's
employment by the Company is terminated for any reason except Gilbert's death
or Disability, the Company will cooperate with Gilbert, to the extent Gilbert
so desires, to transfer to Gilbert, at no cost to the Company and in exchange
for a payment by Gilbert to the Company equal to the value of the Company's
interest in the policies, the life and disability insurance maintained by the
Company on his behalf immediately before the termination of his employment,
to the extent permitted by the applicable insurance policies. If Gilbert's
employment by the Company is terminated as a result of Gilbert's Disability,
the Company will cooperate with Gilbert, to the extent Gilbert so desires, to
transfer to Gilbert, at no cost to the Company and in exchange for a payment
by Gilbert to the Company equal to the value of the Company's interest in the
policies, the life insurance maintained by the Company on his behalf as of
the date five years after the termination of his employment, to the extent
permitted by the applicable insurance policies.

                   (h) No Other Employment Benefits. The severance benefits
provided in this Agreement are exclusive and in lieu of any other severance
benefits to which Gilbert may be entitled, except for any benefits under the
terms of any stock options or restricted stock agreements Gilbert may have.

          6. Payment. Amounts equal to, or based on, salary, other than
deferred compensation, as well as death benefits pursuant to paragraph 5.(a),
other than proceeds of life insurance, and amounts equal to, or based on,
salary, other than deferred compensation and proceeds of life insurance, paid
pursuant to paragraphs 5.(b) and 5.(d), shall be paid in monthly or other
regular periodic installments no less frequent than monthly. Amounts equal to
the pro rata portion of Gilbert's bonus for the year of termination paid
pursuant to paragraphs 5.(a), 5.(b), and 5.(d) shall 

                                      8

<PAGE>

be paid at the time they are paid to other participants in the applicable
bonus plan. Deferred compensation, with interest thereon, shall be paid as
provided in the Jacobson Stores Inc. Deferred Compensation Plan, as amended
from time to time. The amounts described in paragraph 5.(e) shall be paid as
described in paragraph 5.(e)(ii)(5). All such payments shall be made to
Gilbert while he is living; and in the event of his death, the payments shall
be made to Gilbert's wife, if she is then living, or to his estate or any
beneficiary or beneficiaries he designates in writing during his lifetime.

          7. Non-Competition; Confidentiality and Non-Solicitation.

                   (a) Non-Competition. Gilbert will not, during Gilbert's
employment with the Company, directly or indirectly engage in any activity
which is competitive with any business in which the Company engages.

                   (b) Confidential Information. Gilbert will not at any time
during or after Gilbert's employment with the Company, directly or
indirectly, disclose or make accessible to any person or entity or use in any
way for Gilbert's own personal gain (i) any confidential and secret
information as to the prices, costs, discounts, or profit margins of any
goods or services sold, purchased or handled by the Company (or its
subsidiaries), or (ii) any confidential or secret information relating to the
Company's (or its subsidiaries') financial structure, store layouts, supply
sources, designs, procedures, information systems, administration or
operations, except as authorized or directed by the Company and except that
the foregoing restrictions will not apply to information generally available
to others in the Company's line of business, information in the public
domain, information disclosed or made available by the Company to any other
person on a non-confidential basis or disclosures Gilbert are required by law
to make. Upon termination of Gilbert's employment with the Company for any
reason, Gilbert will immediately return to the Company all confidential
materials over which Gilbert exercise any control.

                   (c) Non-Solicitation. Gilbert will not at any time during
Gilbert's employment by the Company and for two years thereafter, directly or
indirectly, solicit for any purpose, interfere with, entice away from the
Company (or its subsidiaries) or hire any employee or agent of the Company
(or its subsidiaries) who was employed by the Company within one year before
the termination of Gilbert's employment.

                   (d) Equitable Remedies. Paragraphs 7.(a), 7.(b) and 7.(c)
are intended, among other things, to protect the confidential information
described in paragraph 7.(b) and relate to matters which are of a special and
unique character, and their violation may cause irreparable injury to the
Company, the amount of which will be extremely difficult, if not impossible,
to determine and which cannot be adequately compensated by monetary damages
alone. Therefore, if Gilbert breaches or threatens to breach any of those
paragraphs, in addition to any other remedies which may be available to the
Company under this Agreement or at law or equity, the Company may obtain an
injunction, restraining order, or other equitable relief against Gilbert and
such other persons and entities as are appropriate.

          8. Modification. This Agreement is the complete agreement between
Gilbert and the Company and may be modified only by a written instrument
executed by both parties.

                                      9

<PAGE>

          9. Law. The internal laws of the State of Michigan shall govern
this Agreement, its construction, and the determination of any rights, duties
or remedies of the parties arising out of or relating to this Agreement.

          10. Costs of Enforcement. The Company shall pay on demand all of
Gilbert's reasonable out-of-pocket fees, costs and expenses (including
reasonable attorneys' fees, court costs and other legal expenses and costs of
investigation) incurred by Gilbert in connection with the enforcement of this
Agreement (as amended from time to time and including any successor to this
Agreement) or in connection with any disputes concerning the meaning or
interpretation of this Agreement (as amended from time to time and including
any successor to this Agreement). During the pendency of any such enforcement
proceeding or dispute, the Company shall continue to pay the disputed amounts
and benefits provided in this Agreement (as amended from time to time and
including any successor to this Agreement), and if it fails to do so, the
Company shall pay Gilbert interest, at the prime or base rate announced from
time to time by Comerica Bank, on such amounts from the date they were due
through the date they are actually paid. The obligations contained in this
paragraph 10 shall survive the end of the Period.

          11. Arbitration.

                   (a) Agreement to Arbitrate. Any disputes between the
parties with respect to the terms and conditions of this Agreement (as
amended from time to time and including any successor to this Agreement)
(other than those disputes with respect to which equitable relief (such as
specific performance or an injunction) is the appropriate remedy) that are
not resolved within 30 days after one party notifies the other party in
writing of the dispute shall be resolved by and through binding arbitration
conducted under the auspices of the American Arbitration Association (or any
like organization successor thereto) in Jackson, Michigan. Both the foregoing
agreement of the parties to arbitrate any and all claims, and the results,
determination, finding, judgment and/or award rendered through such
arbitration, shall be final and binding on the parties to this Agreement and
may be specifically enforced by legal proceedings, and, pursuant to MCLA ss.
600.5001, the parties agree that a judgment of any Michigan circuit court may
be rendered upon any arbitration award rendered pursuant to this paragraph
11. The parties agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this arbitration
agreement and that any party may, in his or its sole discretion, ask for
specific performance and/or injunctive relief in order to enforce or prevent
any violations of the provisions of this arbitration agreement.

                   (b) Procedure. Such arbitration shall be initiated by the
written notice of the dispute described in paragraph 11.(a), and such
arbitration shall be a compulsory and binding proceeding on each party. Such
arbitration proceeding shall be conducted under the commercial arbitration
rules (formal or informal) of the American Arbitration Association before one
arbitrator, and the arbitrator in any such arbitration shall be such person
who is expert in the subject matter of the dispute. The costs of the
arbitrator and the arbitration shall be borne by the Company. Each party will
bear separately the cost of its or his respective attorneys, witnesses and
experts in connection with such arbitration, subject to the Company's
obligations under paragraph 10. Time 

                                      10

<PAGE>

is of the essence of this arbitration procedure, and the arbitrator shall be
requested to render his or her decision within 10 days following completion
of the arbitration.

          12. Successor Obligations. This Agreement will be binding upon and
inure to the benefit of the Company and its successors and assigns, and the
Company will require any successor to, or transferee of, all or substantially
all of its business or assets to assume all of the Company's obligations
under this Agreement (such successor or assign will be deemed, for purposes
of this Agreement, to be the Company). This Agreement will be binding upon
Gilbert and will inure to Gilbert's benefit, but Gilbert may not assign this
Agreement without the Company's prior written consent.

          13. Duplicate Copies. This Agreement may be executed in
counterparts, both of which together will be deemed an original of this
Agreement.

          14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If
any provision of this Agreement is held illegal, void or invalid in its
entirety, the remaining provisions of this Agreement will not in any way be
affected or impaired but will remain binding in accordance with their terms.

          15. Miscellaneous Provisions. This Agreement supersedes all previous
employment and severance agreements between the parties. In addition to all
other remedies available at law, it shall be specifically enforceable by any
court having jurisdiction. Paragraph headings are for convenience only and
shall not affect the construction of any provision. The rights and
obligations hereunder, particularly but without limitation including
paragraph 5.(e), shall survive the expiration of the term of this Agreement.


IN THE PRESENCE OF:                     JACOBSON STORES INC.

                                        By:       /c/  P. Gerald Mills
                                                 ---------------------
                                                 P. Gerald Mills,
                                                    Chairman of the Board and
                                                    Chief Executive Officer

                                        By:      /c/  Richard Z. Rosenfeld
                                                 -------------------------
                                                 Richard Z. Rosenfeld,
                                                   Secretary

                                            /c/  Paul W. Gilbert
                                            --------------------
                                            Paul W. Gilbert

                                      11