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                                                                  EXHIBIT 10.276

[TOSHIBA LOGO]

        FINANCIAL SERVICES

                                                      Agreement # ______________

<TABLE>
<CAPTION>
                                                                         Individual
Equipment Model & Description  Serial Number      Accessories      Minimum Number of Copies
-----------------------------  -------------  -------------------  ------------------------
<S>                            <C>            <C>                  <C>
Toshiba estudio 550            _____________  Finishee/Controllor  ________________________
Toshiba estudio 35             _____________  ___________________  ________________________
_____________________________  _____________  ___________________  ________________________
</TABLE>

- See attached schedule for additional Equipment / Accessories

Consolidated Minimum Number of Copies  21,000
                                      ------------------------------
                                      (Insert N/A if not applicable)

Equipment Location (if different from Billing Address)__________________________

CB Document Solutions
-----------------------------
Name

5030 E sunrise Dv
-----------------------------
Address

Phoenix           AZ              85044
--------------------------------------------
City            State              Zip

YOU HAVE SELECTED THE EQUIPMENT. THE SUPPLIER AND ITS REPRESENTATIVES ARE NOT
OUR AGENTS AND ARE NOT AUTHORIZED TO MODIFY THE TERMS OF THIS AGREEMENT. YOU
ARE AWARE OF THE NAME OF THE MANUFACTURER OF EACH ITEM OF EQUIPMENT AND YOU WILL
CONTACT EACH MANUFACTURER FOR A DESCRIPTION OF YOUR WARRANTY RIGHTS. WE MAKE NO
WARRANTIES TO YOU, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, SUITABILITY OR OTHERWISE. WE PROVIDE THE EQUIPMENT TO YOU
AS-IS. WE SHALL NOT BE LIABLE FOR CONSEQUENTIAL OR SPECIAL DAMAGES.

YOUR PAYMENT OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL AND ARE NOT SUBJECT TO
CANCELLATION, REDUCTION OR SETOFF FOR ANY REASON WHATSOEVER. BOTH PARTIES AGREE
TO WAIVE ALL RIGHTS TO A JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF MISSOURI. YOU CONSENT TO THE JURISDICTION AND VENUE OF FEDERAL AND STATE
COURTS IN MISSOURI.

BY SIGNING THIS AGREEMENT, YOU ACKNOWLEDGE RECEIPT OF PAGE 2 OF THIS AGREEMENT,
AND AGREE TO THE TERMS ON BOTH PAGES 1 AND 2. ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT
YOU AND US FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.

TOSHIBA AMERICA INFORMATION SYSTEMS, INC.
1961 Hirst Drive, Moberly, MO 65270

By:_________________________________________

Name:_______________________________________

Title:______________________________________

Date:_______________________________________

Minimum
Monthly Payment 1227,00        Term 60 months
(plus applicable taxes)

Per Copy                       Excess Per
Charge________________         Copy Charge , 0125

Excess Per Copy Billing Preference (monthly if not checked)

( ) Monthly (X) Quarterly ( ) Semi-Annually ( ) Annually

The following additional payments are due on the date this Agreement is signed
by you:

      SECURITY DEPOSIT $ 0

      ADVANCE PAYMENT * $ 0    * Applied to: (.) first (.) last
        (plus applicable taxes)

      DOCUMENT FEE $49.50 (included on first invoice)

Meadow Valley, INC
-------------------------------
Full Legal Name

-------------------------------
D/B/A

4411 S 40th ST STE D-11
-------------------------------
Billing Address

Phoenix        AZ         85040
-------------------------------
City          State        Zip

KEN NELSON
--------------------------------------------
Contact Name       Phone      E-mail Address

By: /s/ KENNETH D. NELSON
    ---------------------------
    Signature of Authorized Signer

Name: KENNETH D. NELSON
      -------------------------
      Please Print

Title: VICE PRESIDENT
       ------------------------

Date: 6-17-04                Fed Tax ID 88-0171959
      -----------------
      Date of Signature

                         Unconditional Personal Guaranty

In consideration of Owner entering into the Agreement in reliance on this
guaranty, the undersigned unconditionally and irrevocably guarantees to Owner,
its successors and assigns, the prompt payment and performance of all existing
and future obligations to Owner, including the Agreement. I agree that (a) this
is a guaranty of payment and not of collection, and that Owner can proceed
directly against me personally without resorting to any security or seeking to
collect from Customer, (b) I waive all suretyship defenses including impairment
of collateral, failure to properly perfect a security interest in the
collateral, and all notices, including those of protest, presentment and demand,
(c) Owner may renew, extend or otherwise change the terms of the Agreement
without notice to me and I will be bound by such changes, and (d) I will pay all
of Owner's costs of enforcement and collection, including attorneys' fees. This
guaranty survives the bankruptcy of Customer and binds my administrators,
successors and assigns. My obligations under this guaranty continue even if
Customer becomes insolvent or bankrupt or is discharged from bankruptcy and I
agree not to seek to be repaid by Customer in the event I must pay Owner, until
you have been paid all amounts owed. This guaranty shall be governed by the laws
of Missouri. I consent to the personal jurisdiction and venue of federal and
state courts in Missouri.

Printed Name:__________________________ By:_______________________, Individually

PAGE 1 OF 2          VISIT US AT WWW.TOSHIBA-FINANCIAL.COM

<PAGE>

                  ADDITIONAL TERMS AND CONDITIONS OF AGREEMENT

1. COMMENCEMENT OF AGREEMENT. Commencement of this Agreement and acceptance of
the Equipment shall occur upon delivery of the Equipment to you. You agree to
inspect the Equipment upon delivery and verify by telephone or in writing such
information as we may require. If you signed a purchase order or similar
agreement for the purchase of the Equipment, by signing this Agreement you
assign to us all of your rights, but none of your obligations under it. All
attachments, accessories, replacements, replacement parts, substitutions,
additions and repairs to the Equipment shall form part of the Equipment under
this Agreement.

2. SECURITY DEPOSIT. The Security Deposit will be held by us, without interest,
and may be commingled (unless otherwise required by law), until all obligations
under this Agreement are satisfied, and may be applied at our option against
amounts due under this Agreement. The Security Deposit will be returned to you
upon termination of the Agreement, provided you are not in default, or applied
to the Minimum Monthly Payment due at the end of the Term, or to the amount we
may quote for any purchase or upgrade of the Equipment.

3. COPY CHARGES. You agree to remit to us the Minimum Monthly Payment and all
other sums when due and payable each month at the address we provide to you from
time to time. In return for the Minimum Monthly Payment, you are entitled to
produce the Minimum Number of Copies each month. You also agree to pay us the
Excess Per Copy Charge for each metered copy which exceeds the Minimum Number of
Copies (plus applicable taxes). We may estimate the number of copies produced if
you do not provide us with meter readings within seven (7) days of request. We
will adjust the estimated charge for excess copies upon receipt of actual meter
readings. Notwithstanding any adjustments, you will never pay us less than the
Minimum Monthly Payment. You agree that we may increase the Minimum Monthly
Payment and/or Excess Per Copy Charge each year during the Term of this
Agreement by an amount not to exceed ten percent (10%) of the Minimum Monthly
Payment and/or Excess Per Copy Charge in effect at the end of the prior annual
period, or the maximum percentage permitted by law, whichever is lower. At our
option, you will (a) provide us by telephone or facsimile the actual meter
readings when requested by us, (b) provide us (or our agent) access to the
Equipment to obtain meter readings, or (c) allow us (or our agent) to attach an
automatic meter reading device to the Equipment. We may audit any automatic
meter reading device periodically. Minimum Monthly Payments are due whether or
not you are invoiced. If you have a dispute with the Supplier regarding the
Equipment, you shall continue to pay us all Minimum Monthly Payments and Excess
Per Copy Charges without deduction or withholding any amounts. You authorize us
to adjust the Minimum Monthly Payments by not more than 15% to reflect any
reconfiguration of the Equipment or adjustments to reflect applicable sales
taxes or the cost of the Equipment by the manufacturer/supplier.

4. OTHER CHARGES. You agree to: (a) pay all premiums and other costs of insuring
the Equipment; (b) reimburse us for all costs and expenses (including reasonable
attorneys' fees and court costs) incurred in enforcing this Agreement; and (c)
pay all other costs and expenses for which you are obligated under this
Agreement. You agree, at our discretion, to either (1) reimburse us annually for
all personal property and other similar taxes and governmental charges
associated with the ownership, possession or use of the Equipment, or (2) remit
to us each month our estimate of the pro-rated equivalent of such taxes and
governmental charges. You agree to pay us an administrative fee for the
processing of taxes, assessments or fees which may be due and payable under this
Agreement. We may take on your behalf any action required under this Agreement
which you fail to take, and upon receipt of our invoice you will promptly pay
our costs (including insurance premiums and other payments to affiliates), plus
reasonable processing fees. Restrictive endorsements on checks you send to us
will not reduce your obligations to us. We may charge you a return check or
non-sufficient funds charge of $25.00 for any check which is returned by the
bank for any reason (not to exceed the maximum amount permitted by law).

5. LATE CHARGES. For any payment which is not received by its due date, you
agree to pay a late charge equal to the higher of 10% of the amount due or
$22.00 (not to exceed the maximum amount permitted by law) as reasonable
collection costs.

6. MAINTENANCE AND SERVICE: OWNERSHIP AND USE. The Supplier identified on Page 1
of this Agreement has agreed to provide FULL SERVICE MAINTENANCE DURING NORMAL
BUSINESS HOURS, INCLUDING ALL TONER, DEVELOPER AND PARTS NECESSARY TO PRODUCE
COPIES. YOU MUST PURCHASE COPIER PAPER AND STAPLES SEPARATELY. You acknowledge
that (a) we are not responsible for any service, repair or maintenance of the
Equipment, and (b) we are not a party to any service maintenance agreement. You
agree to pay for service maintenance outside of the Supplier's normal business
hours for service required by your negligence or misuse of the Equipment at
Supplier's customary rates. We reserve a security interest in the Equipment to
secure all of your obligations under this Agreement. We own the Equipment and
you have the right to use the Equipment under the terms of this Agreement. If
this Agreement is deemed to be a secured transaction, you grant us a security
interest in the Equipment to secure all of your obligations under this
Agreement. You hereby assign to us all of your rights, but none of your
obligations, under any purchase agreement for the Equipment. We hereby assign to
you all our rights under any manufacturer or supplier warranties, so long as you
are not in default hereunder. You must keep the Equipment free of liens. You may
not remove the Equipment from the address indicated on the front of this
Agreement without first obtaining our approval. If we grant permission to move
the Equipment, the Minimum Monthly Payments and Excess per Copy Charges may be
increased by us at our sole discretion to cover the additional costs of service,
maintenance and supplies. You agree to: (a) keep the Equipment in your exclusive
control and possession; (b) USE THE EQUIPMENT ONLY IN THE LAWFUL CONDUCT OF YOUR
BUSINESS, AND NOT FOR PERSONAL, HOUSEHOLD OR FAMILY PURPOSES; (c) use the
Equipment in conformity with all insurance requirements, manufacturer's
instructions and manuals; (d) keep the Equipment repaired and maintained in good
working order and as required by the manufacturer's warranty and specifications;
and (e) give us reasonable access to inspect the Equipment and its maintenance
and other records.

      If any Equipment is designated "Service Only", you acknowledge and agree
that (1) we do not own such Equipment; (2) we are not providing such Equipment
to you pursuant to the terms of this Agreement; (3) Supplier has agreed to
provide full service maintenance of such Equipment pursuant to the terms
outlined above; and (4) that portion of the Minimum Monthly Payment attributable
to such Equipment includes only the full service maintenance of such Equipment
and not the use or rental of the Equipment.

7. INDEMNITY. You are responsible for all losses, damage, claims, infringement
claims, injuries and attorneys' fees and costs ("Claims"), incurred or asserted
by any person, in any manner relating to the Equipment, including its use,
condition or possession. You agree to defend and indemnify us against all
Claims, although we reserve the right to control the defense and to select or
approve defense counsel. This indemnity continues beyond the termination of this
Agreement, for acts or omissions which occurred during the Term of this
Agreement. You also agree that this Agreement has been entered into on the
assumption that we will be entitled to certain tax benefits available to the
owner of the Equipment. You agree to indemnify us for the loss of any income tax
benefits caused by your acts or omissions inconsistent with such assumption or
this Agreement. In the event of any such loss, we may increase the Minimum
Monthly Payments and other amounts due to offset any such adverse effect.

8. LOSS OR DAMAGE. If any item of Equipment is lost, stolen or damaged you will,
at your option and cost, either: (a) repair the item or replace the item with a
comparable item reasonably acceptable to us, or (b) pay us the sum of; (i) all
past due and current Minimum Monthly Payments, Excess Per Copy Charges and other
charges, (ii) the present value of all remaining Minimum Monthly Payments and
other charges for the item, discounted at the rate of 6% per annum (or the
lowest rate permitted by law, whichever is higher), and (iii) the Fair Market
Value of the Equipment. We will then transfer to you all our right, title and
interest in the Equipment AS-IS AND WHERE-IS, WITHOUT ANY WARRANTY AS TO
CONDITION, TITLE OR VALUE. Insurance proceeds shall be applied toward repair,
replacement or payment hereunder, as applicable, in this Agreement, "Fair Market
Value" of the Equipment means its fair market value at the end of the Term,
assuming good order and condition (except for ordinary wear and tear from normal
use), as estimated by us.

9. INSURANCE. You agree, at your cost, to: (a) keep the Equipment insured
against all risks of physical loss or damage for its full replacement value,
naming us as loss payee; and (b) maintain public liability insurance, covering
personal injury and Equipment damage for not less than $300,000 per occurrence,
naming us as additional insured. You have a choice in how you satisfy these
insurance requirements. First, you may obtain coverage on your own and provide
us with evidence of insurance coverage. If you elect this option, the policy
must be issued by an insurance carrier rated B+ or better by A.M. Best Company,
must provide us with not less than 15 days' prior written notice of
cancellation, non-renewal or amendment, and must provide deductible amounts
acceptable to us. Second, you may elect to have us directly obtain coverage
protecting our interests. UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE
REQUIRED BY THIS AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT
OUR INTEREST IN THE EQUIPMENT. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR
ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE EQUIPMENT. YOU MAY
LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE
THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF WE PURCHASE
INSURANCE FOR THE EQUIPMENT, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE
MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE
INSURANCE MAY BE ADDED TO OUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS
OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO
OBTAIN ON YOUR OWN. The insurance coverage we obtain may be through an insurance
carrier which may be affiliated with us or our assignee. There will be no
deductible and the coverage will include protection for earthquakes, floods and
employee theft. We will pay the premium, but you must reimburse us. Each month,
you must pay us with your Minimum Monthly Payment an amount equal to the amount
of the insurance premium divided by the total number of months in the Term of
this Agreement. At the end of the Term you must pay us any remaining portion of
the premium.

10. DEFAULT. You will be in default under this Agreement if: (a) you fail to
remit to us any payment within ten (10) days of the due date or breach any other
obligation under this Agreement; (b) a petition is filed by or against you or
any Guarantor under any bankruptcy or insolvency law; or (c) you default under
any other agreement with us.

11. REMEDIES. If you default, we may do one or more of the following: (a)
recover from you, AS LIQUIDATED DAMAGES FOR LOSS OF BARGAIN AND NOT AS A
PENALTY, the sum of: (i) all past due and current Minimum Monthly Payments,
Excess Per Copy Charges and other charges, (ii) the present value of all
remaining Minimum Monthly Payments, Excess Per Copy Charges and other charges,
discounted at the rate of 6% per annum (or the lowest rate permitted by law,
whichever is higher) and (iii) the Fair Market Value of the Equipment; (b)
declare any other agreements between us in default; (c) require you to return
all of the Equipment in the manner outlined in Section 12, or take possession of
the Equipment, in which case we shall not be held responsible for any losses
directly or indirectly arising out of, or by reason of the presence and/ or use
of any and all proprietary information residing on or within the Equipment, and
to lease or sell the Equipment or any portion thereof, and to apply the
proceeds, less reasonable selling and administrative expenses, to the amounts
due hereunder; (d) charge you interest on all amounts due us from the due date
until paid at the rate of 1-1/2% per month, but in no event more than the lawful
maximum rate; (e) charge you for expenses incurred in connection with the
enforcement of our remedies including, without limitation, repossession, repair
and collection costs, attorneys' fees and court costs. These remedies are
cumulative, are in addition to any other remedies provided for by law, and may
be exercised concurrently or separately. Any failure or delay by us to exercise
any right shall not operate as a waiver of any other right or future right.

12. END OF TERM OPTIONS; RETURN OF EQUIPMENT. At the end of the Term and upon 30
days prior written notice to us, you shall return all of the Equipment. This
Agreement shall continue on a month-to-month basis and you shall pay us the same
Minimum Monthly Payments, Excess Per Copy Charges and other charges as applied
during the Term until the Equipment is returned to us. If you are in default,
you shall return all of the Equipment, freight and insurance prepaid at your
cost and risk, to wherever we indicate in the continental United States, with
all manuals and logs, in good order and condition (except for ordinary wear and
tear from normal use), packed per the shipping company's specifications, and pay
an inspection, restocking and handling fee of $100, not to exceed the maximum
permitted by law, as reasonable compensation for our costs in processing
returned equipment. You will pay us for any loss in value resulting from the
failure to maintain the Equipment in accordance with this Agreement or for
damages incurred in shipping and handling.

13. ASSIGNMENT. You may not assign or dispose of any rights or obligations under
this Agreement or sublease the Equipment, without our prior written consent. We
may, without notifying you, (a) assign this Agreement or our interest in the
Equipment; and (b) release information we have about you and this Agreement to
the manufacturer, supplier or any prospective investor, participant or purchaser
of this Agreement. If we do make an assignment under subsection 13(a) above, our
assignee will have all of our rights under Ms Agreement, but none of our
obligations. You agree not to assert against our assignee claims, offsets or
defenses you may have against us.

14. MISCELLANEOUS. Notices must be in writing and will be deemed given 5 days
after mailing to your (or our) business address. You represent that: (a) you
have authority to enter into this Agreement and by so doing you will not violate
any law or agreement; and (b) this Agreement is signed by your authorized
officer or agent. This Agreement is the entire agreement between us, and cannot
be modified except by another document signed by us. This Agreement is binding
on you and your successors and assigns. All financial information you have
provided is true and a reasonable representation of your financial condition.
You authorize us or our agent to: (a) obtain credit reports and make credit
inquiries; (b) furnish payment history to credit reporting agencies; and (c) be
your attorney-in-fact for the sole purpose of signing UCC financing statements.
Any claim you have against us must be made within two (2) years after the event
which caused it. If a court finds any provision of this Agreement to be
unenforceable, all other terms shall remain in effect and enforceable. You
authorize us to insert or correct missing information on this Agreement,
including your proper legal name, serial numbers and any other information
describing the Equipment. If you so request, and we permit the early termination
of this Agreement, you agree to pay a fee for such privilege. THE PARTIES INTEND
THIS TO BE A "FINANCE LEASE" UNDER ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE
("UCC"). YOU WAIVE ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A
OF THE UCC.

PAGE 2 of 2                                                    TFS 1802(b) 03/01<PAGE>

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT, made and entered into on June 1, 2004, by and between
Kmart Management Corporation, a Michigan corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and David
Whipple (the "Executive").

      WHEREAS, the Company desires that the Executive become employed by the
Company and provide services to the Company and Holding Corp. (as hereinafter
defined), in the best interest of the Company and its affiliates and
constituencies;

      WHEREAS, the Executive desires to be employed by the Company as provided
herein; and

      WHEREAS, the Executive and the Company desire to enter into this Agreement
to set forth the terms and conditions of the Executive's services with the
Company;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:

            1. Definitions. The following definitions shall apply to this
Agreement in its entirety.

                  (a) "Base Salary" shall mean the salary granted to the
Executive pursuant to Section 4.

                  (b) "Board" shall mean the Board of Directors of the Company.

                  (c) "Cause" shall mean (i) the Executive is convicted of a
felony involving moral turpitude or any other felony (other than motor vehicle
related) and, in the case of such other felony, the Executive is unable to show
that he (A) acted in good faith and in a manner he reasonably believed to be in
the best interests of the Company and its affiliates and (B) had no reasonable
cause to believe his conduct was unlawful; or (ii) the Executive engages in
conduct that constitutes willful gross neglect or willful misconduct in carrying
out his duties under this Agreement, resulting, in either case, in material harm
to the Company or its affiliates, unless the Executive believed in good faith
that such act or non-act was in, or was not opposed to, the best interests of
the Company and its affiliates.

                  (d) "Committee" shall mean the Compensation and Incentives
Committee of the Holding Corp. Board or any other committee of the Holding Corp.
Board performing similar functions.

<PAGE>

                  (e) "Constructive Termination" by the Executive shall mean
termination, during the Term of Employment, based on the occurrence without the
Executive's express written consent of any of the following: (i) a material
diminution or adverse change in the Executive's responsibilities, duties,
authorities or any reduction in title, other than for Cause or Disability; (ii)
a reduction in the Executive's Base Salary or Target Bonus (as defined in
Section 7) other than for Cause or Disability and other than as part of an
across-the-board salary reduction generally imposed on senior executives of the
Company; (iii) the failure of the Company to obtain the assumption in writing of
its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company on or prior to a merger,
consolidation, sale or similar transaction; or (iv) if the Executive no longer
reports to the CEO or to the COO or other direct report of the CEO. The
Executive shall further be required to comply with the provisions of Section
11(d)(i) of this Agreement with respect to a Constructive Termination.

                  (f) "Disability" shall mean the Executive's inability, with or
without a reasonable accommodation, to substantially perform his duties and
responsibilities under this Agreement by reason of any physical or mental
incapacity for a period of 180 consecutive days.

                  (g) "Effective Date" shall mean June 1, 2004.

                  (h) "Holding Corp." shall mean Kmart Holding Corporation, a
Delaware corporation and the Company's parent corporation.

                  (i) "Holding Corp. Board" shall mean the board of directors of
Holding Corp.

            2. Term of Employment. Subject to Holding Corp. Board approval as
set forth in Section 19 and subject to termination pursuant to Section 11, the
Company shall employ the Executive, and the Executive hereby accepts such
employment, for the period commencing on the Effective Date and ending on the
third anniversary thereof (the "Term of Employment"); provided, however, that
the Term of Employment shall be automatically extended for additional one-year
periods on each subsequent annual anniversary of the Effective Date, unless
written notice of non-extension is provided by either Party to the other Party
at least 60 days prior to any such anniversary.

            3. Position, Duties and Responsibilities.

                  (a) During the Term of Employment, the Executive shall be
employed by the Company and shall serve as Senior Vice President, Associate
Resources (or such other position or positions as may be agreed upon in writing
by the Executive and Holding Corp. and/or the Company, as applicable). The
Executive shall have all authority commensurate with the position of Senior Vice
President, Associate Resources, subject to the direction of the Holding Corp.
Board, the Board and/or the Chief Executive Officer ("CEO") of the Company. The
Executive shall initially report directly to the CEO, but this may be changed
such that he reports to the COO or other direct report of the CEO. The Executive
shall devote substantially all of his business time, attention and

<PAGE>

skill to the performance of such duties and responsibilities, and shall use his
best efforts to promote the interests of the Company and its affiliates. The
Executive shall not, without the prior written approval of the Holding Corp.
Board, engage in any other business activity which is in violation of policies
established from time to time by the Company or its affiliates.

                  (b) Anything herein to the contrary notwithstanding, nothing
shall preclude the Executive from (i) serving on the boards of directors of a
reasonable number of other corporations or the boards of a reasonable number of
trade associations and/or charitable organizations (subject to the reasonable
approval of the Holding Corp. Board), (ii) engaging in charitable activities and
community affairs, and (iii) managing his personal investments and affairs,
provided that such activities do not materially interfere with the proper
performance of his duties and responsibilities as a senior executive officer of
Holding Corp. and the Company.

            4. Base Salary. During the Term of Employment, the Executive shall
be paid an annualized Base Salary, payable in accordance with the regular
payroll practices of the Company, in the amount of $390,000. The Base Salary
shall be reviewed no less frequently than annually for increase in the
discretion of the Holding Corp. Board and/or the Committee. The Base Salary,
including any increase, shall not be decreased during the Term of Employment.

            5. Transition Payment. The Company shall pay $50,000 to the
Executive promptly following commencement of the Executive's employment with the
Company to compensate the Executive for expenses associated with his transition
to employment with the Company which are not otherwise covered by the Company's
executive benefit plans, programs and arrangements.

            6. Additional Payments. If any payment or benefit received or to be
received by the Executive (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company or any affiliate) (all
such payments and benefits, excluding the Gross-Up Payment (as hereinafter
defined), being hereinafter called "Total Payments") will be subject (in whole
or part) to any excise tax (the "Excise Tax") imposed under section 4999 of the
Internal Revenue Code of 1986, as amended, then the Company shall pay to the
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment, shall be equal to the Total Payments.

            7. Annual Incentive Awards. During the Term of Employment, the
Executive shall be eligible for an annual target bonus ("Target Bonus") of 60%
of his then-current Base Salary under the annual cash-based incentive program of
the Company (or its affiliate, if applicable) payable if the performance goals
thereunder for the relevant fiscal year are met. Payment of the annual bonus
shall be made at the same time that other senior executives receive their
incentive awards. The actual bonus, if any, earned

<PAGE>

by the Executive for fiscal year 2004 shall be subject to pro-ration by reason
of the Executive's not having been employed by the Company for the entire fiscal
year.

            8. Long-Term Incentive Programs. Starting with the performance
period that begins on February 1, 2005 and continuing throughout the remainder
of the Term of Employment, the Executive shall be eligible to participate in the
Kmart Long Term Incentive Plan ("LTIP"). While awards granted under the LTIP are
subject to the provisions of the LTIP and the discretion of the LTIP Committee
(and thus this sentence shall not be construed as creating any binding
obligation of Company), the Parties anticipate that such awards, will provide
for the payment (in common stock and/or cash at the Executive's election as
provided in the LTIP) of an amount equal to the average annual salary and target
bonuses paid to the Executive during a three-year performance period, payment at
or about the conclusion of the third fiscal year in the performance period
(commencing, therefore, with a payment at or about the conclusion of fiscal year
2007) if the Company meets or exceeds its cumulative EBITDA target for the
three-year period.

            9. Employee Benefit Programs. During the Term of Employment, the
Executive shall be eligible to participate in all employee pension and welfare
benefit plans and programs made available generally to the Company's senior
executives (other than those made available only to the CEO) or to its employees
generally (on terms consistent, respectively, with those offered to the
Company's other senior executives and/or its employees generally), as such plans
or programs may be in effect from time to time, including, without limitation,
pension, profit sharing, savings and other retirement plans or programs,
medical, dental, hospitalization, short-term and long-term disability and life
insurance plans, accidental death and dismemberment protection, travel accident
insurance, and any other pension or retirement plans or programs and any other
employee welfare benefit plans or programs that may be sponsored by the Company
from time to time, including any plans that supplement the above-listed types of
plans or programs, whether funded or unfunded.

            10. Reimbursement of Business and Other Expenses: Perquisites;
Vacations.

                  (a) The Executive is authorized to incur reasonable expenses
      in carrying out his duties and responsibilities under this Agreement and
      the Company shall promptly reimburse him for all reasonable business
      expenses incurred in connection with carrying out the business of the
      Company and its affiliates, subject to documentation in accordance with
      the Company's policy.

                  (b) During the Term of Employment, the Company shall reimburse
      the Executive for reasonable personal financial (including tax) counseling
      (other than legal fees) by a firm or consultant to be chosen by the
      Executive, such reimbursement to be no more than the amount authorized
      under Company policy in effect from time to time.

<PAGE>

                  (c) During the Term of Employment, the Executive shall be
      entitled to four weeks' paid vacation per year.

                  (d) Relocation Expenses.

                        (i) From the Effective Date until August 31, 2004, the
      Company shall provide to, or reimburse (following receipt of appropriate
      documentation), the Executive for temporary housing in the Troy, Michigan
      area; and coach airfare for the Executive for weekend travel home or for
      the reasonable travel of his spouse and two children.

                        (ii) The Executive shall be afforded a relocation
      package consisting of the following: (A) reimbursement of reasonable
      moving expenses, including an amount equal to $7,500 for the purpose of
      covering incidental moving expenses; (B) reimbursement of reasonable
      travel expenses incurred by the Executive's spouse for the purpose of
      searching for a permanent residence in the area of Company headquarters;
      (C) Company assistance with the sale of the Executive's current residence
      in accordance with the Company's executive relocation program; and (D)
      benefits offered under the Company's Tier 4 Domestic Relocation Program.

            11. Termination of Employment.

                  (a) Termination Due to Death. In the event the Executive's
employment is terminated due to his death, his estate or his beneficiaries as
the case may be, shall be entitled to the following:

                        (i) Base Salary through the date of death;

                        (ii) an amount equal to a prorated annual incentive
      award for the year in which death occurs, based on the actual performance
      for such year, the amount of which prorated bonus, if any, shall be
      determined and paid promptly following the end of the year to which such
      bonus relates;

                        (iii) the balance of any annual or long-term cash
      incentive awards (if any) earned (but not yet paid) pursuant to the terms
      of the applicable programs (Executive shall be vested pro-rata on any
      outstanding long-term cash incentive award if the Company was ahead of
      plan at date of termination);

                        (iv) any amounts earned, accrued or owing to the
      Executive but not yet paid under this Agreement; and

                        (v) other or additional benefits in accordance with
      applicable plans and programs of the Company or its affiliates.

<PAGE>

                  (b) Termination Due to Disability. In the event the
Executive's employment is terminated due to his Disability, he shall be entitled
in such case to the following:

                        (i) Base Salary through the date of termination;

                        (ii) through the Company's long-term disability plans or
      otherwise, an amount equal to 60% of the Base Salary for the period
      beginning on the date of termination through the Executive's attainment of
      age 65;

                        (iii) an amount equal to a prorated annual incentive
      award for the year in which termination due to Disability occurs, based on
      the actual performance for such year, the amount of which prorated bonus,
      if any, shall be determined and paid promptly following the end of the
      year to which such bonus relates;

                        (iv) the balance of any annual or long-term cash
      incentive awards (if any) earned (but not yet paid) pursuant to the terms
      of the applicable programs (Executive shall be vested pro-rata on any
      outstanding long-term cash incentive award if the Company was ahead of
      plan at date of termination);

                        (v) any amounts earned, accrued or owing to the
      Executive but not yet paid under this Agreement; and

                        (vi) other or additional benefits in accordance with
      applicable plans and programs of the Company or its affiliates.

            In no event shall a termination of the Executive's employment for
Disability occur unless the Party terminating his employment gives written
notice to the other Party in accordance with Section 18 below.

                  (c) Termination by the Company for Cause. In the event the
Company terminates the Executive's employment for Cause, he shall be entitled
to:

                        (i) Base Salary through the date of the termination of
      his employment;

                        (ii) the balance of any annual or long-term cash
      incentive awards (if any) earned (but not yet paid) pursuant to the terms
      of the applicable programs;

                        (iii) an amount equal to a prorated annual incentive
      award for the year in which such termination occurs, based on the actual
      performance for such year, the amount of which prorated bonus, if any,
      shall be determined and paid promptly following the end of the year to
      which such bonus relates;

<PAGE>

                        (iv) any amounts earned, accrued or owing to the
      Executive but not yet paid under this Agreement; and

                        (v) other or additional benefits in accordance with
      applicable plans or programs of the Company or its affiliates;

                        (vi) a termination for Cause shall not take effect
      unless the provisions of this paragraph (vi) are complied with. The
      Executive shall be given written notice by the Holding Corp. Board of the
      intention to terminate him for Cause, such notice (A) to state in detail
      the particular act or acts or failure or failures to act that constitute
      the grounds on which the proposed termination for Cause is based and (B)
      to be given within six months of the Holding Corp. Board learning of such
      act or acts or failure or failures to act. The Executive shall have 10
      days after the date that such written notice has been given to the
      Executive in which to cure such conduct, to the extent such cure is
      possible. If he fails to cure such conduct, the Executive shall then be
      entitled to a hearing before the Holding Corp. Board. Such hearing shall
      be held within 15 days of notice to the Company by the Executive, provided
      he requests such hearing within 10 days of the written notice from the
      Holding Corp. Board of the intention to terminate his employment for
      Cause. If, within five days following such hearing, the Executive is
      furnished written notice by the Holding Corp. Board confirming that the
      Holding Corp. Board has determined, by majority vote at a meeting of the
      Holding Corp. Board duly called and held as to which termination of the
      Executive is an agenda item, that grounds for Cause on the basis of the
      original notice exist, he shall thereupon be terminated for Cause.

                  (d) Termination Without Cause; Constructive Termination.

                        (i) A Constructive Termination shall not take effect
      unless the provisions of this paragraph 11(d)(i) are complied with. The
      Company shall be given written notice by the Executive of the intention to
      terminate his employment on account of a Constructive Termination, such
      notice (A) to state in detail the particular act or acts or failure or
      failures to act that constitute the grounds on which the proposed
      Constructive Termination is based and (B) to be given within six months of
      the Executive learning of such act or acts or failure or failures to act.
      The Company shall have 30 days after the date that such written notice has
      been given to the Company in which to cure such conduct, to the extent
      such cure is possible.

                        (ii) In the event the Executive's employment is
      terminated (1) by the Company without Cause (other than due to Disability
      or death), (2) by reason of a Constructive Termination or (3) upon
      expiration of the Term of Employment following the Company's

<PAGE>

      having given a notice of non-extension of the Term of Employment, the
      Executive shall be entitled to:

                              (A) Base Salary through the date of termination of
            the Executive's employment;

                              (B) Base Salary, at the monthly rate in effect on
            the date of termination of the Executive's employment (or in the
            event a reduction in Base Salary is the basis for a Constructive
            Termination, then the Base Salary in effect immediately prior to
            such reduction), payable for the 12-month period following such
            termination (the "Severance Period"); provided, however, that the
            Company's obligations under this clause (B) shall be reduced on a
            dollar-for-dollar basis (but not below zero) to the extent that the
            Executive earns fees, salary or wages from a subsequent employer
            (including those arising from self-employment) during the Severance
            Period;

                              (C) an amount equal to a prorated annual incentive
            award for the year in which such termination occurs, based on the
            actual performance for such year, the amount of which prorated
            bonus, if any, shall be determined and paid promptly following the
            end of the year to which such bonus relates;

                              (D) the balance of any annual or long-term cash
            incentive awards earned but not yet paid pursuant to the terms of
            the applicable programs (Executive shall be vested pro-rata on any
            outstanding long-term cash incentive award if the Company was ahead
            of plan at date of termination);

                              (E) any amounts earned, accrued or owing to the
            Executive but not yet paid under this Agreement;

                              (F) continued participation during the Severance
            Period in medical, dental, hospitalization and life insurance
            coverage and in all other employee welfare plans and programs (other
            than disability plans and programs) in which he was participating on
            the date of termination; provided, that the Company's obligations
            under this clause (F) shall be reduced to the extent that the
            Executive receives similar coverage and benefits under the plans and
            programs of a subsequent employer; and provided, further, that (x)
            if the Company determines that

<PAGE>

            the Executive is precluded from continuing his participation in any
            employee benefit plan or program as provided in this clause on
            account of his employment status or for any other reason, he shall
            be provided with the after-tax economic equivalent of the benefits
            provided under the plan or program in which he is unable to
            participate for the period specified in this clause (F) of this
            Section 11(d); (y) the economic equivalent of any benefit foregone
            shall be deemed to be the lowest cost that would be incurred by the
            Executive in obtaining such benefit himself on an individual basis
            through payment of COBRA continuation coverage premiums or by other
            means, and (z) payment of such after-tax economic equivalent shall
            be made quarterly in advance; and

                              (G) other or additional benefits in accordance
            with applicable plans and programs of the Company or its affiliates.

      The Executive agrees to notify the Company immediately upon subsequent
      employment (including self-employment) so that the Company may determine
      and administer the offsets provided under subparagraphs (B) and (F) of
      this Section 11(d)(ii).

                  (e) Voluntary Termination. In the event of a termination of
employment by the Executive on his own initiative, other than a termination due
to death or Disability or a Constructive Termination, the Executive shall have
the same entitlements as provided in Section 11(c) above for a termination for
Cause. A voluntary termination under this Section 11(e) shall be effective upon
30 days' prior written notice to the Company and shall not be deemed a breach of
this Agreement.

                  (f) Mitigation; No Offset. In the event of any termination of
employment under this Section 11, the Executive shall be obligated to seek other
employment which is suitable for Executive based on his education and work
experience. There shall be no offset against amounts due the Executive under
this Agreement on account of any remuneration attributable to any subsequent
employment that he may obtain except as specifically provided in this Section
11.

                  (g) Nature of Payments. Any amounts due under this Section 11
are in the nature of severance payments considered to be reasonable by the
Company. Failure to qualify for any such payment is not in the nature of a
penalty.

                  (h) Exclusivity of Severance Payments. Upon termination of the
Executive's employment during the Term of Employment, he shall not be entitled
to any payments or benefits from the Company or its affiliates, other than as
provided herein, or any payments by the Company or its affiliates on account of
any claim by him of wrongful termination, including claims under any federal,
state or local human and civil

<PAGE>

rights or labor laws, other than the payments and benefits provided hereunder,
except for any benefits which may be due under any employee benefit plan of the
Company or its affiliates which provides benefits after termination of
employment (as set forth above and incorporated herein).

                  (i) Non-competition. The Executive agrees that any right to
receive any payments and/or benefits hereunder, other than Base Salary and/or
any pension, and/or any other compensation already earned by the Executive and
required to be paid by state law other than under this Agreement, will cease and
be immediately forfeited if the Executive breaches the provisions of Section 12.
The Executive agrees that any violation of the provisions of Section 12 will
result in the immediate forfeiture of any rights to exercise or receive stock
options or restricted stock. The foregoing is in addition to the rights of the
Company under Section 12.

                  (j) Release of Claims. As a condition of the Executive's
entitlement to the payment and/or delivery of any of the severance rights and
benefits provided in this Section 11 (other than in the event of the Executive's
death), the Executive shall be required to execute and honor a release of claims
in the form reasonably requested by the Company.

                  (k) Termination at Will. Notwithstanding anything herein to
the contrary, the Executive's employment with the Company is terminable at will
with or without Cause; provided, however, that a termination of the Executive's
employment shall be governed in accordance with the terms hereof.

            12. Restrictive Covenants.

                  (a) Non-Compete. By and in consideration of the substantial
compensation and benefits provided by the Company hereunder, and further in
consideration of the Executive's exposure to the proprietary information of the
Company and its affiliates, the Executive agrees that he shall not, during the
Term of Employment and for a period ending 12 months following termination of
employment for any reason, directly or indirectly own, manage, operate, join,
control, be employed by, or participate in the ownership, management, operation
or control of or be connected in any manner, including, but not limited to,
holding the positions of officer, director, shareholder, consultant, independent
contractor, employee, partner, or investor, with any Competing Enterprise;
provided, however, that the Executive may invest in stocks, bonds or other
securities of any corporation or other entity (but without participating in the
business thereof) if such stocks, bonds, or other securities are listed for
trading on a national securities exchange or NASDAQ-National Market and the
Executive's investment does not exceed 1% of the issued and outstanding shares
of capital stock, or in the case of bonds or other securities, 1% of the
aggregate principal amount thereof issued and outstanding. For purposes of this
Section 12, "Competing Enterprise" shall mean any and/or all of the following:
(i) Albertson's Inc., American Retail Group, Inc., Carrefour se, Fleming
Companies, Inc., Kohl's Corporation, The May Department Store Company, J.C.
Penny Company, Royal Ahold, Safeway, Inc., Sears, Roebuck and Co., ShopKo
Stores, Inc., Supervalue Inc., Target Corp., The Home Depot, Inc., Toys R Us
Inc., TJX

<PAGE>

Companies, Inc., and Wal-Mart Stores, Inc., and any of their parents and/or
subsidiaries that are engaged in retail operations, and/or (ii) an entity or
enterprise whose business is in competition with the business of the Company
which operates retail stores selling general merchandise and/or food if at least
10 of such stores have an area of 50,000 or more square feet and at least 10 of
such stores with 50,000 or more square feet are within 25 miles of any one or
more Kmart stores.

                  (b) Nonsolicitation. By and in consideration of the
substantial compensation and benefits to be provided by the Company and its
affiliates hereunder, and further in consideration of the Executive's exposure
to the proprietary information of the Company and its affiliates, the Executive
agrees that he shall not, during the Term of Employment and for a period of 12
months following termination of employment for any reason, without the express
prior written approval of the Company, (i) directly or indirectly, in one or a
series of transactions, recruit, solicit or otherwise induce or influence any
proprietor, partner, stockholder, lender, director, officer, employee, sales
agent, joint venturer, investor, lessor, supplier, agent, representative or any
other person which has a business relationship with the Company or any of its
subsidiaries or affiliates, or had a business relationship with the Company or
any of its subsidiaries or affiliates within the 24-month period preceding the
date of the incident in question, to discontinue, reduce or modify such
employment, agency or business relationship with the Company or such
subsidiary(ies) or affiliate(s), or (ii) directly or indirectly, employ or seek
to employ (including through any employer of the Executive) or cause any
Competing Enterprise to employ or seek to employ any person or agent who is then
(or was at any time within six months prior to the date the Executive or the
Competing Enterprise employs or seeks to employ such person) employed or
retained by the Company or any of its subsidiaries or affiliates.

                  (c) Confidential Information. During the Term of Employment
and at all times thereafter, Executive agrees that he will not divulge to anyone
or make use of any Confidential Information except in the performance of his
duties as an senior executive of Holding Corp. or the Company or when legally
required to do so (in which case the Executive shall give prompt written notice
to the Company in order to allow the Company the opportunity to object or
otherwise resist such disclosure). "Confidential Information" shall mean any
knowledge or information of any type relating to the business of the Company or
any of its subsidiaries or affiliates, as well as any information obtained from
customers, clients or other third parties, including, without limitation, all
types of trade secrets and confidential commercial information. The Executive
agrees that he will return to the Company, immediately upon termination, any and
all documents, records or reports (including electronic information) that
contain any Confidential Information. Confidential Information shall not include
information (i) that is or becomes part of the public domain, other than through
the breach of this Agreement by the Executive or (ii) regarding the business or
industry of the Company or any of its subsidiaries or affiliates properly
acquired by the Executive in the course of his career as a senior executive in
the Company's industry and independent of the Executive's employment by the
Company. The Executive acknowledges that the Company and its affiliates have
expended, and will continue to expend, significant amounts of time, effort and
money in the procurement of its Confidential Information, that the Company and
its

<PAGE>

affiliates have taken all reasonable steps in protecting the secrecy of the
Confidential Information, that said Confidential Information is of critical
importance to the Company and its affiliates.

                  (d) Non-Disparagement. The Parties agree that, during the Term
of Employment and thereafter (including following the Executive's termination of
employment for any reason): (i) the Executive will not make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly,
disparage the Company or any subsidiary or affiliate or their respective
officers, directors, employees, advisors, businesses or reputations; and (ii)
the officers of the Company will not make any statements or representations or
otherwise communicate, directly or indirectly, in writing, orally, or otherwise,
or take any action which may, directly or indirectly, disparage the Executive.
Notwithstanding the foregoing, nothing in this Agreement shall preclude (A)
either the Executive or the Company from making truthful statements or
disclosures that are required by applicable law, regulation or legal process, or
(B) the Executive from making truthful statements or disclosures to any
director, employee, consultant, professional advisor or other third party
representative of the Company, in each case having a need to know, which
disclosures are reasonably necessary for the Executive to perform his duties as
the chief human resources officer for the Company.

                  (e) Cooperation. The Executive agrees to cooperate with the
Company, during the Term of Employment and thereafter (including following the
Executive's termination of employment for any reason), by being reasonably
available to testify on behalf of the Company or any subsidiary or affiliate in
any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Company, or any subsidiary or affiliate, in any
such action, suit or proceeding, by providing information and meeting and
consulting with the Holding Corp. Board or the Board or their representatives or
counsel, or representatives or counsel to the Company, or any subsidiary or
affiliate, as reasonably requested. The Company agrees to reimburse the
Executive for all expenses actually incurred in connection with his provision of
testimony or assistance (including attorneys' fees incurred in connection
therewith) upon submission of appropriate documentation to the Company.

                  (f) Remedies. The Executive agrees that any breach of the
terms of this Section 12 would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the
Executive therefore also agrees that in the event of said breach or any threat
of said breach, the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Executive and/or any and all persons and/or entities
acting for and/or with the Executive. The terms of this paragraph shall not
prevent the Company from pursuing any other available remedies for any breach or
threatened breach hereof, including, but not limited to, remedies available
under this Agreement and the recovery of damages. The Executive and the Company
further agree that the provisions of the covenant not to compete are reasonable.
Should a court or arbitrator determine, however, that any provision of the
covenant not to compete is unreasonable, either in period of time, geographical
area, or otherwise, the parties hereto

<PAGE>

agree that the covenant shall be interpreted and enforced to the maximum extent
which such court or arbitrator deems reasonable.

                  (g) Continuing Operation. The provisions of this Section 12
shall survive any termination of this Agreement and the Term of Employment, and
the existence of any claim or cause of action by the Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and agreements of
this Section 12.

                  (h) Notice to Employer. The Executive agrees that as long as
the provisions of Section 12(a) or 12(b) continue to bind the Executive, he will
provide written notice of the terms and provisions of this Section 12 to any
prospective employer.

            13. Indemnification.

                  (a) The Company agrees that if the Executive is made a party,
or is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director or employee of the Company or any of its
affiliates or is or was serving at the request of the Company as a director,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Executive's alleged action in
an official capacity while serving as a director, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Board or, if greater, by the laws
of the State of Michigan against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a
director, employee or agent of the Company or other entity and shall inure to
the benefit of the Executive's heirs, executors and administrators. The Company
shall advance to the Executive all reasonable costs and expenses incurred by him
in connection with a Proceeding within 20 days after receipt by the Company of a
written request for such advance. Such request shall include an undertaking by
the Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.

                  (b) Neither the failure of the Company (including the Board or
the Holding Corp. Board or their respective independent legal counsel or
stockholders) to have made a determination prior to the commencement of any
Proceeding concerning payment of amounts claimed by the Executive under Section
13(a) above that indemnification of the Executive is proper because he has met
the applicable standard of conduct, nor a determination by the Company
(including the Board or the Holding Corp. Board or their respective independent
legal counsel or stockholders) that the Executive has not met such applicable
standard of conduct, shall create a presumption that the Executive has not met
the applicable standard of conduct.

<PAGE>

            The Company agrees to continue and/or maintain a directors and
officers' liability insurance policy covering the Executive to the same extent
the Company provides such coverage for its other senior executive officers and
directors and for not less than the amounts in effect for its other senior
executive officers and directors.

            14. Assignability; Binding Nature. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
heirs (in the case of the Executive) and assigns. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale or reorganization transaction as described
in the preceding sentence, it shall take whatever action it legally can in order
to cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law, except as otherwise provided herein.

            15. Miscellaneous Provisions.

                  (a) This Agreement contains the final and entire understanding
and agreement between the Parties concerning the subject matter hereof and
supersedes all prior representations, agreements, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto;
provided, however, that this Agreement shall not supersede any separate written
commitments by the Company with respect to indemnification.

                  (b) No provision in this Agreement may be amended unless such
amendment is authorized by the Holding Corp. Board or the Committee and agreed
to in writing and signed by the Executive and an authorized officer of the
Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company, as the case may
be.

                  (c) In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.

<PAGE>

                  (d) The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.

                  (e) The Executive shall be entitled, to the extent permitted
under any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.

                  (f) All amounts required to be paid by the Company shall be
subject to reduction in order to comply with applicable Federal, state and local
tax withholding requirements, except as otherwise provided herein.

                  (g) The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.

                  (h) This Agreement may be executed in two or more
counterparts.

                  (i) Notwithstanding any provision of this Agreement to the
contrary, any action to be taken by the Board shall require the concurrence of
the Holding Corp. Board.

            16. Governing Law/Jurisdiction. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of Michigan without
reference to principles of conflict of laws. Subject to Section 17, the Company
and the Executive hereby consent to the jurisdiction of any or all of the
following courts for purposes of resolving any dispute under this Agreement: (i)
the United States District Court of Detroit, Michigan or (ii) the State of
Michigan Courts of Oakland County, Michigan. The Company and the Executive
further agree that any service of process or notice requirements in any such
proceeding shall be satisfied if the rules of such court relating thereto have
been substantially satisfied. The Company and the Executive hereby waive, to the
fullest extent permitted by applicable law, any objection which it or the
Executive may now or hereafter have to such jurisdiction and any defense of
inconvenient forum.

            17. Resolution of Disputes. Any disputes arising under or in
connection with this Agreement shall be resolved by binding arbitration, to be
held in the metropolitan area of Company headquarters in accordance with the
rules and procedures of the American Arbitration Association. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. All costs and expenses of any arbitration or court
proceeding (including fees and disbursements of counsel) shall be borne by the
respective Party incurring such costs and expenses, but the Company shall
reimburse the Executive for such reasonable costs and expenses in the event he
substantially prevails in such arbitration or court proceeding. Notwithstanding
the foregoing, the Company shall be entitled to seek equitable relief pursuant
to Section

<PAGE>

12(f) hereof in a Court of competent jurisdiction without otherwise waiving the
right to exclusive arbitration of all other disputes.

            18. Notices. Any notice given to a Party shall be in writing and
shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice of:

            If to the Company:    Kmart Management Corporation
                                  3100 West Big Beaver Road
                                  Troy, MI  48084-3163
                                  Attention:  Chief Executive Officer

            With a copy to:       James E. Defebaugh, Esquire
                                  Senior Vice President, Deputy General
                                  Counsel & Chief Compliance Officer
                                  Kmart Management Corporation
                                  3100 W. Big Beaver Road
                                  Troy, MI 48084

            If to the Executive:

            With a copy to:

            19. Approvals. Except with respect to the Company's obligations
under Section 10(d), the effectiveness of this Agreement shall be subject to the
approval of this Agreement by the Holding Corp. Board. The Company agrees to
seek such approval no later than the first meeting of the Board that takes place
following the Effective Date. Absent such approval by the Holding Corp. Board,
this Agreement shall not be effective except with respect to the Company's
obligations under Section 10(d).

            IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.

                                          KMART MANAGEMENT CORPORATION

                                          By: __________________________________
                                          Title:  Chief Executive Officer

                                          ______________________________________
                                                     David Whipple

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