10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended March 29, 2003.
	OR
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________.

Commission File Number: 000-31127

SPARTAN STORES, INC.
(Exact Name of Registrant as Specified in Its Charter)

Michigan (State or Other Jurisdiction) of Incorporation or Organization)	38-0593940 (I.R.S. Employer Identification No.)
850 76th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan (Address of Principal Executive Offices)	49518-8700 (Zip Code)

Registrant's telephone number, including area code: (616) 878-2000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X     No        

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act).

Yes        No   X     

The aggregate market value of the registrant's voting stock held by non-affiliates of the registrant based on the last sales price of such stock on The NASDAQ Stock Market on September 13, 2002 (which was the last trading day of the registrant's second quarter in the fiscal year ended March 29, 2003) was $55,394,462.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Common Stock, no par value, outstanding as of June 20, 2003: 19,943,257 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Part II, Item 5 and Part III, Items 10, 11,
12 and 13 Proxy Statement for Annual Meeting to be held August 6, 2003

Forward-Looking Statements

          The matters discussed in this Annual Report on Form 10-K include "forward-looking statements" about the plans, strategies, objectives, goals or expectations of Spartan Stores, Inc. (together with its subsidiaries, "Spartan Stores"). These forward-looking statements are identifiable by words or phrases indicating that Spartan Stores or its management "expects," "anticipates," "projects," "plans," "believes," "estimates," "intends" or is "optimistic" or "confident" that a particular occurrence "will," "may," "could," "should" or "will likely" result or that a particular event "will," "may," "could," "should" or "will likely" occur in the future, that the "trend" is toward a particular result or occurrence, or similarly stated expectations. Accounting estimates, such as those described under the heading "Critical Accounting Policies" in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. You should not place undue reliance on these forward-looking sta tements, which speak only as of the date of this Annual Report.

          In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Annual Report and our other periodic reports filed with the Securities and Exchange Commission, there are many important factors that could cause actual results to differ materially. Our ability to strengthen our retail'store performance; improve sales growth; increase gross margin; reduce operating costs; sell assets classified as held for sale on favorable terms; continue to meet the terms of our debt covenants; and implement the other programs, plans, strategies, objectives, goals or expectations described in this Annual Report will be affected by changes in economic conditions generally or in the markets and geographic areas that we serve, adverse effects of the changing food and distribution industries and other factors including, among others, those discussed below.

          Anticipated future sales are subject to competitive pressures from many sources. Our Retail and Grocery Distribution businesses compete with many warehouse discount stores, supermarkets, pharmacies and product manufacturers. Future sales will be dependent on the number of retail stores that we own and operate, competitive pressures in the retail industry generally and our geographic markets specifically, and our ability to implement effective new marketing and merchandising programs. Competitive pressures in these and other business segments may result in unexpected reductions in sales volumes, product prices or service fees.

          Our operating and administrative expenses may be adversely affected by unexpected costs associated with, among other factors: difficulties in the operation of our current business segments; future business acquisitions; adverse effects on existing business relationships with independent retail grocery store customers; difficulties in the retention or hiring of employees; labor shortages, stoppages or disputes; business and asset divestitures; increased transportation or fuel costs; current or future lawsuits and administrative proceedings; and losses of, or financial difficulties of, customers or suppliers. Our operating and administrative expenses could also be adversely affected by changes in our sales mix. Our ongoing cost reduction initiatives and changes in our marketing and merchandising programs may not be as successful as we anticipate. Acts of terrorism or war have in the past and may in the future result in considerable economic and political uncertainties that could have adverse effects on consumer buying behavior, fuel costs, shipping and transportation, product imports and other factors affecting our company and the grocery industry generally.

          Our future interest expense and income also may differ from current expectations, depending upon, among other factors: the amount of additional borrowings; changes in our borrowing arrangements and agreements; changes in the interest rate environment; and the amount of fees received on delinquent accounts. The availability of our senior secured credit facility depends on compliance with the terms of the credit facility.

          As discussed in this Form 10-K, we have recently completed sales of or contracted to sell material assets, including substantially all of the assets of L&L/Jiroch Distributing Company ("L&L/Jiroch") and J.F. Walker Company, Inc. ("J.F. Walker"), and we are in the process of selling or closing additional Food Town stores. We believe that these sales and closings will allow us to better focus our efforts and capital on key strategic markets where we have the strongest growth and value creation opportunities. However, we cannot assure you that these transactions will be beneficial to our company. The agreements relating to many of these transactions require us to indemnify these asset buyers for breaches of our representations and warranties contained in the agreements and certain other matters.

          This section is intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect our expected consolidated financial position, results of operations or liquidity. We undertake no obligation to update or revise our forward-looking statements to reflect developments that occur or information that we obtain after the date of this Annual Report.

PART I

Item 1. Business

Overview

          Spartan Stores is a leading regional grocery retailer and grocery distributor, operating principally in Michigan and Ohio. We operate two primary business segments: Retail and Grocery Distribution. We are the ninth largest distributor to grocery stores in the United States and have been the largest distributor to grocery stores in Michigan for more than 10 years. Our retail and distribution operations hold a combined #1 or #2 market share in many of the key Michigan markets we serve. For the fiscal year ended March 29, 2003 ("fiscal 2003"), we generated net sales from continuing operations of $2.1 billion, which excludes sales of $1.1 billion from discontinued operations.

          Established in 1917 as a cooperative, Spartan Stores converted to a for-profit business corporation in 1973. In over 85 years as a distributor, we have built a strong infrastructure and have developed extensive knowledge of the merchandising and marketing required for successful retail operations. In January 1999, we began to acquire retail grocery stores in our focused geographic regions. In August 2000, our common stock became listed on The NASDAQ Stock Market under the symbol "SPTN."

          We believe that the vertical integration of distribution and retail operations allows us to achieve improved distribution, transportation, merchandising and marketing expense leverage, and increased purchasing power. In addition, this integration allows us to enhance the services we provide to both our company-owned stores and our independent grocery distribution customers. The large number of independent retail grocers in our markets (many of which are our customers) may offer continued consolidation opportunities, although we are currently focused on our operational performance. We believe that our experience and expertise in grocery distribution and our new merchandising team for our retail operations provide us with the tools for successful operation of our integrated business.

          Since the beginning of our transformation from a wholesale distributor to an integrated distributor and retailer in January 1999, we have made significant enhancements to the infrastructure of our Grocery Distribution and Retail segments in order to better integrate these operations where efficiencies exist,

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while keeping each business unit focused on its customers. Furthermore, through recent additions, combined with long-term associates, we have assembled a management team with significant experience in grocery retailing and distribution. One such addition, was the appointment of Craig C. Sturken as our President and Chief Executive Officer effective March 3, 2003. Mr. Sturken has more than forty years of retail experience, including ten years as Chief Executive Officer of the Great Atlantic & Pacific Tea Company's Atlantic and Midwest regions. Prior to his tenure at A&P, Mr. Sturken held executive positions with The Grand Union Company and Hannaford Brothers' Company.

Discontinued Operations

          As a result of the transactions described below, certain of our retail operations, convenience distribution operations, grocery distribution operations, and real estate operations are recorded as discontinued operations in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." Accordingly, for all years presented, the Consolidated Statements of Operations, Consolidated Statements of Cash Flows and all related financial and non-financial disclosures in the notes to the consolidated financial statements and this Annual Report on Form 10-K have been adjusted and the discontinued operations information is excluded, unless otherwise noted.

          Discontinued Retail Operations. In March 2003, we announced our decision to close 13 Food Town stores principally located in Toledo, Ohio and outlying areas and that we were, as part of our strategic evaluation process, considering options for our remaining 26 Food Town stores. We had closed six Food Town, two Family Fare Supermarkets, one Glen's Markets and four The Pharm stores earlier in fiscal 2003.

          Discontinued Convenience Operations. During the fourth quarter of 2003, we began to actively market two of our subsidiaries in our Convenience Distribution segment. On June 9, 2003 we completed the sale of substantially all the assets of L&L/Jiroch and J.F. Walker to The H.T. Hackney Co. for approximately $40.8 million in cash and the assumption of certain liabilities.

          Discontinued Grocery Distribution Operations. We consolidated our Toledo, Ohio distribution operations into our Michigan facilities during the fourth quarter of fiscal 2003. As a result of the decision to exit the Food Town stores, the operating results related to these facilities have been classified as discontinued operations in the consolidated financial statements because the operations and cash flows of these facilities have been substantially eliminated from ongoing operations.

          Discontinued Real Estate Operations. During 2003, we completed the sale of 11 properties within our Real Estate segment for net proceeds of approximately $52.2 million in cash.

          Discontinued Insurance Segment. Discontinued operations also include our discontinued Insurance segment, which continues to be accounted for under Accounting Principles Board ("APB") Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions."

Retail Segment

          Our Retail segment operates 55 retail grocery stores and 21 deep discount drug stores predominantly in small metropolitan and rural areas of Michigan and Ohio. Our retail grocery stores are operated under the banners Family Fare Supermarkets, Glen's Markets, Great Day Food Centers,

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Prevo's Family Market, Ashcraft's Markets and Madison Family Market, and maintain a #1 or #2 market share in many of their Michigan markets. Our deep discount drug stores are operated under the banner The Pharm.

          We believe that our strong market share positions result from our distinct "neighborhood market" focus and the favorable name recognition from many of our banner names. Our neighborhood market strategy distinguishes our stores from supercenters and limited assortment stores by emphasizing convenient locations, demographically targeted merchandise selections, strong perishables offerings, customer service, value pricing and community involvement.

          Our 55 retail grocery stores typically offer dry groceries, produce, dairy products, meat, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, delicatessen items and bakery goods. Twenty-two of our grocery stores also offer pharmacy facilities. In addition to nationally advertised products, the stores carry our private label items, the "Spartan" brand, and the "HomeHarvest" and "Pharm" brands, which are our value brand labels. These private label items provide above-average retail margins and we believe they help generate increased customer loyalty. See "Merchandising and Marketing-Private Label Brands." Our retail grocery stores range in size from approximately 20,000 to 64,000 square feet and average approximately 38,000 square feet per store.

          Our 21 deep discount drug stores, which operate under the banner The Pharm, offer a unique combination of a full'service pharmacy, general merchandise products and basic food offerings. These stores operate under a deep discount format that emphasizes everyday low prices that are typically less than those of a traditional supermarket or drug store. The Pharm stores range in size from approximately 16,000 to 43,000 square feet and average approximately 29,000 square feet per store.

          We have acquired our stores as a result of several acquisitions since 1999:

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Name	Location	Acquisition Date	Number of Stores Acquired	Current Number of Stores
Ashcraft's Markets	Central Michigan	January 1999	8	6
Family Fare Supermarkets	Western Michigan	March 1999	13	13
Glen's Markets	Northern Michigan	May 1999	23	23
Great Day Food Centers	Western Michigan	December 1999	3	3
Food Town/The Pharm	Ohio and southeastern Michigan	August 2000	73	21
Prevo's Family Markets	Northern and western Michigan	March 2001	10	9
Madison Family Market	Western Michigan	October 2002	1	1
			131	76

          Since the acquisitions, we have closed 31 stores as a result of our continual evaluation of store performance against chain-wide profitability benchmarks. We also relocated one store in Harrison, Michigan and changed that store's retail banner from Ashcraft's Markets to Glen's Markets and changed a Cadillac, Michigan store's retail banner from Prevo's Family Markets to Glen's Markets to benefit from the strong name recognition of Glen's Markets in the region. In fiscal 2003, we opened two new stores under the Family Fare Supermarkets banner and assumed operations of a former Grocery Distribution customer, Madison Family Market.

          The following chart details the changes in the number of our retail stores from fiscal 1999 through fiscal 2003:

Fiscal Year	Number of Stores at Beginning of Fiscal Year	Stores Acquired or Added During Fiscal Year	Stores Closed During Fiscal Year	Food Town Stores Designated For Sale or Closure	Number of Stores at End of Fiscal Year
1999	0	8	-	-	8
2000	8	39	-	-	47
2001	47	83	3	-	127
2002	127	-	-	-	127
2003	127	3	28	26	76

          As noted above, in March 2003 we announced that we were considering options for our remaining 26 Food Town stores. As of June 20, 2003, we have entered into asset sale agreements and letters of intent for 20 of these 26 Food Town stores. See "Discontinued Operations" above.

          Capital expenditures, including remodeling, are expected to approximate $10.0 to $15.0 million per year, inclusive of "maintenance" capital. We will evaluate proposed retail projects based on demographics and competition within each market, and prioritize projects based on their expected returns on investment. We require projects to meet a targeted internal rate of return to be approved; however, we may undertake projects that do not meet this standard to the extent they represent required maintenance or necessary infrastructure improvements. We believe that focusing on such measures provides us with an appropriate level of discipline in our capital expenditures process.

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Grocery Distribution Segment

          Spartan Stores is the ninth largest distributor to grocery stores in the United States and the largest distributor to grocery stores in Michigan. We have been the largest distributor to grocery stores in Michigan for more than 10 years. Our Grocery Distribution segment provides approximately 400 stores with a selection of approximately 40,000 products, including dry groceries, produce, dairy products, meat, frozen food, seafood, floral products, general merchandise, pharmacy, and health and beauty care items. In addition, we offer our grocery distribution customers approximately 1,800 private label grocery and general merchandise items. We also operate 12 cash and carry outlets in Michigan and Ohio that serve approximately 2,800 additional stores. Total distribution revenues from continuing operations of our Grocery Distribution segment, including shipments to our company-owned stores, were $1.7 billion for fiscal 2003.

          Customers. Our Grocery Distribution segment supplies our company-owned stores and a diverse group of independent grocery store operators that range from single stores to supermarket chains with as many as 20 stores. We offer our customers payment terms on a net six-day basis from the weekly billing statement date. Pricing is generally based upon a "cost plus" model for grocery, frozen, dairy, pharmacy and health and beauty care items and a "variable mark-up" model for meat, deli, bakery, produce, seafood, floral products and general merchandise.

          Our Grocery Distribution customer base is very diverse, with no single customer exceeding 7% of consolidated net sales. Our five largest Grocery Distribution customers (excluding company-owned stores) accounted for approximately 17.5% of our fiscal 2003 consolidated net sales.

          Distribution Functions. Our Grocery Distribution business utilizes approximately 2.2 million square feet of warehouse, distribution and office space. We supply our company-owned stores and our independent grocery distribution customers from our distribution centers located in Grand Rapids and Plymouth, Michigan and our convenience store customers from 12 cash and carry locations in Michigan and Ohio. We believe that our distribution facilities are strategically located to serve our customers. During fiscal 2003, we implemented a network rationalization initiative, which involved shifting stock-keeping units (SKUs) within our distribution centers to create dedicated slow and fast-moving sections as well as the consolidation of both of our Ohio distribution centers. We believe that this realignment will reduce our labor and inventory carrying costs.

          To supply our Grocery Distribution customers, we operate a fleet of approximately 100 tractors, 200 conventional trailers and 170 refrigerated trailers, substantially all of which are leased. We are currently undertaking several initiatives intended to minimize our vehicles' outbound miles and increase inbound freight revenue based on our new logistics programs.

          In October 2001, we signed a five-year labor contract with our Grand Rapids grocery distribution center associates. The contract provides for improved work-rule flexibility that has improved overall distribution center productivity and created a more efficient distribution operation. In addition, these union associates share in rising healthcare and welfare benefit costs. Subsequent to the labor negotiations, we adopted a gain'share compensation program at our Grand Rapids grocery distribution center that provides for incentive-based compensation and has resulted in improved productivity and reduced direct labor costs. During fiscal 2003, through-put (defined as cases shipped per hour) increased in comparison to fiscal 2002 by 4.0% in our grocery warehouse and by 13.1% in our perishables warehouse.

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          Additional Services. We also provide our independent grocery distribution customers with many value-added services, including:

•	Site identification and market analyses	•	Coupon redemption
•	Store planning and development	•	Product reclamation
•	Marketing, promotion and advertising	•	Printing
•	Technology and information services	•	Merchandising
•	Accounting and tax preparation	•	Real estate services
•	Human resource services

          We have agreements with certain Grocery Distribution customers whereby they agree to purchase a minimum percentage of their total purchases from us for the term of the agreement. At March 29, 2003, we had such agreements with 22 customers covering 71 retail grocery stores with terms ranging from one to 13 years. The minimum purchase requirements under these agreements varied from approximately 50% to 55% of the total retail sales of the grocery stores covered by the agreements. For fiscal 2003, these stores had total retail sales of approximately $744 million and total distribution purchases from us of approximately $369 million. When combined with sales to our own stores, these sales approximate 50% of our total Grocery Distribution sales volume.

Operating Segment Financial Data

          More detailed information about our operating segments may be found in Note 14 to the consolidated financial statements included in Item 8 below, which is herein incorporated by reference. All of our sales and virtually all of our assets are in the United States of America.

Marketing and Merchandising

          General. In fiscal 2003, we implemented changes to our organizational structure that are intended to better support our system-wide efforts to improve sales growth and profitability. These changes are also intended to improve the effectiveness of our retail and wholesale marketing and merchandising functions, and to advance our organization's customer orientation.

          In March 2003, we hired an experienced Executive Vice President of Marketing and Merchandising, charged with the expectation to improve the top line sales and gross margin performance of both our Retail and Grocery Distribution segments. This change is expected to improve our category management function by better coordinating our retail and distribution marketing and merchandising efforts. The heads of Marketing and Merchandising for both our Retail and Grocery Distribution segments now report to the Executive Vice President of Marketing and Merchandising. In addition, in May 2003, a new Vice President of Retail Merchandising and Director of Pharm Merchandising were hired.

          We believe these changes are fundamental to restoring retail operations to profitability, improving our competitive market position, driving better incremental sales growth and capturing more of the natural synergies that exist between our retail stores, customer stores and distribution operations.

          Private Label Brands. We currently market and distribute approximately 1,800 highly recognized private label brand items under three exclusive store brands: the "Spartan" brand, and two value brands, "HomeHarvest" and "Pharm."

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          We believe that the Spartan brand product line, first introduced in 1954, is one of the most widely accepted and recognized private label brands in Michigan. Michigan consumers have come to expect high quality products from Spartan Stores at below national brand pricing. Our value brands, HomeHarvest and Pharm, are effective in combating limited assortment store competitors. These brands appeal to consumers who are looking for a consistent quality brand at a low price.

Competition

          Our Retail and Grocery Distribution segments compete with, among others, other grocery distributors, independently owned retail grocery stores, large chain stores that have integrated wholesale and retail operations, mass merchandisers, limited assortment stores and wholesale membership clubs, some of whom have greater resources than we do. The principal competitive factors in the retail grocery business include the location and image of the store; the price, quality and variety of the products; and the quality and consistency of service.

          We believe we have developed and implemented strategies and processes to meet competition in our Retail segment. We monitor planned store openings by our competitors and have established strategies for proactively responding to new competition. Our goal is to have a comprehensive plan to address new competition in place six months prior to a competitor's opening. Strategies to combat competition vary based on many factors, such as the competitor's format, strengths, weaknesses, pricing and sales focus.

          Our Retail and Grocery Distribution segments operate in highly competitive markets, which typically result in lower profit margins. Our Grocery Distribution segment competes with a number of national and regional distributors, some of whom have greater resources than we do. The primary competitive factors in the Grocery Distribution segment include price, product quality, variety and service.

Suppliers

          We purchase products from a large number of national, regional and local suppliers of name brand and private label merchandise. We have not encountered any material difficulty in procuring or maintaining an adequate level of products to serve our customers. No single supplier accounts for more than 8% of our purchases. We have enjoyed long'standing relationships with these business partners, based on trust, respect and integrity.

Intellectual Property

          We own valuable intellectual property, including trademarks and other proprietary information, some of which, including "Spartan," "Family Fare," "The Pharm," "HomeHarvest" and other related marks, are of material importance to our business.

Technology

          We invest in technology as a means of improving service to our customers and maximizing the efficiency of our operations. During the last two years, we have consolidated and standardized many of our systems across our businesses as we have consolidated the organization. Our focus during the last year has been to provide incremental functionality in our existing systems and to maximize the utilization of our current systems and information.

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          Retail Systems. We completed the consolidation of multiple price management systems to a single system for all company-owned stores, we added enhanced functionality to our electronic payment system and we significantly enhanced our retail reporting system including specific functionality for shrink and margin management. Additionally, we completed the required changes in our pharmacies for compliance with the Health Insurance Portability and Accountability Act ("HIPAA").

          Supply Chain. We continued the upgrading of our warehouse management systems and began upgrading our onboard transportation management system.

          Financial Systems. We streamlined processes and enhanced controls for many aspects of our financial and retail systems.

          Human Resource Systems. We consolidated all associates to one benefits administration system and made other human resources reporting improvements. We completed the required changes in our Human Resource systems for compliance with HIPAA.

          Information Technology. During the last year we significantly improved our business continuity strategy and made many improvements in the security of our internal network and systems.

Subsidiaries

          Our Grocery Distribution segment consists primarily of our wholly owned subsidiaries, Spartan Stores Distribution, LLC and United Wholesale Grocery Company. We operate our Retail segment primarily through two wholly owned subsidiaries, Family Fare, LLC and Seaway Food Town, Inc. and their respective subsidiaries. L&L/Jiroch and J.F. Walker comprised our discontinued Convenience Distribution segment. Substantially all assets of L&L/Jiroch and J.F. Walker were sold in the first quarter of fiscal 2004. See "Discontinued Operations," above.

Associates

          We currently employ approximately 7,400 associates, approximately 4,100 of which are full-time and approximately 3,300 of which are part-time. These numbers do not include those employees that work for a discontinued operation as described above in "Discontinued Operations."

          Unions represent approximately 22% of our associates, with contracts for 927 distribution center and transportation associates expiring between April 2005 and October 2006, contracts for 27 distribution associates at our 12 cash and carry outlets expiring by location from 2004 to 2007 and contracts for 645 retail associates expiring between June 2003 and March 2005.

          We consider our relations with our union and non-union associates to be satisfactory and have not had any material work stoppages in the last five years.

Regulation

          We are subject to federal, state and local laws and regulations covering the purchase, handling, sale and transportation of our products. Several of our products are subject to federal Food and Drug Administration regulation. We believe that we are in substantial compliance with all Food and Drug Administration and other federal, state and local laws and regulations governing our businesses.

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Forward-Looking Statements

          The matters discussed in this Item 1 include forward-looking statements. See "Forward-Looking Statements" at the beginning of this Annual Report on Form 10-K.

Item 2. Properties

          We own real estate totaling approximately 2.6 million square feet under roof, including one shopping center and eight freestanding retail locations. Approximately 67,000 square feet is leased to customers that we supply and to other retailers. We also own certain non-operating real estate assets. Management estimates that the market value of our real estate is approximately $72 million and exceeds its book value by approximately $20 million.

Retail Segment Real Estate

          The following table lists the retail banner, number of stores, geographic region, approximate total square footage under the banner, average store size (in square feet) and ownership of our retail grocery stores.

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Retail Banner	Number of Stores	Geographic Region	Total Square Feet	Average Store Size	Ownership
Ashcraft's Markets	6	Central Michigan	239,018	39,836	Leased
Family Fare Supermarkets	13	Western Michigan	550,846	42,373	Leased
Glen's Markets	23	Northern Michigan	834,834	36,297	Leased
Madison Family Market	1	Western Michigan	21,218	21,218	Leased
Great Day Food Centers	3	Western Michigan	167,464	55,821	Leased
Prevo's Family Markets	1	Northern Michigan	34,665	34,665	Owned
Prevo's Family Markets	8	Western and northern Michigan	258,021	32,253	Leased
Total	55		2,106,066	38,292

          In addition to the stores listed above, we own a 65% interest in a joint venture that operates a grocery store of approximately 45,700 square feet located in southeastern Michigan.

          The following table lists the retail banner, number of stores, geographic region, approximate total square footage under the banner, average store size (in square feet) and ownership of our deep discount drug stores.

Retail Banner	Number of Stores	Geographic Region	Total Square Feet	Average Store Size	Ownership
Pharm Stores	3	Northwestern and central Ohio and southeastern Michigan	78,010	26,003	Owned
Pharm Stores	18	Northwestern and central Ohio	525,177	29,177	Leased
Total	21		603,187	28,723

Grocery Distribution Segment Real Estate

          The following table lists the location, approximate size and ownership of the facilities used in our Grocery Distribution segment.

Facilities	Location		Square Feet	Ownership
Dry grocery		Grand Rapids, MI	585,492	Owned
Perishables (refrigerated)		Grand Rapids, MI	306,522	Owned
General merchandise		Grand Rapids, MI	232,700	Owned
General office (including print shop)		Grand Rapids, MI	127,323	Owned
Transportation and salvage		Grand Rapids, MI	78,760	Owned
Warehouse and office		Grand Rapids, MI	145,790	Leased
Dry grocery		Plymouth, MI	414,700	Leased
Reclamation center/support services		Charlotte, MI	80,000	Owned
Cash and carry distribution centers (11)		Michigan and Ohio	212,284	Owned
Cash and carry distribution center		Harrison, MI	8,200	Leased
Total			2,191,771

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Item 3. Legal Proceedings

          Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against Spartan Stores and its subsidiaries. While the ultimate effect of such lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the consolidated financial position, operating results or liquidity of Spartan Stores.

Item 4. Submission of Matters to a Vote of Security Holders

          No matters were submitted to a vote of Spartan Stores' shareholders during the fourth quarter of fiscal 2003 through the solicitation of proxies or otherwise.

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PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

          Spartan Stores common stock is traded on the National Market System of The NASDAQ Stock Market under the trading symbol "SPTN."

          Stock sale prices are based on transactions reported on The NASDAQ Stock Market. Information on quarterly high and low sales prices for Spartan Stores' common stock appears in Note 15 to the consolidated financial statements and is incorporated herein by reference. At June 20, 2003, there were approximately 870 shareholders of record of Spartan Stores common stock (excluding participants in security position listings).

          During fiscal 2002 and 2003, we did not pay any dividends. The payment of future dividends will be determined by our board of directors. We anticipate that we will use any net earnings from our operations to repay debt and to acquire additional retail operations, and that we will not pay any dividends for the foreseeable future, even if we are permitted to do so under our senior secured credit facility.

          Our senior secured credit facility contains restrictions that do not allow us to pay future dividends or make a variety of other restricted payments. See the "Liquidity and Capital Resources" section of Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 below for a more detailed discussion of these restrictions, as well as Note 8 to the consolidated financial statements.

          The information required by Item 201(d) of Securities and Exchange Commission Regulation S-K is incorporated herein by reference from the section entitled "Equity Compensation Plans" in Spartan Stores' definitive proxy statement relating to its annual meeting of shareholders to be held August 6, 2003.

Item 6. Selected Financial Data

          The following table provides selected historical consolidated financial information of Spartan Stores. The historical information was derived from our audited consolidated financial statements for and as of each of the five fiscal years ended March 27, 1999 through March 29, 2003. Fiscal 2001 was a 53-week year. Certain reclassifications have been made to the fiscal 1999 through fiscal 2002 selected financial data to conform to the fiscal 2003 presentation. As noted elsewhere in this Form 10-K, for all years presented, the Consolidated Statements of Operations, Consolidated Statements of Cash Flows and all related financial and nonfinancial disclosures in the notes to the consolidated financial statements have been adjusted and the discontinued operations information is excluded, unless otherwise noted. See Notes 3 and 5 for additional information on discontinued operations and acquisitions occurring in the periods presented below.

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(In thousands, except per share data)

								Year Ended
		March 29, 2003			March 30, 2002			March 31, 2001			March 25, 2000			March 27, 1999
Statements of Operations Data:
Net sales	$	2,148,067		$	2,270,019		$	2,360,912		$	2,238,597		$	1,958,152
Cost of goods sold		1,774,350			1,865,334			1,980,797			1,917,851			1,760,456
Gross margin		373,717			404,685			380,115			320,746			197,696
Selling, general and administrative   expenses		360,786			369,637			337,722			291,795			181,379
Provision for asset impairments and exit   costs (A)		47,711			1,030			1,098			(2,914	)		5,698
Operating (loss) earnings		(34,780	)		34,018			41,295			31,865			10,619
Interest expense, net		17,429			16,393			17,694			14,941			3,933
Other gains, net		(135	)		(1,351	)		(297	)		(3,315	)		(20	)
(Loss) earnings before income taxes,   discontinued operations, extraordinary   item, and cumulative effect of a change   in accounting principle		(52,074	)		18,976			23,898			20,239			6,706
Income taxes		(18,087	)		6,222			9,177			7,548			2,468
(Loss) earnings from continuing   operations		(33,987	)		12,754			14,721			12,691			4,238
(Loss) earnings from discontinued   operations, net of taxes (B)		(52,968	)		(2,907	)		8,721			4,503			11,592
Extraordinary item, net of taxes					-			-			-			(1,031	)
Cumulative effect of a change in   accounting principle, net of taxes (C)		(35,377	)		- -			- -			- -			- -
Net (loss) earnings	$	(122,332	)	$	9,847		$	23,442		$	17,194		$	14,799
Basic weighted average shares   outstanding (D)		19,896			19,549			17,333			13,432			14,508
(Loss) earnings from continuing operations   per share	$	(1.71	)	$	0.65		$	0.85		$	0.94		$	0.29
Basic (loss) earnings per share		(6.15	)		0.50			1.35			1.28			1.02
Cash dividends per share		-			-			0.0125			0.05			0.05
Balance Sheet Data:
Total assets	$	556,306		$	760,591		$	801,543		$	568,555		$	521,546
Property and equipment, net		120,072			266,423			285,988			178,591			158,348
Working capital		88,507			115,631			82,199			91,574			103,285
Long-term obligations		204,019			304,920			315,203			266,071			277,126
Shareholders' equity		109,632			231,492			218,413			126,007			121,062

                                                                               

(A)	See Note 4 to Consolidated Financial Statements
(B)	See Note 3 to Consolidated Financial Statements
(C)	See Note 2 to Consolidated Financial Statements
(D)	See Note 13 to Consolidated Financial Statements

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

          Spartan Stores is a leading regional grocery retailer and grocery distributor, operating principally in Michigan and Ohio. Spartan Stores was originally formed as a food distribution cooperative in 1917 but converted to a for-profit business corporation in 1973. We historically focused on the distribution of groceries and related merchandise to independently owned stores. However, since January 1999, we have completed several acquisitions of grocery store chains. We currently operate two business segments: Retail and Grocery Distribution.

          Our Retail segment operates 55 retail grocery stores in Michigan under the banners Family Fare Supermarkets, Glen's Markets, Great Day Food Centers, Prevo's Family Markets, Ashcraft's Markets and Madison Family Market and 21 deep discount drug stores in Ohio and Michigan under the banner The Pharm. Our retail grocery stores average approximately 38,000 square feet and have a "neighborhood market" focus to distinguish them from supercenters and limited assortment stores. Our deep discount drug stores average approximately 29,000 square feet and offer a unique combination of full'service pharmacy, general merchandise products and basic food offerings.

          Our Grocery Distribution segment provides approximately 40,000 products and 1,800 private label grocery and general merchandise items to approximately 400 stores, including 330 independently owned grocery stores and 76 company-owned stores. We provide many value-added services to our grocery distribution customers, including advertising, merchandising and other administrative services. We also operate 12 cash and carry outlets in Michigan and Ohio that serve approximately 2,800 convenience and smaller grocery stores.

          Our results of operations from period to period can be significantly impacted by fluctuations in the level of net sales between our business segments. Our Retail segment generally produces significantly higher gross margins as a percent of net sales than our Grocery Distribution segment. However, our Retail segment also generally incurs significantly higher selling, general and administrative ("SG&A") expenses as a percent of sales.

          The matters discussed in this Item 7 include forward-looking statements. See "Forward-Looking Statements" at the beginning of this Annual Report on Form 10-K.

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Results of Operations

          The following table sets forth items from our Consolidated Statements of Operations as a percentage of net sales:

	Year Ended
	March 29, 2003		March 30, 2002		March 31, 2001
Net sales	100.0	%	100.0	%	100.0	%
Gross margin	17.4		17.8		16.1
Less:
Selling, general and administrative expenses	16.8		16.3		14.3
Provision for asset impairments and exit costs	2.2		0.0		0.0
Interest expense	0.8		0.8		0.9
Interest income	(0.0	)	(0.1	)	(0.1	)
Other gains, net	(0.0	)	(0.0	)	(0.0	)
Subtotal	19.8		17.0		15.1
(Loss) earnings before income taxes,      discontinued operations and cumulative      effect of a change in accounting principle	(2.4	)	0.8		1.0
Income taxes	(0.8	)	0.3		0.4
(Loss) earnings from continuing operations	(1.6	)	0.5		0.6
(Loss) earnings from discontinued operations,      net of taxes	(2.5	)	(0.1	)	0.4
Cumulative effect of a change in accounting      principle	(1.6	)	- -		- -
Net (loss) earnings	(5.7	)%	0.4	%	1.0	%

          Results of Continuing Operations for the Fiscal Year Ended March 29, 2003 Compared to the Fiscal Year Ended March 30, 2002

          Net Sales. Net sales decreased $121.9 million, or 5.4%, from $2,270.0 million in fiscal 2002 to $2,148.1 million in fiscal 2003.

          We estimate that fiscal 2002 sales were higher than fiscal 2003 sales by approximately $7.5 million due to the early Easter holiday in fiscal 2002. Fiscal 2003 did not include an Easter holiday. Excluding the estimated effect of the early Easter holiday during fiscal 2002, net sales decreased 5.1%, from $2,224.8 million to $2,110.4 million.

          Net sales in our Retail segment decreased $51.5 million, or 5.5%, from $932.0 million to $880.5 million. Same'store sales decreases of 9.5% were driven by increased competitive conditions, a shift in the Easter holiday from the fourth quarter of fiscal 2002 to the first quarter of fiscal 2004, representing a 1.3% decline, and the weak economic environment in Michigan.

          On March 3, 2003, Craig C. Sturken was appointed our President and Chief Executive Officer. Mr. Sturken has more than forty years of retail experience including ten years as Chief Executive Officer of the Great Atlantic & Pacific Tea Company's Atlantic and Midwest regions. Additionally, we hired an Executive Vice President of Merchandising and Marketing and replaced our Vice President of Merchandising and Director of Pharm Merchandising for our retail operations. The new management brings strong leadership and experience in retail merchandising and marketing that we believe will

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improve our category management efforts and sales trends. Preliminary trends in the first quarter of fiscal 2004 have been very positive.

          Net sales in our Grocery Distribution segment, after intercompany eliminations, declined $70.4 million, or 5.3%, from $1,338.0 million to $1,267.6 million. The decrease resulted from the weak Michigan economy, the ineffectiveness of our previous promotional program canceled in October 2002, increased competitive conditions affecting our distribution customers and the loss of a customer in the second quarter of fiscal 2002 which generated sales of $25.7 million in fiscal 2002. The shift in the Easter holiday, noted above, also accounted for a 0.3% decline.

          The declining sales trend was much improved during the third and fourth quarters of fiscal 2003 as a result of the elimination of our previous promotional program and the implementation of new programs. To continue the improvement during the last two quarters of fiscal 2003, we reinstated a program of strong value on every product category and everyday low costs on certain categories that allows our customers to better compete in today's economic environment.

          Gross Margin. Gross margin decreased by $31.0 million, or 7.7%, from $404.7 million to $373.7 million. As a percent of net sales, gross margin decreased from 17.8% to 17.4%. The decrease was primarily the result of more aggressive promotional activities in our Retail segment to respond to the increasingly competitive market conditions and to protect market share. While we expect the difficult economic and competitive environment to continue, our new merchandising group is implementing programs that we believe will improve our gross margin percentage in fiscal 2004.

          Selling, General and Administrative Expenses. SG&A expenses decreased $8.8 million, or 2.4%, from $369.6 million to $360.8 million, and were 16.8% of net sales compared to 16.3% last year. SG&A expenses decreased primarily as a result of improved labor productivity. Also contributing to the decrease in SG&A expenses was the elimination of goodwill amortization expense. In fiscal 2002, goodwill amortization expense was $3.3 million. Offsetting these decreases were SG&A expenses of $6.2 million related to the addition of three new retail stores in fiscal 2003 and severance of $0.9 million associated with staffing reductions made in fiscal 2003.

          In the fourth quarter of fiscal 2003 and the first quarter of fiscal 2004, we took steps to further reduce our corporate staff by approximately 11%. This reduction is expected to reduce overhead costs by up to $8.0 million annually. For fiscal 2004, we have also suspended the accrual of service and transition credits to our cash balance pension plan, covering qualifying non-union associates. Interest credits will continue to accrue. The suspension of these credits will reduce cash funding of the plan in the range of $3.0 to $4.0 million in fiscal 2004. We will continue to assess the competitiveness of our benefit programs to improve our cost structure while allowing us to maintain a high quality workforce.

          Asset Impairments and Exit Costs. In fiscal 2003, asset impairments and exit costs consist of goodwill impairment of $43.2 million, other long-lived asset impairments of $1.6 million and exit costs of $2.9 million. Based on unfavorable operating results in the third quarter of fiscal 2003, the earnings forecast was revised and a valuation of the Retail segment was conducted. Fair value was determined based on the discounted cash flows and comparable market values for the segment. As a result of the impairment analysis, a loss was recorded to reduce the carrying value of goodwill at the Retail segment to its implied fair value. The other long-lived asset impairments and exit costs relate to the closure of an administrative office for our Retail segment. In fiscal 2002, asset impairments and exit costs consisted primarily of exit costs related to the closure of underperforming stores.

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          Interest Expense. Interest expense from continuing operations increased $0.1 million, or 0.8%, from $18.0 million to $18.1 million, and was 0.8% of net sales in each year. Total average borrowings decreased to $270.8 million from $333.6 million as a result of debt repayments.

          In accordance with Emerging Issues Task Force ("EITF") Issue No. 87-24, "Allocation of Interest to Discontinued Operations," interest was allocated to discontinued operations based on the interest on debt that will be required or was required to be repaid as a result of disposal transactions. Interest expense of $7.8 million and $8.6 million was allocated to, and is included in, loss on discontinued operations in the Consolidated Statements of Operations for fiscal 2003 and fiscal 2002, respectively. Allocated interest expense decreased in fiscal 2003 due to the effect of debt paydowns as a result of the disposal of certain discontinued operations, partially offset by an increase in the interest rate.

          The increase in interest expense from continuing operations was primarily due to a $1.2 million fee incurred for a covenant compliance waiver and a $0.7 million charge made in accordance with Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities," which required us to recognize a portion of our interest rate swap exposure as interest expense. This expense had previously been included in accumulated other comprehensive income (loss) ("AOCI") in the shareholders' equity section of the consolidated balance sheets. These increases were partially offset by lower average borrowings.

          The weighted average interest rate (including the effect of interest rate swap agreements) increased to 9.59% for fiscal 2003 from 8.02% for fiscal 2002.

          Interest Income. Interest income decreased $0.9 million, or 56.0%, from $1.6 million in fiscal 2002 to $0.7 million in fiscal 2003, and was equal to 0.0% and 0.1% of net sales in the respective fiscal years. The fiscal 2002 balance includes $0.4 million in interest related to federal income tax refunds for prior years' filings. Interest income has been adversely impacted by lower interest rates in fiscal 2003.

          Other Gains, Net. Other gains, net decreased by $1.3 million, or 89.6%, from $1.4 million in fiscal 2002 to $0.1 million in fiscal 2003. During fiscal 2002, Other gains, net consisted primarily of $1.4 million in sales of stock in a supplier and a service provider.

          Income Taxes. Our effective tax rate increased from 32.8% for fiscal 2002 to 34.7% for fiscal 2003. During the second quarter of fiscal 2002, we reached a settlement with the Internal Revenue Service regarding certain deductions taken in prior years. The resulting refund reduced income tax expense by $0.7 million, resulting in a lower effective tax rate in fiscal 2002.

          Results of Continuing Operations for the Fiscal Year Ended March 30, 2002 Compared to the Fiscal Year Ended March 31, 2001

          Net Sales. Net sales decreased $90.9 million, or 3.8%, from $2,360.9 million in fiscal 2001 to $2,270.0 million in fiscal 2002.

          Fiscal 2002 consisted of 52 weeks compared with 53 weeks in fiscal 2001. We estimate that this factor, net of increased Easter holiday sales, caused fiscal 2002 sales to be lower than fiscal 2001 sales by approximately $56.9 million. Excluding the estimated effect of an early Easter holiday during fiscal 2002 and the 53rd week of sales in fiscal 2001, net sales would have decreased 1.5%, from $2,259.0 million to $2,225.0 million.

- -18-

          Net sales in our Retail segment increased $159.2 million, or 20.6%, from $772.8 million to $932.0 million. The increase reflects additional sales of $156.4 million by The Pharm stores acquired in the merger with Seaway Food Town, Inc. ("Food Town") in the second quarter of fiscal 2001 and our acquisition of Prevo's Family Markets, Inc. ("Prevo's") in the fourth quarter of fiscal 2001. Excluding the 53rd week of sales in the prior year and the early Easter holiday in fiscal 2002, we estimate that sales would have increased $172.2 million, or 23.2%. Excluding the 53rd week of sales in fiscal 2001 and the early Easter holiday in fiscal 2002, we estimate that same'store sales increased 1.3%.

          Net sales in our Grocery Distribution segment, after intercompany eliminations, declined $250.1 million, or 15.7%, from $1,588.1 million to $1,338.0 million. The decrease primarily resulted from our acquisition of a Grocery Distribution segment customer during fiscal 2001 (requiring the reclassification of $62.3 million of sales to that customer from our Grocery Distribution segment to our Retail segment), the loss of a customer in both the second quarter of fiscal 2002 and the third quarter of fiscal 2001 totaling $114.6 million in sales for the comparable periods, a 53rd week of sales in fiscal 2001 which favorably affected sales in that year by an estimated $22.1 million, and declines in sales of grocery and general merchandise products due to current unfavorable Michigan economic conditions and continued competitive market conditions. Partially offsetting the decrease were increases in sales of perishables of $12.1 million and an estimated increase in sales of $4.3 m illion as a result of the early Easter holiday in fiscal 2002.

          Gross Margin. Gross margin increased by $24.6 million, or 6.5%, from $380.1 million to $404.7 million. As a percent of net sales, gross margin increased from 16.1% to 17.8%. The increase was primarily the result of the increase in retail grocery sales as a percent of consolidated net sales, from 32.7% in fiscal 2001 to 41.1% in fiscal 2002. This increase was partially offset by competitive pricing pressures. Additionally, we believe that declining economic conditions, layoff announcements and uncertain employment conditions in our region caused many grocery customers to purchase lower margin food products.

          Selling, General and Administrative Expenses. SG&A expenses increased $31.9 million, or 9.5%, from $337.7 million to $369.6 million, and were 16.3% of net sales compared to 14.3% in fiscal 2001. The increase was primarily due to the increased sales of our Retail segment, which generates a higher SG&A expense percent than our Grocery Distribution segment, and lower sales volumes, which resulted in less leveraging of existing infrastructure.

          Asset Impairments and Exit Costs. In fiscal 2002, asset impairments and exit costs of $1.0 million consisted primarily of exit costs related to the closure of underperforming stores. In fiscal 2001, an impairment loss of $1.1 million was incurred on technology equipment.

          Interest Expense. Interest expense from continuing operations decreased $1.5 million, or 7.7%, from $19.5 million to $18.0 million, and was 0.8% of net sales for fiscal 2002 compared to 0.9% for fiscal 2001. Total average borrowings increased to $333.6 million from $318.0 million for the prior year as a result of the Food Town and Prevo's acquisitions and borrowings on the revolving credit component of our senior secured credit facility, partially offset by debt repayments of $42.2 million.

          In accordance with EITF Issue No. 87-24, "Allocation of Interest to Discontinued Operations," interest was allocated to discontinued operations based on the interest on debt that will be required or was required to be repaid as a result of disposal transactions. Interest expense of $8.6 million and $10.0 million was allocated to, and is included in, (loss) earnings on discontinued operations in the Consolidated Statements of Operations for fiscal 2002 and fiscal 2001, respectively.

          Interest expense from continuing operations and allocated interest expense from discontinued operations decreased primarily as a result of lower interest rates.

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          The weighted average interest rate (including the effect of the interest rate swap agreements) decreased to 8.02% at March 30, 2002 from 9.83% at March 31, 2001.

          Interest Income. Interest income was unchanged as a percentage of sales compared to fiscal 2001. In the second quarter of fiscal 2002, we received $0.4 million in interest related to federal income tax refunds for prior years' filings. Interest income was adversely impacted by lower interest rates in fiscal 2002.

          Other Gains, Net. Other gains, net increased by $1.0 million from $0.3 million in fiscal 2001 to $1.3 million in fiscal 2002. During fiscal 2002, Other gains, net consisted primarily of $1.4 million in sales of stock in a supplier and a service provider. During fiscal 2001, Other gains, net resulted primarily from sales of stock of $0.2 million.

          Income Taxes. Our effective tax rate decreased from 38.4% for fiscal 2001 to 32.8% for fiscal 2002. During the second quarter of fiscal 2002, we reached a settlement with the Internal Revenue Service regarding certain deductions taken in prior years. The resulting refund reduced income tax expense by $0.7 million in fiscal 2002.

Discontinued Operations

          Retail Operations. On March 6, 2003, we announced the closing of 13 of our Food Town retail stores principally located in Toledo, Ohio and outlying areas with the remaining 26 Food Town stores to be sold or closed. Furthermore, during the first three quarters of fiscal 2003, 15 retail stores were closed. As a result of these actions, the results of operations of the Food Town stores and other stores closed during fiscal 2003 have been classified as discontinued operations in the consolidated financial statements. Discontinued retail operations include asset impairments and exit costs of $53.5 million in fiscal 2003, respectively. See Note 4 to the consolidated financial statements.

          In the first quarter of fiscal 2004, definitive sales agreements were entered into for 20 of the 26 remaining Food Town stores. Completion of the sales for the 20 stores is contingent upon the satisfaction of contractual requirements and conditions. Management expects that proceeds from the transactions will be approximately $25 to $30 million and will be used to reduce outstanding borrowings. We expect to complete the sales of these stores in the first and second quarters of fiscal 2004.

          We expect an improvement in operating profit and cash flow from operations upon completion of these store sales and closings. Management believes that the store sales and closings will allow us to better focus our efforts and capital on key strategic markets where we have the strongest growth and value creation opportunities.

          Grocery Distribution Operations. We consolidated our Toledo, Ohio distribution operations into our Michigan facilities during the fourth quarter of fiscal 2003. As a result of the decision to exit the Food Town stores, the operations related to these facilities have been classified as discontinued operations in the consolidated financial statements because the operations and cash flows of these facilities have been substantially eliminated from ongoing operations. We will continue to distribute to our Pharm stores in Ohio from our distribution facilities in Michigan. Discontinued grocery distribution operations include asset impairments and exit costs of $9.7 million in fiscal 2003.

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          Convenience Distribution Operations. During the fourth quarter of 2003, we began to actively market two of our subsidiaries in our Convenience Distribution segment. On June 9, 2003 we completed the sale of substantially all the assets of L&L/Jiroch Distributing Company ("L&L/Jiroch") and J.F. Walker Company ("J.F. Walker") to The H.T. Hackney Co. for approximately $40.8 million in cash and the assumption of certain liabilities. The operations of these subsidiaries have been classified as discontinued operations in the consolidated financial statements.

          Real Estate Operations. In 2003, we completed the sale of 11 properties for net proceeds of $52.2 million in cash and recorded pre-tax gains of $18.6 million. These assets represented substantially all of the remaining assets and operations of our Real Estate segment; accordingly, we have reported the results of operations of the discontinued components of the Real Estate segment and the net gain on disposal as discontinued operations.

          Insurance Operations. During the fourth quarter of fiscal 2001, we sold the insurance agency component of our Insurance segment and approved a plan to discontinue the remaining operations of our Insurance segment. Accordingly, results of operations of our Insurance segment and the estimated net loss on disposal were recorded as discontinued operations.

          On December 31, 2001, we paid approximately $5.0 million to cede (transfer) a portion of our reinsurance loss portfolio to an unrelated third party. At that time, we also transferred the remaining underwriting, safety and claims components that had been previously retained to another unrelated third party. At March 29, 2003, we had approximately $6.6 million remaining in insurance reserves for open claims liabilities related to policies that were not ceded. We will remain obligated under these policies until all claims are closed and have retained an independent third party administrator to manage these claims. We have not retained any further insurance operations. Additional costs of $1.5 million in fiscal 2003 associated with this segment resulted from revised loss exposure estimates as additional data was received related to outstanding claims.

          For all years presented, the Consolidated Statements of Operations, Consolidated Statements of Cash Flows and all related financial and nonfinancial disclosures in the notes to the consolidated financial statements in this Annual Report on Form 10-K have been adjusted and the discontinued operations information is excluded, unless otherwise noted.

Critical Accounting Policies

          This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts. On an ongoing basis, we evaluate our estimates, which are based on historical experience and on various other assumptions and factors that we believe to be reasonable under the circumstances. Based on our ongoing review, we will make adjustments as we consider appropriate under the current facts and circumstances.

          We believe that the following represent the more critical estimates and assumptions used in the preparation of our consolidated financial statements.

          Goodwill. In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," we are no longer recording amortization expense related to goodwill and intangible assets with indefinite lives. Intangible assets with definite lives, including non-compete agreements and favorable lease treatments, continue to be amortized over the life of the agreement. We adopted the provisions of SFAS No. 142 on March 31, 2002. Under the transitional provisions of SFAS No. 142, goodwill was tested for impairment as of March 31, 2002. As a result of the impairment testing, a non-cash goodwill impairment charge of

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$35.4 million, net of provision for tax benefit of $6.2 million, was recorded in the Retail segment as a cumulative effect of a change in accounting principle.

          SFAS No. 142 requires that we evaluate goodwill for impairment on an annual basis and on a more frequent basis if circumstances indicate that an impairment has occurred. As a result of our impairment analysis, in the third quarter of fiscal 2003 we recorded an impairment charge of $45.0 million (including $1.8 million in discontinued operations), prior to tax benefit of $15.7 million, in the Retail segment.

          Fair value was determined based on the discounted cash flows and comparable market values of the segment. Determining market values using a discounted cash flow method requires that we make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Our judgments are based on historical experience, current market trends and other information. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in different outcomes. In estimating future cash flows, we rely on internally generated five-year forecasts for sales and operating profits, including capital expenditures and a 3% long-term assumed growth rate of cash flows for periods after the five-year forecast. We generally develop these forecasts based on recent sales data for existing operations and other factors.

          During our impairment testing, we estimated that future discounted cash flows projected for individual business units were less than the carrying values related to those business units. An increase in estimated discounted cash flows of 10% would have reduced the recorded impairment charge by $15.0 million. In contrast, if the current estimate of future discounted cash flows was 10% lower, we would have recorded an additional impairment charge of $15.0 million.

          Impairment of Long-Lived Assets Other Than Goodwill. Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset's carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. No material impairments for long-lived assets to be held and used were determined to exist for fiscal 2003.

          Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less costs to sell. During fiscal 2003, asset impairment charges of $43.9 million (including $42.3 million in discontinued operations), prior to provision for tax benefit of $15.8 million, were recorded on assets at retail stores, office and warehouse facilities. The related assets are recorded in the Consolidated Balance Sheets as Property and equipment held for sale. Fair values are determined by independent appraisals, quotes or expected sales prices developed by internal specialists. Estimates of expected sales prices are judgments based upon our experience, knowledge of market conditions and current offers received. Changes in market conditions, the economic environment and other factors can significantly impact these estimates. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in a different outcome. An increase in estimated appraisal values or sales prices, as applicable, of 10% would have reduced the recorded pre-tax impairment charge by $3.6 million. In contrast, if the current estimate of appraised values or sales prices was 10% lower, we would have recorded an additional pre-tax impairment charge of $3.9 million.

          Exit Costs. We record exit costs for closed stores that are subject to long-term lease commitments based upon the future minimum lease payments and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease rentals that could be reasonably obtained for the property. Future cash flows are based on contractual lease terms and knowledge of the market in which the closed store is located. These estimates are subject to multiple factors, including inflation,

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ability to sublease the property and other economic conditions. Internally developed estimates of sublease rentals are based upon the market in which the property is located, the results of previous efforts to sublease similar property and the current economic environment. Reserves may be adjusted in the future based upon the actual resolution of each of these factors. At March 29, 2003, exit costs of $22.0 million (including $19.1 million in discontinued operations) were recorded net of $2.3 million of estimated sublease rentals.

          Pension. Accounting for defined-benefit pension plans involves estimating the cost of benefits to be provided in the future, based on vested years of service, and attributing those costs over the time period each employee works. The most significant factor affecting our pension costs is the fair value of plan assets and the selection of key assumptions, including the discount rate, expected return on plan assets, and rate of compensation increases used by our actuary to calculate our liability. We consider current market conditions, including changes in interest rates and investment returns, in selecting these assumptions. In fiscal 2003, we reduced our discount rate to 6.75% from 7.25%. We also lowered our expected return on plan assets to 8.75% from 9.25% and our rate of compensation increase to 4.25% from 4.50%. While we believe the assumptions selected are reasonable, significant differences in our actual experience or significant changes in our assumpt ions may materially affect our pension obligations and our future expense. For example, a 50 basis point change in the long-term rate of return would change our expense by approximately $250,000.

          During fiscal 2003, the unfunded portion of our defined benefit plans increased to $19.0 million from $4.6 million. The increase in the unfunded balance is a result of an increase in the projected benefit obligation based on the changes to the key actuarial assumptions, lower return on assets, decreased company contributions and a higher level of benefits paid. The plan assets declined by 11.65% due to lower return, as compared to a decline of 30.95% in the composite NASDAQ Stock Market.

Liquidity and Capital Resources

          Net cash provided by operating activities of continuing operations was $24.5 million in fiscal 2003, $58.1 million in fiscal 2002 and $45.9 million in fiscal 2001. The decrease in net cash provided by operating activities of continuing operations in fiscal 2003 is primarily the result of decreased earnings from continuing operations and changes in working capital related to prepaid expenses and other assets and income taxes. Net cash provided by operating activities of continuing operations increased in fiscal 2002 due to changes in working capital related to better payables management.

          Net cash used in investing activities of continuing operations was $11.1 million, $14.6 million and $123.0 million for fiscal 2003, fiscal 2002 and fiscal 2001, respectively. Cash used in investing activities of continuing operations decreased in fiscal 2003 primarily due to lower capital expenditures and no acquisition activity. Cash used by investing activities of continuing operations decreased in fiscal 2002 primarily due to fiscal 2001 use of cash in the Food Town and Prevo's acquisitions and reduced capital expenditures in fiscal 2002.

          Net cash used in financing activities of continuing operations was $47.5 million for fiscal 2003 due primarily to debt repayments and payment of debt issuance costs. Net cash used by financing activities of continuing operations was $21.4 million for fiscal 2002 due primarily to repayments of long-term debt, partially offset by borrowings on the revolving credit facility and other long-term borrowings. Net cash provided by financing activities of continuing operations was $49.9 million in fiscal 2001 due primarily to proceeds from long-term borrowings partially offset by debt repayments and common stock purchased.

          Our principal sources of liquidity are cash generated from operations and borrowings under a $390.0 million senior secured credit facility pursuant to an Amended and Restated Credit Agreement

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dated July 29, 2002, consisting of (1) a revolving credit facility in the amount of $65.0 million terminating in 2005, (2) a term loan A in the amount of $100.0 million terminating in 2005, (3) an acquisition facility in the amount of $75.0 million terminating in 2006 and (4) a term loan B in the amount of $150.0 million terminating in 2007. At March 29, 2003, $192.8 million was outstanding under the credit facility. Available borrowings under the credit facility are based on stipulated levels of earnings before interest, income taxes, depreciation and amortization, as defined in the credit facility. The credit facility contains covenants that include the maintenance of certain financial ratios. Our creditors have waived compliance with certain financial covenants through September 12, 2003 as they work with us on alternatives to amend our existing credit facility. Should we not be able to obtain revised covenants in an amended credit facility, we may not be able to comply with the credit facility coven ants in fiscal 2004. However, management believes that it has the opportunity to amend our existing financing arrangements with our creditors and, if necessary, secure alternative sources of available financing.

          Management has recently taken many actions designed to improve operating results and cash flows. In March 2003, the executive management team was strengthened with the appointment of a new President and Chief Executive Officer with over forty years of retail experience. Shortly thereafter, an Executive Vice President with extensive retail and wholesale expertise was hired to lead the Merchandising and Marketing function. Various initiatives involving category management and promotional programs have already been implemented under the vision of these executives and we believe have resulted in improved sales trends. Cost controls and efficiency have also been priorities of management. Late in the first quarter of fiscal 2004, we eliminated approximately 11% of our corporate staff, resulting in estimated annualized savings of approximately $8.0 million. Improved efficiencies in warehouse operations and store labor costs have also been realized in the first quarter of fiscal 2004 relative to the fourth quarter of fiscal 2003. Total outstanding borrowings were reduced by $100.8 million during fiscal 2003. On June 9, 2003, we completed the sale of the assets of our Convenience Distribution segment. Proceeds received to date from this transaction of $39.5 million were used to further reduce outstanding borrowings and operating liabilities. Additionally, as discussed in Note 2, we are in the process of selling or closing our under-performing Food Town stores. The elimination of these operations will have a positive impact on our continuing operating cash flows. The estimated proceeds of approximately $25 to $30 million from the sales of these stores will be used to further reduce outstanding borrowings and operating liabilities. Management believes that the early results and the long-term expectations of these initiatives and sales transactions will improve ongoing operating results and cash flows.

          The credit agreement which governs our senior secured credit facility does not allow us to make "restricted payments." "Restricted payments" include cash dividends, as well as redemption of shares and a variety of other types of payments as defined in the bank credit agreement, which is filed as an exhibit to this Form 10-K. The covenants in the bank credit agreement could allow for the payment of dividends in the future. However, we intend to use any net earnings generated from our operations, to repay debt and to acquire additional retail operations. We do not anticipate paying any cash dividends for the foreseeable future, regardless of whether they are permitted by the credit agreement.

          We have in the past offered non-subordinated variable rate promissory notes to the public. The notes have been issued in minimum denominations of $1,000 and may be issued by us at any time, although our credit facility restricts the total amount outstanding under the offering to approximately $15.0 million. The non-subordinated variable rate promissory notes are issued under a "shelf" registration statement filed with the Securities and Exchange Commission, effective February 26, 2001, which provides for the issuance of up to $100 million of debt securities. At March 29, 2003, approximately $8.3 million of these notes were outstanding. Effective March 31, 2003, Spartan Stores suspended the promissory note program and all notes were repaid as of that date.

- -24-

          Our current ratio decreased from 1.59:1.00 at March 30, 2002 to 1.39:1.00 at March 29, 2003 and working capital decreased from $115.6 million at March 30, 2002 to $88.5 million at March 29, 2003. The decrease is the result of store closings and more effective working capital management.

          Our long-term debt to equity ratio at March 29, 2003 increased to 1.68:1.00 from 1.28:1.00 at March 30, 2002. The increase was primarily due to the asset impairment and exit costs recorded during the year partially offset by a reduction in the long-term debt balance.

          Our total capital structure includes borrowings under the senior secured credit facility, non-subordinated variable rate promissory notes, various other debt instruments, leases and shareholders' equity. Management believes that cash generated from operating activities and available borrowings under the credit facility will likely be sufficient to support operations under current circumstances.

          The table below presents our significant contractual obligations as of March 29, 2003:

(In thousands)

Fiscal Year		Long-term Debt		Operating Leases		Total Contractual Obligations
2004	$	36,594	$	23,855	$	60,449
2005		45,815		22,732		68,547
2006		23,616		20,631		44,247
2007		106,820		18,077		124,897
2008		4,119		15,858		19,977
Thereafter		3,447		69,524		72,971
Total	$	220,411	$	170,677	$	391,088

          In addition to the above amounts for operating leases are $17.6 million of obligations associated with closed facilities that have been included at their present value in other accrued expenses and other long-term liabilities in the Consolidated Balance Sheets. See Note 4 to the consolidated financial statements for additional information.

Cumulative Effect of a Change in Accounting Principle and New Accounting Standards

          In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations," and SFAS No. 142. SFAS No. 141 requires the purchase method of accounting to be applied to all business combinations after June 30, 2001, and addresses the initial recognition and measurement of goodwill and other intangible assets in a business combination. We adopted SFAS No. 141 on March 31, 2002. There was no material impact as a result of the adoption. SFAS No. 142 provides that intangible assets with finite useful lives be amortized and that goodwill and intangible assets with indefinite lives not be amortized, but tested at least annually for impairment. Under the provisions of SFAS No. 142, any impairment loss identified upon adoption of this standard is recognized as a cumulative effect of a change in accounting principle. Any impairment loss incurred subsequent to initial adoption of SFAS No. 142 is recorded as a charge to current period earnings. As a result of adopting this statement, we recorded a cumulative effect of a change in accounting principle to recognize an impairment of goodwill in the Retail Grocery segment of $35.4 million, net of provision for tax benefit of $6.2 million.

          In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." Among other provisions, SFAS

- -25-
No.145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt." As a result, gains and losses from the extinguishment of debt should be reported as extraordinary items only if they meet the criteria of Accounting Principles Board ("APB") Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." Gains and losses from extinguishment of debt that do not meet the criteria of APB No. 30 should be reclassified to income from continuing operations for all periods presented. We adopted the provisions of SFAS No. 145 on March 30, 2003. The adoption of this statement will impact the classification in the Statements of Operations of any costs associated with debt extinguishment occurring in the future.

          In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires recognition of a liability for the costs associated with an exit or disposal activity when the liability is incurred, as opposed to when the entity commits to an exit plan as required under EITF Issue No. 94-3. SFAS No. 146 primarily impacts the timing of the recognition of costs associated with exit or disposal activities. We adopted SFAS No. 146 for exit and disposal activities initiated after December 31, 2002.

          In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation; however, it does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method. The statement also requires disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in the summary of significant accounting policies in annual and interim financial statements. The disclosure provisions of SFAS No. 148 were adopted on March 29, 2003. As allowed by SFAS No. 148, we have not adopted the fair value method of accounting for stock options.

          EITF Issue No. 02-16, "Accounting by a Reseller for Cash Consideration Received from a Vendor," provides that cash consideration received from a vendor is presumed to be a reduction of the prices of the vendor's products or services and should, therefore, be characterized as a reduction in cost of goods sold. If such payment is for assets or services delivered to the vendor, the cash consideration should be characterized as revenue, or if such payment is a reimbursement of costs incurred to sell the vendor's products, the cash consideration should be characterized as a reduction of that cost. EITF Issue No. 02-16 became effective for us on March 30, 2003. We have determined that the adoption of EITF Issue No. 02-16 will not have a material impact on our net earnings.

          In November 2002, FASB Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others," was issued. FIN 45 requires the initial measurement and recognition, on a prospective basis only, to guarantees issued or modified after December 31, 2002. Additionally, certain disclosure requirements are effective for interim or annual periods ending after December 15, 2002. We have complied with the disclosure provisions of FIN No. 45.

          On April 1, 2001, we adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. All derivatives, whether designated in hedging relationships or not, are required to be reported on the balance sheets at fair value. If the derivative is designated as a cash-flow

- -26-
hedge, changes in fair value of the derivative are recorded in AOCI and recognized in the statements of operations as realized. SFAS No. 133 defines new requirements for designation and documentation of hedging relationships as well as ongoing effectiveness assessments in order to use hedge accounting. For a derivative that does not qualify as a hedge, changes in fair value are recognized in operations. We recorded a cumulative transition adjustment loss of $1.6 million in AOCI on April 1, 2001 (net of related income tax of $0.8 million).

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

          We are exposed to interest rate risk related to our outstanding debt and notes receivable from customers. The interest rate paid on a portion of our outstanding debt is vulnerable to changes in the prime rate, the federal funds rate or the Eurodollar rate. We do not use financial instruments or derivatives for trading or speculative purposes.

          We manage interest rate risk on a majority of our debt through the use of interest rate swap agreements that are effective through June 30, 2003. Under the terms of the agreements, we are protected against increases in interest rates from and after the date of the agreement in the initial aggregate notional amount of $162.5 million, which amount decreases in proportion to scheduled principal payments made on term loan A and term loan B under our senior secured credit facility. The aggregate notional amount will be $123.7 million at the end of the agreements' four-year term. During fiscal 2003, the interest rate swap agreements had a weighted average pay rate of 5.60% and a weighted average receive rate of 1.78%.

          The following table sets forth the maturities of our debt outstanding as of March 29, 2003:

(In thousands)
Fiscal Year		March 29, 2003
2004	$	36,594
2005		45,815
2006		23,616
2007		106,820
2008		4,119
Thereafter		3,447
Carrying value at March 29, 2003	$	220,411
Fair value at March 29, 2003	$	219,120
Weighted average interest rate for fiscal 2003 (including the effect of the interest rate swap agreements)		9.59	%

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Item 8. Financial Statements and Supplementary Data

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Shareholders
Spartan Stores, Inc.
Grand Rapids, Michigan

We have audited the accompanying consolidated balance sheets of Spartan Stores, Inc. and subsidiaries as of March 29, 2003 and March 30, 2002 and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended March 29, 2003. These financial statements are the responsibility of Spartan Stores, Inc. management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Spartan Stores, Inc. and subsidiaries as of March 29, 2003 and March 30, 2002 and the results of their operations and their cash flows for each of the three years in the period ended March 29, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in the notes to the consolidated financial statements, during the year ended March 29, 2003 Spartan Stores, Inc. changed its method of accounting for goodwill (Notes 2 and 6) and for discontinued operations (Note 3) to conform to Statements of Financial Accounting Standards Nos. 142 and 144.

/s/Deloitte & Touche LLP

Grand Rapids, Michigan
May 6, 2003 (June 20, 2003 as to Notes 3 and 8)

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CONSOLIDATED BALANCE SHEETS

Spartan Stores, Inc. and Subsidiaries
(In thousands)

Assets	March 29, 2003		March 30, 2002
Current assets
Cash and cash equivalents	$	23,306	$	27,954
Marketable securities		1,705		10,370
Accounts receivable, net		70,747		84,533
Inventories		138,095		179,319
Prepaid expenses and other current assets		13,141		8,427
Refundable income taxes		9,349		-
Deferred taxes on income		4,113		692
Property and equipment held for sale		54,684		1,892
Total current assets		315,140		313,187
Other assets
Goodwill, net		68,743		155,243
Deferred taxes on income		25,566		-
Other, net		26,785		25,738
Total other assets		121,094		180,981
Property and equipment
Land and improvements		3,221		38,319
Buildings and improvements		125,833		208,353
Equipment		203,827		258,659
Total property and equipment		332,881		505,331
Less accumulated depreciation and amortization		212,809		238,908
Net property and equipment		120,072		266,423
Total assets	$	556,306	$	760,591

See notes to consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (continued)

Spartan Stores, Inc. and Subsidiaries
(In thousands)

Liabilities and Shareholders' Equity	March 29, 2003				March 30, 2002
Current liabilities
Accounts payable	$	112,181		$	104,378
Accrued payroll and benefits		28,533			25,957
Insurance reserves		14,783			17,263
Accrued taxes		16,735			14,323
Other accrued expenses		17,807			9,687
Current maturities of long-term debt		36,594			25,948
Total current liabilities		226,633			197,556
Deferred taxes on income		-			14,490
Other long-term liabilities		20,202			9,707
Postretirement benefits		16,022			12,133
Long-term debt		183,817			295,213
Shareholders' equity
Common stock, voting, no par value; 50,000 shares        authorized; 19,999 and 19,766 shares outstanding		116,388			115,722
Preferred stock, no par value, 10,000        shares authorized; no shares outstanding		- -			- -
Accumulated other comprehensive loss		(2,816	)		(2,622	)
(Accumulated deficit) retained earnings		(3,940	)		118,392
Total shareholders' equity		109,632			231,492
Total liabilities and shareholders' equity	$	556,306		$	760,591

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

	Year Ended
	March 29, 2003			March 30, 2002			March 31, 2001
Net sales	$	2,148,067		$	2,270,019		$	2,360,912
Cost of goods sold		1,774,350			1,865,334			1,980,797
Gross margin		373,717			404,685			380,115
Operating expenses
Selling, general and administrative		360,786			369,637			337,722
Provision for asset impairments and exit costs		47,711			1,030			1,098
Total operating expenses		408,497			370,667			338,820
Operating (loss) earnings		(34,780	)		34,018			41,295
Other income and expenses
Interest expense		18,125			17,975			19,464
Interest income		(696	)		(1,582	)		(1,770	)
Other gains, net		(135	)		(1,351	)		(297	)
Total other income and expenses		17,294			15,042			17,397
(Loss) earnings before income taxes,     discontinued operations and cumulative     effect of a change in accounting principle		(52,074	)		18,976			23,898
Income taxes		(18,087	)		6,222			9,177
(Loss) earnings from continuing operations		(33,987	)		12,754			14,721
(Loss) earnings from discontinued     operations, net of taxes		(52,968	)		(2,907	)		8,721
Cumulative effect of a change in     accounting principle, net of taxes		(35,377	)		- -			- -
Net (loss) earnings	$	(122,332	)	$	9,847		$	23,442
Basic and diluted earnings per share:
(Loss) earnings from continuing operations	$	(1.71	)	$	0.65		$	0.85
(Loss) earnings from discontinued operations		(2.66	)		(0.15	)		0.50
Cumulative effect of a change in accounting    principle		(1.78	)		- -			- -
Net (loss) earnings	$	(6.15	)	$	0.50		$	1.35
Weighted average shares:       Basic		19,896			19,549			17,333
Diluted		19,896			19,690			17,345

See notes to consolidated financial statements.

- -31-

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

			Shares Outstanding			Common Stock Amount			Class A Common Stock Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Accumulated Deficit)			Total
Balance		March 26, 2000	9,919		$	-		$	19,838		$	14,240		$	-		$	91,929		$	126,007
Class A common stock transactions
		Purchases	(1	)		-			(2	)		(11	)		-			-			(13	)
		Issuances	53			-			105			596			-			-			701
Net earnings			-			-			-			-			-			23,442			23,442
Cash dividends		$ .0125 per share	-			-			-			-			-			(125	)		(125	)
Stock dividend		.336 per share	3,351			-			6,701			-			-			(6,701	)		-
Conversion to no par common stock			-			41,467			(26,642	)		(14,825	)		-			-			-
Common stock transactions
		Purchases	(330	)		(2,556	)		-			-			-			-			(2,556	)
		Issuances	6,270			70,957			-			-			-			-			70,957
Balance		March 31, 2001	19,262			109,868			-			-			-			108,545			218,413
Comprehensive income:
Net earnings			-			-			-			-			-			9,847			9,847
Other comprehensive loss,
net of tax:
Cumulative effect of a change in         accounting for interest rate         swap agreements			- -			- -			- -						(1,588	)		- -			(1,588	)
Unrealized loss on securities			-			-			-			-			(36	)		-			(36	)
Minimum pension liability         adjustment			- -			- -			- -			- -			(137	)		- -			(137	)
Unrealized loss on interest rate         swap agreements			- -			- -			- -			- -			(861	)		- -			(861	)
Total other comprehensive loss			-			-			-			-			(2,622	)		-			(2,622	)
Total comprehensive income																					7,225
Common stock transactions
	Purchases		(4	)		(33	)		-			-			-			-			(33	)
	Issuances		508			5,887			-			-			-			-			5,887
Balance	March 30, 2002		19,766			115,722			-			-			(2,622	)		118,392			231,492
Comprehensive loss:
Net loss			-			-			-			-			-			(122,332	)		(122,332	)
Other comprehensive (loss)     income, net of tax
Unrealized gain on securities			-			-			-			-			157			-			157
Minimum pension liability       adjustment			- -			- -			- -			- -			(2,428	)		- -			(2,428	)
Unrealized gain on interest rate      swap agreements			- -			- -			- -			- -			2,077			- -			2,077
Total other comprehensive loss			-			-			-			-			(194	)		-			(194	)
Total comprehensive loss			-			-			-			-			-			-			(122,526	)
Common stock transactions:
	Issuances		233			666			-			-			-			-			666
Balance	March 29, 2003		19,999		$	116,388		$	-		$	-		$	(2,816	)	$	(3,940	)	$	109,632

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Spartan Stores, Inc. and Subsidiaries
(In thousands)

		Year Ended
		March 29, 2003			March 30, 2002			March 31, 2001
Cash flows from operating activities
Net (loss) earnings	$	(122,332	)	$	9,847		$	23,442
Loss (earnings) from discontinued operations		52,968			2,907			(8,721	)
Cumulative effect of a change in accounting principle		35,377			-			-
(Loss) earnings from continuing operations		(33,987	)		12,754			14,721
Adjustments to reconcile net (loss) earnings to
net cash provided by operating activities:
Provision for asset impairments and exit costs		47,711			1,030			1,098
Depreciation and amortization		30,262			32,682			28,624
Postretirement benefits		(987	)		(976	)		2,135
Deferred taxes on income		(34,130	)		2,362			1,503
Other, net		543			(1,227	)		(292	)
Change in operating assets and liabilities, net of         acquisitions:
Accounts receivable		5,660			513			12,062
Inventories		(2,838	)		(1,063	)		10,428
Prepaid expenses and other assets		(8,049	)		258			(2,754	)
Refundable income taxes		(9,349	)		-			-
Accounts payable		15,607			15,306			(8,000	)
Accrued payroll and benefits		3,432			(11,115	)		4,194
Insurance reserves		(355	)		3,403			(2,019)
Accrued taxes		6,336			139			1,202
Other accrued expenses and other liabilities		4,655			4,031			(17,051	)
Net cash provided by operating activities		24,511			58,097			45,851
Cash flows from investing activities
Purchases of property and equipment		(12,196	)		(17,570	)		(27,169	)
Net proceeds from the sale of assets		412			4,383			332
Acquisitions, net of cash acquired		-			(2,106	)		(96,694	)
Other		723			710			575
Net cash used in investing activities		(11,061	)		(14,583	)		(122,956	)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

		Year Ended
		March 29, 2003			March 30, 2002			March 31, 2001
Cash flows from financing activities
Net (payments) proceeds from revolver		(300	)		13,000			-
Proceeds from long-term borrowings		-			4,017			76,570
Repayment of long-term debt		(43,401	)		(37,941	)		(24,645	)
Debt issuance costs		(4,488	)		(1,242	)		-
Proceeds from sale of common stock		666			806			701
Common stock purchased		-			(33	)		(2,569	)
Dividends paid		-			-			(125	)
Net cash (used in) provided by financing activities		(47,523	)		(21,393	)		49,932
Discontinued operations:
Net cash provided by (used in) discontinued operations		29,425			(15,744	)		12,328
Net (decrease) increase in cash and cash equivalents		(4,648	)		6,377			(14,845	)
Cash and cash equivalents at beginning of year		27,954			21,577			36,422
Cash and cash equivalents at end of year	$	23,306		$	27,954		$	21,577
Supplemental Cash Flow Information:
Cash paid for interest	$	24,783		$	25,558		$	34,211
Cash paid for income taxes	$	497		$	196		$	14,614

See notes to consolidated financial statements.

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SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1
Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation: The consolidated financial statements include the accounts of Spartan Stores, Inc. and its subsidiaries ("Spartan Stores"). All significant intercompany accounts and transactions have been eliminated.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods might differ from those estimates.

Fiscal Year: Spartan Stores' fiscal year ends on the last Saturday of March. The fiscal years ended March 29, 2003 and March 30, 2002 consisted of 52 weeks. The fiscal year ended March 31, 2001 consisted of 53 weeks.

Revenue Recognition: The Retail segment recognizes revenues from the sale of products at the point of sale. The Grocery Distribution segment recognizes revenues when products are shipped or ancillary services are provided.

Cost of Goods Sold: Cost of goods sold includes cost of inventory sold during the period, including purchase and distribution costs. Vendor allowances that relate to Spartan Stores' buying and merchandising activities consist primarily of promotional allowances and, to a lesser extent slotting allowances. Promotional allowances are recognized as a reduction in cost of goods sold when the related expense is incurred or the related performance is completed. Slotting allowances are recognized as a reduction in cost of goods sold when the product is first stocked, which is generally when the related expenses have been incurred. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms and conditions.

Fair Value Disclosures of Financial Instruments: Financial instruments include cash and cash equivalents, marketable securities, accounts and notes receivable, accounts and notes payable, long-term debt and interest rate swap agreements. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts and notes payable approximate fair value at March 29, 2003 and March 30, 2002 because of the short-term nature of these financial instruments. The fair value of marketable securities and the interest rate swap agreements are disclosed in Notes 7 and 8, respectively.

- -35-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At March 29, 2003 the estimated carrying value of Spartan Stores' long-term debt (including current maturities) exceeds its fair value by approximately $1.3 million compared to $1.5 million at March 30, 2002. The estimated fair value was based on anticipated rates available to Spartan Stores for debt with similar terms and maturities. The unrealized pre-tax net loss on the interest rate swap agreements was $1.3 million at March 29, 2003 and $3.8 million at March 30, 2002.

Cash and Cash Equivalents: Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase.

Marketable Securities: Investments in marketable securities are classified as available-for'sale and are reported at fair value with unrealized gains and losses recorded as accumulated other comprehensive income (loss) ("AOCI") in shareholders' equity.

Accounts Receivable: Accounts receivable are shown net of allowances for credit losses of $6.3 million in fiscal 2003 and $4.1 million in fiscal 2002.

Inventory Valuation: Inventories are stated at the lower of cost or market using the last-in, first-out ("LIFO") method. If replacement cost had been used, inventories would have been $53.8 million and $53.2 million higher at March 29, 2003 and March 30, 2002, respectively. During fiscal 2003, fiscal 2002 and fiscal 2001, certain inventory quantities were reduced. These reductions resulted in liquidations of LIFO inventory carried at lower costs prevailing in prior years as compared with the costs of purchases in these years, the effect of which decreased the LIFO provision in fiscal 2003, fiscal 2002 and fiscal 2001 by $1.8 million, $2.5 million, and $1.8 million, respectively.

Long-Lived Assets Other than Goodwill: Spartan Stores reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset's carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices developed by internal specialists. Estimates of future cash flows and expected sales prices are judgments based upon Spartan Stores' experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation.

Property and Equipment Held for Sale: Property and equipment held for sale consists of land, buildings and equipment that Spartan Stores expects to sell within 12 months. The assets are included in the following segments (in thousands):

		2003		2002
Grocery Distribution	$	914	$	-
Discontinued operations - Retail		39,274		-
Discontinued operations - Grocery Distribution		1,368		-
Discontinued operations - Convenience Distribution		11,612		-
Discontinued operations - Real Estate		1,516		1,892
Total	$	54,684	$	1,892

- -36-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Goodwill and Intangible Assets: Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in business combinations after amounts have been allocated to intangible assets. Goodwill is not amortized, but is reviewed at least annually for impairment using a discounted cash flow model. Intangible assets consist of favorable lease agreements and non-compete agreements, which are amortized on a straight-line basis over the lease terms of 3 to 20 years, or the agreement length of 3 to 15 years. Intangible assets are classified as Other assets in the Consolidated Balance Sheets.

Other Assets: Included in Other assets are intangibles, as described above, debt issuance costs and the long-term portion of prepaid customer supply agreements which are being amortized over the terms of the related agreements.

During fiscal 2002 and fiscal 2001, net gains of approximately $1.4 million and $0.2 million, respectively, were recognized from the sale of stock held in a supplier and a service provider accounted for by the cost method and are included in Other gains, net in the Consolidated Statements of Operations.

Property and Equipment: Property and equipment are recorded at cost and depreciated over the shorter of the estimated useful lives or lease periods of the assets. Expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation is computed using the straight-line and declining balance methods as follows:

Land and improvements	15 to 40 years
Buildings and improvements	3 to 40 years
Equipment	3 to 20 years

Software development costs are capitalized and amortized between 3 and 5 year periods commencing as each system is implemented.

Accounts Payable: Accounts payable include checks that have been issued and have not cleared Spartan Stores' controlled disbursement bank accounts.

Insurance Reserves: Insurance reserves include a provision for reported losses and incurred but not reported losses related to reinsurance policies that insure the run-off of retained risk associated with the discontinued Insurance segment. Also included are provisions for workers' compensation, health and property insurance for which Spartan Stores is self-insured. Losses are recorded when reported and consist of individual case estimates. Incurred but not reported losses are actuarially estimated based on available historical information.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

- -37-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Derivative Financial Instruments: Spartan Stores uses interest rate swap agreements that effectively convert a portion of variable rate debt to a fixed rate basis. These agreements are considered to be a hedge against changes in future cash flows. Accordingly, the interest rate swap agreements are included in Other long-term liabilities in the Consolidated Balance Sheets as of March 29, 2003 and March 30, 2002, and the related gain or loss on these contracts is deferred in shareholders' equity as a component of AOCI.

Stock-Based Compensation: Spartan Stores has a stock incentive plan, which is more fully described in Note 13. Spartan Stores accounts for the plan under the recognition and measurement principles of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. No stock-based compensation cost is reflected in net (loss) earnings, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net (loss) earnings and (loss) earnings per share as if Spartan Stores had applied the fair value recognition principles of Statement of Financial Accounting Standards ("SFAS") Statement No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation:

(In thousands, except per share data)
	2003			2002			2001
Net (loss) earnings, as reported	$	(122,332	)	$	9,847		$	23,442
Deduct: Total stock-based employee compensation    expense determined under fair value based method    for all awards, net of related tax effects		(1,297	)		(898	)		(256	)
Pro forma net (loss) earnings	$	(123,629	)	$	8,949		$	23,186
Basic and diluted (loss) earnings per share      - as reported	$	(6.15	)	$	0.50		$	1.35
Basic and diluted (loss) earnings per share      - pro forma	$	(6.21	)	$	0.46		$	1.34

Under SFAS No. 123, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2003	2002	2001
Dividend yield	0.00%	0.00%	0.00%
Expected volatility	39.00%	37.00%	37.00%
Risk-free interest rate	3.21% - 5.03%	4.38 - 5.14%	4.95 - 6.47%
Expected life of option	8 years	6 years	6 years

- -38-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Loss) earnings per share: Basic (loss) earnings per share ("EPS") excludes dilution and is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by increasing the weighted average number of common shares outstanding by the dilutive effect of the issuance of common stock for options outstanding under Spartan Stores' stock option plans and stock issued under restricted stock plans.

Weighted average shares issuable upon the exercise of stock options that were not included in the (loss) earnings per share calculations were 1,419,239 in fiscal 2003, 334,014 in fiscal 2002 and 305,728 in fiscal 2001.

Advertising Costs: Spartan Stores' gross advertising costs are expensed as incurred and included in selling, general and administrative expenses in the Consolidated Statements of Operations. Advertising expenses were $16.3 million in fiscal 2003, $16.6 million in fiscal 2002 and $17.1 million in fiscal 2001.

Comprehensive Income: Comprehensive income (loss) is net (loss) earnings adjusted for the net gain or loss on interest rate swap agreements, including the cumulative effect of a change in accounting, unrealized gains and losses on securities and minimum pension liability, net of applicable income taxes.

(In thousands)		Unrealized Gain (Loss) on Securities			Interest Rate Swap Liability			Minimum Pension Liability			Accumulated Other Comprehensive Loss
Balances at April 1, 2001	$	-		$	-		$	-		$	-
Cumulative effect of a change in accounting for    interest rate swap agreements		- -			(1,588	)		- -			(1,588	)
Other comprehensive loss for 2002		(36	)		(861	)		(137	)		(1,034	)
Balances at March 30, 2002		(36	)		(2,449	)		(137	)		(2,622	)
Other comprehensive gain (loss) for 2003		157			2,077			(2,428	)		(194	)
Balances at March 29, 2003	$	121		$	(372	)	$	(2,565	)	$	(2,816	)

Recently Issued Accounting Standards: In April 2002 the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." Among other provisions, SFAS No.145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt." As a result, gains and losses from the extinguishment of debt should be reported as extraordinary items only if they meet the criteria of APB Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." Gains and losses from extinguishment of debt that do not meet the criteria of APB No. 30 should be reclassified to income from continuing operations for all periods presented. Spartan Stores adopted the provisions of SFAS No. 145 on March 30, 2003. The adoption of this statement will impact the classification on the Stat ement of Operations of any costs associated with debt extinguishment occurring in the future.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including

- -39-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires recognition of a liability for the costs associated with an exit or disposal activity when the liability is incurred, as opposed to when the entity commits to an exit plan as required under EITF Issue No. 94-3. SFAS No. 146 primarily impacts the timing of the recognition of costs associated with exit or disposal activities. Spartan Stores adopted SFAS No. 146 for exit and disposal activities initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, to provide alternative methods of transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation; however, it does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method. The statement also requires disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in the summary of significant accounting policies in annual and interim financial statements. The disclosure provisions of SFAS No. 148 were adopted on March 29, 2003. As allowed by SFAS No. 148, Spartan Stores has not adopted the fair value method of accounting for stock options.

EITF Issue No. 02-16, "Accounting by a Reseller for Cash Consideration Received from a Vendor," provides that cash consideration received from a vendor is presumed to be a reduction of the prices of the vendor's products or services and should, therefore, be characterized as a reduction in cost of goods sold. If such payment is for assets or services delivered to the vendor, the cash consideration should be characterized as revenue, or if such payment is a reimbursement of costs incurred to sell the vendor's products, the cash consideration should be characterized as a reduction of that cost. EITF Issue No. 02-16 became effective for Spartan Stores on March 30, 2003. Spartan Stores has determined that the adoption of EITF Issue No. 02-16 will not have a material impact on its net earnings.

In November 2002, FASB Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others," was issued. FIN No. 45 requires the initial measurement and recognition, on a prospective basis only, to guarantees issued or modified after December 31, 2002. Additionally, certain disclosure requirements are effective for financial statements ending after December 15, 2002. Spartan Stores has complied with the disclosure provisions of FIN No. 45.

Reclassifications: Certain reclassifications have been made to the fiscal 2002 and fiscal 2001 financial statements to conform to the fiscal 2003 presentation.

- -40-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 2
Cumulative Effect of a Change in Accounting Principle

SFAS No. 141, "Business Combinations," requires the purchase method of accounting to be applied to all business combinations after June 30, 2001, and addresses the initial recognition and measurement of goodwill and other intangible assets in a business combination. SFAS No. 141 was adopted on March 31, 2002. There was no material impact as a result of the adoption.

SFAS No. 142, "Goodwill and Other Intangible Assets," provides that intangible assets with finite useful lives be amortized and that goodwill and intangible assets with indefinite lives not be amortized, but tested at least annually for impairment. Under the provisions of SFAS No. 142, any impairment loss identified upon adoption of this standard is recognized as a cumulative effect of a change in accounting principle. Any impairment loss incurred subsequent to initial adoption of SFAS No. 142 is recorded as a charge to current period earnings. SFAS No. 142 also requires that goodwill be assigned to reporting units based upon the expected benefits to be derived from synergies resulting from the business combination.

SFAS No. 142 was adopted on March 31, 2002. In accordance with the provisions of SFAS No. 142, goodwill of approximately $30.3 million previously included in the Retail segment was assigned to the Grocery Distribution segment based upon the expected benefits to be realized by each segment. Under the transitional provisions of SFAS No. 142, goodwill was tested for impairment as of March 31, 2002. Each reporting unit was tested for impairment by comparing the fair value of each reporting unit with its carrying value. Fair value was determined based on the discounted cash flows and comparable market values of the segment. As a result of the impairment testing, an impairment loss was recorded to reduce the carrying value of goodwill at the Retail segment by $41.6 million (prior to provision for tax benefit of $6.2 million) to its implied fair value. Impairment was due to a number of factors, including operating performance and the impact of new competition. In accordance with SFAS No. 142, the impairment char ge was reflected as a cumulative effect of a change in accounting principle in the Consolidated Statements of Operations.

On April 1, 2001, we adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS Nos. 137 and 138. Spartan Stores recorded a cumulative transition adjustment loss of $1.6 million in AOCI on April 1, 2001 (net of related income tax of $0.8 million) pertaining to its interest rate swap agreements. Approximately $1.3 million is expected to be reclassified to interest expense in fiscal 2004 resulting from the amortization of the pre-tax unrealized loss on the interest rate swap agreements that is included in AOCI.

- -41-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 3
Discontinued Operations

The following table details the results of discontinued operations reported on the Consolidated Statements of Operations by operating segment:

(In thousands)		Year Ended
		March 29, 2003			March 30, 2002			March 31, 2001
Discontinued retail operations
(Loss) earnings from discontinued operations (less applicable    taxes of ($30,710), ($1,912) and $2,253)	$	(56,104	)	$	(3,570	)	$	3,962
Discontinued convenience distribution operations
Earnings from discontinued operations (less applicable taxes of    $896, $1,515 and $1,940)		1,923			2,554			3,403
Gain on disposal of discontinued operations (less applicable taxes    of $32)		59			- -			- -
Earnings from discontinued convenience distribution    operations		1,982			2,554			3,403
Discontinued grocery distribution operations
(Loss) earnings from discontinued operations (less applicable    taxes of ($4,670) and $38)		(8,727	)		70			- -
Discontinued real estate operations
(Loss) earnings from discontinued operations (less applicable    taxes of ($397), $(26) and $851)		(736	)		(46	)		1,499
Gain on disposal of discontinued operations (less    applicable taxes of $6,509)		12,077			- -			- -
Earnings from discontinued real estate operations		11,341			(46	)		1,499
Discontinued insurance operations
(Loss) earnings from discontinued operations (less applicable    taxes of ($784), ($1,032) and $138)		(1,460	)		(1,915	)		256
Loss on disposal of discontinued operations (less applicable    taxes of ($207))		- -			- -			(399	)
(Loss) earnings from discontinued insurance operations		(1,460	)		(1,915	)		143
Total discontinued operations
(Loss) earnings from discontinued operations (less applicable    taxes of ($35,665), ($1,417) and $5,182)		(65,104	)		(2,907	)		9,120
Gain (loss) on disposal of discontinued operations (less    applicable taxes of $6,541, $0 and ($207))		12,136			- -			(399	)
Total (loss) earnings from discontinued operations	$	(52,968	)	$	(2,907	)	$	8,721

- -42-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Results of the discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all years presented, unless otherwise noted.

Retail Operations

On March 6, 2003 Spartan Stores announced the closing of 13 of its Food Town retail stores principally located in Toledo, Ohio and outlying areas. The remaining 26 Food Town stores will be sold or closed. Furthermore, during the first three quarters of fiscal 2003, 15 retail stores were closed. As a result of these actions, the results of operations of the Food Town stores and other stores closed during fiscal 2003 have been classified as discontinued operations in the consolidated financial statements. Discontinued retail operations include asset impairments and exit costs (including goodwill impairment) of $53.5 million in fiscal 2003. In the first quarter of fiscal 2004, definitive sales agreements were entered into for 20 of the 26 remaining Food Town stores. Completion of the sales for the 20 stores is contingent upon the satisfaction of contractual requirements and conditions. Management expects that proceeds from the transactions will be approximately $25 to $30 million and will be used to reduce o utstanding borrowings.

Convenience Distribution Operations

During the fourth quarter of 2003, Spartan Stores began to actively market two subsidiaries in the Convenience Distribution segment. On June 9, 2003 Spartan Stores completed the sale of substantially all the assets of L&L/Jiroch Distributing Company ("L&L/Jiroch") and J.F. Walker Company, Inc. ("J.F. Walker") to The H.T. Hackney Co. for approximately $40.8 million in cash and the assumption of certain liabilities. The operations of these subsidiaries have been classified as discontinued operations in the consolidated financial statements.

Grocery Distribution Operations

Spartan Stores consolidated its Toledo, Ohio distribution operations into its Michigan facilities during the fourth quarter of fiscal 2003. As a result of the decision to exit the Food Town stores, the operations related to these facilities have been classified as discontinued operations in the consolidated financial statements because the operations and cash flows of these facilities have been substantially eliminated from ongoing operations. Spartan Stores will continue to distribute to its Pharm stores in Ohio from its distribution facilities in Michigan. Discontinued grocery distribution operations include asset impairments and exit costs of $9.7 million in fiscal 2003.

Real Estate Operations

In 2003, Spartan Stores completed the sale of 11 properties for net proceeds of $52.2 million in cash, and recorded pre-tax gains of $18.6 million These assets represented substantially all of the remaining assets and operations of its Real Estate segment; accordingly, Spartan Stores has reported the results of operations of the discontinued components of the Real Estate segment and the net gain on disposal as discontinued operations.

- -43-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Insurance Operations

In January 2001, Spartan Stores approved a plan to discontinue the operations of its Insurance segment. Accordingly, Spartan Stores reported the results of operations of the Insurance segment and the estimated net loss on disposal as discontinued operations.

On December 31, 2001, Spartan Stores paid approximately $5.0 million to cede (transfer) a portion of its reinsurance loss portfolio to an unrelated third party. At that time, Spartan Stores also transferred the remaining underwriting, safety and claims component that had been previously retained to another unrelated third party. This transaction allowed Spartan Stores to reduce its outstanding letters of credit by $4.6 million. In fiscal 2003, Spartan Stores recorded a charge of $1.5 million for additional amounts required to be paid to the unrelated third party for claims liabilities previously ceded based upon updated actuarial studies reflecting a larger than originally anticipated obligation. At March 29, 2003, Spartan Stores had approximately $5.3 million remaining in insurance reserves for open claims liabilities related to policies that were not ceded. Spartan Stores will remain obligated under these policies until all claims are closed and has retained an independent third party administrator to m anage these claims. Spartan Stores has not retained any further insurance operations. Net loss from the Insurance segment from January 2001 to March 29, 2003 totaled $2.5 million.

During the fourth quarter of fiscal 2001, Spartan Stores sold the insurance agency component of its Insurance segment and recognized an estimated loss of $0.4 million on this sale.

Sales and significant assets and liabilities of discontinued operations are included below:

		Retail			Convenience Distribution		Grocery Distribution			Real Estate			Insurance
(In thousands, except per share data)
Sales
March 29, 2003	$	403,452		$	701,153	$	*		$	3,372		$	-
March 30, 2002		501,867			724,700		*			4,567			9,186
March 31, 2001		387,756			752,316		*			4,939			13,610
(Loss) Earnings Per Share
March 29, 2003	$	(2.82	)	$	0.10	$	(0.44	)	$	0.57		$	(0.07	)
March 30, 2002		(0.18	)		0.13		0.00			(0.00	)		(0.10	)
March 31, 2001		0.23			0.20		0.00			0.08			(0.01	)

* All sales from the discontinued Grocery Distribution operations were intercompany, and therefore, eliminated in consolidation.

- -44-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

		Retail		Convenience Distribution		Grocery Distribution		Real Estate		Insurance
(In thousands)
March 29, 2003
Current assets *	$	62,108	$	41,949	$	1,368	$	1,570	$	6,921
Property, net		5,599		-		-		-		-
Other long-term assets		716		43		-		7		-
Current liabilities		11,274		11,813		-		185		11,216
Long-term liabilities		10,182		-		-		-		-
March 30, 2002
Current assets *	$	46,744	$	36,069	$	21,742	$	2,492	$	16,306
Property, net		86,511		13,098		9,703		26,384		-
Other long-term assets		32,319		43		-		7,200		-
Current liabilities		23,331		11,107		13,363		165		13,206
Long-term liabilities		2,101		-		-		-		-

* Includes property and equipment held for sale

Note 4
Asset Impairments and Exit Costs

Spartan Stores evaluated long-lived assets for impairment and recorded charges in fiscal 2003 of $1.5 million and in fiscal 2002 of $0.2 million in the Retail segment and charges in fiscal 2001 of $1.1 million in the Grocery Distribution segment. The charges recorded were based on estimated market values of these facilities. The actual charge to be ultimately realized may vary significantly from these estimates as final sales transactions are consummated.

The Retail segment recognized charges of $2.9 million and $0.9 million in fiscal 2003 and fiscal 2002, respectively, for all other store and office facility exit costs, which include the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease recoveries, as well as severance benefits. Also in fiscal 2003, management determined that one store that had previously been designated for closure would not be closed because market conditions in the area changed.

The following table provides the activity of exit costs for fiscal years 2003, 2002 and 2001. Exit costs recorded in the Consolidated Balance Sheets are included in Other accrued expenses in current liabilities and Other long-term liabilities based on when the costs are expected to be paid.

- -45-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands)	Lease and Ancillary Costs			Severance
Balance at March 26, 2000	$	671		$	-
Provision for lease and related ancillary costs, net of estimated    sublease recoveries		1,000	(a)		- -
Lease reserves at acquisition date		5,067			-
Payments, net of interest accretion		(939	)		-
Balance at March 31, 2001		5,799			-
Provision for lease and related ancillary costs, net of estimated    sublease recoveries		873			-
Payments, net of interest accretion		(1,666	)		-
Balance at March 30, 2002		5,006			-
Provision for lease and related ancillary costs, net of estimated    sublease recoveries		17,936	(b)		- -
Provision for severance		-			4,021	(c)
Payments, net of interest accretion		(3,969	)		(155	)
Balance at March 29, 2003	$	18,973		$	3,866

(a) Charges recorded in discontinued Convenience Distribution operations.
(b) Includes $14.9 million of charges recorded in discontinued Retail operations and $0.1 million recorded in discontinued Grocery Distribution operations.
(c) Includes $3.1 million of charges recorded in discontinued Retail operations and $0.9 million recorded in discontinued Grocery Distribution operations.

Note 5
Acquisitions

On March 4, 2001, Spartan Stores consummated a merger with Prevo's Family Markets, Inc. ("Prevo's"). Prevo's was a supermarket chain located in western and northern Michigan. The total purchase price of Prevo's was $36.1 million in cash. The excess of the purchase price over the fair value of assets and liabilities recorded was $26.1 million.

On August 1, 2000, Spartan Stores consummated a merger with Seaway Food Town, Inc. ("Food Town"). Food Town was a regional supermarket chain that operated supermarkets and deep discount drugstores predominantly in northwest and central Ohio and southeast Michigan. The purchase price of Food Town was $114.3 million, including cash of $36.2 million, the exchange of stock of $70.9 million and a liability to dissenting shareholders of $7.3 million. At the date of the merger, 6.7 million shares of outstanding Food Town common stock were converted into the right to receive one share of Spartan Stores common stock and $5.00 in cash for each Food Town share. In addition, Spartan Stores received $0.5 million in cash and assumed certain liabilities of $85.7 million, which included $32.5 million of long-term debt, in conjunction with the Food Town merger. The holders of 443,300 shares of Food Town common stock provided notice of dissent from the merger. On September 17, 2001, Spartan Stores issued to the dissenting Food Town shareholders one share of Spartan Stores common stock and paid $4.75 for each share of the Food Town common stock held in aggregate by the dissenters in settlement of the dissenters'

- -46-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

rights claims. The excess of the purchase price over the fair value of assets and liabilities recorded was $30.1 million.

The acquisitions of Food Town and Prevo's were accounted for as purchases and, accordingly, the acquired assets and assumed liabilities were included in the accompanying Consolidated Balance Sheets at fair market value.

Note 6
Goodwill and Other Intangible Assets

Spartan Stores' adoption of SFAS No. 142 eliminated the amortization of goodwill as of the beginning of fiscal 2003.

The following table adjusts net (loss) earnings and (loss) earnings per share for the adoption of SFAS No. 142:

(In thousands, except per share data)
	2003			2002		2001
Net (loss) earnings, as reported	$	(122,332	)	$	9,847		23,442
Add: Goodwill amortization, net of tax		-			2,912		2,190
Adjusted net (loss) earnings	$	(122,332	)	$	12,759	$	25,632
Reported basic and diluted (loss) earnings per share	$	(6.15	)	$	0.50	$	1.35
Add: Goodwill amortization, net of tax		-			0.15		0.13
Adjusted basic and diluted (loss) earnings per share	$	(6.15	)	$	0.65	$	1.48

Changes in the carrying amount of goodwill were as follows:

(In thousands)		Retail			Grocery Distribution		Total
Balance at March 30, 2002, net of    accumulated amortization	$	155,243		$	- -	$	155,243
Allocation of goodwill upon    adoption of SFAS No. 142		(30,300	)		30,300		-
Impairment of goodwill    recognized as a cumulative    effect of a change in accounting    principle		(41,600	)		- -		(41,600	)
Impairment of goodwill recognized    in operating loss (earnings)		(43,154	)		-		(43,154	)
Impairment of goodwill recognized    in discontinued operations		(1,846	)		- -		(1,846	)
Balance at March 29, 2003	$	38,343		$	30,300	$	68,643

- -47-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Due to operational results in Spartan Stores' Retail segment, operating results and cash flows were significantly lower than anticipated. Based on this trend, the earnings forecast was revised and a valuation of the Retail segment was conducted in the third quarter of fiscal 2003. Fair value was determined based on the discounted cash flows and comparable market values for the segment. As a result of the impairment analysis, a loss was recorded to reduce the carrying value of goodwill at the Retail segment by $45.0 million (including $1.8 million in discontinued operations), prior to provision for tax benefit of $15.7 million, to its implied fair value.

The following table reflects the components of amortized intangible assets, included in Other, net on the Consolidated Balance Sheets:

(In thousands)	March 29, 2003				March 30, 2002
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-compete agreements	$	6,739	$	3,401	$	7,613	$	4,468
Favorable leases		2,506		699		2,954		953
Total	$	9,245	$	4,100	$	10,567	$	5,421

The weighted average useful life of non-compete agreements, favorable leases, and intangible assets in total is 11.1 years, 14.7 years and 12.0 years, respectively. Amortization expense for intangible assets was $1.0 million and $1.1 million for the fiscal years 2003 and 2002, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:

(In thousands)	Fiscal Year	Amortization Expense
	2004	$	897
	2005		641
	2006		573
	2007		481
	2008		435
	Total	$	3,027

- -48-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 7
Marketable Securities

The amortized cost and estimated fair value of marketable securities available-for-sale is shown below:

		Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
(In thousands)
As of March 29, 2003:
U.S. Treasury securities and obligations of U.S.
Government, corporations and agencies	$	1,463	$	119	$	-	$	1,582
Debt securities issued by foreign governments,
corporations and agencies		114		9		-		123
Total	$	1,577	$	128	$	-	$	1,705
As of March 30, 2002:
U.S. Treasury securities and obligations of U.S.
Government, corporations and agencies	$	4,474	$	-	$	167	$	4,307
Debt securities issued by foreign governments,
corporations and agencies		5,951		117		5		6,063
Total	$	10,425	$	117	$	172	$	10,370

The amortized cost of marketable securities as of March 29, 2003 by contractual maturity, is shown below:

(In thousands)
Due within one year	$	-
Due after one year through five years		114
Due after five years through ten years		98
Due after ten years		1,365
	$	1,577

Actual maturities may differ from contractual maturities due to the exercise of prepayment options.

- -49-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 8
Notes Payable and Long-Term Debt

Spartan Stores' long-term debt consists of the following:

(In thousands)	March 29 2003		March 30, 2002
Senior credit facility, Term Loan A, due March 2005,
quarterly principal payments of $3,591	$	32,317	$	60,000
Senior credit facility, Term Loan B, due March 2007,
semi-annual principal payments of $180		106,468		148,500
Senior credit facility, Acquisition facility, due March 2006,
quarterly principal payments of variable amounts		41,294		65,000
Senior credit facility, Revolving credit facility, due March 2005		12,700		13,000
Variable Rate Promissory Notes, unsecured, due March 31, 2003,
interest payable quarterly at 1% below the prime rate		8,256		13,054
Other		19,376		21,607
		220,411		321,161
Less current portion		36,594		25,948
Total long-term debt	$	183,817	$	295,213

- -50-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Spartan Stores has a $390.0 million senior secured credit facility pursuant to an Amended and Restated Credit Agreement dated July 29, 2002, as amended, consisting of (1) a revolving credit facility in the amount of $65.0 million terminating in 2005, (2) a term loan A in the amount of $100.0 million terminating in 2005, (3) an acquisition facility in the amount of $75.0 million terminating in 2006 and (4) a term loan B in the amount of $150.0 million terminating in 2007. The credit facility provides for the issuance of letters of credit of which $15.4 million and $13.0 million were outstanding and unused as of March 29, 2003 and March 30, 2002, respectively. Interest rates payable on amounts borrowed under the credit facility are based on the prime rate, the federal funds rate or the Eurodollar rate, plus a stipulated margin. The term loan A facility bears interest at the 90-day Eurodollar rate plus 3.50% (4.88% at March 29, 2003), the term loan B facility bears interest at the 90-day Eurodollar rate plus 4.00% (5.38% at March 29, 2003) and the Acquisition facility bears interest at the 90-day Eurodollar rate plus 3.75% (5.13% at March 29, 2003).

The credit facility contains covenants that include the maintenance of certain financial ratios, restrictions on additional indebtedness and payments of cash dividends and restricted payments. Compliance with certain financial covenants at March 29, 2003 and June 21, 2003 has been waived by Spartan Stores' creditors through September 12, 2003 as they work with Spartan Stores on alternatives to amend its existing credit facility. Should Spartan Stores not be able to obtain revised covenants in an amended credit facility, it may not be able to comply with the credit facility financial covenants in fiscal 2004. However, management believes that it has the opportunity to amend its existing financing arrangements with its creditors, and, if needed, secure alternative sources of available financing. The credit facility is secured by substantially all of Spartan Stores' and its subsidiaries assets.

Spartan Stores manages interest rate risk on a portion of its debt through the use of interest rate swap agreements that expire on June 30, 2003. Under the terms of the agreements, Spartan Stores is protected against increases in interest rates from and after the date of the agreements in the initial aggregate notional amount of $162.5 million, which decreases in proportion to scheduled principal payments made on term loan A and term loan B. The aggregate notional amount will be $123.7 million at the end of the agreements' four-year term. The interest rate swap agreements converted a portion of the credit facility from a floating rate obligation to a fixed rate obligation. As of March 29, 2003, the net unrealized loss on the $127.0 million interest rate swap agreements was $1.3 million, compared to a $3.8 million unrealized loss at March 30, 2002. The fair value of the interest rate swap agreements is the amount at which it could be settled based on estimates obtained from lending institutions.

The notional amount is used quarterly in the determination of cash settlements under the agreements. The interest rate swap agreements expose Spartan Stores to credit losses from counter-party nonperformance, although losses are not anticipated from the agreements, which are with a major financial institution. The interest rate swap agreements are accounted for on the accrual basis. Amounts to be paid or received under the agreements are recognized as interest expense or income in the period they accrue. Spartan Stores does not hold or issue interest rate swap agreements for trading purposes.

The weighted average interest rates for fiscal 2003, fiscal 2002 and fiscal 2001 were 9.59%, 8.02% and 9.83%, respectively.

- -51-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At March 29, 2003 long-term debt was due as follows:

(In thousands)
Fiscal Year
2004	$	36,594
2005		45,815
2006		23,616
2007		106,820
2008		4,119
Thereafter		3,447
	$	220,411

Spartan Stores has in the past offered non-subordinated variable rate promissory notes to the public. The notes have been issued in minimum denominations of $1,000 and may be issued by Spartan Stores at any time, although Spartan Stores' senior secured credit facility restricts the total amount outstanding under the offering to approximately $15.0 million. The non-subordinated variable rate promissory notes are issued under a "shelf" registration statement filed with the Securities and Exchange Commission, effective February 26, 2001, which provides for the issuance of up to $100 million of debt securities. Effective March 31, 2003 Spartan Stores suspended the promissory note program and all notes were repaid as of that date.

Note 9
Commitments and Contingencies

Spartan Stores subleases property for eight locations to customers and receives annual rental income of $1.7 million. In the event of the customer's default, Spartan would be responsible for fulfilling these lease obligations. The future payment obligations under these leases are disclosed in Notes 8 and 10.

Various other lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against Spartan Stores. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in a material adverse effect on the consolidated financial position, operating results or liquidity of Spartan Stores.

Note 10
Leases

Rental expense under operating leases was $25.5 million, $24.8 million and $20.9 million in fiscal 2003, fiscal 2002 and fiscal 2001, respectively. Future minimum obligations under operating leases in effect at March 29, 2003 are as follows:

- -52-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands)

Fiscal Year	Used in Operations		Subleased to Others		Total
2004	$	22,840	$	1,015	$	23,855
2005		21,717		1,015		22,732
2006		19,780		851		20,631
2007		17,281		796		18,077
2008		15,249		609		15,858
Thereafter		65,117		4,407		69,524
Total	$	161,984	$	8,693	$	170,677

In addition to the above amounts are $17.6 million of obligations associated with closed facilities that have been included at their present value in Other accrued expenses and Other long-term liabilities in the Consolidated Balance Sheets. See Note 4 for additional information.

One of Spartan Stores' subsidiaries leases retail store facilities to non-related entities. Of the stores leased, several are owned and others were obtained through leasing arrangements and are accounted for as operating leases. Substantially all of the leases provide for minimum and contingent rentals based upon stipulated sales volumes.

Owned assets, included in property and equipment, which are leased to others are as follows:

(In thousands)	March 29, 2003		March 30, 2002
Land and improvements	$	2,417	$	2,417
Buildings		1,271		1,271
		3,688		3,688
Less accumulated depreciation		2,044		1,928
Net property	$	1,644	$	1,760

Future minimum rentals to be received under operating leases in effect at March 29, 2003 are as follows:

(In thousands)

Fiscal Year	Owned Property		Leased Property		Total
2004	$	330	$	1,075	$	1,405
2005		330		1,075		1,405
2006		295		902		1,197
2007		260		844		1,104
2008		260		646		906
Thereafter		21		4,672		4,693
Total	$	1,496	$	9,214	$	10,710

- -53-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 11
Associate Retirement Plans

Spartan Stores' retirement programs include pension plans providing non-contributory benefits, salary reduction defined contribution plans and profit'sharing plans providing contributory benefits. Substantially all of Spartan Stores' associates not covered by collective bargaining agreements are covered by either a non-contributory cash balance pension plan ("Company Plan"), a defined contribution plan or both. Associates covered by collective bargaining agreements are included in multi-employer pension plans.

Spartan Stores' Company Plan benefit formula utilizes a cash balance approach. Under the cash balance formula, credits are added annually to a participant's "account" based on a percent of the participant's compensation and years of vested service at the beginning of each calendar year. Transition credits are also added at Spartan's discretion to certain participants' accounts until the year 2007 if certain age and years-of'service requirements are met. Spartan Stores has suspended the accrual of service and transition credits to the Company Plan for fiscal 2004. The suspension of these credits will reduce cash funding of the plan by approximately $3.0 to $4.0 million in fiscal 2004. Interest credits will continue to accrue. At Spartan's discretion, interest credits are also added annually to a participant's account based upon the participant's account balance as of the last day of the immediately preceding calendar year. Annual payments to the pension trust fund are determined in compliance with the Empl oyee Retirement Income Security Act of 1976 ("ERISA"). Company Plan assets consist principally of common stocks and U.S. government and corporate obligations. At March 29, 2003 and March 30, 2002, Company Plan assets included shares of Spartan Stores common stock valued at $0.4 million and $1.4 million, respectively.

Spartan Stores also maintains a Supplemental Executive Retirement Plan ("SERP"), which provides nonqualified deferred compensation benefits to Spartan Stores' officers. Benefits under the SERP are paid from Spartan Stores' general assets, as there is no separate trust established to fund benefits. On March 21, 2003 Spartan Stores paid $2.9 million in SERP benefits under the provisions of the plan. In fiscal 2004, $1.4 million of this distribution will be recognized as expense under "settlement accounting" requirements.

Matching contributions made by Spartan Stores to salary reduction defined contribution plans and contributions to profit sharing plans totaled $3.1 million, $3.3 million and $3.0 million in fiscal 2003, fiscal 2002 and fiscal 2001, respectively.

In addition to the plans described above, Spartan Stores participates in several multi-employer and other defined contribution plans for substantially all associates covered by collective bargaining agreements. The expense for these plans totaled approximately $5.9 million in fiscal 2003, $6.5 million in fiscal 2002 and $6.6 million in fiscal 2001.

The Multi-Employer Pension Plan Amendments Act of 1980 amended ERISA to establish funding requirements and obligations for employers participating in multi-employer plans, principally related to employer withdrawal from or termination of such plans. Separate actuarial calculations of Spartan Stores' position with respect to the multi-employer plans are not available.

- -54-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Spartan Stores and certain subsidiaries provide health care benefits to retired associates who have at least 30 years of service or 10 years of service and have attained age 55, and who were not covered by collective bargaining arrangements during their employment ("covered associates"). Qualified covered associates that retired prior to March 31, 1992 receive major medical insurance with deductible and coinsurance provisions until age 65 and Medicare supplemental benefits thereafter. Covered associates retiring after April 1, 1992 are eligible for monthly postretirement health care benefits of $5 multiplied by the associate's years of service. This benefit is in the form of a credit against the monthly insurance premium. The balance of the premium is paid by the retiree.

The following tables set forth the change in benefit obligation, change in plan assets, weighted average assumptions used in actuarial calculations and components of net periodic benefit costs for Spartan Stores' pension and postretirement benefit plans. The accrued benefit costs are reported in Postretirement benefits in the Consolidated Balance Sheets. The measurement date was December 31 of each year.

- -55-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands)	Pension Benefits						SERP Benefits						Postretirement Benefits
	March 29, 2003			March 30, 2002			March 29, 2003			March 30, 2002			March 29, 2003			March 30, 2002
Change in benefit obligation
Benefit obligation at beginning of year	$	50,123		$	51,785		$	2,453		$	2,129		$	5,150		$	4,854
Service cost		4,041			3,504			93			90			198			201
Interest cost		3,443			3,525			176			159			368			352
Plan amendments		-			21			-			15			-			32
Actuarial (gain) loss		2,380			(3,568	)		438			182			533			77
Benefits paid		(6,432	)		(5,144	)		(55	)		(122	)		(199	)		(366	)
Benefit obligation at measurement date	$	53,555		$	50,123		$	3,105		$	2,453		$	6,050		$	5,150
Change in plan assets
Plan assets at fair value at beginning of year	$	47,978		$	51,734		$	-		$	-		$	-		$	-
Actual return on plan assets		(5,591	)		(2,043	)		-			-			-			-
Company contributions		1,660			3,431			55			122			199			366
Benefits paid		(6,432	)		(5,144	)		(55	)		(122	)		(199	)		(366	)
Plan assets at fair value at measurement date	$	37,615		$	47,978		$	-		$	-		$	-		$	-
Funded status	$	(15,940	)	$	(2,145	)	$	(3,105	)	$	(2,453	)	$	(6,050	)	$	(5,150	)
Unrecognized net loss		14,684			2,083			1,401			1,005			1,502			998
Unrecognized prior service cost		(4,667	)		(5,029	)		4			21			(1,027	)		(1,091	)
Unrecognized net transition obligation		15			21			-			-			-			-
Accrued benefit cost at measurement date		(5,908	)		(5,070	)		(1,700	)		(1,427	)		(5,575	)		(5,243	)
Contributions during fourth quarter		801			-			-			15			-			-
Benefits paid		-			-			2,889			-			-			-
(Accrued) prepaid benefit cost at end of year	$	(5,107	)	$	(5,070	)	$	1,189		$	(1,412	)	$	(5,575	)	$	(5,243	)
Amounts recognized in the consolidated balance sheets consist of:
Accrued benefit liability	$	(8,530	)	$	(5,070	)	$	(520	)	$	(1,669	)	$	(5,575	)	$	(5,243	)
Prepaid expense		-			-			1,189			-			-			-
Intangible asset		-			-			4			53			-			-
Accumulated other comprehensive income		3,423			-			516			204			-			-
	$	(5,107	)	$	(5,070	)	$	1,189		$	(1,412	)	$	(5,575	)	$	(5,243	)
Weighted average assumptions at
measurement date
Discount rate		6.75%			7.25%			6.75%			7.25%			6.75%			7.25%
Expected return on plan assets		8.75%			9.25%			N/A			N/A			N/A			N/A
Rate of compensation increase		4.25%			4.50%			4.25%			4.50%			N/A			N/A

- -56-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands)	Pension Benefits									SERP
	March 29, 2003			March 30, 2002			March 31, 2001			March 29, 2003		March 30, 2002		March 31, 2001
Components of net periodic benefit cost
Service cost	$	4,041		$	3,504		$	3,653		$	93	$	90	$	83
Interest cost		3,443			3,525			3,626			176		159		146
Expected return on plan assets		(4,630	)		(4,774	)		(4,916	)		-		-		-
Net amortization and deferral		(356	)		(481	)		(445	)		59		77		78
Net periodic benefit cost	$	2,498		$	1,774		$	1,918		$	328	$	326	$	307

(In thousands)	Postretirement Benefits
	March 29, 2003			March 30, 2002			March 31, 2001
Components of net periodic benefit cost
Service cost	$	198		$	201		$	178
Interest cost		368			352			350
Net amortization and deferral		(35	)		(42	)		(40	)
Net periodic benefit cost	$	531		$	511		$	488

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement plan. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 5.00% for fiscal 2003, fiscal 2002 and fiscal 2001. A 1% increase in the assumed health care cost trend rate would increase the accumulated postretirement benefit obligation by 0.98% and the periodic postretirement benefit cost by 0.70%. A 1% decrease in the assumed health care cost trend rate would decrease the accumulated postretirement benefit obligation by 0.90% and periodic postretirement benefit cost by 0.64%.

- -57-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 12
Taxes on Income

The income tax provision for continuing operations is summarized as follows:

(In thousands)	March 29, 2003			March 30, 2002		March 31, 2001
Currently payable	$	3,421		$	2,172	$	7,529
Deferred		(21,508	)		4,050		1,648
	$	(18,087	)	$	6,222	$	9,177

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

	2003		2002		2001
Statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes	-		0.5		1.1
Research and development credit	-		(4.9	)	2.1
Other	(0.3	)	2.2		0.2
Effective income tax rate	34.7	%	32.8	%	38.4	%

Deferred tax assets and liabilities resulting from temporary differences as of March 29, 2003 and March 30, 2002 are as follows:

(In thousands)
	2003		2002
Deferred tax assets:
Employee benefits	$	10,721	$	11,188
Accounts receivable		1,263		1,221
Other comprehensive loss		1,516		1,402
Asset impairment and closed store reserves		25,006		2,161
All other		1,399		1,522
Total deferred tax assets		39,905		17,494
Deferred tax liabilities:
Depreciation		2,548		20,243
Inventory		4,948		8,606
All other		2,730		2,443
Total deferred tax liabilities		10,226		31,292
Net deferred tax asset (liability)	$	29,679	$	(13,798	)

- -58-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Spartan Stores has a net operating loss carryforward of $1.4 million, which expires in fiscal year 2023.

Note 13
Shareholders' Equity

On July 18, 2000, the shareholders approved a proposal to amend Spartan Stores' articles of incorporation and bylaws in connection with the merger with Food Town. As a result, each outstanding share of Spartan Stores Class A common stock, $2.00 par value, was converted into one share of Spartan Stores common stock, no par value.

On August 1, 2000, approximately 6.7 million shares of outstanding Food Town common stock were converted into the right to receive one share of Spartan Stores common stock and $5.00 in cash for each Food Town share. The holders of 443,300 shares of Food Town common stock provided notice of dissent from the merger. (In September 2001, the dissenters' rights claims were settled and the remaining shares of Food Town stock were converted into Spartan Stores common stock.) In addition, Spartan Stores declared a stock split pursuant to a stock dividend of 0.336 shares of Spartan Stores' common stock for each share outstanding immediately prior to the merger. Accordingly, per share amounts have been restated throughout the consolidated financial statements.

Spartan Stores has a shareholder-approved stock incentive plan covering 2,000,000 shares of Spartan Stores common stock. The plan provides for the granting of incentive stock options as well as non-qualified stock options, restricted stock and stock awards to directors, officers and other key associates. Spartan Stores accounts for stock option grants in accordance with SFAS No. 123, and as allowed by this statement recognizes expense using the intrinsic value method prescribed by APB Opinion No. 25 and related Interpretations. Accordingly, no compensation cost has been recognized for stock option grants since the options have exercise prices equal to the fair market value at the date of grant. Options must be exercised within ten years of the date of grant. The authorization to grant options under the plan terminates on May 8, 2011. The following table also includes outstanding options granted under the 1991 Stock Option Plan. As of March 29, 2003, 960,471 shares remained unissued under the plan.

- -59-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

	Shares Under Options		Weighted Average Exercise Price		Weighted Average Fair Value of Options Granted
Options outstanding at March 26, 2000	52,104		$	8.31
Granted	339,696			7.56	$	3.07
Cancelled	(22,712	)		9.02
Options outstanding at March 31, 2001	369,088		$	7.58
Granted	628,500			13.73	$	6.29
Cancelled	(97,834	)		11.34
Options outstanding at March 30, 2002	899,754		$	11.47
Granted	753,784			6.60	$	3.50
Exercised	(16,666	)		7.44
Cancelled	(217,633	)		10.52
Options outstanding at March 29, 2003	1,419,239		$	9.08
Options exercisable at March 29, 2003	327,931		$	9.89

The following table sets forth options outstanding at March 29, 2003 by exercise price and remaining contractual life.

Exercise Prices		Options Outstanding	Weighted Average Remaining Contractual Life Years
$	6.59 - 9.21	24,048	0.1 - 5.1
	5.84 - 16.57	742,407	6.1 - 8.5
	1.75 - 8.07	652,784	9.0 - 10.0
$	1.75 - 16.57	1,419,239	8.51

Spartan Stores has a stock bonus plan covering 300,000 shares of Spartan Stores common stock. Under the provisions of this plan, officers and certain key associates of Spartan Stores may elect to receive a portion of their annual bonus in common stock rather than cash and will be granted additional shares of common stock worth 30% of the portion of the bonus they elect to receive in stock. Stock issued under the stock bonus plan is accounted for in accordance with APB Opinion No. 25. Compensation expense is recorded based upon the market price of the stock as of the measurement date. At March 29, 2003, 300,000 shares remained unissued under the plan.

- -60-

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Spartan Stores has an associate stock purchase plan covering 200,000 shares of Spartan Stores common stock. The plan provides that associates of Spartan Stores and its subsidiaries may purchase shares at 85% of the fair market value. At March 29, 2003, 199,823 shares had been issued under the plan. In August 2003, shareholders will vote on a proposal to increase the authorized shares for the associate stock purchase plan to 700,000 shares.

Spartan Stores has a directors' stock purchase plan covering 25,000 shares of Spartan Stores common stock. The plan provides that directors of Spartan Stores may elect to receive at least 25% and up to 100% of their director's fees in the form of Spartan Stores common stock. At March 29, 2003, no shares remain available for issuance under this plan.

Spartan Stores had a long-term incentive plan covering 668,000 shares of Spartan Stores common stock. Under the provisions of this plan, stock was to be awarded to officers and certain key associates based on the achievement of board-established performance levels during rolling three-year performance periods. Spartan Stores terminated the long-term incentive plan with respect to the performance period beginning with fiscal 2002 and ending with fiscal 2004, as well as all subsequent performance periods. No amounts have been accrued and no shares have been or will be issued under this plan.

Spartan Stores' restated articles of incorporation provide that the board of directors may at any time, and from time to time, provide for the issuance of up to 10 million shares of preferred stock in one or more series, each with such designations as determined by the board of directors. At March 29, 2003, there were no shares of preferred stock outstanding.

Note 14
Operating Segment Information

Using the management approach as required by SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," Spartan Stores' operating segments are identified by products sold and customer profile and include Retail and Grocery Distribution.

The operations of the Insurance, Real Estate and Convenience Distribution segments and a portion of the Retail segment have been classified as discontinued operations. Residual business operations in the Real Estate and Convenience Distribution segments are considered to be immaterial under the criteria in SFAS No. 131 and have not been separately classified. Those operations have been recorded in the Grocery Distribution segment. See Note 3 for further discussion. Segment information for earlier periods has been restated to reflect changes in the composition of the reportable segments.

The Retail segment operates supermarkets and drug stores in Michigan and Ohio that typically offer dry grocery, produce, dairy products, meat, floral, seafood, health and beauty care, cosmetics, delicatessen and bakery goods. Larger retail stores also typically offer pharmacy services.

Spartan Stores' Grocery Distribution segment supplies Spartan Stores' retail stores, independent retail and convenience store customers with dry grocery, produce, dairy products, meat, beverages, frozen food, seafood, floral, general merchandise, tobacco, pharmacy and health and beauty care items. To supply its wholesale customers, Spartan Stores operates a fleet of tractors, conventional trailers and refrigerated trailers, substantially all of which are leased by Spartan Stores.

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SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Identifiable assets represent total assets directly associated with the various operating segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments.

The following tables set forth information about the Company by operating segment:

(In thousands)	Retail			Grocery Distribution		Total
Year Ended March 29, 2003
Net sales	$	880,494		$	1,267,573	$	2,148,067
Provision for asset impairments and exit costs		47,711			-		47,711
Depreciation and amortization		16,172			11,125		27,297
Operating (loss) earnings		(51,745	)		16,965		(34,780	)
Capital expenditures		8,341			3,855		12,196
Year Ended March 30, 2002
Net sales		931,973			1,338,046		2,270,019
Provision for asset impairments and exit costs		1,030			-		1,030
Depreciation and amortization		18,066			12,796		30,862
Operating earnings		17,604			16,414		34,018
Capital expenditures		9,815			7,755		17,570
Year Ended March 31, 2001
Net sales		772,840			1,588,072		2,360,912
Provision for asset impairments and exit costs		-			1,098		1,098
Depreciation and amortization		13,591			13,676		27,267
Operating earnings		20,121			21,174		41,295
Capital expenditures		13,944			13,225		27,169

		2003			2002
Total assets
Retail	$	313,774		$	333,209
Grocery Distribution		883,553			915,203
Discontinued operations - Retail		68,423			165,574
Discontinued operations - Convenience Distribution		41,992			49,210
Discontinued operations - Grocery Distribution		1,368			31,445
Discontinued operations - Real Estate		1,577			36,076
Discontinued operations - Insurance		6,921			16,306
Eliminations		(761,302	)		(786,432	)
Total	$	556,306		$	760,591

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SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 15
Quarterly Financial Information (unaudited)

Earnings (loss) per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year. Stock sales prices are based on transactions reported on The NASDAQ Stock Market. The following financial information has been restated to exclude discontinued operations information.

(In thousands, except per share data)
Fiscal 2003	Full Year (52 weeks)			4th Quarter (12 weeks)			3rd Quarter (16 weeks)			2nd Quarter (12 weeks)			1st Quarter (12 weeks)
Net sales	$	2,148,067		$	475,602		$	665,244		$	516,386		$	490,835
Gross margin		373,717			81,671			111,315			92,553			88,178
Provision for asset impairments and    exit costs		47,711			310			47,401			- -			- -
(Loss) earnings from continuing operations    before income taxes		(52,074	)		(10,398	)		(53,079	)		6,910			4,493
(Loss) earnings from continuing operations		(33,987	)		(6,537	)		(34,736	)		4,391			2,895
Discontinued operations, net of taxes		(52,968	)		(14,380	)		(22,339	)		(4,978	)		(11,271	)
Cumulative effect of a change in accounting    principle		(35,377	)		- -			- -			- -			(35,377	)
Net loss		(122,332	)		(20,917	)		(57,075	)		(587	)		(43,753	)
(Loss) earnings from continuing operations    per share - Basic and Diluted		(1.71	)		(0.33	)		(1.74	)		0.22			0.15
Net loss per share - Basic and Diluted		(6.15	)		(1.05	)		(2.87	)		(0.03	)		(2.21	)
Common stock sale price - High		8.51			3.89			3.25			4.80			8.51
Common stock sale price - Low		1.21			1.52			1.21			2.80			3.74

(In thousands, except per share data)
Fiscal 2002	Full Year (52 weeks)			4th Quarter (12 weeks)			3rd Quarter (16 weeks)			2nd Quarter (12 weeks)		1st Quarter (12 weeks)
Net sales	$	2,270,019		$	497,638		$	688,239		$	546,291	$	537,851
Gross margin		404,685			86,094			120,795			102,899		94,897
Provision for asset impairments and    exit costs		1,030			1,030			- -			- -		- -
Earnings (loss) before income taxes and    discontinued operations		18,976			(2,537	)		4,112			10,603		6,798
(Loss) earnings from continuing operations		12,754			(1,642	)		2,582			7,402		4,412
Discontinued operations, net of taxes		(2,907	)		(3,383	)		(2,528	)		1,813		1,191
Net earnings (loss)		9,847			(5,025	)		54			9,215		5,603
Earnings (loss) from continuing operations    per share - Basic		0.65			(0.08	)		0.13			0.38		0.23
Earnings (loss) from continuing operations    per share - Diluted		0.65			(0.08	)		0.13			0.38		0.23
Net earnings (loss) per share - Basic		0.50			(0.25	)		0.00			0.48		0.29
Net earnings (loss) per share - Diluted		0.50			(0.25	)		0.00			0.47		0.29
Common stock sale price - High		16.95			12.14			13.66			16.95		14.74
Common stock sale price - Low		5.90			5.90			10.79			11.38		9.19

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

          None.

PART III

Item 10. Directors and Executive Officers of the Registrant

          The information required by this item is incorporated herein by reference from the sections entitled "The Board of Directors," "Spartan Stores' Officers" and "Section 16(a) Beneficial Ownership Reporting Compliance" in Spartan Stores' definitive proxy statement relating to its annual meeting of shareholders to be held August 6, 2003.

Item 11. Executive Compensation

          The information required by this item is incorporated herein by reference from the sections entitled "Executive Compensation" and "Compensation of Directors" in Spartan Stores' definitive proxy statement relating to its annual meeting of shareholders to be held August 6, 2003.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

          The information required by this item is incorporated herein by reference from the sections entitled "Ownership of Spartan Stores Stock" and "Equity Compensation Plan Information" in Spartan Stores' definitive proxy statement relating to its annual meeting of shareholders to be held August 6, 2003.

Item 13. Certain Relationships and Related Transactions

          The information required by this item is incorporated herein by reference from the section entitled "Certain Relationships and Related Transactions" in Spartan Stores' definitive proxy statement relating to its annual meeting of shareholders to be held August 6, 2003.

Item 14. Controls and Procedures

          As of March 29, 2003, an evaluation of the effectiveness of the design and operation of Spartan Stores' disclosure controls and procedures (as currently defined in Rule 13a-14 under the Securities Exchange Act of 1934) was performed. This evaluation was performed under the supervision and with the participation of Spartan Stores' management, including its Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"). Based on that evaluation, Spartan Stores' management, including the CEO and CFO, concluded that Spartan Stores' disclosure controls and procedures were effective as of March 29, 2003 in timely alerting them to material information relating to Spartan Stores (including its consolidated subsidiaries) required to be included in Spartan Stores' periodic filings with the Securities and Exchange Commission. There have been no significant changes in Spartan Stores' internal controls or in other factors that could significantly affect Spartan Stores' disclosure controls and procedures subsequent to March 29, 2003.

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PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)	The following documents are filed as part of this Report:
	1.	Financial Statements.
		Independent Auditors' Report of Deloitte & Touche LLP dated May 6, 2003 (June 20, 2003 as to Notes 3 and 8)
		Consolidated Balance Sheets at March 29, 2003 and March 30, 2002
		Consolidated Statements of Operations for each of the three years in the period ended March 29, 2003
		Consolidated Statements of Shareholders' Equity for each of the three years in the period ended March 29, 2003
		Consolidated Statements of Cash Flows for each of the three years in the period ended March 29, 2003
		Notes to Consolidated Financial Statements
	2.	Financial Statement Schedules.

Schedule	Document
II	Valuation and Qualifying Accounts

3. Exhibits.

Exhibit Number	Document
2.1	Agreement and Plan of Merger dated as of April 6, 2000, by and between Spartan Stores, Inc., Spartan Acquisition Corp. and Seaway Food Town, Inc. Previously filed as Annex A to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4, filed June 5, 2000. Here incorporated by reference.
2.2	Asset Purchase Agreement dated May 7, 2003, by and among The H.T. Hackney Co., Spartan Stores, Inc., L&L/Jiroch Distributing Company and J.F. Walker Company, Inc. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K, filed June 24, 2003. Here incorporated by reference.

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Exhibit Number	Document
3.1	Amended and Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
3.2	Amended and Restated Bylaws of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
4.1	Articles IV, V, VIII, IX, X, XII and XIII of the Amended and Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
4.2	Articles II, III and X of the Amended and Restated Bylaws of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
10.1	Amended and Restated Lease, dated as of January 26, 2000, between Plymouth Investors Limited Liability Company and Spartan Stores Distribution, LLC. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 31, 2001. Here incorporated by reference.
10.2*	Spartan Stores, Inc. 1991 Stock Option Plan, as amended. Previously filed as an exhibit to Spartan Stores' Registration Statement on Form S-3 filed January 12, 2001. Here incorporated by reference.
10.3*	Spartan Stores, Inc. Supplemental Executive Retirement Plan. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 27, 1999. Here incorporated by reference.
10.4*	Spartan Stores, Inc. 2000 Annual Incentive Plan. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 31, 2001. Here incorporated by reference.
10.5*	Spartan Stores, Inc. 2001 Stock Incentive Plan. Previously filed as Appendix B to Spartan Stores' Definitive Proxy Statement for its 2001 Annual Meeting of Shareholders, filed on June 8, 2001. Here incorporated by reference.
10.6*	Spartan Stores, Inc. 2001 Stock Bonus Plan. Previously filed as Appendix C to Spartan Stores' Definitive Proxy Statement for its 2001 Annual Meeting of Shareholders, filed on June 8, 2001. Here incorporated by reference.

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Exhibit Number	Document
10.7*	Spartan Stores, Inc. 2001 Associate Stock Purchase Plan, as amended. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.8*	Spartan Stores, Inc. Supplemental Executive Savings Plan. Previously filed as an exhibit to Spartan Stores Form S-8 Registration Statement filed on December 21, 2001. Here incorporated by reference.
10.9*	Spartan Stores, Inc. Directors' Stock Purchase Plan. Previously filed as an exhibit to Spartan Stores' Registration Statement on Form S-3 filed January 12, 2001. Here incorporated by reference.
10.10	Amended and Restated Credit Agreement dated as of July 29, 2002, among Spartan Stores, Inc., ABN AMRO Bank N.V., as Arranger, Syndication Agent, Collateral Agent and Administrative Agent, Standard Federal Bank (formerly known as Michigan National Bank), as Co-Arranger and Administrative Agent, NBD Bank, as Document Agent, and certain other financial institutions as Lenders. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 22, 2002. Here incorporated by reference.
10.11	Waiver and Amendment No. 1 dated March 27, 2003, to Amended and Restated Credit Agreement dated as of July 29, 2002, among Spartan Stores, Inc., ABN AMRO Bank N.V., as Arranger, Syndication Agent, Collateral Agent and Administrative Agent, Standard Federal Bank (formerly known as Michigan National Bank), as Co-Arranger and Administrative Agent, NBD Bank, as Document Agent, and certain other financial institutions as Lenders.
10.12*	Form of Employment Agreements between Spartan Stores, Inc. and certain executive officers. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.13*	Form of Employment Agreements between Spartan Stores, Inc. and Craig C. Sturken and between Spartan Stores, Inc. and Dennis Eidson.
10.14*	Employment Agreement dated November 15, 2001, between Spartan Stores, Inc. and James B. Meyer. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.15*	Memorandum of Understanding dated as of March 3, 2003, between Spartan Stores, Inc. and James B. Meyer.
10.16*	Form of Executive Severance Agreement between Spartan Stores, Inc. and certain executive officers. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.

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Exhibit Number	Document
10.17*	Executive Severance Agreement dated March 3, 2003, between Spartan Stores, Inc. and Craig C. Sturken.
10.18*	Executive Severance Agreement dated March 17, 2003, between Spartan Stores, Inc. and Dennis Eidson.
10.19*	Executive Severance Agreement dated November 15, 2001, between Spartan Stores, Inc. and James B. Meyer. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.20	Contract of Sale dated as of May 23, 2003, between Seaway Food Town, Inc., Gruber's Food Town, Inc., Buckeye Real Estate Management Co., Gruber's Real Estate, LLC and The Kroger Co.
10.21	Purchase Agreement dated as of June 2, 2003, between Market Development Corporation and New Plan Excel Realty Trust, Inc.
21	Subsidiaries of Spartan Stores, Inc.
23	Consent of Deloitte & Touche LLP.
24	Powers of Attorney.
99	Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212.

*          These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10-K.

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          (b)          Spartan Stores furnished the following Forms 8-K during the quarter ended March 29, 2003.

Date of Report	Filing Date	Item(s) Reported
February 4, 2003	February 4, 2003	Under Item 9, this Form 8-K included a press release announcing that Spartan Stores was working with an investment banking firm to explore alternative strategies related to its Food Town retail grocery stores.
February 12, 2003	February 12, 2003	Under Item 9, this Form 8-K included a press release that reported Spartan Stores' financial results for the third quarter of fiscal 2003, which ended January 4, 2003. The press release included summary consolidated financial data for the quarters ended January 4, 2003 and January 5, 2002 and the year-to-date periods ended January 4, 2003 and January 5, 2002. The press release also contained balance sheet information as of January 4, 2003 and March 30, 2002.
March 3, 2003	March 3, 2003	Under Item 9, this Form 8-K included a press release announcing that Spartan Stores had appointed Craig C. Sturken as its President and Chief Executive Officer.
March 6, 2003	March 6, 2003	Under Item 9, this Form 8-K included a press release announcing the planned closing of 13 Food Town stores.

          All of the foregoing Forms 8-K were furnished pursuant to Regulation FD and are considered to have been "furnished" but not "filed" with the Securities and Exchange Commission.

- -69-

SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Spartan Stores, Inc. (the Registrant) has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SPARTAN STORES, INC. (Registrant)
Date:	June 25, 2003	By	/s/ Craig C. Sturken
		Craig C. Sturken       President and Chief Executive Officer

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                    Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Spartan Stores, Inc. and in the capacities and on the dates indicated.

June 25, 2003	By	/s/ Alex J. DeYonker
	Alex J. DeYonker       Director
June 25, 2003	By	/s/ Elson S. Floyd, Ph.D.*
	Elson S. Floyd, Ph.D.       Director
June 25, 2003	By	/s/ Richard B. Iott*
	Richard B. Iott       Director
June 25, 2003	By	/s/ James B. Meyer*
	James B. Meyer
	Director and Chairman of the Board
June 25, 2003	By	/s/ Elizabeth A. Nickels*
	Elizabeth A. Nickels       Director
June 25, 2003	By	/s/ James F. Wright*
	James F. Wright       Director
June 25, 2003	By	/s/ Gregory P. Josefowicz*
	Gregory P. Josefowicz       Director
June 25, 2003	By	/s/ Kenneth T. Stevens*
	Kenneth T. Stevens       Director
June 25, 2003	By	/s/ David M. Staples
	David M. Staples       Executive Vice President and Chief Financial Officer

- -71-

June 25, 2003	*By	/s/ Alex J. DeYonker
	Alex J. DeYonker       Attorney-in-Fact

- -72-

CERTIFICATIONS

          I, Craig C. Sturken, certify that:

          1.          I have reviewed this annual report on Form 10-K of Spartan Stores, Inc.;

          2.          Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

          3.          Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

          4.          The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                    a)          designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

                    b)          evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

                    c)          presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

          5.          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

                    a)          all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

                    b)          any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

          6.          The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: June 25, 2003	/s/ Craig C. Sturken
	Craig C. Sturken President and Chief Executive Officer

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          I, David M. Staples, certify that:

          1.          I have reviewed this annual report on Form 10-K of Spartan Stores, Inc.;

          2.          Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

          3.          Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

          4.          The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                    a)          designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

                    b)          evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

                    c)          presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

          5.          The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

                    a)          all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

                    b)          any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

          6.          The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated: June 25, 2003	/s/ David M. Staples
	David M. Staples Chief Financial Officer

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SCHEDULE II

SPARTAN STORES, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
(In thousands)

COLUMN A	COLUMN B		COLUMN C		ADDITIONS		COLUMN D		COLUMN E
DESCRIPTION	BALANCE AT BEGINNING OF YEAR		CHARGED TO COSTS AND EXPENSES (A)		CHARGED TO OTHER ACCOUNTS (B)		DEDUCTIONS (C)		BALANCE AT END OF YEAR
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Year ended 3/31/01	$	2,414	$	790	$	613	$	1,057	$	2,760
Year ended 3/30/02	$	2,760	$	2,774	$	-	$	1,403	$	4,131
Year ended 3/29/03	$	4,131	$	6,502	$	-	$	4,284	$	6,349
INSURANCE RESERVES:
Year ended 3/31/01	$	14,877	$	16,004	$	5,444	$	15,485	$	20,840
Year ended 3/30/02	$	20,840	$	23,825	$	-	$	27,402	$	17,263
Year ended 3/29/03	$	17,263	$	5,528	$	-	$	8,008	$	14,783

(A)	Bad debt expense of $866, $1,460 and $2,641 and insurance expense of $762, $6,765 and $8,201 is recorded in discontinued operations in fiscal 2003, fiscal 2002 and fiscal 2001, respectively.
(B)	Represents the allowances and reserves acquired through acquisitions.
(C)	Represents the write-off of uncollectible accounts as it relates to the allowance for doubtful accounts and payments made as it relates to insurance reserves.

EXHIBIT INDEX

Exhibit Number	Document
2.1	Agreement and Plan of Merger dated as of April 6, 2000, by and between Spartan Stores, Inc., Spartan Acquisition Corp. and Seaway Food Town, Inc. Previously filed as Annex A to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4, filed June 5, 2000. Here incorporated by reference.
2.2	Asset Purchase Agreement dated May 7, 2003, by and among The H.T. Hackney Co., Spartan Stores, Inc., L&L/Jiroch Distributing Company and J.F. Walker Company, Inc. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K, filed June 24, 2003. Here incorporated by reference.
3.1	Amended and Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
3.2	Amended and Restated Bylaws of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
4.1	Articles IV, V, VIII, IX, X, XII and XIII of the Amended and Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
4.2	Articles II, III and X of the Amended and Restated Bylaws of Spartan Stores, Inc. Previously filed as Annex B to the prospectus and joint proxy statement contained in Spartan Stores' Pre-effective Amendment No. 1 to Registration Statement on Form S-4 filed June 5, 2000. Here incorporated by reference.
10.1	Amended and Restated Lease, dated as of January 26, 2000, between Plymouth Investors Limited Liability Company and Spartan Stores Distribution, LLC. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 31, 2001. Here incorporated by reference.
10.2*	Spartan Stores, Inc. 1991 Stock Option Plan, as amended. Previously filed as an exhibit to Spartan Stores' Registration Statement on Form S-3 filed January 12, 2001. Here incorporated by reference.
10.3*	Spartan Stores, Inc. Supplemental Executive Retirement Plan. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 27, 1999. Here incorporated by reference.

- -i-

Exhibit Number	Document
10.4*	Spartan Stores, Inc. 2000 Annual Incentive Plan. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 31, 2001. Here incorporated by reference.
10.5*	Spartan Stores, Inc. 2001 Stock Incentive Plan. Previously filed as Appendix B to Spartan Stores' Definitive Proxy Statement for its 2001 Annual Meeting of Shareholders, filed on June 8, 2001. Here incorporated by reference.
10.6*	Spartan Stores, Inc. 2001 Stock Bonus Plan. Previously filed as Appendix C to Spartan Stores' Definitive Proxy Statement for its 2001 Annual Meeting of Shareholders, filed on June 8, 2001. Here incorporated by reference.
10.7*	Spartan Stores, Inc. 2001 Associate Stock Purchase Plan, as amended. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.8*	Spartan Stores, Inc. Supplemental Executive Savings Plan. Previously filed as an exhibit to Spartan Stores Form S-8 Registration Statement filed on December 21, 2001. Here incorporated by reference.
10.9*	Spartan Stores, Inc. Directors' Stock Purchase Plan. Previously filed as an exhibit to Spartan Stores' Registration Statement on Form S-3 filed January 12, 2001. Here incorporated by reference.
10.10	Amended and Restated Credit Agreement dated as of July 29, 2002, among Spartan Stores, Inc., ABN AMRO Bank N.V., as Arranger, Syndication Agent, Collateral Agent and Administrative Agent, Standard Federal Bank (formerly known as Michigan National Bank), as Co-Arranger and Administrative Agent, NBD Bank, as Document Agent, and certain other financial institutions as Lenders. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 22, 2002. Here incorporated by reference.
10.11	Waiver and Amendment No. 1 dated March 27, 2003, to Amended and Restated Credit Agreement dated as of July 29, 2002, among Spartan Stores, Inc., ABN AMRO Bank N.V., as Arranger, Syndication Agent, Collateral Agent and Administrative Agent, Standard Federal Bank (formerly known as Michigan National Bank), as Co-Arranger and Administrative Agent, NBD Bank, as Document Agent, and certain other financial institutions as Lenders.
10.12*	Form of Employment Agreements between Spartan Stores, Inc. and certain executive officers. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.13*	Form of Employment Agreements between Spartan Stores, Inc. and Craig C. Sturken and between Spartan Stores, Inc. and Dennis Eidson.

- -ii-

Exhibit Number	Document
10.14*	Employment Agreement dated November 15, 2001, between Spartan Stores, Inc. and James B. Meyer. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.15*	Memorandum of Understanding dated as of March 3, 2003, between Spartan Stores, Inc. and James B. Meyer.
10.16*	Form of Executive Severance Agreement between Spartan Stores, Inc. and certain executive officers. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.17*	Executive Severance Agreement dated March 3, 2003, between Spartan Stores, Inc. and Craig C. Sturken.
10.18*	Executive Severance Agreement dated March 17, 2003, between Spartan Stores, Inc. and Dennis Eidson.
10.19*	Executive Severance Agreement dated November 15, 2001, between Spartan Stores, Inc. and James B. Meyer. Previously filed as an exhibit to Spartan Stores' Annual Report on Form 10-K for the fiscal year ended March 30, 2002. Here incorporated by reference.
10.20	Contract of Sale dated as of May 23, 2003, between Seaway Food Town, Inc., Gruber's Food Town, Inc., Buckeye Real Estate Management Co., Gruber's Real Estate, LLC and The Kroger Co.
10.21	Purchase Agreement dated as of June 2, 2003, between Market Development Corporation and New Plan Excel Realty Trust, Inc.
21	Subsidiaries of Spartan Stores, Inc.
23	Consent of Deloitte & Touche LLP.
24	Powers of Attorney.
99	Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212.

*          These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10-K.

- -iii-

EX-10

EXHIBIT 10.11

EXECUTION COPY

WAIVER AND AMENDMENT NO. 1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 29, 2002

          THIS WAIVER AND AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is made as of March 27, 2003 by and among Spartan Stores, Inc., a Michigan corporation (the "Borrower"), the financial institutions listed on the signature pages hereof as lenders (the "Lenders"), ABN AMRO Bank N.V., in its capacity as Arranger, Collateral Agent, Syndication Agent and Administrative Agent (the "Administrative Agent") and Standard Federal Bank (f/k/a Michigan National Bank), in its capacity as a Co-Arranger (the "Co-Arranger") under that certain Amended and Restated Credit Agreement dated as of July 29, 2002 by and among the Borrower, the Lenders, the Co-Arranger and the Administrative Agent (the "Credit Agreement"). Defined terms used herein and not otherwise defined herein shall have the meaning given to them in the Credit Agreement.

WITNESSETH

          WHEREAS, the Borrower, the Lenders, the Co-Arranger and the Administrative Agent are parties to the Credit Agreement;

          WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement in certain respects and the Lenders, the Co-Arranger and the Administrative Agent are willing to so amend the Credit Agreement on the terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders, the Co-Arranger and the Administrative Agent have entered into this Amendment.

          1.     Waiver. Effective as of the date of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 below, the Administrative Agent and the Lenders hereby agree that the Borrower's non-compliance with the financial covenants contained in Sections 7.4(A), (B), (C) and (D) for the period ending on March 29, 2003 (such Defaults being herein, the "Specified Defaults") is hereby waived until June 20, 2003.

          2.     Amendment to Credit Agreement. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 4 below, the definition of "Aggregate Revolving Loan Commitment" set forth in Section 1.1 of the Credit Agreement is hereby amended to delete therefrom the reference to "Seventy-Five Million Dollars ($75,000,000)" and to substitute a reference to "Sixty-Five Million Dollars ($65,000,000)" therefor.

          3.     Consent to Sale of Collateral. Each of the Lenders, by its signature below, hereby (w) consents to the sale of (i) the Borrower's remaining convenience store business (i.e., the "Cash & Carry" businesses operated by United Wholesale Grocery Company) for a purchase

price not less than $8,000,000, (ii) all or certain of the Borrower's Food Town stores, (iii) the Borrower's Maumee, Ohio distribution facility and (iv) the Borrower's South Street, Toledo, Ohio distribution facility, for a purchase price not less than $40,000,000 in the aggregate for the asset sales described in clauses (ii), (iii) and (iv); (x) waives any non-compliance with any covenants (including, without limitation, Section 7.2(B) and Section 7.3(I)) that may occur as a result of the transactions described in clause (w) above; (y) acknowledges that the asset sales described in clause (w) above shall not be included in the calculation of asset dispositions set forth in Section 7.3(B)(iii) of the Credit Agreement; and (z) authorizes the Collateral Agent to release its lien on the foregoing assets; provided, however, that the proceeds received by the Borrower in connection with such sales shall be subject to the mandatory prepayment provisions set forth in Section 2.4(B) of the Credit Agr eement. For the purposes of this Section 3, "purchase price" shall include cash paid for inventory, equipment, furnishings and related assets, the book value of liabilities assumed by the purchaser, and the net present value of any future lease payments due from the purchaser to Borrower as landlord.

          4.     Conditions of Effectiveness. This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if:

          (a)     the Administrative Agent shall have received duly executed originals of this Amendment from the Borrower, the Administrative Agent and the Required Lenders;

          (b)     the Administrative Agent shall have received a duly executed reaffirmation in the form attached hereto as Exhibit A;

          (c)     all out-of-pocket expenses incurred by the Administrative Agent prior to the date hereof in connection with the Credit Agreement, this Amendment, any other Loan Document or the transactions contemplated by any of the foregoing (including, without limitation, the fees and disbursements of Sidley Austin Brown &Wood), shall have been paid by the Borrower; and

          (d)     the Administrative Agent shall have received an amendment fee for the ratable account of those Lenders who have submitted their signature pages to this Amendment on or prior to 5:00 p.m. (Chicago time) on Thursday, March 27, 2003 (such Lenders, the "Approving Lenders") in the amount of 50 basis points on the sum of such Approving Lender's (i) Acquisition Facility Commitments, (ii) Revolving Loan Commitments (as amended by this Amendment) and (iii) outstanding principal balance of its Term Loans.

          5.     Letters of Intent; Commitment Letter. If Borrower fails to deliver to the Administrative Agent (a) by no later than May 13, 2003, a fully-executed copy of one or more letters of intent or definitive sale agreements relating to the sale of the Borrower's two convenience store businesses (known as "Project Combustible"), (b) by no later than May 30, 2003, a fully-executed copy of one or more commitment letters from General Motors Acceptance Corporation and other financial institutions evidencing a commitment to provide the Borrower with one or more new credit facilities in an aggregate amount sufficient to pay in full all Obligations it owes under the Credit Agreement and (c) by no later than June 12, 2003, a fully-executed copy of one or more letters of intent or definitive sale agreements relating to the sale of

2

at least 75% of the Borrower's 20 Food Town grocery stores which have been identified for sale; then for its failure to comply with any of clauses (a), (b) or (c) of this Section 5, (x) the Borrower shall pay to each Lender, on the date of such failure, a fee in the amount of 25 basis points on the sum of such Lender's (i) Acquisition Facility Commitments, (ii) Revolving Loan Commitments (as amended by this Amendment) and (iii) outstanding principal balance of its Term Loans, and (y) the ratios set forth Section 7.4(F) of the Credit Agreement shall be increased by 5 basis points for each failure to comply (as of the date of such failure to deliver).

          6.     Representations and Warranties of the Borrower. The Borrower hereby represents and warrants as follows:

          (a)     The Borrower has the legal power and authority to execute and deliver this Amendment and the officer(s) of the Borrower executing this Amendment have been duly authorized to execute and deliver the same and bind the Borrower with respect to the provisions hereof.

          (b)     This Amendment and the Credit Agreement as previously executed and as amended hereby, constitute legal, valid and binding obligations of the Borrower, enforceable against it in accordance with their terms.

          (c)     Upon the effectiveness of this Amendment, the Borrower hereby reaffirms all covenants, representations and warranties made in the Credit Agreement and the other Loan Documents to the extent the same are not amended hereby, agrees that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment.

          (d)     There exists no Default or Unmatured Default after giving effect to this Amendment (other than the Specified Defaults).

          7.     Reference to the Effect on the Credit Agreement.

          (a)     Upon the effectiveness of Section 1 hereof, on and after the date hereof, each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import shall mean and be a reference to the Credit Agreement, as amended previously and as amended hereby.

          (b)     Except as specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect, and are hereby ratified and confirmed.

          (c)     The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Arrangers, the Agents or any of the Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

          8.     Costs and Expenses. The Borrower agrees to pay all reasonable costs, fees and out-of-pocket expenses (including attorneys' fees and expenses charged to the Arrangers and the

3

Agents) incurred by the Arrangers and the Agents in connection with the preparation, arrangement, execution and enforcement of this Amendment.

          9.     Governing Law. ANY DISPUTE BETWEEN THE BORROWER AND ANY AGENT OR ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AMENDMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

          10.     Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

          11.     Counterparts. This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A facsimile signature page hereto sent to the Arranger or the Arranger's counsel shall be effective as an original counterpart signature provided each party executing such a facsimile counterpart agrees to deliver originals to the Arranger thereof.

          12.     No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Amendment, the Credit Agreement and the other Loan Documents. In the event an ambiguity or question of intent or interpretation arises, this Amendment, the Credit Agreement and the other Loan Documents shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Amendment, the Credit Agreement or any of the other Loan Documents.

4

          IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

SPARTAN STORES, INC.,
     as Borrower

By: /s/ David M. Staples

     Name: David M. Staples
     Title: EVP and CFO

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

ABN AMRO BANK N.V.,
as Administrative Agent, Arranger, Syndication
Agent, Collateral Agent, as a Lender and as an
Issuing Bank

By: /s/ Terrence J. Ward

     Name: Terrence J. Ward
     Title: Senior Vice President

By: /s/ Peter J. Hallan

     Name: Peter J. Hallan
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

STANDARD FEDERAL BANK (f/k/a Michigan
National Bank), as Co-Arranger, as a Lender and as
an Issuing Bank

By: /s/ Jason T. Byrd

     Title: Jason T. Byrd
     Name: Assistant Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

BANK ONE, NA

By: /s/ Michele L. Quentin

     Name: Michele L. Quentin
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

HARRIS TRUST AND SAVINGS BANK

By: /s/ Michael Johns

     Name: Michael Johns
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

NATIONAL CITY BANK

By: /s/ Thomas E. Redmond

     Name: Thomas E. Redmond
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

ORIX FINANCIAL SERVICES, INC.

By: /s Mark A. Kassis

     Name: Mark A. Kassis
     Title: Senior Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

COMERICA BANK

By: /s/ Jeffrey J. Judge

     Name: Jeffrey J. Judge
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

U.S. BANK, NATIONAL ASSOCIATION

By: /s/ Paul Niedermayer

     Name: Paul Niedermayer
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

UNITED OF OMAHA LIFE INSURANCE
COMPANY

By: /s/ Curtis R. Caldwell

     Name: Curtis R. Caldwell
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

BALANCED HIGH-YIELD FUND I LTD.,
By: ING Capital Advisors LLC, as Asset Manager

By: /s/ Cheryl Wasilewski

     Name: Cheryl Wasilewski
     Title: Vice President

BALANCED HIGH-YIELD FUND II LTD.,
By: ING Capital Advisors LLC, as Asset Manager

By: /s/ Cheryl Wasilewski

     Name: Cheryl Wasilewski
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

THE BANK OF NOVA SCOTIA

By: /s/ Mark Sparrow

     Name: Mark Sparrow
     Title: Director

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

NCB CAPITAL CORPORATION

By: /s/ Mark Hiltz

     Name: Mark Hiltz
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND," NEW YORK BRANCH

By: /s/ Ivan Rodriguez

     Name: Ivan Rodriguez
     Title: Vice President

By: /s/ Ian Reece

     Name: Ian Reece
     Title: Managing Director

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

BANK ONE, MICHIGAN

By:

     Name:
     Title:

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: David L. Babson & Company Inc. as
Investment Adviser

By: /s/ Mary Ann McCarthy

     Name: Mary Ann McCarthy
     Title: Managing Director

SAAR HOLDINGS CDO, LIMITED
By: David L. Babson & Company Inc. under
delegated authority from Massachusetts Mutual Life
Insurance Company as Collateral Manager

By: /s/ Mary Ann McCarthy

     Name: Mary Ann McCarthy
     Title: Managing Director

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

SUNAMERICA

By:

     Name:
     Title:

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

OLYMPIC FUNDING TRUST, SERIES 1999-1

By: /s/ Diana L. Mushill

     Name: Diana L. Mushill
     Title: Authorized Agent

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

FIFTH THIRD BANK (WESTERN
MICHIGAN)

By: /s/ David A. Foote

     Name: David A. Foote
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

FLEET NATIONAL BANK (f/k/a Summit Bank)

By: /s/ Richard E. Lynch

     Name: Richard E. Lynch
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

THE CIT GROUP/EQUIPMENT FINANCING,
INC.

By: /s/ Katie J. Saunders

     Name: Katie J. Saunders
     Title: Senior Credit Analyst

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

FRANKLIN CLO II, LTD

By: /s/ Richard D'Addario

     Name: Richard D'Addario
     Title: Senior Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

MUIRFIELD TRADING LLC

By: /s Diana L. Mushill

     Name: Diana L. Mushill
     Title: Asst. Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

HELLER FINANCIAL LEASING INC.

By: /s/ Ronald E. Les

     Name: Ronald E. Les
     Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

TCF NATIONAL BANK

By: /s/ Michael Klemz

     Name: Michael Klemz
     Title: Executive Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

AIMCO CDO, SERIES 2000-A

By: /s/ Chris Goergen

     Name: Chris Goergen
     Title: Authorized Signatory

By: /s/ Jerry D. Zinkula

     Name: Jerry D. Zinkula
     Title: Authorized Signatory

ALLSTATE LIFE INSURANCE COMPANY

By: /s/ Chris Goergen

     Name: Chris Goergen
     Title: Authorized Signatory

By: /s/ Jerry D. Zinkula

     Name: Jerry D. Zinkula
     Title: Authorized Signatory

AIMCO CLO, SERIES 2001-A

By: /s/ Chris Goergen

     Name: Chris Goergen
     Title: Authorized Signatory

By: /s/ Jerry D. Zinkula

     Name: Jerry D. Zinkula
     Title: Authorized Signatory

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

SEQUILS-CUMBERLAND I, LTD.
By: Deerfield Capital Management, L.L.C., as
its
   Collateral Manager

By: /s/ Matt Stouffer

Name: Matt Stouffer
Title: Vice President

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

RCG CARPATHIA MASTER FUND

By: /s/ Howard J. Golden

     Name: Howard J. Golden
     Title: Managing Director

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

KZH RIVERSIDE LLC

By: /s/ Dorian Herrera

     Name: Dorian Herrera
     Title: Authorized Agent

Signature Page to
Waiver and Amendment No. 1
Spartan Stores, Inc.

EX-10

EXHIBIT 10.13

EMPLOYMENT AGREEMENT

                    THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made by SPARTAN STORES, INC., a Michigan corporation (the "Company"), and ____________ ("Executive"). The parties agree as follows:

          1.    Effective Date and Term. This Agreement will take effect as of March ___, 2003 ("Effective Date"), and will remain in effect during Executive's employment with the Company and thereafter as to those provisions that expressly state that they will remain in effect after termination of Executive's employment.

          2.    Employment. Executive will serve as the Company's ________________, or in such other positions as an officer of Spartan Stores, Inc. ("Officer") and such additional positions with the Company or an Affiliate as may be assigned by the Company (the "Employment"). Executive will perform the duties assigned from time to time to Executive's position. The Employment will be full time and Executive's entire business time and efforts will be devoted to the Employment, except as otherwise provided by written Company policy. Executive agrees to comply with Company policies, including but not limited to any applicable Company policy requiring Executive to own shares of common stock in the Company. As used in this Agreement, the term "Affiliate" includes any organization controlling, controlled by or under common control with the Company.

          3.    Term of Employment. The term of the Employment will be indefinite and will continue until terminated pursuant to this Agreement.

          4.    Compensation. Executive will be compensated during the Employment as follows:

          (a)  Salary. The Executive's salary as of the Effective Date is $____________ per year (or a pro rated weekly amount for any partial year), subject to normal payroll deductions and payable in accordance with the Company's normal payroll practices. Executive's salary will be reviewed annually by the Company and subject to the limitations in Section 5(b)(i) may be adjusted to reflect Company determinations of Executive's performance, Company performance, or business or economic conditions.

          (b)  Bonus. Executive will be eligible to participate in any bonus programs designated by the Company from time to time, in accordance with the terms of such programs, which are subject to change from time to time in the Company's discretion. Executive's Annual Incentive Bonus, to be determined by the compensation committee of the Company's board of directors, in its sole discretion, will be targeted at ___% of his annual base salary and will not exceed more than ____% of his annual base salary.¹ Except as otherwise provided in the Executive Severance Agreement dated March ___

___________________________

¹     Mr. Sturken's Employment Agreement contains the following additional sentence here: "For the fiscal year ending March 27, 2004, Executive's Annual Incentive Bonus will be not less than 40% of his annual base salary, except as otherwise provided in this Agreement."

2003, between Executive and the Company ("Executive Severance Agreement"), consistent with Company policy, Executive will receive no bonus if for any reason Executive is not employed by the Company at the end of a fiscal year.

          (c)  Benefits. Executive will be eligible to participate in fringe benefit programs covering the Company's salaried employees as a group, and in any programs applicable under Company policy to senior executive Officers. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Company's discretion.

          (d)  Business Expenses. The Company will reimburse Executive for reasonable ordinary and necessary business expenses that are specifically authorized or authorized by Company policy, subject to Executive's prompt submission of proper documentation for tax and accounting purposes.

          5.    Termination of Employment.

          (a)  Termination Without Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(a), except (A) unpaid salary installments through the end of the week in which the Employment terminates, and (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program.

          i.          Death. The Employment will terminate automatically upon Executive's death.

          ii.          Disability. If Executive is unable to perform Executive's duties under this Agreement due to physical or mental disability for a continuous period of one hundred eighty days (180) days or longer and Executive is eligible for benefits under the Company's long-term disability insurance policy, the Company may terminate the Employment under this Section (a)(ii). If the Company terminates the Employment as the result of Executive's inability to perform Executive's duties for less than one-hundred eighty (180) days due to a disability, the termination of Employment will be deemed to be pursuant to Section 5(b)(ii) below.

          iii.          Termination by Company for Cause. The Company may terminate the Employment for "Cause", defined as Executive's: (A) breach of any provision of Sections 7, 8, or 9 of this Agreement; (B) willful continued failure to perform or willful poor performance of duties (other than due to disability) after warning and reasonable opportunity to meet reasonable required performance standards; (C) gross negligence causing or placing the Company at risk of significant damage or harm; (D) misappropriation of or intentional damage to Company property; (E) conviction of a felony (other than negligent vehicular

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homicide); or (F) intentional act or omission that Executive knows or should know is significantly detrimental to the interests of the Company.

If the Company becomes aware after termination of the Employment other than for Cause that Executive engaged before the termination of Employment in willful misconduct constituting Cause, the Company may recharacterize Executive's termination as having been for Cause.

          iv.          Discretionary Termination by Executive. Executive may terminate the Employment at will, with at least thirty (30) days advance written notice. If Executive gives such notice of termination, the Company may (but need not) relieve Executive of some or all of Executive's offices and responsibilities for part or all of such notice period, provided that Executive's pay and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.

          v.          Inability to Perform, Risk of Liability. The Company may terminate the Employment if the Company's board of directors, or a committee of the board of directors, determines in its sole discretion that there is more than an insubstantial risk that:

          A.          Executive will be temporarily or permanently unable to fully perform Executive's duties under this Agreement, or

          B.          the Employment of Executive would subject the Company to material liability,

by reason of any agreement, judgment, restraining order, injunction, or other order of a court or arbitrator, whether or not disclosed or known to the Company on the Effective Date, to which Executive is or hereafter becomes a party or by which he is or hereafter becomes bound.

          (b)  Termination With Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(b), except (A) unpaid salary installments through the end of the week in which the Employment terminates, (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program, (C) any Severance Pay to which Executive is entitled under this Section 5(b).

          i.          Termination by Executive for Good Reason. Executive may terminate the Employment for "Good Reason" if and only if (A) the Company materially breaches the Company's obligations to Executive under this Agreement, or reduces Executive's salary other than an economic or business motivated reduction accompanied by proportionate reductions in the salaries of all other Officers, (B) Executive notifies the Company's Secretary in writing, within thirty (30) days after the act or omission in question, asserting that the act or

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omission in question constitutes Good Reason and explaining why the act or omission constitutes a material breach, (C) the Company fails, within fifteen (15) days after the notification, to take all reasonable steps to cure the breach, and (D) Executive resigns by written notice within thirty (30) days after expiration of the fifteen (15) day period under Section (b)(i)(C). If Executive terminates the Employment for Good Reason, Executive will be entitled to Severance Pay as provided in and subject to Section 6. Executive's failure to object to a material breach as provided above will not waive Executive's right to resign with Good Reason after following the above procedure with regard to any subsequent material breach.

          ii.          Discretionary Termination by Company. The Company may terminate the Employment at will, but if the Company does so Executive will be entitled to Severance Pay as provided in and subject to Section 6. Any termination of Executive's Employment by the Company under Section 5(a) that is found not to meet the standards of such Section will be considered to have been a termination under this Section 5(f).

          6.    Severance Pay. The Company will pay and provide Executive with the payments and benefit continuation provided in this Section 6 ("Severance Pay") if Executive's Employment is terminated as provided in Section 5(b) above.

          (a)  Amount and Duration of Severance Pay. Subject to the other provisions of this Section, Severance Pay will consist of:

          i.          Salary Continuation. Continuation of Executive's salary for fifty-two (52) weeks following the week in which the Employment terminates (the "Severance Pay Period"); and

          ii.          Health Coverage Continuation. Payment by the Company of the COBRA continuation coverage premium necessary to continue Executive's then current employee and dependent health, dental, and prescription drug coverage during the Severance Pay Period, provided that (A) Executive elects and remains eligible for COBRA continuation coverage, (B) Executive continues to pay the normal employee contribution for such coverage, and (C) that the Company's obligation to provide coverage will end if Executive becomes eligible for comparable coverage from a new employer; and

          iii.          Outplacement Assistance. Up to $10,000 of outplacement assistance from an outplacement assistance firm selected by Executive and approved by the Company (whose approval shall not be unreasonably withheld).

The Executive will receive the salary continuation provided in Section 6(a)(i) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(c). If Executive dies during the Severance Pay Period, salary continuation under Section 6(a)(i) will continue for the remainder of the Severance Pay Period for the benefit of Executive's designated beneficiary (or Executive's estate if

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Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive's eligible dependants for the remainder of the Severance Pay Period subject to the conditions in Sections 6(b)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits during the Severance Pay Period, Severance Pay will end on the date that Executive is eligible to begin receiving such disability benefits.

          (b)  Conditions to Severance Pay. To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive's obligations under this Agreement that continue after termination of the Employment; (ii) Executive must not claim unemployment compensation for any week for which Executive receives salary continuation under Section 6(a)(i) above; (iii) Executive must promptly sign and continue to honor a release, in form acceptable to the Company, of any and all claims arising out of or relating to Executive's Employment or its termination and that Executive might otherwise have against the Company, the Company's Affiliates, any of their officers, directors, employees and agents, provided that the release will not waive Executive's right to any payments due under this Section or Section 5, or any right of Executive to liability insurance coverage under any liability insurance policy or to indemnification under the C ompany's Articles of Incorporation or Bylaws or any written indemnification agreement; (iv) Executive must reaffirm in writing upon request by Company Executive's obligations under Sections 7, 8 and 9 of this Agreement; (v) Executive must resign upon written request by Company from all positions with or representing the Company or any Affiliate, including but not limited, to membership on boards of directors, and (vi) Executive must provide the Company for a period of ninety (90) days after the Employment termination date with consulting services regarding matters within the scope of Executive's former duties upon request; provided, however, that Executive will only be required to provide those services by telephone at Executive's reasonable convenience and without substantial interference with Executive's other activities or commitments.

          (c)  Offsets to Severance Pay. The Severance Pay due to Executive under Section 6(a)(i) for any week will be reduced (but not below 0) by: (i) any disability benefits to which Executive is entitled for that week under any disability insurance policy or program of the Company or any Affiliate (including but not limited to worker's disability compensation); and (ii) any severance pay payable to Executive under any other agreement or Company policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) any amount owing by Executive to the Company that the Company is legally entitled to set off against the Severance Pay under applicable law.

          7.    Loyalty and Confidentiality; Certain Property and Information.

          (a)  Loyalty and Confidentiality. Executive will be loyal to the Company during the Employment and will forever hold in strictest confidence, and not use or disclose, any information regarding techniques, processes, developmental or experimental work, trade secrets, customer or prospect names or information, or proprietary or confidential

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information relating to the current or planned products, services, sales, employees or business of the Company or any Affiliate, except as disclosure or use may be required in connection with Executive's work for the Company or any Affiliate. The Executive's commitment not to use or disclose information does not apply to information that becomes publicly known without any breach of this Agreement by Executive.

          (b)  Certain Property and Information. Upon termination of the Employment, Executive will deliver to the Company any and all property owned or leased by the Company or any Affiliate and any and all materials and information (in whatever form) relating to the business of the Company or any Affiliate, including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Company-provided equipment. All Company property will be returned promptly and in good condition except for normal wear.

Executive's commitments in this Section will continue in effect after termination of the Employment. The parties agree that any breach of Executive's covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

          8.    Ideas, Concepts, Inventions and Other Intellectual Property. All business ideas and concepts and all inventions, improvements, developments and other intellectual property made or conceived by Executive, either solely or in collaboration with others, during the Employment, whether or not during working hours, and relating to the business or any aspect of the business of the Company or any Affiliate or to any business or product the Company or any Affiliate is actively planning to enter or develop, shall become and remain the exclusive property of the Company, and the Company's successors and assigns. Executive shall disclose promptly in writing to the Company all such inventions, improvements, developments and other intellectual property, and will cooperate in confirming, protecting, and obtaining legal protection of the Company's ownership rights. Executive's commitments in this Section will continue in effect after termination of the Em ployment as to ideas, concepts, inventions, improvements and developments and other intellectual property made or conceived in whole or in part before the date the Employment terminates. The parties agree that any breach of Executive's covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

          Executive represents and warrants that there are no ideas, concepts, inventions, improvements, developments or other intellectual property that Executive invented or conceived before becoming employed by the Company to which Executive, or any assignee of Executive, now claims title, and that would be covered by this Section if made or conceived by Employee during the Employment.

          9.    Covenant Not to Compete.

          (a)  Executive's Commitments. During the Employment Executive will not do or prepare to do, and for twelve (12) months after any termination of the Employment Executive will not do, any of the following:

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          i.          directly or indirectly compete with the Company or any Affiliate; or

          ii.          be employed by, perform services for, advise or assist, own any interest in or loan or otherwise provide funds to, any other business that is engaged (or seeking Executive's services with a view to becoming engaged) in any Competitive Business (as defined below); or

          iii.          solicit or suggest, or provide assistance to anyone else seeking to solicit or suggest, that any person having or contemplating a Covered Relationship (as defined below) with the Company or an Affiliate refrain from entering into or terminate the Covered Relationship, or enter into any similar relationship with anyone else instead of the Company or the Affiliate.

Provided, however, that nothing in this Section 9 prohibits Executive from owning not more than 2% of any class of securities of a publicly traded entity, provided that Executive does not engage in other activity prohibited by this Section 9.

Executive's commitments in this Section will continue in effect after termination of the Employment for the 12-month period set forth above. The parties agree that any breach of Executive's commitments in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

          (b)  Definitions. As used in this Section 9:

          i.          "Competitive Business" means a business that

(A) owns, or

(B) operates, or

(C) sells or supplies products similar to or that substitute for products supplied by the Company to,

any Covered Operation (as defined below) that is located in any state of the United States in which the Company owns, operates, sells or supplies products to, any Covered Operation; and

          ii.          "Covered Operation" means any grocery store, grocery superstore, wholesale club, supermarket, limited assortment store, convenience store, drug store, pharmacy or any other store that offers grocery or food products separate or in combination with pharmaceutical products, general merchandise or other nonfood products, or any grocery or convenience store product distribution facility; and

          iii.          "Covered Relationship" means a customer relationship, a vendor relationship, an employment relationship, or any other contractual or independent contractor relationship).

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          10.    Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Company's board of directors, or a committee of the board of directors, and is agreed to in a writing signed by Executive and by the Chief Executive Officer of the Company. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.

          11.    Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.

          12.    Entire Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to Executive's Employment with the Company or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement and the Executive Severance Agreement, and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement, except the Executive Severance Agreement.

          13.    Coordination of This Agreement with Executive Severance Agreement.

          (a)  Circumstances Under Which Section 9 of This Agreement will Lapse. If there is a termination of Executive's Employment entitling Executive to Severance Benefits under Section 3 of the Executive Severance Agreement, then Section 9 of this Agreement ("Covenant Not to Compete") will lapse and become void and of no further effect on the date of such termination of Employment.

          (b)  Coordination of Severance Pay under this Agreement and Severance Benefits under Executive Severance Agreement. If Executive receives Severance Benefits under Section 3 of the Executive Severance Agreement, Executive will not be entitled to Severance Pay under this Agreement. If Executive becomes entitled to receive Severance Benefits under Section 3 of the Executive Severance Agreement after receiving Severance Pay under this Agreement, the amount of Severance Benefits to which Executive is entitled under Section 3 of the Executive Severance Agreement will be reduced by the amount of Severance Pay received by Executive under this Agreement.

          14.    Non-Contravention. Executive represents and warrants that:

          (a)  No Restrictive Agreement. Executive is not a party to or bound by any agreement that purports to prevent or restrict Executive from: (A) engaging in the Employment that Executive has been offered by the Company; (B) inducing any person to become an employee of the Company; (C) using any information and expertise that

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Executive possesses (other than information constituting a trade secret of another person under applicable law) for the benefit of the Company; or (D) performing any obligation under this Agreement.

          (b)  No Abuse of Confidential Information or Trade Secrets. Executive will not use in the course of his Employment with the Company, or disclose to the Company or its personnel, any information belonging to any other person that is subject to any confidentiality agreement with or constitutes a trade secret of another person.

          15.    Forfeiture of Certain Compensation.

          (a)  Rescission of Securities Grants. If the Employment is terminated pursuant to Sections 5(a)(iii), (iv) or (v) above, the Company's board of directors, or a committee of the board of directors, may rescind and terminate any stock option, restricted stock, or stock award previously granted to Executive within the ninety-day period preceding the date of such termination of Employment, and upon receipt of notice of such rescission, Executive shall promptly return to the Company any shares of the Company stock received pursuant to any such award.

          (b)  Sarbanes-Oxley Act Compliance. If obligated to reimburse the Company under Section 304(a) of the Sarbanes-Oxley Act of 2002, Executive will promptly reimburse the Company for any profit, any bonus or other incentive-based or equity-based compensation, or any other sums as required by Section 304(a), within five (5) days of the earlier of becoming aware of such obligation or receiving written notice of such obligation from the Company.

          16.    Dispute Resolution.

          (a)  Arbitration. The Company and Executive agree that except as provided in Section 16(b) the sole and exclusive method for resolving any dispute between them arising out of or relating to this Agreement shall be arbitration under the procedures set forth in this Section; provided, however, that nothing in this Section prohibits a party from seeking preliminary or permanent judicial injunctive relief, or from seeking judicial enforcement of the arbitration award. The arbitrator shall be selected pursuant to the Rules for Commercial Arbitration of the American Arbitration Association. The arbitrator shall hold a hearing at which both parties may appear, with or without counsel, and present evidence and argument. Pre-hearing discovery shall be allowed in the discretion of and to the extent deemed appropriate by the arbitrator, and the arbitrator shall have subpoena power. The procedural rules for an arbitration hearing under this Section shall be the rule s of the American Arbitration Association for Commercial Arbitration hearings and any rules as the arbitrator may determine. The hearing shall be completed within ninety (90) days after the arbitrator has been selected and the arbitrator shall issue a written decision within sixty (60) days after the close of the hearing. The hearing shall be held in Grand Rapids, Michigan. The award of the arbitrator shall be final and binding and may be enforced by and certified as a judgment of the Circuit Court for Kent County, Michigan or any other court of competent jurisdiction. One-half of the fees and expenses of the arbitrator shall be paid by the Company and one-half by

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Executive. The attorney fees and expenses incurred by the parties shall be paid by each party; provided, however, that the attorney fees and expenses of the party who substantially prevails in any arbitration brought pursuant to this Agreement shall be paid by the other party or, if each party prevails in part, then a proportionate part of each party's attorney fees and expenses shall be paid by the other party, with such proportion to represent the approximate portion of such attorney fees and expenses relating to the issues on which each party prevailed.

          (b)  Subsection 16(a) shall be inapplicable to a dispute arising out of or relating to Sections 7, 8 or 9 of this Agreement.

          17.    Assignability. This Agreement contemplates personal services by Executive, and Executive may not transfer or assign Executive's rights or obligations under this Agreement, except that Executive may designate beneficiaries for Severance Pay in the event of Executive's death, and may designate beneficiaries for benefits as allowed by the Company's benefit programs. This Agreement may be assigned by the Company to any subsidiary or parent corporation or a division of that corporation; provided, however, that the Company shall remain liable for any Severance Pay due under this Agreement and not paid by any assignee. The Company is not required to assign this Agreement but if the Agreement is assigned as provided above, Executive will be given notice and this Agreement will continue in effect.

          18.    Notices. Notices to a party under this Agreement must be personally delivered or sent by certified mail (return receipt requested) and will be deemed given upon post office delivery or attempted delivery to the recipient's last known address. Notices to the Company must be sent to the attention of the Company's Secretary.

          19.    Governing Law. The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in the courts in either Kent County Circuit Court or the U.S. District Court for the Western District of Michigan. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Company may be located at the time any action may be commenced. The parties agree that Kent County is a mutually convenient forum and that each of the parties conducts business in Kent County.

          20.    Counterparts. This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.

* * *

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          The parties have signed this Employment Agreement as of the Effective Date in Section 1.

SPARTAN STORES, INC.

By:
	Mark C. Eriks
Its:	Vice President Human Resources
	"Company"	"Executive"

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EX-10

EXHIBIT 10.15

MEMORANDUM OF UNDERSTANDING

          THIS AGREEMENT is made as of March 3, 2003 by SPARTAN STORES, INC., a Michigan corporation (the "Company"), and JAMES B. MEYER ("Mr. Meyer").

RECITALS

          Mr. Meyer has served the Company for nearly 30 years. He has been the Company's Chief Executive Officer since July 1997, its President since August 1996, its Chairman of the Board since August 2000 and a director since August 1996. Under Mr. Meyer's leadership, the Company has been transformed from a customer-owned grocery distributor to a publicly held corporation whose stock is traded on The Nasdaq Stock Market, operating over 100 retail supermarkets and deep-discount drugstores while continuing its market leading distribution business. Today, the Company is a premier regional grocery retailer and grocery and convenience distributor with more than $3 billion in annual sales.

          Mr. Meyer and the Company entered into an employment agreement dated November 15, 2001 (the "Employment Agreement") and an executive severance agreement dated November 15, 2001 (the "Severance Agreement"). Mr. Meyer also has been granted various options ("Options") to purchase the Company's common stock, no par value ("Common Stock"), under the Spartan Stores, Inc. 1991 Stock Option Plan (the "1991 Plan") and the Spartan Stores, Inc. 2001 Stock Incentive Plan (the "2001 Plan"). Mr. Meyer is also a participant in the Spartan Stores, Inc. Cash Balance Pension Plan (the "Pension Plan") and the Spartan Stores, Inc. Supplemental Executive Retirement Plan (the "SERP").

          Mr. Meyer has announced his intention to retire from the Company on a voluntary basis. Mr. Meyer and the Company are entering into this Agreement to ensure an orderly transition of Mr. Meyer's duties and responsibilities to his successor, clarify, memorialize and implement the parties' understandings of their respective rights and obligations under the Employment Agreement, the Severance Agreement and the plans and other agreements described above, and address various other matters, all as set forth in this Agreement.

          NOW, THEREFORE, the parties agree as follows:

          1.          Retirement. Mr. Meyer will retire as an employee of the Company, effective as of January 1, 2004 or such other later date as the parties may mutually agree in writing (the "Retirement Date"). The Company has, with Mr. Meyer's consent, transferred substantially all of Mr. Meyer's duties and responsibilities as President and Chief Executive Officer to his successor and his services as President and Chief Executive Officer are no longer required. Until the Retirement Date, Mr. Meyer shall be employed as a consultant to the Company. Without limiting the generality of the foregoing, Mr. Meyer shall make himself reasonably available for consultation in person, by telephone or by other means of communication until the Retirement Date. Mr. Meyer hereby retires and resigns from all offices and directorships of the Company and each of its subsidiaries as of the date of this Agreement, except that Mr. Meyer shall remain a direct or of the Company until the Company's 2003 Annual Meeting of Shareholders and Mr. Meyer shall remain the Chairman of the Board of the Company until the earlier of (i) the

Company's 2003 Annual Meeting of Shareholders or (ii) such time as the Company's Board of Directors appoints a successor Chairman of the Board. Mr. Meyer also hereby resigns from all positions as a trustee or administrator (or similar positions and capacities) of all employee benefit and other plans, trusts and similar entities sponsored by the Company or any of its subsidiaries, or to which the Company or any of its subsidiaries contribute or contributes. The Company agrees promptly to communicate to the appropriate person or persons the fact that Mr. Meyer has resigned from such positions and to take any other actions necessary to appoint successors and effect such resignations, as required by the governing documents of such plans, trusts and similar entities. Mr. Meyer's retirement, both as an officer and director of the Company and its subsidiaries and as an employee of the Company and its subsidiaries, is voluntary and discretionary. In consideration of the Company's timely payment of its SERP obligati ons in accordance with Paragraph 6 of this Agreement, Mr. Meyer consents to the immediate transfer to his successor of his duties and responsibilities as President and Chief Executive Officer and agrees that such transfer shall not be deemed "Cause" or "Good Reason" for termination of his employment as those terms are defined in the Employment Agreement; provided, if the SERP obligation is not paid in the time and manner provided in Paragraph 6 of this Agreement, Mr. Meyer's consent to such transfer shall be deemed a nullity and his agreement that the transfer of duties is not "Cause" or "Good Reason" shall be void ab initio.

          2.          Employment Agreement. With respect to the Employment Agreement, the parties agree as follows:

                    (a)          Salary and Fringe Benefits. Unless Mr. Meyer's employment is earlier terminated for Cause in accordance with this Agreement, the Company will pay Mr. Meyer his full salary under the Employment Agreement until October 31, 2003. Before November 1, 2003, Mr. Meyer shall use all of his unused vacation days that he has accumulated in accordance with applicable Company policies. Unless Mr. Meyer otherwise specifies in writing to the Company's Vice President Human Resources, Mr. Meyer will be considered to have begun using his vacation days on the latest day before October 31, 2003 that would result in Mr. Meyer using all of his vacation days by October 31, 2003. Beginning November 1, 2003, Mr. Meyer shall use, and be paid for, all of his unused sick days that he has accumulated in accordance with applicable Company policies. On December 31, 2003, the Company shall pay Mr. Meyer for any sick days then unused and unpaid for. Unless Mr. Meyer's employment is terminated for Cause in accordance with this Agreement, the Company will provide Mr. Meyer with all of the fringe benefits specified in Section 4(c) of the Employment Agreement until the Retirement Date.

                    (b)          Termination Without Severance Pay. Section 5(a) of the Employment Agreement will be applicable as a result of Mr. Meyer's retirement. Sections 5(b) and 6 of the Employment Agreement will not be applicable as a result of Mr. Meyer's retirement. Consequently, subject only to the last sentence of Paragraph 1, after Mr. Meyer's retirement as an employee, he shall not be entitled to any further compensation under the Employment Agreement, except he shall be paid (i) for any unused sick pay earned before the Retirement Date under the Company's existing policies, (ii) any vested benefits accrued before the Retirement Date under the terms of any written Company policy or benefit program and (iii) an amount equal to the cash surrender value of any split-dollar life insurance policies that the

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Company has obtained for Mr. Meyer that is allocable to the portion paid by Mr. Meyer. The parties acknowledge that Mr. Meyer will not be entitled to receive any bonus accrued through the Retirement Date under the terms of applicable bonus plans with respect to the Company's fiscal year ending on March 27, 2004 or any later period or periods.

                    (c)          Assignment of Titles and Duties Not "Good Reason." The Employment Agreement provides that if the Company assigns Mr. Meyer duties substantially inconsistent with his positions, duties, responsibilities and status, or a change occurs in his positions, reporting responsibilities, titles or office as in effect on November 15, 2001 without his consent, Mr. Meyer would be entitled to terminate his employment for "Good Reason" and receive severance pay. Without limiting the generality of Sections 1 or 2(b) above, in consideration of the Company's timely payment of its SERP obligations in accordance with Paragraph 6 of this Agreement, Mr. Meyer consents to the Company's transfer of any or all of Mr. Meyer's titles and duties to his successor in anticipation of and before Mr. Meyer's Retirement Date and agrees that such transfers shall not constitute "Good Reason" under Mr. Meyer's Employment Agreement.

                    (d)          Vacation and Sick Days. Notwithstanding anything in the Employment Agreement or any Company policy or program to the contrary, Mr. Meyer shall not be entitled to, or be deemed to have accrued for any purpose, any vacation or sick days with respect to 2004 or any later years. If Mr. Meyer dies before the Retirement Date, the Company shall pay to his estate the value of Mr. Meyer's unused vacation and sick days as of the date of his death in accordance with current Company policies.

                    (e)          Termination for Cause or Disability. Before the Retirement Date, the Company may not terminate Mr. Meyer's employment for disability pursuant to Section 5(a)(ii) of the Employment Agreement. Before the Retirement Date, the Company may not terminate Mr. Meyer's employment for "Cause," except pursuant to Section 5(a)(iii)(A) or Section 5(a)(iii)(F) of the Employment Agreement with respect to actions occurring after the execution of this Agreement.

                    (f)          Other Provisions of Employment Agreement. The termination of Mr. Meyer's employment under the Employment Agreement shall not affect any of the provisions of the Employment Agreement that by their nature are intended to continue after termination of employment, including but not limited to Section 7 (Loyalty and Confidentiality; Certain Property and Information), Section 8 (Ideas, Concepts, Inventions and Other Intellectual Property) and Section 9 (Covenant Not to Compete).

          3.          Severance Agreement. The Severance Agreement provides Mr. Meyer with certain severance benefits in the event of a "Change in Control" (as defined in the Severance Agreement) of the Company. A "Change in Control" shall not be deemed to have occurred for purposes of the Severance Agreement by reason of transfer of any or all of Mr. Meyers titles and duties to his successor, the occurrence of any event contemplated by this Agreement or Mr. Meyer's failure to continue as a director of the Company. The Severance Agreement shall not apply in the event that any "Change in Control" occurs after the date of this Agreement.

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          4.          Stock Options. The Company has previously granted Mr. Meyer the following Options to purchase the Company's Common Stock under the 1991 Plan and the 2001 Plan which are outstanding as of the date of this Agreement:

Date of Grant	Number of Shares (as Adjusted for All Stock Splits to Date)	Exercise Price per Share (as Adjusted for All Stock Splits to Date)	Normal Expiration Date	Type of Option (ISO or NQSO)	Plan
May 19, 1993	2,672	$6.59	May 18, 2003	ISO	1991 Plan
May 18, 1994	2,672	$6.96	May 17, 2004	ISO	1991 Plan
May 17, 1995	2,672	$7.49	May 16, 2005	ISO	1991 Plan
April 17, 1996	2,672	$7.86	April 16, 2006	ISO	1991 Plan
May 28, 1997	5,344	$8.46	May 27, 2007	ISO	1991 Plan
May 13, 1998	5,344	$9.21	May 12, 2008	ISO	1991 Plan
May 19, 1999	5,344	$9.96	May 18, 2009	ISO	1991 Plan
May 10, 2000	5,344	$9.96	May 9, 2010	ISO	1991 Plan
October 11, 2000	40,320	$7.44	October 10, 2010	ISO	1991 Plan
October 11, 2000	59,680	$7.44	October 10, 2010	ISO	1991 Plan
May 9, 2001	65,710	$10.25	May 8, 2011	NQSO	1991 Plan
July 11, 2001	34,290	$16.57	July 10, 2011	NQSO	2001 Plan
May 8, 2002	100,000	$8.07	May 7, 2012	NQSO	2001 Plan

The above table is for the purpose of identification only. The information in this table is believed to be accurate as of the date of this Agreement, but there is no assurance that it will be accurate as of the Retirement Date. For example, the Options granted to Mr. Meyer on May 19, 1993 will expire before the Retirement Date unless they are exercised before their expiration date.

                    (a)          Stock Options Granted Under the 1991 Plan. All of Mr. Meyer's Options that have been granted under the 1991 Plan will expire on, and no longer be exercisable on and after, the Retirement Date, in accordance with the terms of the 1991 Plan and the stock option agreements evidencing such Options.

                    (b)          Stock Options Granted Under the 2001 Plan. To the extent that they are not exercised before the Retirement Date, all of Mr. Meyer's Options that have been granted under the 2001 Plan will continue to be exercisable after the Retirement Date until their respective expiration dates, subject to the terms of the 2001 Plan and the stock option agreements evidencing such Options.

          5.          Pension Plan. On February 1, 2004, Mr. Meyer will be paid an "Early Retirement Benefit" (as that term is defined in the Pension Plan) under the Pension Plan, in accordance with the terms of the Pension Plan and any election that Mr. Meyer has previously made with respect to the payment of benefits under the Pension Plan. For purposes of the Pension Plan, Mr. Meyer will be deemed to have retired on the Retirement Date, regardless of any use of accumulated sick days before the Retirement Date.

          6.          SERP. Within 30 days after the date of this Agreement, Mr. Meyer will be paid his benefit under the SERP, in accordance with the terms of the SERP and any election that Mr.

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Meyer has previously made with respect to the payment of benefits under the SERP. For purposes of determining Mr. Meyer's benefit under the SERP, Mr. Meyer's "retirement date" (as that term is used in the SERP) will be the Retirement Date, regardless of any use of accumulated sick days before or after the Retirement Date. For purposes of the SERP, Mr. Meyer will be deemed to be employed by the Company on and until the Retirement Date. The Company shall assume and pay Mr. Meyer's share of any FICA tax on the payment of the benefit called for by this Section 6. To the extent that any payment called for by this Section 6 is inconsistent with or conflicts with the SERP in any way, then the SERP shall be deemed to be amended to the extent (and only to the extent) necessary to permit such payment to Mr. Meyer.

          7.          Retiree Health Benefits. Upon his retirement on the Retirement Date, Mr. Meyer and his spouse will be eligible for certain retiree medical, dental and prescription drug coverage benefits until age sixty-five (65) and (ii) certain Medicare supplement reimbursements upon reaching age sixty-five (65), all in accordance with the terms of the Spartan Stores, Inc. Voluntary Employee Health Care Plan.

          8.          Entire Agreement. This Agreement, along with the plans and other agreements referred to herein, contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.

          9.          Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the amendment, modification, waiver or discharge is agreed to in a writing signed by Mr. Meyer and an authorized representative of the Company other than Mr. Meyer.

          10.          Severability. Subject to the last sentence of Paragraph 1 of this Agreement, any provision, or clause of any provision, of this Agreement that may be found to be contrary to Michigan law or otherwise unenforceable will not affect the remaining terms of this Agreement, which will be construed as if the unenforceable provision or clause were absent from this Agreement.

          11.          Governing Law and Venue. The validity, interpretation and construction of this Agreement are to be governed by Michigan law, without regard to choice of law rules. Any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in either the Kent County Circuit Court or the U.S. District Court for the Western District of Michigan. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Mr. Meyer or the Company may be located at the time any action may be commenced. The parties agree that Kent County is a mutually convenient forum and that each of the parties conducts business in Kent County.

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          The parties have signed this Agreement as of the date first set forth above.

SPARTAN STORES, INC.



By: /s/ Dr. Elson S. Floyd

          Dr. Elson S. Floyd
          Chairman, Compensation Committee

/s/ James B. Meyer

JAMES B. MEYER

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EX-10

EXHIBIT 10.17

EXECUTIVE SEVERANCE AGREEMENT

                    THIS AGREEMENT is entered into as of the 3rd day of March, 2003 (the "Effective Date"), by and between SPARTAN STORES, INC. a Michigan corporation ("Spartan Stores"), and CRAIG STURKEN ("Executive").

W I T N E S S E T H:

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

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

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

                    NOW, THEREFORE, COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

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

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

          (b)          "Cause" means (1) the willful and continued failure by Executive to substantially perform his duties with the Company (other than any such failure resulting from Executive's incapacity due to physical or mental injury or illness, or any such actual or anticipated failure resulting from Executive's termination for Good Reason) after a demand for substantial performance is delivered to Executive by the Board (which demand shall specifically identify the manner in which the Board believes that Executive has not substantially performed his or her duties); or (2) the willful engaging by Executive in gross misconduct materially

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and demonstrably injurious to the Company. For purposes of this Section, no act or failure to act on the part of Executive shall be considered "willful" unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) was in the best interests of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until the Company provides Executive with a copy of a resolution adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive has been guilty of conduct set forth in subsections (1) or (2) above, setting forth the particulars in detail. A determination for Cause by the Board shall not be binding upon or entitled to deference by any finder of fact in the event of a dispute, it being the intent of the parties that such finder of fact shall make an independent determination of whether the termination was for "Cause" as defined in (1) or (2) above.

          (c)          "Change in Control" means:

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

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an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Voting Securities, such additional beneficial ownership shall constitute a Change in Control;

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

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

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reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

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

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

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

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

          (f)          "Company" means Spartan Stores, Inc., a Michigan corporation, and any corporation or other entity in which Spartan Stores, Inc. has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

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

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

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

          (1)          (i) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive's position(s), duties, responsibilities, or status with the Company immediately prior to such Change in Control, (ii) a material adverse change in Executive's positions,

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reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control, (iii) any removal or involuntary termination of Executive by the Company otherwise than as expressly permitted by this Agreement (including any purported termination of employment which is not effected by a Notice of Termination), or (iv) any failure to re-elect Executive to any position with the Company held by Executive immediately prior to such Change in Control;

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

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

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

          (5)          the failure of the Company to (i) continue in effect any employee benefit plan or compensation plan in which Executive is participating immediately prior to such Change in Control, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent after-tax economic benefit, or the taking of any action by the Company which would adversely affect Executive's participation in or materially reduce Executive's benefits under any such plan, (ii) provide Executive and Executive's dependents with welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable plans, practices, programs, and polici es of the Company in effect for

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Executive immediately prior to such Change in Control, (iii) provide other fringe benefits in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for Executive immediately prior to such Change in Control, or (iv) provide Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company as in effect for Executive immediately prior to such Change in Control;

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

          (7)          the failure of Spartan Stores to obtain any assumption agreement contemplated in Section 9(b);

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

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

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

          Executive may not terminate the employment for "Good Reason" unless:

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

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

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

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

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

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

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

          (l)          "Retirement" means termination of employment by either the Executive or the Company on or after the Executive's normal retirement date under the terms of retirement plans of the Company, but not earlier than the age of 65.

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

          (n)          "Termination Period" means the period of time beginning with a Change in Control and ending three years following such Change in Control.

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2.	Term of Agreement.          This Agreement shall commence on the Effective Date and shall continue in effect until Spartan Stores has fulfilled all of its obligations under this Agreement following any termination of Executive's employment with the Company.
3.	Severance Benefits.          If the employment of Executive with the Company shall terminate during the Termination Period, other than by reason of a Nonqualifying Termination, then Executive shall receive the following severance benefits as compensation for services rendered:

          (a)          Lump Sum Cash Payment.          Within five (5) days after the Date of Termination, Executive shall receive a lump sum cash payment in an amount equal to the sum of the following:

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

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

          (3)          A bonus will be paid under the Long Term Incentive Plan or any successor Plan ("Long Term Plan"), in an amount equal to the payment called for under the Long Term Plan (as in effect on the date of this Agreement) upon termination of Executive's employment without Cause during a year.

          (4)          An amount equal to [three (3)] times the sum of (i) the higher of the Executive's annual rate of base salary from the Company in effect on the Date of Termination or in effect on the day before the Change in Control; and (ii) the higher of the (A) Executive's current year target bonus under the Annual Plan (with such calculations to be made as

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though the target level has been achieved for each performance goal (as defined in the Annual Plan)), or (B) the bonus awarded to the Executive under the Annual Plan for the fiscal year immediately preceding the Change in Control.

          (b)          Benefits. The Company shall maintain in full force and effect for the benefit of Executive and his spouse and covered dependents those employee benefit plans, programs and arrangements listed in subparagraphs 3(b)(i), (ii) and (iii) below in which the Executive and his spouse and covered dependents were entitled to participate in immediately prior to the Date of Termination until the earlier of the end of the thirty-sixth (36^th) month following the month in which the Date of Termination occurs, or (as to any particular benefit) the date upon which the Executive receives a substantially equal benefit from a new employer. If the participation of the Executive and his spouse and covered dependents in any such plans or programs is not permitted by the terms of any such plans or programs, or would cause the Executive to experience adverse tax consequences, the Company shall provide comparable benefits eliminating the adv erse tax consequences but providing substantially the same after-tax benefit levels as the Executive, spouse and covered dependents previously received under such plans and programs. The covered benefits are:

          (i)          all health, dental and prescription drug benefits,

          (ii)          the Executive's tax and financial planning benefit, and

          (iii)          all Company funded life insurance coverage.

          (c)          Outplacement Services. The Company will provide the Executive with outplacement services through an outplacement services firm selected by the Company with the Executive's approval, which shall not be withheld if the firm selected is reputable, at a cost not to exceed an amount equal to 15 percent of the Executive's annual base salary at the time of the termination.

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

4. Retirement Benefits.

          (a)          The Executive is a Participant in the SERP. If the employment of Executive with the Company shall terminate during the Termination Period other than by reason of a Nonqualifying Termination, then Executive shall receive (as a

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lump sum, to be paid within five (5) days after the Date of Termination) an amount equal to the difference between (i) the total amounts the Executive is eligible to receive as of the Date of Termination under the Spartan Stores, Inc. Cash Balance Pension Plan and any successor plan ("Pension Plan") and the SERP (assuming election by Executive of the lump sum payment options under the Pension Plan and SERP); and (ii) the total amounts the Executive would have been eligible to receive under the Pension Plan and SERP if the Executive were fully vested under the pension plan and the Executive's employment had continued until the end of the thirty-sixth (36^th) month following the month in which the Date of Termination occurs.

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

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

5.

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

6.

Certain Additional Payments by the Company.

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

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imposed upon the Payments, it being the intent of this section that the Executive shall be held harmless from all Excise Tax and interest and penalties on Excise Tax.

          (b)          Subject to the provisions of Section 6(c), all determinations required to be made under this Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company or Executive (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group affecting the Change in Control, Executive shall appoint another nationally recognized public accounti ng firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to Executive within five (5) days of the receipt of the Determination. If the Accounting Firm determines that no Excise Taxes are payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The Determination by the Accounting Firm shall be binding upon the Company and Executive; however, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), co nsistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 6(c) and Executive thereafter is required to make payment of any Excise Tax that qualifies for a Gross-Up Payment in accordance with this Section 6, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

          (c)          Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay

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such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

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

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

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

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

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income or employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initia l jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the

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Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

          (d)          If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 6, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of Section 6) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 6, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amo unt of Gross-Up Payment required to be paid.

7.	Withholding Taxes. The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local, or other law, the Company is required to withhold therefrom.
8.	Reimbursement of Expenses. If any contest or dispute shall arise under or related to this Agreement involving termination of Executive's employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse Executive, on a current basis, for all legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute regardless of the result thereof.
9.	Successors; Binding Agreement.

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

          (b)          Spartan Stores agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 9, it will cause any

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

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

10.	Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:
	If to the Executive:                     Craig Sturken                     ____________________________                     ____________________________
	If to Spartan Stores:                     Spartan Stores, Inc.                     850 76th Street, S.W.                     P. O. Box 8700                     Grand Rapids, Michigan 49518

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	Attention: Secretary
	or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
11.	Full Settlement; Resolution of Disputes.

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

          (b)          If there shall be any dispute between the Company and Executive in the event of any termination of Executive's employment then, until there is a final, nonappealable, determination pursuant to arbitration declaring that such termination was for Cause, that the determination by Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to Executive and his dependents or other beneficiaries, as the case may be, under Sections 3 and 4, the Company shall pay all amounts, and provide all benefits, to Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 as though such termination were by the Company without Cause or by Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts p ursuant to this Section 11 except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive is ultimately determined by the arbitrator not to be entitled.

          (c)          Arbitration. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that Executive shall be entitled to seek specific performance of his right to be paid pursuant to Section 11(b) during a dispute. Judgment may be entered on the arbitration award in any court having jurisdiction. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 11(c).

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12.	Inability to Perform, Risk of Liability. If Executive's Employment is terminated pursuant to Section 5(v) of the Employment Agreement between Executive and the Company dated March 3, 2003, this Agreement shall terminate immediately and the Company shall not be obligated to perform under it.
13.	Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Michigan without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.
14.	Establishment of Trust. Immediately prior to a Change in Control, the Company shall establish and maintain a Trust in the form attached as Exhibit A. Upon the occurrence of a Change in Control the Company shall pay into the Trust the amounts called for under Exhibit A, and shall thereafter make such additional payments as called for under Exhibit A. No payment to the Trust by the Company shall reduce the Company's obligations to make payments to Executive under this Agreement.
15.	Counterparts. This Agreement may be executed in original or by fax in counterparts, each of which shall be deemed to be an original and together the counterparts shall constitute one and the same instrument.
16.	Miscellaneous. No provision of this Agreement may be modified or waived unless such modification is agreed to in writing and signed by Executive and by a duly authorized officer of the Company, or such waiver is signed by the waiving party. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder, including without limitation, the right of Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, Executive, his estate, or his benefici aries pursuant to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate, or his beneficiaries under any other employee benefit plan or compensation program of the Company, except that no benefits pursuant to any other employee plan or compensation program that become payable or are paid in accordance with this Agreement shall be duplicated by operation of this Agreement. No agreements or representations, oral or otherwise, express or implied, with regard to the

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subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

* * *

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

	SPARTAN STORES, INC. By /s/ Mark C. Eriks      Mark C. Eriks      Vice President Human Resources
AGREED TO THIS 3RD DAY OF MARCH, 2003
/s/ Craig Sturken CRAIG STURKEN "Executive"

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EXHIBIT A

SPARTAN STORES, INC.
EXECUTIVE SEVERANCE AGREEMENT AND SERP TRUST

                    This Agreement ("Trust Agreement") is made this___ day of ________, _____, by and between Spartan Stores, Inc. ("Company"), a Michigan corporation, and _____________ ("Trustee").

                    WHEREAS, the Company has entered into separate Executive Severance Agreements with certain key executive employees of the Company identified on Schedule I to this Trust as it may be amended from time to time (each such agreement a "Severance Agreement" and, collectively, the "Severance Agreements"), and the Company maintains a Supplemental Executive Retirement Plan ("SERP") covering certain key executives of the Company identified on Schedule II to this Trust, as it may be amended from time to time; and

                    WHEREAS, the Company has incurred or expects to incur liability under the SERP and/or one or more of the Severance Agreements with respect to one or more Executives, or a Beneficiary of a deceased Executive (the term "Executive" being defined as a person listed on Schedule I or II and the term "Beneficiary" being defined as a person or estate entitled under the SERP or Severance Agreement to receive payments in the event of an Executive's death); and

                    WHEREAS, the Company has determined to establish a trust ("Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as defined in Section 3 of this Trust Agreement, until paid to one or more of the Executives pursuant to the SERP or one or more of the Severance Agreements or otherwise disposed of as provided herein; and

                    WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement that shall not affect the unfunded status of the SERP or Severance Agreements or any other unfunded plans maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended; and

                    WHEREAS, it is the intention of the Company to make contributions to the Trust to provide a source of funds to assist the Company in meeting liabilities under the SERP and Severance Agreements;

                    NOW, THEREFORE, by this Trust Agreement the parties establish the Trust and agree that the Trust shall be comprised of the assets described herein and shall be held, administered and disposed of as follows:

SECTION 1

Establishment of the Trust

          1.1.          Company Contributions. The Company hereby deposits with the Trustee the sum of One Thousand Dollars ($1,000) as the initial principal of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement.

                    The Company, in its sole discretion, at any time and from time to time, may make additional deposits of cash, or other property acceptable to the Trustee, to the Trust to augment the principal to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. Prior to a Change in Control as defined in the SERP and the Severance Agreements neither the Trustee nor any Executive or Beneficiary shall have any right to compel additional deposits.

                    No later than thirty (30) days following a "Change in Control" (as such terms are defined in the SERP and Severance Agreements), unless otherwise agreed by an Executive with respect to amounts potentially due to the Executive, the Company shall make an irrevocable contribution to the Trust in an amount that, together with existing assets in the Trust, will equal one hundred percent (100%) of the sum of the amounts necessary to make all payments which each Executive would be entitled to receive (either immediately or in the future) under the SERP and under the applicable Severance Agreement if the Executive's employment had been terminated on the date of the Change in Control and such termination was a Qualifying Termination; provided, however, that future obligations may be discounted for purposes of computing the initial deposit and all subsequent determinations under Section 4 of this Trust, by a discount rate equal to the then curren t annual interest rate for thirty (30) year Treasury Constant Maturity Securities as reported in Federal Reserve Statistical Release G.13 or H.15 or equivalent. The term "Qualifying Termination," as used in this Trust, means a termination entitling the Executive to payment of some or all of the amounts provided for under the SERP and/or Severance Agreement.

          1.2.          Irrevocable. Prior to a Change in Control, the Trust shall be revocable by the Company. Except as otherwise provided herein, the Trust shall be irrevocable upon a Change in Control.

          1.3.          Grantor Trust. The Trust is intended to be a grantor trust, with the Company as the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

          1.4.          Limited Rights of Executive. The principal of the Trust, and any earnings thereon not distributed to the Company, shall be held separate and apart from other funds of the Company and, except as otherwise provided herein, shall be applied exclusively for the uses and purposes of the Executives and Beneficiaries (to the extent of their rights under the SERP and/or a

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Severance Agreement), and general creditors, and the payment of related fees and expenses, as herein set forth. No Executive or Beneficiary shall have a preferred claim on, or a beneficial ownership interest in, any assets of the Trust. The rights created under the SERP, the Severance Agreements and this Trust Agreement shall be unsecured contractual rights of each Executive and Beneficiary. Assets held in the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3.1 of this Trust Agreement.

          1.5.          Determination of a Change in Control. The highest ranking officer of the Company shall have the duty to inform the Trustee in writing of the occurrence of a Change in Control. If any Executive (or person acting on behalf of any Executive), other than the Company's highest ranking officer, alleges in writing to the Trustee that a Change in Control has occurred, the Trustee shall determine whether a Change in Control has occurred. Unless the Trustee has actual knowledge that a Change in Control has occurred, or has received notice from the Company or an Executive (or person acting on behalf of an Executive) alleging that a Change in Control has occurred, the Trustee shall have no duty to inquire whether a Change in Control has occurred. The Trustee may in all events rely on evidence concerning the existence of a Change in Control that the Trustee considers reasonably reliable and sufficient for a determination.

          1.6.          Acceptance by Trustee. The Trustee accepts its duties and obligations as Trustee hereunder, agrees to accept funds delivered to it by the Company, and agrees to hold, manage, administer, and apply all trust assets in accordance with the terms and conditions of this Trust Agreement.

          1.7.          Committee; Absence of Committee or Company. The Compensation Committee of the Board of Directors of the Company, or any other committee designated by the Board of Directors ("Committee"), shall have the powers, rights, and duties of the Committee described herein. The Board of Directors of the Company will certify to the Trustee from time to time the names of the members of the Committee. The Trustee may rely on the most recent certificate without further inquiry or verification. The Trustee also may rely on minutes and other written communications, certified by the secretary or acting secretary of the Committee or the Board of Directors of the Company, as accurately setting forth any action or decision by the Committee.

                    If for any period there are no members of the Committee, or the Committee is unable to exercise its powers and duties hereunder, the Board of Directors of the Company shall act on behalf of, and shall have all of the powers, rights, and duties otherwise reserved to, the Committee. The Company warrants that all directions and authorizations by the Committee, or by the Board of Directors, whether for the payment of money or otherwise, will comply with the provisions of the SERP, each Severance Agreement and this Trust Agreement.

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                    Following a Change in Control, if the Company no longer exists and there is no successor to the Company, the Trustee shall have all of the powers and duties of the Company and the Committee hereunder and shall determine and make all payments from Trust assets due Executives and Beneficiaries under the SERP and Severance Agreements or due general creditors under Section 3 of this Trust Agreement.

SECTION 2

Payments to Executives

          2.1.          Right To Payment. Except as otherwise provided herein, the Committee shall make an initial determination as to the entitlement of an Executive or Beneficiary to benefits under the SERP or a Severance Agreement, and any claim for benefits by an Executive or Beneficiary shall be considered and reviewed under the procedures set forth in the SERP or Severance Agreement, as applicable.

          2.2.          Payment Directed By Company. Prior to the occurrence of a Qualifying Termination following a Change in Control, there shall be no payment to an Executive or Beneficiary from the Trust. Upon a Qualifying Termination, the Committee shall determine and notify the Trustee of the total amount to be paid to or with respect to the eligible Executive and the timing of the required payment or payments pursuant to the SERP and/or Severance Agreement. Except as otherwise provided herein, the Trustee shall make the payment or payments to each eligible Executive or Beneficiary, debiting each payment from the Executive's account.

          2.3.          Direct Payment by Company. The Company may make direct payments to an eligible Executive or Beneficiary, as benefits become due under the terms of the applicable Severance Agreement, in lieu of payments by the Trustee. The Committee shall notify the Trustee of its decision to make such payments directly. The Committee may direct the Trustee in writing to reimburse the Company from this Trust, and debit the account of each Executive, for amounts paid directly to the Executive or Beneficiary by the Company. The Trustee shall reimburse the Company for such payments promptly after receipt by the Trustee of satisfactory evidence that the Company has made the direct payments.

          2.4.          Default Payment By Trustee. Upon receipt of a written notice from an Executive or Beneficiary that there has been a Qualifying Termination with respect to the Executive, and that amounts due have not been paid, the Trustee may make an independent determination whether a Qualifying Termination has occurred and, if so, of the amount and timing of payments due the eligible Executive or Beneficiary. Upon reaching an independent determination that payment is due, the Trustee shall notify the Company in writing of its conclusion. The Company shall have fifteen (15) days from the date of delivery or eighteen (18) days from the date of mailing of the

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notice in which to provide the Trustee with evidence satisfactory to the Trustee that the Company has made all payments due each Executive or Beneficiary or to serve the Trustee with a summons and complaint or petition filed by the Company in a court of competent jurisdiction naming the Trustee and each affected Executive or Beneficiary as defendants or respondents and disputing the right to payments from the Trust. If the Company does not respond within the time period specified in the preceding sentence, the Trustee may make the payment or payments due each Executive or Beneficiary in the required amount as due.

                    The Trustee shall be compensated and reimbursed from the Trust for its reasonable fees and expenses, including expenses for advice from independent accountants and attorneys retained by it, in connection with an independent determination and payment under this section.

                    Nothing in this section shall require the Trustee to undertake an independent determination or payment. The Trustee may elect to leave any claim for unpaid benefit payments to be resolved directly between the Company and the Executive or Beneficiary.

          2.5.          Limit On Payments; Company Obligation. In no event shall a payment from the Trust to or with respect to an Executive exceed the amount allocated to the Executive's account at the time of the payment. The Trustee shall notify the Company if the assets allocated to an Executive's account are insufficient to make a required payment from the Trust. The Company shall be solely responsible for, and shall make as due, all required payments to or with respect to an Executive under the SERP and/or Severance Agreement that are not made from the Trust.

          2.6.          Reporting and Withholding of Taxes. The Trustee shall withhold, report, and remit any federal, state, or local taxes that may be required to be withheld with respect to any payment of benefits from the Trust and shall pay amounts withheld to the appropriate taxing authorities or shall determine that such amounts have been reported, withheld, and paid by the Company.

          2.7.          Missing Persons. If the recipient entitled to any payment to be made by the Trustee from the Trust cannot be located directly by the Trustee or through a reasonable procedure available through the Internal Revenue Service, the Social Security Administration or another governmental agency, the Trustee shall notify the Committee of that fact. The Trustee thereafter shall have no obligation to search for or ascertain the whereabouts of any payee under this Trust Agreement.

          2.8.          SERP and Severance Agreements for Trustee. The Company at all times shall provide the Trustee with current copies of the SERP and all Severance Agreements, including amendments, and shall notify the Trustee if the SERP or any Severance Agreement is modified.

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SECTION 3

Trustee Responsibility Regarding Payments to Trust
Beneficiary When a Participating Employer Is Insolvent

          3.1.          Insolvency. The Trustee shall cease payment of benefits from the Trust to any Executive or Beneficiary if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if the Company is (a) unable to pay its debts as they become due, (b) subject to a pending proceeding as a debtor under the United States Bankruptcy Code or (c) determined to be insolvent by a governing federal or state regulatory agency.

          3.2.          Claims of General Creditors. At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

          (a)          The Board of Directors and the highest ranking officer of the Company shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payments from the Trust to Executives and Beneficiaries.

          (b)          Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company's solvency.

          (c)          If at any time the Trustee has determined that a Company is Insolvent, the Trustee shall discontinue payments to Executives and Beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of any Executive or Beneficiary to pursue rights as a general creditor of the Company with respect to benefits due under the SERP or an applicable Severance Agreement or otherwise.

          (d)          The Trustee shall resume payments from the Trust to Executives and Beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent or is no longer Insolvent.

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          3.3.          Omitted Payments. Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3.2 above and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Executives and Beneficiaries under the terms of the SERP and all applicable Severance Agreements for the period of such discontinuance, less the aggregate amount of any payments made by the Company in lieu of the payments provided for hereunder during the period of discontinuance.

SECTION 4

Payments to Company from Trust
and by Company to Trust

          4.1.          General Limitation. Except as otherwise provided in this Trust Agreement, including, without limitation, as provided in this Section 4 and in Sections 2.3, 3, and 8.2 of this Trust Agreement, the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before payment of all benefits has been made to the Executives and Beneficiaries pursuant to the terms of this Trust Agreement and the SERP and applicable Severance Agreements.

          4.2.          Cessation of Benefit Obligation To Executive. Prior to a Change in Control, the Trustee shall liquidate (if necessary) and distribute to the Company the Trust Fund assets allocated to an Executive's account upon written notice from the Committee certifying that the Executive is no longer entitled to any payment under the SERP or a Severance Agreement and that the applicable Severance Agreement is no longer in effect. The notice shall specify the date the Executive ceases to be entitled to any further payments. The Trustee shall distribute the assets to the Company no earlier than six (6) months subsequent to the specified date; provided, however, that if a Change in Control occurs within the six (6) month period, the Trustee shall not make any distributions under this paragraph to the Company.

          4.3.          Disposition of Income. Prior to a Change in Control, all income of this Trust, net of expenses and taxes payable by the Trust, shall be returned to the Company.

          4.4.          Return of Excess Assets. Prior to a Change in Control, in the event the value of the assets in the Trust, determined pursuant to the accounting procedures set forth herein as of each December 31, exceeds one hundred percent (100%) of the amount necessary to pay each Executive all amounts the Executive could be entitled to receive under the SERP and applicable Severance Agreement, determined as of each December 31, the Trustee shall pay the excess amount, if any, to the Company as soon as administratively feasible following the December 31 determination date. After a Change in Control, the percentage in the preceding sentence shall be increased to one hundred twenty-five percent (125%).

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          4.5          Additional Deposits. After a Change in Control, if the value of the assets in the Trust, determined pursuant to the accounting procedures set forth herein as of any December 31, is less than one hundred twenty-five percent (125%) of the amount necessary to pay each Executive all amounts each Executive could be entitled to receive under the SERP and each Severance Agreement, assuming a Qualifying Termination of Executive's employment as of the date of determination, the Company shall deposit additional funds into this Trust to attain the one hundred twenty-five percent (125%) level of funding.

SECTION 5

Administration of Trust

          5.1.           In General. The Trust and all Trust assets shall be administered by the Trustee pursuant to all of the express and implied duties and powers and subject to all express and implied conditions and limitations contained in or derived from the provisions of this Trust Agreement and conferred and imposed by applicable law. All rights associated with administration of the Trust and with Trust assets shall be exercised by the Trustee, the Committee, or the Company or person designated by the Trustee, the Committee, or the Company, as provided herein, and in no event shall such rights be exercisable by or rest with any Executive or Beneficiary, except to the extent approval of an amendment or termination of the Trust Agreement or of the removal of the Trustee and appointment of a successor Trustee is reserved to an Executive.

          5.2.          Duties and Powers of Trustee. In addition to the duties and powers set forth in other provisions of this Trust Agreement, and subject to all applicable conditions and limitations, the Trustee shall have the following duties and powers with respect to the Trust:

          (a)          Control, Manage, and Invest Assets. To hold, manage, improve, repair, control and invest all real and personal property forming part of the Trust;

          (b)          Implement Instructions. To carry out the instructions of the Company and the Committee that are consistent with the terms of this Trust Agreement, the SERP and applicable Severance Agreements;

          (c)          Records; Reports. To maintain records and to prepare and file reports required by law to be filed by the Trustee or required by agreement with the Company;

          (d)          Payments. To make payments and distributions from the fund as provided in this Trust Agreement, including benefits that have become payable under the applicable Severance Agreements pursuant to Section 2 or that are

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required to be made to the general creditors of the Company as set forth in Section 3;

          (e)          Acquire and Dispose of Assets. To purchase, sell, convey, exchange, lease, convert, transfer, divide, repair, partition, consent to partition, or otherwise acquire or dispose of any property at any time held in trust hereunder by public or private transaction, for the consideration and upon the terms and conditions determined by the Trustee;

          (f)          Reorganizations. To take any action and to abstain from taking any action with respect to any reorganization, consolidation, merger, dissolution, recapitalization, refinancing, liquidation, bankruptcy, composition, arrangement, readjustment of the financial structure, sale, sale of assets or any other program or change affecting any property constituting a part of the Trust and in connection therewith to delegate the Trustee's discretionary powers and to pay assessments, subscriptions, and other charges from the Trust;

          (g)          Voting Trusts; Protective Committees. To deposit any property in any voting trust, or with any protective, reorganization or similar committee, or with depositories designated thereby; to delegate power thereto, and to pay or agree to pay part of the expenses and compensation and any assessments levied with respect to the deposited property;

          (h)          Extend Due Dates. To extend the time of payment of any obligation held by it;

          (i)          Voting Rights. To exercise all voting rights with respect to property held in the Trust directly or by proxy, with or without the power of substitution, and to delegate the Trustee's powers and discretions with respect to such property to any such proxy;

          (j)          Exercise Other Rights. To exchange securities, to sell or exercise subscription, conversion, and other rights and options, and make payments from the Trust in connection therewith, with respect to any property held in the Trust;

          (k)          Employ Agents and Advisors. To engage as reasonably necessary agents, attorneys, accountants, and other persons (who also may be employed by the Company or the Committee), to delegate duties and discretionary powers to such persons, and to reasonably rely upon information and advice furnished by such persons; provided that each delegation and acceptance of duties and powers shall be in writing; and provided further that the Trustee may not delegate its responsibilities for the management and control of the assets of the Trust;

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          (l)          Borrow. To borrow money for the purposes and benefit of the Trust, without binding itself individually, and in connection with any borrowing to issue a promissory note or other evidence of the debt, and to secure repayment by pledging any property held in the Trust; provided that prior to a Change in Control, any borrowing shall be subject to approval by the Committee;

          (m)          Insure Assets. To insure Trust assets through a policy or contract of insurance;

          (n)          Incorporate. To incorporate or form another entity (or participate in an incorporation or formation of another entity) under the laws of any state for the purpose of acquiring and holding title to any property that is part of the Trust;

          (o)          Custodian. To keep on deposit with a custodian in the United States any part of the Trust; provided that prior to a Change in Control, any deposit with another custodian shall be made only with the prior approval of the Committee;

          (p)          Collection. To demand, collect, and receive the principal, dividends, interest, other income and all other money or property due the Trust;

          (q)          Registration and Holding of Trust Assets. To register investments in its own name or in the name of a nominee; to hold any investment in bearer form; and to combine certificates representing securities with certificates of the same issue held by it in other fiduciary capacities; to deposit or to arrange for the deposit of such securities with any depository or other securities clearing entity, even though, when so deposited, such securities may be held in the name of the nominee of such depository with other securities deposited therewith by other persons; or to deposit or to arrange for the deposit of any securities issued or guaranteed by the United States government, or any agency or instrumentality thereof, including securities evidenced by book entries rather than by certificates, with the United States Department of the Treasury or a Federal Reserve Bank, even though, when so deposited, such securities may not be held se parate from securities deposited therein by other persons; provided, however, that no securities held in the Trust shall be deposited with the United States Department of the Treasury or a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and provided, further, that the books and records of the Trustee shall at all times show that all such securities are part of the Trust;

          (r)          Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, to commence or defend suits

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or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by the Company to its reasonable satisfaction against liability or expenses it may incur;

          (s)          Execute Documents. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted herein; and

          (t)          Other Acts To perform all other acts the Trustee deems necessary, suitable, or desirable for the control and management of the Trust and discharge of its duties.

          5.3.          Limitation on Duties and Powers of the Trustee. Unless properly delegated and assumed by agreement of the Trustee, the Trustee shall not be required to exercise a duty or power of the Company, Committee, or any other fiduciary under this instrument.

                    If an Investment Manager (defined in Section 6.4 below) is appointed to manage and invest some or all of the Trust assets, the Investment Manager shall have, and the Trustee shall not have, the express or implied duties and powers under this Trust Agreement with respect to investment of Trust assets subject to the Investment Manager's control. The Trustee shall have no obligation or power to exercise discretionary authority or control with respect to investment of the assets subject to management by the Investment Manager or to render advice regarding the investment of such assets, unless required by ERISA Section 405. The Trustee shall not be liable for the investment performance of the assets subject to management by the Investment Manager. The powers and duties of the Trustee with respect to such assets shall be limited to the following:

          (a)          Custody and Protection. To act as custodian of the Trust assets not transferred to the custody of the Investment Manager or another custodian, and to protect the assets in its custody from loss by theft, fire, or other cause;

          (b)          Acquisitions. To acquire additional assets for the Trust in accordance with the direction of the Investment Manager;

          (c)          Dispositions. To sell or otherwise dispose of Trust assets in accordance with the direction of the Investment Manager;

          (d)          Accountings. To account for and render accountings with respect to the Trust, except for assets held by another custodian;

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          (e)          Authorized Actions. To take authorized actions for and on behalf of the Trust in accordance with the direction of the Investment Manager; and

          (f)          Ministerial and Custodial Tasks. To perform other ministerial and custodial tasks in accordance with the direction of the Investment Manager.

                    If Trust assets are transferred to another custodian, that custodian shall have, and the Trustee shall not have, the duties and powers specified in Section 5.2 with respect to those assets.

                    The Trustee shall have no liability or responsibility for any loss resulting to the Trust by reason of the sale or purchase of any investment directed by an Investment Manager or the Company or by reason of the failure to take any action with respect to any investment that was acquired pursuant to any such direction in the absence of further directions of such Investment Manager or the Company.

                    Notwithstanding anything in this Agreement to the contrary, the Trustee shall be indemnified and saved harmless by the Company from and against any and all liability to which the Trustee may be subjected by carrying out any investment directions of an Investment Manager or the Company, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense; provided, however, the Trustee shall not be so indemnified if it participates knowingly in, or knowingly undertakes to conceal, an act or omission of an Investment Manager or the Company, having actual knowledge that such act or omission is a breach of a fiduciary duty; and provided further, that the Trustee shall not be deemed to have knowingly participated in or knowingly undertaken to conceal an act or omission of an Investment Manager or the Company with knowledge that such act or omission was a breach of fiduciary duty by merely complying with directions of an Investment Manager or the Company or by failure to act with respect to assets subject to the investment control of an Investment Manager or the Company in the absence of directions from the Investment Manager or the Company. The Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued by the Investment Manager or the Company which the Trustee believes to be genuine and to have been issued by the Investment Manager or the Company. The Trustee shall not be charged with knowledge of the appointment or termination of the appointment of any Investment Manager by the Company until it receives written notice thereof from the Company.

          5.4.          Accounting by Trustee.

          (a)          Pursuant to and as agreed under Section 5.2(c) above, the Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and Trustee. As soon as

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reasonably practicable following the close of each calendar year and each other valuation date agreed by the Company and the Trustee, and after the removal or resignation of the Trustee, the Trustee shall deliver to the Committee a written account of its administration of the Trust during such period, or during the period from the close of the last valuation period to the date of the removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or valuation period, or as of the date of such removal or resignation, as the case may be.

          (b)          The Committee may object to an accounting within 180 days after it is furnished and require that it be settled by an audit by a qualified, independent certified public accountant. The auditor shall be chosen by the Trustee from a list of at least three such accountants furnished by the Committee at the time the audit is requested. Either the Committee or the Trustee may require that the account be settled by a court of competent jurisdiction, in lieu of or in conjunction with the audit. All expenses of any audit or court proceedings, including reasonable attorney fees, shall be allowed as administrative expenses of the Trust.

          (c)          If the Committee does not object to an accounting within the time provided, the account shall be deemed settled and final for the period covered by it. Notwithstanding the preceding sentence, Trustee agrees it will, at reasonable cost, revise any accounting if determined by the Company to be necessary due to a latent error or omission and will do so at no cost to the extent the error or omission was the fault of the Trustee.

          (d)          The Trustee shall maintain a recordkeeping account in the name of each Executive which, pursuant to rules established by the Committee, will reflect with respect to each Executive:

                    (i)          Deposits made by the Company to the Trust for the Executive, pursuant to Section 1 of this Trust Agreement;

                    (ii)          Income, losses, and appreciation or depreciation in the value of Trust assets resulting from investment of the Trust;

                    (iii)          Payments made from the Trust to the Executive or Beneficiary and to the Company; and

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                    (iv)          Any other amounts charged to the accounts of the Executive, including administrative and investment expenses as described in Section 5.5 of this Trust Agreement.

                    Each Executive's account shall be a recordkeeping account only and shall reflect on undivided contingent interest in assets of the Trust and shall not require any actual segregation or separate investment of particular assets. To the extent there are assets in the Trust, other than income or excess assets to be repaid to the Company under Section 4 of this Trust Agreement, that exceed the amounts necessary to pay each Executive the amount the Executive could be entitled to under the SERP and/or Severance Agreement, determined as of each December 31, the excess shall be allocated to the accounts of all Executives in proportion to the amount each Executive could be entitled to as of that date.

          (e)          The Company and the Trustee may agree that the accounts under (d) above shall be maintained by the Committee, or such other person as may be designated by the Committee, rather than the Trustee.

          5.5.          Compensation and Expenses. The Company shall pay directly reasonable compensation of the Trustee as may be agreed upon from time to time between the Committee and the Trustee, and all expenses, except those specifically described in the last sentence of this paragraph, reasonably incurred by the Trustee and the Committee in the administration of this Trust, including compensation of agents, actuaries, attorneys, accountants, and other persons employed by the Trustee or the Committee. To the extent such compensation and expenses remain unpaid forty-five (45) days after mailing of an invoice for same by the Trustee to the Company, the Trustee may notify the Company of the intent to pay the amounts due from the Trust. If any amount remains unpaid thirty (30) days after mailing of the notice of intent to pay from the Trust, the Trustee may pay such compensation and expenses from the Trust. Expenses solely attributable to investme nt of the Trust assets, such as investment manager fees, load or other commission fees, brokerage, postage, express or insurance charges, and stock transfer stamps expense, shall be paid from the Trust to the extent not paid directly by the Company.

          5.6.          Insurance. If an insurance policy or contract is held as an asset of the Trust, the Trustee shall have all powers and incidents of ownership of the policy or contract, but shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy to anyone other than to a successor Trustee or the Company except as a means of making payments to an Executive or Beneficiary, or to loan to any person the proceeds of any borrowing against such policy.

          5.7.          Carrying on a Business. Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within

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the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.

          5.8          Fiduciary Duty of Trustee. The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

SECTION 6

Investment and Investment Managers

6.1.          Investment of Trust Assets.

          (a)          Investment Authority. Trust assets may be invested and reinvested in any readily marketable common and preferred stocks; bonds; notes; debentures, including convertible stocks and securities but not including any stock or security of the Trustee other than a de minimis amount held in a collective or mutual fund; certificates of deposit or demand or time deposits, including any such deposits with the Trustee; notes; commercial paper; obligations of the United States; warrants; options; common or collective funds, including those maintained by the Trustee; other securities; and shares of investment companies and mutual funds and in other investments specifically authorized herein. Trust assets shall not be invested in securities, including stock or rights to acquire stock, or obligations issued by the Company or any successor to the Company, other than a de minimis amount held in a collective or mutual fund.

          (b)          Insurance Contracts. Trust assets may be invested in guaranteed investment contracts and other contracts, policies and funds of insurance companies. The Trustee shall have the right to purchase an insurance policy or an annuity to fund payments to become due under the SERP and/or any Severance Agreement.

          (c)          Collective Investment Trusts. Trust assets may be invested in any common, collective, or commingled trust fund or pooled investment fund that is maintained by a bank or trust company, including a bank or trust company acting as Trustee, provided such investments are consistent with applicable investment requirements and guidelines, if any, established by the Committee pursuant to Section 6.2 below. To the extent that any Trust assets are invested in any such fund, the provisions of the documents under which such common, collective, or

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commingled trust fund or pooled investment fund are maintained are incorporated by reference herein.

          (d)          Related Mutual Funds. Trust assets may be invested and reinvested through the medium of any mutual fund that may be established and maintained by the Trustee or any affiliate of the Trustee or with respect to which the Trustee or any affiliate may provide investment advisory or other services for a fee.

          (e)          Commingled Investment. Assets of the Trust may be commingled for investment purposes with assets of any other similar trust or trusts established by the Company with the Trustee for the purpose of providing deferred compensation or retirement income benefits for its key employees and/or directors through nonqualified plans and arrangements.

          (f)          Short Term Investment Authority. Trust assets may be held uninvested only for such reasonable periods as are necessary to invest new assets deposited in Trust or to clear investment transactions and reinvest the proceeds. The Trustee may hold reasonable amounts of assets invested only in an appropriate daily or other short-term investment alternative for a reasonable period of time pending payment of benefits, payment of expenses or other distributions, or pending availability of other investments.

          (g)          Purchase and Sale of Options. Trust assets may be invested by purchasing put options not exceeding the number of shares of optioned stock actually held by the Trust, by selling put options and maintaining liquidity to the extent necessary pending the exercise or lapse of the option, and by selling call options, but not in a market opening or market closing transaction, not exceeding the number of shares of optioned stock actually held by the Trust.

          6.2.          Investment Direction by Company. Prior to a Change in Control, the Company, through the Committee or one or more employees delegated investment responsibility, may direct investment of all or any part of the assets among investments permitted herein. Prior to a Change in Control, the Company may establish guidelines, objectives, and restrictions regarding the investment of assets held in the Trust. The Trustee shall be under no duty to question, and shall not incur any liability on account of following, any direction of the Company prior to a Change in Control. The Trustee shall be under no duty to review the investment guidelines, objectives, and restrictions established, or the specific investment directions given by the Company, for the Trust or any separate investment account or to make suggestions to the Company in connection therewith.

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                    Prior to a Change in Control, the Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

          6.3.          Investment Funds. Prior to a Change in Control, the Company may direct the Trustee to establish separate investment accounts within the Trust. The Trustee shall allocate to each investment account such portion of the assets of the Trust as the Company may direct from time to time.

                    Except as otherwise provided herein, the Trustee shall not be required to establish separate investment accounts in the absence of direction by the Company, and may administer and invest the deposits made to the Trust by the Company as one fund.

          6.4.          Investment Managers. Prior to a Change in Control, the Company, from time to time, may appoint one or more independent investment managers (each an "Investment Manager"), pursuant to a written investment management agreement describing the powers and duties of the Investment Manager and providing for the delivery of a written acknowledgment from the Investment Manager to the Company and Trustee that it is a fiduciary under this Trust Agreement, to direct the investment and reinvestment of all or any portion of the Trust. As used herein, "Investment Manager" shall have the meaning specified in Section 3(38) of ERISA. The Company in its sole discretion, also may direct the Trustee to transfer the assets to be managed and invested by an Investment Manager to another custodian approved by the Company. The Investment Manager shall manage and invest, and may direct the Trustee or other custodian to invest and reinvest, that portion of the Trust assets under the control of that Investment Manager in investments permitted herein. The Company shall determine the assets of the Trust to be under the control of each Investment Manager from time to time and shall issue appropriate instructions in writing to the Trustee.

                    The Company shall furnish the Trustee with written notice of the appointment of each Investment Manager and of the termination of any such appointment. The notice shall specify the assets to be managed by the Investment Manager. The Trustee shall be fully protected in relying upon the appointment until it receives written notice from the Company that the appointment has been terminated or modified.

                    The Company may provide an Investment Manager investment guidelines to be followed by the Investment Manager from time to time.

                    Notwithstanding the foregoing, the Trustee, without obtaining prior approval or direction from an Investment Manager, and in the absence of contrary direction from the Investment Manager, shall invest cash balances held by it from time to time in short term cash equivalents including, but not limited to, the medium of any short term common, collective or

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commingled trust fund established and maintained by the Trustee; U.S. Treasury Bills; commercial paper, including forms of commercial paper available through the Trustee; certificates of deposit, including certificates issued by the Trustee; and similar securities, with a maturity not to exceed one year, and shall sell such short term investments as necessary to carry out the instructions of an Investment Manager when received.

          6.5.          Investments Following Change in Control. Following a Change in Control, the Trustee shall have sole and absolute discretion in the management and investment of the fund and in exercising investment responsibility shall have all the duties and powers set forth under Section 5.2 of this Trust Agreement. Following a Change in Control, the Company shall not have any of the express or implied duties and powers contained in this Trust Agreement with respect to the control, management and investment of Trust assets and shall not have any power to approve or withhold approval of any action by the Trustee with respect to the control, management and investment of the Trust. Upon a Change in Control the appointment of any Investment Manager and any related custodian shall terminate and the Trustee shall have the sole right to retain or discharge Investment Managers and related custodians, and to determine the terms of the engagement of any Investment Manager and related custodian.

                    In investing Trust assets following a Change in Control, the Trustee shall consider the need for matching the assets with liabilities and probable payments to Executives under the Severance Agreements and shall, subject to Section 3 of this Trust Agreement, act solely in the best interests of the Executives and Beneficiaries.

                    The Trustee shall have the right, in its sole discretion, to delegate its investment responsibility to an Investment Manager, which may be an affiliate of the Trustee. In the event the Trustee appoints an affiliated Investment Manager, the Trustee shall remain, at all times responsible for the acts of the affiliated Investment Manager.

SECTION 7

Resignation and Removal of Trustee

          7.1.          Resignation of Trustee. Prior to a Change in Control, the Trustee may resign at any time by written notice to the Company. The resignation shall be effective sixty (60) days after receipt of the notice unless the Company and the Trustee agree otherwise. Following a Change in Control, the Trustee may resign only upon the appointment of a successor Trustee.

          7.2.          Removal of Trustee. Prior to a Change in Control, the Trustee may be removed by the Company by written notice to the Trustee. The removal shall be effective sixty (60) days after receipt of the notice or upon shorter notice accepted by the Trustee. Subsequent to a Change in Control, the Trustee may be removed by the Company only with the consent of a majority of

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the Executives and Beneficiaries who remain entitled to benefits under the Severance Agreements at such time.

          7.3.          Appointment of Successor. Subject to Sections 7.1 and 7.2 above, if the Trustee resigns or is removed, a successor which is independent of the Company shall be appointed by the Company. If a timely appointment is not made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. If a Trustee desires to resign or is removed following any Change in Control, the resigning or removed Trustee shall appoint a successor Trustee which shall be the trust department of a bank or trust company ranked among the 150 largest banks in size of total assets in the United States, and for such purpose may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. The appointment of the successor shall be effective when accepted in writing by the new Trustee or as of such later date or dates when Trust assets are delivered to the successor Trustee.

          7.4.          Duties of Predecessor Trustee and Successor Trustee. Upon the appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver the assets of the Trust to such successor after reserving such reasonable amounts as it shall deem necessary to provide for any expenses, fees, or taxes then or thereafter chargeable against the Trust. A Trustee that resigns or is removed shall promptly furnish to the Committee and the successor Trustee a final account of its administration of the Trust. A successor Trustee shall succeed to all rights in and ownership of the predecessor Trustee in the assets of the Trust and the predecessor Trustee shall deliver the property comprising the Trust to the successor Trustee together with any instruments of transfer, conveyance, assignment, and further assurances as the successor Trustee may reasonably require. Each successor Trustee shall have all the powers, rights, and dut ies conferred by this Trust Agreement as if named the initial Trustee. Subject to applicable law, no Trustee shall be personally liable for any act or failure to act of a predecessor or successor Trustee.

          7.5.          Expenses. All reasonable expenses of any resigning or removed Trustee, including the reasonable cost of any court proceeding deemed necessary by the resigning or removed Trustee, shall be administrative expenses of the Trust.

SECTION 8

Amendment or Termination

          8.1.          Amendment.

          (a)          Prior to a Change in Control, this Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. The Trust may

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not be amended following a Change in Control without the written consent of a majority of the Executives (and Beneficiaries of any deceased Executive) who remain entitled to benefits under the Severance Agreements at such time. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the SERP or any Severance Agreement or shall make the Trust revocable after it has become irrevocable.

          (b)          The powers, duties and liabilities of the Trustee and any Investment Manager under this Trust Agreement cannot be changed without their written consent.

          8.2.          Termination.

          (a)          The Trust shall terminate, and all the rights, titles, powers, duties, discretions, and immunities imposed on or reserved to the Trustee, the Company, the Committee, the Board of Directors, and any Investment Managers shall terminate with respect to the Trust, upon the earlier of: (i) the date all benefits payable to Executives and Beneficiaries under the SERP and all Severance Agreements have been paid; or (ii) the date mutually agreed in writing between the Company (or the Trustee after a Change in Control) and all Executives (and Beneficiaries of any deceased Executives) who remain entitled to benefits under the SERP and Severance Agreements at such time; provided, however, that if any Executive or Beneficiary has an outstanding claim against the Company regarding the SERP or a Severance Agreement, whether through a complaint filed with a court or through a dispute submitted for arbitration, the Trust shall not terminate with resp ect to the amounts held in the Executive's account until the claim has been resolved, until all assets held in the Executive's account have been distributed, or until the Executive agrees to the termination.

          (b)          Upon termination of this Trust, the Trustee shall continue to have such of the powers provided in this Trust Agreement as are necessary or desirable for the orderly liquidation and distribution of the Trust assets. Upon termination of the Trust, all assets remaining in the Trust shall be returned to the Company.

SECTION 9

Liability and Indemnification

          9.1.          Liabilities Mutually Exclusive. Except as otherwise provided herein or by applicable law, the Company, the Trustee, the Committee, the Board of Directors, and each

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member thereof and each Investment Manager shall be responsible only for its or their own acts or omissions.

          9.2.          Indemnification. The Company hereby agrees to indemnify and hold harmless the Trustee from and against all losses, damages, liabilities, claims, costs, and expenses, including reasonable attorneys' fees, that the Trustee may incur by reason of the negligence or willful misconduct of the Company or the Committee. In making any distributions and taking any other action hereunder, the Trustee may rely upon and shall be fully protected in relying upon, any notice, certificate, or other paper or written document provided by the Company or the Committee and reasonably believed to be genuine.

SECTION 10

General Provisions

          10.1          Successor to Company. In the event the Company is succeeded by another entity, with or without a Change in Control, references to the Company in this Trust Agreement shall refer to the successor.

          10.2.  Merger of Trustee. If the Trustee shall be merged or consolidated with, or shall sell or transfer substantially all of its assets and business to another corporation, or shall be in any manner reorganized or reincorporated, then the successor corporation shall continue to be the Trustee pending subsequent resignation or removal as provided in Section 7 of this Trust Agreement.

          10.3.          Nonalienation. Benefits payable to Executives and Beneficiaries under this Trust Agreement shall not be subject to assignment, conveyance, transfer, anticipation, pledge, alienation, sale, encumbrance, or charge, whether voluntary or involuntary, by the Executive or Beneficiary, even if directed under a qualified domestic relations order or other divorce order. An interest in an amount promised shall not provide collateral or security for a debt of an Executive or Beneficiary or be subject to garnishment, execution, assignment, levy, or to another form of judicial or administrative process or to the claim of a creditor of an Executive or Beneficiary, through legal process or otherwise. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or to otherwise dispose of benefits payable, before actual receipt of the benefits, or a right to receive benefits, shall be void and shall not be recognize d.

          10.4.          Severability. Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

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          10.5.          Governing Law. This Trust Agreement shall be governed by and construed in accordance with the laws of the state of Michigan, to the extent not preempted by federal law.

          10.6.          Notices. Notices pursuant to this Trust Agreement shall be given by first class or priority U.S. mail or by commercial express delivery and shall be addressed to:

                    COMPANY

                    Spartan Stores, Inc.
                    850 76th Street S.W.
                    P. O. Box 8700
                    Grand Rapids, Michigan 49518

                    TRUSTEE

          10.7.          Counterparts. This Trust Agreement and any amendment hereto may be executed in two or more counterparts.

          10.8.          Gender and Number. Except when otherwise indicated by the context, words denoting the masculine gender shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

          10.9.          Scope of this Agreement. This Trust Agreement will be binding on all persons entitled to benefits hereunder and their respective heirs and legal representatives, and upon the Company, the Committee, the Trustee, and any Investment Managers, and their successors and assigns.

          10.10.        Statutory References. Any references in this Trust Agreement to a section of the Internal Revenue Code or any other statute or regulation shall include any comparable section or sections that amends, supplements, or supersedes that section.

          10.11.        Headings. The headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Trust or Severance Agreements and in no way shall affect the Trust or Severance Agreements or the construction of any provision thereof.

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                    IN WITNESS WHEREOF, this Trust Agreement is executed on behalf of Spartan Stores, Inc. and the Trustee by their respective authorized officers, as of the day and year set forth above.

SPARTAN STORES, INC.



By

Its

("Trustee")


By

Its

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EX-10

EXHIBIT 10.18

EXECUTIVE SEVERANCE AGREEMENT

                    THIS AGREEMENT is entered into as of the 17th day of March, 2003 (the "Effective Date"), by and between SPARTAN STORES, INC. a Michigan corporation ("Spartan Stores"), and DENNIS EIDSON ("Executive").

W I T N E S S E T H:

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

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

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

                    NOW, THEREFORE, COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

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

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

          (b)          "Cause" means (1) the willful and continued failure by Executive to substantially perform his duties with the Company (other than any such failure resulting from Executive's incapacity due to physical or mental injury or illness, or any such actual or anticipated failure resulting from Executive's termination for Good Reason) after a demand for substantial performance is delivered to Executive by the Board (which demand shall specifically identify the manner in which the Board believes that Executive has not substantially performed his or her duties); or (2) the willful engaging by Executive in gross misconduct materially

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and demonstrably injurious to the Company. For purposes of this Section, no act or failure to act on the part of Executive shall be considered "willful" unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) was in the best interests of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until the Company provides Executive with a copy of a resolution adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive has been guilty of conduct set forth in subsections (1) or (2) above, setting forth the particulars in detail. A determination for Cause by the Board shall not be binding upon or entitled to deference by any finder of fact in the event of a dispute, it being the intent of the parties that such finder of fact shall make an independent determination of whether the termination was for "Cause" as defined in (1) or (2) above.

          (c)          "Change in Control" means:

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

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an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Voting Securities, such additional beneficial ownership shall constitute a Change in Control;

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

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

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reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

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

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

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

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

          (f)          "Company" means Spartan Stores, Inc., a Michigan corporation, and any corporation or other entity in which Spartan Stores, Inc. has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

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

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

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

          (1)          (i) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive's position(s), duties, responsibilities, or status with the Company immediately prior to such Change in Control, (ii) a material adverse change in Executive's positions,

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reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control, (iii) any removal or involuntary termination of Executive by the Company otherwise than as expressly permitted by this Agreement (including any purported termination of employment which is not effected by a Notice of Termination), or (iv) any failure to re-elect Executive to any position with the Company held by Executive immediately prior to such Change in Control;

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

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

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

          (5)          the failure of the Company to (i) continue in effect any employee benefit plan or compensation plan in which Executive is participating immediately prior to such Change in Control, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent after-tax economic benefit, or the taking of any action by the Company which would adversely affect Executive's participation in or materially reduce Executive's benefits under any such plan, (ii) provide Executive and Executive's dependents with welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable plans, practices, programs, and polici es of the Company in effect for Executive immediately prior to such Change in Control, (iii) provide other fringe benefits in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for

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Executive immediately prior to such Change in Control, or (iv) provide Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company as in effect for Executive immediately prior to such Change in Control;

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

          (7)          the failure of Spartan Stores to obtain any assumption agreement contemplated in Section 9(b);

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

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

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

          Executive may not terminate the employment for "Good Reason" unless:

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

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

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

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

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

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

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

          (l)          "Retirement" means termination of employment by either the Executive or the Company on or after the Executive's normal retirement date under the terms of retirement plans of the Company, but not earlier than the age of 65.

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

          (n)          "Termination Period" means the period of time beginning with a Change in Control and ending two (2) years following such Change in Control.

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2.	Term of Agreement.          This Agreement shall commence on the Effective Date and shall continue in effect until Spartan Stores has fulfilled all of its obligations under this Agreement following any termination of Executive's employment with the Company.
3.	Severance Benefits.          If the employment of Executive with the Company shall terminate during the Termination Period, other than by reason of a Nonqualifying Termination, then Executive shall receive the following severance benefits as compensation for services rendered:

          (a)          Lump Sum Cash Payment.          Within five (5) days after the Date of Termination, Executive shall receive a lump sum cash payment in an amount equal to the sum of the following:

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

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

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

          (b)          Benefits. The Company shall maintain in full force and effect for the benefit of Executive and his spouse and covered dependents those employee

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benefit plans, programs and arrangements listed in subparagraphs 3(b)(i), (ii) and (iii) below in which the Executive and his spouse and covered dependents were entitled to participate in immediately prior to the Date of Termination until the earlier of the end of the twenty-fourth (24^th) month following the month in which the Date of Termination occurs, or (as to any particular benefit) the date upon which the Executive receives a substantially equal benefit from a new employer. If the participation of the Executive and his spouse and covered dependents in any such plans or programs is not permitted by the terms of any such plans or programs, or would cause the Executive to experience adverse tax consequences, the Company shall provide comparable benefits eliminating the adverse tax consequences but providing substantially the same after-tax benefit levels as the Executive, spouse and covered dependents previously received under such plans and programs. The covered benefits are:

          (i)          all health, dental and prescription drug benefits,

          (ii)          the Executive's tax and financial planning benefit, and

          (iii)          all Company funded life insurance coverage.

          (c)          Outplacement Services. The Company will provide the Executive with outplacement services through an outplacement services firm selected by the Company with the Executive's approval, which shall not be withheld if the firm selected is reputable, at a cost not to exceed an amount equal to 15 percent of the Executive's annual base salary at the time of the termination.

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

4. Retirement Benefits.

          (a)          The Executive is a Participant in the SERP. If the employment of Executive with the Company shall terminate during the Termination Period other than by reason of a Nonqualifying Termination, then Executive shall receive (as a lump sum, to be paid within five (5) days after the Date of Termination) an amount equal to the difference between (i) the total amounts the Executive is eligible to receive as of the Date of Termination under the Spartan Stores, Inc. Cash Balance Pension Plan and any successor plan ("Pension Plan") and the SERP (assuming election by Executive of the lump sum payment options under the Pension Plan and SERP); and (ii) the total amounts the Executive would have been eligible to receive under the Pension Plan and SERP if the Executive were

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fully vested under the pension plan and the Executive's employment had continued until the end of the twenty-fourth (24^th) month following the month in which the Date of Termination occurs.

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

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

5.

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

6.

Certain Additional Payments by the Company.

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

          (b)          Subject to the provisions of Section 6(c), all determinations required to be made under this Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the

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public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company or Executive (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group affecting the Change in Control, Executive shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to Executive within five (5) days of the receipt of the D etermination. If the Accounting Firm determines that no Excise Taxes are payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The Determination by the Accounting Firm shall be binding upon the Company and Executive; however, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 6(c) and Executive thereafter is required to make payment of any Excise Tax that qualifies for a Gross-Up Payment in accordance with this Section 6, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

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

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

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

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

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

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income or employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 6(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initia l jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

          (d)          If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 6, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the

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Company's complying with the requirements of Section 6) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 6, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

7.	Withholding Taxes. The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local, or other law, the Company is required to withhold therefrom.
8.	Reimbursement of Expenses. If any contest or dispute shall arise under or related to this Agreement involving termination of Executive's employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse Executive, on a current basis, for all legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute regardless of the result thereof.
9.	Successors; Binding Agreement.

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

          (b)          Spartan Stores agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 9, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of Spartan Stores to obtain such assumption prior to the effectiveness of any such merger, consolidation, or transfer of assets shall be a breach of this Agreement and shall constitute Good Reason hereunder and shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive's employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing

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the foregoing, the date on which any such merger, consolidation, or transfer becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by Executive.

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

10.	Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:
	If to the Executive:                     Dennis Eidson                     ____________________________                     ____________________________
	If to Spartan Stores:                     Spartan Stores, Inc.                     850 76th Street, S.W.                     P. O. Box 8700                     Grand Rapids, Michigan 49518                     Attention: Secretary

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

          (a)          The Company's obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be

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affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

          (b)          If there shall be any dispute between the Company and Executive in the event of any termination of Executive's employment then, until there is a final, nonappealable, determination pursuant to arbitration declaring that such termination was for Cause, that the determination by Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to Executive and his dependents or other beneficiaries, as the case may be, under Sections 3 and 4, the Company shall pay all amounts, and provide all benefits, to Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 as though such termination were by the Company without Cause or by Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts p ursuant to this Section 11 except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive is ultimately determined by the arbitrator not to be entitled.

          (c)          Arbitration. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that Executive shall be entitled to seek specific performance of his right to be paid pursuant to Section 11(b) during a dispute. Judgment may be entered on the arbitration award in any court having jurisdiction. The Company shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 11(c).

12. Inability to Perform, Risk of Liability. If Executive's Employment is terminated pursuant to Section 5(v) of the Employment Agreement between Executive and the Company dated March 17, 2003, this Agreement shall terminate immediately and the Company shall not be obligated to perform under it.

   

13.

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

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14.	Establishment of Trust. Immediately prior to a Change in Control, the Company shall establish and maintain a Trust in the form attached as Exhibit A. Upon the occurrence of a Change in Control the Company shall pay into the Trust the amounts called for under Exhibit A, and shall thereafter make such additional payments as called for under Exhibit A. No payment to the Trust by the Company shall reduce the Company's obligations to make payments to Executive under this Agreement.
15.	Counterparts. This Agreement may be executed in original or by fax in counterparts, each of which shall be deemed to be an original and together the counterparts shall constitute one and the same instrument.
16.	Miscellaneous. No provision of this Agreement may be modified or waived unless such modification is agreed to in writing and signed by Executive and by a duly authorized officer of the Company, or such waiver is signed by the waiving party. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder, including without limitation, the right of Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, Executive, his estate, or his benefici aries pursuant to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate, or his beneficiaries under any other employee benefit plan or compensation program of the Company, except that no benefits pursuant to any other employee plan or compensation program that become payable or are paid in accordance with this Agreement shall be duplicated by operation of this Agreement. No agreements or representations, oral or otherwise, express or implied, with regard to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

* * *

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

	SPARTAN STORES, INC. By /s/ Mark C. Eriks      Mark C. Eriks      Vice President Human Resources
AGREED TO THIS 17TH DAY OF MARCH, 2003
/s/ Dennis Eidson DENNIS EIDSON "Executive"

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EXHIBIT A

SPARTAN STORES, INC.
EXECUTIVE SEVERANCE AGREEMENT AND SERP TRUST

                    This Agreement ("Trust Agreement") is made this___ day of ________, _____, by and between Spartan Stores, Inc. ("Company"), a Michigan corporation, and _____________ ("Trustee").

                    WHEREAS, the Company has entered into separate Executive Severance Agreements with certain key executive employees of the Company identified on Schedule I to this Trust as it may be amended from time to time (each such agreement a "Severance Agreement" and, collectively, the "Severance Agreements"), and the Company maintains a Supplemental Executive Retirement Plan ("SERP") covering certain key executives of the Company identified on Schedule II to this Trust, as it may be amended from time to time; and

                    WHEREAS, the Company has incurred or expects to incur liability under the SERP and/or one or more of the Severance Agreements with respect to one or more Executives, or a Beneficiary of a deceased Executive (the term "Executive" being defined as a person listed on Schedule I or II and the term "Beneficiary" being defined as a person or estate entitled under the SERP or Severance Agreement to receive payments in the event of an Executive's death); and

                    WHEREAS, the Company has determined to establish a trust ("Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as defined in Section 3 of this Trust Agreement, until paid to one or more of the Executives pursuant to the SERP or one or more of the Severance Agreements or otherwise disposed of as provided herein; and

                    WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement that shall not affect the unfunded status of the SERP or Severance Agreements or any other unfunded plans maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended; and

                    WHEREAS, it is the intention of the Company to make contributions to the Trust to provide a source of funds to assist the Company in meeting liabilities under the SERP and Severance Agreements;

                    NOW, THEREFORE, by this Trust Agreement the parties establish the Trust and agree that the Trust shall be comprised of the assets described herein and shall be held, administered and disposed of as follows:

SECTION 1

Establishment of the Trust

          1.1.          Company Contributions. The Company hereby deposits with the Trustee the sum of One Thousand Dollars ($1,000) as the initial principal of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement.

                    The Company, in its sole discretion, at any time and from time to time, may make additional deposits of cash, or other property acceptable to the Trustee, to the Trust to augment the principal to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. Prior to a Change in Control as defined in the SERP and the Severance Agreements neither the Trustee nor any Executive or Beneficiary shall have any right to compel additional deposits.

                    No later than thirty (30) days following a "Change in Control" (as such terms are defined in the SERP and Severance Agreements), unless otherwise agreed by an Executive with respect to amounts potentially due to the Executive, the Company shall make an irrevocable contribution to the Trust in an amount that, together with existing assets in the Trust, will equal one hundred percent (100%) of the sum of the amounts necessary to make all payments which each Executive would be entitled to receive (either immediately or in the future) under the SERP and under the applicable Severance Agreement if the Executive's employment had been terminated on the date of the Change in Control and such termination was a Qualifying Termination; provided, however, that future obligations may be discounted for purposes of computing the initial deposit and all subsequent determinations under Section 4 of this Trust, by a discount rate equal to the then curren t annual interest rate for thirty (30) year Treasury Constant Maturity Securities as reported in Federal Reserve Statistical Release G.13 or H.15 or equivalent. The term "Qualifying Termination," as used in this Trust, means a termination entitling the Executive to payment of some or all of the amounts provided for under the SERP and/or Severance Agreement.

          1.2.          Irrevocable. Prior to a Change in Control, the Trust shall be revocable by the Company. Except as otherwise provided herein, the Trust shall be irrevocable upon a Change in Control.

          1.3.          Grantor Trust. The Trust is intended to be a grantor trust, with the Company as the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

          1.4.          Limited Rights of Executive. The principal of the Trust, and any earnings thereon not distributed to the Company, shall be held separate and apart from other funds of the Company and, except as otherwise provided herein, shall be applied exclusively for the uses and purposes of the Executives and Beneficiaries (to the extent of their rights under the SERP and/or a

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Severance Agreement), and general creditors, and the payment of related fees and expenses, as herein set forth. No Executive or Beneficiary shall have a preferred claim on, or a beneficial ownership interest in, any assets of the Trust. The rights created under the SERP, the Severance Agreements and this Trust Agreement shall be unsecured contractual rights of each Executive and Beneficiary. Assets held in the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3.1 of this Trust Agreement.

          1.5.          Determination of a Change in Control. The highest ranking officer of the Company shall have the duty to inform the Trustee in writing of the occurrence of a Change in Control. If any Executive (or person acting on behalf of any Executive), other than the Company's highest ranking officer, alleges in writing to the Trustee that a Change in Control has occurred, the Trustee shall determine whether a Change in Control has occurred. Unless the Trustee has actual knowledge that a Change in Control has occurred, or has received notice from the Company or an Executive (or person acting on behalf of an Executive) alleging that a Change in Control has occurred, the Trustee shall have no duty to inquire whether a Change in Control has occurred. The Trustee may in all events rely on evidence concerning the existence of a Change in Control that the Trustee considers reasonably reliable and sufficient for a determination.

          1.6.          Acceptance by Trustee. The Trustee accepts its duties and obligations as Trustee hereunder, agrees to accept funds delivered to it by the Company, and agrees to hold, manage, administer, and apply all trust assets in accordance with the terms and conditions of this Trust Agreement.

          1.7.          Committee; Absence of Committee or Company. The Compensation Committee of the Board of Directors of the Company, or any other committee designated by the Board of Directors ("Committee"), shall have the powers, rights, and duties of the Committee described herein. The Board of Directors of the Company will certify to the Trustee from time to time the names of the members of the Committee. The Trustee may rely on the most recent certificate without further inquiry or verification. The Trustee also may rely on minutes and other written communications, certified by the secretary or acting secretary of the Committee or the Board of Directors of the Company, as accurately setting forth any action or decision by the Committee.

                    If for any period there are no members of the Committee, or the Committee is unable to exercise its powers and duties hereunder, the Board of Directors of the Company shall act on behalf of, and shall have all of the powers, rights, and duties otherwise reserved to, the Committee. The Company warrants that all directions and authorizations by the Committee, or by the Board of Directors, whether for the payment of money or otherwise, will comply with the provisions of the SERP, each Severance Agreement and this Trust Agreement.

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                    Following a Change in Control, if the Company no longer exists and there is no successor to the Company, the Trustee shall have all of the powers and duties of the Company and the Committee hereunder and shall determine and make all payments from Trust assets due Executives and Beneficiaries under the SERP and Severance Agreements or due general creditors under Section 3 of this Trust Agreement.

SECTION 2

Payments to Executives

          2.1.          Right To Payment. Except as otherwise provided herein, the Committee shall make an initial determination as to the entitlement of an Executive or Beneficiary to benefits under the SERP or a Severance Agreement, and any claim for benefits by an Executive or Beneficiary shall be considered and reviewed under the procedures set forth in the SERP or Severance Agreement, as applicable.

          2.2.          Payment Directed By Company. Prior to the occurrence of a Qualifying Termination following a Change in Control, there shall be no payment to an Executive or Beneficiary from the Trust. Upon a Qualifying Termination, the Committee shall determine and notify the Trustee of the total amount to be paid to or with respect to the eligible Executive and the timing of the required payment or payments pursuant to the SERP and/or Severance Agreement. Except as otherwise provided herein, the Trustee shall make the payment or payments to each eligible Executive or Beneficiary, debiting each payment from the Executive's account.

          2.3.          Direct Payment by Company. The Company may make direct payments to an eligible Executive or Beneficiary, as benefits become due under the terms of the applicable Severance Agreement, in lieu of payments by the Trustee. The Committee shall notify the Trustee of its decision to make such payments directly. The Committee may direct the Trustee in writing to reimburse the Company from this Trust, and debit the account of each Executive, for amounts paid directly to the Executive or Beneficiary by the Company. The Trustee shall reimburse the Company for such payments promptly after receipt by the Trustee of satisfactory evidence that the Company has made the direct payments.

          2.4.          Default Payment By Trustee. Upon receipt of a written notice from an Executive or Beneficiary that there has been a Qualifying Termination with respect to the Executive, and that amounts due have not been paid, the Trustee may make an independent determination whether a Qualifying Termination has occurred and, if so, of the amount and timing of payments due the eligible Executive or Beneficiary. Upon reaching an independent determination that payment is due, the Trustee shall notify the Company in writing of its conclusion. The Company shall have fifteen (15) days from the date of delivery or eighteen (18) days from the date of mailing of the

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notice in which to provide the Trustee with evidence satisfactory to the Trustee that the Company has made all payments due each Executive or Beneficiary or to serve the Trustee with a summons and complaint or petition filed by the Company in a court of competent jurisdiction naming the Trustee and each affected Executive or Beneficiary as defendants or respondents and disputing the right to payments from the Trust. If the Company does not respond within the time period specified in the preceding sentence, the Trustee may make the payment or payments due each Executive or Beneficiary in the required amount as due.

                    The Trustee shall be compensated and reimbursed from the Trust for its reasonable fees and expenses, including expenses for advice from independent accountants and attorneys retained by it, in connection with an independent determination and payment under this section.

                    Nothing in this section shall require the Trustee to undertake an independent determination or payment. The Trustee may elect to leave any claim for unpaid benefit payments to be resolved directly between the Company and the Executive or Beneficiary.

          2.5.          Limit On Payments; Company Obligation. In no event shall a payment from the Trust to or with respect to an Executive exceed the amount allocated to the Executive's account at the time of the payment. The Trustee shall notify the Company if the assets allocated to an Executive's account are insufficient to make a required payment from the Trust. The Company shall be solely responsible for, and shall make as due, all required payments to or with respect to an Executive under the SERP and/or Severance Agreement that are not made from the Trust.

          2.6.          Reporting and Withholding of Taxes. The Trustee shall withhold, report, and remit any federal, state, or local taxes that may be required to be withheld with respect to any payment of benefits from the Trust and shall pay amounts withheld to the appropriate taxing authorities or shall determine that such amounts have been reported, withheld, and paid by the Company.

          2.7.          Missing Persons. If the recipient entitled to any payment to be made by the Trustee from the Trust cannot be located directly by the Trustee or through a reasonable procedure available through the Internal Revenue Service, the Social Security Administration or another governmental agency, the Trustee shall notify the Committee of that fact. The Trustee thereafter shall have no obligation to search for or ascertain the whereabouts of any payee under this Trust Agreement.

          2.8.          SERP and Severance Agreements for Trustee. The Company at all times shall provide the Trustee with current copies of the SERP and all Severance Agreements, including amendments, and shall notify the Trustee if the SERP or any Severance Agreement is modified.

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SECTION 3

Trustee Responsibility Regarding Payments to Trust
Beneficiary When a Participating Employer Is Insolvent

          3.1.          Insolvency. The Trustee shall cease payment of benefits from the Trust to any Executive or Beneficiary if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if the Company is (a) unable to pay its debts as they become due, (b) subject to a pending proceeding as a debtor under the United States Bankruptcy Code or (c) determined to be insolvent by a governing federal or state regulatory agency.

          3.2.          Claims of General Creditors. At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

          (a)          The Board of Directors and the highest ranking officer of the Company shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payments from the Trust to Executives and Beneficiaries.

          (b)          Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Company's solvency.

          (c)          If at any time the Trustee has determined that a Company is Insolvent, the Trustee shall discontinue payments to Executives and Beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of any Executive or Beneficiary to pursue rights as a general creditor of the Company with respect to benefits due under the SERP or an applicable Severance Agreement or otherwise.

          (d)          The Trustee shall resume payments from the Trust to Executives and Beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent or is no longer Insolvent.

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          3.3.          Omitted Payments. Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3.2 above and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Executives and Beneficiaries under the terms of the SERP and all applicable Severance Agreements for the period of such discontinuance, less the aggregate amount of any payments made by the Company in lieu of the payments provided for hereunder during the period of discontinuance.

SECTION 4

Payments to Company from Trust
and by Company to Trust

          4.1.          General Limitation. Except as otherwise provided in this Trust Agreement, including, without limitation, as provided in this Section 4 and in Sections 2.3, 3, and 8.2 of this Trust Agreement, the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before payment of all benefits has been made to the Executives and Beneficiaries pursuant to the terms of this Trust Agreement and the SERP and applicable Severance Agreements.

          4.2.          Cessation of Benefit Obligation To Executive. Prior to a Change in Control, the Trustee shall liquidate (if necessary) and distribute to the Company the Trust Fund assets allocated to an Executive's account upon written notice from the Committee certifying that the Executive is no longer entitled to any payment under the SERP or a Severance Agreement and that the applicable Severance Agreement is no longer in effect. The notice shall specify the date the Executive ceases to be entitled to any further payments. The Trustee shall distribute the assets to the Company no earlier than six (6) months subsequent to the specified date; provided, however, that if a Change in Control occurs within the six (6) month period, the Trustee shall not make any distributions under this paragraph to the Company.

          4.3.          Disposition of Income. Prior to a Change in Control, all income of this Trust, net of expenses and taxes payable by the Trust, shall be returned to the Company.

          4.4.          Return of Excess Assets. Prior to a Change in Control, in the event the value of the assets in the Trust, determined pursuant to the accounting procedures set forth herein as of each December 31, exceeds one hundred percent (100%) of the amount necessary to pay each Executive all amounts the Executive could be entitled to receive under the SERP and applicable Severance Agreement, determined as of each December 31, the Trustee shall pay the excess amount, if any, to the Company as soon as administratively feasible following the December 31 determination date. After a Change in Control, the percentage in the preceding sentence shall be increased to one hundred twenty-five percent (125%).

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          4.5          Additional Deposits. After a Change in Control, if the value of the assets in the Trust, determined pursuant to the accounting procedures set forth herein as of any December 31, is less than one hundred twenty-five percent (125%) of the amount necessary to pay each Executive all amounts each Executive could be entitled to receive under the SERP and each Severance Agreement, assuming a Qualifying Termination of Executive's employment as of the date of determination, the Company shall deposit additional funds into this Trust to attain the one hundred twenty-five percent (125%) level of funding.

SECTION 5

Administration of Trust

          5.1.           In General. The Trust and all Trust assets shall be administered by the Trustee pursuant to all of the express and implied duties and powers and subject to all express and implied conditions and limitations contained in or derived from the provisions of this Trust Agreement and conferred and imposed by applicable law. All rights associated with administration of the Trust and with Trust assets shall be exercised by the Trustee, the Committee, or the Company or person designated by the Trustee, the Committee, or the Company, as provided herein, and in no event shall such rights be exercisable by or rest with any Executive or Beneficiary, except to the extent approval of an amendment or termination of the Trust Agreement or of the removal of the Trustee and appointment of a successor Trustee is reserved to an Executive.

          5.2.          Duties and Powers of Trustee. In addition to the duties and powers set forth in other provisions of this Trust Agreement, and subject to all applicable conditions and limitations, the Trustee shall have the following duties and powers with respect to the Trust:

          (a)          Control, Manage, and Invest Assets. To hold, manage, improve, repair, control and invest all real and personal property forming part of the Trust;

          (b)          Implement Instructions. To carry out the instructions of the Company and the Committee that are consistent with the terms of this Trust Agreement, the SERP and applicable Severance Agreements;

          (c)          Records; Reports. To maintain records and to prepare and file reports required by law to be filed by the Trustee or required by agreement with the Company;

          (d)          Payments. To make payments and distributions from the fund as provided in this Trust Agreement, including benefits that have become payable under the applicable Severance Agreements pursuant to Section 2 or that are

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required to be made to the general creditors of the Company as set forth in Section 3;

          (e)          Acquire and Dispose of Assets. To purchase, sell, convey, exchange, lease, convert, transfer, divide, repair, partition, consent to partition, or otherwise acquire or dispose of any property at any time held in trust hereunder by public or private transaction, for the consideration and upon the terms and conditions determined by the Trustee;

          (f)          Reorganizations. To take any action and to abstain from taking any action with respect to any reorganization, consolidation, merger, dissolution, recapitalization, refinancing, liquidation, bankruptcy, composition, arrangement, readjustment of the financial structure, sale, sale of assets or any other program or change affecting any property constituting a part of the Trust and in connection therewith to delegate the Trustee's discretionary powers and to pay assessments, subscriptions, and other charges from the Trust;

          (g)          Voting Trusts; Protective Committees. To deposit any property in any voting trust, or with any protective, reorganization or similar committee, or with depositories designated thereby; to delegate power thereto, and to pay or agree to pay part of the expenses and compensation and any assessments levied with respect to the deposited property;

          (h)          Extend Due Dates. To extend the time of payment of any obligation held by it;

          (i)          Voting Rights. To exercise all voting rights with respect to property held in the Trust directly or by proxy, with or without the power of substitution, and to delegate the Trustee's powers and discretions with respect to such property to any such proxy;

          (j)          Exercise Other Rights. To exchange securities, to sell or exercise subscription, conversion, and other rights and options, and make payments from the Trust in connection therewith, with respect to any property held in the Trust;

          (k)          Employ Agents and Advisors. To engage as reasonably necessary agents, attorneys, accountants, and other persons (who also may be employed by the Company or the Committee), to delegate duties and discretionary powers to such persons, and to reasonably rely upon information and advice furnished by such persons; provided that each delegation and acceptance of duties and powers shall be in writing; and provided further that the Trustee may not delegate its responsibilities for the management and control of the assets of the Trust;

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          (l)          Borrow. To borrow money for the purposes and benefit of the Trust, without binding itself individually, and in connection with any borrowing to issue a promissory note or other evidence of the debt, and to secure repayment by pledging any property held in the Trust; provided that prior to a Change in Control, any borrowing shall be subject to approval by the Committee;

          (m)          Insure Assets. To insure Trust assets through a policy or contract of insurance;

          (n)          Incorporate. To incorporate or form another entity (or participate in an incorporation or formation of another entity) under the laws of any state for the purpose of acquiring and holding title to any property that is part of the Trust;

          (o)          Custodian. To keep on deposit with a custodian in the United States any part of the Trust; provided that prior to a Change in Control, any deposit with another custodian shall be made only with the prior approval of the Committee;

          (p)          Collection. To demand, collect, and receive the principal, dividends, interest, other income and all other money or property due the Trust;

          (q)          Registration and Holding of Trust Assets. To register investments in its own name or in the name of a nominee; to hold any investment in bearer form; and to combine certificates representing securities with certificates of the same issue held by it in other fiduciary capacities; to deposit or to arrange for the deposit of such securities with any depository or other securities clearing entity, even though, when so deposited, such securities may be held in the name of the nominee of such depository with other securities deposited therewith by other persons; or to deposit or to arrange for the deposit of any securities issued or guaranteed by the United States government, or any agency or instrumentality thereof, including securities evidenced by book entries rather than by certificates, with the United States Department of the Treasury or a Federal Reserve Bank, even though, when so deposited, such securities may not be held se parate from securities deposited therein by other persons; provided, however, that no securities held in the Trust shall be deposited with the United States Department of the Treasury or a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and provided, further, that the books and records of the Trustee shall at all times show that all such securities are part of the Trust;

          (r)          Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, to commence or defend suits

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or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by the Company to its reasonable satisfaction against liability or expenses it may incur;

          (s)          Execute Documents. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted herein; and

          (t)          Other Acts To perform all other acts the Trustee deems necessary, suitable, or desirable for the control and management of the Trust and discharge of its duties.

          5.3.          Limitation on Duties and Powers of the Trustee. Unless properly delegated and assumed by agreement of the Trustee, the Trustee shall not be required to exercise a duty or power of the Company, Committee, or any other fiduciary under this instrument.

                    If an Investment Manager (defined in Section 6.4 below) is appointed to manage and invest some or all of the Trust assets, the Investment Manager shall have, and the Trustee shall not have, the express or implied duties and powers under this Trust Agreement with respect to investment of Trust assets subject to the Investment Manager's control. The Trustee shall have no obligation or power to exercise discretionary authority or control with respect to investment of the assets subject to management by the Investment Manager or to render advice regarding the investment of such assets, unless required by ERISA Section 405. The Trustee shall not be liable for the investment performance of the assets subject to management by the Investment Manager. The powers and duties of the Trustee with respect to such assets shall be limited to the following:

          (a)          Custody and Protection. To act as custodian of the Trust assets not transferred to the custody of the Investment Manager or another custodian, and to protect the assets in its custody from loss by theft, fire, or other cause;

          (b)          Acquisitions. To acquire additional assets for the Trust in accordance with the direction of the Investment Manager;

          (c)          Dispositions. To sell or otherwise dispose of Trust assets in accordance with the direction of the Investment Manager;

          (d)          Accountings. To account for and render accountings with respect to the Trust, except for assets held by another custodian;

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          (e)          Authorized Actions. To take authorized actions for and on behalf of the Trust in accordance with the direction of the Investment Manager; and

          (f)          Ministerial and Custodial Tasks. To perform other ministerial and custodial tasks in accordance with the direction of the Investment Manager.

                    If Trust assets are transferred to another custodian, that custodian shall have, and the Trustee shall not have, the duties and powers specified in Section 5.2 with respect to those assets.

                    The Trustee shall have no liability or responsibility for any loss resulting to the Trust by reason of the sale or purchase of any investment directed by an Investment Manager or the Company or by reason of the failure to take any action with respect to any investment that was acquired pursuant to any such direction in the absence of further directions of such Investment Manager or the Company.

                    Notwithstanding anything in this Agreement to the contrary, the Trustee shall be indemnified and saved harmless by the Company from and against any and all liability to which the Trustee may be subjected by carrying out any investment directions of an Investment Manager or the Company, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense; provided, however, the Trustee shall not be so indemnified if it participates knowingly in, or knowingly undertakes to conceal, an act or omission of an Investment Manager or the Company, having actual knowledge that such act or omission is a breach of a fiduciary duty; and provided further, that the Trustee shall not be deemed to have knowingly participated in or knowingly undertaken to conceal an act or omission of an Investment Manager or the Company with knowledge that such act or omission was a breach of fiduciary duty by merely complying with directions of an Investment Manager or the Company or by failure to act with respect to assets subject to the investment control of an Investment Manager or the Company in the absence of directions from the Investment Manager or the Company. The Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued by the Investment Manager or the Company which the Trustee believes to be genuine and to have been issued by the Investment Manager or the Company. The Trustee shall not be charged with knowledge of the appointment or termination of the appointment of any Investment Manager by the Company until it receives written notice thereof from the Company.

          5.4.          Accounting by Trustee.

          (a)          Pursuant to and as agreed under Section 5.2(c) above, the Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and Trustee. As soon as

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reasonably practicable following the close of each calendar year and each other valuation date agreed by the Company and the Trustee, and after the removal or resignation of the Trustee, the Trustee shall deliver to the Committee a written account of its administration of the Trust during such period, or during the period from the close of the last valuation period to the date of the removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or valuation period, or as of the date of such removal or resignation, as the case may be.

          (b)          The Committee may object to an accounting within 180 days after it is furnished and require that it be settled by an audit by a qualified, independent certified public accountant. The auditor shall be chosen by the Trustee from a list of at least three such accountants furnished by the Committee at the time the audit is requested. Either the Committee or the Trustee may require that the account be settled by a court of competent jurisdiction, in lieu of or in conjunction with the audit. All expenses of any audit or court proceedings, including reasonable attorney fees, shall be allowed as administrative expenses of the Trust.

          (c)          If the Committee does not object to an accounting within the time provided, the account shall be deemed settled and final for the period covered by it. Notwithstanding the preceding sentence, Trustee agrees it will, at reasonable cost, revise any accounting if determined by the Company to be necessary due to a latent error or omission and will do so at no cost to the extent the error or omission was the fault of the Trustee.

          (d)          The Trustee shall maintain a recordkeeping account in the name of each Executive which, pursuant to rules established by the Committee, will reflect with respect to each Executive:

                    (i)          Deposits made by the Company to the Trust for the Executive, pursuant to Section 1 of this Trust Agreement;

                    (ii)          Income, losses, and appreciation or depreciation in the value of Trust assets resulting from investment of the Trust;

                    (iii)          Payments made from the Trust to the Executive or Beneficiary and to the Company; and

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                    (iv)          Any other amounts charged to the accounts of the Executive, including administrative and investment expenses as described in Section 5.5 of this Trust Agreement.

                    Each Executive's account shall be a recordkeeping account only and shall reflect on undivided contingent interest in assets of the Trust and shall not require any actual segregation or separate investment of particular assets. To the extent there are assets in the Trust, other than income or excess assets to be repaid to the Company under Section 4 of this Trust Agreement, that exceed the amounts necessary to pay each Executive the amount the Executive could be entitled to under the SERP and/or Severance Agreement, determined as of each December 31, the excess shall be allocated to the accounts of all Executives in proportion to the amount each Executive could be entitled to as of that date.

          (e)          The Company and the Trustee may agree that the accounts under (d) above shall be maintained by the Committee, or such other person as may be designated by the Committee, rather than the Trustee.

          5.5.          Compensation and Expenses. The Company shall pay directly reasonable compensation of the Trustee as may be agreed upon from time to time between the Committee and the Trustee, and all expenses, except those specifically described in the last sentence of this paragraph, reasonably incurred by the Trustee and the Committee in the administration of this Trust, including compensation of agents, actuaries, attorneys, accountants, and other persons employed by the Trustee or the Committee. To the extent such compensation and expenses remain unpaid forty-five (45) days after mailing of an invoice for same by the Trustee to the Company, the Trustee may notify the Company of the intent to pay the amounts due from the Trust. If any amount remains unpaid thirty (30) days after mailing of the notice of intent to pay from the Trust, the Trustee may pay such compensation and expenses from the Trust. Expenses solely attributable to investme nt of the Trust assets, such as investment manager fees, load or other commission fees, brokerage, postage, express or insurance charges, and stock transfer stamps expense, shall be paid from the Trust to the extent not paid directly by the Company.

          5.6.          Insurance. If an insurance policy or contract is held as an asset of the Trust, the Trustee shall have all powers and incidents of ownership of the policy or contract, but shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy to anyone other than to a successor Trustee or the Company except as a means of making payments to an Executive or Beneficiary, or to loan to any person the proceeds of any borrowing against such policy.

          5.7.          Carrying on a Business. Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within

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the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.

          5.8          Fiduciary Duty of Trustee. The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

SECTION 6

Investment and Investment Managers

6.1.          Investment of Trust Assets.

          (a)          Investment Authority. Trust assets may be invested and reinvested in any readily marketable common and preferred stocks; bonds; notes; debentures, including convertible stocks and securities but not including any stock or security of the Trustee other than a de minimis amount held in a collective or mutual fund; certificates of deposit or demand or time deposits, including any such deposits with the Trustee; notes; commercial paper; obligations of the United States; warrants; options; common or collective funds, including those maintained by the Trustee; other securities; and shares of investment companies and mutual funds and in other investments specifically authorized herein. Trust assets shall not be invested in securities, including stock or rights to acquire stock, or obligations issued by the Company or any successor to the Company, other than a de minimis amount held in a collective or mutual fund.

          (b)          Insurance Contracts. Trust assets may be invested in guaranteed investment contracts and other contracts, policies and funds of insurance companies. The Trustee shall have the right to purchase an insurance policy or an annuity to fund payments to become due under the SERP and/or any Severance Agreement.

          (c)          Collective Investment Trusts. Trust assets may be invested in any common, collective, or commingled trust fund or pooled investment fund that is maintained by a bank or trust company, including a bank or trust company acting as Trustee, provided such investments are consistent with applicable investment requirements and guidelines, if any, established by the Committee pursuant to Section 6.2 below. To the extent that any Trust assets are invested in any such fund, the provisions of the documents under which such common, collective, or

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commingled trust fund or pooled investment fund are maintained are incorporated by reference herein.

          (d)          Related Mutual Funds. Trust assets may be invested and reinvested through the medium of any mutual fund that may be established and maintained by the Trustee or any affiliate of the Trustee or with respect to which the Trustee or any affiliate may provide investment advisory or other services for a fee.

          (e)          Commingled Investment. Assets of the Trust may be commingled for investment purposes with assets of any other similar trust or trusts established by the Company with the Trustee for the purpose of providing deferred compensation or retirement income benefits for its key employees and/or directors through nonqualified plans and arrangements.

          (f)          Short Term Investment Authority. Trust assets may be held uninvested only for such reasonable periods as are necessary to invest new assets deposited in Trust or to clear investment transactions and reinvest the proceeds. The Trustee may hold reasonable amounts of assets invested only in an appropriate daily or other short-term investment alternative for a reasonable period of time pending payment of benefits, payment of expenses or other distributions, or pending availability of other investments.

          (g)          Purchase and Sale of Options. Trust assets may be invested by purchasing put options not exceeding the number of shares of optioned stock actually held by the Trust, by selling put options and maintaining liquidity to the extent necessary pending the exercise or lapse of the option, and by selling call options, but not in a market opening or market closing transaction, not exceeding the number of shares of optioned stock actually held by the Trust.

          6.2.          Investment Direction by Company. Prior to a Change in Control, the Company, through the Committee or one or more employees delegated investment responsibility, may direct investment of all or any part of the assets among investments permitted herein. Prior to a Change in Control, the Company may establish guidelines, objectives, and restrictions regarding the investment of assets held in the Trust. The Trustee shall be under no duty to question, and shall not incur any liability on account of following, any direction of the Company prior to a Change in Control. The Trustee shall be under no duty to review the investment guidelines, objectives, and restrictions established, or the specific investment directions given by the Company, for the Trust or any separate investment account or to make suggestions to the Company in connection therewith.

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                    Prior to a Change in Control, the Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

          6.3.          Investment Funds. Prior to a Change in Control, the Company may direct the Trustee to establish separate investment accounts within the Trust. The Trustee shall allocate to each investment account such portion of the assets of the Trust as the Company may direct from time to time.

                    Except as otherwise provided herein, the Trustee shall not be required to establish separate investment accounts in the absence of direction by the Company, and may administer and invest the deposits made to the Trust by the Company as one fund.

          6.4.          Investment Managers. Prior to a Change in Control, the Company, from time to time, may appoint one or more independent investment managers (each an "Investment Manager"), pursuant to a written investment management agreement describing the powers and duties of the Investment Manager and providing for the delivery of a written acknowledgment from the Investment Manager to the Company and Trustee that it is a fiduciary under this Trust Agreement, to direct the investment and reinvestment of all or any portion of the Trust. As used herein, "Investment Manager" shall have the meaning specified in Section 3(38) of ERISA. The Company in its sole discretion, also may direct the Trustee to transfer the assets to be managed and invested by an Investment Manager to another custodian approved by the Company. The Investment Manager shall manage and invest, and may direct the Trustee or other custodian to invest and reinvest, that portion of the Trust assets under the control of that Investment Manager in investments permitted herein. The Company shall determine the assets of the Trust to be under the control of each Investment Manager from time to time and shall issue appropriate instructions in writing to the Trustee.

                    The Company shall furnish the Trustee with written notice of the appointment of each Investment Manager and of the termination of any such appointment. The notice shall specify the assets to be managed by the Investment Manager. The Trustee shall be fully protected in relying upon the appointment until it receives written notice from the Company that the appointment has been terminated or modified.

                    The Company may provide an Investment Manager investment guidelines to be followed by the Investment Manager from time to time.

                    Notwithstanding the foregoing, the Trustee, without obtaining prior approval or direction from an Investment Manager, and in the absence of contrary direction from the Investment Manager, shall invest cash balances held by it from time to time in short term cash equivalents including, but not limited to, the medium of any short term common, collective or

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commingled trust fund established and maintained by the Trustee; U.S. Treasury Bills; commercial paper, including forms of commercial paper available through the Trustee; certificates of deposit, including certificates issued by the Trustee; and similar securities, with a maturity not to exceed one year, and shall sell such short term investments as necessary to carry out the instructions of an Investment Manager when received.

          6.5.          Investments Following Change in Control. Following a Change in Control, the Trustee shall have sole and absolute discretion in the management and investment of the fund and in exercising investment responsibility shall have all the duties and powers set forth under Section 5.2 of this Trust Agreement. Following a Change in Control, the Company shall not have any of the express or implied duties and powers contained in this Trust Agreement with respect to the control, management and investment of Trust assets and shall not have any power to approve or withhold approval of any action by the Trustee with respect to the control, management and investment of the Trust. Upon a Change in Control the appointment of any Investment Manager and any related custodian shall terminate and the Trustee shall have the sole right to retain or discharge Investment Managers and related custodians, and to determine the terms of the engagement of any Investment Manager and related custodian.

                    In investing Trust assets following a Change in Control, the Trustee shall consider the need for matching the assets with liabilities and probable payments to Executives under the Severance Agreements and shall, subject to Section 3 of this Trust Agreement, act solely in the best interests of the Executives and Beneficiaries.

                    The Trustee shall have the right, in its sole discretion, to delegate its investment responsibility to an Investment Manager, which may be an affiliate of the Trustee. In the event the Trustee appoints an affiliated Investment Manager, the Trustee shall remain, at all times responsible for the acts of the affiliated Investment Manager.

SECTION 7

Resignation and Removal of Trustee

          7.1.          Resignation of Trustee. Prior to a Change in Control, the Trustee may resign at any time by written notice to the Company. The resignation shall be effective sixty (60) days after receipt of the notice unless the Company and the Trustee agree otherwise. Following a Change in Control, the Trustee may resign only upon the appointment of a successor Trustee.

          7.2.          Removal of Trustee. Prior to a Change in Control, the Trustee may be removed by the Company by written notice to the Trustee. The removal shall be effective sixty (60) days after receipt of the notice or upon shorter notice accepted by the Trustee. Subsequent to a Change in Control, the Trustee may be removed by the Company only with the consent of a majority of

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the Executives and Beneficiaries who remain entitled to benefits under the Severance Agreements at such time.

          7.3.          Appointment of Successor. Subject to Sections 7.1 and 7.2 above, if the Trustee resigns or is removed, a successor which is independent of the Company shall be appointed by the Company. If a timely appointment is not made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. If a Trustee desires to resign or is removed following any Change in Control, the resigning or removed Trustee shall appoint a successor Trustee which shall be the trust department of a bank or trust company ranked among the 150 largest banks in size of total assets in the United States, and for such purpose may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. The appointment of the successor shall be effective when accepted in writing by the new Trustee or as of such later date or dates when Trust assets are delivered to the successor Trustee.

          7.4.          Duties of Predecessor Trustee and Successor Trustee. Upon the appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver the assets of the Trust to such successor after reserving such reasonable amounts as it shall deem necessary to provide for any expenses, fees, or taxes then or thereafter chargeable against the Trust. A Trustee that resigns or is removed shall promptly furnish to the Committee and the successor Trustee a final account of its administration of the Trust. A successor Trustee shall succeed to all rights in and ownership of the predecessor Trustee in the assets of the Trust and the predecessor Trustee shall deliver the property comprising the Trust to the successor Trustee together with any instruments of transfer, conveyance, assignment, and further assurances as the successor Trustee may reasonably require. Each successor Trustee shall have all the powers, rights, and dut ies conferred by this Trust Agreement as if named the initial Trustee. Subject to applicable law, no Trustee shall be personally liable for any act or failure to act of a predecessor or successor Trustee.

          7.5.          Expenses. All reasonable expenses of any resigning or removed Trustee, including the reasonable cost of any court proceeding deemed necessary by the resigning or removed Trustee, shall be administrative expenses of the Trust.

SECTION 8

Amendment or Termination

          8.1.          Amendment.

          (a)          Prior to a Change in Control, this Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. The Trust may

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not be amended following a Change in Control without the written consent of a majority of the Executives (and Beneficiaries of any deceased Executive) who remain entitled to benefits under the Severance Agreements at such time. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the SERP or any Severance Agreement or shall make the Trust revocable after it has become irrevocable.

          (b)          The powers, duties and liabilities of the Trustee and any Investment Manager under this Trust Agreement cannot be changed without their written consent.

          8.2.          Termination.

          (a)          The Trust shall terminate, and all the rights, titles, powers, duties, discretions, and immunities imposed on or reserved to the Trustee, the Company, the Committee, the Board of Directors, and any Investment Managers shall terminate with respect to the Trust, upon the earlier of: (i) the date all benefits payable to Executives and Beneficiaries under the SERP and all Severance Agreements have been paid; or (ii) the date mutually agreed in writing between the Company (or the Trustee after a Change in Control) and all Executives (and Beneficiaries of any deceased Executives) who remain entitled to benefits under the SERP and Severance Agreements at such time; provided, however, that if any Executive or Beneficiary has an outstanding claim against the Company regarding the SERP or a Severance Agreement, whether through a complaint filed with a court or through a dispute submitted for arbitration, the Trust shall not terminate with resp ect to the amounts held in the Executive's account until the claim has been resolved, until all assets held in the Executive's account have been distributed, or until the Executive agrees to the termination.

          (b)          Upon termination of this Trust, the Trustee shall continue to have such of the powers provided in this Trust Agreement as are necessary or desirable for the orderly liquidation and distribution of the Trust assets. Upon termination of the Trust, all assets remaining in the Trust shall be returned to the Company.

SECTION 9

Liability and Indemnification

          9.1.          Liabilities Mutually Exclusive. Except as otherwise provided herein or by applicable law, the Company, the Trustee, the Committee, the Board of Directors, and each

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member thereof and each Investment Manager shall be responsible only for its or their own acts or omissions.

          9.2.          Indemnification. The Company hereby agrees to indemnify and hold harmless the Trustee from and against all losses, damages, liabilities, claims, costs, and expenses, including reasonable attorneys' fees, that the Trustee may incur by reason of the negligence or willful misconduct of the Company or the Committee. In making any distributions and taking any other action hereunder, the Trustee may rely upon and shall be fully protected in relying upon, any notice, certificate, or other paper or written document provided by the Company or the Committee and reasonably believed to be genuine.

SECTION 10

General Provisions

          10.1          Successor to Company. In the event the Company is succeeded by another entity, with or without a Change in Control, references to the Company in this Trust Agreement shall refer to the successor.

          10.2.  Merger of Trustee. If the Trustee shall be merged or consolidated with, or shall sell or transfer substantially all of its assets and business to another corporation, or shall be in any manner reorganized or reincorporated, then the successor corporation shall continue to be the Trustee pending subsequent resignation or removal as provided in Section 7 of this Trust Agreement.

          10.3.          Nonalienation. Benefits payable to Executives and Beneficiaries under this Trust Agreement shall not be subject to assignment, conveyance, transfer, anticipation, pledge, alienation, sale, encumbrance, or charge, whether voluntary or involuntary, by the Executive or Beneficiary, even if directed under a qualified domestic relations order or other divorce order. An interest in an amount promised shall not provide collateral or security for a debt of an Executive or Beneficiary or be subject to garnishment, execution, assignment, levy, or to another form of judicial or administrative process or to the claim of a creditor of an Executive or Beneficiary, through legal process or otherwise. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or to otherwise dispose of benefits payable, before actual receipt of the benefits, or a right to receive benefits, shall be void and shall not be recognize d.

          10.4.          Severability. Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

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          10.5.          Governing Law. This Trust Agreement shall be governed by and construed in accordance with the laws of the state of Michigan, to the extent not preempted by federal law.

          10.6.          Notices. Notices pursuant to this Trust Agreement shall be given by first class or priority U.S. mail or by commercial express delivery and shall be addressed to:

                    COMPANY

                    Spartan Stores, Inc.
                    850 76th Street S.W.
                    P. O. Box 8700
                    Grand Rapids, Michigan 49518

                    TRUSTEE

          10.7.          Counterparts. This Trust Agreement and any amendment hereto may be executed in two or more counterparts.

          10.8.          Gender and Number. Except when otherwise indicated by the context, words denoting the masculine gender shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

          10.9.          Scope of this Agreement. This Trust Agreement will be binding on all persons entitled to benefits hereunder and their respective heirs and legal representatives, and upon the Company, the Committee, the Trustee, and any Investment Managers, and their successors and assigns.

          10.10.        Statutory References. Any references in this Trust Agreement to a section of the Internal Revenue Code or any other statute or regulation shall include any comparable section or sections that amends, supplements, or supersedes that section.

          10.11.        Headings. The headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Trust or Severance Agreements and in no way shall affect the Trust or Severance Agreements or the construction of any provision thereof.

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                    IN WITNESS WHEREOF, this Trust Agreement is executed on behalf of Spartan Stores, Inc. and the Trustee by their respective authorized officers, as of the day and year set forth above.

SPARTAN STORES, INC.



By

Its

("Trustee")


By

Its

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EX-10

EXHIBIT 10.20

Conformed Copy

CONTRACT OF SALE

          THIS CONTRACT OF SALE (this "Contract") is made and entered as of May 23, 2003 (the "Effective Date") by and between SEAWAY FOOD TOWN, INC., a Michigan corporation, GRUBER'S FOOD TOWN, INC., a Michigan corporation, BUCKEYE REAL ESTATE MANAGEMENT CO., an Ohio corporation, and GRUBER'S REAL ESTATE, LLC, a Michigan limited liability company (together "Seller"), on the one part, and THE KROGER CO., an Ohio corporation ("Buyer") on the other part.

I.          Seller is the owner or lessee of thirteen (13) stores listed on Exhibit A and Exhibit B attached hereto (the "Stores").

II.          Seller desires to sell all of Seller's right, title and interest in and to the Stores and related assets, and Buyer desires to purchase the Stores and related assets from Seller, for the consideration and on the terms and conditions hereinafter set forth.

          For and in consideration of the mutual covenants and agreements contained in this Contract and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

1.          PURCHASE, SALE AND ASSIGNMENT: Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Property (hereinafter defined) for the consideration and upon and subject to the terms, provisions and conditions hereinafter set forth. The "Property" means:

          (a)          (i) The land upon which the Stores described in Exhibit A are located (the "Land"), the legal descriptions of which are attached as Exhibit A-1, together with all of Seller's right, title and interest in the improvements situated on the Land and in all other structures, buildings and improvements situated on the Land (the Land and such buildings, structures, and improvements situated on the Land being herein called the "Owned Store Properties"); and (ii) all of Seller's right, title and interest as lessee under those certain leases for the Stores described on Exhibit B hereto, which leases are listed on Exhibit B-1 attached hereto (the "Store Leases"), together with all of Seller's right, title and interest in and to the buildings, structures and improvements situated on the real property leased under the Store Leases (Seller's right, title and interest in and to the real property leased under the Store Leases and the buildings, stru ctures and other improvements situated thereon being herein called the "Leased Store Properties") (the Owned Store Properties and the Leased Store Properties are herein collectively called the "Store Properties"); together with all of Seller's right, title and interest in any and all rights, titles, privileges, easements, licenses, rights-of-way and interests appurtenant to the Store Properties;

          (b)          The food and general merchandise inventory owned by Seller located at, or otherwise held for sale, at the Stores (the "Inventory") as set forth in Section 3 below;

          (c)          The furniture, trade fixtures, bascarts, furnishings, machinery and equipment located in, at or upon the Stores on the Closing Date (as hereinafter defined) ("FF&E") but excluding the items listed on Exhibit C attached hereto;

          (d)          All of Seller's right, title and interest in all leases by Seller as landlord of the Owned Store Properties or as sublandlord of the Leased Store Properties listed on Exhibit D attached hereto (the "Tenant Leases");

          (e)          To the extent assignable, all of Seller's right, title and interest in the agreements listed on Exhibit E attached hereto, and all other cleaning, maintenance, utility, service or similar contracts or agreements relating to the operation of the Stores and the Property ("Service Contracts") in the ordinary course of business, that Buyer elects to assume in writing prior to the end of the Feasibility Period (as hereinafter defined). Seller shall cancel, at or before Closing (as hereinafter defined), any other service contracts of Seller related exclusively to the Stores or the Property that Buyer does not so elect to assume;

          (f)          All of Seller's interest in all transferable licenses, permits and approvals to the extent they relate exclusively to the operation of the Stores and the Property, but only if and to the extent legally assignable (the "Permits");

          (g)          All of Seller's right, title and interest in the pharmacy prescription files ("Files") maintained at any Store operating a pharmacy;

          (h)          All of Seller's right, title and interest in any transferable warranties relating exclusively to the Store Properties and the FF&E; and

          (i)          All of Seller's right, title and interest in any construction drawings, plans and specifications and/or other drawings and maintenance records applicable exclusively to the Store Properties.

          Notwithstanding anything to the contrary set forth in Section 1 and without limitation, the following property, rights and interests are excepted and excluded from the Property and shall be retained by Seller (collectively, the "Excluded Assets"):

(i)	All cash, notes, accounts receivable and refunds of prepaid expenses;
(ii)	Any equipment or other assets listed on the "Retained Equipment List" attached hereto as Exhibit C, and any vendor-owned equipment;
(iii)	Any inventory ordered prior to the Closing Date (hereinafter defined) but delivered after the Closing Date unless Buyer elects to pay for the same;
(iv)	All of Seller's trade names, trademarks and service marks relating to the Stores but excluding any shopping center names which do not have the word "Food Town" as a part thereof,
(v)	Seller's software (but excluding any pharmacy records required by law to be delivered to the Buyer); and

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(vi)	Seller's signs and any equipment displaying the "Food Town" logo from which the logo cannot be removed without disabling or injuring the equipment.
(vii)	The items of inventory excluded from this sale under the provisions of Section 3.

All Excluded Assets shall be removed from the Stores by Seller, at Seller's expense on or before five (5) business days immediately following the Closing Date (as herein defined) except for excluded inventory, which Seller shall use reasonable efforts to remove from the Stores by Seller, at Seller's expense, prior to taking an inventory count as hereinafter provided. Promptly following to taking an inventory count, Seller shall segregate vender-owned equipment in a location of such Store not open to customers, until such equipment is removed in a manner consistent with the foregoing sentence. Buyer may store, use or dispose of any Excluded Assets which are not timely removed in such manner as Buyer deems appropriate, at Seller's risk and expense. Notwithstanding the foregoing, Seller shall cooperate with Buyer's efforts to coordinate the removal of Seller's signs from the Stores and the installation of Buyer's signs on the Stores. Prior to the Closing, Buyer shall obtain and provide to Seller a detailed e stimate of the cost of such removal at each of the Stores for which Buyer desires to coordinate the removal and installation of signs. If Seller approves such cost estimate, which approval shall not be unreasonably withheld, then Buyer shall remove Seller's signs from the Stores covered by the approved cost estimate, and Seller shall reimburse Buyer for the cost of such removal up to the amount of the approved cost estimate.

2.          [Intentionally Omitted]

3.          PHYSICAL INVENTORY: The value assigned to the Inventory shall be determined pursuant to a physical inventory of the Stores taken by a team of RGIS or Keller (as most recently used by the particular Store) inventory takers (the "Inventory Service"), as set forth in Section 6 below (or such other date and time as the parties shall mutually agree upon). Representatives of Buyer and Seller shall be present at the taking of the physical inventories to settle all disputes as to damaged, obsolete, unsalable or other items not to be included in the Inventory. All damaged or unsalable inventory, consigned inventory, inventory with expired "pull dates," prescription drugs carrying an expiration date that is within sixty (60) days after the Closing Date (as hereinafter defined), and so-called "private label" inventory of Seller, and any other items listed on Exhibit F attached hereto shall be excluded from the Inventory schedule and shall be removed by Seller prior to the Closing (as hereinafter defined). Buyer acknowledges and agrees that during the 30-day period preceding the Closing, Seller is permitted to sell-down its inventory not included in the Inventory to be purchased by Buyer under this Contract. Buyer and Seller shall each pay one-half of the costs for the services of the inventory takers. Buyer and Seller agree that all economic operations of the Stores and all deliveries of Inventory to the Stores from and after the Closing Date shall be for the account of Buyer or Buyer's designee, as the case may be, except that which was ordered by Seller, such that any Inventory ordered by Seller prior to the Closing Date, but which does not arrive until after the Closing Date, shall be the

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property of Seller. The sales price for the Inventory shall be determined as set forth on Exhibit F. Buyer and Seller agree to execute, effective as of the Closing Date, a resale certificate(s) for the Inventory if required by the State of Ohio or Michigan, as applicable. As soon as practicable following completion of the taking of the physical inventories of the Store, the Inventory Service shall prepare and furnish to Seller and Buyer a detailed accounting of the computation of the value of the Inventory for the Stores, taking the results of the physical counts of the Inventory and applying the formulas set forth on Exhibit F. Seller and Buyer shall then have five (5) business days after its receipt of such detailed accounting in which to examine such accounting, during which time Buyer and Seller shall reasonably cooperate to resolve any computational errors or discrepancies. If Seller and Buyer are unable to resolve any such errors or discrepancies on mutually agreeable terms, then the matter shall be su bmitted to the Inventory Service for final determination, which determination shall be binding upon Seller and Buyer and not subject to further review.

4.          CONTRACT SALES PRICE: The total purchase price (the "Sales Price") for the Property, excluding Inventory, shall be TWENTY-TWO MILLION and 00/100 DOLLARS ($22,000,000.00), payable in cash at the Closing (as hereinafter defined), as allocated on Exhibit G attached hereto and incorporated herein, plus or minus the prorated amounts described in Section 6 and any other adjustments described herein. In addition, at the Closing, Buyer shall pay to Seller in cash the Inventory value based on the preliminary accounting prepared by the Inventory Service following completion of the physical count, less any amount disputed by Buyer (the "Preliminary Inventory Amount"). Within five (5) days following determination of the final Inventory value as provided in Section 3, if the final Inventory value exceeds the Preliminary Inventory Amount, then Buyer shall pay to Seller in cash the difference; if the Preliminary Inventory Amount exceeds the final Inventory value, then Seller s hall pay to Buyer in cash the difference. Payment in cash shall mean by wire transfer of immediately available federal funds ("Immediately Available Funds").

5.          [Intentionally Omitted]

6.          CLOSING:

          (a)           (1)           The closing of Seller's sale of the Property to Buyer (the "Closing") shall be conducted by the Title Company (hereinafter defined) through the mail (or such other manner or place as may be mutually agreed to by the parties) in two stages. The first Closing shall occur on Friday, June 20, 2003 (the "Initial Closing Date") and the second Closing shall occur one week later (the "Subsequent Closing Date"), provided that such dates may be extended upon the request of Seller for an additional period of time or periods of time not beyond Monday, July 28, 2003 as reasonably necessary to (i) allow for the fulfillment of any condition to Closing which has not been satisfied or waived by the applicable party to which such condition applies or (ii) correct a Material Defect or Material Title Defect. The three Stores listed on Exhibit B (and the Property related to such Stores) shall be transferred on the Initial Closing Date and the remaining ten Stores listed on Exhibit A (and the Property related to such Stores) shall be transferred on the Subsequent Closing Date. The Initial Closing Date and the

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Subsequent Closing Date shall be deemed a "Closing Date" with respect to the Stores (and related Property) which are to be transferred on such date.

                    (2)          The Closing shall be conducted, pro-rations determined and possession delivered in accordance with the following procedures:

(i)	On the Wednesday prior to the Initial Closing, Seller and Buyer shall put into escrow with Chicago Title Insurance Company ("Title Company") the net amount due from Buyer at Closing according to the Settlement Statement and all Closing documents required to be delivered pursuant to the terms of this Contract for all the Stores.
(ii)	On the Wednesday preceding the applicable Closing Date, the Stores to be transferred on such Closing Date shall be closed at 6:00 p.m. eastern time (no Inventory shall be sold or delivered) and the parties shall cause the Inventory to be counted in accordance with the terms and conditions of this Contract (including Exhibit C). At the conclusion of the inventory count, all keys, combinations to safes, and passwords for the Stores shall be delivered to authorized personnel of Buyer ("Possession Date"), and Buyer shall immediately make their own arrangements to have the locks changed.
(iii)	All pro-rations shall be calculated as of the Closing Date, in accordance with the other terms and conditions of this Contract.
(iv)	Exclusive possession of the Property shall transfer as of the Possession Date, subject only to the Permitted Exceptions and the Tenant Leases.
(v)	The Deeds and other documents put into escrow relating to a Store shall be disbursed out of escrow and recorded (where necessary) on the Closing Date for such Store; and on such date, the net amount due Seller according to the Settlement Statement for such Store shall be disbursed by the Title Company to Seller.
(vi)	The Title Company shall invest the funds escrowed by the Buyer in such manner as the Buyer may direct for the period of time the Title Company holds any or all of such funds in escrow. After Closing, the Title Company shall deliver any interest so earned to the Buyer.
(vii)	Seller shall bear the risk of loss for all Property relating to a Store up and until conclusion of the inventory count on the Possession Date.
(viii)	The parties agree to reasonably cooperate to effect the turnover of the Stores. Buyer shall be permitted to commence conversion operations at a particular Store following the closing of the Store for the physical inventory.

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          (b)          At the Closing, Seller shall deliver to Buyer, at Seller's sole cost and expense, the following, unless such delivery shall occur earlier, as provided below:

(1)	duly executed and acknowledged Limited Warranty Deeds in the form mutually agreed upon by the parties (the "Deeds") conveying good and marketable title in fee simple to the Owned Store Properties, by reference to the "historical" legal description or other legal description reasonably acceptable to Buyer and Seller, subject to: (i) the Permitted Exceptions, (ii) easements and restrictions of record, (iii) roads and public rights of way, (iv) real estate taxes and installments of assessments not due and payable as of the Closing Date, (v) zoning laws and ordinances, (vi) exceptions caused by the acts or omissions of Buyer, (vii) matters approved, assumed or waived by Buyer, (viii) matters insured by the Title Company, and (ix) such state of facts as would be shown on an accurate ALTA/ASCM Land Title Survey (nothing contained in this subsection shall affect Buyer's right to object to Material Title Defects in accordance with Section 8(a) below or to refuse to close because the condition s et forth in Section 18(e) has not been satisfied);
(2)	an Assignment and Assumption of Leasehold Agreement in substantially the form attached hereto as Exhibit I (the "Assignment and Assumption of Leasehold") duly executed and acknowledged by Seller, whereby Seller assigns all of Seller's right, title and interest to the Leased Store Properties to Buyer and Buyer agrees to assume all obligations of Seller under the applicable Store Lease from and after the Closing Date;
(3)	duly executed bills of sale in the form mutually agreed upon by the parties (the "Bills of Sale") covering FF&E and Inventory;
(4)	an Assignment and Assumption of Contracts in substantially the form attached hereto as Exhibit K (the "Assignment and Assumption of Contracts") duly executed and acknowledged by Seller, whereby each of the Service Contracts agreed to be assumed by Buyer are assigned to Buyer and whereby the assignable Permits and any assignable warranties, guaranties and bonds are assigned to Buyer and Buyer agrees to assume all obligations under such Service Contracts, Permits and warranties arising from and after the Closing Date;
(5)	an Assignment and Assumption of Leases in substantially the form attached hereto as Exhibit L (the "Assignment and Assumption of Tenant Leases") whereby each of the Tenant Leases applicable to a Store Property are assigned to Buyer and Buyer agrees to assume all obligations of the Seller under the Tenant Leases which arise from and after the Closing Date (subject to Section 6(h));

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(6)	evidence of its capacity and authority for the Closing of the transaction contemplated herein;
(7)	a non-foreign affidavit as permitted by Section 1445 of the Internal Revenue Code, as amended, and the regulations promulgated thereunder;
(8)	a Settlement Statement executed by the parties showing the Sales Price adjusted by the prorations, costs, and other adjustments required by this Contract ("Settlement Statement");
(9)	All original Permits, which if located at the Store, shall remain at the Store; and
(10)	such other documents as may be reasonably required to close this transaction, duly executed, and in a form and substance reasonably satisfactory to Seller and Buyer, including, without limitation, any required Title Company affidavits, Closing certificates, recording affidavits and/or other items routine for a closing of this nature or necessary for the Title Company to remove any standard exceptions in its final title policies;

(c) At the Closing, Buyer shall perform and deliver, at Buyer's sole cost and expense, the following:

(1)	the Sales Price subject to prorations and adjustments as provided in this Contract, in Immediately Available Funds;
(2)	the Assignment and Assumption of Leasehold duly executed by Buyer;
(3)	the Assignment and Assumption of Contracts duly executed by Buyer.
(4)	the Assignment and Assumption of Tenant Leases duly executed by Buyer;
(5)	evidence of its capacity and authority for the closing of the transaction contemplated herein;
(6)	the Settlement Statement; and
(7)	such other documents as may be reasonably required to close this transaction, duly executed and in form and substance reasonably satisfactory to Seller and Buyer.

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          (d)          Seller shall pay 1/2 of any escrow fee arising from the transactions contemplated hereby, and with respect to the Owned Store Properties, 1/2 of the abstracting and title examination costs, title commitment fees, and title premiums with respect to the Owned Store Properties, 1/2 of the transfer tax and conveyance fees, and all of Seller's attorneys' fees and other expenses stipulated to be paid by Seller under other provisions of this Contract. Buyer shall pay all of the Survey costs, and all of the costs of any abstracting and title examination costs, title commitment fees, and title premiums with respect to the Leased Store Properties. Buyer shall pay 1/2 of any escrow fee, 1/2 of the abstracting and title examination costs, title commitment fees, and title premiums for the owner's title policies, 1/2 of the transfer tax and conveyance fees, and all of the costs of any endorsement to the owner's title policies and leasehold title p olicies (other than as required to correct a Material Title Defect), the recording fees for the Deeds, UCC search costs, Buyer's attorneys' fees, and other expenses stipulated to be paid by Buyer under other provisions of this Contract.

          (e)          Seller shall pay all property taxes and installments of assessments with respect to the Owned Store Properties that are due and payable as of the Closing Date. With respect to the Owned Store Properties located in Michigan, property taxes and installments of assessments shall be prorated to the Closing Date as provided in Section 211.2 of the Michigan Compiled Laws, as if paid in advance for the twelve (12) month period succeeding the date they first are billed and become due and payable. With respect to the Owned Store Properties located in Lucas County, Ohio, property taxes and installments of assessments shall be prorated from the last due and payable date to the date of Closing. With respect to all other Owned Store Properties located in Ohio, Seller shall be responsible for all unpaid taxes and installments of assessments for the year prior to Closing and taxes and installments of assessments for the year of Closing shall be pro rated from January 1^st to and including the date of Closing. Subject to the prorations described above, Buyer shall be responsible for all real property taxes and installments of assessments not yet due and payable including, but not limited to, deferred installments not yet payable of assessments that are a lien on the Owned Store Property on the Closing Date.

          (f)          Common area maintenance charges and assessments, taxes, rent, and other lease payments payable by Seller with respect to the Leased Store Properties, to the extent paid for by Seller or required to be paid for by Seller for a period after Closing, shall be prorated as of the Closing Date. CAM charges, insurance, utilities and taxes that have been billed by landlord(s), if any, as to the Leased Store Properties for the period prior to the Closing Date, and which Seller has not otherwise paid or pro-rated at Closing, shall be a continuing obligation of Seller which shall survive Closing. If, under the terms of the applicable Store Lease, Buyer is required to pay percentage rent for any period that includes the Closing Date, then Seller shall pay its pro rata share of such percentage rent based on the sales made by Seller from the applicable Store prior to the Closing Date. For purposes of such proration, the minimum sales base specifie d in the applicable Store Lease shall be prorated between Seller and Buyer based on the number of days in such period before and after the Closing Date. Subject to the pro rations referred to above, in connection with the Store Leases for Fremont and Suder Avenue in Toledo, Seller shall have the right to collect and retain all reimbursements owed to Seller by landlord or another tenant for common

8
area maintenance and insurance costs, assessments and taxes, and other reimbursable costs incurred by Seller for the period prior to the Closing Date.

          (g)          Utilities and other customarily prorated expenses, including but not limited to water, sewer, gas, electricity, trash removal and fire protection service if such utilities cannot be transferred as of the Closing Date, and the Service Contracts, to the extent paid for by Seller or required to be paid for by Seller for a period after Closing, shall be prorated as of the Closing Date. Buyer shall arrange and bear all responsibility to arrange with all utility companies to have accounts styled in Buyer's name beginning on the Closing Date; provided, however, that Seller shall use its prompt and reasonable efforts to cooperate with Buyer in the transfer of such utilities to Buyer, including, without limitation, making reasonable efforts to obtain final meter readings and executing any documentation required to assign the existing telephone numbers for the Stores to Buyer. Seller shall remain responsible for any payments due to third-parti es attributable to the period prior to the Closing; provided, however, that within thirty (30) days after the Closing Date, Buyer shall reimburse Seller for any portion of such payments for utilities and Service Contracts assumed by Buyer attributable to the period after the Closing Date.

          (h)          Security deposits paid by tenants under Tenant Leases shall be transferred to Buyer. Rents due from tenants under Tenant Leases, if applicable, and operating expenses and/or taxes payable by tenants under Tenant Leases, if applicable, shall be apportioned as of the Closing Date on the basis of the period for which the same is payable and if, as and when collected, as follows:

                    (1)          With respect to any parcel of Owned Store Property that contains a free standing Store (that is, a Store that is not part of a shopping center), the following provisions shall apply: All base rent, percentage rent, additional rent and similar charges collected in advance by Seller under the terms of the Tenant Leases shall be prorated between Buyer and Seller as of the Closing Date. To the extent that either party receives any payment of base rent, percentage rent, additional rent and/or other charges after the Closing Date, the same will be paid to or retained by the Parties in accordance with the terms of the Tenant Leases and this Section 6(h)(1). At Closing, base rent shall be prorated as of the Closing Date. Percentage rent will be separately prorated based on the percentage rents actually collected by Buyer and Seller. Such proration will be made separately for each tenant who is obligated to pay percentage rent for any period that includes the Closing Date. Any percentage rent received from a tenant after the Closing Date will be applied as follows: (i) Buyer will be entitled to a prorata portion of such percentage rent payment based on the number of days within the period on or after the Closing Date and (ii) Seller will be entitled to a prorata portion of such percentage rent payment based on the number of days within the period prior to the Closing Date. A party receiving any percentage rent from a tenant after the Closing Date shall promptly forward payment of the appropriate prorated portion to the other party. Any additional rent or similar charges received from a tenant after the Closing Date for charges incurred by Seller shall be retained by or forwarded by Buyer to Seller (as the case may be).

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                    (2)          With respect to any parcel of Owned Store Property that contains a Store that is part of a shopping center, the following provisions shall apply: All base rent shall be prorated between Buyer and Seller as of the Closing Date. Percentage rent will be separately prorated based on the percentage rents actually collected by Buyer and Seller. Such proration will be made separately for each tenant who is obligated to pay percentage rent for any payment year that includes the Closing Date. Any percentage rent received from a tenant after the Closing Date will be applied as follows: (i) Buyer will be entitled to a prorata portion of such percentage rent payment based on the number of days within the payment year on or after the Closing Date and (ii) Seller will be entitled to a prorata portion of such percentage rent payment based on the number of days within the payment year prior to the Closing Date. A p arty receiving any percentage rent from a tenant after the Closing Date shall promptly forward payment of the appropriate prorated portion to the other party. Buyer shall apply rent and other income received from tenants under Tenant Leases after Closing in the following order of priority: (i) first, to base rent first coming due after Closing and applicable to the period of time after Closing, which amount shall be retained by Buyer (ii) second, to payment of the current base rent then due for the month in which the Closing Date occurs, which amount shall be apportioned between Buyer and Seller as of the Closing Date (with Seller's portion thereof to be delivered to Seller); (iii) third, to delinquent base rent which was due and payable as of Closing but not collected by Seller as of Closing, which amount shall be delivered to Seller; and (iv) thereafter, to other tenant receivables for operating expenses and/or taxes payable by tenants under Tenant Leases before or after the Closing Date ("Other Tenant Rec eivables"). After the Closing Date, Seller shall provide a statement to Buyer setting forth the amount of estimated payments received from tenants under the Tenant Leases with respect to any payment period that includes the Closing Date, and a statement of the operating expenses and/or taxes incurred by Seller with respect to the same payment period. Such statement of operating expenses and/or taxes may include all amounts paid or incurred by Seller regardless of whether such amounts were billed to or paid by Seller before or after the Closing Date. Buyer shall incorporate such statements into the final reconciliation or determination of operating expenses and/or taxes due under the Tenant Leases for such payment period. If the final reconciliation or determination of operating expenses and/or taxes due under the Tenant Leases shows that a net amount is owed by Seller to Buyer, Buyer's pro rata portion shall be paid by Seller to Buyer within ten (10) business days of such final determination under the Tenant Leases. If the final determination of operating expenses and/or taxes due under the Tenant Leases shows that a net amount is owed by Buyer to Seller, Buyer shall, within ten (10) business days of such final determination, remit to Seller Seller's portion of operating expenses and/or taxes for the period up to and including the Closing Date, if, as and when received. If the amount of Other Tenant Receivables received from tenants under the Tenant Leases is not sufficient to pay the entire deficiency owed by such tenants to Seller and Buyer for their respective periods of ownership before and after the Closing Date, the amounts received shall be prorated between Seller and Buyer based on the total amount owed by such tenants to Seller and Buyer. Buyer agrees to receive and hold any monies received on account of such Other Tenant Receivables in trust for Seller and to pay same promptly to Seller as aforesaid. Notwithstanding the foregoing, Seller shall have the right to pursue the collection of Other Tenant Re ceivables for a period of one (1) year after Closing without prejudice to

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Seller's rights or Buyer's obligations hereunder, provided, however, Seller shall have no right to cause any such tenant to be evicted or to exercise any other "landlord" remedy (as set forth in such tenant's Tenant Lease) against such tenant other than to sue for collection. Seller expressly agrees that if Seller receives any amounts after the Closing Date which are attributable, in whole or in part, to any period after the Closing Date, Seller shall remit to Buyer that portion of the monies so received by Seller to which Buyer is entitled within ten (10) business days after receipt thereof. With respect to delinquent base rent which was due and payable as of Closing but not collected by Seller as of Closing and Other Tenant Receivables, Buyer covenants and agrees to (A) bill the same when billable and (B) reasonably cooperate with Seller to determine and collect the correct amount of such delinquent base rent and Other Tenant Receivables due from tenants under the Tenant Leases. The Parties acknowledge tha t notwithstanding the terms of the Tenant Leases, all monthly payments made by tenants for estimated operating costs and/or taxes have been collected and reconciled by Seller on a calendar-year basis.

          (i)          Seller agrees to pay or discharge at or prior to Closing all leasing commissions under any brokerage or leasing commission agreements, costs for tenant improvements, legal fees and other costs and expenses (collectively, "Leasing Costs") that are due with respect to Tenant Leases in force as of or prior to the Closing Date. As of Closing, Buyer shall assume Seller's obligations for Leasing Costs incurred with respect to Tenant Leases and Tenant Lease renewals and extensions executed subsequent to the Closing Date.

          (j)          Seller shall deliver to each tenant under the Tenant Lease immediately after the Closing a notice regarding the sale, the form of which shall be reasonably acceptable to Buyer.

          (k)          Within a commercially reasonable period of time after Closing but in no event more than three (3) weeks after Closing, Seller shall deliver to Buyer all of its (i) maintenance and inspection records applicable to the Stores and/or the FF&E and (ii) such other documents and files which Buyer may reasonably request which are not proprietary to Seller.

          The provisions of Section 6 shall survive Closing.

7.          FEASIBILITY STUDY AND INSPECTION, TERMINATION RIGHT:

          (a)          Subject to the terms and conditions of the Tenant Leases, Buyer shall conduct such engineering studies and physical inspections of the Stores and the Store Properties that Buyer deems necessary, including, without limitation, environmental site assessments (collectively, the "Feasibility Study") during the period (the "Feasibility Period") commencing on the Effective Date of this Contract and ending at 5:00 p.m., eastern time on the date that is thirty (30) days after the Effective Date of this Contract. After Seller has received advance notice (which may be by facsimile) sufficient to permit it to schedule in an orderly manner Buyer's examination of the Stores, Buyer or its designated agents may enter upon the Stores during such hours as may be reasonably agreed to by Seller's representative during the Feasibility Period for

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purposes of analysis or other tests and inspections which may be deemed necessary by Buyer for the Feasibility Study. Buyer shall not be required to give more than twenty-four (24) hours' notice to examine the Stores. Buyer's notice shall state the dates on which Buyer shall inspect the Stores. Seller agrees to make its designated representatives available for such inspections. Seller shall have the right to accompany Buyer and/or its representatives during all inspections and any employee interviews (which interviews shall not be permitted without the pre-approval of Seller through its designated contact). Buyer shall not alter the physical condition of a Store without notifying Seller of its requested tests and obtaining the written consent of Seller to any physical alteration of the Store. Seller agrees to cooperate with Buyer to accommodate all inspections reasonably requested by Buyer during the Feasibility Period.

          (b)          In the event that the Feasibility Study, in the reasonable judgment of Buyer, based on the operating standards of other similarly situated properties in Buyer's chain, discloses a Material Defect (as hereinafter defined), then Buyer shall notify Seller of the Material Defect in writing (the "Material Defect Notice") no later than the last day of the Feasibility Period (time being of the essence with respect thereto). A "Material Defect" with respect to any individual Store and related Store Property is defined as defect(s) in the condition of the structure (including roof), equipment, plumbing, electrical or mechanical systems, or parking lot or other building included in such Store Property (each a "Store Component"), or an environmental condition affecting such Store Property that would materially and adversely affect the value of such Store Property, but only to the extent that such defect(s) for such Store Property would cost mor e than $75,000, in the aggregate, to correct. Notwithstanding the foregoing, the term "Material Defect" shall not be deemed to include (i) reasonable wear and tear or other conditions related to the age of any Store Component, unless such Store Component is in immediate need of replacement due to the imminent failure thereof prior to the Closing Date, or (ii) any condition that is within the maintenance obligations of the landlord under the terms of any of the Store Leases; and if equipment is not working (and has not otherwise been repaired or replaced by Seller), then the correction cost shall be included in the calculation of the $75,000 referenced in the preceding sentence. The Material Defect Notice, in order to be effective, must include (i) a reasonably sufficient description of the Material Defect(s), (ii) the recommended form of correction, and (iii) a reasonable estimate of the cost involved in order to correct the same provided by an independent architect, engineer or contractor (the "Cost Estimat e"). Buyer shall pay the first $75,000, in the aggregate, of the cost of correction of the Material Defect(s) for each Store Property. If the Material Defect(s) for a Store Property would cost more than $75,000, in the aggregate, to correct (according to the Cost Estimate), Seller shall pay the next $75,000 of the cost of correction up to the amount of the Cost Estimate, but only to the extent that such cost is not recoverable by Buyer under Tenant Leases. In lieu of paying the cost of correction, Seller may replace any Store Component with a reasonably comparable used Store Component supplied by Seller. If Seller corrects the Material Defect(s) prior to the Closing Date, Buyer shall pay its share of the cost of such correction on or before the Closing Date. If Seller does not correct the Material Defect(s) on or before the Closing Date, Seller agrees that an amount equal to 100% of Seller's share of the Cost Estimate (less any amount recoverable by Buyer under Tenant Leases) will be placed in escrow until s uch Material Defect(s) are corrected. If the Material Defect(s) are not corrected by Seller within sixty

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(60) days after the Closing Date, subject to force majeure, then Buyer shall make the corrections and deduct Seller's share of the cost of such corrections (up to the amount of the Cost Estimate) from the escrow account. Any proceeds remaining in the escrow account following the earlier of (i) the correction of the Material Defect(s) or, (ii) the first anniversary of the Closing Date, shall be released to Seller. If Seller and Buyer cannot agree on the form or cost of correction, such dispute shall be submitted to an engineer mutually agreeable to the parties, the expense of which shall be borne equally by the parties. The engineer shall decide which form of correction is the most cost-effective solution based on the age and condition of the Store Property and such decision shall be binding upon the parties. Notwithstanding anything to the contrary contained in this Section 7(b), if the Material Defect(s) for a Store Property would cost more than $150,000, in the aggregate, to correct, and Seller elects not to pay any cost of correction in excess of $150,000, Seller shall give written notice of such election to Buyer. Buyer may exclude such Store Property in accordance with Section 25 by giving Seller written notice within five (5) business days of Seller's notification of its intent not to pay any cost of correction in excess of $150,000. If Buyer does not give such notice to Seller, then Buyer shall purchase the Store at the Closing. If any equipment located in the Stores is in working order at the time of Kroger's completion of the Feasibility Study, but breaks down prior to the Closing, Seller shall either repair or replace such equipment prior to the Closing (and may replace such equipment with reasonably comparable used equipment supplied by Seller).

          (c)          Except as otherwise may be set forth herein, the Feasibility Study shall be at Buyer's expense. Buyer shall promptly restore the Stores and the FF&E to their condition prior to Buyer's entry thereon if damaged or changed due to the tests and inspections performed by Buyer, free of any mechanic's or materialmen's liens or other encumbrances arising out of any of the inspections or tests, and shall provide Seller, at no cost to Seller, without warranty or representation by Buyer of any kind, a copy of the results of any tests and inspections made by Buyer, its agents, independent contractors, servants and/or employees (collectively, "Buyer's Related Parties"). Prior to Closing, Buyer shall keep confidential the results of any tests and inspections made by Buyer, and shall not disclose such results to any third parties, other than Buyer's partners, employees and agents and prospective lenders, partners, engineers, prospective tenant s and/or purchasers, all of whom shall similarly keep such information confidential, except disclosure required under force of law. Buyer hereby indemnifies and holds Seller harmless from all claims, liabilities, damages, liens, losses, costs, expenses (including, without limitation, reasonable attorneys' fees), actions and causes of action arising out of the tests and inspections performed by Buyer and/or Buyer's Related Parties, excluding those caused by or in any way contributed to by the negligence or willful misconduct of Seller, its agents, independent contractors, servants and/or employees; provided, for purposes of this indemnification only, Buyer shall not have any liability for any pre-existing conditions discovered by Buyer in connection with its Feasibility Study, except to the extent that such pre-existing conditions are aggravated by Buyer or Buyer's Related Parties in conducting its Feasibility Study.

          (d)          All information and material furnished or made available by Seller to Buyer in accordance with this Contract or obtained by Buyer in the course of its investigation

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shall be treated as confidential information by Buyer prior to the purchase of the Property by Buyer, and if this Contract shall not close, Buyer shall not divulge, and shall use reasonable efforts to prevent Buyer's Related Parties from divulging, such information, except as reasonably necessary to third parties engaged by Buyer for the limited purpose of analyzing and investigating such information for the purpose of consummating the transaction, including, without limitation, Buyer's attorneys and representatives, agents, experts, consultants, prospective lenders, partners, engineers, tenants and/or purchasers, all of whom shall similarly keep such information confidential, except disclosure required under force of law, except disclosure required under force of law. Notwithstanding the foregoing, Buyer shall be permitted to disclose, during the term of this Contract, to its prospective lenders, agents, experts, consultants, partners, engineers, tenants and/or purchasers, courts and governmental agencies h aving jurisdiction, information regarding the description, location and condition of the Stores, including the fact that Buyer has the Stores under contract, and the proposed Closing Date. In the event this Contract shall not close, Buyer shall deliver to Seller within ten (10) business days all copies made of materials and information pertaining to the Property furnished or made available to Buyer or Buyer's Related Parties (excluding Buyer's or its assignees' financial information). The provisions of this Section 7(d) shall survive the Closing or any termination of this Contract for so long as the Confidentiality Agreement, dated December 23, 2002 between Buyer and Spartan Stores, Inc. (the "Confidentiality Agreement"), by its express terms, survives. Buyer shall have no liability to Seller or otherwise for information already in the public domain or obtained by third-parties independently. In the event of any inconsistency between this Contract and the Confidentiality Agreement, this Contract shall contro l. Notwithstanding the above, the Confidentiality Agreement remains in effect with respect to the information provided to Buyer about the operation of Seller or its affiliates not related to the Stores or the Property (i.e., the other stores of Seller that Buyer is not purchasing under this Contract).

          (e)          Within ten (10) days after the Effective Date, Seller shall deliver to Buyer true, correct and complete copies of (i) the Permits, and (ii) any existing land surveys, environmental assessments or reports, appraisals, plans and specifications, engineering, maintenance and inspection records pertaining to the Property and in Seller's possession. All such materials and information shall be provided to Buyer in such form as such information may presently exist or be readily available. If this purchase and sale is closed, then Buyer may keep and use all such information and materials without restriction. If this purchase and sale does not close for any reason, then Buyer shall promptly return such materials and information to Seller within ten (10) business days after written demand, provided however, in the event of Seller's default, Buyer shall be entitled to retain copies of such material, if any, relating to such default. The provisio ns of this Section 7(e) shall survive Closing or any termination of this Contract.

          (f)          Prior to the Effective Date, Buyer has reviewed copies of the Leases and Tenant Leases. If a Store Lease or Tenant Lease is materially different from the copies provided to Buyer prior to the Effective Date or contains material terms not previously disclosed to Buyer which are unacceptable to Buyer in its reasonable discretion, Buyer shall notify Seller of its objection ("Lease Objection") no later than the last day of the Feasibility Period. In the event Seller is unwilling or unable to cure a

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Lease Objection, Seller shall give notice to Buyer that it is unwilling or unable to cure such Lease Objection, and Buyer shall either waive the uncured Lease Objection and proceed to Closing or exclude the Store with the Lease Objection in accordance with Section 25. Buyer shall give notice to Seller of its election to exclude or purchase the Store within five (5) business days of its receipt of Seller's notice.

          (g)          Seller has provided to Buyer copies of Seller's records, if any, concerning asbestos containing materials present at the Store Properties, or presumed to be present at the Store Properties.

          The provisions of Section 7 shall survive the Closing or any termination of this Contract.

8.          TITLE APPROVAL:

          (a)           During the Feasibility Period, Buyer may obtain, at Buyer's sole option, for each Store Property a Commitment for Title Insurance from the Title Company with copies of all recorded instruments affecting the Store Property and recited as exceptions in such Commitment for Title Insurance (the "Commitment"). During the Feasibility Period, Buyer, at Buyer's sole option, may obtain current surveys of the Store Properties (the "Survey") made by a registered professional land surveyor. Buyer may, within the Feasibility Period, provide to Seller a notice ("Title Defect Letter") setting forth all such title and survey matters constituting a Material Title Defect (defined below) to which Buyer objects, and Seller shall have the option to be exercised in writing ("Seller Response Letter") within five (5) days of the receipt of the Title Defect Letter to elect to cure (or cause the Title Company to "insure over") some or all of such objections but shall not be required to correct the same; provided that Seller shall be required, at or prior to the Closing, to remove (or cause the Title Company to "insure over") any existing deeds of trust, mortgages, liens or other encumbrances evidencing final and determinable monetary obligations given by or caused by Seller and recorded in the chain of title against the Store Properties, but in no event shall any of Seller's obligations hereunder require expenditures of money for the discharge of judgment or other non consensual liens in excess of the Sales Price. In the event such objections cannot be corrected or such objection can be cured (or "insured over") and Seller elects not to correct such objection, it shall notify Buyer, and Buyer shall either waive the uncured title objections and proceed to Closing, or exclude the Store with the Material Title Defect in accordance with Section 25. Buyer shall notify Seller of its election to exclude or purchase the Store within five (5) business days of its receip t of notice from Seller. Buyer may not remove a Store as a result of any matter in any Commitment or Survey which is not a Material Title Defect (as defined below). The phrase "Permitted Exceptions" shall mean: (i) those exceptions to title set forth in a Commitment or disclosed by the Survey that are not Material Title Defects or are Material Title Defects (A) to which Buyer does not object, (B) to which Buyer waives any objection, or (C) which are cured by Seller (or "insured over"), and (ii) the two easements to be placed on the Land related to Store 6042, located at 850 S. Monroe St., Monroe, Michigan 48161 (one being a replacement easement for parking and drainage in favor of Monroe Bank and Trust and the other being an access easement to Wendy's). To the extent Buyer's title examinations reveal any title defect that has, in Buyer's reasonable

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business judgment, a material adverse effect on the ability of the Buyer to utilize a Store as a Kroger full service grocery supermarket and pharmacy or materially and adversely affect the value of the Property, then any such title exception is herein called a "Material Title Defect". Without limitation, a Material Title Defect shall be deemed to exist if (i) any third-party has the right to "repurchase" all or any portion of any Owned Store Property or a reversionary interest exists with respect thereto, (ii) Buyer's rights as a tenant under a Lease may be foreclosed or otherwise terminated by the existence of a lien, mortgage, deed of trust or other encumbrance on the fee-interest or any superior leasehold interest in the Leased Store Property or (iii) any judgment or non-consensual liens recorded against a Store Property which is not fully bonded over or fully insured over by the Title Company. If Seller elects to cause the Title Insurer to "insure over" any objection, Seller shall pay any resulting incre ase in the title insurance premium, and the form of "insurance over" such objection shall be subject to Buyer's approval, which shall not be unreasonably withheld.

          (b)          After the Effective Date of this Contract, Seller, without the prior written consent of Buyer, shall not intentionally or deliberately place, or permit to be placed, on any Store Property any lien, encumbrance or other exception other than (1) the Permitted Exceptions; and (2) any replacement, renewal, refinancing, or extension of any secured indebtedness of Seller or affiliate of Seller existing as of the date of this Contract (each, a "Refinancing"). If as a result of Seller's intentional or deliberate actions without the prior written consent of Buyer, any lien, encumbrance or other matter is placed on a Store Property after the Effective Date and prior to the Closing Date, then Buyer shall nevertheless proceed to Closing and Seller shall provide evidence at Closing, as approved by the Title Company, of the removal of the lien, encumbrance or other matter from the Title Policy, or shall otherwise cure or remove the lien, encumbran ce or other matter or cause the Title Company to insure over such defect in a manner reasonably acceptable to Buyer.

9.          BROKER'S FEE: Except for the commission owed to The Food Partners, which Seller agrees to pay, Buyer and Seller represent and warrant to each other that no real estate commissions, finders' fees, or brokers' fees have been or will be incurred in connection with the sale of the Property by Seller to Buyer. Buyer and Seller shall indemnify, defend and hold each other harmless from any claim, liability, obligation, cost or expense (including reasonable attorneys' fees and expenses) for fees or commissions relating to Buyer's purchase of the Property asserted against either party by any broker or other person claiming by, through or under the indemnifying party or whose claim is based on the indemnifying party's acts. The provision of this Section 9 shall survive the Closing or any termination of this Contract.

10.          LIMITATIONS OF SELLER'S REPRESENTATIONS AND WARRANTIES:

          Buyer acknowledges and agrees that, except as otherwise expressly stated in Section 13A or in any conveyance instrument delivered by Seller pursuant to this Contract, Seller has not made, and Seller hereby specifically disclaims any warranty, guaranty or representation, oral or written, past, present or future, including but not limited to any warranty, guaranty or representation concerning (i) the nature and condition of the Property, including, without limitation, the water, soil and geology, and

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the suitability thereof and of the Property for any and all activities and uses which Buyer may elect to conduct thereon; (ii) except for any warranty contained in the Deed, any Assignment and Assumption of Leasehold, any Assignment and Assumption of Tenant Leases, any Assignment and Assumption of Contracts and any Bills of Sale to be delivered by Seller pursuant to this Contract, the existence, nature and extent of any right-of-way, lease, right to possession or use, lien, encumbrance, license, reservation, condition or other matter affecting title to the property; and (iii) the compliance of the Property or its operation with any laws, ordinances, orders, rules or regulations of any governmental or other body. Buyer acknowledges that, having been given the opportunity to inspect the Property, Buyer is relying solely on the express provisions of Section 13A and on its own investigation of the Property. Buyer agrees to accept the Property and acknowledges that the sale of the Property as provided for in this Contract is made by Seller on an "as is, where is and with all faults" basis, except as otherwise expressly provided in Section 13A or as expressly agreed to in writing prior to closing. Buyer expressly acknowledges that, in consideration of the agreements of Seller in this Contract, except as otherwise specified in Section 13A, Seller makes no warranty or representation, express or implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, merchantability, tenantability or fitness for a particular use or purpose, with respect to the Property.

11.          DEFAULT: Unless otherwise provided for in this Contract, if the transaction contemplated hereby is not consummated by reason of Buyer's breach or other failure to timely perform all obligations and conditions to be performed by Buyer, and Buyer fails to cure such breach or failure within twenty (20) days following written notice from Seller, Seller may (i) terminate this Contract, (ii) sue Buyer for specific performance or (iii) pursue such other remedies as may be available at law or in equity, including a recovery for damages sustained and proven as a result of the breach of this Contract by Buyer provided that Buyer's liability for damages hereunder shall in no event exceed the Sales Price. If the transaction contemplated hereby is not consummated by reason of Seller's breach or other failure to timely perform all obligations and conditions to be performed by Seller, and Seller fails to cure such breach or failure within twenty (20) days following written no tice from Buyer, Buyer may (i) terminate this Contract, (ii) sue Seller for specific performance or (iii) pursue such other remedies as may be available at law or in equity, including a recovery for damages sustained and proven as a result of a breach of this Contract by Seller provided that Seller's liability for damages hereunder shall in no event exceed the Sales Price.

12.          ATTORNEYS' FEES: Any party to this Contract who is the prevailing party in any legal proceeding against the other party brought under or with respect to this Contract or transaction (including any post Closing matters) shall be additionally entitled to recover court costs and reasonable attorneys' fees from the non-prevailing party.

13A.          REPRESENTATIONS AND WARRANTIES OF SELLER: Seller hereby represents and warrants to Buyer, as of the effective date of this Contract and remade as of the Closing Date as follows:

          (a)          Corporate Status. Seller is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of the State of Ohio or

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Michigan, as applicable, and is qualified to transact business in, and is in good standing under the laws of, the State of Ohio or Michigan, as applicable. Seller has the corporate power and authority to sell and convey the Property as provided in this Contract and to carry out Seller's obligations hereunder, and all requisite corporate action necessary to authorize Seller to enter into this Contract and to carry out Seller's obligations hereunder has been taken.

          (b)          No Violation, Binding Effect. The execution, delivery and performance of this Contract by Seller do not contravene, or constitute a default under, Seller's articles of incorporation or any provision of any agreement, law, rule, regulation, judgment, order, decree or other instrument binding upon Seller or the Property. This Contract has been duly executed and delivered by Seller and constitutes a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms.

          (c)          Leases. Seller has provided to Buyer a true and complete copy of the Store Leases to which Seller is a party, which have not been amended or modified except as set forth in Exhibit B-1. Seller has not previously assigned its interest in the Store Leases. The leasehold estate created under the Store Leases are, or will be, as of the Closing Date, free and clear of all liens created by, through or under Seller except the Permitted Exceptions. Seller is not in default in the payment of rent or other sums due under the Store Leases, and to Seller's current actual knowledge, Seller is not in material default under any other provision of the Store Leases. "Seller's current actual knowledge" means the actual knowledge of the current executive officers of Seller, Cliff Sasfy, Director of Real Estate, Darline Wessels, Manager of Real Estate, and Bob Dykhouse, Manager of Facilities.

          (d)          Tenant Leases. Seller has provided a true and complete copy of the Tenant Leases to which Seller is a party existing as of the Effective Date of this Contract, which have not been materially amended, modified or supplemented, except as set forth in Exhibit D. Seller has not previously assigned its interest in such Tenant Leases. To Seller's current actual knowledge, Seller is not in material default under such Tenant Leases. To Seller's current actual knowledge, the tenants under the Tenant Leases are not in material default of such leases, except as described in Exhibit M.

          (e)          Property. To Seller's current actual knowledge, Seller has or, as of the Closing Date, will have, good and marketable title in all respects to the Property, subject to the Permitted Exceptions. None of the personal property included in the Property will be subject to any lien, except for Permitted Exceptions. Except for the Tenant Leases, there are no leases, sub-leases, licenses, concession or similar agreements that grant any third party the right to occupy any part of a Store or Store Property or to operate any business or conduct any other activity in a Store or Store Property. The Owned Store Properties are covered by insurance at $65 per square foot and other retail improvements are covered by insurance at $40 per square foot.

          (f)          Litigation. Except for any litigation described on Exhibit N, to Seller's current actual knowledge there are no judgments, orders or decrees binding on Seller that are reasonably likely to delay or prevent the consummation of the transaction

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contemplated hereby or are reasonably likely to prevent or materially and adversely affect the operation of any Store Property by Buyer. Except as disclosed on such Exhibit N, to Seller's current actual knowledge Seller has not received any written notice of (i) any pending or threatened litigation or governmental proceeding which would materially adversely affect the Store Property; or (ii) any violation or alleged violation of any governmental requirement affecting the Store Property which would materially and adversely affect any Store Property.

          (g)          Hazardous Materials. Except as disclosed in Section 7(g), Seller has no current actual knowledge of and has received no written notice of (i) any violation of any environmental laws, rules, regulations, ordinances or order with respect to any hazardous wastes, hazardous materials, toxic substances or related substances with respect to any Store Property, or (ii) the existence of any underground or aboveground storage tanks under or on any Store Property.

          (h)          No Violations. To Seller's current actual knowledge, no written notice of material violation of any building, zoning, fire, health or other regulatory laws, statutes, ordinance or regulations relating to any Store Property has been received by Seller and is now outstanding, except for any matters disclosed on Exhibit O.

          (i)          Permits. To Seller's current actual knowledge, Seller has obtained from all federal, state and local authorities all material permits, licenses and variances required for Seller's operation of the Store Properties. To Seller's current actual knowledge, the Store Properties are not being operated or sold in any material respects in violation of any of the provisions of such permits or licenses.

          (j)          Personal Property Tax. Seller has delivered to Buyer accurate and complete copies of all personal property tax documents for the Stores for the tax year 2002 filed with the State of Ohio or Michigan, as applicable.

          (k)          [Intentionally Omitted]

          (l)          Vendor Equipment. Seller has granted Buyer access to all Stores; all equipment owned by third-party vendors and located in the Stores was present in the Stores at such time. All such equipment (excluding any equipment covered by leases assumed by Buyer at Closing) shall be removed by Seller from the Stores within five (5) business days after the Closing Date.

          (m)          Seller Equipment. Seller has granted Buyer access to all Stores; all equipment owned by Seller and located in the Stores was present in the Store at such time. All such equipment is present in the Store as of the Effective Date. No replacement/removal of such equipment shall be allowed other than as contemplated by Section 7.

13.B.          SURVIVABILITY OF REPRESENTATIONS AND WARRANTIES: Any representations and warranties contained in this Section 13 shall survive from and after the Closing Date for a period of eighteen (18) months except that the representations in (a), (b) and (e) shall survive for an unlimited period ("Survivability Period"). To enforce a

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breach of any representations and warranties set forth in this Section 13, Buyer must commence a legal action in writing prior to the expiration of the Survivability Period. In the event of a breach of such representations and warranties, Buyer shall be entitled to be indemnified by Seller for its damages proven and arising from such breach (subject to the limitations set forth in Section 20).

14.A.          COVENANTS OF SELLER: Seller agrees with Buyer that, from and after the Effective Date of this Contract to and including the applicable Possession Date:

          (a)          Modify Contract. Seller shall not amend, extend, modify or in any way alter any Lease, Tenant Lease or other contract or agreement in any material respect which adversely affects the Property or enter into any new contract or agreement affecting the Property or any portion thereof in any material respect without the prior written consent of Buyer, except (i) Seller may grant any lien, encumbrance, interest or other matter on or in Property after the Effective Date and prior to the Closing Date in connection with a Refinancing if it removes or otherwise cures the lien, encumbrance, interest or other matter prior to the Closing Date, or if such Property is covered by the Title Policy, then Seller will remove the lien, encumbrance interest or other matter from the Title Policy, or shall otherwise cure or remove the lien, encumbrance interest or other matter or cause the Title Company to insure over such defect in a manner reasona bly acceptable to Buyer, (ii) Seller may amend, extend, modify or otherwise alter any contracts or agreements which are terminable on the Closing Date or are terminable upon the delivery of thirty (30) days prior notice by the owner of the Property, (iii) Seller may amend, modify or otherwise alter any existing Tenant Lease in the ordinary course of business except in no event shall there be any change in the term (unless a tenant is exercising a right of renewal or extension), decrease in monetary obligations or adverse change in the use or exclusions of such Tenant Lease without the prior written consent of Buyer and (iv) Seller shall terminate any Service Contracts as of the Closing Date (as to the Store being transferred) which Buyer has not elected to assume during the Feasibility Period.

          (b)          Expenses. Seller shall, subject to the prorations and other provisions described herein, pay all accounts, bills, trade payable and expenses of maintenance and operation of the Property relating to the Store attributable to the period prior to the Closing Date, except for such amounts as are contested or disputed by Seller in good faith with reasonable grounds.

          (c)          Maintenance. Seller will maintain and keep the Property, the Stores and all FF&E located therein in the condition as exists on the Effective Date of this Contract, except for ordinary wear and tear and damage due to casualty or condemnation.

          (d)          Insurance. Seller will keep in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it with respect to the Property and will not change or alter its current programs of insurance.

          (e)          Permits and Approvals. Seller will perform in all material respects all of its obligations under all licenses, permits and approvals relating to or affecting the Store.

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          (f)          Disposition of Assets. Seller will not sell, assign, transfer, convey or otherwise dispose of, or enter into any agreement to sell, assign, transfer, convey or otherwise dispose of, any of the Property (excluding sales of Inventory in the ordinary course of business) without Buyer's prior written approval, provided Seller shall be allowed (i) to sell or dispose of any FF&E in the ordinary course of its store operations provided other FF&E in substantially the same or better condition replaces the sold or disposed FF&E, or (ii) Seller may grant any lien, encumbrance, interest or other matter on or in Property after the Effective Date and prior to the Closing Date in connection with a Refinancing if it removes or otherwise cures the lien, encumbrance, interest or other matter prior to the Closing Date, or if such Property is covered by the Title Policy, then Seller will remove the lien, encumbrance interest or other matter from the Title Policy, or shall otherwise cure or remove the lien, encumbrance interest or other matter or cause the Title Company to insure over such defect in a manner reasonably acceptable to Buyer.

          (g)          Employee Termination. Seller is responsible for complying with the requirements of the Worker Adjustment and Retaining Notification Act ("WARN") with respect to its cessation of operation of the Stores.

          (h)          Inventory Transfers. Except in the ordinary course of business, Seller shall not transfer any Inventory into a Store from any store or other facility owned or operated by Seller or any affiliate of Seller.

          (i)          Bulk Sales Act. Buyer waives compliance by Seller with any applicable Bulk Sales Act or similar law to the extent required in connection with this transaction. Seller shall indemnify, defend and hold harmless Buyer and the Property from any demands, claims or liabilities arising from any failure of Seller to so comply as provided in Section 20 of this Contract.

14.B.          ADDITIONAL COVENANTS: Each party will use all reasonable efforts to fulfill the conditions required to be fulfilled by such party that are necessary to bring about the timely consummation of the transactions contemplated by this Contract. After the Closing, each party will take all such further actions, execute and deliver all such further documents and do all other acts and things as the other party may reasonably request for the purpose of carrying out the intent of this Contract (including the satisfaction of closing conditions) and the other documents referred to in this Contract. Promptly following the Closing, Seller shall make a public announcement in the markets served by the Stores that it will accept Spartan Stores-affiliated gift cards and gift certificates at its Pharm stores.

15.          CONDEMNATION: Seller shall give prompt written notice to Buyer of Seller's receipt of any pending or threatened condemnation affecting a Store. If prior to the Closing, condemnation proceedings are commenced in writing against Store Properties that involve a taking that has a material adverse effect on the ability of Buyer to utilize a store as a Kroger full service grocery supermarket (and pharmacy if applicable), then Buyer shall have the right to exclude such Store in accordance with Section 25 by giving Seller written notice within five (5) business days following its receipt of Seller's notice. If Buyer does not exercise its right to exclude the Store, then at Closing Seller

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shall assign to Buyer the condemnation award, if any, previously received by, or subsequently payable to, Seller with respect to the Store, and the Sales Price shall not be reduced.

16.          DAMAGE TO PROPERTY: Seller agrees to give Buyer prompt notice of any fire or other casualty affecting a Store between the Effective Date of this Contract and the Closing.

          (a)          Owned Store Property. If, prior to the Closing, there shall occur any damage to an Owned Store Property caused by fire or other casualty ("Casualty"), and if such Casualty damages twenty percent (20%) or less (by replacement cost) of the buildings located on the Land, Buyer shall purchase the Store at Closing without reduction in the Sales Price, whereupon Seller shall assign any Casualty award under any applicable insurance policy to Buyer and shall pay Buyer an amount equal to any deductible under such insurance policy. If, prior to the Closing, there shall occur any damage to an Owned Store Property caused by Casualty, and if such Casualty damages more than twenty percent (20%) (by replacement cost) of the buildings located on the Land, then Buyer, at its option, shall either (i) purchase the Store at the Closing without reduction in the Sales Price, whereupon Seller shall assign any Casualty award under any applicable insu rance policy to Buyer and shall pay Buyer an amount equal to any deductible under such insurance policy, or (ii) elect to exclude the Store from this Contract in accordance with Section 25. Buyer shall notify Seller of its election to exclude or purchase the Store within twenty (20) days from the date of the Casualty.

          (b)          Leased Store Properties. If prior to the Closing, any part of any of the Leased Store Properties shall be damaged by Casualty such that the landlord under such Store Lease may elect to terminate the Lease and the landlord does so elect to terminate such Lease, such Store shall be excluded from this Contract in accordance with Section 25. If the landlord has not exercised its election as of the scheduled Closing Date, the Closing Date for the affected Leased Store Property shall be delayed until ten (10) days after the Landlord exercises such election. If the landlord does not or cannot terminate such Lease, then the Closing shall take place and Seller shall assign its right, title and interest in any Casualty award under the applicable Lease to Buyer. Notwithstanding the foregoing, if any such Casualty damages more than twenty percent (20%) (by replacement cost) of the premises described in any Store Lease, then regardless of whether the landlord elects not to terminate the Store Lease, Buyer, at its option, may either (i) purchase the Leased Store Property at the Closing without reduction in the Sales Price, whereupon Seller shall assign any Casualty award under any applicable insurance policy to Buyer and shall pay Buyer an amount equal to any deductible under such insurance policy, or (ii) elect to exclude the Store from this Contract in accordance with Section 25. Buyer shall notify Seller of its election to exclude or purchase the Store within twenty (20) days from the date of the Casualty.

17.          REPRESENTATIONS AND WARRANTIES OF BUYER: Buyer represents and warrants to Seller, which representations and warranties shall be deemed made by Buyer to Seller as of the Effective Date of this Contract and also as of the Closing Date, as follows:

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          (a)           Corporate Status. Buyer is a corporation duly organized and validly existing and in good standing under the laws of the State of Ohio. Buyer has the power and authority to purchase and receive the Property as provided in this Contract and to carry out Buyer's obligations hereunder, and all requisite action necessary to authorize Buyer to enter into this Contract and to carry out Buyer's obligations hereunder has been taken.

          (b)          No Violation, Binding, Effect. The execution, delivery and performance of this Contract by Buyer do not contravene, or constitute a default under, Buyer's articles of incorporation or by-laws or any provision of any agreement, law, rule, regulation, judgment, order, decree or other instrument binding upon Buyer. This Contract has been duly executed and delivered by Buyer and constitutes a valid and binding agreement of Buyer enforceable against Buyer in accordance with its terms.

18.          CONDITIONS PRECEDENT TO PERFORMANCE OF BUYER'S OBLIGATIONS: The obligations of Buyer to purchase the Property under this Contract are subject to the satisfaction at or prior to the Closing Date or waiver by Buyer of the following conditions:

          (a)          No Violations of Law. At the Closing Date there shall exist (i) no law, rule or regulation, (ii) no judgment, order or decree, and (iii) no violation by Seller of any law, rule, regulation, judgment order or decree which makes the transactions (or any part of same) described herein illegal or otherwise prohibited; provided that if such condition cannot be satisfied, Seller shall have the option to elect to exclude one or more Stores from this Contract in accordance with Section 25; and provided further, that this subsection shall not include the existence of any law, rule, or regulation that would otherwise limit or prohibit the transfer of a license or permit (e.g., pharmacy or liquor license).

          (b)           Performance of Agreements. Seller shall have duly performed in all material respects all of its agreements herein that are required to be performed by it at or prior to the Closing Date.

          (c)          Consents. Seller shall have obtained the consent of the landlords, if required, to the assignment of the Store Leases to Buyer, or if such consent cannot be obtained, Buyer shall either (i) purchase the Leased Store Property at the Closing without reduction in the Sales Price, or (ii) elect to exclude the Store from this Contract in accordance with Section 25.

          (d)          Estoppels. Seller shall obtain and deliver to Buyer an estoppel certificate as to each Leased Store Property executed by the landlord thereof, dated within sixty (60) days of the Closing Date and in the form attached hereto as Exhibit P, or a Seller's certificate dated as of the Possession Date certifying to the same matters set forth in the subject estoppel certificate. If a landlord deletes or otherwise fails to address any specific substantive item set forth in the estoppel certificate it receives from Seller, Seller shall deliver a Seller's certificate dated as of the Possession Date covering such deleted or unaddressed item. Such Seller's certificates shall be valid for the remaining

23
term of the Store Lease to which it applies, excluding any renewal period that has not commenced prior to the Closing Date. Seller has delivered to Buyer estoppel certificates from the tenants under the Tenant Leases occupying seventy-five percent 75% or more of the floor space in the Owned Store Properties dated within 180 days prior to the Effective Date. At the Closing, Seller shall deliver to Buyer Seller's certificates dated as of the Possession Date certifying the same matters set forth in such estoppel certificates for the period from the date thereof through the Possession Date, which certificates shall be valid for a period of eighteen (18) months after the Closing Date. If, after the Closing Date, Seller delivers to Buyer an estoppel certificate from any landlord or tenant who did not provide an estoppel certificate prior to the Closing Date, Seller may substitute such estoppel certificate for the corresponding Seller's certificate, and Seller shall be released from any liability with respect there to.

          (e)          Title Insurance. Buyer shall receive at Closing the Title Policy or a final binding Commitment for each Store Property (dated as of the Closing Date) containing no unsatisfied title requirements of Seller and no exceptions to title, except for any Permitted Exceptions.

          (f)          Representations and Warranties. The warranties and representations of Seller contained in this Contract shall be true in all material respects at and as of the Closing Date, except where the failure to be true in all material respects does not (i) prevent or materially impair the operation of the Store Property as a Kroger grocery supermarket in the ordinary course of Buyer's business or (ii) materially and adversely affect the value of the Property.

19.          CONDITION PRECEDENT TO PERFORMANCE OF SELLER'S OBLIGATIONS. The obligations of Seller to sell the Property under this Contract are subject to the satisfaction at or prior to the Closing Date or waiver by Seller of the following:

          (a)          No Violations of Law. At the Closing Date there shall exist (i) no law, rule or regulation, (ii) no judgment, order or decree, and (iii) no violation by Buyer of any law, rule regulation, judgment order or decree which makes the transactions described herein (or any part of same) illegal or otherwise prohibited.

          (b)          Performance of Agreements. Buyer shall have duly performed in all material respects all of its agreements contained herein that are required to be performed by it at or prior to the Closing Date.

          (c)          Representations and Warranties. The warranties and representations of Buyer contained in this Contract shall be true in all material respects at and as of the Closing Date.

20.          INDEMNIFICATION:

          (a)          Indemnification by Seller. Seller agrees to indemnify, defend and hold harmless Buyer from any and all liability, claims, damages, expenses (including reasonable attorneys' fees), judgments, proceedings and causes of action arising out of (i) non-compliance by Seller with any applicable state "Bulk Sales Law" (ii) subject to

24
the Survivability Period, the breach of any warranty or representation of Seller as of the Closing Date (other than those disclosed to Buyer by written notice prior to Closing given by Seller or of which Buyer becomes aware and nevertheless elected to close) which has been claimed by Buyer in accordance with Section 13B, and (iii) the employment of any person at the Store by Seller (including, without limitation, any actual or alleged unfair labor practice, discrimination, wrongful discharge or similar activity) prior to the Closing Date. Seller shall indemnify and hold Buyer harmless for any inadequacy of the WARN ACT (hereinafter defined) notice and from any liability whatsoever, including, without limitation, fines, costs, expenses, reasonable attorney fees, and other payments described in the WARN ACT (hereinafter defined).

          (b)          Indemnification by Buyer. Buyer agrees to indemnify, defend and hold harmless Seller from any and all liability, claims, damages, expenses (including reasonable attorneys' fees), judgments, proceedings, and causes of action arising out of or in any way connected with (i) the use by Buyer of Seller's DEA or States of Ohio and Michigan licenses pursuant to Section 22 below, (ii) the breach of any warranty or representation of Buyer as of the Closing Date (other than those disclosed to Seller by written notice prior to Closing given by Buyer or of which Seller becomes aware and nevertheless elected to close), (iii) the employment of any person at the Store by Buyer (including, without limitation, any actual or alleged unfair labor practice, discrimination, wrongful discharge or similar activity, including those based on actions or inactions of Buyer prior to Closing) on or after the Closing Date or (iv) any Store conversion work undertaken by Buyer in the Store prior to the Closing Date, except as arising from the negligence or willful misconduct of Seller, its agents, employees and contractors.

          (c)          Notice. It is further agreed that in the event of any claim which is indemnified under this Section 20, the indemnitee shall give prompt notice of the claim to the indemnitor and shall cooperate fully with the indemnitor, so that the indemnitor can be responsible for and control the defense and/or settlement of such claim in the indemnitor's sole discretion. In the event the indemnitee shall fail to give such notice or shall settle or otherwise compromise any claim without the written consent of the indemnitor, then the indemnity shall be of no force or effect with respect to such claim. The indemnitee may, at its options and expense, participate in the defense of any claim for which indemnity is sought.

          (d)          Limitations. Seller shall not be liable to Buyer, and Buyer shall not be liable to Seller, for indemnification pursuant to this Section 20 unless (i) the amount of any individual loss or series of related losses exceeds the sum of $25,000 (such losses in excess of $25,000 are each called "Permitted Losses") and (ii) the aggregate amount of all Permitted Losses exceeds a sum equal to $200,000 (the "Floor"), in which event the indemnified party shall be entitled to indemnification for all Permitted Losses in excess of the Floor, up to $3,300,000; provided, however that the Floor and limitation on Permitted Losses shall not be applicable to claims arising from the failure (i) of either party to satisfy any payment obligation under the Store Leases or Permitted Exceptions, or in respect of the assumed liabilities or excluded liabilities with respect to third party claims, (ii) of Buyer to pay the Purchase Price, (iii) of Seller to satisfy any obligations arising under Section 21, including any obligations arising under the WARN ACT, (iv) of either party to pay or reimburse the other party for apportionments provided for herein,

25
and (v) the failure of either party to pay or perform any obligation set forth herein, including the obligations of Seller to remove any Excluded Equipment or Inventory, the obligation of Buyer to pay delinquent rent or Other Tenant Receivables collected by Buyer on Seller's behalf, and the obligations of either party to pay escrow fees, transfer taxes, prorations and apportionments, and to deliver documents and other agreements. Neither party will have any liability for indemnification (i) to the extent it cures the breach within a reasonable period of time following notice from the other party, and (ii) on account of consequential, incidental or indirect damages or losses and, in particular, no "multiple of profits" or other items will be applied in calculating any indemnity amount. In addition, Seller will have no liability for indemnification with respect to the uncollectability of any amounts payable by tenants under the Tenant Leases accruing after the Closing Date. The right of a party to assert indem nification claims and receive indemnification payments pursuant to this Section 20 shall be the sole and exclusive remedy exercisable by that party with respect to any breach by the other party of any provision of this Contract for which indemnification may be sought, and each party hereby irrevocably waives and releases each other from any and all claims and other causes of action relating to this Contract for which indemnification may be sought.

21.          OPERATION OF STORE, EMPLOYEES:

          (a)          Continued Operation. Seller covenants and agrees to maintain the equipment and Store facilities as usual at the Stores, except as expressly provided in this Contract. Notwithstanding any provision in this Contract, Buyer acknowledges and agrees that Buyer is not purchasing a substantial portion of Seller's inventory pursuant to Exhibit F. Accordingly, Seller may sell-down such non-purchased inventory and make reductions in labor and other expenses if and to the extent that sales decline as a result of such inventory sell-down or otherwise. Effective upon the Closing Date, Seller shall terminate its business and employees as provided in Section (b) below.

          (b)          Store Closure. Effective as of the Closing Date, Seller shall (A) terminate the employment of all employees working at the Stores (or transfer such employees to other stores or facilities owned or operated by Seller); and (B) terminate all vendor, distribution and supply agreements applicable with respect to the Stores, except for any Service Contracts Buyer has elected to assume pursuant to this Contract or in writing delivered during the Feasibility Period.

          (c)          Seller's Employee Obligations. Seller shall remain responsible for payment of, and shall pay, all amounts accruing to or for employees of the Stores prior to the effective time of Closing, including expenses for accrued wages and salary, vacation pay, severance pay, COBRA benefits, and other employee benefits. Buyer shall not be responsible for any obligations or accrued obligations of Seller to any of Seller's employees, pursuant to any collective bargaining agreements or otherwise, including without limitation pensions or otherwise, or arising out of services rendered, employment, occurrence, or transaction entered into while employed by Seller. Buyer agrees to interview Seller's employees at the Stores and to consider hiring such employees, but Buyer shall not be obligated to employ or extend any offer of employment to any employee of Seller.

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          Buyer will provide Seller with a list of employees to whom Buyer has made an offer of employment and a list of employees who have accepted offer of employment with Buyer or one of its affiliates. For a period of 120 days after the Closing, Buyer shall promptly notify Seller of the name, date of hire and rate of compensation of any person hired by Buyer or one of its affiliate and who was an employee of Seller or one of its affiliates.

          (d)          Business Taxes. Seller shall file, with respect to the business of the Store, applicable business, sales and use tax returns with all requisite jurisdictions as soon as practicable after the Closing; and upon request, shall furnish to Buyer a receipt, certificate of the taxing authority or other evidence that all taxes have been paid.

22.          PHARMACY ISSUES: Buyer and Seller agree to cooperate with one another in connection with the transfer of existing pharmacy records from Seller to Buyer at Closing in accordance with applicable law. Without limitation, Seller and Buyer both agree to cooperate in effectuating the transfer of the prescription dispensing records and other patient records for at least two (2) years immediately prior to the Closing Date in accordance with board regulations and in a manner to insure the confidentiality, integrity and security of the pharmacy prescription dispensing records, other patient records, and the continuity of pharmacy services at the Store at substantially the same level of that offered by the Seller. Additionally, Buyer agrees to promptly make all applications and post such notices as may be required in connection with Ohio and Michigan law for the transfer of the pharmacy licenses. Seller agrees to grant Buyer or its designee a limited power of attorney und er Seller's "DEA" license or State of Ohio or Michigan license, if any, so as to allow Buyer or its designee to order pharmacy supplies after Closing until Buyer obtains its DEA license. The provisions of this Section 22 shall survive Closing. To the extent required by applicable law, Buyer shall maintain all prescription records for a period of seven years from the Closing Date.

23.          ABC NOTICE: Following the Public Announcement Date (as hereinafter defined), Buyer may post in the Store any notice required for purposes of obtaining liquor licenses from Alcohol Beverage Control authorities.

24.          SHOPPING CENTER NAMES: Notwithstanding the fact that the Excluded Assets includes any shopping center name with the word "Food Town" as a part thereof, in the event that the removal of the "Food Town" name from the signage for any applicable shopping center would cause a violation of any sign and/or zoning ordinance applicable to such shopping center, Buyer shall be entitled to continue to use for a period not to exceed three (3) months the "Food Town" name as part of the shopping center's name and on the shopping center's signage until Buyer is able to obtain any necessary approvals from applicable governmental authorities to remove the "Food Town" name from such shopping center's signage.

25.          EXCLUSION OF STORES.

          (a)          If, under Section 7(b), 7(f), 8(a), 15, 16(a), 16(b), or 18 Buyer or Seller excludes one or more Stores (including all related real and personal property) from this

27
Contract, then the Sales Price shall be reduced by the sum of the allocated values of such Store(s) as set forth on Exhibit G.

          (b)          If Buyer or Seller excludes a particular Store, then Seller shall have the option to exclude from this Contract each other Store (including all related real and personal property) located in the same market (as indicated on Exhibit G) as such excluded Store(s) and the Sales Price shall be further reduced by the sum of the allocated values of such Stores as set forth on Exhibit G; provided that if a Findlay Store is excluded pursuant to Section 18(a), then both Findlay Stores shall automatically be excluded. Seller may exercise this option to exclude Stores in the same market by written notice to Buyer within five (5) business days of its receipt of notice from Buyer of the exclusion of one or more Stores.

          (c)          If three or more Stores are excluded from this Contract (by either Buyer or Seller or a combination of both), then Seller shall have the option to terminate this Contract without obligation or liability of either party. Seller may exercise this termination option by written notice to Buyer at any time following the exclusion of the third Store from this Contract.

26.          MISCELLANEOUS:

          (a)          Except as otherwise provided herein, any notice required or permitted to be delivered hereunder shall be in writing and shall be deemed received when (i) personally delivered, (ii) sent by United States mail, postage prepaid, registered or certified mail, return receipt requested, and properly addressed, (iii) deposited with a nationally recognized overnight courier service, charges prepaid, and properly addressed or (iv) sent by facsimile transmission. For purposes of this Subsection, the addresses of each party shall be that set forth below with a copy to the other addressees set forth below the signature of such party. Either party may change its address for notice from time to time by delivery of at least five (5) days prior written notice of such change to the other party hereto in the manner prescribed herein.

Seller Spartan Stores, Inc. 850 76th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan 49518-8700 Telephone:  (616) 878-2426 Facsimile:  (616) 878-2775 Attn:  David M. Staples          Executive Vice President          And Chief Financial Officer	Buyer The Kroger Co. - Real Estate Dept. 1014 Vine Street Cincinnati, OH 45202-1100 Attn: James E. Hodge Telephone:  (513) 762-4214 Telecopier:  (513) 762-4839
Copy to	Copy to
Warner Norcross & Judd LLP 900 Fifth Third Center 111 Lyon Street, N.W. Grand Rapids, Michigan 49503-2489	The Kroger Co. - Law Dept. 1014 Vine Street Cincinnati, OH 45202-1100 Attn: Patricia Tighe Ash, Esq.

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Telephone:  (616) 752-2000
Facsimile:  (616) 752-2500
Attn:  Alex J. DeYonker Telephone:  (513) 762-4423
Telecopier:  (513) 762-4935

          (b)          This Contract shall be construed under and in accordance with the laws of the State of Ohio, without giving effect to its conflict of law principles.

          (c)          This Contract shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns. Nothing in this Contract, express or implied, is intended to confer upon any other person or entity any rights or remedies under or by reason of this Contract, this Contract being for the exclusive benefit of the parties and their respective successors and authorized assigns.

          (d)          In case any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Contract shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. Furthermore, in lieu of any such invalid, illegal or unenforceable provision, there shall be automatically added to this Contract a provision as similar to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

          (e)          This Contract constitutes the sole and only agreement of the parties hereto with respect to the subject matter hereof and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter hereof and cannot be changed except by their written consent.

          (f)           Time is of the essence with regard to the performance of this Contract.

          (g)           Words of any gender used in this Contract shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

          (h)          The parties may execute this Contract in one or more identical counterparts, all of which when taken together will constitute one and the same instrument.

          (i)          The parties hereto acknowledge that the parties and their respective counsel have each reviewed and revised this Contract, and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Contract or any amendments or exhibits hereto.

          (j)          Buyer may assign this Contract to a subsidiary corporation or affiliate or may designate a subsidiary corporation or affiliate to take title to one or more of the Store Properties, provided (i) such assignment would not delay or prevent the consummation of the transaction contemplated hereby, and (ii) no such assignment or designation shall relieve Buyer of its obligations under this Contract.

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          (k)          Buyer and Seller agree to consult and cooperate in the release of public information concerning the transaction contemplated by this Contract. Neither party shall make any public announcement of the transaction or the existence of this Contract, without the prior written consent of the other party, prior to Initial Closing Date at which time all parties hereto shall issue a mutually agreeable press release (the "Public Announcement") as further described herein. The parties agree to furnish each other with draft copies of the Public Announcement before the Initial Closing Date so that all parties may agree on the content and wording contained in such Public Announcement. Prior to the Initial Closing Date, Buyer and/or its affiliates shall be prohibited from discussing the transaction described herein with any Store employees. Nothing contained herein shall prevent either party at any time from promptly furnishing any information or m aking any public announcement required by law, or governmental authority, the Nasdaq Stock Market, or the New York Stock Exchange with respect to the transaction.

          (l)          Buyer (as Seller's landlord) hereby consents to the assignment by Seller (as tenant) of its real property lease to a third-party in connection with Seller's divestiture of its Bellevue, Ohio location (Seller's store #6063), provided Seller shall remain principally liable for tenant's obligations under such lease.

EXHIBITS:
A -	List of Owned Store Properties
A-1 -	Legal Descriptions of Owned Store Properties
B -	List of Leased Store Properties
B-1 -	List of Leases
C -	Retained Equipment List
D -	List of Tenant Leases
E -	List of Service Contracts
F -	Inventory Procedures
G -	Allocation of Sales Price
H -	[Reserved]
I -	Form of Assignment and Assumption of Leasehold Agreement
J -	[Reserved]

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K -	Form of Assignment and Assumption of Contracts
L -	Form of Assignment and Assumption of Tenant Leases
M -	Defaults under Tenant Lease
N -	Litigation
O -	Violation of Laws
P -	Form of Estoppel Certificate

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          IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed as of the day and year first above written.

SELLER:
SEAWAY FOOD TOWN, INC.
By:	/s/ David M. Staples
	Name: David M. Staples
	Title: Treasurer
GRUBER'S FOOD TOWN, INC.
By:	/s/ David M. Staples
	Name: David M. Staples
	Title: Treasurer
BUCKEYE REAL ESTATE MANAGEMENT CO.
By:	/s/ David M. Staples
	Name: David M. Staples
	Title: Treasurer
GRUBER'S REAL ESTATE, L LC
By:	/s/ David M. Staples
	Name: David M. Staples
	Title: Treasurer
BUYER:
THE KROGER CO.
By:	/s/ James E. Hodge
	Name: James E. Hodge
	Title: Vice President

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EX-10

EXHIBIT 10.21

PURCHASE AGREEMENT

BETWEEN

MARKET DEVELOPMENT CORPORATION,

AS SELLER,

AND

NEW PLAN EXCEL REALTY TRUST, INC.,

AS BUYER

DATED:          JANUARY 2, 2003

INDEX

		Page
1.	Sale and Purchase of the LLC	2
2.	Purchase Price	3
3.	Conditions Precedent to Buyer's Oblilgations	4
4.	Conditions Precedent to Seller's Obligations	9
5.	Failure to Satisfy Conditions Precedent	9
6.	Operation of the Properties Prior to Closing	9
7.	Additional Covenants of Seller	11
8.	Closing	12
9.	Condition of Property	20
10.	Seller's Representations, Warranties and Covenants	22
11.	Buyer's Representations and Warranties	33
12.	Commissions	34
13.	Confidentiality	34
14.	Damage or Destruction	35
15.	Condemnation	36
16.	Notices	37
17.	Default	38
18.	Reimbursement Amount	38
19.	Attorney's Fees	39
20.	1031 Transaction	39
21.	Public Announcements	40
22.	Survival	40
23.	Miscellaneous	40

i

PURCHASE AGREEMENT

                    THIS PURCHASE AGREEMENT (the "Agreement") is made as of January 2, 2003, between NEW PLAN EXCEL REALTY TRUST, INC., a Maryland corporation ("Buyer"), and MARKET DEVELOPMENT CORPORATION, a Michigan corporation ("Seller"). Buyer and Seller are sometimes referred to individually in this Agreement as a "Party" and collectively as the "Parties."

RECITALS:

                    A.          Seller has established a new Delaware limited liability company to be known as MDC Shopping Center, LLC (the "LLC") of which Seller is the sole member and own one hundred (100%) percent of the membership interests thereof and, subject to the terms and conditions of this Agreement, Seller plans to transfer to the LLC the following:

                         (i)          The fee simple estate in and to the parcels of land described in Exhibit A attached hereto (the "Land") together with the buildings and all other improvements located thereon ("Improvements") for the seven (7) shopping centers listed on Exhibit A, together with all easements, rights of way, reservations, privileges, appurtenances, hereditaments and other estates and rights appertaining thereto including, without limitation, all of Seller's right, title and interest, if any, in and to the streets and roads adjacent thereto to the center line thereof, any strips and gores adjacent to the Land, any alleys adjacent to the Land, any award hereafter made (or to be hereafter made in lieu thereof) for any taking by condemnation and any damages to be paid hereafter with respect to the Land or the Improvements by reason of a change of grade of any stre et, road or avenue (the Land and Improvements for each shopping center are individually referred to herein as a "Property" and the Land and Improvements for all seven (7) shopping centers are herein collectively referred to as the "Properties");

                         (ii)          All of Seller's right, title and interest in and to all machinery, apparatus, equipment, fittings and fixtures in or on, or used in connection with the Properties and which are attached thereto ("Fixtures");

                         (iii)          All of Seller's right, title and interest in and to all of the personal property located in or on any of the Properties ("Personal Property"). Notwithstanding the foregoing, Personal Property does not include Seller's office equipment located at the Kentwood Shopping Center;

                         (iv)          All of Seller's right, title and interest in, to and under all rights, if any, to the names or trade names and/or logos (collectively "Trade Names") used in connection with the Properties; provided that the name "Market Development Corporation" shall not be included;

                         (v)          The interest of Seller, as landlord, in all occupancy leasehold estates created by those certain leases, license agreements, tenancies and rental agreements and all amendments thereto, and guaranties of obligations thereunder relating to the Properties, including, without limitation, those that are described in the Lease Schedule attached hereto as

Schedule 10(h) together with additional occupancy leases, tenancies and rental agreements entered into by Seller in accordance with the terms of this Agreement (hereto collectively referred to as the "Leases"; and the tenants and/or licensees under the Leases are herein, collectively, referred to as the "Tenants") and all unaccrued, prepaid rents and unapplied security deposits, if any, and non-cash security, if any, held by landlord under the Leases;

                         (vi)          All of Seller's right, title and interest in, to and under all assignable warranties and guarantees, if any, issued in connection with the Properties including, without limitation, the warranties and guaranties listed on Schedule 10(gg) hereof (collectively, the "Assignable Warranties");

                         (vii)          All of Seller's right, title and interest in, to and under all consents, authorizations, variances or waivers, licenses, permits and approvals from any governmental or quasi-governmental agency, department, board, commission, bureau or other entity or instrumentality relating to the Properties (collectively, the "Approvals");

                         (viii)          All of Seller's right, title and interest in, to and under all written agreements and contracts, including, without limitation, personal property leases and service contracts (other than the Leases and the Permitted Exceptions as hereinbelow defined) to which Seller is a party which affect the Properties and which Buyer agrees the LLC will assume ("Contracts"), a schedule of which is attached as Schedule 10(i);

                         (ix)          All of Seller's right, title and interest in, to and under all plans and specifications and blueprints (collectively, the "Plans"), if any, related to the Land and the Improvements; and

                         (x)          All of Seller's right, title and interest in and to the Property Files (as defined below), subject to Seller's right to access or copy the Property Files upon request.

                         Except as herein otherwise specifically provided, it is intended that Seller shall transfer to the LLC all of its interests of every kind or nature in the Properties, the Fixtures, the Leases, the Contracts, the Personal Property, Trade Names, the Assignable Warranties, the Approvals, the Plans, the Property Files, and all other interests of Seller in and to the Properties (individually a "Center" and collectively, the "Centers").

                    B.          Subject to the terms and conditions set forth below, Seller desires to sell to Buyer Seller's entire right, title and interest in, to and under the LLC, and Buyer desires to purchase from Seller, Seller's entire right, title and interest in, to and under the LLC provided that the LLC shall theretofore have acquired the Centers pursuant to the terms of this Agreement.

                    NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and promises of the Parties set forth herein, the parties agree as follows:

1.          Sale and Purchase of the LLC. On the terms and subject to the conditions of this Agreement:

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(a)          At or prior to the Closing (as defined below), Seller will transfer the Centers to the LLC; and

(b)          At the Closing, Seller will sell and transfer to Buyer, and Buyer will purchase from Seller, one hundred percent (100%) of the membership interests in the LLC together with the sole and exclusive right to manage and operate the LLC including, without limitation, the rights to all profits, losses, distributions, voting rights and capital accounts and all right, title and interest in the Certificate of Formation of the LLC in the form of Exhibit B attached hereto and the LLC Agreement in the form of Exhibit C attached hereto (collectively, the "LLC Interest"). Following such sale and transfer, Seller shall own the entire LLC Interest and therefor, through the LLC, all of the Centers.

2.          Purchase Price. The purchase price for the LLC to be paid by Buyer to Seller will be the sum of Forty-Six Million and no/100 U.S. dollars (U.S. $46,000,000.00) (the "Purchase Price"). The portion of the Purchase Price allocated to each Center is set forth on Exhibit D attached hereto. Buyer has tendered and deposited One Million and no/100 U.S. dollars (U.S. $1,000,000.00) as earnest money (together with all interest earned thereon, the "Deposit") to be applied against the Purchase Price at Closing. The Deposit will be held in escrow by Transnation Title Company ("Title Company"), 921 North Division, Grand Rapids, Michigan 49503, as escrow agent. The balance of the Purchase Price, plus or minus prorations and other adjustments as hereinafter provided, will be paid at the Closing by wire transfer of immediately available funds pursuant to written instructions sent by Seller to Buyer. Title Company shall acknowledg e receipt of the Deposit, subject to collection, and shall hold the Deposit in escrow and disburse the Deposit in accordance with the terms set forth below:

(a)          Title Company shall deliver the Deposit to Seller (i) upon the Closing hereunder or (ii) in the event that Seller makes a written demand therefor stating that Buyer has failed to perform Buyer's obligation to close the transaction in accordance with the terms of this Agreement.

(b)          Title Company shall return the Deposit to Buyer in the event that Buyer makes a written demand therefor stating that Seller has failed to perform Seller's obligations hereunder or that Buyer is entitled to the Deposit pursuant to the provisions of this Agreement.

(c)          In the event that Title Company intends to release the Deposit to either Party pursuant to subparagraph (a)(ii) or (b) above, then Title Company shall give to the other Party not less than ten (10) business days prior written notice of such fact, and if Title Company actually receives written notice during such ten (10) business day period that such other Party objects to the release, then Title Company shall not release the Deposit and any such dispute shall be resolved as provided herein. Notwithstanding anything herein to the contrary, in the event Buyer shall timely exercise its right pursuant to Section 3(c) hereof to terminate this Agreement on or before the expiration of the Inspection Period (as defined below), the Title Company shall automatically refund the Deposit to the Buyer

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without delivery of the written notice otherwise required pursuant to the preceding sentence.

(d)          If the Deposit will be held by Title Company for more than two (2) business days, Title Company shall invest the Deposit in an interest bearing F.D.I.C. insured account at a commercial bank. All interest earned on the Deposit shall belong to the Party entitled to receive the Deposit. Buyer shall be responsible for paying all taxes on any interest earned on the Deposit, which obligation shall survive the Closing.

(e)          Title Company may not commingle the Deposit with other funds held in its "trustee's account."

(f)          In the event that a dispute shall arise as to the disposition of the Deposit or any other funds held hereunder in escrow, Title Company shall have the right, at its option, to either hold the same or deposit the same with a court of competent jurisdiction pending decision of such court, and Title Company shall be entitled to rely upon the decision of such court.

(g)          Title Company shall have no liability whatsoever arising out of or in connection with its activity as escrow agent provided it does not act in bad faith and Seller and Buyer jointly and severally agree to indemnify and hold harmless Title Company from all loss, cost, claim, damage, liability and expenses (including reasonable attorneys' fees) which may be incurred by reason of its acting as escrow agent unless caused by Title Company's bad faith or willful disregard of the escrow provisions in this Section 2.

(h)          Title Company shall be entitled to rely upon any judgment, certification, demand or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein, the propriety or validity thereof, or the jurisdiction of a court issuing any such judgment. Title Company may act in reliance upon (i) any instrument or signature believed to be genuine and duly authorized, and (ii) advice of counsel in reference to any matter or matters connected therewith.

(i)          In the event of a dispute concerning disposition of the Deposit, the Party to whom the Deposit is finally awarded by a court of competent jurisdiction shall be entitled to be reimbursed by the other Party for its reasonable legal fees incurred in the dispute.

                    Title Company has executed this Agreement to acknowledge and agree to the terms and conditions of this Section 2 relating to the holding and disbursement of the Deposit.

3.          Conditions Precedent to Buyer's Obligations. Buyer's obligation to purchase the LLC Interest will be conditioned upon satisfaction of the following conditions, which shall be solely for the benefit of the Buyer, and may be waived at any time by Buyer, and

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if not satisfied, Buyer shall have the right to terminate this Agreement by giving written notice of termination to Seller in which event the Termination Remedy (as defined below) shall apply.

(a)          Title.

(i)          Seller has delivered to Buyer title insurance commitments (together with all underlying recorded instruments referenced therein) for the Properties ("Title Commitments") issued by the Title Company. Seller has delivered to Buyer ALTA surveys of the Properties certified to the Title Company, the LLC and Buyer ("Surveys"). No later than January 3, 2003 ("Title Review Period"), Buyer shall furnish Seller with a written statement of objections, if any, to the title to each of the Properties as reflected in the Title Commitments and on the Surveys ("Objections"). If an update or endorsement to any of the Title Commitments delivered to Buyer ("Title Update") or any revision to a Survey ("Revised Survey") discloses a title matter that was not disclosed in a Title Commitment, on a Survey, in a previous Title Update or on a previous Revised Survey, Buyer shall deliver to Seller no later than January 3, 2003 ("Title Update Review Per iod") a written Objection to any matter first disclosed in the Title Update and/or on the Revised Survey accompanied by a copy of the Title Update or Revised Survey (as applicable). Should Buyer fail so to notify Seller of any Objections to title to the Properties which are contained in the Title Commitments or any Title Updates, or on the Surveys or any Revised Survey, Buyer shall be deemed to have agreed to accept title conveyed by Seller to the LLC subject to all matters reflected in the Title Commitments and any Title Updates and to the state of facts shown on the Surveys and any Revised Surveys. All title matters and exceptions set forth in the Title Commitments and any Title Updates and the state of facts shown on the Surveys and any Revised Surveys which are not Objections, or which are thereafter waived by Buyer as hereinafter provided, and the rights of the Tenants under the Leases as tenants only, shall be referred to herein as the "Permitted Exceptions".

          If Buyer notifies Seller within the Title Review Period or the Title Update Review Period, as applicable, of Objections, then prior to the Closing, Seller shall notify Buyer in writing ("Seller's Title Response Notice") of the Objections which Seller agrees to satisfy on or prior to the Closing, at Seller's sole cost and expense, and of the Objections that Seller cannot or will not satisfy. Notwithstanding the foregoing sentence, Seller shall, in any event, be obligated to satisfy those Objections (i) that are monetary liens or security interests or other encumbrances against any of the Properties that by their terms can be satisfied for a liquidated sum of money, and/or (ii) that have been placed against any of the Properties by Seller or the LLC in violation of this Agreement and that will not

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otherwise be satisfied on or before the Closing. For purposes of this Agreement, Seller may "satisfy" any Objection by discharging, terminating or otherwise eliminating the lien, document or other encumbrance that is the subject of the Objection such that it is omitted from the applicable Title Policy (as hereinafter defined) or by obtaining affirmative title insurance against collection with respect to any Objection that is a lien, security interest, or other encumbrance that can be satisfied for a liquidated sum of money. Buyer shall have the right to use any portion of the Purchase Price to pay and satisfy (or to cause the Title Company to provide affirmative insurance against) any of the Objections listed in clause (i) of the second sentence of this paragraph which Seller is obligated to satisfy. If Seller chooses not to satisfy any of the Objections that Seller is not obligated to satisfy, Seller shall notify Buyer thereof prior to the Closing, and then Buyer shall have the option of either (i) terminat ing this Agreement by giving written notice of termination to Seller, whereupon the Termination Remedy shall apply or (ii) electing to consummate the purchase of the LLC Interest, in which case Buyer shall be deemed to have waived such Objections and such Objections shall become "Permitted Exceptions". "Termination Remedy" means that the Party entitled to the remedy may terminate this Agreement by notice to the other Party, in which case the Deposit will be returned to Buyer, and neither Party will have any further liability to the other under this Agreement, except (a) to make any payment of the Reimbursement Amount as required under Section 18 hereto, and (b) under any provisions of this Agreement that specifically survive its termination.

(ii)          It is a condition to Buyer's obligation to close that the Title Company shall be irrevocably committed to issue standard American Land Title Association Owners Title Policies (on the current form) (individually, a "Title Policy" and collectively, the "Title Policies") to the LLC, concurrently with Buyer's acquisition of the LLC Interest, for each of the Properties in the amount of the Purchase Price, insuring that the LLC has good, marketable and indefeasible fee simple title to each of the Properties, subject only to the Permitted Exceptions applicable to the particular Property. The total amount of coverage for each Title Policy shall be as set forth on Exhibit E annexed hereto. The Title Policies shall be in the form and shall include such endorsements and affirmative coverages, including, without limitation, the endorsements and affirmative coverages listed on Schedule 3(a)(ii) attached hereto as shall be contained in "Specimen Title P olicies" for each of the Centers to be delivered by the Title Company to Buyer and approved by Buyer prior to the Closing.

(b)          UCC Search. Seller will transfer the Personal Property to the LLC by a bill of sale ("Bill of Sale") in the form of Exhibit F attached hereto. Seller shall obtain and deliver to Buyer prior to the Closing (as hereinafter defined) Uniform Commercial Code searches of Seller's name and the LLC's name ("UCC

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Search") by the Michigan Secretary of State and the applicable county clerk's office for each of the counties where the Properties are located with respect to the Seller and by the Delaware Secretary of State with respect to the LLC. Seller shall be obligated to transfer the Personal Property to the LLC free and clear of all liens and encumbrances.

(c)          General Inspection. For a period beginning December 18, 2002 and expiring on the Closing Date (as defined below) (the "Inspection Period"), Buyer and its agents have had and will have the right to make, at Buyer's sole cost and expense: (i) a physical inspection of the Improvements; (ii) an environmental investigation of the Properties (subject to the terms and restrictions set forth in Section 9 below); and (iii) such other reviews and inspections of the files, books and records pertaining to the Properties and/or interviews of Tenants, Contract vendors and/or governmental agencies and/or officials as Buyer has deemed or shall deem necessary or desirable in connection with its due diligence investigations of the Properties provided, however, that Buyer's activities hereunder will not damage the Properties, unreasonably disrupt any business operations thereon, or endanger, or otherwise constitute a nuisance to persons or improvement s at the Properties.

          Buyer's access to, and inspection of, the Properties has been and will be at Buyer's sole risk and expense and Seller will have no responsibility therefor. Buyer will immediately repair any loss or damage to the Properties caused by the acts of Buyer in connection with its inspection or testing of the Properties hereunder. Buyer will indemnify and hold Seller harmless from and against any and all liability, loss, damage, cost or expense (including court costs and reasonable attorneys' fees) (collectively "Liabilities") incurred by Seller, of whatever nature and by whomever asserted, arising out of, resulting from or in any way connected with the acts of Buyer, its employees, agents or contractors ("Buyer's Agents") in connection with Buyer's access to, and inspection of the Properties hereunder, provided that the foregoing indemnification shall not apply to any Liabilities relating to or arising out of pre-existing conditions. The obligations of Buyer under this paragraph shall survive the Closing or the termination of this Agreement.

          On or before the expiration of the Inspection Period, Buyer, in its sole and absolute discretion, shall have the right to terminate this Agreement by giving written notice of termination to Seller. In the event Buyer timely exercises its right to terminate this Agreement pursuant to this Section 3(c), the Termination Remedy shall apply.

(d)          Estoppel Certificates. Seller has used diligent and good faith efforts to obtain and deliver to Buyer at or before the Closing, Approved Estoppel Certificates (as hereinafter defined) addressed to the Buyer and the LLC dated no earlier than thirty (30) days prior to the Closing Date duly executed by each of the Tenants of the Properties. Seller has prepared estoppel certificates for each

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Tenant of the Properties using an estoppel certificate in the form of Exhibit G attached hereto, and submitted same to Buyer for its review and approval. The estoppel certificate for each Tenant approved by Buyer, including any estoppel certificate approved by Buyer after negotiation with the Tenant, is herein referred to as the "Approved Estoppel Certificate." The Approved Estoppel Certificates executed by each of the Tenants without discrepancy, adverse claim or exception are herein referred to as the "Tenant Executed Estoppels." At or prior to the Closing, Seller shall deliver to Buyer copies of all Tenant Executed Estoppels obtained by Seller as of such date. In the event Seller shall not have obtained Tenant Executed Estoppels from all of the Tenants listed on Exhibit G-1 ("Required Tenants") hereto with respect to each Center ("Required Tenant Executed Estoppels"), Buyer shall have the right to terminate this Agreement by giving written notice of terminati on to Seller, in which event the Termination Remedy shall apply. In the event that Seller shall not have obtained Tenant Executed Estoppels from one hundred (100%) percent of the Tenants of the Properties other than the Required Tenants ("Non Required Tenants") at the time of the Closing, Seller shall execute and deliver to Buyer at the Closing, an estoppel certificate ("Seller Executed Estoppel") in the form of the applicable Approved Estoppel Certificate with respect to any Non Required Tenants who did not execute and deliver an Approved Estoppel Certificate. In the event that any Non Required Tenant executes and delivers an estoppel certificate alleging any default, claim or right of offset, Seller shall either cure any such default or settle any such claim or right of offset prior to Closing or Seller shall execute and deliver to Buyer at the Closing an estoppel certificate ("Seller Executed Disputed Estoppel") in the form of the applicable Approved Estoppel Certificate with res pect to such Non Required Tenant that delivered an estoppel certificate alleging a default, claim, or right of offset. The obligation of Seller under the Seller Executed Estoppels and the Seller Executed Disputed Estoppels shall be covered by an indemnification agreement to be executed at Closing by Seller and Spartan Stores, Inc., a Michigan corporation ("Spartan") with respect to the statements set forth therein in the form of Exhibit H attached hereto (the "Indemnification Agreement").

(e)          Seller's Representations. The representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date both individually and in the aggregate.

(f)          Seller's Covenants. Seller shall have complied with all of its covenants and agreements contained in this Agreement prior to the Closing.

(g)          Adverse Changes. There shall be no material adverse change in either the financial condition of any of the Properties or the physical condition of any of the Properties prior to the Closing, subject to the provisions of Sections 14 and 15 hereof relating to damage, destruction and condemnation.

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(h)          Amendments. Amendments to the Leases with D & W Food Centers, Inc. ("D&W") and V. G.'s Food Center, Inc. ("VG") in the forms of Exhibit I annexed hereto shall have been executed and delivered by Seller, as landlord, and D&W or VG, as applicable.

(i)          New Kentwood Lease. Seller shall have executed and delivered a new lease for its premises at Kentwood Shopping Center in the form of Exhibit T annexed hereto ("New Kentwood Lease").

(j)          ABN-AMRO Release. ABN-AMRO shall have satisfied or released of record, at or prior to the Closing, all liens, deeds of trust, mortgages, security interests, collateral assignments, UCC-1 Financing Statements or similar security documents affecting the Centers and securing any indebtedness to ABN-AMRO.

(k)          No LLC Liabilities. The LLC shall have no liabilities or obligations except for the Leases and Contracts assumed by the LLC pursuant to the terms hereof.

(l)          Corporate Approvals. Copies of all authorizations and approvals required on the part of Seller and Spartan to make this Agreement and the agreements, transactions and closing documents (including, without limitation, the Indemnification Agreement) contemplated herein valid, binding, and enforceable obligations of Seller and Spartan and incumbency certificates with respect to the officers of Seller and Spartan executing the closing documents shall be delivered to Buyer.

4.          Conditions Precedent to Seller's Obligations. Seller's obligations to sell the Properties will be conditioned upon satisfaction of the following conditions, which shall be solely for the benefit of Seller, and may be waived at any time by Seller, and if not satisfied, Seller shall have the right to terminate this Agreement by giving written notice of termination to Buyer in which event the Termination Remedy shall apply:

(a)          Consent to Kentwood Lease Assignment. At Closing, Buyer shall cause the LLC to execute a consent to the assignment of the Kentwood D&W Lease in the form of Exhibit J attached hereto.

5.          Failure to Satisfy Conditions Precedent. If this Agreement is terminated due to the failure to satisfy any condition precedent set forth in Section 3 or 4 hereof, the Termination Remedy shall apply.

6.          Operation of the Properties Prior to Closing. From the date hereof until the Closing, or the termination of this Agreement, whichever shall first occur, Seller shall (and shall cause the LLC to) (a) continue to operate the Properties in the manner in which it presently operates the Properties; (b) perform and/or comply with all of Seller's obligations under the Leases and Contracts; (c) not apply any tenant security deposits or draw upon any letters of credit posted by a tenant as security without Buyer's written

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consent; (d) maintain the existing insurance covering the Properties or if any of such policies is expiring such policies shall be replaced with new policies containing the same coverage; (e) not place any mortgage or any other encumbrance, easement, covenant, condition, right-of-way or restriction on the Properties without Buyer's written consent; (f) not intentionally take any action that has a material adverse effect on title to any of the Properties as same exist on the date hereof; (g) not remove any of the Personal Property unless Seller replaces the same with personal property of the same quality and utility; (h) continue to maintain the Properties in their present order and condition, make all reasonably necessary repairs, replacements and/or improvements thereto (including any repairs, replacements and/or improvements necessary to cure any violation notices issued prior to the date of this Agreement ("Existing Violations") by any governmental authority) and deliver the Properties at the Closing in substantially the same condition they are in on the date of this Agreement (but free and clear of any Existing Violations), reasonable wear and tear and damage by fire or other casualty or by condemnation excepted; (i) give prompt written notice to Buyer of any fire or other casualty affecting any of the Properties after the date of this Agreement; (j) deliver to Buyer, promptly after receipt or issuance by Seller, copies of (i) all written default and other material notices to and from Tenants of the Properties; (ii) all written default and other material notices from the service providers under any Contracts; and (iii) all written notices of any violations issued by governmental authorities with respect to the Properties and any other material notices received from any governmental authority with respect to the Properties; (k) maintain in full force and effect all Approvals and timely apply for renewals of all such Approvals which will expire before the Closing; (l) not alter, amend or become a party to any new Contract without Buyer's written consent, unless the Contract is terminable on or before the Closing Date without payment or premium; (m) not terminate any Lease, or voluntarily accept a surrender of the leased premises thereunder prior to the expiration of the applicable Lease, without Buyer's written consent (n) not offer the Properties or any part thereof for sale to any other person or entity or enter into a contract or letter of intent for the sale of the Properties or any portion thereof to any other person or entity; (o) Subject to Section 8(c) pay all real estate taxes and assessments before they become subject to any penalty or interest; and (p) at or prior to the Closing, pay or satisfy any commission or referral fee with respect to any Lease. If Seller is unable to cure any Existing Violation at or before the Closing, Seller shall have the right and obligation, in lieu of curing any such Existing Violation, to deposit in escrow with the Title Company at Closing a sum of mon ey sufficient to cure any such Existing Violation.

          Between the date hereof and the Closing, Seller shall not (and shall not permit the LLC to) enter into any new Lease without Buyer's written consent, nor shall it amend, modify, extend or terminate any Lease or grant any rent abatement or concessions without obtaining Buyer's written consent, unless such new Lease, renewal of a Lease or amendment, modification or termination or rent abatement or concession is expressly provided for in an existing Lease. Seller shall advise Buyer of any proposed amendment, modification or termination of a Lease or any proposed new Lease in writing, including the identity of the proposed tenant, together with (y) a summary of the terms thereof in reasonable detail and (z) a statement of the amount of any brokerage commissions and any other costs or expenses that Seller will incur in connection therewith, including,

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without limitation, tenant inducement (including tenant improvements) costs and the terms of payment thereof and Buyer shall notify Seller in writing within three (3) business days of receipt of its consent thereto or of any objections thereto together with the reasons therefor. Between the date hereof and Closing or the earlier termination of this Agreement, Seller will not consent (and will not permit the LLC to consent) to any request by a Tenant for permission to assign its Lease or sublet its leased premises (or any part thereof) to the extent Seller or the LLC, as landlord, has the right to approve or consent to such assignment or subletting without obtaining Buyer's written consent thereto. The obligations of Seller contained in this Section 6 shall be covered by the Indemnification Agreement to be executed by Seller and Spartan at the Closing.

7.          Additional Covenants of Seller. Seller covenants and agrees as follows:

(a)          Seller shall pay all tenant improvement allowances or inducements and all leasing commissions owing with respect to any existing Leases and/or new Leases entered into between the date hereof and the Closing. Seller shall pay all free rent owing under the Leases listed on Schedule 10(h) with respect to the period from and after the Closing Date. The obligations in this Section 7(a) shall survive the Closing;

(b)          Seller will convey to the LLC or to Buyer all of the Properties and any other real property and improvements located adjacent to and abutting any of the Properties which are owned by Seller or any affiliate of Seller. The obligations in this Section 7(b) shall survive the Closing;

(c)          Seller shall be obligated to convey fee title to the Centers to Buyer upon the terms and subject to the conditions of this Agreement in the event Seller shall have failed to convey the Centers to the LLC prior to the Closing as contemplated in this Agreement;

(d)          Seller covenants and agrees that Seller shall cause ABN-AMRO to satisfy or release of record, at or prior to the Closing, all liens, deeds of trust, mortgages, security interests, collateral assignments, UCC-1 Financing Statements, or similar security documents affecting the Centers and securing any indebtedness to ABN-AMRO. At the Closing, the LLC will own the Centers free and clear of all mortgages, deeds of trust, liens, security interests, rights of first refusal and purchase options;

(e)          Seller has used good faith efforts to obtain and deliver to Buyer estoppel certificates (the "REA Estoppel Certificates") in the form of Exhibit K attached hereto executed and delivered by the parties listed in Exhibit K-1 with respect to the monetary obligations of the parties under the reciprocal easement agreements listed in Exhibit K-1. Because Seller has not obtained the REA Estoppel Certificates from all of the parties listed in Exhibit K-1 as of the Closing Date, Seller shall execute and deliver to Buyer at the Closing, an estoppel certificate ("Seller Executed REA Estoppel") in the form of the applicable REA Estoppel Certificate with respect to any party who did not execute and deliver a REA

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Estoppel Certificate. The obligation of Seller under any Seller Executed REA Estoppels shall be covered by the Indemnification Agreement to be executed by Seller and Spartan at the Closing;

(f)          Upon request by the LLC or Buyer following the Closing, Seller shall send monthly rent invoices for the month of February, 2003 to Tenants of the Centers acquired by the LLC or the Buyer, which obligation shall survive the Closing. The obligation contained in this Section 7(f) shall survive the Closing; and

(g)          Seller shall not incur any expenses or liabilities with respect to the operation of the Centers for the period from and after January 1, 2003 except for the snow removal Contracts listed on Schedule 10(i) hereof. The obligation contained in this Section 7(g) shall survive the Closing.

          The obligations of Seller contained in this Section 7 shall be covered by the Indemnification Agreement to be executed and delivered by Seller and Spartan at the Closing.

8.          Closing.. Provided that all of the conditions precedent to Buyer's obligation to close set forth in Section 3 hereof have been satisfied, the Closing of the transaction contemplated by this Agreement (the "Closing") will take place at the office of Seller's counsel on January 3, 2003 (the "Closing Date"). All wire transfers of the Purchase Price shall be received from Buyer by the Title Company by 1:00 P.M. (Eastern Standard Time) on the Closing Date. Notwithstanding any other time periods provided for under this Agreement but subject to the provisions of this first paragraph of Section 8, if the Closing does not occur and conclude on the Closing Date, either Party shall have the right to exercise the Termination Remedy provided that a Party shall not have the right to exercise the Termination Remedy if it is in default under this Agreement. The Closing Date with respect to any one or more of the Centers may be delayed by Buyer if any of the conditions precedent set forth in Sections 3(f), 3(h), 3(i), 3(j) or 3(l) hereof shall not have been satisfied; provided, however, that (i) Buyer shall waive all other conditions precedent to Buyer's obligations under this Agreement, and (ii) if the Closing does not occur and conclude by January 31, 2003, either Party shall have the right to exercise the Termination Remedy provided that a Party shall not have the right to exercise the Termination Remedy if it is in default under this Agreement. Any such delay in the Closing Date shall apply only to the Center or Centers with respect to which the conditions precedent set forth in Section 3(f), 3(h), 3(i), 3(j) or 3(l) hereof have not been satisfied, and Buyer shall complete the Closing with respect to all other Centers on January 3, 2003. The Deposit shall be applied against the portion of the Purchase Price allocated to the last Center purchased by Buyer. Notwithstanding any other time periods provided for in this Agreements, Closing sh all not be delayed past January 3, 2003, except as provided in this first paragraph to Section 8.

(a)          Seller's Obligations. At or prior to Closing, Seller will execute, acknowledge (if applicable) and deliver and/or undertake, as applicable, all of the following:

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(i)          Deeds. Deliver to the LLC general warranty deeds for each Property in form suitable for recording, duly signed and acknowledged by Seller, conveying fee simple title to the Properties to the LLC, subject only to the Permitted Exceptions applicable to the particular Property.

(ii)          Possession. Deliver to the LLC possession of the Properties, subject only to the Permitted Exceptions.

(iii)          Land Division. Grant to the LLC the right to make the maximum number of available division(s) under Section 108 of the Land Division Act, Act No. 288 of the Public Acts of 1967, as amended ("Act"). Except as otherwise provided in this Agreement, the division rights will be transferred without any representation or warranty regarding the number, extent or nature of the division or redivision rights or rights to create parcels owned or transferred by Seller to the LLC.

(iv)          Instrument of Assignment - LLC. Deliver to Buyer an Instrument of Assignment in the form of Exhibit L sufficient to transfer the LLC Interest to Buyer.

(v)          Certified Resolutions. Deliver to Buyer certified copies of all authorizations and approvals required on the part of Seller and Spartan to make this Agreement and the agreements, transactions and closing documents (including, without limitation, the Indemnification Agreement) contemplated herein valid, binding and enforceable obligations of Seller and Spartan and incumbency certificates with respect to the officers of Seller and Spartan executing the closing documents.

(vi)          Lease Update. Deliver to Buyer a schedule for each Property updating and recertifying (in the manner provided in Section 10) the information contained in the Lease Schedule (as defined below) for each Property.

(vii)          Lease Assignments. Deliver to Buyer separate fully-executed assignments of Seller's interest in the Leases to the LLC and an assumption by the LLC for each Property in the form of Exhibit M attached hereto and made a part hereof, together with the original copies of the same (or photocopies if the originals are not in Seller's possession or control).

(viii)          Notices to Tenants. Deliver to Buyer at the Closing, notices to all Tenants of the Properties advising them of the transfer of title to the applicable Property to the LLC in the form of Exhibit N attached hereto and made a part hereof together with stamped and addressed envelopes with certified mail/return receipt cards.

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(ix)          Other Assignments. Deliver to the LLC separate assignments of Seller's Assignable Warranties, Approvals, Trade Names, Plans, Property Files, and other intangible property relating to each of the Properties in the form of Exhibit O attached hereto and made a part hereof.

(x)          Update Certificate. Deliver to Buyer a certificate in the form of Exhibit P attached hereto and made a part hereof to the effect that all representations and warranties made by Seller in Section 10 of this Agreement continue to be true and correct in all material respects on the Closing Date and that Seller has complied with (and has caused the LLC to have complied with) all of the covenants and agreements of Seller set forth in this Agreement.

(xi)          FIRPTA Affidavit. Deliver to Buyer a FIRPTA Affidavit stating that Seller is not a foreign person (as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder).

(xii)          Tenant Estoppels. Deliver to Buyer the Tenant Executed Estoppels, the Seller Executed Estoppels and the Seller Executed Disputed Estoppels required pursuant to Section 3(d) hereof.

(xiii)          REA Estoppels. Deliver to Buyer The REA Estoppel Certificates and the Seller Executed REA Estoppel Certificates required pursuant to Section 7(e).

(xiv)          Lease Amendments. Deliver to Buyer fully-executed amendments to the Leases with D&W and VG in the forms attached hereto as Exhibit I.

(xv)          Assignment of Contracts. Deliver to Buyer separate, fully-executed assignments to the LLC and an assumption by the LLC of those Contracts for each Property which Buyer agreed to assume in the form of Exhibit Q attached hereto and made a part hereof, together with the original copies thereof (or photocopies if the originals are not in Seller's possession or control).

(xvi)          Notices to Vendors. Deliver to the Buyer at the Closing, a notice letter in the form of Exhibit R attached hereto and made a part hereof to each vendor under a Contract being assigned advising the vendor of the transfer of the applicable Property and the assignment and assumption of the applicable Contract, together with stamped and addressed envelopes with certified mail/return receipt cards.

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(xvii)          Bill of Sale. Deliver to Buyer a separate Bill of Sale for each Property in the form of Exhibit F attached hereto and made a part hereof transferring title to all Personal Property for such Property to the LLC.

(xviii)          Closing Statement. Deliver to Buyer a closing statement setting forth the Purchase Price and all closing credits and adjustments expressly provided for in this Agreement ("Closing Statement").

(xix)          Notices to REA Parties. Notice Letters to REA Parties in the form of Exhibit R-1 attached hereto.

(xx)          Title Documents. Deliver to the Title Company and Buyer such authorization documentation of Seller and such other instruments and documents (including without limitation, owner's affidavits, gap affidavits, non-imputation affidavits and indemnities, and such other affidavits, certifications, and/or indemnities as shall be required by the Title Company to issue the Title Policies in the form of the Specimen Title Policies approved by Buyer) as shall be reasonably required by the Title Company to issue the Title Policies and which do not impose any liability upon Seller not agreed to or contemplated in this Agreement.

(xxi)          Other Documents. Deliver to the LLC and Buyer such other instruments and documents which shall be reasonably necessary in connection with the transactions contemplated herein and which do not impose any liability upon Seller not agreed to or contemplated in this Agreement.

(xxii)          Records. Deliver to Buyer all Plans, records and files which are in Seller's possession or control relating to the current operation and maintenance of the Properties, including, without limitation, all lease files, warranties and guarantees, all operation and maintenance manuals and books, current tax bills, current water, sewer, utility and fuel bills, billing records for Tenants of the Properties, repair and maintenance records and the like (collectively the "Property Files") which affect or relate to the Properties and all documents necessary to conduct tenant reconciliations as described in Section 8(c).

(xxiii)          Indemnification Agreement. Deliver to the LLC and the Buyer the Indemnification Agreement of Seller and Spartan in the form attached hereto as Exhibit H.

(xxiv)          New Kentwood Lease. Deliver to Buyer a fully executed duplicate original of the New Kentwood Lease.

          In the event that any of the Centers shall not be owned by the LLC at the time of the Closing, then, at the Closing, Seller shall convey and/or assign the Centers to Buyer by executing and delivering the closing documents required to

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be delivered pursuant to this Section 8(a) applicable to the Center(s) not owned by the LLC at the time of the Closing. In the event the Centers are conveyed by Seller to LLC at or prior to the Closing, Seller shall immediately deliver to Buyer a fully-executed duplicate original of each of the conveyance and assignment documents.

(b)          Buyer's Obligations. At Closing, Buyer will execute and undertake, and will cause the LLC to execute and undertake, all of the following:

(i)          Purchase Price. Pay the balance of the Purchase Price to Seller.

(ii)          Certified Resolutions. Deliver to Seller the unanimous written consent of the Investment Committee of Buyer authorizing this Agreement and the transactions and closing documents described herein.

(iii)          Title Documents. Deliver to the Title Company and Seller evidence reasonably satisfactory to the Title Company of Buyer's authority to execute and deliver this Agreement and the documents to be delivered by it pursuant hereto.

(iv)          Lease Assumptions. If the Centers are conveyed to the Buyer rather than the LLC, deliver to Seller instruments of assumption of all of Seller's obligations under the Leases in the form of Exhibit M.

(v)          Contract Assumptions. If the Centers are conveyed to the Buyer rather than the LLC, deliver to Seller instruments of assumption of all of Seller's obligations under the Contracts in the form of Exhibit Q.

(vi)          Closing Statement. Deliver to Seller the Closing Statement.

(vii)          Other Documents. Deliver to Seller such other instruments or documents which shall be reasonably necessary in connection with the transaction contemplated herein and which do not impose any liability upon Buyer not agreed to in this Agreement.

(viii)          Consent to Assignment of Kentwood Lease. Cause the LLC to execute and deliver to Seller the consent to assignment of the Kentwood Lease in the form of Exhibit J attached hereto.

(ix)          New Kentwood Lease. Cause the LLC to execute and deliver the New Kentwood Lease if the New Kentwood Lease shall not have been executed and delivered by the Seller or the LLC, as landlord, and the Seller, as tenant, prior to the Closing.

(c)          Prorations. Buyer and Seller shall apportion or prorate as of midnight of the day preceding the Closing, the items hereinafter set forth. Any errors or omissions in computing apportionments at Closing shall be promptly corrected.

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The obligations set forth in this Section 8(c) shall survive the Closing and Seller's obligation to make any payment under this Section 8(c).shall be covered by the Indemnification Agreement to be executed by Seller and Spartan at the Closing The items to be adjusted are:

(i)          Property Taxes. City, state, county and school, ad valorem property taxes that became due and payable during the 12-month period immediately preceding the Closing Date. Such property tax proration shall be calculated as provided in Section 211.2 of the Michigan Compiled Laws, as if the property taxes are paid in advance for the twelve (12) month period succeeding the date they first are billed and become due and payable.

(ii)          Rent and Other Charges. All base rent, percentage rent, additional rent (including common area maintenance, property taxes, insurance premiums and other expenses paid by tenants as additional rent) and similar charges to the extent collected by Seller. To the extent that Seller receives any base rent, percentage rent, additional rent and/or other charges after the Closing, the same shall be immediately delivered to Buyer and applied in accordance with the terms of this Section 8(c)(ii). Any base rent, additional rent or other charges received from a tenant after the Closing shall be applied in the following order of priority: (A) first, to any calendar month or months following the calendar month in which the Closing occurred until the tenant, under the applicable Lease, is current on base rent and additional rent and other charges; (B) second, to the calendar month in which the Closing occurred; and (C) third, to any calendar month or months preceding the calendar month in which the Closing occurred. Buyer shall bill tenants for all amounts owing by the tenants as reflected in Schedule 10(h)(ii) in a manner consisted with its general practices. Notwithstanding anything herein to the contrary, if the Closing occurs on January 3, 2003, then provided that common area maintenance charges, insurance premiums and other additional rent items and percentage rent are calculated on a calendar year basis under the Leases, there shall be no proration of common area maintenance charges, insurance premiums and other additional rent items and/or percentage rent and Buyer or the LLC shall be responsible for the payment of all common area maintenance expenses, insurance premiums and other additional rent items from and after January 1, 2003. If any Tenants are entitled to a credit or a payment ("Pre Closing Credits") in respect of overpayments of base rent, percentage rent or additional rent (including common area maintenance, property taxes, insuran ce charges and/or other expenses paid by tenants as additional rent) for any period prior to January 1, 2003, Seller shall promptly reimburse the LLC or Buyer for the amount of all Pre Closing Credits, which obligation shall survive the Closing. The obligation of Seller to reimburse to the LLC or Buyer the amount of all Pre Closing Credits shall be covered by the Indemnification Agreement to be executed

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by Seller and Spartan at the Closing. Subject to the order of priority described in the third sentence of this paragraph, if any tenants are obligated to make a payment ("Pre-Closing Obligation") in respect of underpayments of base rent, percentage rent or additional rent (including common area maintenance, property taxes, insurance charges and/or other expenses paid by tenants as additional rent) for the 2002 calendar year, Buyer shall promptly pay to Seller the amount of the Pre-Closing Obligations when and if collected from such tenants, which obligation shall survive the Closing.

          At Closing, percentage rents shall be separately apportioned based on the percentage rents actually collected by Seller or Buyer. Such apportionment shall be made separately for each tenant who is obligated to pay percentage rent for the calendar year. Any percentage rent received from a tenant after the Closing shall be applied as follows: (Y) Seller shall be entitled to the portion of such percentage rent payment attributable to the 2002 calendar year and (Z) Buyer shall be entitled to the portion of such percentage rent payment attributable to the 2003 calendar year. The provisions of this paragraph shall only apply if the Closing occurs on January 3, 2003 and then only for the applicable Center(s).

          Within ten (10) days of the first anniversary of the Closing, Seller and Buyer shall make a final adjustment in accordance with the provisions of this Section 8(c) (the "Final Closing Adjustment") of percentage rent and other items of additional rent for which final adjustments or prorations could not be determined at the Closing because of the lack of actual statements, bills or invoices for the current period, the year-end adjustment of common area maintenance, property taxes, insurance premiums and like items, the unavailability of final sales figures or amounts for percentage rent or any other reason. Any net adjustment in favor of Buyer or Seller is to be paid in cash by the other party no later than thirty (30) days after the Final Closing Adjustment. The obligations of the Parties under this paragraph shall survive the Closing.

(iii)          Other Expenses. All other income and ordinary operating expenses of the Properties including, without limitation, public utility charges, maintenance and other service charges and all other normal operating charges with respect to the Properties shall also be prorated, and appropriate cash adjustments shall be made by Buyer and Seller.

(iv)          Prepaid Rents and Security Deposits. At Closing, any prepaid rents and security deposits provided for in the Leases and not previously applied pursuant thereto (together with any interest accrued thereon and credited to the tenant under the Leases) shall be transferred to Buyer or the LLC either directly or, at Seller's option, by way of a credit in favor of Buyer.

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(v)          Assessments. If at the time of the Closing the Properties or any part thereof shall have been affected by an assessment or assessments, which are or may become payable in annual installments, of which the first installment is then a charge or lien, then for the purposes of this Agreement, all the unpaid installments of any such assessment due and payable in calendar years prior to the year in which the Closing occurs shall be paid by Seller and all installments becoming due and payable after the delivery of the deed shall be assumed and paid by the LLC or Buyer, as applicable, except, however, that any installments which are due and payable in the calendar year in which the Closing occurs shall be adjusted pro rata. However, if at the time of the Closing the Properties or any part thereof shall have been affected by an assessment or assessments due in one lump sum payment, and if Seller does not have the right under applicable law to elect to pay such assessmen t(s) in installments, then if such assessment(s) is for improvements in place as of the date of this Agreement, such assessment(s) shall be paid by Seller, but if such assessment(s) is for improvements to be made subsequent to the date of this Agreement, such assessment(s) shall be paid by the LLC or Buyer, as applicable.

(d)          Costs. Except as set forth in Section 18 hereof, transaction costs contemplated by this Agreement will be paid on or prior to the Closing Date on the following basis:

(i)          Seller's Exclusive Costs. Seller will be solely responsible for the cost of the recording fees for the general warranty deeds conveying the Centers to the LLC or the Buyer, the cost of all title examination costs and charges, costs and charges for all UCC searches, premiums for the Title Policies issued to the LLC or Buyer, including, without limitation, the cost of all affirmative coverages and title insurance endorsements, the cost of recording any title clearance documents or collateral discharges, any transfer and/or documentary taxes due upon recording of the general warranty deeds to the LLC, fifty (50%) percent of the cost of all closing or escrow fees charged by the Title Company, any costs imposed by ABN-AMRO, including, without limitation, any costs to consent to this transaction and/or to release its liens and rights encumbering the Properties and the fees and expenses of Seller's attorneys and its designated representatives.

(ii)          Buyer's Exclusive Costs. Subject to the provisions of Section 18 hereof, Buyer will pay (or cause the LLC to pay) the cost of the Surveys, fifty (50%) percent of the costs of all closing fees or escrow fees charged by the Title Company, the cost of all environmental assessments and all inspections, investigations and tests by Buyer under Section 3 above or

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Section 9 below, and the fees and expenses of Buyer's attorneys, accountants, engineers, consultants and designated representatives.

9.          Condition of Property.

(a)          No Representations. Buyer hereby affirms that, except as set forth in this Agreement (including, without limitation, in Section 10 below and in any of the closing documents executed and delivered by Seller pursuant to Section 8 hereof in connection with the Closing), Seller, its agents, employees and/or attorneys have not made, nor has Buyer relied upon, any representation, warranty, or promise with respect to the Properties or any other subject matter of this Agreement, including, without limitation, any warranties or representations, expressed or implied, as to the general plan designation, zoning, value, use, tax status or physical condition of the Properties, or any part of the Properties, including but not limited to the flood elevations, drainage patterns and soil and subsoils composition and compaction level, and other conditions at the Properties, or the existence or non-existence of Hazardous Materials (as defined in Section 10(t) below) on or under the Properties, or as to the accuracy of any survey, soils report or other plan or report with respect to the Properties. Without limiting the generality of the foregoing and except for the representations and warranties of Seller contained in this Agreement and except as provided in any of the closing documents executed and delivered by Seller pursuant to Section 8 hereof in connection with the Closing, for all purposes related to Buyer's purchase of the LLC Interest from Seller, Buyer acknowledges that the Properties will be accepted by Buyer and the LLC in an "AS IS" "WHERE IS" CONDITION, SUBJECT TO "ALL FAULTS," INCLUDING BUT NOT LIMITED TO BOTH LATENT AND PATENT DEFECTS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT AND IN ANY OF THE CLOSING DOCUMENTS EXECUTED AND DELIVERED BY SELLER PURSUANT TO SECTION 8 HEREOF IN CONNECTION WITH THE CLOSING, BUYER FOR ITSELF AND ON BEHALF OF THE LLC, HEREBY WAIVES ALL WARRANTIES, EXPRESS OR IMPLIED , REGARDING THE CONDITION AND USE OF THE PROPERTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Buyer acknowledges that it has inspected the Properties and otherwise performed investigations of the Properties in accordance with this Agreement, and subject to the terms of this Agreement and any closing documents executed by Seller pursuant to Section 8 hereof in connection with the Closing, Buyer will purchase the LLC Interest without adjustment to or offset against the Purchase Price.

(b)          Phase I. At Buyer's expense (except as set forth in Section 18 hereof), Buyer has obtained Phase I Environmental Assessments ("Phase I") of the Properties using one or more environmental consulting firms acceptable to Buyer. The Phase I did not include any groundwater monitoring wells or any other invasive sampling technique. Buyer has caused the Phase I to be completed and

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has provided a copy of the Phase I to Seller. Within the Inspection Period, Buyer will notify Seller whether Buyer will: (i) determine that the environmental condition of the Properties is satisfactory and forego any further environmental investigation of the Properties; or (ii) determine that the environmental condition of the Properties or of certain of the Properties is unsatisfactory and terminate this Agreement, in which case the Termination Remedy will apply.

(c)          Phase II. Intentionally deleted.

(d)          BEA. Intentionally deleted.

(e)          Prior BEA. Seller will promptly provide to Buyer a true and complete copy of any existing BEA of the Kentwood Property, as defined and provided in MCL 324.20126(1)(c). The BEA delivered to Buyer is listed in Schedule 10(z).

(f)          Facility Notice. Buyer acknowledges that Seller has advised Buyer pursuant to MCL 324.20116(1) that Seller has knowledge or information or is on notice through a recorded instrument that the Kentwood Property and the Stevensville Property are each a "facility" within the meaning of MCL 324.20101(o). All of the information known to Seller concerning the general nature and extent of the releases that qualify the Kentwood Property and the Stevensville Property as "facilities" is contained in the applicable documents listed in Schedule 10(z).

(g)          ACM Documents. Buyer acknowledges that Seller has provided true and complete copies of, or made available to Buyer for its review, Seller's records, if any, concerning asbestos containing materials present at the Properties, or presumed to be present at the Properties ("ACM Documents"). At Closing, Seller will deliver to Buyer any original ACM Documents in Seller's possession.

(h)          Environmental Release. Buyer, for itself and on behalf of the LLC, expressly assumes the risk that any Hazardous Materials are or hereafter may be located on the Properties, except to the extent that any Hazardous Materials are located on the Properties due to Seller's acts or omissions; provided that the foregoing assumption shall not apply with respect to the presence of any Hazardous Materials which would constitute a breach of any of Seller's representations and warranties set forth in Sections 10(t) or (z) hereof. Buyer and the LLC will bear full responsibility for compliance with all Environmental Laws (as defined in Section 10(t) below), as amended, regardless of whether the responsibility arose or was caused by acts or omissions occurring before the Closing, except to the extent caused by Seller's acts or omissions. Subject to the penultimate sentence of this Section 9(h), Buyer agrees, for itself and on behalf of the LLC from and a fter the Closing, to forever release and discharge Seller, and any parent, subsidiary or affiliate of Seller, their directors, officers, employees, representatives and agents, from and against any and all claims, expenses (including reasonable attorneys' and other consultants' reasonable fees and costs),

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causes of action, damages, and liabilities relating to Hazardous Materials located at the Properties, including without limitation, (i) all foreseeable damages, directly or indirectly arising out of the use, generation, storage, disposal, release or threatened release of Hazardous Materials on any or all or a portion of the Properties, except to the extent caused by Seller's acts or omissions, and (ii) unless the Hazardous Materials contamination resulted from Seller's acts or omissions, the cost of any reasonably necessary investigation, repair, cleanup, remediation or detoxification of any affected Property and other affected property and the preparation of any corrective action, closure or other required plans or reports to the full extent that such actions are alleged to be attributable, directly or indirectly, to the presence or use, generation, storage, release, threatened release, or disposal of Hazardous Materials on or from the affected Property. For purposes of this Section 9, "Seller's a cts or omissions" shall also include the acts or omissions of Seller's agents, employees and contractors (other than tenants). Nothing contained herein shall constitute a waiver or release by Buyer or the LLC in favor of Seller of any representations or warranties of Seller set forth in Sections 10(t) and 10(z) hereof relating to Hazardous Materials, Environmental Laws and/or Environmental Reports (as hereinafter defined). The foregoing provisions of this Section 9(h) shall not apply to Buyer's or the LLC's right to implead or otherwise seek joinder of, and/or contribution from Seller with respect to any claims brought against Buyer by a third party unaffiliated with Buyer (including, without limitation, a governmental entity) arising out of or relating to violations of Environmental Laws existing prior to the Closing Date and for which Seller is be liable under applicable law.

10.          Seller's Representations, Warranties and Covenants. Seller represents, warrants and covenants to Buyer as follows:

(a)          Good Standing. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan and is entitled to and has all requisite corporate power and authority to own and operate its assets as they are presently owned and operated.

(b)          LLC Interest.

(i)          Seller will own as of the Closing Date legal and beneficial title in and to 100% of the LLC Interest. As of the Closing Date the LLC Interest will be held free of liens, encumbrances, judgments, adverse interests, pledges or security interests and shall not be subject to any right or option of any person to purchase or otherwise obtain title to or an interest in the LLC. Seller has the full right, power, capacity and authority to validly convey the LLC Interests.

(ii)          The LLC Interest has been duly authorized and validly issued in accordance with the LLC's organizational documents or by the applicable law governing the LLC's formation.

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(iii)          The LLC is duly organized and validly existing under the laws of its jurisdiction of organization and has the power and authority to carry on its business as now being conducted.

(iv)          The LLC is or shall be as of the Closing Date duly qualified to do business and is or shall be as of the Closing Date in good standing in the State of Michigan.

(v)          Attached hereto as Exhibit C is a true and complete copy of the LLC Agreement in effect for the LLC which has not been modified, amended or supplemented;

(vi)          Attached hereto as Exhibit B is a true and complete copy of the Certificate of Formation for the LLC which have not been modified, amended or supplemented. Seller is the sole member of the LLC.

(vii)          The LLC has neither conducted nor currently conducts any business nor has owned nor owns any assets other than cash and title to the Centers and assets relating thereto.

(viii)          Except for such matters as, individually or in the aggregate with other such matters, would not have a material adverse effect on the LLC, (A) all tax returns required to be filed on or before the date hereof (including any valid extensions of time to file such tax returns) by or on behalf of the LLC have been filed through the date hereof or will be filed on or before the Closing Date in accordance with all applicable laws; (B) there is no action, suit or proceeding pending against, or with respect to, the LLC for any taxes, nor has any claim for additional taxes been asserted by any such authority; and (C) all taxes reflected upon or required to be reflected upon a tax return so filed or so to be filed on or before the applicable Closing Date have been paid or will be paid on or before such Closing Date, unless such taxes are being contested in good faith and adequate reserves for the payment of such taxes have been established by the LLC and will be maintained through the Closing Date.

(viii)          There is no pending or, to Seller's knowledge, threatened tax audit of any tax return filed by or on behalf of the LLC or with respect to the LLC's income, operations, properties or assets or any tax return by or on behalf of any other person as to which the LLC may have liability for any such person's taxes (whether by operation of law or by contract).

(ix)          There is no action, proceeding or investigation pending against the LLC before any court or governmental department, commission, board, agency or instrumentality.

(x)          The LLC is not in breach of, or default under, the organizational documents of the LLC. Seller as the sole member of the LLC is not in breach of, or in default under, the organizational documents of the LLC

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and no event has occurred that, with the giving of notice or the passage of time, or both, would constitute a default under the organizational documents of the LLC.

(xi)          Prior to the Closing, the LLC shall not engage in any operations nor have any liabilities of any nature (accrued or unaccrued), except for liabilities under the Leases and Contracts assumed by the LLC pursuant to this Agreement.

(xii)          Seller has not made a loan to the LLC that is still outstanding and Seller as the sole member of the LLC has no outstanding capital commitments to the LLC.

(xiii)          The LLC does not and has not had any employees.

(xiv)          The LLC is treated as a partnership or as an entity disregarded as separate from its owners for federal income tax purposes. The LLC does not own directly or indirectly, or by attribution (in accordance with the attribution rules referred to in Code Section 856(d)(5)) any of the stock of any person that is treated as a corporation or an association taxed as a corporation for federal income tax purposes or of a lessee or sublessee of all or any part of the Centers. In addition, at the Closing, the LLC will not own any securities of or interest in, or rights to acquire securities of or interests in any other person, except for funds of the LLC that may be temporarily invested in:

(A)          obligations of or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States;

(B)          federal funds, unsecured certificates of deposit, time deposits and bankers' acceptances denominated in United States dollars of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or trust company;

(C)          a bank account of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or trust company; and

(D)          a money market fund or a qualified investment fund.

(c)          No Liabilities. Prior to the completion of the transactions described in this Agreement, (i) the LLC shall not engage in any operations nor have any liabilities of any nature, except for liabilities under the Leases and Contracts

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assumed by the LLC pursuant to this Agreement and (ii) the LLC is not and shall not be a party to or bound by any agreements except the Leases and the Contracts to be assumed by the LLC pursuant to this Agreement.

(d)          Injunction Litigation. No judgment is outstanding against Seller or the LLC and no litigation, action, suit, judgment, proceeding, or investigation is pending or outstanding before any forum, court, or governmental body, department or agency, or, to the knowledge of Seller, threatened, that has the stated purpose or the probable effect of enjoining or preventing the Closing.

(e)          Bankruptcy. No insolvency proceeding, including, without limitation, bankruptcy, receivership, reorganization, composition, or arrangement with creditors, voluntary or involuntary, affecting Seller or the LLC or any of Seller's or the LLC's assets or properties, is now or on the Closing Date will be pending or, to the knowledge of Seller, threatened. Neither Seller nor the LLC has commenced (within the meaning of any federal or state bankruptcy law) a voluntary case, consented to the entry of an order for relief against it in an involuntary case, or consented to the appointment of a custodian of it or for all or any substantial part of its property, nor has a court of competent jurisdiction entered an order or decree under any federal or state bankruptcy law that is for relief against Seller or the LLC in an involuntary case or appointed a custodian of Seller or the LLC for all or any substantial part of its property.

(f)          Authorization. The execution of this Agreement by Seller, the consummation of the transactions herein contemplated, and the execution and delivery of all documents to be executed and delivered by Seller or the LLC pursuant hereto, have been duly authorized by all requisite action on the part of Seller and the LLC and this Agreement has been and all documents to be delivered by Seller pursuant hereto, will be, duly executed and delivered by Seller and is or will be, as the case may be, binding upon and enforceable against it in accordance with their respective terms.

(g)          Violations. Neither the execution of this Agreement nor the carrying out of the transactions contemplated herein will result in any violation of or be in conflict with the instruments pursuant to which Seller was organized and/or operates or, to Seller's knowledge, any applicable law, rule or regulation of any public, governmental or quasi-governmental agency or authority, or any instrument or agreement to which Seller is a party, nor will it result in the creation or imposition of any lien on any of the Properties, nor will it result in the termination or the right to terminate any agreement to which Seller is a party or which affects any of the Properties, and no consent or approval of any third party is required for the execution of this Agreement or the carrying out of the transactions contemplated herein.

(h)          Leases. Attached hereto as Schedule 10(h) is the a schedule (the "Lease Schedule") which is correct and complete, which includes the name of each

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Tenant of the Properties; the date of each Tenant's Lease and all amendments, if any, thereto (and if the Tenant is not the original lessee, the name of the original lessee); the approximate gross leaseable area of each leased premises; the current monthly base rent and monthly estimated "triple net" charges payable by each Tenant under its Lease; prepaid rent to the extent paid more than thirty (30) days in advance, if any; rent delinquencies, if any and a description of any material non-monetary defaults by Tenants known to Seller; the expiration date of each Lease; subleases, if any, known to Seller; and the amount of any security deposit held by Seller under each Lease, and whether any of the security deposits are letters of credit. There are no Leases or other tenancies for any space in the Properties other than those set forth on the Lease Schedule and any subtenants or licensees of the Tenants listed on such Schedule. Seller has delivered (or will promptly deliver after request by Buyer to the extent in Seller's possession), true, correct, complete and legible copies of each Lease (including all assignments thereof) and of subleases, if any, known to Seller (to the extent that Seller has copies of such subleases in its possession) and any other agreements described in the Lease Schedule. Except as expressly set forth on the Lease Schedule:

     (A)          no Tenant has given Seller any written notice of its intention to terminate its Lease;

     (B)          all of the Leases are valid and are in full force and effect in accordance with their terms, there is no default by the landlord thereunder that would entitle any Tenant to terminate its Lease or offset rent, and to Seller's knowledge, there is no default by any Tenant thereunder except as described in the Lease Schedule;

     (C)          (i) no construction, alteration, decoration or other work remains to be performed under any Lease by the landlord thereunder and (ii) all construction allowances or other sums to be paid to any Tenants have been paid. There are no written promises, understandings or commitments between Seller and any person or entity with respect to the foregoing which would be binding upon Buyer other than those contained in the Leases.

     (D)          all brokerage commissions and other compensation and fees payable by reason of the Leases (including any renewals or expansions contained in the Leases) have been fully paid. There exists no exclusive or continuing leasing or brokerage agreements as to any space in the Properties;

     (E)          no Tenant is entitled to any allowance, credit, rebate, concession, deduction or offset against rent except as set forth on the Lease Schedule;

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     (F)          no Tenant has paid any rent for any period of more than thirty (30) days in advance except as set forth on the Lease Schedule;

     (G)          each Tenant is now in possession of the premises leased to it under its Lease;

     (H)          none of the Tenants is in default in the payment of any amounts due for rent, additional rent or other charges payable under its Lease;

     (I)          no renewal, extension or expansion options have been granted to any tenant, except as set forth in such Tenant's Lease;

     (J)          no Tenant has an option or right of first refusal to purchase the Properties, or any part thereof;

     (K)          Seller has the sole right to collect rent under each Lease and such right has not been assigned, pledged, hypothecated, or otherwise encumbered in any manner that will survive the Closing;

     (L)          Neither Seller nor any affiliate of Seller has made a loan or other advance to, or has any ownership interest in, any Tenant or any affiliate of any Tenant, except for (i) the New Kentwood Lease attached as Exhibit T; (ii) the tenant improvement allowances or inducements ("Tenant Allowances") listed on Schedule 10(h)(1) which, to Seller's knowledge, shows both the amount of all Tenant Allowances that were paid to Tenants and the amount, if any, remaining to be paid in respect of the Tenant Allowances; and (iii) loans or other advances made by a Seller affiliate to D&W and/or V.G.'s, which loans or advances are not pursuant to the applicable Leases and do not affect either the landlord's or tenant's rights or obligations under the applicable Leases;

     (M)          There are no loans or other advances to Tenants for tenant improvements, past due rent, or otherwise by Seller or its affiliates except (i) for the Tenant Allowances listed on Schedule 10(h)(1) which, to Seller's knowledge, shows both the amount of all Tenant Allowances that were paid to Tenants and the amount, if any, remaining to be paid in respect of the Tenant Allowances; and (ii) loans or other advances made by a Seller affiliate to D&W and/or V.G.'s, which loans or advances are not pursuant to the applicable Leases and do not affect either the landlord's or tenant's rights or obligations under the applicable Leases; and.

     (N)          There are no pending or to Seller's knowledge, threatened audits by Tenants relating to common area maintenance charges, real

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estate taxes, insurance, percentage rents or other items of additional rent paid or payable under the Leases; and

     (O)          Attached hereto as Schedule 10(h)(2) are aged receivable reports for each of the Centers which, to Seller's knowledge, are true and correct.

(i)          Contracts. Attached hereto as Schedule 10(i) is a list of all material agreements, instruments and understandings (excluding Leases and recorded instruments) to which Seller is a party and/or which are known to Seller and affect the Properties, including all amendments, guarantees, side letters and other documents relating thereto (collectively, the "Contracts"). Except as described on Schedule 10(i) each of the Contracts is assignable by Seller to Buyer or the LLC without consent or the payment of any fee, and each of the Contracts may be canceled upon not more than thirty (30) days' prior written notice without the payment of any fee, penalty, or termination payment. True, correct, complete and legible copies of each of the Contracts have been delivered to Buyer or will be delivered to Buyer promptly upon request by Seller. Each of such Contracts is in full force and effect and has not been modified or amended, except as indicated Schedule 10 (i). Seller is not in default of any of its obligations under any of the Contracts and all fees and other charges described in the Contracts have been paid on a current basis. To Seller's knowledge, the vendor under each of the Contracts is not in default of any of its obligations thereunder.

(j)          General Litigation. There are no actions, suits or other proceedings by any person, firm, corporation, Tenant, or by any governmental authority now pending or to the Seller's knowledge, information, and belief, threatened against or affecting the LLC, the Centers or any part thereof, or Seller's interest in the Centers or any part thereof, except those which are described on Schedule 10(j), nor to Seller's knowledge, are there any investigations pending or threatened against or affecting the LLC, the Centers, or Seller's interest in the Centers, except those which are described on Schedule 10(j). Neither Seller nor the LLC has commenced any action, suit, or proceeding against any person or party, including, without limitation, any Tenant, relating to or affecting any of the Centers, except those which are described on Schedule 10(j).

(k)          Management Agreements; Employees. There are no management agreements in effect at any of the Properties. Buyer shall not have any obligation with respect to any employee engaged in connection with the Centers including to employ any such persons or to make any payment to them.

(l)          Eminent Domain. Seller has no knowledge of (i) any pending or threatened eminent domain proceedings affecting the Properties, in whole or in part and (ii) any pending or proposed changes to any roads or streets that provide access to the Properties. Seller will promptly notify Buyer if, prior to the Closing, Seller receives notice or obtains knowledge of any pending or threatened eminent

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domain proceeding or change to any roads or streets that provide access to the Properties.

(m)          Possession of Properties. To Seller's knowledge, there are no adverse or other parties in possession of the Properties or of any part thereof, except Seller and the Tenants under the Leases (and any subtenants or licensees of such Tenants), and unless otherwise identified on the Lease Schedule no party has been granted by Seller or the LLC any license, lease, or other right relating to the use or possession of the Properties, or any part thereof, except the Tenants under the Leases and parties named in recorded instruments. The Lease Schedule sets forth a list of all subtenants, concessionaires, and assignees of Tenants for which Seller has documentation in its possession.

(n)          Insurance Matters. To Seller's knowledge, no insurance company or board of fire underwriters has given notice requesting the performance of any work or alterations with respect to the Properties that has not been performed or required an increase in insurance rates applicable to the Properties as a result of work which has not been performed.

(o)          Foreign Person. Seller is not a foreign person (as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder).

(p)          Management Agreement. On the Closing date, there will be no contract or agreement in effect for the management of the Centers.

(q)          Governmental Approvals. To Seller's knowledge, all Approvals required by all governmental authorities for the ownership, use, occupancy, management and operation of the Properties in the manner in which each Property is being used, managed and operated on the date of this Agreement have been issued and are in effect and will be maintained and/or renewed by Seller through the date of the Closing.

(r)          Construction Liens. All bills and claims for labor performed and materials furnished with respect to the Properties for all periods prior to the Closing date have been (or prior to the Closing date will be) paid in full, and on the Closing date there will be no construction liens, mechanics' liens or materialmen's liens (whether or not perfected) for labor performed and materials furnished, recorded or filed against the Properties.

(s)          Legal Requirements. Neither Seller nor the LLC has received written notice from any governmental authority of any violation of any applicable laws, statutes, ordinances, codes, rules, regulations, permits, approvals or authorizations of any governmental body, agency or official relating to the Properties, including, without limitation, those regarding zoning which have not heretofore been cured.

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(t)          Environmental Laws. Seller has not received any written notice from any governmental authority of the violation of any Environmental Laws (as hereinafter defined) with respect to the Properties. To Seller's knowledge, the current use and operation of the Properties is not in violation of any applicable Environmental Laws, except as described on Schedule 10(t) or in the Environmental Reports (as defined below). To Seller's knowledge, except as disclosed on Schedule 10(t), there are no underground storage tanks located on the Properties and no underground storage tanks have been removed from the Properties by Seller or any other person or party. "Environmental Laws" means all laws or regulations which relate to the manufacture, processing, distribution, use or storage of Hazardous Materials (as hereinafter defined). "Hazardous Materials" shall mean:

          (i)          Those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances," or "solid waste" in the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) ("CERCLA"), as amended by Superfund Amendments and Reauthorization Act of 1986 (Pub. L. 99-499 100 Stat. 1613) ("SARA"), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) ("RCRA"), and the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), and in the regulations promulgated pursuant to said laws, all as amended;

          (ii)          Those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto or by the Environmental Protection Agency (or any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto);

          (iii)          Any material waste or substance which is (A) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317) or (B) radioactive materials; and

          (iv)          Those substances included within the definitions of "hazardous substances", "hazardous materials", "toxic substances" or "solid waste" in the Hazardous Waste Management Act of 1978; and

          (v)          Any other hazardous substance, pollution or contaminant that is regulated or becomes regulated under any other federal, state, regional, county, municipal, and other local laws, regulations, and ordinances.

(u)          Documentation. Between the date hereof and the Closing, Seller will make available all documentation with respect to the Centers and the LLC Interest in Seller's possession or under its control.

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(v)          Insurance Policies. Seller will maintain all currently existing policies of insurance with respect to the Properties through the Closing Date. Seller will promptly notify Buyer of any claims made under any of the policies prior to the Closing.

(w)          Title. Seller currently owns and at or prior to the Closing, the LLC will own fee title to the Properties free and clear of all liens (other than liens for real estate taxes not yet due and payable and existing recorded mortgages, liens and security interests to be discharged by Seller at Closing), rights of first refusal and purchase options.

(x)          Personal Property. To Seller's knowledge, there is no Personal Property owned by Seller (or any affiliate of Seller including the LLC) and located at or used in connection with the operation or maintenance of the Properties. Between the date hereof and the Closing, neither Seller nor the LLC shall remove any Personal Property from the Properties except for necessary repairs or replacements, after which same shall be returned or installed at the Properties. If any item of Personal Property requires replacement, such item shall be replaced with another item comparable in quality and utility to the item removed.

(y)          Assessments. To Seller's knowledge, except as described in the Title Commitments there are no special or other governmental, quasi-governmental, public or private assessments for public improvements or otherwise now affecting the Properties nor are there any: (i) pending or threatened special assessments affecting the Properties or (ii) any contemplated improvements affecting the Properties that may result in special assessments affecting the Properties. To Seller's knowledge, none of the Properties is subject to a real estate tax abatement or a real estate tax program that would have the effect of deferring the payment of real estate taxes to a period after the Closing.

(z)          Environmental Reports. Seller has delivered to Buyer true and complete copies of all environmental and hazardous substance reports, BEAs and ACM Documents relating to the Properties which are (i) in the possession of or control Seller, or (ii) which were prepared for Seller and of which Seller has knowledge, which reports, BEAs and ACM Documents are listed in Schedule 10(z) (the "Environmental Reports"). Except as disclosed in the Environmental Reports or any Phase I or other environmental report obtained by Buyer or Buyer's Agents, to Seller's knowledge no Hazardous Materials are or have been stored, used or located at the Properties in violation of any applicable legal or regulatory requirement.

(aa)          Division Rights. Seller has not assigned, transferred, conveyed, pledged or otherwise hypothecated any division rights available to the Properties under the Act.

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(bb)          REAs. To Seller's knowledge, the Title Commitments contain a true, correct, and complete list of all reciprocal easement agreements, including all amendments and supplements thereto, relating to the Properties (the "REAs"), and true, correct, and complete copies of the REAs have been delivered or made available to Buyer by the Title Company. Seller has not received any written notice, and Seller is not aware, that Seller is in violation of or in default under any of the REAs, and Seller has not sent any written notice, and Seller is not aware, that any party is in violation of or in default under any of the REAs. There are no unpaid monetary obligations due from the owner of the Properties under the REAs. Each REA is in full force and effect. There are no pending or, to Seller's knowledge, threatened audits by Tenants or other parties to the REAs for common area maintenance, taxes, and other similar billings.

(cc)          Additional Documentation. to Seller's knowledge, between the date of this Agreement and the Closing (i) Seller has provided or will make available to Buyer all material documentation with respect to the Centers or the operation thereof in Seller's possession or control and (ii) has not failed to provide, make available or disclose to Buyer any documentation (y) in Seller's possession or control or (z) known by Seller to be necessary to make any of the representations set forth in this Section 10 or the other materials delivered or made available to Buyer not misleading in any material respect.

(dd)          Board Approvals. Seller has obtained the approval of its board of directors and Spartan has obtained the approval of its executive committee to this Agreement, the transactions contemplated herein and to the closing documents contemplated herein ("Board Approvals"). Except for the Board Approvals, no other approvals, consents or authorizations are necessary for the Seller and Spartan to enter into and consummate the transactions contemplated herein including, without limitation, the execution and delivery of the closing documents contemplated in this Agreement.

(ee)          No Property Violations. As of the date hereof Seller has received no notice of any violations of applicable laws, codes, rules, regulations, permits, approvals, authorizations or orders of any governmental agency, body, board or governmental officer (including, without limitation, land use, zoning and/or subdivision laws, codes, rules and regulations) affecting any of the Centers.

(ff)          No Adjacent Land. Except for the Properties, Seller and the LLC own no land and improvements adjacent to and abutting any of the Centers.

(gg)          Assignable Warranties. Attached hereto as Exhibit 10(gg) is a list of all assignable warranties and guaranties relating to the Centers.

                    Notwithstanding anything in this Section 10 to the contrary, Seller shall be solely liable for the breach of any of the representations and warranties contained in this Section 10 whether same relate to Seller or the LLC; it being understood that neither the Buyer nor the LLC shall be deemed to have waived or limited their rights to assert a

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claim against Seller with respect to the breach of any representations and warranties contained in this Section 10 relating to the LLC due to the fact that Buyer or an affiliate of Buyer will own the entire membership interest in the LLC following the Closing. The liability of Seller and Spartan with respect to the foregoing representations, warranties and covenants of Seller shall be as set forth in the Indemnification Agreement to be executed and delivered by Seller and Spartan at the Closing.

                    For purposes of this Agreement, phrases such as "Seller's knowledge" or "known to Seller" shall mean actual awareness of a particular fact or other matter by any officer or director of Seller, and Darline Wethington, Cynthia Mehigh, and Marcia Holt.

11.          Buyer's Representations and Warranties. Buyer represents and warrants to Seller as follows:

(a)          Good Standing. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and is entitled to and has all requisite corporate power and authority to own and operate its assets as they are presently owned and operated.

(b)          Authorization. Except as otherwise provided herein, the execution of this Agreement by Buyer, the consummation of the transactions herein contemplated, and the execution and delivery of all documents to be executed and delivered by Buyer pursuant hereto, have been duly authorized by all requisite action on the part of Buyer and this Agreement has been and all documents to be delivered by Buyer pursuant hereto, will be, duly executed and delivered by Buyer and is or will be, as the case may be, binding upon and enforceable against it in accordance with their respective terms.

(c)          Violations. Neither the execution of this Agreement nor the carrying out of the transactions contemplated herein will result in any violation of or be in conflict with the instruments pursuant to which Buyer was organized and/or operates or, to Buyer's knowledge, any applicable law, rule or regulation of any public, governmental or quasi-governmental agency or authority, or any instrument or agreement to which Buyer is a party. No consent or approval of any third party is required for the execution of this Agreement or the carrying out of the transactions contemplated herein by Buyer.

(d)          Litigation. No judgment is outstanding against Buyer and no litigation, action, suit, judgment, proceeding, or investigation is pending or outstanding before any forum, court, or governmental body, department or agency, or, to the knowledge of Buyer, threatened, that has the stated purpose or the probable effect of enjoining or preventing the Closing.

(e)          Bankruptcy. No insolvency proceeding, including, without limitation, bankruptcy, receivership, reorganization, composition, or arrangement with creditors, voluntary or involuntary, affecting Buyer or any of Buyer's assets or properties, is now or on the Closing Date will be pending or, to the knowledge of

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Buyer, threatened. Buyer has not commenced (within the meaning of any federal or state bankruptcy law) a voluntary case, consented to the entry of an order for relief against it in an involuntary case, or consented to the appointment of a custodian of it or for all or any substantial part of its property, nor has a court of competent jurisdiction entered an order or decree under any federal or state bankruptcy law that is for relief against Buyer in an involuntary case or appointed a custodian of Buyer for all or any substantial part of its property.

(f)          Sufficient Funds. Buyer will have sufficient funds to pay the Purchase Price on the Closing Date.

12.          Commissions. Seller represents that it has not dealt with or entered into any contracts with any brokers or finders nor has Seller obligated itself to pay any real estate commissions or finders' fees on account of the execution of this Agreement or the transactions contemplated herein to any person, including, but not limited to, any of Seller's Associate Brokers or Salespersons listed in this Section 12. Buyer represents that it has not dealt with or entered into any contracts with any brokers or finders nor has Buyer obligated itself to pay any real estate commissions or finders' fees on account of the execution of this Agreement or the close of the transaction contemplated herein. Based on such representations, Buyer and Seller hereby agree to indemnify and hold each other harmless from any claims, damages, expenses, liabilities, liens or judgments (including costs, expenses and reasonable attorneys' fees in defending the same) which arise on account of any claim made by any person or entity for commissions or finders' fees with respect to the transactions contemplated herein due to the breach of any of the representations and warranties made by the indemnifying Party in this Section. Seller hereby acknowledges and discloses that Seller is a licensed real estate broker in the State of Michigan. Darline Wethington, Allan Graham and Chris Kindel are Associate Real Estate Brokers working under the Broker License of Seller and Cynthia Mehigh and Sharon Platteschorre are Salespersons working under the Broker License of Seller. If this Agreement is executed by Darline Wethington, such execution is solely in her capacity as a duly authorized officer of the Seller, and not in any capacity as a broker or agent of Seller. The provisions of this Section 12 shall survive the Closing. The liability of Seller under this Section 12 shall be as set forth in the Indemnification Agreement to be executed and delivered by Seller and Spartan at the Closing.

13.          Confidentiality. All information obtained by Buyer or Buyer's Agents from Seller or Seller's agents, employees, or contractors, or by reason of any inspection, survey, or investigation of the Property by Buyer or Buyer's Agents, including, but not limited to, any data, surveys, written reports, field notes, and drawings resulting from any inspection, survey, test or other inquiry, except for any information in the public domain (collectively, "Confidential Information"), will be held strictly confidential by Buyer and Buyer's Agents and consultants, attorneys, accountants and advisors, subject only to mandatory disclosure pursuant to applicable law or legal process. All inspections and tests performed on the Properties by Buyer or Buyer's Agents will be conducted in compliance with all applicable federal, state, and local laws, orders, regulations, and ordinances. If this Agreement is terminated for any reason, Buyer will promptly deliver

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to Seller copies of the Confidential Information provided by Seller to Buyer or obtained or prepared by Buyer's environmental consultants, engineers, and Buyer's Agents performing physical inspections or tests on the Properties, which Confidential Information shall be transferred or assigned by Buyer to Seller without any representation or warranty whatsoever. The obligations of Buyer under this Section will survive the termination of this Agreement. Notwithstanding anything herein to the contrary, the obligations of Buyer shall not apply to any Confidential Information that is required, or Buyer or its affiliates determines based on advice of counsel (including in house counsel) is advisable, to be disclosed by Buyer or its affiliates (x) to comply with applicable securities laws or regulations (collectively, "Securities Laws") or under the rules or policies of the New York Stock Exchange ("NYSE"), including in connection with the filing by Buyer or its affiliates of a registration statement under th e Securities Laws, (y) in connection with an offering of its securities or (z) as otherwise may be consistent with its past securities disclosure practices. Without limiting but subject to the foregoing, Buyer may disclose, (i) a summary description of the material terms of this Agreement, (ii) a copy of this Agreement, (iii) to the extent necessary to comply with applicable Securities Laws or the rules or policies of the NYSE or as reasonably determined by Buyer or its affiliates to be advisable in connection with an offering of its securities, historical and pro forma financial information with respect to the Centers, and (iv) such aggregate portfolio information, including the location of the Centers, that would typically be disclosed in any investor or analyst call or, to the extent necessary to comply with applicable Securities Laws or the rules or policies of the NYSE or as reasonably determined by Buyer or its affiliates to be advisable in connection with an offering of its securities, in a regis tration statement or other public filing made under applicable Securities Laws or otherwise consistent with its past disclosure practices.

14.          Damage or Destruction. If prior to the Closing, any portion of the Properties is partially damaged or destroyed by fire or other casualty, but is not materially damaged or destroyed (as defined below) by fire or other casualty, Buyer shall be required to perform this Agreement (provided that Seller maintained full replacement cost coverage with a financially responsible insurance company) and Buyer or the LLC shall be entitled to an assignment of the proceeds under the applicable insurance policy or a credit in the amount of any insurance proceeds received by Seller plus a credit against the Purchase Price in the amount of the applicable insurance deductible and in the amount of any uninsured loss not to exceed $150,000 for any Property. If any portion of the Properties is materially damaged or destroyed by fire or other casualty, then Buyer may terminate this Agreement on written notice to Seller given no later than three (3) business days after Buyer receives an estimate of the cost of repairs. If Buyer shall exercise such option to terminate, the Termination Remedy shall apply. If a Property is materially damaged or destroyed, Buyer shall have the right in lieu of terminating this Agreement to remove the applicable Property from this Agreement in which event (i) the Purchase Price shall be adjusted downward by the amount of the Purchase Price allocated to such Property, (ii) the Deposit shall be adjusted downward so that the Deposit remains the same percentage of the adjusted Purchase Price as the percentage of the original Deposit to the original Purchase Price and (iii) the terms "Properties" and "Centers" shall not thereafter refer to any Property and Center that was removed from this Agreement; provided that

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Buyer shall only be entitled to remove only one (1) Property from this Agreement under this Section 14 and under Section 15 below. If Buyer does not exercise such option to terminate this Agreement or to remove the affected Property from this Agreement, the Agreement shall remain in full force and effect in accordance with its terms and Buyer or the LLC shall be entitled to an assignment of the insurance proceeds and credits as provided in the first sentence of this Section 14. In the event of any damage by fire or other casualty, the determination as to whether such damage or destruction is material shall be made by an engineer or architect ("Approved Engineer") designated jointly by Seller and by Buyer. For purposes hereof, a Property shall be deemed "materially damaged or destroyed" if (i) the cost of repair and restoration of such damage or destruction as estimated by the Approved Engineer for any portion of the Property is greater than One Hundred Fifty Thousand and No/100 ($ 150,000.00) Dollars or (ii) if the supermarket Tenant at the applicable Property would have the right to terminate its Lease as a result of the damage or destruction to the applicable Property. If Buyer agrees to close with respect to any Property that has been materially damaged, Seller shall pay to Buyer the amount of any rent loss incurred by the LLC or Buyer for rent abatements taken by Tenant due to such damage or destruction between the date hereof and the date that such rent abatement fully ceases less the amount of rent-loss insurance proceeds, if any, received by the LLC or Buyer (the "Rent Abatement Amount"). The proceeds of all rent-loss insurance payable with respect to any damage or destruction after the date of this Agreement shall be assigned by Seller to Buyer or the LLC at the Closing (pro rated to midnight of the day preceding the Closing).

15.          Condemnation. In the event proceedings to condemn any material portion (as defined below) of the Property are commenced or threatened before the Closing, Seller shall immediately notify Buyer thereof and Buyer shall have the right to terminate this Agreement, in which event the Termination Remedy shall apply. If a material portion of a Property shall be condemned, Buyer shall have the right in lieu of terminating this Agreement to remove the applicable Property from this Agreement in which event (i) the Purchase Price shall be adjusted downward by the amount of the Purchase Price allocated to such Property, (ii) the Deposit shall be adjusted downward so that the Deposit remains the same percentage of the adjusted Purchase Price as the percentage of the original Deposit to the original Purchase Price and (iii) the terms "Properties" and "Centers" shall not thereafter refer to any Property and Center that was removed from this Agreement; provided that Buyer shall only be entitled to remove only one (1) Property from this Agreement under this Section 15 and under Section 14 above. In the event Buyer does not elect to terminate this Agreement or to remove the affected Property from this Agreement, Seller shall assign to Buyer or the LLC, at the Closing, all of Seller's right, title and interest in and to any condemnation proceeds payable with respect to the affected Property. Prior to the Closing, Seller and Buyer shall jointly negotiate and settle any condemnation award. "Material portion" shall mean any portion, the loss of which would (i) render the affected Property in non-compliance with applicable legal or regulatory requirements for the current use, occupancy or operation thereof, (ii) materially impair pedestrian or vehicular ingress or egress to or from the affected portion of the Property, (iii) require the expenditure for repair and/or restoration of more than One Hundred Fifty Thousand and No/100 ($150,000.00) Dollars in the aggregate, or (iv )

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give the supermarket Tenant at the applicable Property the right to terminate its Lease or abate its rent as a result of the condemnation to the applicable Property.

16.          Notices. All notices, requests, demands and other communications hereunder will be in writing and will be given by (i) established express delivery service which maintains delivery records, (ii) hand delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested, to the Parties at the following addresses, or at such other address as the Parties may designate by written notice in the above manner:

To Seller:

Market Development Corporation
850-76th Street, SW
P.O. Box 8700
Kentwood, MI 49518-8700
Facsimile: (616) 530-4564
Attention: Clifford C. Sasfy

With copy to:

Richard E. Cassard, Esq.
Warner Norcross & Judd LLP
900 Old Kent Building
111 Lyon Street, NW
Grand Rapids, MI 49503-2487
Facsimile: (616) 752-2500

To Buyer:

New Plan Excel Realty Trust, Inc.
1120 Avenue of the Americas, 12^th Floor
New York, New York 10036
Attn: Steven F. Siegel
Facsimile: (212) 869-7460

With copy to:

Lichter Gliedman Weinberg PC
666 Fifth Avenue, 14^th Floor
New York, New York 10103
Attn: Edwin Weinberg, Esq.
Facsimile: (212) 658-9424

Communications may also be given by facsimile transmission at the number(s) set forth above, provided the communication is concurrently given by one of the above methods. Notices are effective upon receipt, or upon attempted delivery if delivery is refused or if

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delivery is impossible because of the recipient's failure to provide a reasonable means for accomplishing delivery. The attorneys for each party shall have the right to give notices on behalf of its client.

17.          Default.

(a)          IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER, THEN SELLER AS ITS SOLE AND EXCLUSIVE REMEDY SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES (OR IF THE DEPOSIT HAS NOT BEEN PAID BY BUYER, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $1,000,000), THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT, BY SIGNING THIS AGREEMENT EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.

(b)          If Seller shall default in its obligations under this Agreement, the Parties agree that Buyer's sole remedies shall be limited to the Termination Remedy or to specific performance of this Agreement.

18.          Reimbursement Amount. For purposes of this Agreement the "Reimbursement Amount" shall mean all of Buyer's out-of-pocket expenses incurred for environmental consultants and reports (not to exceed $42,000), engineering consultants and reports (not to exceed $26,000), accounting consultants (not to exceed $50,000), and legal fees and disbursements (not to exceed $100,000). If Buyer shall default in its obligation under this Agreement to close, Seller shall not reimburse Buyer for any portion of the Reimbursement Amount. If Seller shall default in its obligations under this Agreement (including, without limitation, the obligation to cause ABN-AMRO to release or satisfy its liens, encumbrances and security interests in the Centers), Seller shall promptly reimburse Buyer for one hundred percent (100%) of the Reimbursement Amount. If Seller shall not default in its obligations under this Agreement and Buyer shall not default in its obligation to close under this Agree ment, but the Closing does not occur due to Seller's failure to satisfy the conditions precedent set forth in Sections 3(d), 3(e), 3(f), 3(h), 3(i), 3(j), 3(k) or 3(l), Seller shall promptly reimburse Buyer for one hundred percent (100%) of the Reimbursement Amount. If Seller shall not default in its obligation under this Agreement and Buyer shall not default in its obligation to close under this Agreement but the Closing does not occur for any reason other than Seller's failure to satisfy the conditions precedent set forth in Sections 3(d), 3(e), 3(f), 3(h), 3(i),

- -38-
3(j), 3(k) or 3(l), Seller shall promptly reimburse Buyer for fifty percent (50%) of the Reimbursement Amount. If Buyer terminates this Agreement during the Inspection Period pursuant to Section 3(c) hereof, Seller shall promptly reimburse Buyer for fifty (50%) percent of the Reimbursement Amount. The provisions of this Section 18 shall survive the Closing or the sooner termination of this Agreement. The obligation of Seller under this Section 18 shall be covered by the Indemnification Agreement to be executed and delivered by Seller and Spartan at the Closing.

19.          Attorneys' Fees. In the event a Party or Parties commences a legal proceeding to enforce any of the terms of this Agreement, the prevailing Party or Parties in such action will have the right to recover reasonable attorneys' fees and costs from the responsible Party or Parties to be fixed by the court in the same action. The term "legal proceedings" as used above will be deemed to include appeals from a lower court judgment and it will include proceedings in the federal bankruptcy court, whether or not they are adversary proceedings or contested matters. The term "prevailing Party or Parties" as used above will be deemed to mean the prevailing Party or Parties in any adversary proceeding or contested matter or any other actions taken by the non-bankrupt Party or Parties which are reasonably necessary to protect its rights in the Properties and the terms of this Agreement. The phrase "prevailing Party or Parties" in the context of proceedings in any court other than the federal bankruptcy court will mean the Party or Parties that prevail in obtaining the remedy or relief sought and the responsible Party or Parties will be the Party or Parties held liable for such remedy or relief. The provisions of this Section 19 shall survive the Closing or the termination of this Agreement.

20.          1031 Transaction. Notwithstanding anything to the contrary set forth herein, Seller may take such steps as Seller shall deem necessary or desirable to qualify the sale of each Property (or any portion thereof) under Section 1031 of the Internal Revenue Code, including the use of, and/or assignment of this Agreement to, a "qualified intermediary" within the meaning of Treas. Regs. § 1.1031(k)-(g)(4), or the use of any other multiparty arrangement described in Treas. Regs. § 1.1031(k)-1(g) and/or in accordance with revenue procedure 2000-37 (a "1031 Transaction"). Buyer shall reasonably cooperate (which cooperation shall be at Seller's sole cost and expense) in so structuring a 1031 Transaction, if so desired by Seller, provided that such structuring shall not affect Buyer's rights or obligations hereunder except to a de minimis extent. Notwithstanding anything to the contrary contained herein, in no event shall Buyer be required to accept title to any property other than the LLC Interest which shall only have title to the Centers in connection with any such 1031 Transaction. Seller agrees to indemnify Buyer from and against all losses resulting from any claim made against Buyer in connection with such 1031 Transaction by Seller. In addition, notwithstanding anything to the contrary contained herein, Buyer may take such steps as Buyer shall deem necessary or desirable to qualify the purchase of each Property (or any portion thereof) or the LLC Interest as a 1031 Transaction including a reverse 1031 Transaction. Notwithstanding anything to the contrary contained herein, Buyer expressly reserves the right to assign its rights, but not its obligations, hereunder to a "qualified intermediary" as provided in Treas. Regs. § 1.031(k)-1(g)(4) on or before the Closing Date. Seller shall cooperate (which cooperation shall be at Purchaser's expense) in so structuring a 1031 Transaction, including a reverse 1031 Transaction, if so desired by Purchaser, provided

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that such structuring shall not affect Seller's rights hereunder except to a de minimis extent. Notwithstanding anything to the contrary contained herein, in no event shall Seller be required to accept any property other than cash in connection with any such 1031 Transaction from any entity in satisfaction of Purchaser's obligation to pay the Purchase Price. Buyer agrees to indemnify Seller from and against all losses resulting from any claim made against Seller in connection with such 1031 Transaction of Purchaser. The obligations of the Parties contained in this Section 20 shall survive the Closing.

21.          Public Announcements. After the Closing Date, either party or its affiliates may issue any press release or otherwise make public disclosures that it deems desirable or necessary with respect to this Agreement or the transactions contemplated hereby without the consent of the other Party; provided, however, the Party making such disclosure or its affiliates shall consult with the other Party (which shall not be deemed to require the other Party's consent therefor) prior to the issuance of any press releases relating to this Agreement or the transactions contemplated hereby and the Party making such disclosure shall reasonably consider the comments of the other Party to any proposed press release or public disclosures. The obligations of the Parties contained in this Section 21 shall survive the Closing.

22.          Survival. Subject to the limitations contained in this Agreement, the representations and warranties, releases, waivers, and indemnity agreements contained in this Agreement will survive any expiration or termination of this Agreement and will not merge into any deed delivered and accepted upon the Closing of the transaction herein contemplated. Notwithstanding anything to the contrary contained in this Agreement, the monetary liability of Seller and Spartan with respect to any representations, warranties, indemnifications, obligations, covenants or agreements contained in this Agreement, any document delivered pursuant to Section 8(a) of this Agreement, and/or any Exhibit or Schedule to this Agreement shall be limited solely and exclusively to the monetary liabilities and any applicable limits contained in the Indemnification Agreement to be executed and delivered by Seller, Buyer, the LLC and Spartan at Closing.

23.          Miscellaneous.

(a)          The terms, covenants and conditions of this Agreement will be binding upon and inure to the benefit of the heirs, successors, transferees and assigns of the Parties.

(b)          This Agreement may be assigned by the Buyer to Buyer's affiliates without the prior written consent of the Seller, provided that Seller shall have received written notice of such assignment at or prior to the Closing together with an executed copy of an assignment and assumption instrument pursuant to which the Buyer assigns all of its right, title and interest in and to this Agreement to the assignee (including all rights to the Deposit) and the assignee assumes and agrees to be bound by all of the obligations of the Buyer under this Agreement. Buyer shall not be released from any of its obligations under this Agreement in

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connection with any such assignment. Except as permitted by this Section 23(b), this Agreement shall not be assigned by Buyer without Seller's written consent, which consent shall not be unreasonably withheld or delayed.

(c)          This Agreement constitutes the entire Agreement between the Parties with respect to the subject matter hereof, incorporates all prior agreements (except for the Confidentiality Agreement between the Parties which shall remain in effect until the completion of the Closing), and may only be modified by a subsequent writing duly executed by the Buyer and by Clifford C. Sasfy or David M. Staples on behalf of Seller.

(d)          Time is expressly made of the essence of each and every provision of this Agreement.

(e)          This Agreement will be interpreted and construed only by the contents hereof, and there will be no presumption or standard of construction in favor of or against either Party.

(f)          This Agreement will be interpreted and construed in accordance with, and governed by, the laws of Michigan without reference to the conflicts of laws principles thereof.

(g)          The captions in this Agreement are for convenience only and do not constitute a part of the provisions hereof.

(h)          If any term or provision of this Agreement or the application of it to any person, entity or circumstance will to any extent be invalid and unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable will not be affected thereby, and each term and provision of this Agreement will be valid and will be enforced to the extent permitted by law.

(i)          The individuals executing this Agreement represent and warrant that they have the power and authority to do so, and to bind the entities for which they are executing this Agreement.

(j)          If the last day of any time period stated herein will fall on a Saturday, Sunday or federal or state legal holiday, then such time period will be extended to the next succeeding day which is not a Saturday, Sunday or federal or state legal holiday.

(k)          The parties recognize that the law firm of Warner Norcross & Judd LLP ("Seller's Counsel") is representing the Seller and is not representing the LLC in the transaction contemplated by this Agreement. Buyer has hired independent legal counsel to represent it in the transaction contemplated by this Agreement ("Buyer's Counsel"). Seller's Counsel will represent Seller's interests with

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respect to the LLC, and Buyer's Counsel will represent Buyer's interests with respect to the LLC.

(l)          This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same original, and the execution of separate counterparts by Buyer and Seller shall bind Buyer and Seller as if they had each executed the same counterpart.

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                    THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION OR NEGOTIATION OF THE TRANSACTION DESCRIBED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL THE PROPERTY, AND THE EXECUTION OF THIS AGREEMENT BY BUYER DOES NOT CONSTITUTE A BINDING CONTRACT UNTIL SUCH TIME AS THIS AGREEMENT HAS BEEN EXECUTED ON BEHALF OF SELLER AND DELIVERED TO BUYER.

                    This Agreement has been executed as of the date first above written.

WITNESSES:	SELLER:
	MARKET DEVELOPMENT CORPORATION, a Michigan corporation
/s/ Christian E. Meyer	By: /s/ Clifford C. Sasfy
Name: Christian E. Meyer
	Its: V.P.
/s/ Jill E. Schneider
Name: Jill E. Schneider

	BUYER:
WITNESSES	NEW PLAN EXCEL REALTY TRUST, INC., a Maryland corporation
/s/ Christian E. Meyer	By: /s/ Steven Siegel
Name: Christian E. Meyer
	Its: EVP
/s/ Jill E. Schneider
Name: Jill E. Schneider

The undersigned is executing this Agreement to acknowledge and agree to the terms hereof applicable to the undersigned.

SPARTAN STORES, INC.

By: /s/ James B. Meyer

          Name: James B. Meyer

          Title: President and CEO

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EXHIBIT A		LEGAL DESCRIPTIONS OF THE LAND
EXHIBIT B	--	CERTIFICATE OF FORMATION
EXHIBIT C	--	LLC AGREEMENT
EXHIBIT D	--	PURCHASE PRICE ALLOCATION
EXHIBIT E	--	TITLE POLICY ALLOCATION
EXHIBIT F	--	FORM OF BILL OF SALE
EXHIBIT G	--	FORM OF TENANT ESTOPPEL CERTIFICATE
EXHIBIT G-1	--	LIST OF TENANTS FROM WHOM ESTOPPEL                     CERTIFICATES MUST BE OBTAINED
EXHIBIT H	--	FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT I	--	INTENTIONALLY DELETED
EXHIBIT J	--	CONSENT TO THE ASSIGNMENT OF KENTWOOD                     D&W LEASE
EXHIBIT K	--	FORM OF REA ESTOPPEL CERTIFICATES
EXHIBIT K-1	--	LIST OF PARTIES FROM WHOM REA ESTOPPEL          CERTIFICATES MUST BE OBTAINED
EXHIBIT L	--	FORM OF ASSIGNMENT OF LLC INTEREST
EXHIBIT M	--	FORM LEASE ASSIGNMENT AND ASSUMPTION
EXHIBIT N	--	FORM OF NOTICE TO TENANTS
EXHIBIT O	--	FORM OF ASSIGNMENT OF WARRANTIES,                     APPROVALS, TRADE NAMES, PLANS AND                     PROPERTY FILES
EXHIBIT P	--	FORM OF UPDATE CERTIFICATE
EXHIBIT Q	--	FORM ASSIGNMENT AND ASSUMPTION                     OF CONTRACTS
EXHIBIT R	--	FORM OF NOTICE TO CONTRACT VENDORS
EXHIBIT S	--	FORM OF NOTICE TO REA PARTIES
EXHIBIT T	--	FORM OF KENTWOOD LEASES FOR SELLER                     AFFILIATES
SCHEDULE 3(a)(ii)	--	ENDORSEMENTS AND AFFIRMATIVE                     CONVENANTS TO BE CONTAINED                     IN TITLE POLICIES
SCHEDULE 10(h)	--	LEASE SCHEDULE
SCHEDULE 10(h)(1)		LIST OF TENANT ALLOWANCES AND                     INDUCEMENTS
SCHEDULE 10(h)(2)	--	AGED RECEIVABLE REPORTS FOR                     THE PROPERTIES
SCHEDULE 10(i)	--	CONTRACTS
SCHEDULE 10(j)	--	GENERAL LITIGATION
SCHEDULE 10(t)	--	ENVIRONMENTAL MATTERS
SCHEDULE 10(z)	--	ENVIRONMENTAL REPORTS
SCHEDULE 10(gg)		LIST OF ASSIGNABLE WARRANTIES AND                     GUARANTIES

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EX-21

EXHIBIT 21

LIST OF SUBSIDIARIES OF SPARTAN STORES, INC.
1.	SPARTAN STORES DISTRIBUTION, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Spartan Stores Distribution, LLC
2.	JFW DISTRIBUTING COMPANY Jurisdiction of Incorporation: Names under which business is conducted:	Michigan JFW Distributing Company
3.	LLJ DISTRIBUTING COMPANY Jurisdiction of Incorporation: Names under which business is conducted:	Michigan LLJ Distributing Company
4.	UNITED WHOLESALE GROCERY COMPANY Jurisdiction of Incorporation: Names under which business is conducted:	Michigan United Wholesale Grocery Company
5.	MARKET DEVELOPMENT CORPORATION Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Market Development Corporation Ludington Corner Ludington Corners Ludington Plaza Westland of Three Rivers Harvest Place Cascade East Kentwood Center Jefferson Square (in IN) Market Street Plaza (in IN)
6.	SPARTAN STORES HOLDING, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Spartan Stores Holding, Inc.

- 7.	SPARTAN STORES HOLDING, INC. subsidiaries include: FAMILY FARE, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Family Fare, LLC Ashcraft's Markets Ashcraft's Pharmacy Family Fare Management Services Family Fare Trucking Family Fare Pharmacy Family Fare Pharmacy #107 Family Fare Pharmacy #108 Family Fare Pharmacy #119 Family Fare Pharmacy #122 Family Fare Supermarket Glen's Markets Glen's Pharmacy Glen's Pharmacy #1523 Grand Valley Food Center Great Day Food Centers Great Day Markets Great Day Food Store Great Day Pharmacy Spartan Retail (in MI and IN) 32nd Street Baking Co.
- 8.	FAMILY FARE, LLC subsidiaries include: PREVO'S FAMILY MARKETS, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Prevo's Family Markets, Inc. Prevo's Pharmacy of Chum's Corner Prevo's Pharmacy of Bellaire Prevo's Pharmacy #636
9.	SPARTAN STORES ASSOCIATES, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Spartan Stores Associates, LLC
10.	MSFC, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan MSFC, LLC Madison Family Market

-2-

11.	MDP, L.L.C. (Family Fare, LLC has a 65% interest in MDP, L.L.C.) Jurisdiction of Formation: Names under which business is conducted:	Michigan MDP, L.L.C. Madison Family Market
12.	SEAWAY FOOD TOWN, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Seaway Food Town, Inc. (in OH) Handy Pantry (in OH) Valley Farm Foods (in OH) Balduf Bakeries (in OH) The Pharm (in OH) Buckeye Discount (in OH) Tracy & Avery Food Town (in OH)
- 13.	SEAWAY FOOD TOWN, INC. subsidiaries include: THE PHARM OF MICHIGAN, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan The Pharm of Michigan, Inc.
14.	BUCKEYE REAL ESTATE MANAGEMENT CO. Jurisdiction of Incorporation: Names under which business is conducted:	Ohio Buckeye Real Estate Management Co.
15.	VALLEY FARM DISTRIBUTING CO. Jurisdiction of Incorporation: Names under which business is conducted:	Ohio Valley Farm Distribution Co. VFD (in MI, OH and PA) Valley Farm Foods (in OH)
16.	PORT CLINTON REALTY COMPANY (General partnership owned 32% by Seaway Food Town, Inc.) Jurisdiction of Incorporation: Names under which business is conducted:	Ohio Port Clinton Realty Company

-3-

17.	GRUBER'S FOOD TOWN, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Gruber's Food Town, Inc. Kash N' Karry Super Food Stores Kash N' Karry Warehouse Market The Pharm Food Town Pharmacy #6040
18.	GRUBER'S REAL ESTATE, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Gruber's Real Estate, LLC
19.	CUSTER PHARMACY, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Custer Pharmacy, Inc. Food Town Pharmacy
20.	SI INSURANCE AGENCY, INC. (Formerly Shield Insurance Services, Inc.) Jurisdiction of Incorporation: Names under which business is conducted	Michigan SI Insurance Agency, Inc.
21.	SPARTAN INSURANCE COMPANY LTD. Jurisdiction of Incorporation: Names under which business is conducted	Bermuda Spartan Insurance Company Ltd.

-4-

EX-23

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE

Board of Directors of Spartan Stores, Inc.
Grand Rapids, Michigan

We consent to the incorporation by reference in Registration Statement No. 33-47442 of Spartan Stores, Inc. 1991 Stock Bonus Plan, Registration Statement No. 33-47493 of Spartan Stores, Inc. 1991 Stock Option Plan, Registration Statement No. 33-96259 of Spartan Stores, Inc. Long Term Incentive Plan, Registration Statement No. 333-65802 of Spartan Stores, Inc. 2001 Stock Incentive Plan, Registration Statement No. 333-66430 of Spartan Stores, Inc. Savings Plus Plan, Spartan Stores, Inc. Savings Plus Plan for Union Associates, Spartan Retail Savings Plus Plan, Spartan Stores, Inc. Savings Plus Plan for J.F. Walker Company Associates, and the Post Effective Amendment No. 1 thereto, Registration Statement No. 333-71774 of Spartan Stores, Inc. 2001 Stock Bonus Plan, Registration Statement No. 333-72010 of Spartan Stores, Inc. 2001 Associate Stock Purchase Plan, Registration Statement No. 333-75810 of Spartan Stores, Inc. Supplemental Executive Savings Plan, Registration Statement No. 333-100794 of Spartan Store s, Inc. Savings Plus Plan, Spartan Stores, Inc. Savings Plus Plan for Union Associates, Spartan Retail Savings Plus Plan, and Spartan Stores, Inc. Savings Plus Plan for J.F. Walker Company Associates, Registration Statement No. 333-96615 of Spartan Stores, Inc. Savings Plus Plan for J.F. Walker Company Associates on Forms S-8, and Registration Statement No. 333-53672 of Spartan Stores, Inc. Prospectus on Form S-3 and Amendments No. 1 and No. 2 thereto of our report dated May 6, 2003, (June 20, 2003 as to Notes 3 and 8) (which report expresses an unqualified opinion and includes an explanatory paragraph related to a change in the method of accounting for goodwill and discontinued operations to conform to Statements of Financial Accounting Standards Nos. 142 and 144) appearing in this Annual Report on Form 10-K of Spartan Stores, Inc. for the year ended March 29, 2003.

Our audits of the financial statements referred to in our aforementioned report also included the financial statement schedule of Spartan Stores, Inc. (the "Company"), listed in Item 14(a)(2). This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan
June 25, 2003

EX-24

EXHIBIT 24

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ James B. Meyer
Print Name:	James B. Meyer
Title:	Chairman of the Board
Date:	April 16, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ Kenneth T. Stevens
Print Name:	Kenneth T. Stevens
Title:	Director
Date:	April 15, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ James F. Wright
Print Name:	James F. Wright
Title:	President / CEO
Date:	April 26, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ Elson S. Floyd
Print Name:	Elson S. Floyd
Title:	Director
Date:	April 15, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ Richard B. Iott
Print Name:	Richard B. Iott
Title:	Director
Date:	April 17, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ Gregory P. Josefowicz
Print Name:	Gregory P. Josefowicz
Title:	Chairman, CEO Browns Group
Date:	April 15, 2003

POWER OF ATTORNEY

          KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that the person whose signature appears below constitutes and appoints DAVID M. STAPLES and ALEX J. DEYONKER, and each of them, such individual's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such individual and in his or her name, place and stead, in any and all capacities, to sign the Form 10-K of SPARTAN STORES, INC. for its fiscal year ended March 29, 2003, together with any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission or other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature:	/s/ Elizabeth A. Nickels
Print Name:	Elizabeth A. Nickels
Title:	Director
Date:	April 14, 2003

EX-99

EXHIBIT 99

CERTIFICATION

Solely for the purpose of complying with 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of Spartan Stores, Inc. (the "Company") that the Annual Report of the Company on Form 10-K for the year ended March 29, 2003 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

/s/ Craig C. Sturken	/s/ David M. Staples
Craig C. Sturken President and Chief Executive Officer Dated: June 25, 2003	David M. Staples Executive Vice President and Chief    Financial Officer Dated: June 25, 2003

A signed original of this written statement has been provided to Spartan Stores, Inc. and will be retained by Spartan Stores, Inc. and furnished to the Securities and Exchange Commission or its staff upon request