SHOPKO STORES INC
FORM OF STOCK OPTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>c88090exv10w2.txt
<DESCRIPTION>FORM OF STOCK OPTION AGREEMENT
<TEXT>
<PAGE>

Exhibit 10.2

                                  STOCK OPTION

                                    AGREEMENT

                           (2004 Stock Incentive Plan)

      THIS AGREEMENT, entered into as of the Agreement Date (as defined in
Paragraph 1), by and between the Participant and ShopKo Stores, Inc. (the
"Company");

                                WITNESSETH THAT:

      WHEREAS, the Company maintains the ShopKo Stores, Inc. 2004 Stock
Incentive Plan (the "Plan"), which is incorporated into and forms a part of this
Agreement, and the Participant has been selected by the committee administering
the Plan (the "Committee") to receive a Non-Qualified Stock Option Award under
the Plan;

      NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:

      1. Terms of Award. The following terms used in this Agreement shall have
the meanings set forth in this Paragraph 1:

            a.    The "Participant" is ____________________.

            b.    The "Agreement Date" is _________________.

            c.    The number of "Covered Shares" shall be _____ shares of Stock.

            d.    The "Exercise Price" is $_______ per share.

Other capitalized terms used in this Agreement are defined in Paragraph 8 or
elsewhere in this Agreement.

      2. Award and Exercise Price. The Participant is hereby granted an option
(the "Option") to purchase the number of Covered Shares of Stock at the Exercise
Price per share as set forth in Paragraph 1. The Option is not intended to
constitute an "incentive stock option" as that term is used in Code section 422.

      3. Exercisability of Option. So long as the Participant's Date of
Termination shall not have occurred, the Option shall become exercisable
according to the following schedule:

<TABLE>
<CAPTION>
                                                          Percentage of Covered Shares Becoming
Anniversaries of the Agreement Date                              Exercisable on Such Date
-----------------------------------                              ------------------------
<S>                                                       <C>
     _________, 200_                                                     33 1/3%
     _________, 200_                                                     33 1/3%
     _________, 200_                                                     33 1/3%
</TABLE>

Exercisability under this schedule is cumulative, and after the Option becomes
exercisable with respect to any portion of full Covered Shares, it shall
continue to be exercisable with respect to that portion of the Covered Shares
until the Option expires. Notwithstanding the foregoing provisions of this
Paragraph 3, the Option shall become exercisable with respect to all of the
Covered Shares as follows:

      a.    The Option shall become fully exercisable upon the date of the
            Participant's Date of Termination by reason of the Participant's
            death or Disability.

      b.    The Option shall become fully exercisable upon a Change of Control
            if the Participant's Date of Termination does not occur before the
            Change of Control.

                                       33
<PAGE>

      4. Expiration. The Option shall not be exercisable on or after the
Expiration Date. The "Expiration Date" shall be earliest to occur of:

      a.    the tenth anniversary of the Agreement Date;

      b.    if the Participant's Date of Termination occurs by reason of death
            or Disability, the first anniversary of such Date of Termination;

      c.    if the Participants' Date of Termination occurs by reason of
            Retirement, the second anniversary of such Date of Termination; or

      d.    if the Participant's Date of Termination occurs for reasons other
            than death, Disability, or Retirement, the 90 day anniversary of
            such Date of Termination.

If the Participant's Date of Termination occurs by reason of death, or if the
Participant dies after the Date of Termination and prior to the occurrence of
the Expiration Date, then, notwithstanding the foregoing, the Expiration Date
shall be the first anniversary of the date of death.

      5. Method of Option Exercise. The Option may be exercised in whole or in
part, but with respect to a whole number of shares only, by filing a written
notice with the Secretary of the Company at its corporate headquarters prior to
the Expiration Date. Such notice shall specify the whole number of shares of
Stock which the Participant elects to purchase, and shall be accompanied by
payment of the Exercise Price for such shares of Stock indicated by the
Participant's election. Payment shall be by cash or by check payable to the
Company. Except as otherwise provided by the Committee before the Option is
exercised: (i) all or a portion of the Exercise Price may be paid by the
Participant by delivery of previously-owned shares of Stock which are mature as
determined by applicable Internal Revenue Service and accounting rules and
regulations and acceptable to the Committee and having an aggregate Fair Market
Value (valued as of the date of exercise) that is equal to the amount of cash
that would otherwise be required; or (ii) the Participant may pay the Exercise
Price by authorizing a third party to sell shares of Stock (or a sufficient
portion of the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.

      6. Withholding. All distributions under this Agreement are subject to
withholding of all applicable taxes. At the election of the Participant, and
subject to such rules as may be established by the Committee, such withholding
obligations may be satisfied through the surrender of shares of Stock which the
Participant already owns, or to which the Participant is otherwise entitled
under the Plan.

      7. Transferability. Except as otherwise provided in this Paragraph 7, the
Option is not transferable other than as designated by the Participant by will
or by the laws of descent and distribution, and during the Participant's life,
may be exercised only by the Participant.

      8. Definitions. For purposes of this Agreement, the terms listed below
shall be defined as follows:

      a. Change of Control. The term "Change of Control" shall mean any of the
following events:

            (1) the acquisition by an individual, entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
      1934, as amended (the "Exchange Act") (a "Person") 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
      the Company (the "Outstanding Company Common Stock") or (ii) the combined
      voting power of the then outstanding voting securities of the Company
      entitled to vote generally in the election of directors (the "Outstanding
      Company Voting Securities"); provided, however, that for purposes of this
      subsection (1), the following acquisitions shall not constitute a Change
      of Control: (i) any acquisition directly from the Company, (ii) any
      acquisition by the Company, (iii) any acquisition by any employee benefit
      plan (or related trust) sponsored or maintained by the Company or any
      corporation controlled by the Company, (iv) any acquisition by any
      corporation pursuant to a transaction which complies with clauses (i),
      (ii) and (iii) of subsection (3) below, or (v) any acquisition of 20% or
      more but less than a majority of either the Outstanding Company Common

                                       34
<PAGE>

      Stock or the Outstanding Company Voting Securities by any individual,
      entity or group if at least a majority of the members of the Board of
      Directors of the Company were members of the Incumbent Board, as defined
      below, at the time of such acquisition; or

            (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 the Board; provided, however, that any individual becoming a
      director subsequent to the date hereof whose election, or nomination for
      election by the Company's shareholders, was approved by a vote of at least
      a majority of the directors then constituting the Incumbent Board shall be
      considered as though such individual were a member of the Incumbent Board,
      but excluding, for this purpose, any such individual whose initial
      assumption of office occurs as a result of an actual or threatened
      election contest with respect to the election or removal of directors or
      other actual or threatened solicitation of proxies or consents by or on
      behalf of a person other than the Board; or

            (3) consummation of a reorganization, merger or consolidation or
      sale or other disposition of all or substantially all of the assets of the
      Company for which approval of the shareholders of the Company is required
      (a "Business Combination"), in each case, unless, immediately following
      such Business Combination, (i) all or substantially all of the individuals
      and entities who were the beneficial owners, respectively, of the
      Outstanding Company Common Stock and Outstanding Company Voting Securities
      immediately prior to such Business Combination beneficially own, directly
      or indirectly, more than 50% of, respectively, the then outstanding shares
      of common stock and the combined voting power of the then outstanding
      voting securities entitled to vote generally in the election of directors,
      as the case may be, of the corporation resulting from such Business
      Combination (including, without limitation, a corporation which as a
      result of such transaction owns the Company or all or substantially all of
      the Company's assets either directly or through one or more subsidiaries)
      in substantially the same proportions as their ownership, immediately
      prior to such Business Combination of the Outstanding Company Common Stock
      and Outstanding Company Voting Securities, as the case may be and (ii) at
      least a majority of the members of the Board of Directors of the
      corporation resulting from such Business Combination were members of the
      Incumbent Board at the time of the execution of the initial agreement, or
      of the action of the Board, providing for such Business Combination; or

            (4) approval by the shareholders of the Company of a complete
      liquidation or dissolution of the Company.

      b.    Date of Termination. The Participant's "Date of Termination" shall
            be the first day occurring on or after the Agreement Date on which
            the Participant's employment with the Company and all Related
            Companies terminates for any reason; provided that a termination of
            employment shall not be deemed to occur by reason of a transfer of
            the Participant between the Company and a Related Company or between
            two Related Companies; and further provided that the Participant's
            employment shall not be considered terminated while the Participant
            is on a leave of absence from the Company or a Related Company
            approved by the Participant's employer. If, as a result of a sale or
            other transaction, the Participant's employer ceases to be a Related
            Company (and the Participant's employer is or becomes an entity that
            is separate from the Company), the occurrence of such transaction
            shall be treated as the Participant's Date of Termination caused by
            the Participant being discharged by the employer.

      c.    Disability. "Disability" is as defined in the Company's long-term
            disability plan as in effect at the time disability is being
            determined.

      d.    Retirement. "Retirement" of the Participant shall mean the
            occurrence of the Participant's Date of Termination after age 55
            with ten (10) or more years of service with the Company or a Related
            Company, or if the Committee consents at the time employment
            terminates, the Participant's Date of Termination after age 55
            regardless of the number of years of service with the Company.

      e.    Plan Definitions. Except where the context clearly implies or
            indicates the contrary, capitalized terms not defined herein shall
            have the meanings specified in the Plan.

                                       35
<PAGE>

      9. Heirs and Successors. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. In the
event of the Participant's death prior to exercise of this Award, the Award may
be exercised by the estate of the Participant to the extent such exercise is
otherwise permitted by the Agreement. Subject to the terms of the Plan, any
benefits distributable to the Participant under this Agreement that are not paid
at the time of the Participant's death shall be paid at the time and in the form
determined in accordance with the provisions of this Agreement and the Plan, to
the beneficiary designated by the Participant in writing filed with the
Committee in such form and at such time as the Committee shall require. If a
deceased Participant fails to designate a beneficiary, or if the designated
beneficiary of the deceased Participant dies before the Participant or before
complete payment of the amounts distributable under this Agreement, the amounts
to be paid under this Agreement shall be paid to the legal representative or
representatives of the estate of the last to die of the Participant and the
beneficiary.

      10. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding.

      11. Agreement Subject to Plan. Notwithstanding anything in this Agreement
to the contrary, the terms of this Agreement shall be subject to the terms of
the Plan, a copy of which may be obtained by the Participant from the office of
the Secretary of the Company. In the event of any inconsistency between the
terms of this Agreement and the terms of the Plan, the terms of the Plan shall
control.

      12. Amendment. This Agreement may be amended as described in the Plan, or
by written Agreement of the Participant and the Company, without the consent of
any other person.

      IN WITNESS WHEREOF, the Participant has executed this Agreement, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Agreement Date.

                                         Participant:

                                         _______________________________________

                                         SHOPKO STORES, INC.

                                         By: ___________________________________
                                             Peter G. Vandenhouten
                                         Its: Secretary

                                       36

</TEXT>
</DOCUMENT>
