EMPLOYMENT AGREEMENT

                               (JOSEPH R. BACZKO)



         EMPLOYMENT AGREEMENT (the "Agreement"), dated January 18, 2001, by and

among FNC Holdings Inc. ("Holdings"), Frank's Nursery & Crafts, Inc. (the

"Company") and Joseph R. Baczko (the "Executive").



         WHEREAS, Executive is currently employed as the Chief Executive Officer

of each of Holdings and the Company, and currently serves on the Board of

Directors of each of Holdings and the Company as Chairman of the Board and as a

member of the Executive Committee;



         WHEREAS, Holdings and the Company desire to continue to employ

Executive and to enter into an agreement embodying the terms of such employment;



         WHEREAS, Executive desires to continue such employment and enter into

such an agreement;



         WHEREAS, Holdings and the Company each consider it essential to its

best interests and the best interests of its stockholders to foster the

continued employment of Executive by Holdings and the Company during the term of

this Agreement; and



         WHEREAS, Executive is willing to accept and continue his employment on

the terms hereinafter set forth in this Agreement;



         NOW, THEREFORE, in consideration of the premises and mutual covenants

herein and for other good and valuable consideration, the parties agree as

follows:



         1. TERM OF EMPLOYMENT; EXECUTIVE REPRESENTATION.



                  a. Employment Term. Subject to the remaining provisions of

this Agreement, Executive shall be employed by Holdings and the Company for a

period commencing on the date hereof and ending on January 31, 2003 (the

"Employment Term") on the terms and subject to the conditions set forth in this

Agreement.



                  b. Executive Representation. Executive hereby represents to

Holdings and the Company that (i) the execution and delivery of this Agreement

by Executive, Holdings and the Company and the performance by Executive of the

Executive's duties hereunder shall not constitute a breach of, or otherwise

contravene, the terms of any employment agreement or other agreement or policy

to which Executive is a party or otherwise bound, and (ii) Executive has acted

in compliance with the provisions of Section 9 below at all times prior to the

date hereof.





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                  c. Prior Agreements. This Agreement supercedes all prior

agreements and understandings (including verbal agreements) between Executive,

Holdings and/or the Company and/or any of their affiliates regarding the terms

and conditions of Executive's employment with Holdings, the Company and/or any

of their affiliates.



         2. POSITION.



                  a. During the Employment Term, Executive shall serve as the

Chief Executive Officer of Holdings and the Company, and the Company shall use

reasonable best efforts to ensure that Executive is elected to serve, following

due nomination and Executive's agreement to run, as a member of the Executive

Committee (as long as such Executive Committee exists) and as Chairman of the

Board of Directors of each of Holdings and the Company. Executive shall

principally perform his duties to Holdings and the Company from the Company's

offices in the Troy, Michigan metropolitan area, subject to normal and customary

travel requirements in the conduct of such business. In such positions,

Executive shall have such duties and authority as shall be determined from time

to time by the Board of Directors of Holdings (the "Board"), and the Executive

shall report directly to the Board.



                  b. During the Employment Term, Executive will devote his full

business time and best efforts to the performance of his duties hereunder and

will not engage in any other business, profession or occupation for compensation

or otherwise which would conflict with the rendition of such services either

directly or indirectly, without the prior written consent of the Board.



         3. BASE SALARY. During the Employment Term, the Company shall pay

Executive a base salary (the "Base Salary") at the annual rate of five hundred

seventy-five thousand dollars ($575,000), payable in regular installments in

accordance with the Company's usual payment practices. Executive shall be

entitled to such increases in his Base Salary, if any, as may be determined from

time to time in the sole discretion of the Compensation Committee of the Board.



         4. ANNUAL BONUS. With respect to each calendar year during the

Employment Term, Executive shall be eligible to earn an annual bonus award (an

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