Docstoc

Albertson's Severance Plan For Officers - SUPERVALU INC - 9-13-2001

Document Sample
Albertson's Severance Plan For Officers - SUPERVALU INC - 9-13-2001 Powered By Docstoc
					EXHIBIT 10.39 ALBERTSON'S SEVERANCE PLAN FOR OFFICERS EFFECTIVE JULY 18, 2001 SECTION 1--PURPOSE The purpose of the Albertson's Severance Plan for Officers ("Plan") is to provide severance pay and benefits to certain Officers of Albertson's, Inc. and its subsidiaries (collectively the "Company") whose employment is involuntarily terminated in connection with the Company's cost control initiatives, where such employment termination is other than by discharge including unsatisfactory performance, during the period from July 18, 2001 to June 30, 2002. When the employment of such Officers is so terminated, the employment relationship shall be completely severed and affected Officers shall have no current or future right to employment on a full-time, parttime, per diem, consulting or other basis. The Plan is intended to be "employee welfare benefit plan" as that term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended. Severance benefits for this period shall be determined exclusively under this Plan unless a separate agreement has been or will be reached. All of the corporate policies and practices regarding severance, or similar payments upon employment termination, with respect to Officers eligible to participate herein are hereby superseded by this Plan. Benefits under this Plan are in no way contingent upon retirement under any Company retirement plan. SECTION 2--DEFINITIONS The following capitalized terms shall have the meanings set forth in this Section 2 unless the context clearly indicates otherwise: 2.1 Administrator means the Company or its delegees. 2.2 Company means Albertson's, Inc. and its subsidiaries except as excluded in the definition of "Officer" in Section 2.5. 2.3 Effective Date means July 18, 2001. 2.4 ERISA means the Employee Retirement Income Security Act of 1974, as amended. 2.5 Officer means any active, full-time officer of the Company who is listed as an Officer on Exhibit B hereto. For purposes of this Plan, "Officer" as defined in Exhibit B excludes any individual who has an individual employment or severance agreement with the Company. 1

EXHIBIT 10.39 2.6 Participant means an Officer who is notified by the Company that his or her employment is to be involuntarily terminated by the Company on or after the Effective Date but on or before June 30, 2002, other than termination that is the result of actions by the Officer which, as determined by the Company in its sole discretion, would normally result in termination or discharge. 2.7 Pay or Base Pay means the Officer's regular base salary or wages on the Officer's Severance Date, excluding all extra pay such as overtime, premiums, bonuses, commissions, living or other allowance. 2.8 Plan means the Albertson's Severance Plan for Officers. 2.9 Plan Year means the period from July 18, 2001 through June 30, 2002.

EXHIBIT 10.39 2.6 Participant means an Officer who is notified by the Company that his or her employment is to be involuntarily terminated by the Company on or after the Effective Date but on or before June 30, 2002, other than termination that is the result of actions by the Officer which, as determined by the Company in its sole discretion, would normally result in termination or discharge. 2.7 Pay or Base Pay means the Officer's regular base salary or wages on the Officer's Severance Date, excluding all extra pay such as overtime, premiums, bonuses, commissions, living or other allowance. 2.8 Plan means the Albertson's Severance Plan for Officers. 2.9 Plan Year means the period from July 18, 2001 through June 30, 2002. 2.10 Release Agreement means the Severance Agreement and Release attached hereto as Exhibit A, which shall include a general release given by the Participant to the Company and other matters stated therein. The Release Agreement shall bind the Participant and the Company. 2.11 Severance Date means the date established by the Company as a Participant's last day of employment. 2.12 Successor means any employer (whether or not the employer is affiliated with the Company) which acquires (through merger, consolidation, reorganization, transfer, sublease, assignment, or otherwise) (i) all or substantially all of the business or assets of the Company, of a division of the Company, or of a single facility or business unit of the Company, or (ii) the facility where the Officer usually works. 2.13 Years of Service shall mean the completed 12-month periods during which an Officer has been employed by the Company on a continuous basis measured from the Officer's most recent hire or rehire date (not an adjusted or reinstated hire date). SECTION 3--ELIGIBILITY AND PAYMENT 3.1 Subject to Sections 3.2, 3.3, and 3.4 of this Plan, an Officer shall become a Participant if, on or after the Effective Date, but on or before June 30, 2002, the Officer is notified by the Company that his or her employment with the Company is to be involuntarily terminated by the Company unless such termination is the result of actions by the Officer which, as determined by the Company in its sole discretion, would normally result in a termination or discharge. An employee who is on a Company-approved Family and Medical leave, worker's compensation or other medical or disability related leave will be subject to the appropriate Company leave policy when the employee returns from leave. 3.2 A Participant shall be entitled to the severance pay set forth in Section 4 hereof, if: 2

EXHIBIT 10.39 (a) he or she returns and does not revoke a completed and executed Release Agreement to the Company within the time period specified in the Release Agreement after such person's Severance Date; and, (b) he or she is not and does not become disqualified from receiving severance pay pursuant to Section 3.3 hereof at any time prior to such person's Severance Date. 3.3 A Participant shall not be entitled to the severance pay set forth in Section 4 hereof, if: (a) the Officer either (i) fails to return a signed Release Agreement to the Company within the time period specified in the Release Agreement after that person's Severance Date or (ii) revokes such Release Agreement

EXHIBIT 10.39 (a) he or she returns and does not revoke a completed and executed Release Agreement to the Company within the time period specified in the Release Agreement after such person's Severance Date; and, (b) he or she is not and does not become disqualified from receiving severance pay pursuant to Section 3.3 hereof at any time prior to such person's Severance Date. 3.3 A Participant shall not be entitled to the severance pay set forth in Section 4 hereof, if: (a) the Officer either (i) fails to return a signed Release Agreement to the Company within the time period specified in the Release Agreement after that person's Severance Date or (ii) revokes such Release Agreement within the time period specified in the Release Agreement; (b) prior to his or her Severance Date, the Officer (i) terminates voluntarily his or her employment, (ii) fails to show up and properly attend work, and/or (iii) fails to adequately perform his or her employment duties as established by the Company in its sole discretion; (c) the Officer begins employment or provides services as an independent contractor with or for the Company or any of its affiliates within 6 months following his or her Severance Date; (d) the Officer rejects an offer or fails to accept an offer of another position from a Successor or from any affiliate of the Company on or before his or her Severance Date; provided, however, that an Officer may still receive his or her severance benefits despite rejecting such offer if either (i) the new position has a Base Pay less than eighty (80) percent of his or her current Base Pay, or (ii) the new job will require the Officer to work in a facility located more than 50 miles from his or her current workplace; or (e) prior to the Severance Date, the Company terminates the employment of the Officer and either (i) the termination is the result of actions by the Officer which, as determined by the Company in its sole discretion would normally result in termination or discharge, or (ii) the Company determines after such termination that the Officer had engaged in conduct that was significantly detrimental to the Company, in clear violation of Company policies or procedures, or that resulted in a cost to the Company and that would result in termination or discharge had such conduct been known to the Company prior to such termination. 3.4 Prior to the date the Participant's employment with the Company will terminate, such Participant will receive a Release Agreement, substantially in the form attached to this Plan as Exhibit A. If the Participant accepts and agrees to his or her severance pay and benefits as determined, he or she shall execute the Release Agreement and return it to the Vice President, Human Resources Administration within the time period specified in the Release Agreement following his or her Severance Date. Such Release Agreement must be timely and 3

EXHIBIT 10.39 appropriately executed by its terms for the Participants to qualify for payments and benefits under Section 4. SECTION 4--AMOUNT AND PAYMENT OF SEVERANCE PAY 4.1 A Participant's severance pay under this Section 4 shall be the number of weeks of Pay set forth in the following schedule based on such Participant's status and his or her number of full Years of Service and shall be paid in one lump sum as soon as practicable after the Participant's Severance Date with the Company or such longer period as may be required by the Release Agreement. Amounts to be paid are as follows: Thirty-nine weeks' Pay plus (1) 100 percent target bonus prorated based on the number of weeks actually worked during the fiscal year since the beginning of the most recent bonus eligibility period, plus (2) 100 percent target bonus prorated based on twenty-six weeks.

EXHIBIT 10.39 appropriately executed by its terms for the Participants to qualify for payments and benefits under Section 4. SECTION 4--AMOUNT AND PAYMENT OF SEVERANCE PAY 4.1 A Participant's severance pay under this Section 4 shall be the number of weeks of Pay set forth in the following schedule based on such Participant's status and his or her number of full Years of Service and shall be paid in one lump sum as soon as practicable after the Participant's Severance Date with the Company or such longer period as may be required by the Release Agreement. Amounts to be paid are as follows: Thirty-nine weeks' Pay plus (1) 100 percent target bonus prorated based on the number of weeks actually worked during the fiscal year since the beginning of the most recent bonus eligibility period, plus (2) 100 percent target bonus prorated based on twenty-six weeks. Employment taxes shall be withheld from all severance payments but voluntary deductions shall not be allowed. In addition, any amount payable under this Section above, shall be reduced (but not below zero) by any payment made as required by government-mandated programs that require payment of wages and fringe benefits in lieu of notice of closing, layoffs or termination of employment. 4.2 In addition to the severance payment described above, the Company will also offer additional benefits to all Participants as follows. (a) Participants shall have the right to continue medical and dental benefits under the continuation health coverage provisions of Title X of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) after his or her Severance Date, if otherwise eligible and/or, if eligible, may enroll in the Retiree Health Plan. To the extent that the Participant is eligible for and elects COBRA coverage, the Company shall cover the premiums or cost of such coverage on a monthly basis for the lesser of (1) the first six months of coverage, or (2) until Participant no longer qualifies to participate. At the end of the Officer's Company-paid COBRA coverage, the Officer may continue COBRA coverage at the Officer's expense or to the extent eligible under the terms of such Plan may elect to participate in the Company's self-pay retiree health care plan. Alternatively, if eligible, the Officer may elect the self-pay retiree health coverage at the end of the 18-month COBRA period. In no event shall any Participant be entitled to a cash payment in lieu of health coverage. (b) Participants shall be paid for normal termination vacation pay and any other earned pay (if any) pursuant to existing Company policy and applicable state law. (c) Benefits under any other employee benefit plans, including but not limited to, tax-qualified retirement plans, retiree health care plan, fringe benefit plans, policies, programs, stock option 4

EXHIBIT 10.39 plans and nonqualified deferred compensation plans sponsored by the Company are governed solely by the terms of those plans, programs or policies. Participants may exercise stock options, to the extent that such options are exercisable under their terms. This Plan does not change the eligibility, termination or other provisions for those benefits. (d) The Company may offer additional benefits or programs which, if offered, shall be described in appendices to this Plan. 4.3 The Company reserves the right to offset the benefits payable under Section 4, by any advance, loan or other monies the Participant owes the Company. SECTION 5--DEATH BENEFITS

EXHIBIT 10.39 plans and nonqualified deferred compensation plans sponsored by the Company are governed solely by the terms of those plans, programs or policies. Participants may exercise stock options, to the extent that such options are exercisable under their terms. This Plan does not change the eligibility, termination or other provisions for those benefits. (d) The Company may offer additional benefits or programs which, if offered, shall be described in appendices to this Plan. 4.3 The Company reserves the right to offset the benefits payable under Section 4, by any advance, loan or other monies the Participant owes the Company. SECTION 5--DEATH BENEFITS 5.1 If a Participant dies before receiving all of his or her severance pay due under this Plan, such pay will be distributed in one lump sum cash payment to the Officer's estate. 5.2 The Administrator may require that any individual or entity purporting to represent a Participant's estate provide such proof of such status as the Administrator may deem appropriate, including but not limited to letters testamentary or letters of administration. The Administrator may also require that such individual, as a condition to receiving severance pay, agree in a provision to be incorporated in the Release Agreement, to indemnify and hold harmless the Administrator and such other persons deemed appropriate by the Administrator for any financial responsibility, liability or expense arising out of a claim by another party or parties asserting entitlement to all or part of the benefit payable hereunder. In addition, the Company reserves the right to offset the benefits payable under this Section 5 by any advance, loan or other monies the Participant, with respect to whom the severance pay is being paid, owes the Company. SECTION 6--ADMINISTRATION 6.1 The Company shall have sole discretionary authority to interpret, apply and administer the terms of the Plan and to determine eligibility for and the amounts of benefits under the Plan, including interpretation of ambiguous Plan provisions, determination of disputed facts or application of Plan provisions to unanticipated circumstances. The Company's decision on any such matter shall be final and binding. 6.2 The Company shall be the administrator of the Plan for purposes of Section 3(16) of ERISA and shall have responsibility for complying with any ERISA reporting and disclosure rules applicable to the Plan for any Plan Year. The Administrator may at any time delegate to any other named person or body, or reassume therefrom, any of its fiduciary responsibilities (other than trustee responsibilities as defined in Section 405(c)(3) of ERISA) or administrative duties with respect to this Plan. 6.3 The Administrator may contract with one or more persons to render advice or services with regard to any responsibility it has under this Plan. 5

EXHIBIT 10.39 6.4 Subject to the limitations of this Plan, the Administrator shall from time to time establish such rules for the administration of this Plan as the Administrator may deem desirable. SECTION 7--CLAIMS PROCEDURE 7.1 If a Participant believes he or she has not been provided with severance pay benefits due under the Plan, then the Participant may file a request for benefits under this procedure with the Human Resources Department or its delegate within ninety (90) days after the date the Participant believes he or she should have received such benefits. If a Participant makes such a request for benefits under the Plan and that claim is denied, in whole or in

EXHIBIT 10.39 6.4 Subject to the limitations of this Plan, the Administrator shall from time to time establish such rules for the administration of this Plan as the Administrator may deem desirable. SECTION 7--CLAIMS PROCEDURE 7.1 If a Participant believes he or she has not been provided with severance pay benefits due under the Plan, then the Participant may file a request for benefits under this procedure with the Human Resources Department or its delegate within ninety (90) days after the date the Participant believes he or she should have received such benefits. If a Participant makes such a request for benefits under the Plan and that claim is denied, in whole or in part, the Administrator shall notify the Participant of the adverse determination within ninety (90) calendar days unless the Administrator determines that special circumstances require an extension of time for processing. If the Administrator determines that an extension of time is necessary, written notice shall be furnished to the claimant prior to the end of the initial ninety-day period and the extension shall not exceed ninety days from the original ninety-day period. The extension notice shall indicate the special circumstances requiring an extension and the date by which the Administrator expects to render a determination. The Administrator shall notify the Participant of the specific reasons for the denial with specific references to pertinent Plan provisions on which the denial is based and shall notify the Participant of any additional material or information that is needed to perfect the claim and explanation of why such material or information is necessary. At that time the Participant will be advised of his or her right to appeal that determination, and given an explanation of the Plan's review and appeal procedure including time limits, and a statement regarding the Participant's right to bring a civil action under ERISA section 502(a) following an adverse determination or appeal. 7.2 A Participant may appeal from the determination or denial by submitting to the Administrator within sixty (60) calendar days after receiving a denial notice: (a) Requesting a review by the Administrator of the claim; (b) Setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and (c) Setting forth any issues or comments which the Participant deems relevant to the claim. The Participant may submit written comments, documents, records and other information relating to his claim. Upon request, the Participant may obtain free of charge, copies of all documents and records relevant to his claim. 7.3 The Administrator shall act upon the appeal taking into account all comments, documents, records and other information submitted by the 6

EXHIBIT 10.39 Participant without regard to whether such information was submitted or considered in the initial benefit determination and shall render a decision within sixty (60) days or one hundred twenty (120) days in special circumstances after its receipt of the appeal. If the Administrator determines that an extension of time is necessary, written notice of the extension shall be furnished to the Participant prior to the end of the initial sixtyday period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a determination. The Administrator shall review the claim and all written materials submitted by the Participant, and may require him or her to submit, within ten (10) days of its written notice, such additional facts, documents, or other evidence as the Administrator in its sole discretion deems necessary or advisable in making such a review. On the basis of

EXHIBIT 10.39 Participant without regard to whether such information was submitted or considered in the initial benefit determination and shall render a decision within sixty (60) days or one hundred twenty (120) days in special circumstances after its receipt of the appeal. If the Administrator determines that an extension of time is necessary, written notice of the extension shall be furnished to the Participant prior to the end of the initial sixtyday period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Administrator expects to render a determination. The Administrator shall review the claim and all written materials submitted by the Participant, and may require him or her to submit, within ten (10) days of its written notice, such additional facts, documents, or other evidence as the Administrator in its sole discretion deems necessary or advisable in making such a review. On the basis of its review, the Administrator shall make an independent determination of the Participant's eligibility for benefits and the amount of such benefits under the Plan. The decision of the Administrator on any claim shall be final and conclusive upon all persons if supported by substantial evidence. If the Administrator denies a claim on review in whole or in part, it shall give the Participant written notice of its decision setting forth the following: (a) the specific reasons for the denial and specific references to the pertinent Plan provisions on which its decision was based; (b) notice that the Participant may obtain free of charge, copies of all documents, records and other information relevant to the Participant's claim; and (c) a statement of the Participant's right to bring a civil action under section 502(a) of ERISA. 7.4 A Participant or his or her legal representative may appeal any final decision by filing an action in a federal court of competent jurisdiction, provided that such action is filed no later than 90 days after receipt of a final decision by the Participant or his or her legal representative. SECTION 8--GENERAL 8.1 The benefits and costs of this Plan shall be paid by the Company out of its general assets. 8.2 This Plan is intended to be an "employee welfare benefit plan", as defined in Section 3(1), Subtitle A of Title 1 of ERISA. The Plan will be interpreted to effectuate this intent. Notwithstanding any other provision of this Plan, no Officer shall receive hereunder any payment exceeding twice that Officer's annual compensation during the year immediately preceding the termination of his service, within the meaning of 29 C.F.R. Section 2510.3-2, as the same was in effect on the effective date of this Plan. SECTION 9--AMENDMENT AND TERMINATION The Company reserves the right to amend this Plan, in whole or in part, or discontinue or terminate the Plan; provided, however, that any such amendment, discontinuance or termination shall not affect any right of any Participant to 7

EXHIBIT 10.39 claim benefits under the Plan or as in effect prior to such amendment, discontinuance or termination, for events occurring prior to the date of such amendment, discontinuance or termination. An amendment to this Plan, and/or resolution of discontinuance or termination, may be made by the Administrator, to the extent permitted by resolution of the Board of Directors. IN WITNESS WHEREOF, the Company has caused its officer, duly authorized by its Board of Directors to execute the Plan effective as of the 18th day of July 2001. ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin

EXHIBIT 10.39 claim benefits under the Plan or as in effect prior to such amendment, discontinuance or termination, for events occurring prior to the date of such amendment, discontinuance or termination. An amendment to this Plan, and/or resolution of discontinuance or termination, may be made by the Administrator, to the extent permitted by resolution of the Board of Directors. IN WITNESS WHEREOF, the Company has caused its officer, duly authorized by its Board of Directors to execute the Plan effective as of the 18th day of July 2001. ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin ---------------------Name: Thomas R. Saldin Its: Executive Vice President and General Counsel

8

SAMPLE Exhibit A SEVERANCE AGREEMENT AND RELEASE In consideration for the payment to me of (amount to be computed and added later), less lawful deductions, as severance pay, I, (name to be added), hereby make the following promises and agree to the terms of this Severance Agreement and Release, intending to be legally bound by them. 1. I hereby release Albertson's, Inc. ("Company") and its parent companies, subsidiaries, affiliates, and their respective successors, officers, directors, employees, and associates from any and all claims, actions, and causes of action arising out of my employment with, and/or termination from the Company, including but not limited to claims based on express or implied contract, covenants of fair dealing and good faith, wrongful discharge, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act of 1988, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, as amended, and any other applicable federal, state, or local laws, ordinances, and regulations. This release does not, however, apply to or waive any rights I may have under applicable workers' compensation laws or employee benefit plans, or to claims which may arise after the date of this release except as to disability plan payments which may be offset by the Severance payment(s) herein. 2. I understand that by signing this Severance Agreement and Release, I am forever relinquishing any right to sue any of the companies and persons described in paragraph 1 above based on any claim arising out of my employment with, and/or termination from, the Company (other than claims arising under employee benefit plans or claims for injuries compensable under workers' compensation laws), and I agree that I will never maintain any litigation against any of those companies or persons based on any of the claims I am giving up by signing this document. Any controversy or claim arising out of or relating to this release, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Employment Dispute Resolution Rules. 3. I expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California, and I do so understanding and acknowledging the significance and consequence of that waiver. Section 1542 of the Civil Code of the State of California states: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

SAMPLE Exhibit A SEVERANCE AGREEMENT AND RELEASE In consideration for the payment to me of (amount to be computed and added later), less lawful deductions, as severance pay, I, (name to be added), hereby make the following promises and agree to the terms of this Severance Agreement and Release, intending to be legally bound by them. 1. I hereby release Albertson's, Inc. ("Company") and its parent companies, subsidiaries, affiliates, and their respective successors, officers, directors, employees, and associates from any and all claims, actions, and causes of action arising out of my employment with, and/or termination from the Company, including but not limited to claims based on express or implied contract, covenants of fair dealing and good faith, wrongful discharge, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act of 1988, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, as amended, and any other applicable federal, state, or local laws, ordinances, and regulations. This release does not, however, apply to or waive any rights I may have under applicable workers' compensation laws or employee benefit plans, or to claims which may arise after the date of this release except as to disability plan payments which may be offset by the Severance payment(s) herein. 2. I understand that by signing this Severance Agreement and Release, I am forever relinquishing any right to sue any of the companies and persons described in paragraph 1 above based on any claim arising out of my employment with, and/or termination from, the Company (other than claims arising under employee benefit plans or claims for injuries compensable under workers' compensation laws), and I agree that I will never maintain any litigation against any of those companies or persons based on any of the claims I am giving up by signing this document. Any controversy or claim arising out of or relating to this release, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Employment Dispute Resolution Rules. 3. I expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California, and I do so understanding and acknowledging the significance and consequence of that waiver. Section 1542 of the Civil Code of the State of California states: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. 4. I acknowledge that, after I leave the employ of the Company, I am still obliged to abide by the Company's policies concerning confidential and proprietary information. 5. I shall cooperate with and assist the Company (including making myself available at reasonable times and places) so as to aid the Company in connection with any matters related to my employment by the Company or about which I am knowledgeable; provided, however, my cooperation with such matters shall not interfere unreasonably with my subsequent employment, if any. 9

6. I agree not to directly, indirectly, or through third parties solicit any Company associate for employment for two years. 7. I understand that I will receive listings of the age and job title of persons who are eligible and ineligible for pay and benefits under the Albertson's Severance Plan applicable to me. I also understand that I will have forty-five calendar days following the date on which I receive those lists to consider whether to accept the pay and benefits under the Albertson's Severance Plan applicable to me. I understand that I waive the forty-five calendar day consideration period if I sign and return the Severance Agreement and Release before the end of the forty-five day period. I acknowledge that I am hereby advised to consult with the attorney or other advisor of my choice regarding the terms of this document before signing it. I understand that I may revoke this Severance Agreement

6. I agree not to directly, indirectly, or through third parties solicit any Company associate for employment for two years. 7. I understand that I will receive listings of the age and job title of persons who are eligible and ineligible for pay and benefits under the Albertson's Severance Plan applicable to me. I also understand that I will have forty-five calendar days following the date on which I receive those lists to consider whether to accept the pay and benefits under the Albertson's Severance Plan applicable to me. I understand that I waive the forty-five calendar day consideration period if I sign and return the Severance Agreement and Release before the end of the forty-five day period. I acknowledge that I am hereby advised to consult with the attorney or other advisor of my choice regarding the terms of this document before signing it. I understand that I may revoke this Severance Agreement And Release anytime within 7 days of signing it and that the terms of this agreement and release will not be effective until the 7-day revocation period expires. I must contact David Biderman, in writing, at Albertson's Human Resources Department in Boise (fax 208-395-4844) to revoke this agreement. 8. This Release will be governed by the laws of Idaho. 9. I have signed this document freely and voluntarily and not because of any deception or coercion. I understand the terms of this document and agree that they are fair and equitable. DO NOT SIGN AND RETURN THIS FORM UNTIL AFTER YOU HAVE RECEIVED THE LISTING OF THE AGES AND JOB TITLES OF THE INDIVIDUALS SELECTED FOR THE REDUCTION IN FORCE / SEVERANCE PAY AND BENEFIT.
--------------------Print Name of Witness --------------------Signature of Witness ---------------------Print Name of Officer ---------------------Signature of Officer --------------------------Date of Officer's Signature --------------------------Last Date of Employment

Note: Section 3 is required only if the severed associate has worked for the Company in the state of California, whether at the time of termination or some time prior. 10

Exhibit B
Location Lname Fname -------------------------------------------------------------------------------1) 48400 Adams Pat 2) 48400 Allen Craig 3) 71301 Apker Debra 4) 74200 Arnold William 5) 70428 Bailey Boyce 6) 71701 Banks Bob 7) 48300 Bassler Dennis 8) 55000 Bates Bill 9) 72900 Bates Mark 10) 48500 Bay Gerry 11) 71302 Bell Dario 12) 70405 Bergquist Renee 13) 70401 Bessent Mike 14) 73601 Biderman Dave 15) 71701 Bock Carolyn 16) 70405 Boyd John 17) 71301 Brady Kathy 18) 71302 Brother Tom 19) 72402 Brown Craig 20) 53000 Brune Jeff 21) 48700 Buckles Gerry 22) 71300 Butler Bob 23) 48400 Casey Karen 24) 50300 Casteel Ritchie

Exhibit B
Location Lname Fname -------------------------------------------------------------------------------1) 48400 Adams Pat 2) 48400 Allen Craig 3) 71301 Apker Debra 4) 74200 Arnold William 5) 70428 Bailey Boyce 6) 71701 Banks Bob 7) 48300 Bassler Dennis 8) 55000 Bates Bill 9) 72900 Bates Mark 10) 48500 Bay Gerry 11) 71302 Bell Dario 12) 70405 Bergquist Renee 13) 70401 Bessent Mike 14) 73601 Biderman Dave 15) 71701 Bock Carolyn 16) 70405 Boyd John 17) 71301 Brady Kathy 18) 71302 Brother Tom 19) 72402 Brown Craig 20) 53000 Brune Jeff 21) 48700 Buckles Gerry 22) 71300 Butler Bob 23) 48400 Casey Karen 24) 50300 Casteel Ritchie 25) 71300 Cefalo Roe 26) 71704 Christoffersen Shirley 27) 50400 Clawson Mike 28) 74200 Cole Chip 29) 50100 Colgrove Bob 30) 54200 Colgrove John 31) 48300 Conrad Monty 32) 48600 Corry Tim 33) 48500 Cousin Ertharin 34) 71005 Croft John 35) 48500 Cygan Doug 36) 70400 Czarniecki Walt 37) 71304 Dean Dave 38) 48700 DeBruin Mark 39) 72905 DeMeyer Keith 40) 71300 Denningham Wayne 41) 57900 Eckstein Frank 42) 54200 Emmons William 43) 70467 Fehringer Joe 44) 70715 Fetzer Dennis 45) 48500 Gentile Jim 46) 56700 Giles Charla 47) 57100 Gloyne Clay 11

Exhibit B 48) 49) 50) 51) 52) 53) 54) 55) 56) 57) 58) 59) 60) 61) 62) 71700 52700 52700 71301 53200 71301 75501 71301 72900 48500 54300 48700 70416 54000 48500 Goins Gossett Gray Gruell Gullickson Guthmiller Hamblin Hansen Hansen Hanson Hanson Harbecke Harmon Hays Herbert Greg Paul Kim Kip Greg Dick Laura Larry Roger Ed Greg William Larry Scott Kathy

Exhibit B 48) 49) 50) 51) 52) 53) 54) 55) 56) 57) 58) 59) 60) 61) 62) 63) 64) 65) 66) 67) 68) 69) 70) 71) 72) 73) 74) 75) 76) 77) 78) 79) 80) 81) 82) 83) 84) 85) 86) 87) 88) 89) 90) 91) 92) 93) 94) 95) 96) 71700 52700 52700 71301 53200 71301 75501 71301 72900 48500 54300 48700 70416 54000 48500 48700 74100 73604 48700 72908 70700 48600 72900 48400 52200 71000 79039 73604 72402 53400 71701 57000 56500 71000 57800 48700 71702 71302 48700 48600 71700 56000 71301 48700 54700 71301 71600 59000 48400 Goins Gossett Gray Gruell Gullickson Guthmiller Hamblin Hansen Hansen Hanson Hanson Harbecke Harmon Hays Herbert Hiller Hilton Hughes Hunstiger Imlay Iverson Jablonski Jacobsen Javier Jerry Johnston Jolley Jones Kinde Kowalski Lavin Lawrence Little Lynch Mann Massimino Mattefs McCarthy McGovern McKeon McKinney McNiff McReynolds Mecham Melville Michael Mielke Miles Molendyk 12 Greg Paul Kim Kip Greg Dick Laura Larry Roger Ed Greg William Larry Scott Kathy Bruce Steve Terri Gary Thomas John Carl Jim Virginia David Larry Tony Peggy Dennis Eileen Mark Michelle Ed Peter Bill Mike Sue Mike John Colin Dave Greg Peggy Rory Gerald Todd Chris Matt Harvey

Exhibit B 97) 98) 99) 100) 101) 102) 103) 104) 105) 106) 107) 108) 109) 110) 111) 112) 113) 56300 48700 74200 73610 50800 72900 70400 73608 48500 70405 71304 74550 72901 48300 53600 48700 73610 Morris Mulcock Mumford Murphy Murty Muta Navarro Neumann Nielsen Ober Oddo O'Riordan Osban Ouellette Ozark Palmer Paolini Jacque Dave Lee Michele Brian Matt Rick Sue Keith Dave Mitch Kaye Jeff Mark Gerard Dennis Bruce

Exhibit B 97) 98) 99) 100) 101) 102) 103) 104) 105) 106) 107) 108) 109) 110) 111) 112) 113) 114) 115) 116) 117) 118) 119) 120) 121) 122) 123) 124) 125) 126) 127) 128) 129) 130) 131) 132) 133) 134) 135) 136) 137) 138) 139) 140) 141) 142) 143) 144) 56300 48700 74200 73610 50800 72900 70400 73608 48500 70405 71304 74550 72901 48300 53600 48700 73610 72402 48400 54300 72600 48300 71600 70715 71302 48500 71000 50900 75308 48400 71302 56100 71302 74200 71000 54300 72901 70700 48300 70408 73610 48700 74200 48300 73602 71301 48600 71300 Morris Mulcock Mumford Murphy Murty Muta Navarro Neumann Nielsen Ober Oddo O'Riordan Osban Ouellette Ozark Palmer Paolini Paterson Patton Perkins Pichulo Potter Powell Raffo Raudabaugh Redfearn Reuling Rice Rissing Robbins Robertson Rocheleau Rood Rowan Saldin Sampson Schachtell Schroeder Schuit Schuler Scoggin Shadle Sharp Simonson Snow Spiers Spires Stablein 13 Jacque Dave Lee Michele Brian Matt Rick Sue Keith Dave Mitch Kaye Jeff Mark Gerard Dennis Bruce Gary Mike Jim Philip Bob Pamela Ed John George Mike Jim Bob Donna Dave Terry Brian Paul Tom Shane Steve Kathy Fred Bob Andrew Mark Linc Dave Jack Gary Judy Larry

Exhibit B 145) 146) 147) 148) 149) 150) 151) 152) 153) 154) 155) 156) 157) 158) 159) 160) 161) 162) 50200 72900 71301 71304 57700 71304 48300 71700 72600 71301 71300 48300 48500 70400 72901 55300 48500 72480 Stachofsky Steele Stevens Strong Styer Sutton Teall Thayer Tobin Tommack Tripp Trom Van Helden Volger Wagner Wahlstrom Walter Wardle Bob Pat Clement John Don Dan Martin Scott Dan Ed Kevin Brad Pete Ron Hadley Larry Tom Gerry

Exhibit B 145) 146) 147) 148) 149) 150) 151) 152) 153) 154) 155) 156) 157) 158) 159) 160) 161) 162) 163) 164) 165) 166) 167) 168) 169) 170) 171) 172) 173) 50200 72900 71301 71304 57700 71304 48300 71700 72600 71301 71300 48300 48500 70400 72901 55300 48500 72480 54200 79039 48300 50900 71301 48700 50500 71304 73604 52000 73600 Stachofsky Steele Stevens Strong Styer Sutton Teall Thayer Tobin Tommack Tripp Trom Van Helden Volger Wagner Wahlstrom Walter Wardle Washington Weiser White Williams Williams Willyard Withers Wright Yager Yaksitch Young Bob Pat Clement John Don Dan Martin Scott Dan Ed Kevin Brad Pete Ron Hadley Larry Tom Gerry Clem Ed Wanda Marcia Shane Jim Mike Steve Bryan Frank Steve

14

EXHIBIT 10.40 August 6, 2001 Ms. Felicia Denault Thornton 2546 Manhattan Avenue Hermosa Beach, California 90254 Dear Felicia: I am pleased to confirm my verbal offer of employment for the position of Executive Vice President and Chief Financial Officer (CFO) for Albertson's, Inc. (the "Company"). In this assignment, you will report directly to me. Your employment with the Company will commence on August 22, 2001 (the "Effective Date"). Your initial base salary ("Base Salary") will be $540,000 per annum, payable in accordance with the Company's policies relating to salaried employees. Your Base Salary may be increased (but not decreased) by the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee") in its sole discretion. On the Effective Date, the Company shall pay to you an amount in cash equal to $250,000 as a signing bonus, less applicable tax withholding. Commencing with the fiscal year of the Company ("Fiscal Year") in which the Effective Date occurs, you will have the opportunity to earn a bonus for each Fiscal Year as recommended by the Compensation Committee in accordance with the Company's annual bonus plan applicable to the Company's senior officers (the "Annual Bonus Plan"). The amount of each annual bonus shall be set by the Compensation Committee and shall be equal to seventy percent (70%) of Base Salary if the applicable "target" performance goals (as defined in the Annual Bonus Plan for such period) are met (the "Target Bonus") and shall not exceed one hundred five percent (105%) of Base Salary. The criteria for determining the amount of any Target Bonus and the bases upon which such

EXHIBIT 10.40 August 6, 2001 Ms. Felicia Denault Thornton 2546 Manhattan Avenue Hermosa Beach, California 90254 Dear Felicia: I am pleased to confirm my verbal offer of employment for the position of Executive Vice President and Chief Financial Officer (CFO) for Albertson's, Inc. (the "Company"). In this assignment, you will report directly to me. Your employment with the Company will commence on August 22, 2001 (the "Effective Date"). Your initial base salary ("Base Salary") will be $540,000 per annum, payable in accordance with the Company's policies relating to salaried employees. Your Base Salary may be increased (but not decreased) by the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee") in its sole discretion. On the Effective Date, the Company shall pay to you an amount in cash equal to $250,000 as a signing bonus, less applicable tax withholding. Commencing with the fiscal year of the Company ("Fiscal Year") in which the Effective Date occurs, you will have the opportunity to earn a bonus for each Fiscal Year as recommended by the Compensation Committee in accordance with the Company's annual bonus plan applicable to the Company's senior officers (the "Annual Bonus Plan"). The amount of each annual bonus shall be set by the Compensation Committee and shall be equal to seventy percent (70%) of Base Salary if the applicable "target" performance goals (as defined in the Annual Bonus Plan for such period) are met (the "Target Bonus") and shall not exceed one hundred five percent (105%) of Base Salary. The criteria for determining the amount of any Target Bonus and the bases upon which such Target Bonus shall be payable shall be no less favorable to you than those used for other senior executives of the Company, such criteria and bases to be determined in the sole discretion of the Compensation Committee. As of the Effective Date, you will be granted 60,000 shares of deferrable restricted stock units of the Company ("Restricted Stock Unit Award") in accordance with the form of grant used by the Company for grants made to its senior executive officers; provided that the provisions of such grant shall not be inconsistent with, or provide for additional obligations upon you beyond, the terms of this letter agreement, and shall be subject to reasonable review by CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 2 your counsel. Such grant shall provide that 12,000 of such units shall vest on the Effective Date, and 12,000 of such units shall vest on each of the first, second, third and fourth anniversaries of the Effective Date; provided in each case that you have been continuously employed as a senior executive with the Company from the Effective Date through the applicable vesting date, except as otherwise provided in this letter agreement and in such deferrable restricted stock unit agreement. To the extent that dividends are paid on Company common stock after the Effective Date and prior to the date that the Company common stock that is subject to a Restricted Stock Unit Award is issued to you, you shall be entitled to receive a cash payment in an amount equal to the dividends you would have been entitled to receive had you been the owner of such unissued shares on the date such dividends are paid. Such cash payment shall be made at the same time payment of dividends are made to other shareholders of Company common stock.

Ms. Felicia Denault Thornton August 6, 2001 Page 2 your counsel. Such grant shall provide that 12,000 of such units shall vest on the Effective Date, and 12,000 of such units shall vest on each of the first, second, third and fourth anniversaries of the Effective Date; provided in each case that you have been continuously employed as a senior executive with the Company from the Effective Date through the applicable vesting date, except as otherwise provided in this letter agreement and in such deferrable restricted stock unit agreement. To the extent that dividends are paid on Company common stock after the Effective Date and prior to the date that the Company common stock that is subject to a Restricted Stock Unit Award is issued to you, you shall be entitled to receive a cash payment in an amount equal to the dividends you would have been entitled to receive had you been the owner of such unissued shares on the date such dividends are paid. Such cash payment shall be made at the same time payment of dividends are made to other shareholders of Company common stock. As of the Effective Date, you will be granted an option ("Initial Option") to purchase 200,000 shares of common stock of the Company at a per share exercise price equal to the fair market value of the common stock of the Company on the Effective Date in accordance with the form of grant used by the Company for grants made to its senior executive officers; provided that the provisions of such grant shall not be inconsistent with, or provide for additional obligations upon you beyond, the terms of this letter agreement, and shall be subject to reasonable review by your counsel. Such grant will vest and become exercisable in annual installments at the rate of 40,000 shares on each of the first, second, third, fourth, and fifth anniversaries of the Effective Date (each such installment, an "Initial Option Installment"); provided in each case that you have been continuously employed as a senior executive with the Company from the Effective Date through the applicable vesting date, except as otherwise provided in this letter agreement and in such stock option grant agreement. You will be entitled to receive additional grants of stock options to purchase shares of common stock of the Company from time to time as recommended by the Compensation Committee in its sole discretion; provided that not later than December 31, 2001, the Compensation Committee will grant to you an option to purchase shares of Company common stock which has a value equal to three million dollars ($3,000,000), the number of shares of which shall be equal to three million dollars ($3,000,000) divided by the closing New York Stock Exchange price of the Company's stock on the date of such grant (which would be approximately 100,000 shares based on the current stock price), and vesting at the rate of twenty percent (20%) of the total shares granted on each of the first, second, third, fourth and fifth anniversaries of the date of such grant (the "First Additional Option"). The First Additional Option grant will be in the same form as the Initial Option. Subsequent annual option awards otherwise shall be subject to the terms and conditions as generally apply to stock options granted to other senior executive officers who participate in the Company's equity incentive plans. The Company will also provide reimbursement for reasonable legal and other professional fees and expenses you incur in connection with the negotiation and preparation of this letter agreement. The Company will maintain, for your CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 3 benefit, officer liability insurance in a form it maintains for its other senior executive officers. You will be indemnified by the Company against liability as an officer of the Company and any subsidiary or affiliate of the Company to the same extent as the Company's other senior executive officers. Your rights to such indemnification and insurance will continue so long as you may be subject to liability, whether or not your employment may have terminated prior thereto.

Ms. Felicia Denault Thornton August 6, 2001 Page 3 benefit, officer liability insurance in a form it maintains for its other senior executive officers. You will be indemnified by the Company against liability as an officer of the Company and any subsidiary or affiliate of the Company to the same extent as the Company's other senior executive officers. Your rights to such indemnification and insurance will continue so long as you may be subject to liability, whether or not your employment may have terminated prior thereto. You will be provided with four (4) weeks of paid vacation per year and sick leave and paid holidays in accordance with the Company's standard policy regarding these benefits for senior executive officers of the Company. You will also be eligible to participate in each fringe, welfare and pension benefit and incentive programs adopted from time to time by the Company for the benefit of, and which generally apply to, its highest level of senior executive offers from time to time, including the Company's 401(k) and profit sharing plans. The Company will reimburse you in accordance with the Company's relocation policy provided under its "Full Service Move Program for Senior Executive Officers" (the "Relocation Program"), a copy of which has been provided to you previously, in connection with your relocation to Boise, Idaho. Pursuant to the Relocation Program, you will be entitled to a "gross-up" payment with respect to those reimbursement payments described in the Relocation Program in an amount such that, after payment of all applicable taxes on such reimbursement payments and "gross-up" payment, you retain an amount equal to the amount of such reimbursement payments. In the event of your termination of employment for any reason, within thirty (30) days following the date of termination, you shall be entitled to receive ("Accrued Obligations"): (a) Any earned, but unpaid, Base Salary; (b) Any earned, but unpaid, bonus for any Fiscal Year that ended prior to the Fiscal Year in which the date of termination occurs; (c) The cash equivalent of any accrued, but unused, vacation; and (d) Any accrued employee benefits, subject to the terms of the applicable employee benefit plans. In the event that your employment is terminated by the Company without Cause (as defined in Exhibit "A" hereto) or you voluntarily terminate your employment for Good Reason (as defined in Exhibit "A" hereto), you shall receive the following severance benefits, in addition to the Accrued Obligations: CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 4 (a) Severance payments and continuation of benefits as follows: (i) For any such termination which occurs prior to the first anniversary of the Effective Date, a lump sum payment equal to three (3) times the sum of Base Salary and Target Bonus, and continued participation in the Company's welfare benefit plans, fringe benefits, and employee perquisites for a period ("Continuation Period") of three (3) years (which shall be concurrent with any health care continuation benefits under COBRA);

Ms. Felicia Denault Thornton August 6, 2001 Page 4 (a) Severance payments and continuation of benefits as follows: (i) For any such termination which occurs prior to the first anniversary of the Effective Date, a lump sum payment equal to three (3) times the sum of Base Salary and Target Bonus, and continued participation in the Company's welfare benefit plans, fringe benefits, and employee perquisites for a period ("Continuation Period") of three (3) years (which shall be concurrent with any health care continuation benefits under COBRA); (ii) For any such termination which occurs after the first anniversary of the Effective Date but prior to the second anniversary of the Effective Date, a lump sum payment equal to two (2) times the sum of Base Salary and Target Bonus, and continued participation in the Company's welfare benefit plans, fringe benefits, and employee perquisites for a Continuation Period of two (2) years (which shall be concurrent with any health care continuation benefits under COBRA); and (iii)For any such termination which occurs after the second anniversary of the Effective Date, a lump sum payment equal to one (1) times the sum of Base Salary and Target Bonus, and continued participation in the Company's welfare benefit plans, fringe benefits, and employee perquisites for a Continuation Period of one (1) year (which shall be concurrent with any health care continuation benefits under COBRA). (b) For any such termination, you shall be entitled to receive a pro-rata portion of the amount due to you under the Annual Bonus Plan for the fiscal year in which the date of termination occurs, which amount shall be payable at the time of payment of bonuses under such plan to senior executives of the Company; (c) You shall be deemed to have earned vesting service under all unvested outstanding stock options and all unvested outstanding restricted stock equal to the applicable Continuation Period under subparagraph (a) above effective upon a termination of employment. All of your outstanding vested options to purchase Company common stock, after giving affect to additional vesting under the preceding sentence, shall remain exercisable for ninety (90) days from the date of termination; (d) Any vested Restricted Stock Unit Awards and restricted stock, after giving affect to additional vesting under subparagraph (c) above, shall become nonforfeitable; and CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 5 (e) You, to the extent determined to be nondiscriminatory under the Company's qualified employee benefit plans, shall become fully vested in your benefits under such plans, and you shall become fully vested with respect to any of the Company's non-qualified benefit plans in which you are a participant. In the event of a termination of your employment due to your death, you shall receive: (a) the Accrued Obligations, (b) all options to purchase stock shall be exercisable by your legal representatives and become vested to the extent and in the manner prescribed under the option plan pursuant to which such options were granted, and (c) all restricted stock units and restricted stock granted by the Company to you prior to your death shall become vested and paid to the extent and in the manner prescribed in the plan pursuant to which such units or stock were awarded. If a Change in Control shall occur while you are employed by the Company, you will be entitled to the following:

Ms. Felicia Denault Thornton August 6, 2001 Page 5 (e) You, to the extent determined to be nondiscriminatory under the Company's qualified employee benefit plans, shall become fully vested in your benefits under such plans, and you shall become fully vested with respect to any of the Company's non-qualified benefit plans in which you are a participant. In the event of a termination of your employment due to your death, you shall receive: (a) the Accrued Obligations, (b) all options to purchase stock shall be exercisable by your legal representatives and become vested to the extent and in the manner prescribed under the option plan pursuant to which such options were granted, and (c) all restricted stock units and restricted stock granted by the Company to you prior to your death shall become vested and paid to the extent and in the manner prescribed in the plan pursuant to which such units or stock were awarded. If a Change in Control shall occur while you are employed by the Company, you will be entitled to the following: (a) All of your outstanding options to purchase Company common stock shall become fully vested and shall be exercisable until the date of expiration of the full stated term of the option in the manner prescribed in the plan pursuant to which such options were awarded; and (b) Any Restricted Stock Unit Awards and restricted stock that are unvested shall become fully vested and nonforfeitable in the manner prescribed in the plan pursuant to which such units or stock were awarded. "Change in Control" shall have the meaning set forth in the Albertson's, Inc. 1995 Stock-Based Incentive Plan in effect on the date hereof, or as hereafter may be modified in a manner more favorable to you. If the aggregate of all payments or benefits made or provided to you under this letter agreement and under all other plans and programs of the Company (the "Aggregate Payment") is determined to constitute a parachute payment, as such term is defined in Section 280G(b)(2) of the Code, the Company shall pay to you, prior to or coincident with the time any excise tax imposed by Section 4999 of the Code (the "Excise Tax") is payable with respect to such Aggregate Payment, an additional amount that, after the imposition of all penalties, income, excise and other federal, state and local taxes thereon, is equal to the sum of the Excise Tax on the Aggregate Payment and interest and penalties imposed with respect to the Excise Tax and such additional amount ("Additional Amount"). The determination of whether the Aggregate Payment constitutes a Parachute Payment and, if so, the amount to be paid to you and the time of payment pursuant to this paragraph shall be made by an independent auditor (the "Auditor") jointly selected by the Company and you and paid by the Company. If the Company and you cannot agree on the firm to serve as the Auditor, then the Company and you shall CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 6 each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor. Notwithstanding the foregoing, in the event that the amount of your Excise Tax liability is subsequently determined to be greater than the Excise Tax liability with respect to which an initial Additional Amount has been paid to you under this paragraph, the Company shall pay to you a further Additional Amount with respect to such additional Excise Tax (and any interest and penalties thereon) at the time and in the amount determined in the same manner as the initial Additional Amount was determined so as to make you whole, on an after-tax basis, with respect to such Excise Tax (and any interest and penalties thereon) and such additional amount paid by the Company. In the event the amount of your Excise Tax liability is subsequently determined to be less than the Excise Tax liability with respect to which an initial payment to you has been made, you shall, as soon as practical after the

Ms. Felicia Denault Thornton August 6, 2001 Page 6 each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor. Notwithstanding the foregoing, in the event that the amount of your Excise Tax liability is subsequently determined to be greater than the Excise Tax liability with respect to which an initial Additional Amount has been paid to you under this paragraph, the Company shall pay to you a further Additional Amount with respect to such additional Excise Tax (and any interest and penalties thereon) at the time and in the amount determined in the same manner as the initial Additional Amount was determined so as to make you whole, on an after-tax basis, with respect to such Excise Tax (and any interest and penalties thereon) and such additional amount paid by the Company. In the event the amount of your Excise Tax liability is subsequently determined to be less than the Excise Tax liability with respect to which an initial payment to you has been made, you shall, as soon as practical after the determination is made, pay to the Company the amount of the overpayment by the Company, reduced by the amount of any relevant taxes already paid by you and not refundable, all as determined by the Auditor. The Company and you shall cooperate with each other in connection with any proceeding or claim relating to the existence or amount of liability for Excise Tax, and all expenses incurred by you in connection therewith shall be paid by the Company promptly upon notice of demand from you. This letter shall not be construed to create an employment contract of any kind, express or implied, and your employment status shall be and remain "employment at will"; provided, however, that upon termination you shall be entitled to the benefits as set forth in this letter. As a condition to receipt of any severance payments or continued benefits under this letter upon your termination for any reason, you will execute a release agreement reasonably satisfactory to Albertson's releasing any and all claims arising out of your employment with the Company. In the event of any conflict between the terms of this letter agreement and the terms of any other agreement, award or arrangement contemplated hereby, the terms of this letter agreement shall control. If the terms outlined above reflect your understanding of our offer and you accept employment based on these terms, please indicate your acceptance by signing the two original letters provided. Please keep one letter for your records and return the other to me. CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 7 Felicia, we are extremely pleased to have you join the Albertson's team, and I look forward with great pleasure to our association with you in this important role at Albertson's. I anticipate benefiting from your expertise, and I believe you will help us establish a winning formula for success in the future. Sincerely,
/s/ Lawrence R. Johnston ------------------------Lawrence R. Johnston, Chief Executive Officer

Accepted and agreed to this 6th day of August, 2001

Ms. Felicia Denault Thornton August 6, 2001 Page 7 Felicia, we are extremely pleased to have you join the Albertson's team, and I look forward with great pleasure to our association with you in this important role at Albertson's. I anticipate benefiting from your expertise, and I believe you will help us establish a winning formula for success in the future. Sincerely,
/s/ Lawrence R. Johnston ------------------------Lawrence R. Johnston, Chief Executive Officer

Accepted and agreed to this 6th day of August, 2001
/s/ Felicia Denault Thornton --------------------------Felicia Denault Thornton

CHICAGO/#799708.6

Ms. Felicia Denault Thornton August 6, 2001 Page 8 EXHIBIT A "Cause" means the occurrence of any one or more of the following: (a) That you have been convicted of, or plead guilty or nolo contendere to, a felony involving theft or moral turpitude; or (b) That you have engaged in conduct that constitutes gross neglect or willful gross misconduct (including misappropriation or embezzlement of property of, or fraud with respect to, the Company or its subsidiaries or their affiliates) with respect to your employment duties which results in material and demonstrable harm to the Company; provided, however, that for purposes of determining whether conduct constitutes willful gross misconduct, no act on your part shall be considered "willful" unless it is done by you in bad faith and without reasonable belief that your action was in the best interests of the Company. Notwithstanding the foregoing, the Company may not terminate your employment for Cause unless (i) a determination that Cause exists is made and approved by a majority of the Board, (ii) you are given at least 15 days' written notice of the Board meeting called to make such determination and an opportunity to cure during such notice period, and (iii) you and your legal counsel are given the opportunity to address such meeting. "Good Reason" means the occurrence of any one or more of the following, unless you have expressly consented in writing thereto: (a) The assignment to you of duties inconsistent in any material respect with your position (including status, offices, titles, and reporting relationships), authority, duties or responsibilities as contemplated hereunder, or any

Ms. Felicia Denault Thornton August 6, 2001 Page 8 EXHIBIT A "Cause" means the occurrence of any one or more of the following: (a) That you have been convicted of, or plead guilty or nolo contendere to, a felony involving theft or moral turpitude; or (b) That you have engaged in conduct that constitutes gross neglect or willful gross misconduct (including misappropriation or embezzlement of property of, or fraud with respect to, the Company or its subsidiaries or their affiliates) with respect to your employment duties which results in material and demonstrable harm to the Company; provided, however, that for purposes of determining whether conduct constitutes willful gross misconduct, no act on your part shall be considered "willful" unless it is done by you in bad faith and without reasonable belief that your action was in the best interests of the Company. Notwithstanding the foregoing, the Company may not terminate your employment for Cause unless (i) a determination that Cause exists is made and approved by a majority of the Board, (ii) you are given at least 15 days' written notice of the Board meeting called to make such determination and an opportunity to cure during such notice period, and (iii) you and your legal counsel are given the opportunity to address such meeting. "Good Reason" means the occurrence of any one or more of the following, unless you have expressly consented in writing thereto: (a) The assignment to you of duties inconsistent in any material respect with your position (including status, offices, titles, and reporting relationships), authority, duties or responsibilities as contemplated hereunder, or any other action by the Company which results in a significant diminution in such position, authority, duties or responsibilities, excluding any isolated and inadvertent action not taken in bad faith and which is remedied by the Company within fifteen (15) days after receipt of notice thereof given by you; (b) Any failure by the Company to comply with any of the material provisions of this letter agreement other than an isolated and inadvertent failure not committed in bad faith and which is remedied by the Company within fifteen (15) days after receipt of notice thereof given by you; and (c) Your being required to relocate to a principal place of employment more than fifty (50) miles from your current principal place of employment as of the Effective Date. CHICAGO/#799708.6