<PAGE>
Exhibit 10.59
May 5, 2005
Clarence J. Gabriel, Jr.
Albertson's, Inc.
250 E. Parkcenter Blvd.
Boise, Idaho 83706
Dear Gabe,
This letter will confirm the agreement between you and Albertsons,
Inc.,
including its subsidiaries and affiliates,
(the "Company") regarding your
resignation from the position of Executive
Vice President, Supply Chain and
Asset Management as of May 5, 2005
("Resignation Date"), and sets forth our
mutual understanding of the terms of your
agreement and general release. This
agreement will become effective on the
eighth (8th) day after the date of its
execution by you (the "Effective
Date").
1. Your
employment as Executive Vice President, Supply Chain and Asset
Management will end on the Resignation Date. You will be classified
as a
special employee from the Resignation Date through the Termination
Date.
The term "Termination Date" shall mean the earliest of (i) May 5,
2006,
(ii) the date you commence employment with or become an
independent
consultant for a third party (regardless of whether such third
party is
a "Competing Business," as that term is defined in Exhibit A
hereto), or
(iii) the date of your death.
2.
Conditioned upon your agreement to the terms set forth herein, you
shall
be entitled to the compensation and benefits listed below during
the
period from the Resignation Date to the Termination Date. This
will
constitute the only compensation and benefits payable to you,
including
but not limited to those provided by the employment letter between
you
and the Company dated December 24, 2002.
A.) During said period you will be entitled to:
(1) A base salary at the rate in effect on the Resignation Date
from the Resignation Date until the Termination Date in
accordance with practices and policies in effect on the
Effective
Date and to accrue vesting service in all plans and programs in
which you are eligible to participate (including but not
limited
to continued vesting in the deferrable restricted stock units
you
received under the Albertson's, Inc. Amended and Restated 1995
Stock Based Incentive Plan) as if you were a regular, full-time
employee and officer;
<PAGE>
Mr. C. J. Gabriel, Jr.
May 5, 2005
(2) All earned vacation up to the Resignation Date;
(3) Participate in the Company's medical, dental, life
insurance
and retirement plans according to the terms and conditions of
such plans
(you will receive a COBRA notice as required by law
upon the Termination Date.);
(4) Defer eligible amounts under the 2005 Deferred Compensation
Plan;
(5) Receive benefits (including but not limited to any Company
contribution and any match provided under ASRE during the term
of
this agreement pursuant to the terms of the Plan) according to
the terms and conditions of the Company's qualified and
non-qualified retirement plans accrued with respect to your
service through the Termination Date;
(6) Receive the benefits associated with stock options or
restricted stock units in the same manner as an active employee
during the period from the Resignation Date to the Termination
Date and for the period thereafter as set forth in the relevant
agreement or grant under which such options or units were
received. (You understand that you are subject to the Company's
window periods only until the end of the fiscal 2005 first
quarter earnings release, but agree to consult with the
Corporate
Secretary prior to trading Company stock during the term of
this
agreement.);
(7) Receive up to $50,000 in outplacement services, commencing
on
the Resignation Date, provided by Drake Beam Morin, Inc. or
such
other firm as is mutually acceptable to the parties; and
(8) Receive financial counseling services as provided by the
Company for other executives through AYCO, commencing on the
Resignation Date and ending on the Termination Date.
B. In addition to the above items, you will be entitled to receive
(i) a
lump sum payment equal to $350,000, less applicable taxes (the
amount of
the target bonus under the Company's annual bonus plan), which sum
will
be payable to you promptly following the expiration of the seven
(7) day
period referred to in paragraph 14, and (ii) a bonus for 2005 that
will
be calculated pursuant to the annual Corporate Bonus Plan based
on
actual Company performance, prorated through the Resignation Date,
and
paid when the Company distributes such amounts to bonus
eligible
participants; provided any bonus is payable under the Corporate
Incentive Plan.
2
<PAGE>
Mr. C. J. Gabriel, Jr.
May 5, 2005
3.
Notwithstanding anything to the contrary in this agreement, you
acknowledge that you will not be entitled to or receive any raises,
be
granted any additional options or restricted stock, be eligible for
any
bonuses except as provided herein, earn or accrue any vacation
benefits,
or be eligible to participate in the long-term disability plans
following the
Resignation Date. Moreover, you expressly waive all rights
to termination or severance benefits except as may be provided in
this
agreement. Such waiver specifically extends to any rights under
your
Change of Control Severance Agreement dated as of January 13, 2003
and
your employment letter dated December 24, 2002.
4.
Notwithstanding anything to the contrary in this agreement, the
parties
agree as follows:
(a) If the
Termination Date occurs because you commence employment
with or become an independent contractor for a third party
other
than a Competing Business or die prior to May 5, 2006, the
Company will pay you: i) the remaining amount of your base
salary
(calculated from the Termination Date through May 5, 2006) in a
lump sum, less applicable taxes, within ten (10) business days
of
receipt of the notice required by Paragraph 5 below, and ii)
the
prorated bonus payment described in paragraph 2 B (ii) above as
provided therein. and
(b) If the
Termination Date occurs prior to May 5, 2006 other than
as set forth in Paragraph 4(a) above, no further sums or
benefits shall be payable to you or your spouse under this
agreement; although the terms of the relevant plans and
programs
will continue to apply as to any benefits accrued or vested as
of the
Termination Date and subject to your rights under COBRA.
5. You agree
to notify the Company in writing if you accept employment with
or accept a position as an independent contractor for any third
party,
within five (5) business days of your acceptance. Such notice
shall
specify the name and address of the employer or such third party
and the
date of commencement or engagement and shall be delivered to the
Company
care of the General Counsel at Albertsons, Inc., 250 E.
Parkcenter
Blvd., Boise, Idaho 83706.
6. Upon the
Resignation date, you shall return to the Company all of the
Company's personal property, including without limitation all
documents,
data, computers, phones, personal digital assistants, books,
records,
documents, videos, cards, keys, credit cards issued to you, and
all
other such personal property of every nature and kind.
7. Nothing in
this agreement shall be construed as an admission of
liability by the Company or you; rather, we are resolving any and
all
3
<PAG
