Exhibit 10.1

 

February 9, 2006

 

Peter L. Lynch

Chief Executive Officer

Winn-Dixie Stores, Inc.

5050 Edgewood Court

Jacksonville, Florida 32254-3699

 

  Re: 2006 Retention Bonus

 

Dear Peter:

 

I am pleased to have this opportunity to thank you for your continued efforts on
behalf of Winn-Dixie Stores, Inc. (the “Company”). The purpose of this letter
agreement is to set forth the terms and conditions under which the Company will
provide a retention incentive to you that is designed to further ensure your
continued service to the Company at least through August 31, 2006 (the
“Retention Incentive”).

 

Subject to (a) your countersigning and returning this letter, (b) the United
States Bankruptcy Court for the Middle District of Florida (the “Court”)
entering an order authorizing payment of the Retention Incentive and the terms
of such an order, and (c) the terms and conditions described below, the Company
agrees to pay you a Retention Incentive of $1.15 million net of any taxes that
must be withheld pursuant to applicable law for the purpose of assuring your
continued service through August 31, 2006. The Retention Incentive will be paid
to you as soon as is practicable (but in any event within five (5) days)
following the date upon which the Court enters an order approving payment of the
Retention Incentive.

 

The Retention Incentive will not be subject to forfeiture unless your employment
with the Company is terminated on or before August 31, 2006, either by the
Company with “Cause” or by you without “Good Reason” and other than for
“Disability,” (in each case, within the meaning of our Employment Agreement
dated December 9, 2004, as it may be amended (the “Employment Agreement”)).
Should your employment with the Company be terminated on or before August 31,
2006, under either of the circumstances described in the preceding sentence, you
must repay the Retention Incentive to the Company, without interest, as soon as
is practicable (but in any event within five (5) days) after the date of such
termination in employment.

 

Given the unique nature of the Retention Incentive, except as otherwise required
by law, the Retention Incentive will not be taken into account in determining
benefits under any Company benefit plan, program, or agreement in which you
participate or are covered. Of course, notwithstanding the preceding sentence,
the Retention Incentive shall not be to any

 

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extent in lieu of payments or benefits to which you are or may become entitled
pursuant to the Employment Agreement, and neither the payment of the Retention
Incentive nor the terms of this letter agreement should be construed to give you
any right to be retained in the employment of the Company beyond those expressly
set forth in the Employment Agreement. This letter agreement shall be binding
upon our respective heirs, executors, administrators and successors, but our
respective rights and obligations hereunder shall not otherwise be transferable
or assignable.

 

If you agree that this letter agreement sets forth our mutual understanding with
regard to the subject matter hereof, please sign two copies of this letter
agreement where indicated below and return one executed copy to me. Of course,
if you have any questions regarding the matters covered by this letter
agreement, please contact me directly to discuss them.

 

Peter, I want to thank you again personally for all of your efforts on behalf of
the Company. It has been a pleasure working with you, and I look forward to a
long relationship.

 

 

WIIN-DIXIE STORES, INC. By:  

 

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    H. Jay Skelton     Chairman of the Board of Directors

 

ACKNOWLEDGED AND AGREED

 

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Peter L. Lynch

 

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