Exhibit 10.32





January 31, 2006


Mr. Charles R. Newsom

1362 Brenner Park Drive

Venice, FL 34292

crnewsom@verizon.net


Dear Chuck:


This letter will confirm an offer of employment to you
by Duane Reade Inc. (the “Company.”)


Your initial assignment will be as Senior Vice
President, Store Operations, reporting directly to Mr. Richard Dreiling,
President/CEO. You will be based at our headquarters office located at 440 9th Avenue, New York, NY. Your initial salary will
be $325,000.00 annually ($12,500.00 paid Bi-weekly). Future salary increases
will be based on demonstrated job performance in accordance to Company policy
and practice.


The Company offers an executive benefit program in
which you will be able to participate, subject to the terms of eligibility for
the individual benefit plans. Those plans include a 401(k) program, major
medical benefits and other welfare benefit packages. You will receive three (3) weeks
of paid vacation each calendar year subject to restrictions of your job
requirements. Please be aware that Company’s vacation policy does not allow
carryover from year to year. Therefore, if the three weeks are not taken they
are forfeited each year.


As an executive of the Company, you will be eligible
to participate in the Company’s performance incentive plan at Fifty percent
(50%) of your annual salary. The program is based on the attainment of company
performance towards EBITDA targets and your individual performance towards
goals mutually set between you and your immediate manager. Actual incentive
payments will be paid yearly, usually at the end of the first quarter of each
year, after Board approval. As with other executive benefits programs, eligibility
and participation are subject to the specific provisions of the plan.


As an executive, you will be eligible to participate
in the employee stock option plan. Subject to the terms and conditions of that
plan, you will receive an initial grant of Thirteen Thousand (13,000) shares of
Company stock options at a par value price of one hundred dollars ($100.00) per
share. Under the current plan provisions, the shares vest at a rate of twenty
percent (20%) per year of service with the Company. They will be 100% vested at
the end of five (5) years employment. Nothing in this provision shall act
as a guarantee of any specific value of the Company stock other than the value
described in the stock plan itself.


Your employment with the Company will be “at will,” meaning
that either you or the Company will be entitled to terminate your employment at
any time and for any reason, with or without cause. Except as set forth in the
following sentence, in the event the Company terminates your employment other
than for “cause,” you will be paid severance equal to one-year salary at your
then current salary payable in bi-weekly installments. For purposes of this
Agreement “cause” shall mean termination for: (1) a repeated refusal to
comply with a lawful directive of the Chief Executive Officer, (2) serious
misconduct, dishonesty or disloyalty directly related to the performance of
duties for the Company, which results from a willful act or omission and which
is materially injurious to the operations, financial condition or business
reputation of the Company or any significant subsidiary thereof; (3) being
convicted (or entering into a plea bargain admitting criminal guilt) in any
criminal proceeding that may have an adverse impact on the Company’s 











reputation and standing in
the community; (4) willful and continued failure to substantially perform
your duties under this Agreement; or (5) any other material breach of this
Agreement. In the event of termination for cause, you will be entitled to any
unpaid salary through the date of termination, plus any earned and accrued
unused vacation pay or deferred compensation payments. You will not be entitled
to any other compensation from the Company, including, without limitations,
severance pay.


You will be reimbursed for all normal business
expenses in accordance to Company policy. The Company will provide relocation
assistance. The amount of assistance to be determined up to what is usual and
customary for the offered position related to relocation (ie: moving expense,
closing costs etc.).  It is committed
that you and your family will endeavor to relocate to the New York City metro
vicinity within three (3) months of your start date. In addition, the
Company will provide temporary living during relocation for a period of three (3) months.
You will be reimbursed for all normal business expenses in accordance to
Company policy.


This letter is intended to
memorialize the offer of employment provided by the Company and if these terms
are acceptable, to create an at-will employment relationship under these terms.
Nothing in this letter is intended or shall have the effect of modifying or
amending the terms, conditions or requirements of any benefit plan, retirement
plan or welfare plan or arrangement offered by the Company. During your employment,
you will remain subject to, and be required to abide by, all terms, conditions
and requirements of the policies and practices dictated by the Company for
executive employees.


Sincerely,


Jim Rizzo

Vice President

Human Resources


	
  

  	
   

  	
   

  
	
  Mr. Charles Newsom/Date

  	
   

  	
   

  
	
  CC:    Mr. Richard
  Dreiling—President/CEO

  



 



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