Exhibit
10.33





Richard
Dreiling

CEO & President


March 1, 2006


Mr. David W. D’Arezzo 

9797 Wexford Circle

Granite Bay, CA 95746


Dear David:


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, Chief Marketing Officer, 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 $460,000.00 annually ($17,692.31
bi-weekly). Future salary increases will be based on demonstrated job
performance in accordance with 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, Company paid life and disability programs and other welfare
benefit packages. You will receive four (4) 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 four weeks are not taken they are forfeited each year.


As a senior executive of the Company, you will be
eligible to participate in the Company’s performance incentive plan at fifty
percent (50%) of annual salary as follows: 
50% of your annual bonus will be paid upon achievement of the “minimum
target”, 100% of your annual bonus will be paid upon achievement of the “target”
and 150% of your annual bonus will be paid upon achievement of the “maximum
target”. The program targets are set by the compensation committee annually and
are typically 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.



 Executive Offices:   440 9th Avenue, New York, NY 10001
 Telephone 212-273-5704       FAX: 917-351-0392
 








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 for relocation
assistance. The amount of assistance will be determined by reference to what is
usual and customary for the offered position related to relocation (i.e. 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.


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.


We all look forward to you
joining our team on or around March 20, 2006. Please do not hesitate to
call me if you have any questions.


Sincerely,


Rick Dreiling

President/CEO




	
   

  	
   

  	
   

  
	
  Mr. David W. D’Arezzo/Date

  	
   

  	
   

  
	
  CC:

  	
   

  	
  Mr. John Henry—SVP/CFO

  	
   

  	
   

  
	
   

  	
   

  	
  Ms. Michelle Bergman—SVP/General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
  Mr. Jim Rizzo—VP/Human Resources

  	
   

  	
   

  






 



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