Exhibit
10.16


 


 





 


 


June 24, 2003


 


 


Mr. Timothy R. LaBeau


9705 Rocky Point


Clarence, NY 14031


 


Dear Tim:


 


This letter will confirm
an offer of employment to you by Duane Reade Inc.


 


Your initial assignment
will be as Senior Vice President/Merchandising, reporting directly to Mr. Tony
Cuti, Chairman/ C.E.O.  You will be
based at our headquarters office located at 440 9th Avenue, New
York, NY.  Your initial salary will be
$385,000.00 per/year, ($14,807.70 Bi-Weekly). 
Future salary increases will be based on demonstrated job
performance.  Your performance will be
reviewed each year.  Future salary
adjustments will be in accordance to Company policy and practice.


 


You will be eligible to
join the company’s executive benefit program upon beginning employment.  You will be eligible to join the Company’s
401K program on the first of the month of the quarter following your ninety
(90) day anniversary.  You will be
eligible for three (3) weeks vacation each calendar year.  Please be aware that Duane Reade’s vacation policy
does not allow carryover from year to year. 
Therefore, if the three weeks are not taken they are forfeited each
year.


 


It is committed that you
will join 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 Earnings per Share (EPS)
targets and can be increased to a maximum of one hundred percent (100%) or
decreased based on the actual company results. 
Actual incentive payments will be paid yearly, usually at the end of the
first quarter of each year, after Board approval.  The Company will guarantee a minimum of a Seventy-Five Thousand
payout with first year incentive, ($75,000.00).


 


It was also committed
that you will be eligible to receive seventy-five thousand (75,000) shares of
Duane Reade stock options at a price equivalent to the average trading price
for five (5) trading days prior to the first day of your employment.  Twenty percent (20%) of the shares will vest
at the end of each anniversary of your employment with Duane Reade Inc.


 


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 of termination other than for “cause,” you
will be paid severance equal to one year salary at your then current
salary.  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 of up to $125,000.00 net for expenses 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.  The Company will provide temporary living
during relocation for a period of three (3) months.


 


I believe this covers
everything.  We all look forward to you
joining our Executive team on Monday, July 21, 2003.  Please do not hesitate to call Tony, Gary or me if you have any
questions.


 


 


Sincerely,


	
   

  
	
  /s/ Jim Rizzo

  
	
  Jim Rizzo

  
	
  Vice President

  
	
  Human Resources

  



 


 


	
  /s/ Timothy R. LaBeau

  	
   

  
	
  Timothy R. LaBeau/Date

  	
   

  
	
   

  
	
  CC:

  	
  Mr. Tony Cuti –
  Chairman/C.E.O.

  
	
   

  	
  Mr. Gary Charboneau –
  SVP/Sales and Marketing

  
			



 


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