Document:

EX-10.1

P. H. Glatfelter Company

Summary of Non-Employee Director Compensation

(effective January 1, 2005)

	 	 	 	 	 	 	 	 	 
	Type	 	Frequency	 	Amount
	Board Retainer (1)
	 	Annually               
	 	$	22,000	 
	Committee chairperson retainer
	 	Annually               
	 	 	4,000	 
	Board retreat
	 	Annually               
	 	 	1,500	 
	Board or committee meetings
	 	Per meeting            
	 	 	1,000	 
	Other: Restricted Stock Units (2)
	 	Annually               
	 	 	15,000	 

	 	(1)	 	Annual retainer two-thirds of which will consist of shares of Glatfelter common stock
and one-third in cash.

	 	(2)	 	Restricted stock units with a grant-date value of $15,500 vesting ratably over a
three year period.EX-10.54

Exhibit 10.54

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made in the City of Boise and State of Idaho, as of the 15th day of
December, 2004, between Albertsons, Inc., a Delaware corporation (hereinafter called the
“Employer”), and Paul Gannon (hereinafter called the “Employee”).

In consideration of the premises, it is agreed by and between the parties hereto as follows:

1. Employment.

	 	1.1	 	Employment and Duties. The Employer shall employ the Employee, and the
Employee shall serve the Employer, as an executive for the period (the “Term”)
described in Section 2.1 hereof. During the Term the Employee shall faithfully and in
conformity with the directions of the Chief Executive Officer of the Employer (the
“CEO”) or his delegate perform the duties of his or her employment and shall devote to
the performance of such duties his or her full time and attention, provided, however,
that it shall not be a violation of this Agreement for the Employee to (i) devote
reasonable periods of time to charitable and community activities and, with the
approval of the Employer, industry or professional activities, and (ii) manage personal
business interests and investments, subject to Section 7, so long as such activities do
not materially interfere with the performance of the Employee’s responsibilities under
this Agreement.

	 	1.2	 	Offices and Location. During the Term the Employee shall serve in the office
or offices of the Employer which the Board of Directors (the “Board”) of the Company
may from time to time elect or appoint him or her, or the CEO may from time to time
appoint him or her, and shall perform such services in such location as the CEO may
direct. The Employee shall be excused from performing any services hereunder during
periods of temporary incapacity and during vacations in accordance with the Employer’s
disability and vacation policies.

2. Term of Employment.

	 	2.1	 	Initial Term. The Employee’s employment under this Agreement (“Term”) shall
commence on December 15, 2004 (the “Start Date”) and, subject to the provisions of this
Agreement, shall terminate (the “Termination Date”) on the earlier of (i) the third
anniversary of the Start Date (the “Initial Term”) or (ii) termination of the
Employee’s employment pursuant to Section 5.

	 	2.2	 	Renewal Term. This Agreement shall expire automatically at the end of the
Initial Term, unless extended as provided in this Section 2.2. Within 60 days after
the second anniversary of the Initial Term or any Renewal Term (as defined below),
Employer shall notify Employee regarding (i) whether the Agreement shall be extended
and (ii) the terms and conditions, if any, for such extension. Any such additional
extension period (“Renewal Term”) shall be deemed to be part of the Term for purposes
of this Agreement. If the Employer and the Employee have not entered into a written
agreement to extend this Agreement within 45 days after such notice, then at the
Employer’s election the Employer may release the Employee from Employee’s duties during
the remaining Term of the Agreement in accordance with and subject to the conditions in
Sections 5.4 and 6.3. If Employee is not so released and completes the then remaining
Term of the Agreement, Employee shall become employed at-will upon the expiration of
such Term as provided for in Section 2.3. Nothing in this Section 2.2 shall be deemed
to grant a right of continued employment to the Employee upon expiration of the Initial
Term or any Renewal Term.

	 	2.3	 	Post-Term At-Will Employment. If (i) this Agreement is not terminated pursuant
to Section 5, and (ii) neither party has otherwise terminated the Employee’s
employment, upon expiration of the Term (including any Renewal Term), this Agreement
shall expire and the Employee shall become employed at-will and may be terminated from
employment at any time, without notice or cause. In the event this Agreement expires
and the Employee becomes employed at-will, the Employee shall not be entitled to any
severance or other termination compensation or benefits under this Agreement, and the
Employee’s employment shall be subject to those policies and procedures that the
Employer may adopt and change in its discretion from time to time. Nothing in this
Section 2.3 shall be deemed to grant a right of continued employment to the Employee
upon expiration of the Term, and the Employer may terminate the Employee’s employment
upon expiration of the Term without any further notice and financial obligation to the
Employee under Section 6. 

3. Compensation.

	 	3.1	 	Salary. In consideration of the services of the Employee during the Term, the
Employer shall pay the Employee salary at an annualized rate of no less than $610,000
(“Base Salary”) (less applicable withholding for taxes and authorized deductions) in
accordance with the Employer’s usual payroll policies. The Employee’s Base Salary
shall be reviewed at least annually in accordance with Employers’ customary review
practices applicable to its Senior Executives. Base Salary may be increased by action
of the appropriate committee of the Employer’s Board of Directors or its delegate
without the necessity of written amendment pursuant to Section 9.8. Notwithstanding
the foregoing, the Employee’s Base Salary may be proportionally decreased in connection
with a general decrease applicable to Employer’s Senior Executives by action of the
appropriate committee of the Employer’s Board of Directors or its delegate without the
necessity of written amendment pursuant to Section 9.8.

	 	3.2	 	Annual Incentive Compensation. The Employee shall be eligible to participate
in any annual and/or long-term bonus plan, and any equity compensation plan in which
Executives of a comparable level of the Employer participate on the terms and
conditions provided in such plans. In addition, Employer will, subject to final
approval by the Management Development/Compensation Committee of the Board of
Directors, grant to Employee 125,000 options in December 2004 pursuant to the terms and
conditions of Employer’s stock option plan (the Company may, in its sole discretion,
issue restricted stock units in place of some or all of the aforementioned stock
options, provided that such an issue of restricted stock units results in a comparable
overall value to the 125,000 stock option award at the time of the grant).

4. Employee Benefits.

	 	4.1	 	Benefits. During the Term, the Employee shall be entitled to the benefits
generally provided or made available to employees of the Employer at the same level,
including, but not limited to, group medical insurance benefits (subject in each case,
however, to (i) eligibility and (ii) modification or elimination in accordance with the
Employer’s standard policies as in effect from time to time).

	 	4.2	 	Perquisites. During the Term, the Employee shall likewise be entitled to
receive all perquisites provided or made generally available to other employees of the
Employer at the same level, subject, however, in each case to (i) eligibility and (ii)
modification or elimination in accordance with Employer’s standard policies in effect
from time to time.

	 	4.3	 	Expenses. During the Term, the Employee shall be allowed reasonable traveling
expenses and shall be furnished office space, assistance and accommodations suitable to
the character of his position with the Employer and adequate for the performance of his
duties hereunder.

5. Termination of Employment Prior to Expiration of Term.

	 	5.1	 	Death. In the event of the Employee’s death during the Term, the Employee’s
employment shall terminate, and the Employer shall pay or provide to the Employee’s
beneficiaries or estate, as appropriate, as soon as practicable after the Employee’s
death, the amounts and benefits provided for in Section 6.1.

	 	5.2	 	Permanent Disability. If the Employee becomes totally and permanently disabled
(as defined in the Employer’s Long-Term Disability Plan) during the Term (“Permanent
Disability”), the Employer may terminate the Employee’s employment on written notice
thereof in accordance with Section 9.5, and the Employer shall provide to the Employee
the amounts and benefits provided for in Section 6.1. 

	 	5.3	 	Termination by the Employer for Cause. During the Term the Employer may
terminate the Employee’s employment for “Cause.” For purposes of this Agreement,
“Cause” shall mean any of the following: (a) conviction of a crime (including a nolo
contendere plea) involving the commission by the Employee of a felony or of a criminal
act involving, in the good faith judgment of the Board of Directors, fraud, dishonesty,
or moral turpitude but excluding any conviction which results solely from the
Employee’s title or position with the Employer and is not based upon his personal
conduct; (b) deliberate and continual refusal to perform employment duties reasonably
requested by the Employer after thirty (30) days’ written notice by certified mail of
such failure to perform, specifying that the failure constitutes Cause (other than as a
result of vacation, sickness, illness or injury); (c) fraud or embezzlement determined
in accordance with the Employer’s normal, internal investigative procedures
consistently applied in comparable circumstances; (d) gross misconduct or gross
negligence in connection with the business of the Employer which has a substantial
adverse effect on the Employer; (e) material breach of any of the covenants set forth
in Section 7 of this Agreement; or (f) the Employee has committed a serious breach of
Code of Corporate Conduct or Conflict of Interest Policies of the Company; provided,
however, that termination for Cause based on clause (b) shall not be effective unless
the Employee has failed, in the good faith judgment of the Board of Directors after the
Employee has been given a reasonable opportunity to be heard, after receipt of the
notice indicated to satisfactorily discharge the Employee’s duties.

	 	5.4	 	Termination by the Employer Without Cause. During the Term the Employer may
terminate the Employee’s employment without Cause. “Without Cause” shall mean for any
reason other than death, Permanent Disability or Cause, as provided for in Sections
5.1, 5.2 and 5.3. The Employee’s employment may be terminated by the Employer Without
Cause by delivery to the Employee of notice of termination in accordance with Section
9.5.

6. Termination Payments and Benefits.

	 	6.1	 	Death or Permanent Disability. In the event of the death or Permanent
Disability of the Employee, as soon as practicable, the Employer shall pay any (i)
accrued and unpaid Base Salary and vacation to which the Employee was entitled as of
the date of death or determination of Permanent Disability or termination of
employment, whichever first occurs, (collectively, the “Compensation Payments”), and
(ii) the target bonus for the Bonus Plan for the fiscal year in which the date of death
or the determination of Permanent Disability occurs, prorated for the actual period of
service for that fiscal year (the “Prorated Bonus”). The payment of any death benefits
or disability benefits under any employee benefit or compensation plan that is
maintained by the Employer for the Employee’s benefit shall be governed by the terms of
such plan.

	 	6.2	 	Termination by the Employer for Cause; Termination by the Employee. In the
event of the termination of the Employee by the Employer for Cause or by the Employee,
the Employer shall pay the Compensation Payments to the Employee as soon as practicable
or within the period required by law, and the Employee shall be entitled to no other
compensation, except as otherwise due to the Employee under applicable law. The
Employee shall not be entitled to the payment of any bonuses for any portion of the
fiscal year in which such termination occurs.

	 	 	 	6.3

1

Termination by the Employer Without Cause.

	 	6.3.1	 	Form and Amount. In the event of the termination of the
Employee by the Employer Without Cause, the Employer shall pay the Compensation
Payments to the Employee as soon as practicable or within the period required
by law. In addition, conditioned upon receipt of the Employee’s written
release of claims in such form as may be required by the Employer and
completion and execution of updated applicable financial certifications as
customarily obtained by the Company as part of its financial compliance
program, the Employer shall pay or provide to the Employee (a) as severance
pay, an aggregate amount equal to two times the amount of his or her then
current Base Salary, payable in equal monthly installments on the Employer’s
regular payroll dates over the 24 month period beginning on the date of
termination; (b) an amount equal to the Employee’s targeted annual bonus for
such year, multiplied by a fraction, the numerator of which is the number of
days that have elapsed during the fiscal year as of the date the Employee’s
employment shall terminate and the denominator of which is 365 (which sum shall
be in lieu of any other annual bonus payment for such year); (c) outplacement
services by a firm selected by the Employer at the expense of the Employer, in
an amount up to $50,000; and (d) for up to 24 months following termination of
employment (the “Continuation Period”) the continuation of group medical
insurance benefits, except as provided in Section 6.6, or as prohibited by law.
Solely for purposes of determining the period of continuation coverage to which
the Employee or any of the Employee’s dependents is entitled under section
4980B of the Internal Revenue Code of 1986, as amended (“Code”), (or any
successor provision thereto), the Employee shall be deemed to have remained
employed until the end of the Continuation Period, subject to the provisions of
Section 6.6.

	 	6.3.2	 	Maintenance of Benefits. During the Continuation Period, the
Employer shall use its best efforts to maintain its group medical insurance
benefits in full force and effect for the continued benefit of the Employee or
shall arrange to make available to the Employee group medical benefits
substantially similar to those that the Employee would otherwise have been
entitled to receive if the Employee’s employment had not been terminated. Such
benefits shall be provided on the same terms and conditions (including the
Employee contributions toward the premium payments) under which the Employee
was entitled to participate immediately prior to the Employee’s termination.

	 	6.3.3	 	Forfeiture. Notwithstanding the foregoing provisions of this
Section 6, any right of the Employee to receive termination payments and
benefits under Section 6 shall be forfeited to the extent of any amounts
payable or benefits to be provided after a material breach of any covenant set
forth in Section 7.

	 	6.4	 	Nonduplication of Benefits. It is possible that a category of payment or
benefit that is paid or provided under this Section 6 would also be paid or provided
under the terms of another Employer plan, program, or arrangement, including, without
limitation, a severance program or change in control agreement. In such case, (i) the
payment or benefit under the terms of another Employer plan, program, or arrangement
will be paid or provided in full, and (ii) the Employer’s obligation under this Section
6 will automatically be reduced (but not below zero) to the extent and only to the
extent of the payment or benefit provided under clause (i). For purposes of
illustration only, if the Employee were eligible to receive both a cash severance
payment under Section 6.3.1(a) of this Agreement and under Paragraph 1(A) of Annex A of
the Change of Control Severance Agreement with the Employer, then the Employer’s
obligation under this Agreement would be reduced (but not below zero) by the payments
made under the Change of Control Severance Agreement.

	 	6.5	 	Employer’s Right of Offset. If the Employee is at any time indebted to the
Employer, or otherwise obligated to pay money to the Employer for any reason, the
Employer, at its election, may offset amounts otherwise payable to the Employee under
this Agreement, including, but without limitation, Base Salary and incentive
compensation payments, against any such indebtedness or amounts due from the Employee
to the Employer, to the extent permitted by law.

	 	6.6	 	Mitigation. In the event of the termination of the Employee by the Employer
Without Cause, the Employee shall not be required to mitigate damages by seeking other
employment or otherwise as a condition to receiving termination payments or benefits
under this Agreement. No amounts earned by the Employee after the Employee’s
termination by the Employer Without Cause, whether from self-employment, as a common
law employee, or otherwise, shall reduce the amount of any payment or benefit under any
provision of this Agreement. Notwithstanding the foregoing, the Employee’s coverage
under the Employer’s group medical insurance during the Continuation Period as provided
in Section 6.3 shall terminate as soon as the Employee becomes covered under any group
medical plan made available by another employer. The Employee shall report to the
Employer any such coverage actually received by the Employee.

	 	6.7	 	Resignations. Except to the extent requested by the Employer, upon any
termination of the Employee’s employment with the Employer, the Employee shall
immediately resign all positions and directorships with the Employer and each of its
subsidiaries and affiliates.

7. Covenants and Representations of the Employee.

	 	7.1	 	Confidentiality. During the Term, and in consideration for the Employee’s
agreement to enter into this Agreement, the Employer will disclose to the Employee its
confidential or proprietary information and trade secrets (together, the “Proprietary
Information”) to the extent necessary for the Employee to carry out Employee’s
obligations under this Agreement. The Employee hereby covenants and agrees that the
Employee shall not, without the prior written consent of the Employer, during the Term
or at any time thereafter disclose to any person not employed by the Employer, or use
in connection with engaging in competition with the Employer, any Proprietary
Information of the Employer.

	 	7.1.1	 	It is expressly understood and agreed that the Employer’s
Proprietary Information is all nonpublic information relating to the Employer’s
business, including but not limited to information, plans and strategies
regarding suppliers, pricing, marketing, customers, hiring and terminations,
employee performance and evaluations, succession plans, internal reviews and
investigations, short term and long range plans, acquisitions and divestitures,
advertising, information systems, sales objectives and performance, as well as
any other nonpublic information, the nondisclosure of which may provide a
competitive or economic advantage to the Employer. Proprietary Information
shall not be deemed to have become public for purposes of this Agreement where
it has been disclosed or made public by or through anyone acting in violation
of a contractual, ethical, or legal responsibility to maintain its
confidentiality.

	 	7.1.2	 	In the event the Employee receives a subpoena, court order or
other summons that may require the Employee to disclose Proprietary
Information, on pain of civil or criminal penalty, the Employee will promptly
give notice of the subpoena or summons pursuant to Section 9.5 and provide the
Employer an opportunity to appear at the Employer’s expense and challenge the
disclosure of its Proprietary Information, and the Employee shall provide
reasonable cooperation to the Employer for purposes of affording the Employer
the opportunity to prevent the disclosure of the Employer’s Proprietary
Information.

	 	7.2	 	Nonsolicitation of Employees. The Employee hereby covenants and agrees that
during the Term and for two years thereafter, the Employee shall not, without the prior
written consent of the Employer, on the Employee’s own behalf or on the behalf of any
person, firm or company, directly or indirectly, attempt to influence, persuade or
induce, or assist any other person in so persuading or inducing, any of the employees
of the Employer (or any of its subsidiaries or affiliates) to give up his or her
employment with the Employer (or any of its subsidiaries or affiliates), and the
Employee shall not directly or indirectly solicit or hire employees of the Employer (or
any of its subsidiaries or affiliates) for employment with any other employer.

	 	7.3	 	Noninterference with Business Relations. The Employee hereby covenants and
agrees that during the Term and for two years thereafter, the Employee shall not,
without the prior written consent of the Employer, on the Employee’s own behalf or on
the behalf of any person, firm or company, directly or indirectly, attempt to
influence, persuade or induce, or assist any other person in so persuading or inducing,
any person, firm or company to cease doing business with, reduce its business with, or
decline to commence a business relationship with, the Employer (or any of its
subsidiaries or affiliates).

	 	7.4	 	Noncompetition. It is recognized by the Employee and the Employer that the
Employee’s duties hereunder will require the receipt and creation of Proprietary
Information, as defined in Section 7.1. The Proprietary Information has been and will
continue to be developed by the Employer and its subsidiaries and affiliates at
substantial cost and constitutes valuable and unique property of the Employer. The
Employee further acknowledges that due to the nature of the Employee’s position, the
Employee will have access to Proprietary Information affecting plans and operations in
every location in which the Employer (and its subsidiaries and affiliates) does
business or plans to do business throughout the world, and the Employee’s decisions and
recommendations on behalf of the Employer may affect its operations throughout the
world. Accordingly, the Employee acknowledges that the foregoing makes it reasonably
necessary for the protection of the Employer’s business interests that the Employee not
compete with the Employer or any of its subsidiaries or affiliates during the Term and
for a reasonable and limited period thereafter, as provided below.

	 	7.4.1	 	The Employee covenants that during the Term of this Agreement
and for a period of one year following the later of either a termination of
employment pursuant to Section 5 or a termination of at-will employment
following expiration of the Term, the Employee will not undertake work for a
Competing Business, as defined in Section 7.4.2. For purposes of this
covenant, “undertake work for” shall include performing services, whether paid
or unpaid, in any capacity, including as an officer, director, owner,
consultant, employee, agent or representative, where such services involve the
performance of similar duties or oversight responsibilities as those performed
by the Employee during all or any portion of the 18-month period preceding the
Employee’s termination from the Employer for any reason.

	 	7.4.2	 	As used in this Agreement, the term “Competing Business” shall
mean any business that, at the time of the determination:

	 	 	 	7.4.2a is substantially similar to the whole or a substantial part of the
business conducted by the Company or any of its divisions or
affiliates;

	 	 	 	7.4.2b is operating a store or stores which, during its or their fiscal year
preceding the determination, had aggregate net sales in excess of
$10,000,000, if such store or any of such stores is or are located in a
city or within a radius of 25 miles from the outer limits of a city
where the Company, or any of divisions or affiliates, is operating a
store or stores which, during its or their fiscal year preceding the
determination, had aggregate net sales in excess of $10,000,000; and

	 	 	 	7.4.2c had aggregate net sales at all its locations, and sales by its
divisions and affiliates, during its fiscal year preceding that in
which the Employee made an investment therein, or first rendered
personal services thereto, in excess of $500,000,000.

	 	7.5	 	Injunctive Relief. If the Employee shall breach the covenants contained in
this Section 7, the Employer shall have no further obligation to make any payment to
the Employee pursuant to this Agreement and may recover from the Employee all such
damages as it may be entitled to at law or in equity. In addition, the Employee
acknowledges that any such breach is likely to result in immediate and irreparable harm
to the Employer for which money damages are likely to be inadequate. Accordingly, the
Employee consents to injunctive and other appropriate equitable relief without the
necessity of bond in excess of $500.00 (five hundred dollars) upon the institution of
proceedings therefore by the Employer in order to protect the Employer’s rights
hereunder.

	 	7.6	 	Representations of the Employee. The Employee represents and warrants to the
Employer that upon and after the Employee’s termination or cessation of employment with
the Employer, including any post-Term at-will employment, and until such time as no
obligations of the Employee to the Employer hereunder exist, the Employee: (a) shall
provide a complete copy of this Agreement to any prospective employer or other person,
entity or association in a Competing Business with whom or which the Employee proposes
to be employed, affiliated, engaged, associated or to establish any business or
remunerative relationship prior to the commencement thereof, provided that Employee
shall first cause the compensation and severance amounts hereunder to be deleted or not
disclosed; and (b) shall notify the Employer of the name and address of any such
person, entity or association prior to the Employee’s employment, affiliation,
engagement, association or the establishment of any business or remunerative
relationship.

	 	8	 	Survival. The expiration or termination of the Term shall not impair the rights or
obligations of any party hereto that accrue hereunder prior to such expiration or termination,
except to the extent specifically stated herein. In addition to the foregoing, the Employee’s
covenants and warranties contained in Section 7, and the parties’ agreements under Section 9
shall survive the expiration of this Agreement and the termination of the Employee’s
employment, including any post-Term at-will employment.

9 Miscellaneous Provisions.

	 	9.1	 	Dispute Resolution. Any dispute between the parties under this Agreement shall
be resolved (except as provided below) through informal arbitration by an arbitrator
selected under the rules of the American Arbitration Association for arbitration of
employment disputes (located in Boise, Idaho) and the arbitration shall be conducted in
that location under the rules of said Association. Each party shall be entitled to
present evidence and argument to the arbitrator. The arbitrator shall have the right
only to interpret and apply the provisions of this Agreement and may not change any of
its provisions, except as expressly provided in Section 9.4 and only in the event
Employer has not brought an action in a court of competent jurisdiction to enforce the
covenants in Section 7. The arbitrator shall permit reasonable pre-hearing discovery of
facts, to the extent necessary to establish a claim or a defense to a claim, subject to
supervision by the arbitrator. The determination of the arbitrator shall be conclusive
and binding upon the parties and judgment upon the same may be entered in any court
having jurisdiction thereof. The arbitrator shall give written notice to the parties
stating the arbitrator’s determination, and shall furnish to each party a signed copy
of such determination. The expenses of arbitration shall be borne equally by the
Employer and the Employee or as the arbitrator equitably determines consistent with the
application of state or federal law; provided, however, that the Employee’s share of
such expenses shall not exceed the maximum permitted by law. Any arbitration or action
pursuant to this Section 9.1 shall be governed by and construed in accordance with the
substantive laws of the State of Idaho and, where applicable, federal law, without
giving effect to the principles of conflict of laws of such State.

Notwithstanding the foregoing, the Employer shall not be required to seek or
participate in arbitration regarding any actual or threatened breach of the
Employee’s covenants in Section 7, but may pursue its remedies, including injunctive
relief, for such breach in a court of competent jurisdiction in the city in which
the Employer’s principal executive offices are based, or in the sole discretion of
the Employer, in a court of competent jurisdiction where the Employee has committed
or is threatening to commit a breach of the Employee’s covenants, and no arbitrator
may make any ruling inconsistent with the findings or rulings of such court.

	 	9.2	 	Binding on Successors; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Employee, the Employer and each of their respective
successors, assigns, personal and legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees, as applicable; provided however, that
neither this Agreement nor any rights or obligations hereunder shall be assignable or
otherwise subject to hypothecation by the Employee (except by will or by operation of
the laws of intestate succession) or by the Employer except that the Employer may
assign this Agreement to any successor (whether by merger, purchase or otherwise) to
all or substantially all of the stock, assets or businesses of the Employer, if such
successor expressly agrees to assume the obligations of the Employer hereunder.

	 	9.3	 	Governing Law. This Agreement shall be governed, construed, interpreted, and
enforced in accordance with the substantive law of the State of Idaho and federal law,
without regard to conflicts of law principles, except as expressly provided herein. In
the event the Employer exercises its discretion under Section 9.1 to bring an action to
enforce the covenants contained in Section 7 in a court of competent jurisdiction where
the Employee has breached or threatened to breach such covenants, and in no other
event, the parties agree that the court may apply the law of the jurisdiction in which
such action is pending in order to enforce the covenants to the fullest extent
permissible.

	 	9.4	 	Severability. Any provision of this Agreement that is deemed invalid, illegal
or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective, to
the extent of such invalidity, illegality or unenforceability, without affecting in any
way the remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal or unenforceable in any other
jurisdiction. If any covenant in Section 7 should be deemed invalid, illegal or
unenforceable because its time, geographical area, or restricted activity, is
considered excessive, such covenant shall be modified to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.

	 	9.5	 	Notices. For all purposes of this Agreement, all communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have been
duly given when hand delivered or dispatched by electronic facsimile transmission (with
receipt thereof confirmed), or five business days after having been mailed by United
States registered or certified mail, return receipt requested, postage prepaid, or
three business days after having been sent by a nationally recognized overnight courier
service, addressed to the Employer at its principal executive office and to the
Employee at the Employee’s principal residence, or to such other address as any party
may have furnished to the other in writing and in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

	 	9.6	 	Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one
and the same Agreement.

	 	9.7	 	Entire Agreement. The terms of this Agreement are intended by the parties to
be the final expression of their agreement with respect to the Employee’s employment by
the Employer and may not be contradicted by evidence of any prior or contemporaneous
agreement. The parties further intend that this Agreement shall constitute the
complete and exclusive statement of its terms and that no extrinsic evidence whatsoever
may be introduced in any judicial, administrative, or other legal proceedings to vary
the terms of this Agreement.

	 	9.8	 	Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, approved by the Employer and signed by
the Employee and the Employer. Failure on the part of either party to complain of any
action or omission, breach or default on the part of the other party, no matter how
long the same may continue, shall never be deemed to be a waiver of any rights or
remedies hereunder, at law or in equity. The Employee or the Employer may waive
compliance by the other party with any provision of this Agreement that such other
party was or is obligated to comply with or perform only through an executed writing;
provided, however, that such waiver shall not operate as a waiver of, or estoppel with
respect to, any other or subsequent failure.

	 	9.9	 	No Inconsistent Actions. The parties hereto shall not voluntarily undertake or
fail to undertake any action or course of action that is inconsistent with the
provisions or essential intent of this Agreement. Furthermore, it is the intent of the
parties hereto to act in a fair and reasonable manner with respect to the
interpretation and application of the provisions of this Agreement.

	 	9.10	 	Headings and Section References. The headings used in this Agreement are
intended for convenience or reference only and shall not in any manner amplify, limit,
modify or otherwise be used in the construction or interpretation of any provision of
this Agreement. All section references are to sections of this Agreement, unless
otherwise noted.

	 	9.11	 	Withholding. The Employer shall be entitled to withhold from payment any
amount of withholding required by law.

	 	9.12	 	Prior Agreements. Employee hereby agrees that, effective with the Employee’s
execution hereof, (i) that certain Employment Agreement dated as of November 7, 2000,
by and between Shaw’s Supermarkets, Inc., and Employee; (ii) that certain change in
control agreement dated as of October 30, 2000 between Shaw’s Supermarkets, Inc. and
the Employee, are each void and of no further force or effect.

	 	9.13	 	Interpretation and Amendment. Notwithstanding any provision in this Agreement
to the contrary, this Agreement will be interpreted, applied and to the minimum extent
necessary, amended, so that the Agreement does not fail to meet, and is operated in
accordance with, the requirements of paragraphs (2), (3) and (4) of Section 409A(a)(1)
of the Code.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.

Albertsons, Inc.

By: /s/ Kathy Herbert

	 	 	 	Name: Kathy Herbert

Title: Executive Vice President, Human Resources

Paul Gannon

/s. Paul Gannon

   

Paul Gannon

Printed Name

2

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