AMENDMENT TO EMPLOYMENT AGREEMENT

            THIS AMENDMENT to the Employment Agreement by and between Lawrence R. Johnston (the “Executive”) and Albertson’s, Inc. (the “Company”) is entered into as of July 19, 2001.

            WHEREAS, the Executive and the Company entered into that certain Employment Agreement dated April 23, 2001 (“Agreement”); and

            WHEREAS, the parties hereto wish to amend the Agreement to delete the provisions relating to the Executive’s right to require the Company to purchase the Executive’s Louisville, Kentucky residence and to add a requirement for the Company to purchase the Executive’s Boise, Idaho residence in the event the Executive relocates from Boise, Idaho or in the event of a termination of the Executive’s employment for any reason during the Term of the Agreement.

            NOW, THEREFORE, in consideration of the agreements set forth herein, the parties agree as follows:

            1.         Capitalized terms used herein (including in the recitals) and not otherwise specifically defined herein shall have the same meaning given to such terms in the Agreement.

 

            2.         Paragraph 3 of Schedule 1 (Relocation Policy) of the Agreement pertaining to the right of the Executive to require the Company to purchase the Executive’s current residence in Louisville, Kentucky (the address of which is 3609 Glenview Avenue, Glenview, Kentucky) is hereby deleted in its entirety and replaced with the following:

 

3.  Purchase of Executive’s Boise, Idaho Residence in Certain Circumstances.”

The Executive shall be entitled to require the Company to purchase the Executive’s primary residence in Boise, Idaho upon the terms and conditions set forth in Section 6(h) of the Agreement.”

            3.         Section 6 (Termination) of the Agreement is hereby amended by adding the following as clause (h) to the end of said Section 6 to provide the Executive with the right to require the Company to purchase the Executive’s primary residence in Boise, Idaho, if, during the Term of the Agreement, the Executive relocates from Boise, Idaho to another location outside the State of Idaho or the Executive’s employment with the Company is terminated for any reason:

“(h)  Purchase of Executive’s Boise, Idaho Residence upon Executive’s Relocation or Termination.

            (i)         If, during the Term of the Agreement, (i) the Executive relocates from Boise, Idaho to another location outside the State of Idaho (subject to the Company permitting such relocation pursuant to Section 4 hereof) or (ii) the Executive’s employment with the Company is terminated for any reason, the Executive may, upon written notice to the Company, cause the Company to purchase the Executive’s then primary residence in Boise, Idaho (“Boise Residence”), provided the Executive is unable, notwithstanding his reasonable efforts, to sell the Boise Residence on his own.  “Reasonable efforts” shall include listing the Boise Residence for at least six (6) months with a qualified real estate broker.  In the event the company purchases the Boise Residence from the Executive pursuant to this clause (h), the purchase price shall be the Executive’s initial investment in the Boise Residence, plus the cost of any improvement made thereto.  The Executive shall provide documentation reasonably satisfactory to the Company evidencing his initial investment in and the cost of improvements to the Boise Residence.  In addition to the purchase price, the Company shall pay all reasonable closing costs, including real estate commissions, if any.

            (ii)        All amounts payable by the Company to the Executive under this Section 6(h) shall be in addition to all other amounts payable to the Executive upon relocation or termination set forth herein.”

            4.         Except as amended herein, the Agreement shall remain unchanged and in full force and effect.

            IN WITNESS WHEREOF, the Executive has signed this Amendment and the Company has caused this Amendment to be executed by its duly authorized officers as of the effective date first above written.

                                                                                      ALBERTSON’S, INC.         

            a Delaware corporation                                               

            By:  /s/  Thomas R. Saldin

                                                                                     Thomas R. Saldin

                                                                                     Executive Vice President and General Counsel

 

 

            Executive

 

            by:  /s/  Lawrence R. Johnston

                                                                                            Lawrence R. Johnston

 

EXHIBIT 10.4



                              EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  ("Agreement")  is entered  into by and between
Lawrence  R.  Johnston  (the  "Executive")  and  Albertson's,  Inc.,  a Delaware
corporation (the "Company") on April 23, 2001 (the "Commencement Date").

     WHEREAS,  the Company  desires to provide for the service and employment of
the Executive with the Company and the Executive  wishes to perform services for
the Company,  all in accordance with the terms and conditions  provided  herein.

     NOW, THEREFORE,  in consideration of the mutual agreements  hereinafter set
forth, the Executive and the Company hereby agree as follows:

     Section 1. EMPLOYMENT. The Company does hereby employ the Executive and the
Executive  does  hereby  accept  employment  as  Chairman of the Board and Chief
Executive  Officer of the  Company.  The  Executive  shall have all the  duties,
responsibilities  and authority  normally performed by the Chairman of the Board
and Chief  Executive  Officer and shall  render  services  consistent  with such
positions  on the  terms  set  forth  herein  and  shall  report to the Board of
Directors of the Company (the "Board").  In addition,  the Executive  shall have
such other  executive  and  managerial  powers and  duties  with  respect to the
Company and its  subsidiaries as may reasonably be assigned to him by the Board,
to the extent  consistent with his position and status as set forth above. In no
event shall the duties,  responsibilities and authority of the Executive be less
than  those  initially  performed  by him as  Chairman  of the  Board  and Chief
Executive  Officer.  The Executive  agrees to devote all of his working time and
efforts to the business and affairs of the Company and its subsidiaries, subject
to periods of  vacation  and sick leave to which he is  entitled,  and shall not
engage  in  activities  that  substantially  interfere  with  such  performance;
provided,  however, that this Agreement shall not be interpreted to prohibit the
Executive, subject to the prior approval of the Board, from serving on the board
of directors of any corporation other than the Company.

     Section 2. TERM OF  AGREEMENT.  Subject to Section 6 hereof,  the term (the
"Term") of this  Agreement  shall  commence on the  Commencement  Date and shall
continue through the tenth (10th)  anniversary of the Commencement Date.

     Section 3. BOARD MEMBERSHIP.  Simultaneously with the execution hereof, the
Company shall cause the Executive to be appointed to the Board.

     Section 4. LOCATION.  In connection with the Executive's  employment by the
Company,  the  Executive  shall be based at the  headquarters  of the Company in
Boise, Idaho, except for required travel for the Company's business.

     Section 5. COMPENSATION.

     (a) BASE SALARY.  Effective as of the Commencement  Date, the Company shall
pay the Executive a base salary ("Base Salary") at an initial rate of $1,250,000
per year, payable in accordance with the Company's policies relating to salaried
employees.  The Executive's  Base Salary may be increased (but not decreased) by
the Compensation  Committee of the Board (the  "Compensation  Committee") in its
sole discretion.

     (b) SIGNING BONUS. On the  Commencement  Date, the Company shall pay to the
Executive an amount in cash equal to $1,230,000 as a signing bonus.

     (c) ANNUAL BONUS.  Commencing with the fiscal year of the Company  ("Fiscal
Year") in which the  Commencement  Date  occurs,  the  Executive  shall have the
opportunity  to  earn a  bonus  for  each  Fiscal  Year  as  recommended  by the
Compensation  Committee  in  accordance  with the  Company's  annual  bonus plan
applicable to the Company's senior executive officers (the "Annual Bonus Plan").
The amount of each annual bonus shall be set by the  Compensation  Committee and
shall be equal to one hundred  percent  (100%) of Base Salary if the  applicable
"target" performance goals (as defined in the Annual Bonus Plan for such period)
are met (the "Target  Bonus") and shall not exceed two hundred percent (200%) of
Base Salary. The criteria for determining the amount of any Target Bonus and the
bases upon which such Target Bonus shall be payable  shall be no less  favorable
to the  Executive  than those used for other  senior  executive  officers of the
Company,  such criteria and bases to be determined in the sole discretion of the
Compensation  Committee.  Notwithstanding  the  preceding,  subject  to  Section
7(a)(iii),  the amount of the bonus to be paid to the Executive  with respect to
the Fiscal Year in which the  Commencement  Date  occurs  shall not be less than
$1,250,000 (the "Guaranteed Bonus").

     (d) OTHER  BONUSES.  The Executive  shall be entitled to receive such other
bonuses as are determined in the discretion of the Board.

     (e) DEFERRABLE RESTRICTED STOCK UNITS AND STOCK OPTIONS.

         (i) Deferrable Restricted Stock Units. As of the Commencement Date, the
         Executive  shall be granted  728,670  shares of  deferrable  restricted
         stock  units  of  the  Company   ("Restricted  Stock  Unit  Award")  in
         accordance  with the form of grant used by the  Company for grants made
         to its senior executive officers;  provided that the provisions thereof
         shall not be inconsistent  with, or provide for additional  obligations
         of the  Executive  beyond,  the terms of this  Agreement,  and shall be
         subject to reasonable review by Executive's  counsel.  Such grant shall
         provide that 123,132 of such units shall vest on the Commencement Date,
         145,734 of such units  shall  vest on each of the first  (1st),  second
         (2nd),  third (3rd) and fourth (4th)  anniversaries of the Commencement
         Date and 22,602 of such units shall vest on the fifth (5th) anniversary
         of the Commencement Date;  provided in each case that the Executive has
         been continuously  employed with the Company from the Commencement Date
         through the  applicable  vesting  date,  except as  otherwise  provided
         herein and in such deferrable  restricted stock unit agreement.  Except
         as otherwise  provided herein and in such deferrable  restricted  stock
         unit agreement, stock subject to such Restricted Stock Unit Award would
         not be  distributable  until  the date the  Executive  ceases  to be an
         executive  officer  of the  Company  or  such  earlier  date  as may be
         approved by the Board. To the extent that dividends are paid on Company
         common stock after the Commencement Date and prior to the date that the
         Company  common stock that is subject to a Restricted  Stock Unit Award
         is issued to the Executive,  the Executive shall be entitled to receive
         a cash payment in an amount equal to the  dividends  that he would have
         been entitled to receive had he been the owner of such unissued  shares
         on the date such dividends are paid. Such cash payment shall be made at
         the same time as payment of dividends are made to other shareholders of
         Company common stock. The issuance of any Company common stock pursuant
         to a Restricted  Stock Unit Award shall be subject to the  satisfaction
         of any and all  conditions  necessary  for the  issuance of such shares
         under applicable law.

         (ii) Initial Option Grant. As of the  Commencement  Date, the Executive
         shall be granted an option (the "Initial  Option") to purchase  651,078
         shares of common  stock of the  Company at a per share  exercise  price
         equal to the fair  market  value of the common  stock of the Company on
         the Commencement  Date in accordance with the form of grant used by the
         Company for grants made to its senior executive officers; provided that
         the provisions  thereof shall not be inconsistent  with, or provide for
         additional  obligations  of the  Executive  beyond,  the  terms of this
         Agreement,  and shall be subject to  reasonable  review by  Executive's
         counsel. The Initial Option shall vest and become exercisable in annual
         installments  at the rate of 130,215 shares on each of the first (1st),
         second  (2nd),  third  (3rd)  and  fourth  (4th)  anniversaries  of the
         Commencement  Date and 130,218 shares on the fifth (5th) anniversary of
         the  Commencement  Date  (each such  installment,  an  "Initial  Option
         Installment");  provided  in each  case  that  the  Executive  has been
         continuously  employed  with the  Company  from the  Commencement  Date
         through the  applicable  vesting  date,  except as  otherwise  provided
         herein and in such stock  option grant  agreement.  Except as otherwise
         provided herein,  the Initial Option shall be subject to such terms and
         conditions,    including    provisions    regarding    post-termination
         exercisability,  as generally  apply to stock options  granted to other
         senior  executive  officers who  participate  in the  Company's  equity
         incentive  plans as such  terms  and  conditions  are in  effect on the
         Commencement Date.

         (iii)  Additional  Option  Grants.  The Executive  shall be eligible to
         receive additional grants of stock options to purchase shares of common
         stock of the Company as  recommended by the  Compensation  Committee in
         its sole discretion;  provided that each Fiscal Year commencing  during
         the Term,  the  Executive  shall be granted  options to  purchase  that
         number of shares such that the  Black-Scholes  value of the grant shall
         be no less than  285% of the sum of (i) the  Executive's  initial  Base
         Salary  plus (ii) his initial  Target  Bonus,  subject to such  vesting
         schedule as generally  applies to stock options granted to other senior
         executive  officers who participate in the Company's  equity  incentive
         plans; provided, however, that, not later than December 31, 2001, or if
         earlier,  in connection  with the first awards  granted in the ordinary
         course  of  business  to other  senior  executive  officers  under  the
         Company's  equity incentive  plans,  after the  Commencement  Date, the
         Compensation  Committee shall grant the Executive an option to purchase
         not less than 500,000 shares of Company common stock,  which shall vest
         at the rate of twenty percent (20%) of the total shares granted on each
         of the first (1st),  second (2nd), third (3rd),  fourth (4th) and fifth
         (5th)  anniversaries  of the date of grant of such  awards  (the "First
         Additional Option").  The First Additional Option grant shall be in the
         same  form as the  Initial  Option.  Subsequent  annual  option  awards
         otherwise  shall be subject to the terms and  conditions  as  generally
         apply to stock options granted to other senior  executive  officers who
         participate  in the Company's  equity  incentive  plans.  Executive may
         elect to  receive  up to fifty  percent  (50%) of the First  Additional
         Option  and  all  subsequent  annual  option  awards  in the  form of a
         deferrable  restricted  stock  unit award with  equivalent  value.  The
         number of such deferrable restricted stock units shall be determined by
         dividing the  Black-Scholes  value of the options  being granted by the
         closing New York Stock  Exchange  price of the  Company's  stock on the
         date of grant.  The number of shares of Company common stock subject to
         the First  Additional  Option  shall be reduced by the number of shares
         Executive  elects to receive  (pursuant  to the  preceding  formula) as
         deferrable restricted stock units.

     (f) SUPPLEMENTAL RETIREMENT BENEFITS.

         (i) Amount. Subject to the provisions set forth below, upon termination
         of Executive's  employment  with the Company for any reason,  Executive
         shall be entitled to a life annuity payable at age sixty-two (62) equal
         to fifty percent (50%) of his Final Average  Earnings (the  "Retirement
         Benefit").  "Final Average  Earnings" shall mean the average of the sum
         of Executive's  Base Salary and actual bonus from the highest three (3)
         consecutive  years during the ten (10) years prior to such termination,
         but not less  than  the sum of  Executive's  initial  Base  Salary  and
         initial  Target Bonus.  The amount of such life annuity shall be offset
         by the  amount of all  qualified  and  non-qualified  pension  benefits
         payable  from plans  maintained  by the  Company or  Executive's  prior
         employers.  Executive  agrees to provide the Company  with  information
         regarding any benefits payable from prior employers as requested by the
         Company  in  order to  determine  the  amount  of the  benefit  payable
         pursuant to this provision.

         (ii)  Reduction  for Early  Termination.  In the  event of  Executive's
         death,  Executive's  termination  without  Good  Reason (as  defined in
         Section  6(f)(iii)  hereof) or termination by the Company for Cause (as
         defined in Section  6(e)(i)  hereof),  the Retirement  Benefit shall be
         reduced by 3% for each full calendar year during the period  commencing
         on the date of such termination or death, and ending on the Executive's
         sixty-second  (62nd)  birthday;  and in the event of such a termination
         (other than the Executive's death) prior to the fifth (5th) anniversary
         of the Commencement Date, the Retirement  Benefit, as reduced under the
         preceding  clause,  shall  be  prorated  by  multiplying  such  reduced
         Retirement Benefit by a fraction,  the numerator of which is the number
         of full calendar months Executive was actively  employed by the Company
         (rounded up) and the denominator of which is sixty (60).

         (iii)  Reduction  for  Early  Payment.  In  the  event  of  Executive's
         termination of employment  with the Company for any reason prior to age
         sixty-two  (62),  Executive  may elect to  commence  the payment of the
         Retirement  Benefit (as adjusted pursuant to Section 5(f)(ii)) prior to
         age sixty-two (62), subject to a discount of four percent (4%) for each
         twelve  (12)  full  calendar  months  that  payment  of  such  benefits
         commences prior to age sixty-two (62). In the event of a termination of
         employment  following a Change of Control  (as defined in Section  7(b)
         hereof), the four percent (4%) discount in the preceding sentence shall
         be measured from age fifty-five (55).

         (iv) Form of Benefit Payment. The Retirement Benefit may be paid in any
         form  permitted  under   applicable   supplemental   retirement   plans
         maintained  by the  Company  for its senior  executives  or, by written
         election  delivered  to the Company by the  Executive  at least six (6)
         months prior to the commencement of Executive's  Retirement  Benefit or
         upon termination of Executive's employment after age sixty-two (62), or
         with the consent of the Company at any other time,  the  Executive  may
         elect, in lieu of a life annuity,  to receive the Retirement Benefit in
         a  lump  sum.  The  amount  of  such  lump  sum  benefit  shall  be the
         actuarially  equivalent  present value of the  Retirement  Benefit that
         would  otherwise  have been payable,  commencing  immediately as of the
         date such lump sum payment is made.  Any other optional form of payment
         shall have an actuarially  equivalent present value equal to the amount
         of such lump sum.  For  purposes  of this  Agreement,  any  actuarially
         equivalent  present  value  shall  not be less than the  present  value
         determined on the basis of the applicable mortality table prescribed in
         Section  417(e)(3)(A)(ii)(I)  of the Internal  Revenue Code of 1986, as
         amended (the "Code") and the then  prevailing  PBGC rate for  immediate
         annuities.

     (g) FRINGE BENEFITS.

         (i) General.  The Executive  shall be entitled to  participate  in each
fringe,  welfare and pension benefit and incentive programs adopted from time to
time by the  Company  for the  benefit  of,  and which  generally  apply to, its
highest level of senior executive officers from time to time.

         (ii)  Vacation.  The  Executive  will  receive  five (5)  weeks of paid
vacation  annually,  subject to the terms of the Company's  vacation policies as
they relate to senior executive officers.

         (iii) Death Benefits.  Subject to the Executive  providing  evidence of
adequate  insurability  to the Board,  the Executive  shall be entitled to death
benefits  under  group  life plans or  otherwise  in an amount not less than (i)
$13,400,000 in the event of Executive's accidental death and (ii) $10,400,000 in
the event of the Executive's death other than his accidental death.

         (iv) Salary Continuation and Disability  Insurance.  Executive shall be
covered  under  the  Company's  salary  continuation  and  long-term  disability
insurance  programs,  in  accordance  with their terms as in effect from time to
time in an amount no less than 70% of Executive's Base Salary and Target Bonus.

         (v) Aircraft.  The Company shall make available a private  aircraft for
use by Executive and  Executive's  family.  Executive  shall be required,  where
practicable,  to travel by use of such  aircraft,  for security  purposes.  Upon
Executive's family's personal use of such aircraft, the Company shall include in
Executive's  taxable  income  an amount  equal to the  related  benefit  of such
accommodations.  Such inclusion shall be made as required under the Code and the
regulations promulgated thereunder.

     Section 6. TERMINATION.

     (a) NOTICE OF TERMINATION.

         (i) "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances  claimed to provide a basis for
termination  of the  Executive's  employment  under the provisions so indicated.

         (ii) Any purported  termination  of the  Executive's  employment by the
Company  or by  the  Executive  shall  be  communicated  by  written  Notice  of
Termination to the other party hereto in accordance with Section 13 hereof.

     (b) DATE OF TERMINATION. "Date of Termination" shall mean:

         (i) if the Executive's  employment is terminated  because of death, the
date of the Executive's death, or

         (ii) if the Executive's  employment is terminated for any other reason,
the date specified in the Notice of Termination, which shall not be a date prior
to the date  such  Notice  of  Termination  is given  or the  expiration  of any
required notice period.

     (c)  ACCRUED  AND  UNPAID  BENEFITS.   Following  the  termination  of  the
Executive's  employment  with the Company for any reason,  the  Executive  shall
receive:

         (i) any earned, but unpaid, Base Salary,

         (ii) any earned, but unpaid, bonus for any Fiscal Year that ended prior
to the Fiscal Year in which the Date of Termination occurs,

         (iii) the cash equivalent of any accrued, but unused, vacation,

         (iv) the Retirement Benefit, as provided in Section 5(f),

         (v)  any  accrued  employee  benefits,  subject  to  the  terms  of the
applicable employee benefit plans, and

     The amounts payable under  subparagraphs  6(c)(i),  (ii) and (iii) shall be
paid within thirty (30) days following the Date of Termination.

     (d)  DEATH.  In the event  that the  Executive's  employment  hereunder  is
terminated by reason of the Executive's death, the Company shall pay the amounts
described in Section 6(c) above and all benefits  payable to the  Executive,  if
any, under the terms of the Company's  compensation and benefit plans,  programs
or arrangements. All options to purchase stock of the Company previously granted
to the  Executive  and not  exercised  shall  become  fully  vested and shall be
exercisable by his legal  representatives  for a period extending to the earlier
of (i) two (2) years following  Executive's death or (ii) the date of expiration
of the full stated term of each such  option.  Such number of  restricted  stock
units and restricted  stock granted by the Company to the Executive prior to his
death,  which had not vested prior to such date,  equal to the number that would
have become vested had Executive survived to the next two (2) successive vesting
dates   applicable   to  each  such  grant  shall   become   fully   vested  and
nonforfeitable.

     (e)  TERMINATION  FOR CAUSE.  The Company  may  terminate  the  Executive's
employment  under this  Agreement  for Cause (as defined  below) at any time, in
which  event,  any rights of the  Executive to  continued  employment  under the
Agreement shall thereupon cease.

         (i) As used herein,  termination  for "Cause" shall mean the occurrence
of any of the following:

             (A) that  Executive  shall have been convicted of, or pleads guilty
or nolo contendere to, a felony involving theft or moral turpitude; or

             (B) that Executive  shall have engaged in conduct that  constitutes
gross  neglect  or  willful  gross  misconduct  (including  misappropriation  or
embezzlement  of  property  of, or fraud with  respect  to,  the  Company or its
subsidiaries or their affiliates) with respect to Executive's  employment duties
which  results in  material  and  demonstrable  harm to the  Company;  provided,
however,  that for purposes of determining  whether conduct  constitutes willful
gross  misconduct,  no act on  Executive's  part shall be  considered  "willful"
unless it is done by Executive in bad faith and without  reasonable  belief that
his action was in the best interests of the Company.

         (ii)  Notwithstanding  the  foregoing,  the Company  may not  terminate
Executive's employment for Cause unless (x) a determination that Cause exists is
made and  approved by a majority of the Board  (excluding  the  Executive),  (y)
Executive  is given at least  fifteen  (15)  days  written  notice  of the Board
meeting called to make such determination and an opportunity to cure during such
notice period, and (z) Executive and his legal counsel are given the opportunity
to address such meeting.

         (iii)  Termination  of Executive upon  Disability  shall not constitute
Cause. For this purpose,  Executive's  "Disability"  shall mean, after giving to
Executive  ninety (90) days prior  written  notice of its intention to terminate
Executive  therefor,  Executive's  illness  or injury  which  substantially  and
materially limits the Executive from performing each of the essential  functions
of the  Executive's  job,  even with  reasonable  accommodation,  and he becomes
entitled to receive disability benefits under the Company's long-term disability
plan for exempt employees.

     (f)  TERMINATION  OTHER THAN FOR  CAUSE.  The  Company  may  terminate  the
Executive's  employment under this Agreement without Cause at any time, in which
event,  any rights of the Executive to continued  employment under the Agreement
shall thereupon  cease. In the event of such a termination,  the Executive shall
be entitled to the severance benefits as provided in Section 7(a) hereof.

     (g) TERMINATION BY THE EXECUTIVE.

         (i) For  Good  Reason.  The  Executive  may  terminate  his  employment
hereunder  for Good  Reason (as defined  below)  upon at least  thirty (30) days
prior written notice to the Company.

         (ii) Without Good Reason.  The Executive  may terminate his  employment
hereunder  voluntarily  without Good Reason upon at least thirty (30) days prior
notice to the Company.

         (iii)  "Good  Reason".  The  Executive  shall  have  "Good  Reason"  to
terminate his employment hereunder upon any of the following:

             (A) the assignment to Executive of any duties  inconsistent  in any
material respect with Executive's  position (including status,  offices,  titles
and  reporting   relationships),   authority,   duties  or  responsibilities  as
contemplated  hereunder,  or any other action by the Company  which results in a
significant diminution in such position,  authority, duties or responsibilities,
excluding any isolated and  inadvertent  action not taken in bad faith and which
in remedied  by the Company  within  fifteen  (15) days after  receipt of notice
thereof given by Executive;

             (B) any failure by the  Company to comply with any of the  material
provisions of this Agreement other than an isolated and inadvertent  failure not
committed in bad faith and which is remedied by the Company  within fifteen (15)
days after receipt of notice thereof given by Executive;

             (C) Executive  being  required to relocate to a principal  place of
employment more than fifty (50) miles from Executive's  current  principal place
of employment;

         (iv) UPON A CHANGE OF CONTROL.  Executive may terminate his  employment
hereunder  at any time during the seventh (7th ) full  calendar  month after the
occurrence of a Change of Control,  which voluntary  election to terminate shall
be deemed a termination for Good Reason pursuant to Section 6(g)(i).

     Section 7. SEVERANCE.

     (a)  SEVERANCE   BENEFITS.   If  the  Company  terminates  the  Executive's
employment with the Company for any reason other than (i) the Executive's  death
or (ii) for  Cause,  or if the  Executive  terminates  his  employment  with the
Company for Good Reason (a  "Qualifying  Termination"),  the Executive  shall be
entitled to the following:

         (i) All amounts payable pursuant to Section 6(c);

         (ii) An amount equal to three (3) times the sum of (x) Executive's Base
Salary in  effect  at the time of the  Qualifying  Termination  and (y)  without
proration,  the greater of (A) the most  recent  annual  bonus paid  pursuant to
Section  5(c) hereof or (B) the most recent  Target  Bonus  payable (and in each
case without  deduction  for any  contributions  by the Company for  Executive's
benefit to any retirement or other investment plans). Such payment shall be made
in a lump sum in cash within thirty (30) days after the Date of Termination.

         (iii) the prorata  portion of the amount due Executive under the Annual
Bonus Plan for the fiscal year in which the Date of Termination  occurs based on
a 365-day Fiscal Year  (including,  in the event the Date of Termination  occurs
during the Fiscal Year in which the  Commencement  Date occurs,  the  Guaranteed
Bonus),  which amount  shall be payable at the time of payment of bonuses  under
such plan to senior executives of the Company.

         (iv) Continued  participation  in the Company's  welfare benefit plans,
fringe  benefits,  and  employee  perquisites  for the  three  (3)  year  period
commencing on the Date of Termination.

         (v) All of Executive's  outstanding  options to purchase Company common
stock shall become fully vested and shall be exercisable prior to the earlier of
(x) five (5) years from the Date of Termination or (y) the date of expiration of
the full stated term of the option.

         (vi) Any  Restricted  Stock Unit Awards and  restricted  stock that are
unvested shall become fully vested and nonforfeitable.

         (vii) The Executive,  to the extent determined to be  nondiscriminatory
under the Company's  qualified employee benefit plans, shall become fully vested
in his benefits under such plans. Additionally, the Executive shall become fully
vested with respect to any of the Company's non-qualified benefit plans in which
he is a participant.

         (viii) The Retirement Benefit, as provided in Section 5(f).

     (b)  "CHANGE OF  CONTROL".  A "Change of  Control"  shall mean the first to
occur of the following:

         (i) (x) any Person (as  defined  below) is or  becomes  the  Beneficial
Owner (as defined below),  directly or indirectly,  of securities of the Company
(not  including  in  the  securities  beneficially  owned  by  such  Person  any
securities  acquired  directly from the Company or its affiliates)  representing
25% or more of the  combined  voting  power of the  Company's  then  outstanding
securities,  excluding  any  Person  who  becomes  such a  Beneficial  Owner  in
connection with a transaction  described in subclause (x) of clause (iii) below,
or (y) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company  representing 35% or more of the combined voting power
of the Company's then outstanding  securities,  excluding any Person who becomes
such a Beneficial Owner in connection with a transaction  described in subclause
(x) of clause (iii) below; or

         (ii) the  following  individuals  cease for any reason to  constitute a
majority of the number of directors then serving:  individuals  who, on the date
hereof,  constitute the Board and any new director  (other than a director whose
initial  assumption  of office  is in  connection  with an actual or  threatened
election contest, including but not limited to a consent solicitation,  relating
to the election of directors of the Company)  whose  appointment  or election by
the Board or nomination for election by the Company's  stockholders was approved
or  recommended  by a vote of at least  two-thirds  (2/3) of the directors  then
still  in  office  who  either  were  directors  on the  date  hereof  or  whose
appointment,  election or nomination  for election was previously so approved or
recommended; or

         (iii) there is consummated a merger or  consolidation of the Company or
any direct or indirect  subsidiary  of the Company  with any other  corporation,
other  than (x) a merger or  consolidation  which  would  result  in the  voting
securities  of the  Company  outstanding  immediately  prior to such  merger  or
consolidation (1) continuing to represent (either by remaining outstanding or by
being  converted  into voting  securities of the surviving  entity or any parent
thereof),  in combination  with the ownership of any trustee or other  fiduciary
holding  securities  under  an  employee  benefit  plan  of the  Company  or any
subsidiary  of the  Company,  at least 65% of the  combined  voting power of the
securities  of the  Company  or such  surviving  entity  or any  parent  thereof
outstanding immediately after such merger or consolidation and (2) continuing to
be held by holders thereof immediately prior to such merger or consolidation, or
(y) a merger or consolidation  effected to implement a  recapitalization  of the
Company (or similar transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly,  of securities of the Company representing 35% or
more of the combined voting power of the Company's then outstanding  securities;
or

         (iv)  the  stockholders  of the  Company  approve  a plan  of  complete
liquidation  or  dissolution of the Company or there is consummated an agreement
for the sale or  disposition by the Company of all or  substantially  all of the
Company's  assets,  other than a sale or  disposition  by the  Company of all or
substantially  all of the  Company's  assets to an  entity,  at least 65% of the
combined   voting  power  of  the  voting   securities  of  which  is  owned  by
substantially  all of the stockholders of the Company  immediately prior to such
sale in  substantially  the same  proportions as their  ownership of the Company
immediately prior to such sale.

     Notwithstanding  the  foregoing,  a Change of Control shall not include any
event, circumstance or transaction described in clauses (i), (ii), (iii) or (iv)
of this Section 7(b) where,  in connection with such  transaction,  Executive or
any party acting in concert with Executive  substantially  increases his or its,
as the case may be,  ownership  interest in the  Company or a  successor  to the
Company  (other than  through  conversion  of prior  ownership  interests in the
Company or through equity awards received  entirely as compensation  for past or
future personal services).

     "Person" shall have the meaning given in Section  3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange  Act"),  as modified and used in
Sections  13(d) and 14(d)  thereof,  except that such term shall not include (i)
the  Company  or any of its  subsidiaries,  (ii) a  trustee  or other  fiduciary
holding  securities  under an employee benefit plan of the Company or any of its
affiliates,  (iii) an underwriter  temporarily holding securities pursuant to an
offering  of  such  securities,   or  (iv)  a  corporation  owned,  directly  or
indirectly,  by  substantially  all  of  the  stockholders  of  the  Company  in
substantially the same proportions as their ownership of stock of the Company.

     "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.

         (c) If the  aggregate of all  payments or benefits  made or provided to
the Executive under this Agreement and under all other plans and programs of the
Company  (the  "Aggregate  Payment")  is  determined  to  constitute a parachute
payment,  as such term is defined in Section 280G(b)(2) of the Code, the Company
shall pay to the Executive,  prior to or coincident with the time any excise tax
imposed by Section 4999 of the Code (the  "Excise  Tax") is payable with respect
to such Aggregate  Payment,  an additional  amount that, after the imposition of
all penalties,  income, excise and other federal, state and local taxes thereon,
is equal to the sum of the Excise Tax on the Aggregate  Payment and interest and
penalties  imposed  with  respect to the Excise Tax and such  additional  amount
("Additional  Amount").  The  determination  of whether  the  Aggregate  Payment
constitutes  a  Parachute  Payment  and,  if so,  the  amount  to be paid to the
Executive and the time of payment pursuant to this Section 7(c) shall be made by
an independent  auditor (the "Auditor")  jointly selected by the Company and the
Executive and paid by the Company. The Auditor shall be a nationally  recognized
United States public  accounting  firm. If the Executive and the Company  cannot
agree on the firm to serve as the Auditor,  then the  Executive  and the Company
shall each select one  accounting  firm and those two firms shall jointly select
the accounting firm to serve as the Auditor.  Notwithstanding the foregoing,  in
the  event  that  the  amount  of  the  Executive's   Excise  Tax  liability  is
subsequently determined to be greater than the Excise Tax liability with respect
to which an initial  Additional Amount has been paid to the Executive under this
Section 7(c), the Company shall pay to the Executive a further Additional Amount
with  respect to such  additional  Excise Tax (and any  interest  and  penalties
thereon)  at the time and in the  amount  determined  in the same  manner as the
initial  Additional  Amount was determined so as to make the Executive whole, on
an  after-tax  basis,  with  respect to such  Excise Tax (and any  interest  and
penalties thereon) and such additional amount paid by the Company.  In the event
the amount of the Executive's Excise Tax liability is subsequently determined to
be less than the Excise Tax liability  with respect to which an initial  payment
to the Executive has been made, the Executive  shall, as soon as practical after
the  determination  is made, pay to the Company the amount of the overpayment by
the  Company,  reduced by the amount of any relevant  taxes  already paid by the
Executive and not  refundable,  all as determined by the Auditor.  The Executive
and the  Company  shall  cooperate  with  each  other  in  connection  with  any
proceeding or claim  relating to the existence or amount of liability for Excise
Tax, and all expenses incurred by the Executive in connection therewith shall be
paid by the Company promptly upon notice of demand from the Executive.

         (d) MITIGATION. The Executive shall not be required to mitigate damages
with  respect  to  any  payments  made  pursuant  to  this  Agreement,   and  no
compensation  received  by  Executive  from  other  employment  with  respect to
services  rendered after the Date of Termination shall reduce the obligations of
the Company under this Agreement.

         (e) RELEASE OF EMPLOYMENT  CLAIMS. The Executive agrees, as a condition
to receipt of the payments and benefits  provided for in this Section 7, that he
will  execute a release  agreement,  in a form  attached  hereto as  Exhibit  A,
releasing any and all claims arising out of the  Executive's  employment  (other
than  enforcement of this Agreement and the Executive's  rights under any of the
Company's  incentive  compensation  and employee  benefit  plans and programs to
which he is entitled under this Agreement).

     Section 8. CONFIDENTIALITY; NON-COMPETITION.

     (a)  CONFIDENTIALITY.  "Confidential  Information"  shall  mean  non-public
information  about the Company and its  subsidiaries  or their  affiliates,  and
their  respective  clients and customers that is not disclosed by the Company or
its  subsidiaries for financial  reporting  purposes and that was learned by the
Executive in the course of his employment with the Company,  including,  without
limitation,   any  proprietary   knowledge,   trade  secrets,   data,  formulae,
information  and client and customer  lists and all papers,  resumes and records
(including  computer  records) of the  documents  containing  such  Confidential
Information. Confidential Information does not include information regarding the
Executive's own compensation and benefits.

         (i) The Executive acknowledges that in his employment with the Company,
he will  occupy a position of trust and  confidence.  The  Executive  shall not,
except as may be  required  to perform  his duties  hereunder  or as required by
applicable law, without  limitation in time or until such information shall have
become public other than by the Executive's unauthorized disclosure, disclose to
others or use, whether directly or indirectly, any Confidential Information.

         (ii) The Executive  acknowledges  that all Confidential  Information is
specialized,  unique  in  nature  and of  great  value  to the  Company  and its
subsidiaries,  and that such Confidential  Information gives the Company and its
subsidiaries a competitive advantage.  The Executive agrees to deliver or return
to the Company,  at the  Company's  request at any time or upon  termination  or
expiration of his employment or as soon  thereafter as possible,  all documents,
computer tapes and disks,  records,  lists, data,  drawings,  prints,  notes and
written information (and all copies thereof) furnished by or on behalf of or for
the benefit of the Company and its  subsidiaries or their affiliates or prepared
by the Executive during the term of his employment by the Company, but excluding
documents relating to the Executive's own compensation and benefits.

     (b) NON-COMPETITION. During the Executive's employment with the Company and
during the one (1) year period  commencing on the Date of  Termination,  if any,
the Executive shall not, directly or indirectly,  whether as owner,  consultant,
employee,  partner,  venturer,  agent,  through stock  ownership,  investment of
capital,  lending of money or property,  rendering of  services,  or  otherwise,
compete  with  the  Company  or any of its  affiliates  or  subsidiaries  in any
business in which any of them is engaged  while the  Executive is employed  with
Company (such  businesses are  hereinafter  referred to as the  "Business"),  or
assist,  become  interested  in or be  connected  with  any  corporation,  firm,
partnership,  joint  venture,  sole  proprietorship  or  other  entity  which so
competes  with the  Business.  During the one (1) year period  commencing on the
Date of  Termination,  the  restrictions  imposed by this Section 8(b) shall not
apply to any business in which the Company or its  affiliates  and  subsidiaries
were  not  engaged  at the time of  termination  of the  Executive's  employment
hereunder or to any  geographic  area in which the Company or its affiliates and
subsidiaries were not engaged in the Business at the time of termination.

     (c)  NON-SOLICITATION  OF CUSTOMERS AND SUPPLIERS.  During the  Executive's
employment with the Company and during the one (1) year period commencing on the
Date of Termination, the Executive shall not, directly or indirectly,  influence
or attempt to  influence  customers  or  suppliers  of the Company or any of its
subsidiaries  or their  affiliates  to divert  their  business to any  business,
individual,  partner,  firm,  corporation  or other entity that is then a direct
competitor of the Company or its  subsidiaries  or their  affiliates  (each such
competitor,  a "Competitor  of the  Company");  provided,  however,  that if the
Executive is employed by customers  or  suppliers of the Company  following  his
termination  of employment  and such  employment  does not violate  Section 8(b)
hereof,  the normal  execution of his duties in connection  with such employment
shall not constitute a violation of this Section 8(c).

     (d) NON-SOLICITATION OF EMPLOYEES.

         (i)  The  Executive   recognizes  that  he  will  possess  confidential
information  about other employees of the Company and its  subsidiaries or their
affiliates  relating  to  their  education,   experience,   skills,   abilities,
compensation and benefits, and interpersonal relationships with customers of the
Company and its subsidiaries or their affiliates.

         (ii) The  Executive  recognizes  that the  information  he will possess
about these other employees is not generally  known, is of substantial  value to
the Company and its  subsidiaries  in developing  their business and in securing
and  retaining  customers,  and will be acquired by him because of his  business
position with the Company and its subsidiaries.

         (iii) The Executive agrees that, during the Executive's employment with
the  Company  and  during  the one (1)  year  period  commencing  on the Date of
Termination he will not, directly or indirectly, solicit or recruit any employee
of the Company or its  subsidiaries or their affiliates for the purpose of being
employed by him or by any Competitor of the Company on whose behalf he is acting
as an agent,  representative  or  employee  and that he will not convey any such
confidential  information or trade secrets about other  employees of the Company
and its subsidiaries or their affiliates to any other person.

     (e) STANDSTILL.  During the period  commencing on the Commencement Date and
ending on the fifth (5th) anniversary of the Date of Termination, Executive will
not, directly or indirectly:

         (i) Make, or in any way  participate in any  Solicitation of Proxies to
vote, solicit any consent or communicate with or seek to advise or influence any
person or entity  with  respect to the  voting of any  Company  common  stock or
engage,  encourage,  participate in or support a Solicitation in Opposition with
respect to the Company;

         (ii) Solicit, seek to effect, negotiate with or provide any information
to any other party with respect to, or make any  statement or proposal,  whether
written or oral,  to the Board or any  director  or  officer  of the  Company or
otherwise make any public  announcement or proposal  whatsoever with respect to,
any form of business combination  transaction involving the Company,  including,
without  limitation,  a merger,  exchange  offer or liquidation of the Company's
assets,  or any  restructuring,  recapitalization  or similar  transaction  with
respect to the Company; or

         (iii)  Otherwise  act to seek to  control,  disrupt  or  influence  the
management,  policies or affairs,  of the Company, or instigate or encourage any
third party to take any action described in this Section 8(e).

     Defined terms used in this Section 8(e) shall have the following  meanings:
"Solicitation in Opposition"  shall have the meaning specified in Note 3 to Rule
14(a)-6(a) under the Exchange Act; "Proxy" shall have the meaning ascribed to it
in Rule 14a-1  under the  Exchange  Act;  "Solicitation"  shall have the meaning
ascribed to it in Rule 14a-1 under the Exchange Act.

     (f) REMEDIES. In the event of a breach or threatened breach of this Section
8,  the  Executive  agrees  that the  Company  shall be  entitled  to apply  for
injunctive  relief in a court of  appropriate  jurisdiction  to remedy  any such
breach or threatened breach,  the Executive  acknowledging that damages would be
inadequate and insufficient.

     (g) SURVIVAL OF  PROVISIONS.  The  obligations  contained in this Section 8
shall,  to the extent  provided in this  Section 8, survive the  termination  or
expiration of the  Executive's  employment  with the Company and, as applicable,
shall be fully  enforceable  thereafter  in  accordance  with the  terms of this
Agreement. If it is determined by a court of competent jurisdiction in any state
that any  restriction  in this Section 8 is excessive in duration or scope or is
unreasonable or unenforceable  under the laws of that state, it is the intention
of the parties that such  restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.

     Section 9. NO VIOLATION OF THIRD-PARTY RIGHTS.

         (a) The  Executive  hereby  represents,  warrants and  covenants to the
Company that the Executive:

             (i) shall not, in the course of his  employment  with the  Company,
infringe upon or violate any proprietary  rights of any third party  (including,
without  limitation,  any  third  party  confidential  relationships,   patents,
copyrights, trade secrets or other proprietary rights);

             (ii) is not a party to any  agreements  with third parties that are
not  publicly  available  and that  prevent  him from  fulfilling  the  terms of
employment and the obligations of this Agreement or which would be breached as a
result of his execution of this Agreement; and

             (iii) agrees to respect any and all valid  obligations which he may
now have to prior employers or to others  relating to confidential  information,
inventions  or  discoveries  which are the property of those prior  employers or
others, as the case may be.

         (b)  If  the   Executive   is  in  breach  of  any  of  the   foregoing
representations,  warranties and covenants and a court of competent jurisdiction
issues a final order (not including a temporary restraining order or other order
subject to  interlocutory  appeal)  precluding the Executive from performing his
duties hereunder,  the Company shall be entitled to terminate this Agreement and
treat the Executive as if he were terminated for Cause; provided,  however, that
if such an order  is  issued  within  the six (6)  month  period  following  the
Commencement Date, the Executive shall be obligated to return to the Company all
amounts  received by the  Executive  under  Section  5(b) and shall  forfeit any
Restricted Stock Unit Awards awarded under Section 5(e).

     Section 10.  RELOCATION  EXPENSES.  The Executive  shall be entitled to the
relocation benefits described in Schedule 1 hereto.

     Section  11.   REIMBURSEMENT  FOR  PROFESSIONAL  FEES.  The  Company  shall
reimburse the Executive for  reasonable  legal and other  professional  fees and
expenses  incurred by the  Executive  in  connection  with the  negotiation  and
preparation  of this  Agreement;  provided  that the  aggregate  amount  of such
reimbursement  shall not exceed  $250,000 and the Executive has furnished to the
Company  evidence  satisfactory  to the Company  relating to such legal fees and
expenses.

     Section 12. INDEMNIFICATION. The Company shall maintain, for the benefit of
the  Executive,  director  and officer  liability  insurance in form at least as
comprehensive as, and in an amount that is at least equal to, that maintained by
the Company on the  Commencement  Date.  In  addition,  the  Executive  shall be
indemnified by the Company  against  liability as an officer and director of the
Company and any  subsidiary  or affiliate  of the Company to the maximum  extent
permitted by applicable law. The Executive's  rights under this Section 12 shall
continue  so long as he may be  subject  to such  liability,  whether or not his
employment may have terminated prior thereto.

     Section  13.  WITHHOLDING.  The  Company  shall  make such  deductions  and
withhold such amounts from each payment made to the  Executive  hereunder as may
be required from time to time by law, governmental regulation or order.

     Section  14.  NOTICES.  All  notices  and other  communications  under this
Agreement  shall  be in  writing  and  shall be  given  by  hand,  facsimile  or
first-class  mail,  certified or registered with return receipt  requested,  and
shall be deemed to have been duly  given upon  delivery  or three (3) days after
mailing or  twenty-four  (24) hours after  transmission  of a  facsimile  to the
respective persons named below:

         (a) If to the Company:


                                    Albertson's, Inc.
                                    250 E. Park Center Blvd.
                                    Boise, Idaho 83706
                                    Attn: General Counsel
                                    Facsimile:  (208) 395-5231

         (b) If to the Executive:

                                    Lawrence R. Johnston
                                    3609 Glenview Ave.
                                    Glenview, Kentucky 40025

                                    With a copy to:

                                    Robert J. Stucker, Esq.
                                    Vedder, Price, Kaufman & Kammholz
                                    222 North LaSalle Street
                                    Chicago, Illinois 60601
                                    Facsimile:  312-609-5005

Either party may change such party's address for notices by notice duly given
pursuant hereto.

     Section  15.  DISPUTE  RESOLUTION;  ATTORNEYS'  FEES.  The  Company and the
Executive  agree  that  any  dispute  arising  as to  the  parties'  rights  and
obligations  hereunder,  other than with  respect to Section 8 hereof,  shall be
resolved by binding  arbitration  in  accordance  with the rules of the American
Arbitration  Association  for resolution of employment  disputes then in effect.
Each party shall have the right, in addition to any other relief granted by such
arbitrator  (or by any court with  respect  to relief  granted  with  respect to
Section 8 hereof), to reasonable attorneys' fees based on a determination by the
arbitrator  (or,  with respect to Section 8 hereof,  the court) of the extent to
which each party has prevailed as to the material issues raised the dispute.

     Section 16.  GOVERNING  LAW. This  Agreement and the legal  relations  thus
created  between the parties hereto shall be governed by and construed under and
in  accordance  with the laws of the State of  Delaware,  without  regard to its
conflicts of law principles.

     Section 17. TERMINATION OF PRIOR AGREEMENTS.  This Agreement terminates and
supersedes any and all prior agreements and  understandings  between the parties
with respect to the Executive's employment and compensation by the Company.

     Section 18. WAIVER; MODIFICATION.  Failure to insist upon strict compliance
with any of the terms,  covenants  or  conditions  hereof  shall not be deemed a
waiver  of  such  term,   covenant  or  condition,   nor  shall  any  waiver  or
relinquishment  of, or failure to insist upon strict  compliance with, any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.  This Agreement  shall not be
modified in any respect except by a writing executed by each party hereto.

     Section  19.  ASSIGNMENT;  SUCCESSORS.  This  Agreement  is personal in its
nature and  neither of the  parties  hereto  shall,  without  the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder;
provided  that, in the event of the merger,  consolidation,  transfer or sale of
all or  substantially  all of the  assets  of the  Company  with or to any other
individual or entity or any similar event, this Agreement shall,  subject to the
provisions  hereof,  be binding upon and inure to the benefit of such  successor
and such  successor  shall  discharge and perform all the  promises,  covenants,
duties and obligations of the Company hereunder.

     Section 20. SEVERABILITY. Except as provided in Section 8(g) hereof, in the
event that a court of competent jurisdiction determines that any portion of this
Agreement is in violation of any statute or public policy,  only the portions of
this Agreement that violate such statute or public policy shall be stricken. All
portions of this  Agreement  that do not  violate  any statute or public  policy
shall continue in full force and effect.  Furthermore,  any court order striking
any  portion of this  Agreement  shall  modify the  stricken  terms as little as
possible to give as much effect as  possible  to the  intentions  of the parties
under this Agreement.

     Section 21. HEADINGS; INCONSISTENCY. Section headings in this Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.  In the event of any inconsistency
between the terms of this Agreement and any form,  award,  plan or policy of the
Company, the terms of this Agreement shall control.

     Section 22.  COUNTERPARTS.  This Agreement may be executed in  counterparts
(including  counterparts delivered by facsimile),  each of which shall be deemed
an original,  but all of which taken together shall  constitute one and the same
instrument.

     Section  23.   REPRESENTATION  BY  COUNSEL;   INTERPRETATION.   Each  party
acknowledges  that it has had the  opportunity  to be  represented by counsel in
connection with this Agreement. Any rule of law or any legal decision that would
require  interpretation of any claimed ambiguities in this Agreement against the
party that drafted it has no application and is expressly waived.


<PAGE>


     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has hereunto signed this Agreement
on the date first above written.

                                        ALBERTSON'S, INC.



                                        /s/ PAUL I. CORDDRY
                                        By:     Paul I. Corddry
                                        Title:  Director


                                        EXECUTIVE



                                        /s/ LAWRENCE R. JOHNSTON
                                        Lawrence R. Johnston


<PAGE>


                                   SCHEDULE 1

                                RELOCATION POLICY


1.   Reimbursement  for  Relocation  Expenses.  The Company shall  reimburse the
     Executive  in  accordance  with the  Company's  relocation  policy  for the
     Executive's reasonable  relocation-related costs and expenses in connection
     with the Executive's  relocation to the Boise,  Idaho, area;  provided that
     the  Executive has furnished to the Company  evidence  satisfactory  to the
     Company  relating to such costs and  expenses.  Such  reimbursements  shall
     include  all  reasonable  costs  related  to  the  buying  and  selling  of
     Executive's  current primary residence,  including  brokerage fees, closing
     costs and moving expenses.

2.   Temporary  Living  Expense  Reimbursement.  The Company will  reimburse the
     Executive for reasonable  temporary  living  expenses for the Executive and
     his family  (including  reasonable  travel expenses between the Executive's
     current primary residence and the Boise,  Idaho,  area) for a period not to
     exceed one (1) year following the Commencement Date.

3.   Purchase of Current Primary Residence.  The Executive may, during the three
     (3) year period  commencing on the Commencement  Date, cause the Company to
     purchase the Executive's  current  primary  residence at the then appraised
     value, with such appraisal  performed by a third party mutually  acceptable
     to the Executive and the Company.

4.   Tax  Gross-Up.  Executive  shall be entitled to a  "gross-up"  payment with
     respect to those payments  described in paragraphs 1 and 2 of this Schedule
     1 in an amount  that,  after  reduction  for all  applicable  taxes on such
     "gross-up" payment, is equal to the amount of applicable taxes imposed with
     respect to those payments  described in paragraphs 1 and 2 of this Schedule
     1.


<PAGE>




                                                                      EXHIBIT A


                                 GENERAL RELEASE
                                  OF ALL CLAIMS


Capitalized  terms used herein  shall have the  meaning  ascribed to them in the
employment  agreement  dated April 23, 2001  between  Lawrence R.  Johnston  and
Albertson's, Inc.

1.   In  consideration  of  the  payments  made  pursuant  to  Section  7 of the
     Agreement  and the  Company's  other  covenants  and  agreements  contained
     therein, Executive does hereby knowingly and voluntarily, fully and finally
     release  and  forever  discharge  the  Company,  including  its  related or
     affiliated   companies,   partnerships,   subsidiaries  or  other  business
     entities,  and  its and  their  present  and  former  respective  officers,
     directors, shareholders,  members, owners, agents, consultants,  employees,
     representatives,  insurers, successors and assigns (hereinafter referred to
     collectively as the "Released Parties"),  from any and all claims, charges,
     complaints,  liens,  demands,  causes of action,  obligations,  damages and
     liabilities, known or unknown, suspected or unsuspected that Executive had,
     now has,  or may  hereafter  claim to have  against the  Released  Parties,
     arising  out of or relating in any way to  Executive's  employment  with or
     separation  from the Company or  otherwise  relating to any of the Released
     Parties from the  beginning of time through the date  Executive  signs this
     General  Release of All  Claims.  This  release  specifically  extends  to,
     without  limitation,  claims or causes of action under any local, state and
     federal laws governing employment  relations,  including but not limited to
     federal  equal  employment  opportunity  laws and  federal  and state labor
     statutes and regulations,  including,  but not limited to, Title VII of the
     Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
     and the Employee  Retirement  Income  Security Act of 1974,  all as amended
     from time to time.

     With respect to the Released Parties, Executive expressly waives all rights
     afforded by any provision under Idaho law which  generally  provides that a
     general  release does not extend to claims which the creditor does not know
     or  suspect  to exist in his favor at the time of  executing  the  release,
     which if known by him must have materially affected his settlement with the
     debtor.   Notwithstanding   any  such  forgoing   provision  or  comparable
     provision, Executive understands and agrees that this agreement is intended
     to include all claims, if any, which Executive may have and which Executive
     does not now know or  suspect to exist in  Executive's  favor  against  the
     Released Parties and that this release extinguishes those claims.
 
2.   Notwithstanding  anything  to the  contrary  contained  in this  agreement,
     Executive is not releasing any of rights to the following:

     (a)  To  indemnification  as an officer or director pursuant to Section 145
          of the Delaware General Corporation Law.

     (b)  To exercise and obtain,  in accordance with the terms of such options,
          any and all the  benefits  appurtenant  to the options to purchase the
          Company's common stock held by Executive on the Date of Termination;

<PAGE>

     (c)  To continuation  coverage, at the Company's expense, as provided under
          the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and
          any other  continuation  coverage as provided under  applicable  state
          law;

     (d)  To any  right or claim to  benefits  due under  any  Company  employee
          benefit plan or program;

     (e)  To any right or claim that arises after the  execution of this General
          Release of All Claims; or

     (f)  To enforcement of the Agreement.

3.   Executive   acknowledges  that  the  Company  has  advised  Executive  that
     Executive  may  consult,  at the  Company's  expense,  with an  attorney of
     Executive's choosing prior to signing this agreement and that Executive has
     been given at least twenty-one days during which to review and consider the
     provisions of this agreement  before signing,  although  Executive may sign
     and  return  it  sooner  if   Executive  so  desires.   Executive   further
     acknowledges  that Executive has been advised by the Company that Executive
     has the right to revoke  this  agreement  for a period of seven  days after
     signing  it  and  that  this  agreement  shall  not  become   effective  or
     enforceable until such seven-day  revocation period has expired.  Executive
     acknowledges  and agrees that if Executive wishes to revoke this agreement,
     Executive must do so in writing, and that such revocation must be signed by
     Executive and received by the Executive Vice President,  Human Resources at
     Albertson's Inc., 250 E. Parkcenter Blvd., Boise, Idaho 83706 no later than
     5:00 p.m.  Mountain  Standard  Time on the seventh day after  Executive has
     signed this agreement. Executive acknowledges and agrees that, in the event
     that Executive  revokes this  agreement,  Executive  shall have no right to
     receive the payments described in Section 7 of the Agreement.

                  IN WITNESS WHEREOF, the Company has caused this  Agreement  to
be executed by its duly authorized officer and the Executive has hereunto signed
this General Release of All Claims on this _______ day of __________, 200____.

                                                     ALBERTSON'S, INC.


                                                     By:
                                                     Title:


                                                     EXECUTIVE



                                                     Lawrence R. Johnston