Exhibit 10.2

 

[      , 2015]

 

Private & Confidential

 

[NAME]
[ADDRESS]

 

Re:                             Retention Award Agreement

 

Dear [First Name of Recipient]:

 

Your continued services and loyalty to Rite Aid Corporation and its subsidiaries
(“us” or “we” or the “Company”) are very important to us.  We are therefore
pleased to inform you that, pursuant to the terms of this letter agreement (the
“Award Agreement”), you are eligible to receive a retention award in the form of
a cash payment pursuant to the terms set forth herein (the “Retention Award”). 
This Retention Award is intended to incentivize you to contribute towards the
successful completion of the contemplated merger with Walgreens Boots
Alliance, Inc., a Delaware corporation (“WBA”), and Victoria Merger Sub, Inc., a
Delaware corporation and a wholly-owned direct subsidiary of WBA (the “Merger”),
and to continue to use your best efforts to ensure optimal corporate performance
through the closing of the Merger and thereafter.

 

Accordingly, in consideration of the mutual promises and covenants hereinafter
set forth, it is hereby agreed as follows:

 

1.                                      Retention Award.  You will be eligible
to receive a Retention Award equal to [$      ] (less applicable tax
withholdings) if you continue to be employed with the Company on the one hundred
twentieth (120th) day (or if not a business day, the next business day following
such date) following the closing date of the Merger (such date, the “Vesting
Date”).  To the extent earned, the Retention Award will be payable in a lump sum
no later than five (5) business days following the Vesting Date.

 

2.                                      Termination of Employment and Repayment
Obligations.

 

(a)                                 Notwithstanding Paragraph 1 of this Award
Agreement, if you experience a Qualifying Termination (as defined in Paragraph
2(b)) prior to the Vesting Date, you will be entitled to receive the Retention
Award (less applicable tax withholdings), payable in a lump sum no later than
five (5) business days following the date of termination.

 

(b)                                 For the purpose of this Award Agreement, you
will be deemed to have incurred a “Qualifying Termination” in the event that
your employment is terminated (i) by the Company other than for Cause (as
defined in your employment agreement with the Company) or (ii) by you for Good
Reason (as defined in your employment agreement with the Company).

 

3.                                      Acceleration of Fiscal Year 2016 Annual
Bonus; Acceleration of Equity.

 

(a)                                 On December 31, 2015 (the “Acceleration
Date”), the Company shall accelerate the payment of your target annual incentive
bonus for fiscal year 2016 (less applicable tax

 

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withholdings) (the “Accelerated Annual Bonus”).  In the event that the
Compensation Committee of the Board of Directors of the Company (the
“Compensation Committee”) determines that the relevant performance criteria for
fiscal year 2016 was not achieved, you will be required to repay to the Company
the Accelerated Annual Bonus, or any portion thereof, on an after tax basis. If
the Compensation Committee determines that you would be entitled to an
above-target annual incentive bonus for fiscal year 2016 (the “Actual Bonus”),
the Company shall pay you the excess of the Actual Bonus over the Accelerated
Annual Bonus at such time as the Company pays its annual incentive bonuses for
fiscal year 2016 in the ordinary course of business.

 

(b)                                 On the Acceleration Date, the Company shall
accelerate the vesting of certain restricted stock awards as set forth on
Appendix A hereto (the “Accelerated Restricted Stock Awards”).  If you incur a
Qualifying Termination prior to the date(s) on which the Accelerated Restricted
Stock Awards would have otherwise vested and become nonforfeitable (such
date(s), the “Original Vesting Date”), you will retain and not forfeit the
shares of Company stock underlying the Accelerated Restricted Stock Awards.  If
your employment with the Company terminates for any reason other than pursuant
to a Qualifying Termination at any time prior to the Original Vesting Date, you
will be required to return the shares of Company stock, or an equivalent cash
value as measured as of the Acceleration Date, that would not have been earned
by you (other than shares of Company stock withheld, or an equivalent cash value
as measured as of the Acceleration Date, to satisfy the Company’s obligation to
withhold income taxes with respect to the vesting of such Accelerated Restricted
Stock Awards) within fifteen (15) business days after the date of such
termination.

 

4.                                      Acknowledgements.

 

(a)                                 By executing this Award Agreement, you
hereby agree to maintain the confidentiality of this Award Agreement and to
refrain from disclosing or making reference to its terms, except (i) as required
by law, (ii) with your accountant or attorney for the sole purposes of
obtaining, respectively, financial or legal advice, or (iii) with your immediate
family members (the parties in clauses (ii) and (iii), “Permissible Parties”);
provided, the Permissible Parties agree to keep the terms and existence of this
Award Agreement confidential.

 

(b)                                 You hereby acknowledge that in the event
that you are required to repay any portion of the Accelerated Annual Bonus
pursuant to Paragraph 3(a) of this Award Agreement or return any portion of the
Accelerated Restricted Stock Awards pursuant to Paragraph 3(b) of this Award
Agreement and fail to repay such amount(s) in a timely manner, you will be
(i) charged interest at the rate of ten percent (10%) per annum from the date of
default to the date payment is made and (ii) required to reimburse the Company
for any reasonable fees (including reasonable attorneys’ fees) or costs it
incurs in connection with seeking the repayment of such amount.  For the purpose
of assessing the interest penalty on the Accelerated Restricted Stock Awards
pursuant to Paragraph 4(b)(i) of this Award Agreement, such penalty will be
(i) assessed on the number of the shares of Company common stock underlying the
Accelerated Restricted Stock Awards multiplied by the closing price of the
Company’s common stock on the date of your termination of employment and
(ii) payable in cash.

 

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(c)                                  You hereby acknowledge that you have been
advised to consult with your tax advisor regarding the tax consequences of the
receipt of the Accelerated Annual Bonus and the Accelerated Restricted Stock
Awards, including the tax consequences if you are required to return any portion
of the Accelerated Annual Bonus or Accelerated Restricted Stock Awards for any
reason.

 

5.                                      No Right of Employment.  Neither this
Award Agreement, nor any modification thereof, nor the creation of any fund,
trust or account, nor the payment of any benefits shall be construed as giving
you, or any person whomsoever, the right to be retained in the service of the
Company or its subsidiaries.  Except to the extent provided under an employment
agreement with the Company, your employment with the Company is “at-will,”
meaning that either you or the Company may terminate your employment at any time
and for any reason.

 

6.                                      Counterparts.  This Award Agreement may
be signed in counterparts, each of which will be deemed to be an original but
all of which together will constitute one and the same instrument.

 

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We are pleased to be able to provide you with this incentive and look forward to
your active participation during this important time for the Company.  If you
accept the terms and conditions of this Award Agreement, please sign one of the
two enclosed copies and return it to the undersigned.

 

Yours sincerely,

 

 

[Name]
[Title]

 

 

 

 

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

 

 

 

Signature:

 

 

Date:

 

 

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