Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into and effective as of
the 24th day of September, 2008 (the “Effective Date”) by and between Rite Aid
Corporation, a Delaware corporation (the “Company”) and John T. Standley (the
“Executive”).

 

WHEREAS, Executive desires to provide the Company with his services and the
Company desires to hire and employ Executive on the terms and subject to the
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Executive (individually a “Party” and together the “Parties”),
intending to be legally bound, agree as follows:

 

1.             Term of Employment.

 

The term of Executive’s employment under this Agreement shall commence on the
Effective Date and, unless earlier terminated pursuant to Section 5 below, shall
continue for a period ending on the date that is two (2) years following the
Effective Date (the “Original Term of Employment”).  The Original Term of
Employment shall be automatically renewed for successive one year terms (the
“Renewal Terms”) unless at least 180 days prior to the expiration of the
Original Term of Employment or any Renewal Term, either Party notifies the other
Party in writing that he or it is electing to terminate this Agreement at the
expiration of the then current Term of employment “Term” shall mean the Original
Term of Employment and all Renewal Terms.  For purposes of this Agreement,
except as otherwise provided herein, the phrase “year during the Term” or
similar language shall refer to each 12 month period commencing on the Effective
Date or applicable anniversaries thereof.

 

2.             Position and Duties.

 

2.1          Generally.  During the Term, Executive shall serve as President and
Chief Operating Officer of the Company and shall have the titles, duties,
responsibilities and authority as are customary for such positions and such
other titles, duties, responsibilities and authorities as shall be assigned by
the Company from time to time consistent with such positions.  Executive shall
devote his full working time, attention, knowledge and skills faithfully and to
the best of his ability, to the duties and responsibilities assigned by the
Company in furtherance of the business affairs and activities of the Company and
its subsidiaries, affiliates and strategic partners.  Executive shall report
solely to the Company’s Chief Executive Officer and/or Board of Directors. 
Following termination of Executive’s employment for any reason, Executive shall
immediately resign from all offices and positions he holds with the Company or
any subsidiary.

 

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Other than necessary travel in connection with the performance of his duties
hereunder, the Executive shall be based at the Company’s headquarters.

 

2.2          Other Activities.  Anything herein to the contrary notwithstanding,
nothing in this Agreement shall preclude the Executive from engaging in the
following activities:  (i) serving on the board of directors of a reasonable
number of other corporations or the boards of a reasonable number of trade
associations and/or charitable organizations, subject to the Company’s approval,
which shall not be unreasonably withheld, with the current activities listed on
Appendix D being approved; (ii) engaging in charitable activities and community
affairs; and (iii) managing his personal investments and affairs, provided that
such activities do not violate Sections 6 or 7 below or materially interfere
with the proper performance of his duties and responsibilities under this
Agreement.  Executive shall at all times be subject to, observe and carry out
such lawful rules, regulations, policies, directions, and restrictions as the
Company may from time to time establish for officers of the Company.

 

3.             Compensation.

 

3.1          Base Salary.  During the Term, as compensation for his services
hereunder, Executive shall receive a base salary at the annualized rate of
$900,000.00 per year (“Base Salary” as shall be reviewed annually for possible
increase), which shall be paid in accordance with the Company’s normal payroll
practices and procedures, less such deductions or offsets required by applicable
law or otherwise authorized by Executive.

 

3.2          Annual Performance Bonus.  The Executive shall participate each
fiscal year during the Term in the Company’s annual bonus plan as adopted and
approved by the Board or the Compensation Committee from time to time.  For the
current fiscal year (Fiscal Year 2009), Executive’s annual bonus opportunity
pursuant to such plan shall equal 125% (the “Annual Target Bonus”) of the
annualized Base Salary ($900,000 per year for Fiscal Year 2009) even though the
entire $900,000 Base Salary for Fiscal Year 2009 will not be paid to Executive
as a result of this Agreement.  For subsequent fiscal years, the Annual Target
Bonus may be adjusted (however, in no event shall it be less than 125%) and
shall be based upon the Board approved plan for that year.

 

3.3          Equity Awards.

 

(a)           On the Effective Date, the Executive will be granted an option
(the “Option”) to purchase 3,500,000 shares of the Company’s Common Stock, par
value $1.00 per share (“Company Stock”).  The Option shall:  (i) be a
nonqualified stock option; (ii) have an exercise price equal to the closing
price of the Company Stock as reported on the New York Stock Exchange (“NYSE “)
on the date of grant; (iii) have a term of ten (10) years following the date of
grant; (iv) vest and become exercisable as to one-fourth of the shares of the
Company Stock subject to the option on each of the first four (4) anniversaries
from the date of grant; (v) be subject to the acceleration exercise

 

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and termination provisions set forth in Section 3.3(c) and Article 5 hereof; and
(vi) otherwise be evidenced by and subject to the terms of the Company’s stock
option and equity plans.

 

(b)           At the first regular meeting of the Compensation Committee of the
Board of Directors following the Effective Date and subject to the approval of
the Compensation Committee, Executive will be recommended for participation in
the Company’s Executive Equity Plan (the “EEP”).  On a going forward basis, the
award will be based upon Executive’s annual Base Salary and the stock closing
price on the date of grant.  For the current fiscal year (FY 2009) only,
Executive’s participation in the EEP will be on a prorated basis.

 

(c)           Upon the occurrence of a Change in Control of the Company and
prior to the termination of Executive’s employment with the Company, the Options
awarded pursuant to subsection (a) above and any stock options awarded pursuant
to the EEP in subsection (b) above then held by Executive shall immediately vest
and become exercisable in full.  For purposes of this Agreement “Change in
Control” shall have the meaning set forth in the attached Appendix A.

 

(d)           It is understood and acknowledged by Executive that the securities
underlying the stock options and/or restricted stock that may be awarded to
Executive from time to time may not be subject to an effective registration
statement under the federal securities laws until some time after the Effective
Date.  The Company agrees that if, as of the date of termination of Executive’s
employment under the circumstances described in Sections 5.2 (except termination
for Cause), 5.3 and 5.5, the securities underlying the then vested and
exercisable portion of any stock options are not subject to an effective
registration statement, the 90 day periods in Section 5.2 (except termination
for Cause), 5.3 and 5.5, as applicable, will be deemed to run from the first
date such securities become subject to an effective registration statement.

 

4.             Additional Benefits.

 

4.1      Employee Benefits.  During the Term, Executive and, as to welfare plans
the Executive’s eligible immediate family, as the case may be, shall be entitled
to participate in the employee benefit plans (including, but not limited to
medical, dental and life insurance plans, short-term and long-term disability
coverage, the Supplemental Executive Retirement Plan (which shall be at the
monthly contribution rate equal to 2% of Executive’s Base Salary) and
401(k) plans) in which senior management employees of the Company are generally
eligible to participate, subject to any eligibility requirements and the other
generally applicable terms of such plans.

 

4.2      Expenses.  During the Term, the Company shall reimburse Executive for
any expenses reasonably incurred by him in furtherance of his duties hereunder,
including without limitation travel, meals and accommodations, upon submission
of vouchers or receipts and in compliance with such rules and policies relating
thereto as the Company may from time to time adopt or as may be required in
order to permit such

 

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payments to be taken as proper deductions by the Company or any subsidiary under
the Internal Revenue Code of 1986, as amended, and the rules and regulations
adopted pursuant thereto now or hereafter in effect.

 

4.3      Vacation.  Executive shall be entitled to four (4) weeks paid vacation
during each year of the Term.

 

4.4      Automobile Allowance.  During the Term, the Company shall provide
Executive with an automobile allowance of $1,000.00 per month.

 

4.5      Annual Financial Planning Allowance.  During each year of the Term, the
Company shall provide Executive with an executive planning allowance in the
amount of up to $7,000.00.

 

4.6      Indemnification.  The Company shall (a) indemnify and hold Executive
harmless, to the full extent permitted under applicable law, for, from and
against any and all losses, claims, costs, expenses, damages, liabilities or
actions (including security holder actions, in respect thereof) relating to or
arising out of the Executive’s employment with and service as an officer of the
Company or as an officer or director of an entity other than the Company at the
request of the Company; and (b) pay all reasonable costs, expenses and
attorney’s fees incurred by Executive in connection with or relating to the
defense of any such loss, claim, cost, expense, damage, liability or action,
subject to Executive’s undertaking to repay in the event it is ultimately
determined that Executive is not entitled to be indemnified by the Company and
enforcement of its rights hereunder.  Following termination of the Executive’s
employment or service with the Company, the Company shall cause any Director and
Officer liability insurance policies applicable to the Executive prior to such
termination to remain in effect for six (6) years following the date of
termination of employment.

 

5.             Termination.

 

5.1          Termination of Executive’s Employment by the Company for Cause. 
The Company may terminate Executive’s employment hereunder for Cause (as defined
below).  Such termination shall be effected by written notice thereof delivered
by the Company to Executive, indicating in reasonable detail the facts and
circumstances alleged to provide a basis for such termination, and shall be
effective as of the date of such notice in accordance with Section 12 hereof.
“Cause” as determined in reasonable good faith by a resolution adopted by the
affirmative vote of a majority of the Company’s Board of Directors (after
reasonable written notice to Executive setting forth in reasonable detail the
specific conduct of Executive upon which the Board relies in reaching its
determination, and a reasonable opportunity for Executive, together with his
counsel, to be heard before the Board prior to making such determination) shall
mean:  (i) Executive’s gross negligence or willful misconduct in the performance
of the duties or responsibilities of his position with the Company or any
subsidiary, or failure to timely carry out any lawful and reasonable directive
of the Chief Executive Officer or Board of Directors; (ii) Executive’s
intentional misappropriation of any funds or property of the

 

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Company or any subsidiary; (iii) the conduct by Executive which is a material
violation of this Agreement or written Company Policy which materially
interferes with the Executive’s ability to perform his duties; provided,
however, that Executive shall have the right, within thirty (30) days after
receipt of written notice (which shall set forth in reasonable detail the
specific conduct of Executive that constitutes Cause and the specific
provision(s) of this Agreement on which Company relies) from Company of the
Executive’s violation of this subsection, to cure the event or circumstances
giving rise to such Cause and in the event of which cure, such event or
circumstances shall not constitute Cause hereunder; (iv) the commission by
Executive of an act of fraud, misappropriation or embezzlement toward the
Company or any subsidiary; (v) Executive’s gross negligence or willful
misconduct which damages or injures the Company or the Company’s reputation;
(vi) Executive is convicted of or pleads guilty to a felony involving moral
turpitude; or (vii) the use or imparting by Executive of any confidential or
proprietary information of the Company, or any subsidiary in material violation
of Section 6 below.

 

5.2          Compensation Upon Termination by the Company for Cause or by
Executive Without Good Reason.  In the event of Executive’s termination of
employment (i) by the Company for Cause or (ii) by Executive voluntarily without
Good Reason:

 

(a)           Executive shall be entitled to receive within ten (10) business
days of the date of termination:  (i) all amounts of accrued but unpaid Base
Salary through the effective date of such termination, (ii) reimbursement for
reasonable and necessary expenses incurred by Executive through the date of such
termination, to the extent otherwise provided under Section 4.2 above, and
(iii) all other vested payments and benefits to which Executive may otherwise be
entitled pursuant to the terms of the applicable benefit plan or arrangement
through the effective date of such termination ((i), (ii) and (iii), the
(“Accrued Benefits”).  All other rights of Executive (and, except as provided in
Section 5.6 below, all obligations of the Company) hereunder or otherwise in
connection with Executive’s employment with the Company shall terminate
effective as of the date of such termination of employment and Executive shall
not be entitled to any payments or benefits not specifically described in this
subsection (a) or (b) below.

 

(b)           Except as provided in Section 3.3(d), any portion of any
restricted stock or any other equity incentive awards as to which the
restrictions have not lapsed or as to which any other conditions shall not have
been satisfied prior to the date of termination shall be forfeited as of such
date and any portion of Executive’s stock options that have vested and become
exercisable prior to the date of termination shall remain exercisable for a
period of ninety (90) days following the date of termination of employment (or,
such later date as may be permitted by the relevant stock option or equity plan,
or, if earlier, until the expiration of the respective terms of the options),
whereupon all such options shall terminate; provided, however, in the event of
termination of Executive by the Company for Cause, any stock options that have
not been exercised prior to the date of termination shall immediately terminate
as of such date.

 

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Any termination of Executive’s employment by Executive voluntarily without Good
Reason shall be effective upon thirty (30) days’ notice to the Company or such
earlier date as the Company determines in its discretion and designates in
writing.  A termination of Executive’s employment by the Company for Cause or by
the Executive other than for Good Reason shall not constitute a breach of this
Agreement.

 

5.3          Compensation Upon Termination of Executive’s Employment by the
Company Other Than for Cause or By Executive for Good Reason.  Executive’s
employment hereunder may be terminated by the Company other than for Cause or by
Executive for Good Reason.  In the event that Executive’s employment hereunder
is terminated by the Company other than for Cause or by Executive for Good
Reason:

 

(a)            Executive shall be entitled to receive:  (i) within ten
(10) business days of the date of termination the Accrued Benefits; (ii) an
amount equal to two (2) times the sum of Executive’s then Base Salary plus
Annual Target Bonus as of the date of termination of employment, such amount
payable in equal installments pursuant to the Company’s standard payroll
procedures for management employees over a period of two (2) years following the
date of termination of employment; and (iii) continued health and medical
insurance coverage (or reimbursement to Executive of the cost of purchasing
health and medical coverage substantially comparable in all material respects to
the coverage provided by the Company to the Executive, excepting payments for
such periods that the Company provides such coverage) for Executive and his
immediate family for a period of two years following the date of termination of
employment.  In addition, if such termination occurs following the start of the
Company’s fiscal year, Executive shall also be entitled to receive (which shall
be paid at the same time paid to other eligible participants in the bonus plan
and following determination by the Board that the Company has achieved or
exceeded its annual performance targets for the fiscal year) a pro rata annual
bonus determined by multiplying Executive’s then Annual Target Bonus by a
fraction (x) the numerator of which is the number of days between the beginning
of the then current fiscal year of the Company and the date of termination of
employment and (y) the denominator of which is 365.

 

(b)           The Executive’s stock option awards held by Executive shall vest
and become immediately exercisable and the restrictions with respect to any
awards of restricted stock shall lapse, in each case to the extent such options
would otherwise have become vested and exercisable (or such restrictions would
have lapsed) had Executive remained in the employ of the Company for a period of
two years following the date of termination.  Except as provided in
Section 3.3(d), such portion of Executive’s stock options (together with any
portion of Executive’s stock options that have vested and become exercisable
prior to the date of termination) shall remain exercisable for a period of
ninety (90) days following the date of termination of employment (or, such later
date as may be permitted by the relevant stock option or equity plan, or, if
earlier, until the expiration of the respective terms of the options), whereupon
all such options shall terminate.  Any remaining portion of Executive’s stock
options that have not vested (or deemed to have vested) as of the date of
termination shall terminate as of such date; and

 

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all shares of restricted stock as to which the restrictions shall not have
lapsed (or deemed to have lapsed) as of the date of termination shall be
forfeited as of such date.

 

(c)            All other rights of Executive (and, except as provided in
Section 5.6 below, all obligations of the Company) hereunder or otherwise in
connection with Executive’s employment with the Company shall terminate
effective as of the date of such termination of employment and Executive shall
not be entitled to any payments or benefits not specifically described in
5.3(a) through (c).

 

Any termination of employment pursuant to this Section 5.3 shall be effective
upon thirty (30) days notice thereof or the Company may elect in its sole
discretion to reduce or eliminate the notice period and pay the Executive his
base salary for some or all of the notice period in lieu of notice, prorated as
applicable.  A termination of Executive’s employment by the Company other than
for Cause or by the Executive for Good Reason shall not constitute a breach of
this Agreement.  To be eligible for the payment, benefits and stock rights
described in Section 5.3(a)(ii)-(iii), (b) and (c) above, Executive must
execute, not revoke and abide by a release (which shall be substantially in the
form attached hereto as Appendix C) of all other claims, reasonably cooperate
(subject to reimbursement by Company of reasonable costs and expenses incurred
by Executive) with the Company in the event of litigation (other than by
Executive) involving the Company and fully comply in all material respects with
Executive’s obligations under Sections 6 and 7 below.

 

5.4          Definition of Good Reason.  For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any one of the following:

 

(a)           any adverse alteration in Executive’s titles, position, status,
duties, authorities, reporting relationship or responsibilities with the Company
or its subsidiaries from those specified in this Agreement;  or

 

(b)           any decrease in Executive’s then Base Salary as set forth in
Section 3.1 or Annual Target Bonus in Section 3.2 to which Executive has not
agreed in writing; or

 

(c)           any other material breach by the Company of this Agreement; or

 

(d)           failure to promptly provide any material benefits hereunder;

 

provided, however, that in each such case the Company shall have the right,
within thirty (30) days (fifteen (15) days for the payment of compensation under
this Agreement) after receipt of written notice (which shall set forth in
reasonable detail the specific conduct of Company that constitutes Good Reason
and the specific provision(s) of this Agreement on which Executive relies) from
Executive of the Company’s violation of any of the foregoing, to cure the event
or circumstances giving rise to such Good Reason and in the event of which cure,
such event or circumstances shall not constitute Good Reason hereunder.

 

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5.5          Compensation Upon Termination of Executive’s Employment By Reason
of Executive’s Death or Total Disability.  In the event that Executive’s
employment with the Company is terminated by reason of Executive’s death or
Total Disability (as defined below):

 

(a)            Executive or Executive’s estate, as the case may be, shall be
entitled to receive:  (i) within ten (10) business days of the date of
termination the Accrued Benefits; (ii) promptly any other benefits payable under
the then current disability and/or death benefit plans, as applicable, in which
Executive is a participant; and (iii) continued health and medical insurance
coverage (or reimbursement to Executive of the cost of purchasing health and
medical coverage substantially comparable in all material respects to the
coverage provided by the Company to the Executive, excepting payments for such
periods that the Company provides such coverage ) for Executive and/or his
immediate family, as applicable, for a period of two (2) years following the
date of termination of employment.  In addition, if such termination occurs
following the start of the Company’s fiscal year, Executive shall also be
entitled to receive (which shall be paid at the same time paid to other eligible
participants in the bonus plan and following determination by the Board that the
Company has achieved or exceeded its annual performance targets for the fiscal
year) a prorata annual bonus determined by multiplying Executive’s then Annual
Target Bonus by a fraction (x) the numerator of which is the number of days
between the beginning of the then current fiscal year of the Company and the
date of termination of employment and (y) the denominator of which is 365.

 

(b)           All stock option awards held by Executive shall vest and become
immediately exercisable and the restrictions with respect to any awards of
restricted stock shall lapse, in each case to the extent such options would
otherwise have become vested and exercisable (or such restrictions would have
lapsed) had Executive remained in the employ of the Company for a period of two
(2) years following the date of termination.  Except as provided in
Section 3.3(d) such portion of Executive’s stock options (together with any
portion of Executive’s stock options that have vested and become exercisable
prior to the date of termination) shall remain exercisable for a period of
ninety (90) days following the date of termination of employment (or, such later
date as may be permitted by the relevant stock option or equity plan or, if
earlier, until the expiration of the respective terms of the options), whereupon
all such options shall terminate.  Any remaining portion of Executive’s stock
options that have not vested (or deemed to have vested) as of the date of
termination shall terminate as of such date; and all shares of restricted stock
as to which the restrictions shall not have lapsed as of the date of termination
shall be forfeited as of such date.

 

(c)           All other rights of Executive (and, except as provided in
Section 5.6 below, all obligations of the Company) hereunder or otherwise in
connection with Executive’s employment with the Company shall terminate
effective as of the date of

 

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such termination of employment and Executive shall not be entitled to any
payments or benefits not specifically described in Section 5.5(a) through (c).

 

“Total Disability” shall mean any physical or mental disability that prevents
Executive from:  (a) (i) performing one or more of the essential functions of
his position for a period of not less than 150 days in any twelve (12) month
period, and (ii) which is expected to be of permanent or indeterminate duration
but expected to last at least twelve (12) continuous months or result in death
of the Executive as determined (y) by a physician selected by the Company or its
insurer or (z) pursuant to the Company’s benefit programs; or (b) reporting to
work for ninety (90) or more consecutive business days or unable to engage in
any substantial activity.

 

5.6          Survival.  In the event of any termination of Executive’s
employment, Executive and the Company nevertheless shall continue to be bound by
the terms and conditions set forth in Section 4.6 above, 5.7 and 5.9 below and
Sections 6 through 10 below, which shall survive the expiration of the Term.

 

5.7          Excise Tax Gross-Up.

 

(a)           In the event that any payment or benefit received or to be
received by the Executive pursuant to the terms of this Agreement or any other
plan, arrangement or agreement of the Company (or any affiliate) (collectively,
the “Payments”) would be subject to the Excise Tax (the “Excise Tax”) imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), as
determined as provided below, the Company shall pay to the Executive, at the
time specified in Section 5.7(b) below an additional amount (the “Gross-Up
Payment”) such that the net amount retained by the Executive, after deduction of
the Excise Tax on payments and any federal, state and local income and
employment or other tax and the Excise Tax upon the Gross-Up Payment, and any
interest, penalties or additions to tax payable by the company, Executive with
respect thereto, shall be equal to the total Payments.  For purposes of
determining whether any of the Payments will be subject to the Excise Tax and
the amounts of such Excise Tax, (1) the total amount of the Payments shall be
treated as “parachute payments” within the meaning of section 280G(b)(2) of the
Code, and all “excise parachute payments” within the meaning of section
280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to
the extent that, in the opinion of tax counsel (“Tax Counsel”) reasonably
acceptable to Executive and selected by the Company, a Payment (in whole or in
part) does not constitute a “parachute payment” within the meaning of section
280G(b)(2) of the Code, or such “excess parachute payments” (in whole or in
part) are not subject to the Excise Tax, (2) the amount of the Payments that
shall be treated as subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of the Payments or (B) the amount of “excess parachute
payments” within the meaning of section 280G(b)(1) of the Code (after applying
clause (1) hereof), and (3) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Tax Counsel in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.  For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rates

 

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of federal income taxation applicable to individuals in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation applicable to individuals as are in effect in
the state and locality of the Executive’s residence in the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals subject to
federal income tax at the highest marginal rates.

 

(b)          The Gross-Up Payment provided for in Section 5.7(a) hereof shall be
made upon the earlier of (i) thirty (30) days following the date of termination
of Executive’s employment or (ii) the imposition upon the Executive or payment
by the Executive of any Excise Tax.

 

(c)          If it is established pursuant to a final determination of a court
or an Internal Revenue Service proceeding that the Excise Tax is less than the
amount taken into account under Section 5.7(a) hereof, the Executive shall repay
to the Company within thirty (30) days of the Executive’s receipt of notice of
such final determination the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income tax imposed on the portion of the
Gross-Up Payment being repaid by the Executive if and to the extent that such
repayment results in a reduction in Excise Tax and a dollar for dollar reduction
in the Executive’s taxable income and wages for the purpose of federal, state
and local income taxes) plus any interest received by the Executive on the
amount of such repayment.  If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding that the
Excise Tax exceeds the amount taken into account hereunder (including without
limitation by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment pursuant to Section 5.7(a) in respect of such excess
within thirty (30) days of the Company’s receipt of notice of such final
determination or proceeding.  The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Payments.

 

(d)           In the event of any change in, or further interpretation of,
sections 280G or 4999 of the Code and the regulations promulgated thereunder,
the Executive shall be entitled, by written notice to the Company, to request an
opinion of Tax Counsel regarding the application of such change to any of the
foregoing, and the Company shall use its best efforts to cause such opinion to
be rendered as promptly as practicable.  All fees and expenses of the Tax
Counsel incurred in connection with this Agreement shall be borne by the
Company.

 

5.8          No Other Severance or Termination Benefits.  Except as expressly
set forth herein, Executive shall not be entitled to damages or to any severance
or other benefits upon termination of employment with the Company under any
circumstances

 

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and for any or no reason, including, but not limited to any severance pay under
any Company severance plan, policy or practice.

 

5.9          Section 409A.  Notwithstanding anything in this Agreement to the
contrary, to the extent:  (a) that any payment to which the Executive becomes
entitled under this Agreement (including, without limitation, any payments made
pursuant to this Clause), or any agreement or plan referenced herein, in
connection with the Executive’s termination of employment with the Company
constitutes deferred compensation subject to Section 409A of the Code; and
(b) the Executive is deemed at the time of such termination of employment to be
a “specified employee” under Code Section 409A, such payment shall not be made
or commence until the earliest of:  (i) the expiration of the six (6) month
period measured from the date of the Executive’s “separation from service” (as
such term is at the time defined in Treasury Regulations under Code
Section 409A) with the Company; (ii) the date the Executive becomes “disabled”
(as defined in Code Section 409A); or (iii) the date of the Executive’s death
following such separation from service; provided, however, that such deferral
shall only be effected if and to the extent required to avoid adverse tax
treatment to the Executive, including, without limitation, those imposed under
Code Section 409A(a)(1)(B) in the absence of such deferral; provided, however,
that if the Company reasonably and in good faith determines, based upon and in
accordance with advice from its outside counsel or tax advisors, that a deferral
pursuant to this sentence is necessary, the Executive agrees that the Company
will not be liable to the Executive for any damages to the Executive arising
from such deferral of such payment.  Upon the expiration of the deferral period,
any payments that would have otherwise been made during that period (whether in
a single sum or in installments) shall be paid in a single cash lump sum payment
to the Executive (or his beneficiary, as applicable).  With regard to any
provision that provides for reimbursement of costs and expenses or of in-kind
benefits, except as permitted by Code Section 409A, (i) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement or in-kind benefits to be provided during any taxable year shall
not affect the expenses eligible for reimbursement or in-kind benefits to be
provided in any other taxable year, provided that the foregoing clause
(ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Code Section 105(b) solely because such expenses are
subject to a limit related to the period the arrangement is in effect, and
(iii) such payments shall be made on or before the last day of the Executive’s
taxable year following the taxable year in which the expense occurred.  Each
amount to be paid or benefit to be provided to the Executive shall be construed
as a “separate identified payment” for purposes of Code Section 409A to the
fullest extent permitted therein.

 

6.             Protection of Confidential Information.

 

Executive acknowledges that during the course of his employment with the
Company, its subsidiaries, affiliates and strategic partners, he will be exposed
to documents and other information regarding the confidential affairs of the
Company, its subsidiaries, affiliates and strategic partners, including without
limitation, information about their past, present and future financial
condition, pricing strategy, prices, suppliers,

 

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cost information, business and marketing plans, the markets for their products,
key personnel, past, present or future actual or threatened litigation, trade
secrets and other intellectual property, current and prospective customer lists,
operational methods, acquisition plans, prospects, plans for future development
and other business affairs and information about the Company and its
subsidiaries, affiliates and strategic partners not readily available to the
public (the “Confidential Information”).  Executive further acknowledges that
the services to be performed under this Agreement are of a special, unique,
unusual, extraordinary and intellectual character.  In recognition of the
foregoing, the Executive covenants and agrees as follows:

 

6.1          No Disclosure or Use of Confidential Information.  At no time shall
Executive ever divulge, disclose, or otherwise use any Confidential Information
(other than as necessary to perform his duties under this Agreement and in
furtherance of the Company’s best interests or as otherwise required by law,
regulation or legal process or with respect to a lawsuit with the Company, its
affiliates, subsidiaries or parents), unless and until such information is
readily available in the public domain by reason other than Executive’s
disclosure or use thereof in violation of the first clause of this Section 6.1. 
Executive acknowledges that Company is the owner of, and that Executive has no
rights to, any trade secrets, patents, copyrights, trademarks, know-how or
similar rights of any type, including any modifications or improvements to any
work or other property developed, created or worked on by Executive during the
Term of this Agreement.

 

6.2          Return of Company Property, Records and Files.  Upon the
termination of Executive’s employment at any time and for any reason, or at any
other time the Board may so direct, Executive shall promptly deliver to the
Company’s offices in Harrisburg, Pennsylvania all of the property and equipment
of the Company, its subsidiaries, affiliates and strategic partners (including
any cell phones, pagers, credit cards, personal computers, etc.) and any and all
documents, records, and files, including any notes, memoranda, customer lists,
reports or any and all other documents, including any copies thereof, whether in
hard copy form or on a computer disk or hard drive, which relate to the Company,
its subsidiaries, affiliates, strategic partners, successors or assigns, and/or
their respective past and present officers, directors, employees or consultants
(collectively, the “Company Property, Records and Files”); it being expressly
understood that, upon termination of Executive’s employment at any time and for
any reason, Executive shall not be authorized to retain any of the Company
Property, Records and Files, any copies thereof or excerpts therefrom.

 

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7.             Noncompetition and Other Matters.

 

7.1          Noncompetition.  During the Executive’s employment with the Company
and for the one (1) year period immediately following the date of termination of
Executive’s employment (the “Restricted Period”) Executive shall not, directly
or indirectly, in any city, town, county, parish or other municipality in any
state of the United States (the names of each such city, town, parish, or other
municipality, including, without limitation, the name of each county in the
Commonwealth of Pennsylvania being expressly incorporated by reference herein),
or any other place in the world, where the Company, or its subsidiaries,
affiliates, strategic partners, successors, or assigns, engages in the
ownership, management and operation of retail drugstores (i) engage in a
Competing Business for Executive’s own account; (ii) enter the employ of, or
render any consulting or contracting services to, any Competing Business; or
(iii) become interested in or otherwise associated or connected with any
Competing Business in any capacity, including, without limitation, as an
individual, partner, shareholder, officer, director, principal, agent, trustee,
employee, contractor, consultant or management position with any entity
providing consulting services to a Competing Business; provided, however,
Executive may (i) own, directly or indirectly, solely as a passive investment,
securities of any entity traded on any national securities exchange if Executive
is not a controlling person of, or a member of a group which controls such
entity and does not, directly or indirectly, own 3% or more of any class of
securities of such entity.  For purposes of this Section 7.1, the phrase
“Competing Business” shall mean any entity a majority of whose business involves
the ownership and operation of retail or internet based drugstores.

 

7.2          Noninterference.  During the Restricted Period, Executive shall
not, directly or indirectly, solicit, induce, or attempt to solicit or induce
any officer, director, employee, agent or consultant of the Company or any of
its subsidiaries, affiliates, strategic partners, successors or assigns to
terminate his, her or its employment or other relationship with the Company or
its subsidiaries, affiliates, strategic partners, successors or assigns for the
purpose of associating with any competitor of the Company or its subsidiaries,
affiliates, strategic partners, successors or assigns, or otherwise encourage
any such person or entity to leave or sever his, her or its employment or other
relationship with the Company or its subsidiaries, affiliates, strategic
partners, successors or assigns for any other reason.

 

7.3          Nonsolicitation.  During the Restricted Period, Executive shall
not, directly or indirectly, solicit, induce, or attempt to solicit or induce
any customers, clients, vendors, suppliers or consultants then under contract to
the Company or its subsidiaries, affiliates, strategic partners, successors or
assigns, to terminate, limit or otherwise modify his, her or its relationship
with the Company or its subsidiaries, affiliates, strategic partners, successors
or assigns, for the purpose of associating with any competitor of the Company or
its subsidiaries, affiliates, strategic partners, successors or assigns, or
otherwise encourage such customers, clients, vendors, suppliers or consultants
then under contract to terminate his, her or its relationship with the Company
or its subsidiaries, affiliates, strategic partners, successors or assigns for
any reason.  During the Restricted

 

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Period, Executive shall not hire, either directly or through any employee, agent
or representative, any field and corporate management employee of the Company or
any subsidiary or any such person who was employed by the Company or any
subsidiary within 180 days of such hiring, provided, however, nothing herein
shall prohibit any advertisement or general hiring as a result thereof that is
not specifically targeted at such persons.

 

8.             Rights and Remedies Upon Breach.

 

If Executive breaches, or threatens to commit a breach of any of the provisions
of Sections 6 or 7 above (the “Restrictive Covenants”), the Company and its
subsidiaries, affiliates, strategic partners, successors or assigns shall have
the following rights and remedies, each of which shall be independent of the
others and severally enforceable, and each of which shall be in addition to, and
not in lieu of, any other rights or remedies available to the Company or its
subsidiaries, affiliates, strategic partners, successors or assigns at law or in
equity.

 

8.1          Specific Performance.  The right and remedy to have the Restrictive
Covenants specifically enforced by any court of competent jurisdiction by
injunctive decree or otherwise, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the
Company or its subsidiaries, affiliates, strategic partners, successors or
assigns and that money damages would not provide an adequate remedy to the
Company or its subsidiaries, affiliates, strategic partners, successors or
assigns.

 

8.2          Accounting.  The right and remedy to require Executive to account
for and pay over to the Company or its subsidiaries, affiliates, strategic
partners, successors or assigns, as the case may be, all compensation, profits,
monies, accruals, increments or other benefits derived or received by Executive
as a result of any transaction or activity constituting a material or
intentional breach of any of the Restrictive Covenants.

 

8.3          Severability of Covenants.  Executive acknowledges and agrees that
the Restrictive Covenants are reasonable and valid in geographic and temporal
scope and in all other respects.  If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full force and effect without regard to the invalid portions.

 

8.4          Modification by the Court.  If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or scope of such provision, such court shall have the power (and is
hereby instructed by the parties) to modify or reduce the duration or scope of
such provision, as the case may be (it being the intent of the parties that any
such modification or reduction be limited to the minimum extent necessary to
render such provision enforceable), and, in its modified or reduced form, such
provision shall then be enforceable.

 

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8.5          Enforceability in Jurisdictions.  Executive intends to and hereby
confers jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographic scope of such covenants.  If the courts of
any one or more of such jurisdictions hold the Restrictive Covenants
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of Executive that such determination not bar or in any way affect the
right of the Company or its subsidiaries, affiliates, strategic partners,
successors or assigns to the relief provided herein in the courts of any other
jurisdiction within the geographic scope of such covenants, as to breaches of
such covenants in such other respective jurisdictions, such covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.

 

8.6          Extension of Restriction in the Event of Breach.  In the event that
Executive breaches any of the provisions set forth in this Section 8, the length
of time of the Restricted Period shall be extended for a period of time equal to
the period of time during which Executive is in breach of such provision.

 

9.             No Violation of Third Party Rights.  Executive represents,
warrants and covenants that he:

 

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

 

(ii)           is not a party to any conflicting agreements with third parties,
which will prevent him from fulfilling the terms of employment and the
obligations of this Agreement;

 

(iii)          does not have in his possession any confidential or proprietary
information or documents belonging to others and will not disclose to the
Company, use, or induce the Company to use, any confidential or proprietary
information or documents of others; and

 

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

 

Executive has supplied to the Company a copy of each written agreement with any
of Executive’s prior employers, as well as any other agreements to which
Executive is subject, which includes any obligation of confidentiality,
assignment of intellectual property, nonsolicitation or noncompetition. 
Executive has listed each of such agreements in Appendix “B”.

 

Executive agrees to indemnify and save harmless the Company from any loss,
claim, damage, cost or expense of any kind (including without limitation,
reasonable

 

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attorney fees) to which the Company may be subjected by virtue of a breach by
Executive of the foregoing representations, warranties, and covenants.

 

10.          Arbitration.

 

Except as necessary for the Company and its subsidiaries, affiliates, strategic
partners, successors or assigns or Executive to specifically enforce or enjoin a
breach of this Agreement (to the extent such remedies are otherwise available),
the parties agree that any and all disputes that may arise in connection with,
arising out of or relating to this Agreement, or any dispute that relates in any
way, in whole or in part, to Executive’s employment with the Company or any
subsidiary, affiliate or strategic partner, the termination of that employment
or any other dispute by and between the parties or their subsidiaries,
affiliates, strategic partners, successors or assigns, shall be submitted to
final and binding arbitration in Harrisburg, Pennsylvania according to the
National Employment Dispute Resolution Rules and procedures of the American
Arbitration Association at the time in effect.  This arbitration obligation
extends to any and all claims that may arise by and between the parties or their
subsidiaries, affiliates, strategic partners, successors or assigns, and
expressly extends to, without limitation, claims or causes of action for
wrongful termination, impairment of ability to compete in the open labor market,
breach of an express or implied contract, breach of the covenant of good faith
and fair dealing, breach of fiduciary duty, fraud, misrepresentation,
defamation, slander, infliction of emotional distress, disability, loss of
future earnings, and claims under the Pennsylvania Constitution, the United
States Constitution, and applicable state and federal fair employment laws,
federal and state equal employment opportunity laws, and federal and state labor
statutes and regulations, including, but not limited to, the Civil Rights Act of
1964, as amended, the Fair Labor Standards Act, as amended, the Americans With
Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as
amended, the Employee Retirement Income Security Act of 1974, as amended, the
Age Discrimination in Employment Act of 1967, as amended, and any other state or
federal law.  Executive understands that by entering into this Agreement,
Executive is waiving Executive’s rights to have a court determine Executive’s
rights, including under federal, state or local statutes prohibiting employment
discrimination, including sexual harassment and discrimination on the basis of
age, race, color, religion, national origin, disability, veteran status or any
other factor prohibited by governing law.

 

11.          Assignment.

 

Neither this Agreement, nor any of Executive’s rights or obligations hereunder,
may be assigned or otherwise subject to hypothecation by Executive, other than
by will or the laws of the descent and distribution.  The Company may assign its
rights and obligations hereunder, and Executive hereby consents to any such
assignment, in whole or in part (i) to the Company’s parent corporation; or
(ii) to any other successor or assign in connection with the sale of all or
substantially all of the Company’s assets or stock or in connection with any
merger, acquisition and/or reorganization involving the Company; provided,
however, any such assignment will not diminish or waive any of Executive’s

 

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rights hereunder, including, without limitation, rights upon any Change in
Control of the Company.

 

12.         Notices.

 

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

 

If to the Company:               Rite Aid Corporation

30 Hunter Lane

Camp Hill, PA 17011

Attention:  General Counsel

Fax:  (717) 760-7867

 

If to Executive:                      John T. Standley

at the most recent address on file at the Company’s payroll office

 

Any party may change such party’s address for notices by notice duly given
pursuant hereto.

 

13.          General.

 

13.1        No Offset or Mitigation.  The Company’s obligation to make the
payments provided for in, and otherwise to perform its obligations under this
Agreement shall not be affected by any setoff, counterclaim, recoupment, defense
or other claim, right or action that the Company may have against the Executive
or others whether in respect of claims made under this Agreement or otherwise. 
In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts, benefits and other
compensation payable or otherwise provided to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced, regardless
of whether the Executive obtains other employment.

 

13.2        Governing Law.  This Agreement is executed in Pennsylvania and shall
be governed by and construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania without giving effect to conflicts of laws
principles thereof which might refer such interpretations to the laws of a
different state or jurisdiction.  Any court action instituted by Executive
relating in any way to this Agreement shall be filed exclusively in state or
federal court in Harrisburg, Pennsylvania and Executive consents to the
jurisdiction and venue of said courts in any action instituted by or on behalf
of the Company against him.

 

13.3       Entire Agreement.  This Agreement sets forth the entire understanding
of the parties relating to Executive’s employment with the Company and cancels
and

 

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supersedes all agreements, arrangements and understandings relating thereto made
prior to the date hereof, written or oral, between the Executive and the Company
and/or any subsidiary or affiliate.

 

13.4       Amendments: Waivers.  This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms or covenants hereof may
be waived, only by a written instrument executed by the parties, or in the case
of a waiver, by the party waiving compliance.  The failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect the right of such party at a later time to enforce the same.  No waiver
by any party of the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.

 

13.5        Conflict with Other Agreements.  Executive represents and warrants
that neither his execution of this Agreement nor the full and complete
performance of his obligations hereunder will violate or conflict in any respect
with any written or oral agreement or understanding with any person or entity.

 

13.6       Successors and Assigns.  This Agreement shall inure to the benefit of
and shall be binding upon the Company (and its successors and assigns) and
Executive and his heirs, executors and personal representatives.

 

13.7       Withholding.  Notwithstanding any other provision of this Agreement,
the Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.

 

13.8       Severability.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.  If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.

 

13.9        No Assignment.  The rights and benefits of the Executive under this
Agreement may not be anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process except as
required by law.  Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be void.  Payments
hereunder shall not be considered assets of the Executive in the event of
insolvency or bankruptcy.

 

13.10     Survival.  This Agreement shall survive the termination of Executive’s
employment and the expiration of the Term to the extent necessary to give effect
to its provisions.

 

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13.11     Captions.  The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

 

13.12     Counterparts.  This Agreement may be executed by the parties hereto in
separate counterparts; each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument.

 

13.13     Legal Fees and Expenses.  Promptly following the Effective Date, the
Company shall reimburse the Executive for legal fees and expenses incurred by
Executive in negotiation of this Agreement up to the maximum of $7,500.

 

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

 

 

RITE AID CORPORATION

 

 

 

 

 

 

 

 

 

By:

Robert B. Sari

 

Its:

Executive Vice President, General Counsel

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

John T. Standley

 

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APPENDIX A

 

A “Change in Control of the Company” shall be deemed to have occurred if, as the
result of a single transaction or a series of transactions, the event set forth
in any one of the following paragraphs shall have occurred:

 

(1) 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 voting securities; or

 

(2) Incumbent Directors cease at any time and for any reason to constitute a
majority of the number of directors then serving on the Board.  “Incumbent
Directors” shall mean directors who either (A) are directors of the Company as
of the Effective Date or (B) are elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors to the Board); or

 

(3) 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: 
(i) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least 60% 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
or (ii) 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 voting securities; or

 

(4) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or 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 60% of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such
sale.

 

“Affiliate” shall have the meaning set forth in Rule 12b-2 under Section 12 of
the Exchange Act.

 

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“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the
Exchange Act, except that a Person shall not be deemed to be the Beneficial
Owner of any securities which are properly filed on a Form 13G.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.

 

“Person” shall have the meaning given in Section 3(a)(9) of 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 subsidiaries; (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities; or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

 

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APPENDIX B

 

The following is a list of all written agreements with any of Executive’s prior
employers, as well as any other agreements to which Executive is subject, which
includes any obligation of confidentiality, assignment of intellectual property,
nonsolicitation or noncompetition.  If none, type “None”.

 

Employment Agreement with Pathmark Stores, Inc. dated August 23, 2005

 

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[APPENDIX C]

 

[g240042ke07i001.jpg]

 

MAILING ADDRESS

 

P.O. Box 3165

 

Harrisburg, PA 17105

 

GENERAL OFFICE

 

30 Hunter Lane

 

Camp Hill, PA 17011

 

(717) 761-2633

 

Appendix C to Employment Agreement

 

Date

 

Name

Address

City, St Zip

 

Re:          Severance Agreement and General Release

 

Dear Name:

 

We are interested in resolving cooperatively your separation of employment with
Rite Aid Corporation (the Company), which will take place on (date), your
Separation Date.  Toward this end, we propose the following Severance Agreement,
which includes a General Release.

 

Whereas, the Company has previously entered into an employment agreement with
you, dated (Date) (the Employment Agreement), which contains among other things,
certain provisions regarding severance compensation payable upon termination of
your employment with the Company under certain circumstances. Other than what is
expressly set forth herein, the terms and conditions of the Employment Agreement
shall remain in full force and effect.

 

The terms and conditions set forth in Paragraph 1 below will apply regardless of
whether you decide to sign this Severance Agreement and General Release. 
However, you will not be eligible to receive the payments and benefits set forth
in Paragraph 2 below unless you sign and do not revoke this Severance Agreement
and General Release, within the time period specified below.  (Please see
Paragraph 20 below for what it means to revoke this Severance Agreement and
General Release.)

 

You may consider for forty-five (45) days whether you wish to sign this
Severance Agreement and General Release.  Since this Severance Agreement and
General Release (“Agreement”) is a legal document, you are encouraged to review
it with your attorney.

 

1.             GENERAL TERMS OF TERMINATION. AS NOTED ABOVE, WHETHER OR NOT YOU
SIGN THIS AGREEMENT:

 

(A)           YOUR LAST DAY OF EMPLOYMENT IS (DATE) WHICH IS YOUR SEPARATION
DATE.  YOU WILL BE PAID FOR ALL TIME WORKED UP TO AND INCLUDING YOUR
TERMINATION.

 

(B)           YOU WILL BE PAID FOR EARNED BUT UNUSED VACATION DAYS AND ANY
PROPERLY DOCUMENTED REASONABLE EXPENSES INCURRED IN CONNECTION WITH YOUR
EMPLOYMENT THROUGH YOUR SEPARATION DATE.

 

1

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(C)           EXCEPT AS CONTEMPLATED BY THE EMPLOYMENT AGREEMENT, YOUR
ELIGIBILITY TO PARTICIPATE IN ALL OTHER GROUP BENEFITS EXCEPT COMPANY SPONSORED
HEALTH INSURANCE INCLUDING MEDICAL, DENTAL, VISION AND PRESCRIPTION AS AN
EMPLOYEE OF THE COMPANY WILL END ON YOUR SEPARATION DATE.

 

(D)           YOU ARE REQUIRED TO COMPLY WITH PARAGRAPHS 6 AND 7 BELOW.

 

2.             SEPARATION PAYMENT.  EXCEPT WITH RESPECT TO THE ACCRUED BENEFITS
AS DEFINED IN THE EMPLOYMENT AGREEMENT, IF YOU SIGN THIS AGREEMENT, AGREEING TO
BE BOUND BY THE GENERAL RELEASE IN PARAGRAPH 3 BELOW AND THE OTHER TERMS AND
CONDITIONS OF THIS AGREEMENT DESCRIBED BELOW, AND COMPLY WITH THE REQUIREMENTS
OF THIS PARAGRAPH 2 (OTHER THAN THE ACCRUED BENEFITS), YOU WILL RECEIVE THE
COMPENSATION AND BENEFITS AS CONTEMPLATED BY THE EMPLOYMENT AGREEMENT. YOU WILL
NOT BE ELIGIBLE FOR THE PAYMENT AND BENEFITS DESCRIBED IN PARAGRAPH 2 UNLESS: 
(I) YOU SIGN THIS AGREEMENT NO LATER THAN FORTY FIVE (45) DAYS AFTER YOU RECEIVE
IT, PROMPTLY RETURN THE AGREEMENT TO THE COMPANY AFTER YOU SIGN IT, AND DO NOT
TIMELY REVOKE IT IN ACCORDANCE WITH PARAGRAPH 20 BELOW; (II) YOU HAVE RETURNED
ALL COMPANY PROPERTY AND DOCUMENTS IN ACCORDANCE WITH PARAGRAPH 7 BELOW.

 

3.             GENERAL RELEASE.

 

(A)           IN EXCHANGE FOR THE CONSIDERATION DESCRIBED IN PARAGRAPH 2 AND
EXCEPT AS CONTEMPLATED UNDER PARAGRAPH 4 BELOW, YOU RELEASE AND FOREVER
DISCHARGE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE COMPANY AND EACH OF THE
OTHER “RELEASEES” AS DEFINED BELOW, FROM ANY AND ALL CLAIMS, CAUSES OF ACTION,
COMPLAINTS, LAWSUITS OR LIABILITIES OF ANY KIND WITH RESPECT TO THE COMPANY
(COLLECTIVELY “CLAIMS”) AS DESCRIBED BELOW WHICH YOU, YOUR HEIRS, AGENTS,
ADMINISTRATORS OR EXECUTORS HAVE OR MAY HAVE AGAINST THE COMPANY, OR ANY OF THE
OTHER RELEASEES.

 

(B)           BY AGREEING TO THIS GENERAL RELEASE, YOU ARE WAIVING, TO THE
MAXIMUM EXTENT PERMITTED BY LAW AND OTHER THAN AS CONTEMPLATED BY PARAGRAPH 4
BELOW, ANY AND ALL CLAIMS WHICH YOU HAVE OR MAY HAVE AGAINST THE COMPANY, OR ANY
OF THE OTHER RELEASEES ARISING OUT OF OR RELATING TO ANY CONDUCT, MATTER, EVENT
OR OMISSION WITH RESPECT TO THE COMPANY EXISTING OR OCCURRING BEFORE THE
SEPARATION DATE, INCLUDING BUT NOT LIMITED TO THE FOLLOWING:

 

(I)            ANY CLAIMS HAVING ANYTHING TO DO WITH YOUR EMPLOYMENT AGREEMENT
OR YOUR EMPLOYMENT WITH THE COMPANY OR ANY OF THE RELEASEES;

 

(II)           ANY CLAIMS HAVING ANYTHING TO DO WITH THE TERMINATION OF YOUR
EMPLOYMENT WITH THE COMPANY OR ANY OF THE RELEASEES;

 

(III)          ANY CLAIMS FOR UNPAID OR WITHHELD WAGES, SEVERANCE OR RETENTION
PAYMENTS, BENEFITS, BONUSES, COMMISSIONS AND/OR OTHER COMPENSATION OF ANY KIND;

 

(IV)          ANY CLAIMS FOR REIMBURSEMENT OF EXPENSES OF ANY KIND;

 

(V)           ANY CLAIMS FOR ATTORNEYS’ FEES OR COSTS;

 

(VI)          ANY CLAIMS FOR ANY BREACH UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT (“ERISA”);

 

(VII)         ANY CLAIMS OF DISCRIMINATION AND/OR HARASSMENT BASED ON AGE, SEX,
RACE, RELIGION, COLOR, CREED, DISABILITY, HANDICAP, CITIZENSHIP, NATIONAL
ORIGIN, ANCESTRY, SEXUAL ORIENTATION, OR ANY OTHER FACTOR PROTECTED BY FEDERAL,
STATE OR LOCAL LAW AS ENACTED OR AMENDED (SUCH AS THE AGE DISCRIMINATION IN
EMPLOYMENT ACT, 29 U.S.C. §621 ET. SEQ.; TITLE VII OF THE CIVIL

 

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RIGHTS ACT OF 1964; THE AMERICANS WITH DISABILITIES ACT, THE EQUAL PAY ACT;
CIVIL RIGHTS OF PEOPLE WITH DISABILITIES ACT AND DOMESTIC ABUSE BIAS IN
EMPLOYMENT LAW) AND ANY CLAIMS FOR RETALIATION UNDER ANY OF THE FOREGOING LAWS;

 

(VIII)        ANY CLAIMS REGARDING LEAVES OF ABSENCE INCLUDING, BUT NOT LIMITED
TO, ANY CLAIMS UNDER THE FAMILY AND MEDICAL LEAVE ACT;

 

(IX)           ANY CLAIMS UNDER THE NATIONAL LABOR RELATIONS ACT;

 

(X)            ANY CLAIMS UNDER THE SARBANES-OXLEY ACT;

 

(XI)           ANY CLAIMS UNDER THE WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION ACT (“WARN”);

 

(XII)          ANY CLAIMS FOR VIOLATION OF PUBLIC POLICY;

 

(XIII)         ANY WHISTLEBLOWER OR RETALIATION CLAIMS;

 

(XIV)         ANY CLAIMS FOR EMOTIONAL DISTRESS OR PAIN AND SUFFERING; AND/OR

 

(XV)          ANY OTHER STATUTORY, REGULATORY, COMMON LAW OR OTHER CLAIMS OF ANY
KIND, INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR BREACH OF CONTRACT (OTHER THAN
AS CONTEMPLATED HEREBY), LIBEL, SLANDER, FRAUD, WRONGFUL DISCHARGE, PROMISSORY
ESTOPPEL, EQUITABLE ESTOPPEL AND MISREPRESENTATION.

 

(C)           THE TERM “RELEASEES” MEANS: ALL AND SINGULARLY, RITE AID
CORPORATION, RITE AID HDQTRS. CORP., AS WELL AS ANY OF THEIR DIRECT OR INDIRECT
PARENT, SUBSIDIARY, RELATED OR AFFILIATED COMPANIES, AND EACH OF THEIR PAST AND
PRESENT EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, OWNERS, PARTNERS, INSURERS,
BENEFIT PLAN FIDUCIARIES AND AGENTS, AND ALL OF THEIR RESPECTIVE PREDECESSORS,
SUCCESSORS AND ASSIGNS.

 

(D)           IT IS IMPORTANT THAT YOU UNDERSTAND THAT THIS GENERAL RELEASE
INCLUDES ALL CLAIMS KNOWN OR UNKNOWN BY YOU, THOSE THAT YOU MAY HAVE ALREADY
ASSERTED OR RAISED AS WELL AS THOSE THAT YOU HAVE NEVER ASSERTED OR RAISED.

 

4.             NON-RELEASED CLAIMS.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
TO THE CONTRARY, THE GENERAL RELEASE IN PARAGRAPH 3 ABOVE DOES NOT APPLY TO:

 

(A)           ANY CLAIMS FOR VESTED BENEFITS UNDER ANY RETIREMENT, 401(K),
PROFIT-SHARING, DEFERRED COMPENSATION OR STOCK OPTION PLAN OR OTHER PLAN OR
ARRANGEMENT;

 

(B)           ANY CLAIMS TO ENFORCE THE COMMITMENTS SET FORTH IN THIS AGREEMENT
OR THE APPLICABLE PROVISIONS OF THE EMPLOYMENT AGREEMENT THAT SURVIVE
TERMINATION OF YOUR EMPLOYMENT;

 

(C)           ANY CLAIMS TO INTERPRET OR TO DETERMINE THE SCOPE, MEANING OR
EFFECT OF THIS AGREEMENT OR THE APPLICABLE PROVISIONS OF THE EMPLOYMENT
AGREEMENT THAT SURVIVE TERMINATION OF YOUR EMPLOYMENT;

 

(D)           ANY CLAIMS ARISING OUT OF ANY CONDUCT, MATTER, EVENT OR OMISSION
EXISTING OR OCCURRING AFTER THE SEPARATION DATE;

 

(E)           ANY CLAIM THAT CAN NOT BE WAIVED AS A MATTER OF LAW; OR

 

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(f)            Any Claim arising under or otherwise having anything to do with
Sections 5.3 or 5.6 of the Employment Agreement to survive termination of your
employment thereunder.

 

Further, the General Release does not prevent you from contacting or filing a
charge with any federal, state or local government agency or commission. 
However, the General Release does prevent you, to the maximum extent permitted
by law, from obtaining any monetary or other personal relief for any of the
Claims you have released in Paragraph 3.

 

5.             ADEQUACY OF CONSIDERATION.  YOU ACKNOWLEDGE AND AGREE THAT THE
CONSIDERATION UNDER PARAGRAPH 2 ABOVE:

 

(A)           CONSTITUTES ADEQUATE CONSIDERATION TO SUPPORT YOUR GENERAL RELEASE
IN PARAGRAPH 3 ABOVE; AND

 

(B)           FULLY COMPENSATES YOU FOR THE CLAIMS YOU ARE RELEASING.

 

For purposes of this Agreement, “consideration” means something of value to
which you are not already entitled.

 

6.             PROHIBITION ON YOUR USING OR DISCLOSING CERTAIN INFORMATION.
REGARDLESS OF WHETHER YOU SIGN THIS AGREEMENT, TO THE EXTENT PROVIDED IN
SECTION 6 OF THE EMPLOYMENT AGREEMENT, YOU ARE PROHIBITED FROM USING OR
DISCLOSING CONFIDENTIAL AND/OR PROPRIETARY INFORMATION WHICH YOU ACQUIRED IN THE
COURSE OF YOUR EMPLOYMENT WITH THE COMPANY OR ITS PREDECESSORS, AND WHICH IS NOT
GENERALLY KNOWN BY OR READILY ACCESSIBLE TO THE PUBLIC.

 

7.             COMPANY PROPERTY AND DOCUMENTS.  REGARDLESS OF WHETHER YOU SIGN
THIS AGREEMENT, AND AS A CONDITION OF RECEIVING THE PAYMENT SET FORTH IN
PARAGRAPH 2 ABOVE, TO THE EXTENT PROVIDED IN SECTION 6 OF THE EMPLOYMENT
AGREEMENT YOU MUST RETURN TO THE COMPANY, RETAINING NO COPIES, ALL COMPANY
PROPERTY, KEYS, DOCUMENTS (HARD COPY OR ELECTRONIC), FORMS, CORRESPONDENCE,
COMPUTER PROGRAMS, MEMOS, DISKS, DVDS AND ANY OTHER COMPANY PROPERTY IN YOUR
POSSESSION OR CONTROL.

 

8.             CONFIDENTIALITY OF THIS AGREEMENT.  YOU AND THE COMPANY AND ITS
AFFILIATES EACH AGREE THAT, AT ALL TIMES, THE EXISTENCE, TERMS AND CONDITIONS OF
THIS AGREEMENT WILL BE KEPT SECRET AND CONFIDENTIAL AND WILL NOT BE DISCLOSED
VOLUNTARILY TO ANY THIRD PARTY, EXCEPT:  (I) TO YOUR SPOUSE, IF APPLICABLE,
(II) TO THE EXTENT REQUIRED BY LAW; (III) IN CONNECTION WITH ANY CLAIM TO
ENFORCE, INTERPRET OR DETERMINE THE SCOPE, MEANING, OR EFFECT OF THE AGREEMENT;
OR (IV) TO OBTAIN CONFIDENTIAL LEGAL, TAX OR FINANCIAL ADVICE WITH RESPECT
THERETO.

 

9.             COOPERATION.  TO THE EXTENT PROVIDED IN SECTION 5.3 OF THE
EMPLOYMENT AGREEMENT, YOU AGREE THAT, UPON REASONABLE REQUEST, YOU WILL MEET
WITH REPRESENTATIVES OF THE COMPANY, RITE AID HDQTRS. CORP., OR THEIR RESPECTIVE
PARENT OR SUBSIDIARY COMPANY REPRESENTATIVES AND PROVIDE ANY INFORMATION YOU
ACQUIRED DURING THE COURSE OF YOUR EMPLOYMENT RELATING IN ANY WAY TO ANY
DISPUTES OR OTHER MATTERS INVOLVING THE COMPANY OR ANY RELEASEE (AS DEFINED
ABOVE). YOU FURTHER AGREE THAT YOU WILL COOPERATE FULLY WITH THE COMPANY
RELATING TO ANY MATTER IN WHICH YOU WERE INVOLVED OR WHICH YOU HAVE KNOWLEDGE BY
VIRTUE OF YOUR EMPLOYMENT WITH THE COMPANY, INCLUDING ANY EXISTING OR FUTURE
LITIGATION INVOLVING THE COMPANY, WHETHER ADMINISTRATIVE, CIVIL OR CRIMINAL IN
NATURE IN WHICH AND TO THE EXTENT THE COMPANY DEEMS YOUR COOPERATION NECESSARY.

 

10.           NON-DISPARAGEMENT.  YOU AND THE COMPANY AGREE THAT NEITHER PARTY
WILL MAKE ANY NEGATIVE COMMENTS OR DISPARAGING REMARKS, IN WRITING, ORALLY OR
ELECTRONICALLY, ABOUT THE OTHER PARTY OR ANY OTHER RELEASEE (AS DEFINED ABOVE)
AND THEIR RESPECTIVE PRODUCTS AND SERVICES.  HOWEVER, NOTHING IN

 

4

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THIS AGREEMENT IS INTENDED TO OR SHALL BE INTERPRETED TO RESTRICT EITHER PARTY’S
RIGHT AND/OR OBLIGATION:  (I) TO TESTIFY TRUTHFULLY IN ANY FORUM; OR (II) TO
CONTACT, COOPERATE WITH OR PROVIDE INFORMATION TO ANY GOVERNMENT AGENCY OR
COMMISSION.

 

11.           RESIGNATION OF POSITIONS. IN CONNECTION WITH THE TERMINATION OF
YOUR EMPLOYMENT BY THE COMPANY, YOU HEREBY RESIGN FROM ALL POSITIONS YOU MAY
HOLD AS AN OFFICER OR DIRECTOR OF THE COMPANY AND IT SUBSIDIARIES AND
AFFILIATES, AND THE COMPANY HEREBY ACCEPTS SUCH RESIGNATIONS. YOU AGREE TO
EXECUTE ALL SUCH INSTRUMENTS AND TAKE ALL SUCH OTHER ACTIONS AS THE COMPANY MAY
REASONABLY DEEM NECESSARY OR DESIRABLE TO EVIDENCE OR ACCOMPLISH THE FOREGOING
IN FULL.

 

12.           GOVERNING LAW AND FORUM.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF PENNSYLVANIA, WHERE THIS AGREEMENT IS
ENTERED INTO, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PROVISIONS.  ANY
COURT ACTION INSTITUTED BY YOU OR ON YOUR BEHALF RELATING TO IN ANY WAY TO THIS
AGREEMENT, OR YOUR EMPLOYMENT OR TERMINATION OF EMPLOYMENT WITH THE COMPANY OR
ANY RELEASEE, SHALL BE FILED EXCLUSIVELY IN THE CUMBERLAND COUNTY COURT OF
COMMON PLEAS IN THE COMMONWEALTH OF PENNSYLVANIA OR IN THE UNITED STATES
DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA, AND YOU CONSENT TO THE
JURISDICTION AND VENUE OF THESE COURTS.

 

13.           STATEMENT OF NON-ADMISSION.  NOTHING IN THIS AGREEMENT IS INTENDED
AS OR SHALL BE CONSTRUED AS AN ADMISSION OR CONCESSION OF LIABILITY OR
WRONGDOING BY YOU, THE COMPANY OR ANY RELEASEE AS DEFINED ABOVE.  RATHER, THE
PROPOSED AGREEMENT IS BEING OFFERED FOR THE SOLE PURPOSE OF SETTLING
COOPERATIVELY AND AMICABLY ANY AND ALL POSSIBLE DISPUTES DESCRIBED IN PARAGRAPH
3.

 

14.           INTERPRETATION OF AGREEMENT.  NOTHING IN THIS AGREEMENT IS
INTENDED TO VIOLATE ANY LAW OR SHALL BE INTERPRETED TO VIOLATE ANY LAW.  IF ANY
PARAGRAPH OR PART OR SUBPART OF ANY PARAGRAPH IN THIS AGREEMENT OR THE
APPLICATION THEREOF IS CONSTRUED TO BE OVERBROAD AND/OR UNENFORCEABLE, THEN THE
COURT MAKING SUCH DETERMINATION SHALL HAVE THE AUTHORITY TO NARROW THE PARAGRAPH
OR PART OR SUBPART OF THE PARAGRAPH AS NECESSARY TO MAKE IT ENFORCEABLE AND THE
PARAGRAPH OR PART OR SUBPART OF THE PARAGRAPH SHALL THEN BE ENFORCEABLE IN
ITS/THEIR NARROWED FORM.  MOREOVER, EACH PARAGRAPH OR PART OR SUBPART OF EACH
PARAGRAPH IN THIS AGREEMENT IS INDEPENDENT OF AND SEVERABLE (SEPARATE) FROM EACH
OTHER.  IN THE EVENT THAT ANY PARAGRAPH OR PART OR SUBPART OF ANY PARAGRAPH IN
THIS AGREEMENT IS DETERMINED TO BE LEGALLY INVALID OR UNENFORCEABLE BY A COURT
AND IS NOT MODIFIED BY A COURT TO BE ENFORCEABLE, THE AFFECTED PARAGRAPH OR PART
OR SUBPART OF SUCH PARAGRAPH SHALL BE STRICKEN FROM THE AGREEMENT, AND THE
REMAINING PARAGRAPHS OR PARTS OR SUBPARTS OF SUCH PARAGRAPHS OF THIS AGREEMENT
SHALL REMAIN IN FULL, FORCE AND EFFECT.

 

15.           ENTIRE AGREEMENT.  THIS AGREEMENT AND THE APPLICABLE PROVISIONS OF
THE EMPLOYMENT AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES
AND SUPERSEDES ANY AND ALL PRIOR REPRESENTATIONS, AGREEMENTS, WRITTEN OR ORAL,
EXPRESSED OR IMPLIED, BY THE COMPANY OR ANY RELEASEE ARISING OUT OF OR RELATING
IN ANY WAY TO YOUR EMPLOYMENT OR THE TERMINATION OF YOUR EMPLOYMENT WITH ANY
RELEASEE. THIS AGREEMENT MAY NOT BE MODIFIED OR AMENDED OTHER THAN BY AN
AGREEMENT IN WRITING SIGNED BY YOU AND EITHER THE VICE PRESIDENT & ASSISTANT
GENERAL COUNSEL OR THE SENIOR DIRECTOR OF CORPORATE HUMAN RESOURCES OF RITE AID
HDQTRS. CORP.

 

16.           ACKNOWLEDGMENT.  YOU ACKNOWLEDGE AND AGREE THAT, SUBSEQUENT TO THE
TERMINATION OF YOUR EMPLOYMENT, YOU SHALL NOT BE ELIGIBLE FOR ANY PAYMENTS FROM
THE COMPANY OR ANY OF THE RELEASEES OR ANY BENEFITS ARISING OUT OF YOUR
EMPLOYMENT WITH ANY OF THE RELEASEES, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT OR THE EMPLOYMENT AGREEMENT.

 

17.           HEADINGS.  THE HEADINGS CONTAINED IN THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND ARE NOT INTENDED, AND SHALL NOT BE CONSTRUED,
TO MODIFY, DEFINE, LIMIT, OR EXPAND THE INTENT OF THE

 

5

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PARTIES AS EXPRESSED IN THIS AGREEMENT, AND THEY SHALL NOT AFFECT THE MEANING OR
INTERPRETATION OF THIS AGREEMENT.

 

18.           DAYS.  ALL REFERENCES TO A NUMBER OF DAYS THROUGHOUT THIS
AGREEMENT REFER TO CALENDAR DAYS.

 

19.           REPRESENTATIONS.  YOU AGREE AND REPRESENT THAT:

 

(A)           YOU HAVE READ CAREFULLY THE TERMS OF THIS AGREEMENT, INCLUDING THE
GENERAL RELEASE;

 

(B)           YOU HAVE HAD AN OPPORTUNITY TO AND HAVE BEEN ENCOURAGED TO REVIEW
THIS AGREEMENT, INCLUDING THE GENERAL RELEASE, WITH AN ATTORNEY;

 

(C)           YOU UNDERSTAND THE MEANING AND EFFECT OF THE TERMS OF THIS
AGREEMENT, INCLUDING THE GENERAL RELEASE;

 

(D)           YOU WERE GIVEN FORTY-FIVE (45) DAYS TO DETERMINE WHETHER YOU
WISHED TO SIGN THIS AGREEMENT, INCLUDING THE GENERAL RELEASE;

 

(E)           YOUR DECISION TO SIGN THIS AGREEMENT, INCLUDING THE GENERAL
RELEASE, IS OF YOUR OWN FREE AND VOLUNTARY ACT WITHOUT COMPULSION OF ANY KIND;

 

(F)            NO PROMISE OR INDUCEMENT NOT EXPRESSED IN THIS AGREEMENT OR THE
EMPLOYMENT AGREEMENT HAS BEEN MADE TO YOU; AND

 

(G)           YOU HAVE ADEQUATE INFORMATION TO MAKE A KNOWING AND VOLUNTARY
WAIVER.

 

20.           REVOCATION PERIOD.  IF YOU SIGN THIS AGREEMENT, YOU WILL RETAIN
THE RIGHT TO REVOKE IT FOR SEVEN (7) DAYS.  IF YOU REVOKE THIS AGREEMENT, YOU
ARE INDICATING THAT YOU HAVE CHANGED YOUR MIND AND DO NOT WANT TO BE LEGALLY
BOUND BY THIS AGREEMENT.  THE AGREEMENT SHALL NOT BE EFFECTIVE UNTIL AFTER THE
REVOCATION PERIOD HAS EXPIRED WITHOUT YOUR HAVING REVOKED IT.  TO REVOKE THIS
AGREEMENT, YOU MUST SEND A CERTIFIED LETTER TO THE FOLLOWING ADDRESS:  STEVEN
CHESNEY, SENIOR DIRECTOR OF CORPORATE HUMAN RESOURCES, RITE AID HDQTRS. CORP.,
30 HUNTER LANE, CAMP HILL, PA 17011.  THE LETTER MUST BE POST-MARKED WITHIN
SEVEN (7) DAYS OF YOUR EXECUTION OF THIS AGREEMENT.  IF THE SEVENTH DAY IS A
SUNDAY OR FEDERAL HOLIDAY, THEN THE LETTER MUST BE POST-MARKED ON THE FOLLOWING
BUSINESS DAY.  IF YOU REVOKE THIS AGREEMENT ON A TIMELY BASIS, YOU SHALL NOT BE
ELIGIBLE FOR THE CONSIDERATION SET FORTH IN PARAGRAPH 2.

 

21.           OFFER EXPIRATION DATE.  AS NOTED ABOVE, YOU HAVE FORTY-FIVE (45)
DAYS TO DECIDE WHETHER YOU WISH TO SIGN THIS AGREEMENT.  IF YOU DO NOT SIGN THIS
AGREEMENT WITHIN 45 DAYS OF THE DATE YOU RECEIVE IT, THEN THIS OFFER IS
WITHDRAWN AND YOU WILL NOT BE ELIGIBLE FOR THE CONSIDERATION SET FORTH IN
PARAGRAPH 2 ABOVE.

 

If you agree with the all of the terms of this Agreement, please sign below,
indicating that you understand, agree with and intend to be legally bound by
this Agreement, including the General Release, and return the signed Agreement
to Steven Chesney at the above address.

 

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We wish you the best in the future.

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

 

 

 

 

UNDERSTOOD AND AGREED,

 

 

INTENDING TO BE LEGALLY BOUND:

 

 

 

 

 

 

 

 

Name

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

Witness

 

 

 

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