Exhibit 10.35

 

December 5, 2017

 

Mr. Brian Hoover

Group Vice President and Controller

Rite Aid Corporation

30 Hunter Lane

Camp Hill, PA 17011

 

RE:                           Agreement dated as of January 1, 2001 by and
between Rite Aid Corporation (the “Company”) and Brian Hoover (the “Executive”),
as amended from time to time (the “Agreement”)

 

Dear Brian:

 

I am pleased to provide you with this letter in order to update the Agreement to
reflect your promotion to the position of Group Vice President and Controller of
the Company.  This amendment shall be effective as of October 30, 2017 (the
“Amendment Date”).

 

In consideration of your appointment and of other good and valuable
consideration, the receipt of which is acknowledged:

 

1.                                      Section 2.1 (“Position”) is hereby
amended by deleting the term “Vice President, General Accounting” and replacing
it with the term “Group Vice President and Controller” in the first sentence of
Section 2.1.

 

2.                                      Section 2.2 (“Duties”) is hereby amended
by deleting the term “Vice President, General Accounting” and replacing it with
the term “Group Vice President and Controller” in the first sentence of
Section 2.2.

 

3.                                      Section 3.1 (“Base Salary”) is hereby
amended by deleting the term “Two Hundred Forty-Two Thousand Five Hundred
Seventy-Six Dollars ($242,576)” and replacing it with the term “Two Hundred
Seventy-Five Thousand Dollars ($275,000).”

 

4.                                      Section 3.2 (“Annual Performance Bonus”)
is hereby deleted in its entirety and replaced with the following provision:

 

Annual Performance Bonus.  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.  Executive’s annual target
bonus opportunity pursuant to such plan (the “Annual Target Bonus”) shall equal
30% of the Base Salary in effect for Executive as of the beginning of such
fiscal year; provided that for the current fiscal year in which the Amendment
Date falls, the 30% shall apply beginning with the fiscal period in which the
Amendment Date falls, through the balance of such fiscal year.  Payment of any
bonus earned shall be made in accordance with the terms of the Company’s annual
bonus plan as in effect for the year for which the bonus is earned.

 

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5.                                      The following provision is hereby added
to the Agreement as a new Section 3.3:

 

Equity Awards.  Executive will be eligible to participate during the Term in the
Company’s Long Term Incentive Plan (“LTIP”).  Executive’s target long term
incentive opportunity shall be fifty percent (50%) of Executive’s Base Salary. 
In the discretion of the Board, on each regular grant date occurring during the
Term, Executive will be granted long-term incentive awards under the Company’s
2014 Omnibus Equity Plan or any successor plan thereto (the “Equity Plan”), a
copy of which Equity Plan has been filed as Exhibit 10.1 to the Company’s
current report on Form 8-K filed with the Securities and Exchange Commission on
June 23, 2014, pursuant to the LTIP valued at fifty percent (50%) of Base Salary
calculated in a manner consistent with and containing the same terms and
conditions as other senior executives of the Company.

 

6.                                      The following provision is hereby added
to the Agreement as a new Section 4.4:

 

Automobile Allowance.  During the Term, the Company shall provide Executive with
an auto allowance of One Thousand Dollars ($1,000) per month.

 

7.                                      Section 5.4(b) (“Definition of Good
Reason”) is hereby amended by deleting the term “Vice President, General
Accounting” and replacing it with the term “Group Vice President and
Controller.”

 

8.                                      The following provision is hereby added
to the Agreement as a new Section 7.4:

 

Change in Control Best Payments Determination.  Any other provision of this
Agreement to the contrary notwithstanding, if any portion of any payment or
benefit under this Agreement either individually or in conjunction with any
payment or benefit under any other plan, agreement or arrangement (all such
payments and benefits, the “Total Payments”) would constitute an “excess
parachute payment” within the meaning of Internal Revenue Code Section 280G,
that is subject to the tax imposed by Section 4999 of such Code (the “Excise
Tax”), then the Total Payments to be made to Executive shall be reduced, but
only to the extent that Executive would retain a greater amount on an after-tax
basis than he would retain absent such reduction, such that the value of the
Total Payments that Executive is entitled to receive shall be $1 less than the
maximum amount which the Employee may receive without becoming subject to the
Excise Tax.  For purposes of this Section 7.4, the determination of whichever
amount is greater on an after-tax basis shall be (x) based on maximum federal,
state and local income and employment tax rates and the Excise Tax that would be
imposed on Executive and (y) made at the Company’s expense by independent
accountants selected by the Company and Executive (which may be the Company’s
income tax return preparers if Executive so agrees) which determination shall be
binding

 

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on both Executive and the Company. Any such reduction as may apply under this
Section 7.4 shall be applied in the following order: (i) payments that are
payable in cash the full amount of which are treated as parachute payments under
Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary,
to zero), with amounts that are payable last reduced first; (ii) payments and
benefits due in respect of any equity the full amount of which are treated as
parachute payments under Treasury Regulation Section 1.280G-1, Q&A 24(a), with
the highest values reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that
are payable in cash that are valued at less than full value under Treasury
Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced
first, will next be reduced; (iv) payments and benefits due in respect of any
equity valued at less than full value under Treasury Regulation
Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values
are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be
reduced; and (v) all other non-cash benefits not otherwise described in clauses
(ii) or (iv) will be next reduced pro-rata.

 

If you are in agreement with the changes described in the above paragraphs,
please sign both copies of this letter below where indicated, returning one copy
to me and retaining one copy for your records.

 

[SIGNATURE PAGE FOLLOWS]

 

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Sincerely,

 

 

 

 

 

Rite Aid Corporation

 

 

 

 

 

 

By:

/s/ James J. Comitale

 

 

 

Name: James J. Comitale

 

 

 

Title:   Senior Vice President & General Counsel

 

 

 

 

Agreed:

 

 

 

 

 

 

 

/s/ Brian Hoover

 

 

 

Brian Hoover

 

 

 

 

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