Exhibit 10.1

 

October 26, 2015

 

Mr. Darren W. Karst

Senior Executive Vice President, Chief Financial Officer and

Chief Administrative Officer

Rite Aid Corporation

30 Hunter Lane

Camp Hill, PA 17011

 

RE:                           Agreement dated as of July 24, 2014 by and between
Rite Aid Corporation (the “Company”) and Darren W. Karst (the “Executive”), as
amended from time to time (the “Agreement”)

 

Dear Darren:

 

On October 26, 2015, the Board of Directors elected you to the position of
Senior Executive Vice President, Chief Financial Officer and Chief
Administrative Officer of the Company.  Accordingly, Section 2.1 of the
Agreement is hereby updated by deleting the terms “Executive Vice President and
Chief Financial Officer” and replacing it with the term “Senior Executive Vice
President, Chief Financial Officer and Chief Administrative Officer” in the
first sentence of said Section 2.1.

 

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

 

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

 

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 Company’s Board of Directors (the “Board”) or the Compensation Committee of
the Board (the “Compensation Committee”) from time to time.  For each fiscal
year during the Term, Executive’s annual bonus opportunity pursuant to such plan
shall equal one hundred twenty five percent (125%) (the “Annual Target Bonus”)
of the Base Salary.  The Annual Target Bonus may be adjusted by the Compensation
Committee (however, in no event shall it be less than one hundred twenty five
percent (125%)).  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.

 

2.                                      Clause 5.4(a) of Section 5.4 of the
Agreement (“Definition of Good Reason”) is hereby deleted in its entirety and
replaced with the following provision:

 

(a)                                 the assignment to Executive of any duties or
responsibilities materially inconsistent with Executive’s status and positions
as Senior Executive Vice

 

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President, Chief Financial Officer and Chief Administrative Officer of the
Company, or any material adverse change in Executive’s title or reporting
relationships; or

 

3.                                      Section 5.7 of the Agreement (“Change in
Control Best Payments Determination”) is hereby amended by replacing the final
sentence thereof with the following sentence:

 

Any such reduction as may apply under this Section 5.7 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.

 

 

 

Sincerely,

 

 

 

 

 

 

 

Rite Aid Corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Dedra N. Castle

 

 

 

 

Name: Dedra N. Castle

 

 

 

 

Title: EVP & CHRO

 

 

 

 

 

Agreed:

 

 

 

 

 

 

 

/s/ Darren W. Karst

 

 

 

Darren W. Karst

 

 

 

 

2

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