Exhibit 10.28

 

March 12, 2019

 

John T. Standley

 

Re:                             Separation of Employment

 

Dear John:

 

This letter agreement (this “Agreement”) confirms our understanding and
agreement with respect to your separation of employment with Rite Aid
Corporation (the “Company,” and together with you, the “Parties”).  Capitalized
terms not otherwise defined herein will have the meanings attributed to them in
your employment agreement with the Company, effective as of September 24, 2008
and amended as of January 21, 2010 (the “Employment Agreement”).

 

1.                                      Separation of Employment. The Parties
mutually agree that in the interest of an orderly succession in leadership, your
employment with the Company shall continue from March 12, 2019 through the date
on which your successor as Chief Executive Officer of the Company is appointed
by the Board or such earlier date on which your employment terminates (such
period, the “Employment Transition Period”).  During the Employment Transition
Period, the Parties agree that: (a) you will continue to receive your Base
Salary in effect as of the date hereof plus all applicable benefits and
perquisites, accrual and crediting of applicable amounts under the Company’s
annual performance bonus plan, accrual and crediting of vacation and paid time
off, vesting of equity and other long-term incentive awards in accordance with
the terms thereof and reimbursement of expenses, (less, in each case, applicable
deductions and withholdings in accordance with Company’s usual payroll practices
and procedures), and (b) you will continue in a full-time capacity in your role
of Chief Executive Officer of the Company.  Your last day of employment with the
Company as described above shall be the “Separation Date.”  Effective as of the
Separation Date, you agree that you shall irrevocably resign from all positions
you hold with the Company and its subsidiaries, including as Chief Executive
Officer and agree to execute any additional documents required by the Company to
effectuate such resignations as of the Separation Date.  You agree that,
following the Separation Date, you will not represent yourself to be associated
in any ongoing capacity with the Company or any of its subsidiaries or
affiliates (collectively, the “Company Group”).

 

2.                                      Payments and Benefits.

 

(a)                                 Whether or not this Agreement becomes
effective pursuant to its terms, the Company will pay you the Accrued Benefits
set forth on Appendix A hereto, less all applicable withholdings and deductions.

 

(b)                                 Provided that this Agreement becomes
effective on the Release Effective Date (as defined in Section 5(c) below) and
you remain in compliance with this Agreement (other than the requirement that
you remain employed through the date on which your successor as Chief Executive
Officer of the Company is appointed by the Board) at all

 

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times, the Company will pay you the severance payments and benefits set forth on
Appendix A items 2(a) through 2(e), in each case less all applicable
withholdings and deductions, at the time and in the form set forth on Appendix
A.

 

(c)                                  Provided that you do not resign your
employment without Good Reason (and not due to Disability) prior to the date on
which your successor as Chief Executive Officer of the Company is appointed by
the Board, this Agreement becomes effective on the Second Release Effective Date
(as defined in Section 5(d) below) and you remain in compliance with this
Agreement at all times, the Company will pay you an amount equal to $100,000
(the “Second Release Consideration”), less all applicable withholdings and
deductions, paid in equal installments over the twenty-four month period
following the Second Release Effective Date in accordance with the Company’s
regular payroll practices, with any payments that would have otherwise been made
during the period between the Separation Date and the Second Release Effective
Date to be paid to you in a cash lump sum payment with the first installment.

 

(d)                                 Provided that this Agreement becomes
effective on the Release Effective Date (as defined in Section 5(c) below), the
Company will reimburse you for your documented attorney’s fees incurred in
connection with the completion of this Agreement in an amount not to exceed
$5,000.

 

3.                                      Release.

 

(a)                                 You hereby release, discharge and forever
acquit the Company, and its affiliates and subsidiaries and each of their past,
present and future stockholders, directors, employees, agents, attorneys, heirs,
legal representatives, successors and assigns of the foregoing, in their
personal and representative capacities (individually, “Company Party,” and
collectively, the “Company Parties”), from liability for, and hereby waive, any
and all claims, charges, liabilities, causes of action, rights, complaints, sums
of money, suits, debts, covenants, contracts, agreements, promises, benefits,
obligations, damages, demands or liabilities of every nature, kind and
description, in law, equity or otherwise, whether known or unknown, suspected or
unsuspected (collectively, “Claims”) which you or your heirs, executors,
administrators, spouse, relatives, successors or assigns ever had, now have or
may hereafter claim to have by reason of any matter, cause or thing whatsoever:
(i) arising from the beginning of time through the date upon which you sign this
Agreement or re-execute this Agreement (as applicable) including, but not
limited to (A) any such Claims relating in any way to your employment
relationship with the Company or any other Company Parties, and (B) any such
Claims arising under any federal, state, local or foreign statute or regulation,
including, without limitation, the Age Discrimination in Employment Act of 1967,
as amended by the Older Workers Benefit Protection Act (the “ADEA”), Title VII
of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990,
the Employee Retirement Income Security Act of 1974, the Pennsylvania Human
Relations Act, the Pennsylvania Equal Pay Law and any other federal, state,
local or foreign law (statutory, regulatory or otherwise) that may be legally
waived and released; (ii) relating to wrongful employment termination; or
(iii) arising under or relating to any policy, agreement, understanding or
promise, written or oral, formal or informal, between the Company or any of the
other Company Parties and you, including, without limitation, the Employment
Agreement, between you and the Company and any incentive compensation plan or
equity plan with any Company Party; Notwithstanding the above, this release does
not extend to

 

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(A) claims for Accrued Benefits; (B) claims for worker’s compensation benefits
or for an occupational disease; (C) any whistleblower claims arising under the
Sarbanes-Oxley Act or Dodd-Frank Wall Street Reform and Consumer Protection Act;
(D) claims to require the Company to honor its commitments set forth in this
Agreement; (E) claims to interpret or to determine the scope, meaning or effect
of this Agreement; (F) claims for indemnification and officers and directors
liability insurance coverage including under Section 4.7 of the Employment
Agreement, the Company’s charter, by-laws or applicable law; and/or (G) claims
that cannot be waived as a matter of law pursuant to federal, state, or local
law (collectively, clauses (A) through (G) are the “Excluded Claims”).

 

(b)                                 You further acknowledge and agree that,
except with respect to the payments, benefits and actual performance and vesting
credit set forth in Section 1, Excluded Claims and the payments and benefits set
forth on Appendix A, the Company Parties have fully satisfied any and all
obligations whatsoever owed to you arising out of your employment with the
Company or any other Company Party, and that no further payments or benefits are
owed to you by the Company or any other Company Party.

 

4.                                      Attorney Consultation; Voluntary
Agreement.

 

(a)                                 You acknowledge that (i) the Company has
advised you to consult with an attorney of your own choosing before signing this
Agreement, (ii) you have been given the opportunity to seek the advice of
counsel, (iii) you have carefully read and fully understand all of the
provisions of this Agreement, including the release in Section 3 (the
“Release”), (iv) the Release specifically applies to any rights or claims you
may have against the Company Parties pursuant to the ADEA, (v) you are entering
into this Agreement knowingly, freely and voluntarily in exchange for good and
valuable consideration to which you are not otherwise entitled, including the
payments and benefits referenced in items 2(a) through 2(e) of Appendix A, and
(vi) you have the full power, capacity and authority to enter into this
Agreement.

 

(b)                                 This Agreement is being offered to you in
connection with a group termination.  In accordance with 29 C.F.R. § 1625.22,
attached hereto as Appendix B is a listing of the ages and job titles of persons
who were selected for this termination program and persons in the same
decisional unit who were not selected for this termination program.

 

5.                                      Review and Revocation Period.

 

(a)                                 You have forty-five (45) days following your
receipt of this Agreement to review its terms, including the Release, and to
reflect upon them and consider whether you want to sign it, although you may
sign it sooner.  You understand and agree that you may consent to this
Agreement, including the Release, by signing and returning this Agreement within
the applicable time frame to General Counsel, Rite Aid Corporation, 30 Hunter
Lane, Camp Hill, PA 17011 or by e-mail at jcomitale@riteaid.com.

 

(b)                                 You may revoke your consent to the Release
within the seven day period beginning on the date you execute this Agreement
(such seven day period being referred to herein as the “Release Revocation
Period”). To be effective, such revocation must be in

 

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writing signed by you and delivered to the Company at the above address before
11:59 p.m., Eastern Standard time, on the last day of the Release Revocation
Period.

 

(c)                                  In the event of such revocation by you, the
Release shall be of no force or effect, and you will not have any rights and the
Company will not have any obligations under Section 2(b) of this Agreement. 
Provided that you do not revoke your consent to the Release within the Release
Revocation Period, the Release shall become effective on the eighth (8th)
calendar day after the date upon which you execute this Agreement (the “Release
Effective Date”).

 

(d)                                 In order to be entitled to the payments and
benefits referenced in Section 2(c) of this Agreement, you must re-execute this
Agreement between the Separation Date and the date that is no later than
forty-five (45) days following the Separation Date.  You may revoke your
re-execution of this Agreement within the seven day period beginning on the date
you re-execute this Agreement.  If this Agreement is not re-executed within such
forty-five (45) day period, or if you timely revoke your re-execution, the
Company shall have no obligations under Section 2(c) of this Agreement.  This in
no way affects your prior release of claims under this Agreement.  Provided that
you do not timely revoke your re-execution of this Agreement, the Release shall
become effective on the eighth (8th) calendar day after the date upon which you
re-execute this Agreement (the “Second Release Effective Date”) and be deemed to
cover any claims which you have, may have had, or thereafter may have existing
or occurring at any time on or before the date on which you re-execute this
Agreement.

 

6.                                      Restrictive Covenants.  You acknowledge
and agree that the confidentiality obligations and the restrictive covenants and
agreements set forth in Sections 6 and 7 of the Employment Agreement,
respectively, are incorporated herein by reference and fully made a part hereof
for all purposes and remain in full force and effect.

 

7.                                      Permitted Disclosures.  Pursuant to 18
U.S.C. § 1833(b), you will not be held criminally or civilly liable under any
Federal or State trade secret law for the disclosure of a trade secret of the
Company that (a) is made (i) in confidence to a Federal, State, or local
government official, either directly or indirectly, or to your attorney and
(ii) solely for the purpose of reporting or investigating a suspected violation
of law; or (b) is made in a complaint or other document that is filed under seal
in a lawsuit or other proceeding.  If you file a lawsuit for retaliation by the
Company for reporting a suspected violation of law, you may disclose the trade
secret to your attorney and use the trade secret information in the court
proceeding if you (I) file any document containing the trade secret under seal
and (II) do not disclose the trade secret except pursuant to court order. 
Nothing in this Agreement or any other agreement you have with the Company is
intended to conflict with 18 U.S.C. § 1833(b) or create liability for
disclosures of trade secrets that are expressly allowed by such section. 
Further, nothing in any agreement you have with the Company will prohibit or
restrict you from making any voluntary disclosure of information or documents
related to any violation of law to any governmental agency or legislative body,
or any self-regulatory organization, in each case, without advance notice to the
Company.  The Parties agree that it shall not be a breach of this Agreement if
you make any disclosures that are permitted hereunder.

 

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8.                                      Cooperation.  To the extent provided in
Section 5.3 of the Employment Agreement, you agree that, at mutually agreeable
times, you will meet with representatives of the Company, or its respective
parent or subsidiary company representatives and provide any information you
acquired during the course of your employment relating in any way to any legal
disputes involving the Company.  You further agree that you will cooperate fully
with the Company relating to any such litigation matter or other legal 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.  You will be entitled to
reimbursement by the Company of reasonable costs and expenses incurred by you in
connection with complying with your obligations under this Section 8.

 

9.                                      Non-Disparagement. The Parties agree
that neither Party will make any negative comments or disparaging remarks, in
writing, orally or electronically, about the other party or any other Company
Parties (as defined above) and their respective products and services. However,
nothing in 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.

 

10.                               No Admission.  Nothing herein will be deemed
to constitute an admission of wrongdoing by you or any of the Company Parties. 
Neither this Agreement nor any of its terms may be used as an admission or
introduced as evidence as to any issue of law or fact in any proceeding, suit or
action, other than an action to enforce this Agreement.

 

11.                               Counterparts.  This Agreement may be executed
in counterparts, and each counterpart, when so executed and delivered, will be
deemed to be an original and both counterparts, taken together, will constitute
one and the same Agreement.  A faxed or .pdf-ed signature will operate the same
as an original signature.

 

12.                               Successors and Assigns.  This Agreement will
inure to the benefit of and be binding upon the Company and any successor
organization which shall succeed to the Company by acquisition, merger,
consolidation or operation of law, or by acquisition of assets of the Company
and any assigns.  You may not assign this Agreement, except with respect to the
rights provided under Section 2 of this Agreement, which will inure to the
benefit of your heirs, executors and administrators.  In the event of your death
at any time, your estate will receive all unpaid payments and benefits due you
under this Agreement, including under Appendix A.

 

13.                               Severability; Blue-Penciling.  The provisions
of this Agreement are severable and the invalidity of any one or more provisions
will not affect the validity of any other provision.  In the event that a court
of competent jurisdiction shall determine that any provision of this Agreement
or the application thereof is unenforceable in whole or in part because of the
scope thereof, the Parties hereto agree that said court in making such
determination shall have the power to reduce the scope of such provision to the
extent necessary to make it enforceable, and that this Agreement in its reduced
form shall be valid and enforceable to the full extent permitted by law.

 

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14.                               Governing Law.  This Agreement will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to any conflict of law principles thereof that
would give rise to the application of the laws of any other jurisdiction.

 

15.                               Entire Agreement/No Oral Modifications.  This
Agreement constitutes the entire agreement between you and any of the Company
Parties with respect to the subject matter hereof and supersedes all prior
discussions, negotiations, representations, arrangements or agreements relating
thereto, whether written or oral, including but not limited to the Employment
Agreement, provided, however, that (i) Section 4.6 of the Employment Agreement
shall survive the Separation Date, (ii) Sections 6 and 7 of the Employment
Agreement shall remain in effect, for the duration and on the terms set forth
therein, (iii) Sections 4.2 and 4.4 of the Employment Agreement, and any
provisions of any other agreement which addresses matters covered under
Section 1(a), shall survive as to items accrued, credited or earned during the
Employment Transition Period and (iv) any other defined terms under the
Employment Agreement shall not be superseded hereby to the extent necessary for
the interpretation, application or enforcement of this Agreement.  You represent
that in executing this Agreement, you have not relied on any representation or
statement not set forth herein.  No amendment or modification of this Agreement
shall be valid or binding on the Parties unless in writing and signed by both
Parties.

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the dates
indicated below.

 

Rite Aid Corporation

 

John Standley

 

 

 

 

 

 

 

By:

/s/ James J. Comitale

 

/s/ John Standley

 

Name: James J. Comitale

 

John Standley

 

Title: SVP, General Counsel & Secretary

 

 

 

 

Date: 3/12/2019

Date: 3/12/2019

 

 

 

RE-EXECUTION ON OR AFTER THE SEPARATION DATE
ACKNOWLEDGED AND AGREED

 

John Standley

 

 

 

 

 

John Standley

 

 

 

Date:

 

 

 

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APPENDIX A

 

ACCRUED BENEFITS AND SEVERANCE BENEFITS

 

Accrued Benefits and Severance Benefits

 

1.              Accrued Benefits:  The Company will pay or provide to you
through the Separation Date (i) your Base Salary earned plus any paid time off
that has been accrued but unused in accordance with the Company’s policies;
(ii) any reimbursements owed to you pursuant to Sections 4.2, 4.4, and 4.6 of
the Employment Agreement; (iii) vesting and actual performance credit under all
outstanding equity and other long-term incentive awards; and (v) the amounts
accrued and credited to your account under the Company’s Supplemental Executive
Retirement Plan, 401(k) Savings Plan and other tax-qualified retirement plans
and employee welfare benefits in each case in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements (the
“Accrued Benefits”).

 

2.              Severance Benefits:  You will be paid or provided with the
following payments/benefits:

 

a.              (i) $7,223,300, representing two times the sum of Base Salary
and Annual Target Bonus less the Second Release Consideration in respect of the
Release, payable in equal installments over 24 months following the Separation
Date in accordance with the Company’s regular payroll practices and
(ii) $100,000 representing the Second Release Consideration in respect of the
Second Release, payable in the time and form set forth in Section 2(c). 
Notwithstanding the forgoing, to the extent that (i) any payment to which you
are entitled under this Agreement, the Employment Agreement or any other plan or
agreement referenced in the Employment Agreement in connection with the
termination of your employment with the Company constitutes deferred
compensation subject to Section 409A of the Internal Revenue Code and (ii) you
are deemed at the time of such termination of employment to be a “specified
employee” under Code Section 409A, such payments will not be made or commence
until the earliest of: (A) the expiration of the six (6) month period measured
from the date of your “separation from service” (as such term is at the time
defined in Treasury Regulations under Code Section 409A) with the Company or
(B) the date of your death following such separation from service; provided,
however, that such deferral will only be effected if and to the extent required
to avoid adverse tax treatment to you, 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, you agree that
the Company will not be liable to you for any damages to you 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) will be paid in a single cash lump sum payment to
you (or your beneficiary, as applicable).

 

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b.              Annual bonus for FY 2019, and if applicable, FY 2020, in each
case based on actual performance (as determined on a basis consistent with the
methodology applied to members of the Company’s executive team generally).  To
the extent earned, the annual bonus for a completed fiscal year will be paid at
the same time as annual performance bonus amounts are paid to the Company’s
executive team generally.

 

c.               Pro-rata portion of your annual bonus for the fiscal year in
which the Separation Date occurs based on actual performance following
determination by the Board that the Company has achieved or exceeded its annual
performance targets for the year, determined by multiplying your then Annual
Target Bonus by a fraction (x) the numerator of which is the number of days
between the beginning of the relevant fiscal year and the Separation Date and
the denominator of which is 365, paid at the same time as annual performance
bonus amounts are paid to the Company’s executive team generally in respect of
such fiscal year.

 

d.              Accelerated vesting as of the Separation Date with respect to
those stock options and restricted stock awards that would have vested within
the three (3) year period following the Separation Date.

 

e.               Continued coverage under the Company’s group health plan at the
Company’s cost for you, your spouse and any other eligible dependent for 24
months following the Separation Date.

 

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