Exhibit
10.1



EMPLOYMENT AGREEMENT



THIS
EMPLOYMENT AGREEMENT (the
‘‘Agreement’’) is entered into as of the
1st day of August, 2000 (the ‘‘Effective
Date’’) by and between Rite Aid Corporation, a Delaware
corporation (the "Company’’), and Douglas E.
Donley (the
‘‘Executive’’).


WHEREAS,
Executive desires to provide the Company with his services and the
Company desires to employ Executive in the capacity of Group Vice
President Controller 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 parties hereto,
intending to be legally bound, agree as
follows:

		
	1. 	Term Of
Employment.


The term of Executive's employment with
the Company hereunder (the ‘‘Term’’)
pursuant to 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; provided, however, that on each anniversary of the
Effective Date occurring prior to the termination of Executive's
employment hereunder (each such date a ‘‘Renewal
Date’’), an additional year shall be added to the Term,
unless notice of non-renewal has been delivered by one party to the
other party at least 180 days prior to such Renewal Date. For purposes
of this Agreement, except as otherwise provided herein, the phrases
‘‘year during the Term’’ or
‘‘during any year of 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    Position.    During
the Term, Executive shall be employed as Group Vice President
Controller. 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.


2.2    Duties.    Subject
to the supervision and control of the Chief Accounting Officer
(‘‘CAO’’) of the Company (or any designee),
to whom he shall report, Executive shall do and perform all services
and acts necessary or advisable to fulfill the duties and
responsibilities of his position as Group Vice President Controller and
shall render such services on the terms set forth herein. In addition,
Executive shall have such other executive and managerial powers and
duties with respect to the Company and its subsidiaries, affiliates and
strategic partners as may be assigned to him by the Chief Accounting
Officer of the Company or any designee. Except for sick leave,
vacations (as provided in Section 4.3 below), and excused leaves of
absence, Executive shall, throughout the Term, devote substantially all
his working time, attention, knowledge and skills faithfully and to the
best of his ability, to the duties and responsibilities of his position
in furtherance of the business affairs and activities of the Company
and its subsidiaries, affiliates and strategic partners. Executive
shall at all times be subject to, observe and carry out such rules,
regulations, policies, directions, and restrictions as the Company may
from time to time establish for management
employees.

		
	3. 	Compensation.



3.1    Base
Salary.    During the Term, as compensation for his services
hereunder, Executive shall receive a salary at the annualized rate of
Two Hundred Twenty Five Thousand Dollars ($225,000) per year
(‘‘Base Salary’’), 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 

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Compensation Committee from time to time. The
Executive's annual target bonus opportunity pursuant to such plan
(the ‘‘Annual Target Bonus’’) shall equal
25% of the Base Salary in effect for the Executive at the
beginning of such fiscal
year.

		
	4. 	Additional
Benefits.



4.1    Employee
Benefits.    During the Term, Executive shall be entitled to
participate in the employee benefit plans in which 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 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 weeks paid vacation during each year of the
Term.

		
	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’’ 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 directive of the Chief
Accounting Officer or any designee; (ii) Executive's
misappropriation of any funds or property of the Company or any
subsidiary; (iii) the commission by Executive of an act of fraud or
dishonesty toward the Company or any subsidiary; or (iv) the use or
imparting by Executive of any confidential or proprietary information
of the Company, or any subsidiary in violation of any confidentiality
or proprietary agreement to which Executive is a
party.


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 (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 notice 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.

(b) Any portion of the Option or any
other then outstanding stock option that has not been exercised prior
to the date of termination shall immediately terminate as of such date,
and any portion of any 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.

Any termination of
Executive's employment by Executive voluntarily without Good
Reason shall be effective upon 30 days' notice to the
Company.

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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) the Accrued Benefits, (ii) an amount equal to two times the sum of
Executive's 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 years following the date of
termination of employment, and (iii) continued health insurance
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 beginning on or about March 2001, Executive shall also be
entitled to receive 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 (or, if later,
Executive's start date) 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 to the extent such options would otherwise have become
vested and exercisable had Executive remained in the employ of the
Company for a period of two years following the date of termination.
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 90 days following the date of termination of employment
(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 as of
the date of termination shall terminate 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.

Any termination of
employment pursuant to this Section 5.3 shall be effective upon thirty
(30) days notice thereof.


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 material
adverse alteration in Executive's titles, positions, duties,
authorities or responsibilities with the Company or its subsidiaries
from those specified in this Agreement, as the same may be augmented
from time to time;

(b) the assignment to Executive
of any duties or responsibilities materially inconsistent with
Executive's status as Group Vice President Controller of the
Company; or

(c) any other material breach of this
Agreement by the Company, including without limitation any decrease in
Executive's Base Salary or Annual Target Bonus opportunity as set
forth in Sections 3.1 and 3.2, except to the extent such decrease is
generally applicable to all other employees having duties and
responsibilities equivalent to those of employee.

provided, however, that in each such case the Company shall
have the right, within ten (10) days after receipt of notice from
Executive of the Company's violation of any of the foregoing, to
cure the event or circumstances giving rise to such Good Reason, in the
event of which cure such event or circumstances shall be deemed not to
constitute Good Reason
hereunder.


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) the Accrued
Benefits, (ii) any other benefits payable under the then current
disability and/or death benefit 

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plans, as applicable, in which Executive is a
participant and (iii) continued health insurance coverage for Executive
and/or his immediate family, as applicable, for a period of two years
following the date of termination of employment.

(b) All
stock option awards held by Executive shall vest and become immediately
exercisable to the extent such options would otherwise have become
vested and exercisable 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(c), 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 90 days following
the date of termination of employment (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 as of the date of termination shall
terminate 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.

‘‘Total
Disability’’ shall mean any physical or mental disability
that prevents Executive from performing one or more of the essential
functions of his position for a period of not less than 90 days in any
12-month period and/or which is expected to be of permanent
duration.


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


5.7    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
and for any or no reason.

		
	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, the markets for their products, key personnel, past, present
or future actual or threatened litigation, trade secrets, 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, 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.


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 

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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.

		
	7. 	Noncompetition and Other
Matters.



7.1    Noncompetition.    During
the Term and, as applicable, for the two-year period immediately
following the date of termination of Executive's employment
either (x) by the Company for Cause or (y) by Executive other than for
Good Reason, 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 services
to, any Competing Business; or (iii) become interested in any Competing
Business in any capacity, including, without limitation, as an
individual, partner, shareholder, officer, director, principal, agent,
trustee or consultant; provided however, Executive may 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 1% 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 drug
stores.


7.2    Noninterference.    During
the Term and for the two-year period immediately following the date of
termination of Executive's employment at any time and for any
reason (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 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.

		
	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 

5









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
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 reduce the duration
or scope of such provision, as the case may be (it being the intent of
the parties that any such reduction be limited to the minimum extent
necessary to render such provision enforceable), and, in its reduced
form, such provision shall then be
enforceable.


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.

		
	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 to which Executive is subject,
which includes any obligation of confidentiality, assignment of
intellectual property or non-competition.

Executive agrees to
indemnify and save harmless the Company from any loss, claim, damage,
cost or expense of any kind (including without limitation, reasonable
attorney fees) to which the Company may be subjected by virtue of a
breach by Executive of the foregoing representations, warranties, and
covenants.

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	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 binding arbitration in Harrisburg, Pennsylvania
according to the National Employment Dispute Resolution Rules and
procedures of the American Arbitration Association. The parties agree
that the parties shall each bear his or its own attorneys' fees
and costs in connection with any such arbitration. 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.

		
	11. 	Assignment.


Neither
this Agreement, nor any of Executive's rights or obligations
hereunder, may be assigned or otherwise subject to hypothecation by
Executive. The Company may assign its rights and obligations hereunder,
in whole or in part, (i) to any of the Company's subsidiaries,
affiliates, or parent corporations; 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.

		
	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 (3) 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, Pennsylvania 17011

Attention: General Counsel
 Fax: (717) 760-7867


		
	If to
Executive: 	Douglas E. Donley
 28 Richard Road

Mechanicsburg, PA 17055


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

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	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 set-off,
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 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.


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 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.


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.

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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.


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





											
	 		RITE
AID
CORPORATION
	 		/s/
Christopher Hall
	 		By:		Christopher
Hall
	 		Its:		EVP
Finance
	 		EXECUTIVE
	 		/s/
Douglas E. Donley
	






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