Document:

Exhibit
10.4

 

FOURTH
AMENDMENT TO SUPPLY AGREEMENT

 

This
Fourth Amendment to the Supply Agreement (the “Fourth Amendment”) is entered
into the 11th day of December, 2009, by and between Rite Aid
Corporation (“Rite Aid”) and McKesson Corporation (“McKesson”).

 

INTRODUCTION

 

Pursuant
to the terms of the Supply Agreement dated December 22, 2003 (the “Rite
Aid Agreement”) as amended by the First Amendment to the Supply Agreement dated
December 8, 2007 (the “First Amendment”), the Second Amendment to the
Supply Agreement dated November 7, 2008 (the “Second Amendment”) and the
Third Amendment to the Supply Agreement dated February 1, 2009 (the “Third
Amendment”) (collectively referred to herein as the “Agreement”), McKesson and
Rite Aid entered into an agreement to establish a program for McKesson’s supply
of pharmaceutical and OTC products to Rite Aid.

 

AGREEMENT

 

For
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, McKesson and Rite Aid agree as follows:

 

1.     Sections 1.1 and 1.2 of the
Agreement are hereby deleted in their entirety and replaced with the following:

 

1.1.     Initial
Term. The initial term of this Agreement (the “Initial Term”) shall commence
on December 1, 2003 (the “Effective Date”) and end on October 31, 2009,
notwithstanding anything to the contrary in Section 2 of the First
Amendment.

 

1.2.     Renewal
Term. At the conclusion of the Initial Term this Agreement shall renew for
an additional three year and five month term (the “Renewal Term”) commencing on
November 1, 2009 and ending on April 1, 2013, unless earlier
terminated in accordance with Section 13.

 

2.     Effective as of November 1,
2009, Section 2.1(c) of the Agreement is hereby amended with the
addition of a new subsection x:

 

x.             In the event of
the initial introduction of a generic version of a previously patent protected
Branded Rx Product, Rite Aid may request in writing from McKesson an exemption
from the “only for the purpose of dispensing by Rite Aid” provision found in Section 2.1(a) for
that Branded Rx Product so that Rite Aid may seek to eliminate its inventory
position of said Product.  McKesson shall
not unreasonably withhold permission for any such exemption request, but shall
be entitled to withhold permission if proper written documentation for such a
denial is provided to Rite Aid within twenty (20) days from the date of Rite
Aid’s original request.  Such denials may
occur, but are not limited to the following situations: quantities in excess of
thirty (30) days of normal Rite Aid purchase activity or the product in
question not yet being generic.  In the event that Rite Aid has Branded Rx
Product in quantities in excess of thirty (30) days of normal Rite Aid purchase
activity, McKesson and Rite Aid agree to work cooperatively in an effort to eliminate
Rite Aid’s inventory of said Product.

 

3.     Effective as of December 1,
2009, Section 3.4 of the Agreement is hereby deleted in its entirety and
replaced with the following:

 

DSD Returns Adjustment: As an incentive for Rite
Aid to continue to maintain its chain-wide average DSD return volume at or
below [**Redacted**] of total DSD purchases (“DSD
Acceptable Returns 

 

 

Volume
Percentage”), Rite Aid’s DSD Cost of Goods shall only be subject to an
adjustment, as determined pursuant to the matrix below, based on Rite Aid’s
performance for each quarter effective for the following quarter in the event
that Rite Aid does not achieve the DSD Acceptable Returns Volume Percentage.
Any applicable adjustment will take place [***Redacted***]
after [**Redacted**], and continue for [***Redacted***].

 

	
  % of Chain-Wide Average Saleable Returns

  	
   

  	
  Adjustments to Cost of Goods

  	
   

  
	
  & Allowances to DSD Purchases

  	
   

  	
  Markup on All DSD Purchases

  	
   

  
	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  
	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  

 

4.     Effective as of December 1,
2009, Section 3.7 of the Agreement is hereby deleted in its entirety.

 

5.     Effective as of November 1,
2009, Section 3.8 of the Agreement is hereby deleted in its entirety.

 

6.     Effective as of December 1,
2009, Section 3.9(a) of the Agreement is hereby deleted in its
entirety and replaced with the following:

 

(a)      Buy Profit
Rebate.  McKesson will issue to Rite Aid
a rebate, in the form of a credit, in an amount equal to [**Redacted**]
of the Cost of Goods for Warehouse purchases of Branded Rx Products and OTC
Products (net of Warehouse returns as provided in Section 8.1 and
excluding Warehouse Repackaged Merchandise) (the “Buy Profit Rebate”). The Buy
Profit Rebate shall be paid [**Redacted**]
for purchases made [**Redacted**].  An illustration of the Buy Profit Rebate
calculation is set forth below:

 

	
  Total

  [**Redacted**]

  Warehouse

  Purchases of

  Branded Rx

  Products and OTC

  Products

  	
   

  	
  (-)

  Warehouse

  Returns (Includes

  returns to vendors)

  	
   

  	
  (-)

  Warehouse

  Repackaged

  purchases

  	
   

  	
  (X)

  Buy Profit Rebate

  of

  [**Redacted**]

  	
   

  	
  (=)

  Buy Profit Rebate

  	
   

  
	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  	
  [**Redacted**]

  	
   

  

 

7.     Effective as of December 1,
2009, Section 3.9(b) of the Agreement is hereby deleted in its
entirety.  McKesson and Rite Aid agree that
Rite Aid will receive the Rite Aid Market Basket Rebate earned but unpaid
through November 30, 2009 no later than January 31, 2010.

 

8.     Section 4.7 of the
Agreement is hereby deleted in its entirety and replaced with the following:

 

4.7      Matters
Regarding Affiliates

 

(a)      Rite Aid may from time to
time assign its right to place Orders under this Agreement to one or more of
its Control Affiliates (each an “Assignment Affiliate”). In such event, the
Assignment Affiliate receiving such assignment shall be legally obligated to
pay McKesson for any Orders placed by such Assignment Affiliate under this
Agreement from time to time (whether such Orders are placed on its own behalf
or on behalf of one or more Control Affiliates or whether the Products are
delivered to one or more Control Affiliates). Notwithstanding the foregoing, no
assignment under this Section 4.7(a) shall be valid, and no Control
Affiliate may become an 

 

 

Assignment
Affiliate hereunder, until Rite Aid has presented evidence in form and substance
reasonably satisfactory to McKesson that such Assignment Affiliate has received
notice of the terms and conditions of this Agreement and has accepted and
agreed to be legally bound by such terms (such as by executing an appropriate
Joinder Agreement referred to in section 4.7(c) hereof, a copy of which is
attached hereto). Without limiting the generality of the foregoing, any
Assignment Affiliate placing Orders hereunder shall be deemed to have consented
and agreed to the terms and conditions of this Agreement pursuant to section
1584 of the California Civil Code and shall be legally obligated to comply with
all of the terms and conditions of this Agreement.

 

(b)      McKesson hereby reserves all of its rights and
remedies under applicable law against Rite Aid and its Affiliates; provided,
however, in the event of any conflict between the California Commercial Code or
such applicable laws and the express terms or provisions of this Agreement,
this Agreement shall control. For the removal of doubt, McKesson shall have,
and each Control Affiliate (to the extent of Products received pursuant to an
Order placed hereunder by Rite Aid or an Assignment Affiliate, as the case may
be) and every Assignment Affiliate (to the extent of the Orders placed under
this Agreement by such Assignment Affiliate whether or not such Orders are
placed on its own behalf or on behalf of one or more Control Affiliates) hereby
acknowledges that McKesson has, and grants to McKesson, the rights and remedies
provided to a seller under the California Commercial Code, including but not
limited to Section 2-702 thereof, and under the Bankruptcy Code, including
but not limited to Sections 503(b)(9) and 546(c) thereof, however, in
the event of any conflict between the California Commercial Code or such
applicable laws and the express terms or provisions of this Agreement, this
Agreement shall control.

 

(c)      Prior to Rite Aid or any Assignment Affiliate
placing an Order for Products on behalf of another Control Affiliate, the
Assignment Affiliate and such Control Affiliate shall have executed a Joinder
Agreement (in form and substance reasonably satisfactory to McKesson and Rite
Aid, including in the form attached hereto) by which it would become a party to
this Agreement for purposes of this Section 4.7 only and acknowledging: (i) that
the receipt by such Control Affiliate of any Products from McKesson constitutes
an acceptance of the terms and conditions of Section 4. 7(b) of this
Agreement; (ii) that it is the buyer of such Products as that term is defined
in section 2-103 of the California Commercial Code and (iii) that it is
buying such Products from McKesson in the ordinary course of its business.  Said Joinder Agreement shall also provide
that each Control Affiliate promises to pay McKesson for all Orders pursuant to
the applicable payment terms set forth of the Supply Agreement.

 

(d)      For purposes of this Section 4.7,
the term “Control Affiliate” shall mean any direct or indirect subsidiary of
Rite Aid.  Rite Aid shall be deemed to
control a subsidiary if Rite Aid possesses, directly or indirectly, the power
to direct, or cause the direction of the management and policies of such
subsidiary, whether through ownership or voting securities, membership
interests, by contract or otherwise.

 

9.     Effective as of November 1,
2009, only the “Warehouse Order and Delivery Schedule” contained in Section 5.1
of the Agreement is hereby deleted in its entirety and replaced with the
following:

 

Warehouse Order and
Delivery Schedule

 

	
  Rite
  Aid Warehouse

  	
   

  	
  McK DC

  	
   

  	
  Order Day

  	
   

  	
  Delivery Day

  	
   

  	
  Delivery Time

  
	
  Perryman,
  MD

  	
   

  	
  RDC

  	
   

  	
  Monday

  	
   

  	
  Wednesday

  	
   

  	
  7:00 a.m.

  
	
  Perryman,
  MD

  	
   

  	
  RDC

  	
   

  	
  Tuesday

  	
   

  	
  Thursday

  	
   

  	
  7:00 a.m.

  
	
  Perryman,
  MD

  	
   

  	
  RDC

  	
   

  	
  Wednesday

  	
   

  	
  Friday

  	
   

  	
  7:00 a.m.

  

 

 

	
  Perryman,
  MD

  	
   

  	
  RDC

  	
   

  	
  Thursday

  	
   

  	
  Monday

  	
   

  	
  7:00 a.m.

  
	
  Perryman,
  MD

  	
   

  	
  RDC

  	
   

  	
  Friday

  	
   

  	
  Tuesday

  	
   

  	
  7:00 a.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Woodland,
  CA

  	
   

  	
  RDC

  	
   

  	
  Tuesday

  	
   

  	
  Friday

  	
   

  	
  5:00 a.m.

  
	
  Woodland,
  CA

  	
   

  	
  RDC

  	
   

  	
  Thursday

  	
   

  	
  Monday

  	
   

  	
  5:00 a.m.

  
	
  Woodland,
  CA

  	
   

  	
  RDC

  	
   

  	
  Friday

  	
   

  	
  Wednesday

  	
   

  	
  5:00 a.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tuscaloosa,
  AL

  	
   

  	
  RDC

  	
   

  	
  Tuesday

  	
   

  	
  Wednesday

  	
   

  	
  6:30 a.m.

  
	
  Tuscaloosa,
  AL

  	
   

  	
  RDC

  	
   

  	
  Thursday

  	
   

  	
  Friday

  	
   

  	
  6:30 a.m.

  
	
  Tuscaloosa,
  AL

  	
   

  	
  RDC

  	
   

  	
  Friday

  	
   

  	
  Monday

  	
   

  	
  6:30 a.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Liverpool,
  NY

  	
   

  	
  RDC

  	
   

  	
  Monday

  	
   

  	
  Wednesday

  	
   

  	
  5:00 a.m.

  
	
  Liverpool,
  NY

  	
   

  	
  RDC

  	
   

  	
  Tuesday

  	
   

  	
  Thursday

  	
   

  	
  5:00 a.m.

  
	
  Liverpool,
  NY

  	
   

  	
  RDC

  	
   

  	
  Wednesday

  	
   

  	
  Friday

  	
   

  	
  5:00 a.m.

  
	
  Liverpool,
  NY

  	
   

  	
  RDC

  	
   

  	
  Thursday

  	
   

  	
  Monday

  	
   

  	
  5:00 a.m.

  
	
  Liverpool,
  NY

  	
   

  	
  RDC

  	
   

  	
  Friday

  	
   

  	
  Tuesday

  	
   

  	
  5:00 a.m.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dayville,
  CT

  	
   

  	
  RDC

  	
   

  	
  Tuesday

  	
   

  	
  Friday

  	
   

  	
  6:30 a.m.

  
	
  Dayville,
  CT

  	
   

  	
  RDC

  	
   

  	
  Wednesday

  	
   

  	
  Monday

  	
   

  	
  6:30 a.m.

  
	
  Dayville,
  CT

  	
   

  	
  RDC

  	
   

  	
  Thursday

  	
   

  	
  Tuesday

  	
   

  	
  6:30 a.m.

  
	
  Dayville,
  CT

  	
   

  	
  RDC

  	
   

  	
  Friday

  	
   

  	
  Wednesday

  	
   

  	
  6:30 a.m.

  

 

10.   Section 7.9 of the
Agreement is hereby deleted in its entirety and replaced with the following:

 

7.9   Payment
for Purchases.  Rite Aid
Corporation (including any entity or entities that succeed to or acquire
substantially all of its assets) shall be responsible for payment for all
purchases hereunder by Rite Aid and shall unconditionally guarantee the prompt
payment of all purchases by its Control Affiliates, including its Assignment
Affiliates, which guaranty shall in the form attached hereto as Exhibit E.

 

11.   In Section 8.2(3) of
the Agreement the Credit Issued matrix for Saleable Products is hereby amended
with the following change:

 

	
  Saleable*

  	
  [**Redacted**]

  	
  [**Redacted**]

  
	
   

  	
  [**Redacted**]

  	
  [**Redacted**]

  

 

12.   Section 8.4 of the
Agreement is hereby deleted in its entirety.

 

 

13.   Effective as of November 1,
2009, Section 11.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:

 

11.1  In consideration of the various purchase
commitments set forth in this Agreement, McKesson will provide throughout the
Renewal Term of the Agreement a [**Redacted**] rebate
to Rite Aid on total purchases of Merchandise (net of returns) by Rite Aid
(such rebate shall be referred to herein as a “[**Redacted**]
Purchase Volume Rebate”).  Each [**Redacted**] Purchase Volume Rebate shall be paid to Rite Aid [**Redacted**].

 

In order to continue to obtain the [**Redacted**]
Purchase Volume Rebate set forth above, Rite
Aid must meet its obligations set forth in this Agreement [**Redacted**] throughout the Renewal Term.  In the event of termination
of this Agreement by either party for any reason whatsoever during the Renewal
Term hereof, McKesson’s obligation to pay the then current unearned and
pro-rated [**Redacted**] Purchase Volume Rebate
or any future [**Redacted**] Purchase Volume
Rebates (including any previously suspended [**Redacted**]
Purchase Volume Rebate(s)) shall immediately cease.  In the event of either  (i) an unsatisfactory payment
performance by Rite Aid for which Rite Aid has received an Unsatisfactory
Payment Notice as specified in Section 7.12; or  (ii) any default by Rite Aid under Section 13.A
of this Agreement, the then current [**Redacted**] Purchase
Volume Rebate and all subsequent [**Redacted**] Purchase
Volume Rebates shall be suspended until [**Redacted**]
such unsatisfactory payment performance or default is cured.  Notwithstanding anything in the foregoing to
the contrary, if any [**Redacted**] Purchase
Volume Rebate(s) payment is suspended pursuant to this Section 11.1
during the Renewal Term of this Agreement for [**Redacted**],
McKesson shall have no further obligation to pay the suspended [**Redacted**] Purchase Volume Rebate(s) to Rite
Aid.  For illustration purposes only, the
following examples reflect McKesson’s payment obligations under this Section 11.1
in the event of an unsatisfactory payment performance or default during the
Renewal Term of this Agreement and assume that no termination has occurred
during any of the time periods specified therein.

 

Example 1:

 

Assume
an unsatisfactory payment performance occurs on [**Redacted**]
and Rite Aid thereafter cures the nonpayment on [**Redacted**].

 

In
this example, McKesson would suspend the Purchase Volume Rebate for [**Redacted**] and [**Redacted**].  The [**Redacted**] Purchase
Volume Rebate would then resume beginning [**Redacted**].  The suspended [**Redacted**]
Purchase Volume Rebate for [**Redacted**] and
[**Redacted**] will be paid on [**Redacted**].  The [**Redacted**] Purchase Volume Rebate for [**Redacted**] would be paid on [**Redacted**].

 

Example 2:

 

Assume
an unsatisfactory payment performance occurs on [**Redacted**]
and Rite Aid thereafter cures the nonpayment on [**Redacted**].

 

In
this example, McKesson would suspend the [**Redacted**] Purchase
Volume Rebate for [**Redacted**] through
[**Redacted**].  The [**Redacted**] Purchase
Volume Rebate would then resume beginning [**Redacted**].  McKesson will have no obligation to pay Rite
Aid the suspended [**Redacted**] Purchase
Volume Rebate for [**Redacted**] through
[**Redacted**].  The [**Redacted**] Purchase
Volume Rebate for [**Redacted**] would
be paid on [**Redacted**].

 

The
[**Redacted**] Purchase Volume Rebate
obtained by Rite Aid hereunder is a “discount or other reduction in price” to
Rite Aid under Section 1128B(b)(3)(A) of the Social Security
Act.  Accordingly, 

 

 

to
the extent requested to do so or required by law, Rite Aid shall accurately
disclose the [**Redacted**] Purchase Volume
Rebate (including an amount reflecting the time value of money, if required)
and any other discount or reduction in price it receives, under any state or
federal program which provides cost or charge based reimbursement for the
Products covered by this Agreement.

 

14.   Effective as of November 1,
2009, Section 12.4(a).i of the Agreement is hereby deleted in its
entirety.

 

15.   Effective as of November 1,
2009, Section 12.4(a)v of the Agreement is hereby deleted in its entirety.

 

16.   Sections 13.A and B of the
Agreement are hereby deleted in their entirety and replaced with the following:

 

13.     TERMINATION

 

A.      Each of the following shall
constitute a default hereunder:

 

1.     If Rite Aid has received three (3) Unsatisfactory
Payment Notices (as defined above in Section 7.12) relating to separate and distinct payment obligations to McKesson
within any consecutive  thirty
(30) day period during the Term of this Agreement, regardless of whether or not
such unsatisfactory payment performances have been cured.

 

2.     Either party materially
breaches this Agreement (except as set forth in clause 13.A.1) and such breach
continues for thirty (30) days after written notice of such breach is given by
the non-breaching party.

 

3.     If
(a) a party shall file any petition under any bankruptcy, reorganization,
insolvency or moratorium laws, or any other law or laws for the relief of or in
relation to the relief of debtors; (b) there shall be filed against a
party any involuntary petition under any bankruptcy statute or a receiver or
trustee shall be appointed to take possession of all or substantial part of the
assets of the party which has not been dismissed or terminated within sixty
(60) days of the date of such filing or appointment; (c) a party shall
make a general assignment for the benefit of creditors or shall become unable
or admit in writing its inability to meet its obligations as they mature; (d) a
party shall institute any proceedings for liquidation or the winding up of its
business other than for purposes of reorganization, consolidation or merger; or
(e) a party shall become insolvent within the meaning of 11 U.S.C. §
101(32).

 

B.       Upon the
occurrence of a default (i) under Section 13.A.1, this Agreement
shall terminate immediately upon receipt by Rite Aid of written notice of
termination from McKesson, (ii) under Section 13.A.2, the
non-defaulting party may terminate this Agreement on five (5) days’
written notice, and (iii) under Section 13.A.3., this Agreement shall
terminate immediately without further action by the non-defaulting party.  The right of termination provided to Rite Aid
in Exhibit D shall not be subject to the notice and cure provisions of
this Section 13, however, such termination may be on no less than five (5) days’
prior written notice to McKesson. 
Notwithstanding anything to the contrary contained in this Agreement, in
no event shall any payment be due for any unearned weekly, monthly, quarterly
or other rebate for which the applicable earning period has not been completed
on the date of termination.  For any
weekly, monthly, quarterly, or other rebate that has been earned in which the
applicable earning period has not been completed on the date of termination,
the earned, pro-rated portion of the rebate(s) will be paid by McKesson
when due; provided however, notwithstanding anything contained in the
foregoing, McKesson shall have no obligation to pay any such prorated rebate(s) that
is or has been suspended pursuant to Section 11.1 of this Agreement as of
the date of termination of this Agreement.

 

17.   Section 14 of the
Agreement is hereby deleted in its entirety and replaced with the following:

 

 

14.     PROPRIETARY
AND CONFIDENTIAL INFORMATION

 

A.      This Agreement and the terms
and conditions hereof, together with the following information of Rite Aid and
McKesson shall constitute “Confidential Information” under this Agreement and
shall be confidential and proprietary to the party creating or generating such
information: (i) all information disclosed by Rite Aid or McKesson (as
applicable, the “Holder”), including, but not limited to, any and all accounts,
records, books, files, and lists regarding any transaction provided for or
contemplated hereunder, (ii) all non-public financial information provided
by the Holder pursuant to Section 7.11 above; and (iii) any operating
manuals, symbols, trademarks, trade names, service marks, trade secrets, Rite
Aid lists, procedures, formulas, and any other patented, copyrighted, or
legally protected materials which are confidential and/or proprietary to the
Holder.

 

B.       The parties expressly agree
to (i) maintain the confidentiality of the Confidential Information and to
disclose the Confidential Information only to those employees, agents,
directors, officers, counsel, consultants, affiliates or advisors of each of
the parties (each, a “Representative”) who have a reasonable need to know such
information and who are bound by obligations of confidentiality comparable to
those provided in this Section 14 and (ii) subject to the preceding
clause, not disclose the terms of this Agreement during the term hereof and for
an additional period of twenty-four months following the effective date of
expiration or other termination of this Agreement.  In the event that any such Confidential
Information is used by the party other than the Holder (the “Recipient”) or the
Recipient’s Representatives during the course of this Agreement it shall retain
its confidential and proprietary nature.

 

C.       Notwithstanding anything
herein to the contrary, nothing in this subsection shall require either party
or its Representatives to maintain in confidence any Confidential Information (i) the
disclosure of which is consented to in writing by the Holder in the Holder’s
sole and absolute discretion, (ii) which is in the public domain, (iii) which
enters the public domain through no fault of such party, (iv) which was in
possession of the party prior to being furnished to it by the other without a
corresponding duty of confidentiality (v) which was supplied to the party
by a third party or parties lawfully in possession thereof, or (vi) subject
to Section 14.D., below, which the Recipient is required to divulge
pursuant to process of any judicial or governmental body of competent
jurisdiction.. Nothing herein shall prohibit either party from making
statements (such as, by way of example, statements in financial reports,
guidance and other disclosures, both public and selective) regarding the
general terms of this Agreement.  In the
event that either party is required to file this Agreement as an exhibit to one
of its periodic reports under the Securities Exchange Act of 1934, as amended,
it shall work with the Recipient to redact any information the Holder deems to
be Confidential Information.

 

D.       If the
Recipient or any of its Representatives becomes legally obligated (by oral
questions, interrogations, requests for information or documents, subpoena,
investigative demand or similar process) to disclose any of the Confidential
Information, the Recipient shall use its reasonable best efforts to provide the
Holder with prompt written notice so that the Holder may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions
of this Section 14. If such protective order or other remedy is not
obtained, or if the Holder waives compliance with the provisions of this Section 14,
the Recipient or its Representatives will furnish only that portion of the
Confidential Information which it is legally required to disclose and will
exercise its reasonable best efforts to obtain reliable assurance, to the
extent that such assurance can be obtained, that confidential treatment will be
accorded the Confidential Information.

 

18.   Section 18.19(a) of
the Agreement is hereby deleted in its entirety and replaced with the
following:

 

(a)           Upon a
reasonable request by Rite Aid during the Term of this Agreement, McKesson
agrees to promptly execute an assignment (to Rite Aid or its designee) of [**Redacted**].

 

 

19.   Section 18.19(d) of
the Agreement is hereby amended to include the following sentence:

 

The
GSK exception to McKesson’s obligation to assign antitrust claims to Rite Aid
set forth herein shall be in effect only as long as McKesson’s contractual
non-assignment obligation to GSK exists.

 

20.   A new Section 18.20 shall be added to the
Agreement as follows:

 

If
the “U.S. Regular Gasoline Retail Prices (Cents per Gallon)”, as reported by
the Department of Energy in “This Week in Petroleum” (the “Index Price”), is
greater than or equal to [**Redacted**],
McKesson has the right to charge a fuel surcharge of [**Redacted**]
per delivery to each Rite Aid Store.  This fuel surcharge will be assessed
for each delivery stop made by a vehicle, even if such stops are within the
same pharmacy or occurs in the same pharmacy but at multiple times on the same
day or otherwise.  Should the “U.S. Regular Gasoline Retail Price (Cents
per Gallon)” fall below any aforementioned threshold for a period of at least
two weeks and the fuel surcharges charged to McKesson are reduced, the assessed
fuel surcharges will be eliminated.  In the event that McKesson imposes a
fuel surcharge or removes the same pursuant to this Section, such action will
be effective upon [**Redacted**]
written notice to Rite Aid.

 

21.   Rite Aid agrees to work
towards the implementation of an electronic Controlled Substance Ordering System
(CSOS) solution within [**Redacted**]
of the date of execution of this Fourth Amendment by both parties.  Orders placed via CSOS will receive next
business day delivery if the order is placed prior to the order cut-off time.  Orders placed by 222 form may be subject to
greater than next business day fulfillment due to 222 form delivery time to the
servicing McKesson distribution center.

 

22.   Exhibit C of Agreement
is hereby deleted in its entirety and replaced with a new Statement of Work
detailing the Third Party Return (RTV) process as attached.

 

23.   This Fourth Amendment shall
only become enforceable on the date when both Rite Aid and McKesson have
executed said Fourth Amendment.

 

24.   Except as amended above, the
Agreement remains unchanged and in full force and effect.  Capitalized terms used in this Fourth
Amendment and not otherwise defined herein shall have the meaning given to them
in the Agreement.

 

25.   This Fourth Amendment may be
executed in counterparts, each of which shall constitute an original.

 

26.   This Fourth Amendment,
together with the Rite Aid Agreement, the First Amendment, the Second Amendment
and the Third Amendment, embodies the entire agreement between the parties with
regard to the subject matter hereof and supersedes all prior agreements
understanding and representations with the exception of any promissory note,
security agreement or other credit or financial related document(s) executed
by or between Rite Aid and McKesson.

 

 

IN
WITNESS WHEREOF the parties have caused this Fourth Amendment to be duly
executed as of the date and year written below and the persons signing warrant
that they are duly authorized to sign for and on behalf of the respective
parties.  This Fourth Amendment shall be
deemed accepted by McKesson only upon execution by a duly authorized
representative of McKesson.

 

 

	
  RITE AID CORPORATION

  	
   

  	
  McKESSON CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert I. Thompson

  	
   

  	
  By:

  	
  /s/
  Paul C. Julian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Robert
  I. Thompson

  	
   

  	
  Name: 

  	
  Paul
  C. Julian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  EVP,
  Pharmacy

  	
   

  	
  Title:
  

  	
  Executive
  Vice President, Group President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  12/08/2009

  	
   

  	
  Date:

  	
  12/11/09

  

 

 

Exhibit C

Rite Aid Return to Vendor Pass
Through

Statement of Work

 

1.     McKesson agrees to act as an
agent of Rite Aid facilitating the amount of credits obtained from manufacturers
for goods returned by Rite Aid through Rite Aid Pharmacy Returns Processor, or
the selected returns processor for Rite Aid.

 

2.     Rite Aid will provide
McKesson access to information provided by Rite Aid’s Pharmacy Returns
Processor that includes manufacturer and store summary and detail; summary and
detailed debit memos; product disposition/shipment tracking information; and
other information required to collect from the manufacturers.  Any changes in processors or processing
operations should involve McKesson since the back office reconciliation
workload is directly correlated to the accuracy and timeliness of the debit
memos created and shipped.

 

3.     McKesson will receive debit
memos from Rite Aid’s Pharmacy Returns Processor via electronic transmission.  Any changes to the existing format must be
approved by Rite Aid in writing and all programming fees and costs associated
with these changes are the sole responsibility of McKesson.

 

4.     McKesson will process those
debit memos on behalf of Rite Aid and contact the appropriate vendors for
follow-up credit – except for those Exception Vendors that are identified as “No
Credit Vendors”, “Unvoucherable” (Inactive Vendors with McKesson), or “Debit
Balance Vendors”.  Debit Balance Vendors
are defined as those vendors that have been in a debit balance for [**Redacted**] and present a financial risk to reimburse
McKesson and/or customers for product returns. No deductions by Rite Aid for “No
Credit Vendors”, “Unvoucherable” or “Debit Balance Vendors” shall be permitted
and McKesson will not pursue credit for those Exception Vendors unless a debit
balance vendor is an active McKesson vendor and the debit balance has existed
for [**Redacted**].  McKesson will pass credit to Rite Aid’s
account for any checks issued to McKesson by the vendor in which remittance
information reference a valid Rite Aid return debit memo. Should a vendor enter
into any of the statuses discussed in this Section 4 after any deduction
to McKesson, Rite Aid shall be required to repay such deduction within [**Redacted**] of their notification of the change in status
for the vendor.  McKesson will provide
Rite Aid with a list of the Exception Vendors (including, but not limited to
those vendors noted as “No Credit Vendors”, “Unvoucherable”, or “Debit Balance
Vendors”) that are active McKesson vendors and whose debit balance has existed
for [**Redacted**].

 

5.     The basis for vendor
collections will be mutually agreed upon by McKesson and Rite Aid with the
understanding that both companies strive for maximum recovery on returns.  The basis of this valuation includes, but is
not limited to, returnable value based on Rite Aid Pharmacy Returns Processor’s
valuation and the manufacturer’s nationally published returns policy, if any
that do not allow returns from third parties, proper disposition of product and
other issues that impact the accuracy of the valuation of the return debit
memos generated for Rite Aid to reflect expected return value.

 

6.     McKesson agrees to pass
through all credits collected from the vendor upon receipt of a final credit
notification within [**Redacted**]
of posting the vendor credit memo. 
McKesson will hold all partial credits relating to a debit memo until a
final credit notification (short pay form) based on compliance to vendor return
policies, is received.  Any subsequent
credit received from the vendor relating to such debit memo will, within [**Redacted**], be passed to Rite Aid.

 

7.     Rite Aid may deduct from
McKesson on those open deductions [**Redacted**]
subsequent to the date that the return invoice valued at returnable value
generated by Rite Aid Pharmacy Returns Processor and reported by Rite Aid
except for those vendors described in Section 4 which can not be
deducted.  

 

 

Rite
Aid is required to repay any items posted to the Rite Aid account that were
previously deducted within [**Redacted**]
of receipt of the appropriate documentation or any direct payment from a
supplier to Rite Aid for items previously deducted from McKesson within [**Redacted**].  All
paperwork and underwriting is required by Rite Aid prior to processing
paybacks.  McKesson will provide access
to all documentation from the supplier on a web portal within [**Redacted**] of the posted transaction.  Proper underwriting includes but is not limited
to final credit notification from the manufacturer, including a credit memo.

 

8.     All credits passed to Rite
Aid will reference the debit memo assigned by Rite Aid Pharmacy Returns
Processor, unless such a reference is not made, at which time McKesson will
pass the credit through to Rite Aid referencing the credit memo number.

 

9.     McKesson will provide to
Rite Aid monthly reports of vendor debit memos that are beyond [**Redacted**] in which the vendors have not provided final
credit and short pay forms.  After [**Redacted**] of the debit memo deduction from the vendor,
if no valid response (“VNR”) is received from a vendor, McKesson will credit
Rite Aid the returnable value of the debit memo.  After [**Redacted**]
from the debit memo date for debit memos closed as VNR, McKesson will pass the
difference between the total value of the debit memo and the returnable value
previously credited to Rite Aid’s account provided such vendors meet the
requirements found in Section 4 of this Exhibit C.    If, after that time, the vendor provides
sufficient evidence to review this “closed” debit memo, McKesson will
facilitate discussions regarding the matter between Rite Aid and the vendor
partner.  Rite Aid and McKesson agree to
address such matters in a reasonable manner if facts pertaining to the debit
memo warrant such.  If any amount will be
repaid to the vendor for such transaction, Rite Aid will pay McKesson within [**Redacted**] then McKesson will repay the vendor within [**Redacted**] of the receipt of Rite Aid’s payment.

 

10.   McKesson will expect vendors
to credit Rite Aid under “Retail” returned goods policies where such a
differential exists.

 

11.   Credits for Rite Aid, passed
through McKesson, not relating to returned goods (i.e. promotional credits)
will incur a maximum of a [**Redacted**]
fee to the vendor.  Rite Aid will inform
vendors of this policy.

 

12.   Vendor-published returned
goods policies and shipping data will be used to determine the credit amount
due for each debit memo.  Signed and/or
otherwise documented agreements between Rite Aid and vendor partners provided
to McKesson will supersede vendor standard returned goods policies.

 

13.   McKesson hereby assumes no
liability or responsibility of the actual collection or timely payment of any
sums contemplated by Rite Aid from a vendor based on this returned goods
collection process.   Rite Aid will not
make any unauthorized deductions from McKesson for such returns.

 

14.   McKesson will provide
periodic reporting on amounts recovered by vendor as agreed to with Rite Aid.

 

15.   Rite Aid and McKesson agree
that Rite Aid will have the right to perform post-audits on any debit memos it
deems appropriate.

 

16.   Rite Aid will pass all
credit memos it receives directly from vendors for invoices deducted from
McKesson provided that such credit memos for such vendors meet the requirements
found in Section 4 of this Exhibit C. 
McKesson will post all credit memos it receives from Rite Aid to Rite
Aid’s account within [**Redacted**]
upon notification by McKesson A/R that Rite Aid’s deductions for those vendors
have been repaid to McKesson.Exhibit 10.5

 

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT
(the “Agreement”) is entered into as of the 3rd day of February, 2008 (the “Effective
Date”) by and between Rite Aid Corporation, a Delaware corporation (the “Company”)
and Robert I. Thompson (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 one (1) year
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
120 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 an officer
of the Company and shall have such officer level duties, responsibilities and
authority as shall be assigned by the Company from time to time. 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. 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                               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 

 

1

 

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,  (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 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 salary at the annualized rate of
Two-Hundred and Fifty Thousand Dollars ($250,000.00) per year (“Base Salary” as
may be adjusted from time to time), 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 (FY 2008),
Executive’s annual bonus opportunity pursuant to such plan shall equal 40% (the
“Annual Target Bonus”) of the Base Salary, which shall be prorated based upon
the Effective Date. For subsequent fiscal years, the Annual Target Bonus may be
adjusted and shall be based upon the Board approved plan for that year.

 

3.3                               Equity Awards.

 

(a) 
Subject to the
approval by the Compensation Committee of the Board, Executive will be
recommended for participation in the Company’s Senior Executive Equity Plan
(the “SEEP”) as existing from time to time.

 

(b) It is
understood and acknowledged by Executive that the securities underlying any
stock options and restricted stock awarded Executive 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.

 

2

 

4.                                      Additional Benefits.

 

4.1                                     Employee Benefits.     During the Term, Executive 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 and 401(k) 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 (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
$3,000.00.

 

4.6                                     Relocation Expenses. 
Executive shall be entitled to benefits under the Company’s Executive
Level relocation policy as from time to time in effect.

 

4.7                                     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; 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.  Following termination (except
for termination by the Company for Cause) 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.

 

3

 

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 committee comprised of three senior officers (one of which shall be Executive’s
supervisor)  of the Company or the Board
of Directors 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 Company; (ii) Executive’s misappropriation of any funds
or property of the Company or any subsidiary; (iii) the conduct by
Executive which is a material violation of this Agreement or Company Policy or
which materially interferes with the Executive’s ability to perform his duties;
(iv) the commission by Executive of an act of fraud or dishonesty toward
the Company or any subsidiary; (v) Executive’s misconduct or negligence
which damages or injures the Company or the Company’s reputation; (vi) Executive
is convicted of or pleads 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 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 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(b),
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 

 

4

 

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, 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.

 

Any termination of
Executive’s employment by Executive voluntarily without Good Reason shall be
effective upon 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) the
Accrued Benefits, (ii) an amount equal to one year of Executive’s then
Base Salary 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 one year following the date of
termination of employment, and (iii) continued health insurance coverage
for Executive and his immediate family for a period of one year following the
date of termination of employment.

 

(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 one year following the date of termination. Except as
provided in Section 3.3(b), 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, 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  

 

5

 

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. 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 of all other claims, cooperate in
the event of litigation and fully comply 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)                                  the assignment to Executive of any duties
or responsibilities materially inconsistent with Executive’s status as an
officer of the Company; or

 

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

 

(c) a material
breach by the Company of this Agreement

 

provided, however, that
in each such case the Company shall have the right, within thirty (30) days
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.

 

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
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 one year following the date of termination of
employment.

 

6

 

(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 one year following the date of termination. Except as
provided in Section 3.3(b) 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,
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 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)(1) 
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 (ii)  which is
expected to be of permanent or indeterminate duration but expected to last at
least 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 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 4.7 above and Sections 6
through 10 below, which shall survive the expiration of the Term; provided,
however, the indemnification obligations in Section 4.7 shall not survive
expiration of the Term in the event of termination of Executive’s employment by
the Company for Cause.

 

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 equal 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, 

 

7

 

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 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 

 

8

 

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

 

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, 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), 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-

 

9

 

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.

 

7.                                      Noncompetition and Other
Matters.

 

7.1                               Noncompetition.     During the Executive’s employment with the Company and
for the one-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 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 or internet based drug
stores.

 

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,

 

10

 

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 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.

 

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

 

11

 

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 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.

 

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;

 

12

 

(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 non-competition. Executive has listed each of such
agreements in Appendix “A”.

 

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.

 

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 

 

13

 

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. The Company may assign its
rights and obligations hereunder, and hereby consents to any such assignment,
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:

  	
   

  	
  Robert I. Thompson

  
	
   

  	
   

  	
  30 Hunter Lane

  
	
   

  	
   

  	
  Camp Hill, Pennsylvania
  17011

  

 

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 

 

14

 

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 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 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.

 

15

 

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. .

 

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.

 

16

 

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

 

	
   

  	
  RITE AID CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ Robert Sari

  
	
   

  	
   

  
	
   

  	
  By: Robert Sari

  
	
   

  	
  Its: Executive Vice
  President/General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert I. Thompson

  
	
   

  	
  Robert I. Thompson

  

 

17

 

APPENDIX A

 

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 non-competition. If none, type “None”.

 

NONE

 

18

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