Rite Aid Corporation (NYSE:RAD) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 3, 2019, Rite Aid Corporation (the Company) announced that James Peters was appointed to serve as the Chief Operating Officer of the Company, effective as of October 7, 2019.
Mr. Peters, age 47, most recently served as chief executive officer of Skyward Health, a strategic healthcare advisory firm, from 2016 until the present. Prior to joining Skyward Health in 2016, Mr. Peters was a 12-year senior executive at Geisinger Health System (Geisinger). From 2012 to 2016, Mr. Peters served as chief executive officer of Geisinger Medical Management Corp., the for-profit entrepreneurial arm of Geisinger. In addition, from 2014 to 2016, Mr. Peters held the role of senior vice president, chief strategic partnerships officer at Geisinger, with broad authority for corporate development, and had also served as managing partner, Geisinger Ventures. Prior to joining Geisinger, Mr. Peters served as principal at Updata Capital, a venture capital firm focused on software, data analytics and health information technology from 2002 to 2004.
Mr. Peters is a member of the American College of Corporate Directors and, from 2016 until its recent acquisition in 2019, Mr. Peters was an independent director of NxStage Medical, Inc. Mr. Peters currently serves as an independent director of Special Olympics PA, Ben Franklin Technology Partners of Northeastern PA, and the Scranton Lackawanna Industrial Building Company. Since 2004, Mr. Peters has served as adjunct lecturer at Lehigh University. Mr. Peters earned a master of business administration in finance from the Wharton School at the University of Pennsylvania and a bachelor of arts degree in architecture from Lehigh University.
There are no arrangements or understandings between Mr. Peters and any other person to which he was selected as an officer. There are no family relationships between Mr. Peters and any director or officer of the Company or any other related-party transaction of the Company involving Mr. Peters.
The Company has entered into an employment agreement with Mr. Peters, dated as of October 2, 2019 (the Employment Agreement). The Employment Agreement has an initial term of two (2) years, and thereafter will automatically renew for successive one (1) year terms unless either he or the Company gives prior notice of nonrenewal. to the Employment Agreement, Mr. Peters will be paid a base salary, on an annualized basis, of $750,000, he will be eligible for a target annual cash bonus opportunity equal to 125% of his base salary (pro-rated for the current 2020 fiscal year), and, beginning in the Companys 2021 fiscal year, he will be granted long-term equity incentive awards under the Companys long-term incentive plan (the LTIP) with a grant date fair value equal to 250% of his base salary, consistent with the award issuances to senior executives of the Company generally, which is in the sole discretion of the Board. The Employment Agreement further provides that the Company will make the following initial equity grants to Mr. Peters to the LTIP: (i) an award of restricted stock with a grant date fair value equal to $500,000 (which will vest in one-third increments on each of the first three anniversaries of his commencement date, subject to continued employment through each vesting
date) and (ii) nonqualified stock options with a grant date fair value equal to $500,000 determined by the Company using the Black Scholes pricing method (which will vest and become exercisable in one-third increments on each of the first three anniversaries of his commencement date, subject to continued employment through each vesting date).
The Employment Agreement provides that in the event the Company terminates Mr. Peterss employment without cause or Mr. Peters terminates his employment for good reason (each as defined in the Employment Agreement), and subject to his execution of a release of claims, Mr. Peters will receive: (i) an amount equal to two (2) times the sum of his (x) base salary plus (y) target annual bonus, which will be payable in equal installments, generally over a period of two (2) years following the date the release of claims becomes irrevocable; (ii) if earned, an annual bonus for the year in which the termination of employment occurs based on actual performance for the year, prorated to reflect the portion of the year prior to his termination of employment; (iii) a lump sum payment equal to the cost for eighteen (18) months continuation of group health plan coverage as of the date of termination of employment; and (iv) accelerated vesting of any then-outstanding restricted stock awards and stock options that would have vested and become exercisable, as applicable, assuming he remained employed by the Company for a period of two (2) years following the date of termination of employment. The Employment Agreement also subjects Mr. Peters to certain confidentiality obligations and certain noncompetition, noninterference and nonsolicitation restrictions for a period of twelve (12) months post-employment.
The foregoing description of the Employment Agreement is a summary of certain of its terms only and is qualified in its entirety by the full text of the agreement filed as Exhibit 10.1 hereto and incorporated herein by reference.
Also on October 3, 2019, the Company announced that the Company and Bryan Everett, Chief Operating Officer of the Company, have mutually agreed that Mr. Everett will cease to serve in that role and will be terminating employment with the Company on October 11, 2019. Mr. Everett and the Company have entered into a separation agreement providing for a release of claims and severance payments and benefits governed by Mr. Everetts employment agreement with the Company. On October 2, 2019, the Company also entered into a consulting agreement with Mr. Everett (the consulting agreement), to which Mr. Everett will provide consulting services to the Company for the principal purpose of assisting in the orderly transition of his previous role and responsibilities. Under the terms of the consulting agreement, Mr. Everett will provide such consulting services to the Company, commencing on October 14 for a two month period, up to ten hours per week. to the consulting agreement, the Company will pay the consultant $37,500 per month in connection with such consulting services. The consulting agreement will terminate automatically at the end of the two-month term.
The foregoing descriptions of the separation agreement and the consulting agreement are not complete and are qualified in their entirety by the full text of the separation agreement filed as Exhibit 10.2 hereto and the consulting agreement filed as Exhibit 10.3 hereto, each of which is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On October 3, 2019, the Company issued a press release relating to the announcement described in Item 5.02. A copy of the Companys press release is being furnished as Exhibit 99.1 to this Form 8-K.
The information (including Exhibit 99.1) being furnished to this Item 7.01 Regulation FD Disclosure shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
RITE AID CORP Exhibit
EX-10.1 2 a19-19363_1ex10d1.htm EX-10.1 Exhibit 10.1 Execution Copy EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this Agreement) is entered into as of the 2nd day of October,…
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About Rite Aid Corporation (NYSE:RAD)
Rite Aid Corporation is a retail drugstore chain. The Company’s segments include Retail Pharmacy and Pharmacy Services. The Company operates under The Rite Aid name. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. The Company’s Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog. It sells brand and generic prescription drugs, as well as an assortment of front-end products, including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. Its front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products. The Company’s Pharmacy Services segment consists of EnvisionRx, which provides a range of pharmacy benefit services.
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