<PAGE> 1
As filed with the Securities and Exchange Commission on July 12, 1996
Registration No. 33-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
RITE AID CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-1614034
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(717) 761-2633
(Address of principal executive offices)
1990 OMNIBUS STOCK INCENTIVE PLAN
(Full title of the plan)
Elliot S. Gerson, Esquire
Senior Vice President and
Assistant Chief Legal Counsel
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(Name and address of agent for service)
(717) 761-2633
(Telephone number, including area code, of agent for service)
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate offering registration fee
per share(1) price(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 6,301,426(2) $29.8125 $187,861,262 $64,780
$1.00 par value
=========================================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(h) under the Securities Act of 1933,
based upon the average of the reported high and low sales prices for
the Company's Common Stock on July 8, 1996 as reported on the New York
Stock Exchange.
(2) Pursuant to Rule 416 under the Securities Act of 1933, this
Registration Statement also covers such additional shares as may
hereinafter be offered or issued to prevent dilution resulting from
stock splits, stock dividends, recapitalizations or certain other
capital adjustments.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Rite Aid Corporation (the
"Registrant") with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated in this registration statement by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended March 2, 1996.
2. The description of the Registrant's shares of Common Stock,
par value $1.00 per share (the "Common Stock"), contained in the Registration
Statement on Form 8-A dated July 18, 1991 filed by the Registrant to register
such securities under the Exchange Act, including all amendments and reports
filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this registration
statement and prior to the filing of a post-effective amendment to this
registration statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this registration statement and to be
a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed to constitute a part
hereof except as so modified or superseded.
The consolidated financial statements and schedules included in the
Registrant's Annual Report on Form 10-K as of March 2, 1996, and for each of
the years in the three-year period ended March 2, 1996 have been incorporated
by reference in this registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing. To the extent that KPMG Peat Marwick LLP audits and reports on
consolidated financial statements of the Company issued at future dates, and
consents to the use of their report thereon, such consolidated financial
statements also will be incorporated by reference in the registration statement
in reliance upon their report and said authority.
The report of KPMG Peat Marwick LLP on the consolidated financial
statements for the fiscal year ended March 4, 1995 refers to a change in the
method of accounting for investments.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law ("DGCL"), a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an
II-1
<PAGE> 3
action by or in the right of the corporation) by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding (i) if such person
acted in good faith and in a manner that person reasonably believed to be in or
not opposed to the best interests of the corporation and (ii) with respect to
any criminal action or proceeding, if he or she had no reasonable cause to
believe such conduct was unlawful. In actions brought by or in the right of
the corporation, a corporation may indemnify such person against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner that person reasonably believed to be in or
not opposed to the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as to
which that person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which the Court of Chancery or other such
court shall deem proper. To the extent that such person has been successful on
the merits or otherwise in defending any such action, suit or proceeding
referred to above or any claim, issue or matter therein, he or she is entitled
to indemnification for expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith. The
indemnification and advancement of expenses provided for or granted pursuant to
Section 145 is not exclusive of any other rights of indemnification or
advancement of expenses to which those seeking indemnification or advancement
of expenses may be entitled, and a corporation may purchase and maintain
insurance against liabilities asserted against any former or current director,
officer, employee or agent of the corporation, or a person who is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, whether or not the power to indemnify is provided by the statute.
Article Tenth of the Company's Certificate of Incorporation and
Article VII of the Company's By-laws provide for the indemnification of its
directors and officers as authorized by Section 145 of the DGCL.
The directors and officers of the Company and its subsidiaries are
insured (subject to certain exceptions and deductions) against liabilities
which they may incur in their capacity as such including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), under liability
insurance policies carried by the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement:
4 Rite Aid Corporation 1990 Omnibus Stock Incentive Plan, as
amended
5 Opinion of Elliot S. Gerson, Senior Vice President and
Assistant Chief Legal Counsel to the Registrant
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Elliot S. Gerson, Senior Vice President and
Assistant Chief Legal Counsel to the
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<PAGE> 4
Registrant (contained in Exhibit 5)
24 Power of Attorney (contained on signature page of this
Registration Statement)
99 Rite Aid Corporation 1990 Omnibus Stock Incentive Plan
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
II-3
<PAGE> 5
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Camp Hill, Pennsylvania on this 11th day of
July, 1996.
RITE AID CORPORATION
By: /s/ Martin L. Grass
-----------------------------
Martin L. Grass
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Martin L. Grass and Franklin C. Brown
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Frank M. Bergonzi Principal Financial Officer and July 11, 1996
------------------------------------------- Principal Accounting Officer
Frank M. Bergonzi
/s/ Franklin C. Brown Director July 11, 1996
-------------------------------------------
Franklin C. Brown
/s/ Alex Grass Director July 11, 1996
-------------------------------------------
Alex Grass
/s/ Martin L. Grass Chief Executive Officer and July 11, 1996
------------------------------------------- Director
Martin L. Grass
/s/ Philip Neivert Director July 11, 1996
-------------------------------------------
Philip Neivert
</TABLE>
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<PAGE> 6
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Timothy J. Noonan Chief Operating Officer and July 11, 1996
------------------------------------------- Director
Timothy J. Noonan
/s/ Leonard N. Stern Director July 11, 1996
-------------------------------------------
Leonard N. Stern
/s/ Henry Taub Director July 11, 1996
-------------------------------------------
Henry Taub
/s/ Preston Robert Tisch Director July 11, 1996
-------------------------------------------
Preston Robert Tisch
Director July 11, 1996
-------------------------------------------
Gerald Tsai, Jr.
</TABLE>
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
4 - Rite Aid Corporation 1990 Omnibus Stock Incentive Plan, as amended
5 - Opinion of Elliot S. Gerson, Senior Vice President and Assistant Chief Legal Counsel to the Registrant
23.1 - Consent of KPMG Peat Marwick LLP
23.2 - Consent of Elliot S. Gerson, Senior Vice President and Assistant Chief Legal Counsel to the Registrant (contained
in Exhibit 5)
24 - Power of Attorney (contained on signature page of this Registration Statement)
99 - Rite Aid Corporation 1990 Omnibus Stock Incentive Plan
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5
July 11, 1996
Rite Aid Corporation
30 Hunter Lane
Camp Hill, PA 17011
Re: Registration Statement on Form S-8 Relating to the Company's 1990
Omnibus Stock Incentive Plan
Ladies and Gentlemen:
I have acted as counsel to Rite Aid Corporation, a Delaware corporation (the
"Company"), in connection with the preparation of a registration statement on
Form S-8 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating
to the offering of up to 6,301,426 shares of the Company's Common Stock, par
value $1.00 per share (the "Common Stock"), which may be issued pursuant to
incentive awards involving stock options, stock appreciation rights, restricted
stock, and other stock-based awards (collectively "Awards") granted or to be
granted under the Company's 1990 Omnibus Stock Incentive Plan (the "Plan").
I have examined such records, documents, statutes and decisions as I have
deemed relevant in rendering this opinion. In my examination I have assumed
the genuineness of documents submitted to me as originals and the conformity
with the original of all documents submitted to me as copies thereof.
In my opinion, the shares of Common Stock to be issued pursuant to Awards
granted or to be granted in accordance with the terms of the Plan will be, when
issued in accordance with the terms of such Awards and the Plan, duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
of the Company.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware.
I hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such opinion, I do not thereby admit that I am acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
RITE AID CORPORATION
/s/ Elliot S. Gerson
- --------------------
Senior Vice President and
Assistant Chief Legal Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Rite Aid Corporation
We consent to the use of our reports incorporated by reference herein and to
the reference to our firm as experts in accounting and auditing.
Our report on the consolidated financial statements refers to a change in the
method of accounting for investments in the fiscal year ended March 4, 1995.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
July 12, 1996
<PAGE> 1
EXHIBIT 99
RITE AID CORPORATION
1990 OMNIBUS STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to foster and promote the long-term success of
the Company and materially increase shareholder value by: (a) strengthening
the Company's ability to develop, maintain and direct an outstanding management
team, (b) motivating superior performance by means of long-term performance
related incentives, (c) encouraging and providing for obtaining an ownership
interest in the Company, (d) attracting and retaining outstanding talent by
providing incentive compensation opportunities competitive with other major
companies and (e) enabling executives and other key Employees to participate in
the long-term growth and financial success of the Company.
These purposes may be achieved through the grant of options to purchase the
Company's Common Stock, the grant of Restricted Stock Awards, the grant of
Stock Appreciation Rights, and the grant of other Stock-Based Awards, as
described below.
2. DEFINITIONS.
All capitalized terms used herein, unless otherwise defined, shall have the
following meaning:
(a) "Board" means the Board of Directors of Rite Aid Corporation or the
Executive Committee thereof.
(b) "Code" means the Internal Revenue Code of 1986, as it may be amended
from time to time.
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<PAGE> 2
(c) "Committee" means the Compensation Committee of the Board, or other
committee the Board may subsequently appoint to administer the Plan, as herein,
defined. The Committee shall be composed entirely of members of the Board who
meet the requirements of Section 4(a) hereof.
(d) "Common Stock" means the common stock of Rite Aid Corporation having a
par value of $1.00 per share.
(e) "Company" means Rite Aid Corporation, a Delaware corporation and any
present or future domestic or foreign corporation in which more than 50% of the
voting securities are owned directly or indirectly by Rite Aid Corporation.
(f) "Employee" means any employee of the Company.
(g) "Fair Market Value" means the average of the high and low price of
Common Stock as quoted on the composite tape of the New York Stock Exchange and
published in The Wall Street Journal with respect to the date on which the fair
market value is to be determined, or if there is no trading of Common Stock on
such date, such price on the next date on which there is trading in such
shares.
(h) "Incentive Award" means a Stock Option, Stock Appreciation Right,
Restricted Stock Award or Stock Based Award granted under the Plan.
(i) "Incentive Stock Option" means a Stock Option that is intended to meet
the requirements of Section 422A of the Code and regulations thereunder.
(j) "Non-Qualified Stock Option" means a Stock Option other than an
Incentive Stock Option.
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<PAGE> 3
(k) "Participant" means any key Employee selected to receive an Incentive
Award under the Plan.
(l) "Plan" means the Rite Aid Corporation 1990 Omnibus Stock Incentive
Plan as set forth herein, as it may be amended from time to time.
(m) "Restricted Stock Award" means an award of shares of Common Stock that
is subject to the restrictions set forth under Section 8.
(n) "Stock Appreciation Right" means the right to receive an amount up to
the excess of the Fair Market Value of a share of Common Stock (as determined
on the date of exercise), over (i) if the Stock Appreciation Right is not
related to a Stock Option, the purchase price of a share of Common Stock on the
date the Stock Appreciation Right was granted, or (ii) if the Stock
Appreciation Right is related to a Stock Option, the purchase price of a share
of Common Stock specified in the related Stock Option, and pursuant to such
further terms and conditions as are provided under Section 7.
(o) "Stock-Based Award" means any award granted under Section 9.
(p) "Stock Option" means a right to purchase Common Stock.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 3(c) and Section 10 of the Plan,
the aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Incentive Awards under the Plan will not exceed
7,000,00 shares.
(b) The Common Stock to be delivered under the Plan will be made
available, at the discretion of the
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<PAGE> 4
Board or the Committee, either from authorized but unissued shares, treasury
shares or shares to be purchased or acquired by the Company.
(c) If any Incentive Award shall expire or terminate for any reason,
without being exercised or paid, shares of Common Stock subject to such
Incentive Award shall again be available for grant in connection with
subsequent Incentive Awards. Shares as to which a Stock Option has been
surrendered in connection with the exercise of a related Stock Appreciation
Rights or with respect to Stock Based Awards for which other consideration in
lieu of shares has been paid, will not be available for grant in connection
with subsequent Incentive Awards.
4. ADMINISTRATION OF THE PLAN.
(a) The Plan will be administered by the Committee, which will consist of
three or more members of the Board of Directors who are disinterested persons
as defined under rules promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions described in the Plan. Each Incentive Award will be evidenced by a
written instrument and may include any other terms and conditions consistent
with the Plan, as the Committee may determine. The Committee also has the
authority to interpret the Plan, to determine the terms and provisions of the
respective Incentive Award agreements and to make all other determinations
necessary or advisable for Plan administration. The Committee has authority to
prescribe, amend, and rescind rules and regulations relating to the Plan. All
interpretations, determinations and actions by the Committee will be final,
conclusive and binding upon all parties. Any action of the Committee with
respect to the administration of the Plan shall be taken pursuant to a majority
vote or by the unanimous written consent of its members.
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<PAGE> 5
(c) No member of the Board o the Committee and no Employee will be liable
for any action taken, or determination or omission made, in good faith by the
Board, the Committee or any Employee with respect to the Plan or any Incentive
Award granted under it.
5. PARTICIPATION.
(a) The Committee shall from time to time designate those key Employees,
if any, to be granted Incentive Awards under the Plan, the type of awards
granted, the number of shares, options, rights or units, as the case may be,
which shall be granted to each such Employee, and any other terms or conditions
relating to the awards as it may deem appropriate, consistent with the
provisions of the Plan. An individual who has been granted an Incentive Award
may, if otherwise eligible, be granted additional Incentive Awards.
(b) No person will be eligible for the grant of any Incentive Stock Option
who owns or would own immediately before the grant of such Stock Option,
directly or indirectly, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company. This restriction
does not apply if, at the time such Incentive Stock Option is granted, the
Incentive Stock Option exercise price is at least 110% of the Fair Market Value
on the date of the grant and the Incentive Stock Option by its terms is not
exercisable after the expiration of the five years from the date of grant.
(c) In no event may any member of the Board who is not an Employee be
granted an Incentive Award under the Plan.
(d) Only full-time key Employees will be eligible to receive incentive
Awards under the Plan.
(e) Except as otherwise provided herein or determined by the Committee, no
Incentive Award may be exercised and no amount or property under any Incentive
Award shall be paid unless the Participant is at such
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<PAGE> 6
time in full-time employ of the Company, and shall have been continuously so
employed by the Company since the date of the Incentive Award was awarded. A
leave of absence, unless otherwise determined by the Committee, shall not
constitute a cessation of full-time employment when the Participant is on
military, sick leave or other bona fide leave of absence (such as temporary
Government employment) if such period of leave does not exceed ninety days, or
such longer period so long as the right to reemployment of the individual with
the Company is guaranteed either by statute or by contract or is otherwise
approved by the Committee.
(f) The rights under an Incentive Award which have accrued in accordance
with the provisions of this Plan, may be exercised in whole or in part at the
time of such accruals or at any time thereafter until the expiration of such
rights.
(g) The maximum number of shares of Common Stock with respect to which
Stock Options, Stock Appreciation Rights, Restricted Awards, Stock-Based Awards
and/or any other Incentive Awards may, in the aggregate, be granted under the
Plan to any Employee during any calendar year is 300,000 shares.
6. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) The purchase price of Common Stock under each Stock Option will be
determined by the Committee, but may not be less then the Fair Market Value of
the Common Stock on the date of grant.
(b) Stock Options may be exercised as determined by the Committee but in
no event after ten years from the date of grant.
(c) To purchase shares under any Stock Option granted under this Plan,
Participants must give notice in writing to the Company of their intention to
purchase and specify the number of shares as to which they intend to exercise
their option. Upon the date or dates specified for the completion of the
purchase of the shares, the purchase price will be payable in full in cash or
its equivalent acceptable to the Company. To the
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<PAGE> 7
extent provided by the Stock Option, the purchase price may be paid by the
assignment and delivery to the Company of shares of Common Stock or a
combination of cash and such shares equal in value to the exercise price. Any
shares so assigned and delivered to the Company in payment or partial payment
of the purchase price will be valued at their Fair Market Value on the exercise
date.
(d) Notwithstanding any other provision of the Plan, Participants who
dispose of shares of Common Stock acquired on the exercise of an incentive
Stock Option by sale or exchange either (i) within two years after the date of
the grant of the Stock Option under which the stock was acquired or (ii) within
one year after the transfer of such shares to them pursuant to exercise shall
notify the Company of such disposition and of the amount realized and their
adjusted basis in such shares.
(e) No fractional shares will be issued pursuant to the exercise of a
Stock Option; payment for fractional shares will be made in cash.
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
(a) A Stock Appreciation Right may be granted in connection with a Stock
Option, either at the time of grant or at any time thereafter during the term
of the Stock Option, or may be granted unrelated to a Stock Option.
(b) A Stock Appreciate Right related to a Stock Option shall required the
holder, upon exercise, to surrender such Stock Option with respect to the
number of shares as to which such Stock Appreciation Right is exercised, in
order to receive payment of any amount computed pursuant to Section 7(e). Such
Stock Option will, to the extent surrendered, then cease to be exercisable.
(c) In the case of Stock Appreciation Rights granted in relation to Stock
Options, if the Stock
II-14
<PAGE> 8
Appreciation Right covers as many shares as the related Stock Option, the
exercise of a related Stock Option shall cause the number of shares covered by
the Stock Appreciation Right to be reduced by the number of shares with respect
to which the related Stock Option is exercised. If the Stock Appreciation
Right covers fewer shares than the related Stock Option, when a portion of the
related Stock Option is exercised, the number of shares subject to the
unexercised Stock Appreciation Right shall be reduced only to the extent
necessary so that the number of remaining shares subject to the Stock
Appreciation Right is not more than the remaining shares subject to the Stock
Option.
(d) Subject to Section 7(j) and to such rules and restrictions as the
Committee may impose, a Stock Appreciation Right granted in connection with a
Stock Option will be exercisable at such time or times, and only to the extent
that a related Stock Option is exercisable, and will not be transferable except
to the extent that such related Stock Option may be transferable.
(e) Upon the exercise of a Stock Appreciation Right related to a Stock
Option, the holder will be entitled to receive payment of an amount determined
by multiplying:
(i) The difference obtained by subtracting the purchase price of a share
of Common Stock specified in the related Stock Option from the Fair Market
Value of a shares of Common Stock on the date of exercise of such Stock
Appreciation Right, by
(ii) The number of shares as to which such Stock Appreciation Rights will
have been exercised.
(f) A Stock Appreciation Right granted without relationship to a Stock
Option will be exercisable as determined by the Committee but in no event after
ten years from the date of grant.
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<PAGE> 9
(g) A Stock Appreciation Right granted without relationship to a Stock
Option will entitle the holder, upon exercise of the Stock Appreciation Right,
to receive payment of an amount determined by multiplying:
(i) The difference obtained by subtracting the Fair Market Value of a
share of Common Stock on the date the Stock Appreciation Right is granted from
the Fair Market Value of a share of Common Stock on the date of exercise of
such Stock Appreciation Right, by
(ii) the number of shares as to which such Stock Appreciation Rights will
have been exercised.
(h) Notwithstanding subsections (e) and (g) above, the Committee may place
a limitation on the amount payable upon exercise of a Stock Appreciation Right.
Any such limitation must be determined as of the date of grant and noted on the
instrument evidencing the Participant's Stock Appreciation Right granted
hereunder.
(i) Payment of the amount determined under subsections (e) and (g) above
may be made solely in whole shares of Common Stock valued at their Fair Market
Value on the date of exercise of the Stock Appreciation Right or alternatively,
in the sole discretion of the Committee, solely in cash or a combination of
cash and shares. If the Committee decides that full payment will be made in
shares of Common Stock, and the amount payable results in a fractional shares,
payment for the fractional share will be made in cash.
(j) So long as required by the federal securities laws, no Stock
Appreciation Right granted to an Employee subject to Section 16 of the Exchange
Act may be exercised less than six months after the date of grant except in the
event death or disability of such Employee occurs before the expiration of the
six-month period; and, except as otherwise permitted under Rule 16b-3(e)(iii)
of the Exchange Act or a successor provision, any exercise of a Stock
Appreciation Right for cash will be made only during the period beginning on
the third business day following the date of release for publication of the
Company's regular or quarterly or annual summary statement of revenues and
income (assuming such financial data appears on a wire service,
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in a financial news service, or in a newspaper of general circulation, or is
otherwise made publicly available) and ending on the twelfth business day
following such date.
(k) The Committee may impose such additional conditions or limitations on
the exercise of a Stock Appreciation Right as it may deem necessary or
desirable to secure for holders of Stock Appreciation Rights the benefits of
Rule 16b-3 promulgated under Section 16(b) of the Exchange Act, or any
successor provision in effect at the time of grant or exercise of a Stock
Appreciation Right or as it may otherwise deem advisable.
8. RESTRICTED STOCK AWARDS.
(a) Grants of Awards. Restricted Stock Awards may be granted under the
Plan in such forms and on such terms and conditions as the Committee may from
time to time approve. Such Restricted Stock Awards shall be awarded for no
cash or such cash as shall be required to comply with applicable laws.
Restricted Stocks Awards may be granted alone, in addition to or in tandem with
other incentive Awards under the Plan. Subject to the terms of the Plan, the
Committee shall determine the number of shares of Restricted Stock to be
awarded to a Participant and the Committee may impose different terms and
conditions on any particular Restricted Stock Award made to any Participant.
Each Participant receiving a Restricted Stock Award shall be issued a stock
certificate in respect of such shares of Common Stock. Such certificate shall
be registered in the name of such Participant, shall be accompanied by a stock
power duly executed by such Participant, and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such award.
The stock certificate evidencing such shares shall be held in custody by the
Company or its designee, as escrow holder, until the restrictions thereon shall
have lapsed.
(b) Restriction Period. At the time of a Restricted Stock Award the
Committee shall establish, for all shares which are then being awarded to a
Participant or for each portion of the total shares, a period of time
commencing with the date of the award, which shall be known a the "Restriction
Period". A Participant may
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elect, subject to the approval of the Committee, to extend the Restriction
Period applicable to all or any portion of shares of the Company's Common Stock
awarded the Participant pursuant to this Plan by notifying the Committee, in
accordance with the rules and procedures established by the Committee, of (i)
the Participant's election to extend the Restriction Period, (ii) the
Restricted Stock Award or portion thereof to which the extension would apply
and (iii) t he period of time for the extension which shall in no event be less
than two years. A Participant may exercise the aforesaid election only once
with respect to each Restricted Stock Award. During any such extension of a
Restriction Period, the Participant and the shares to which such extension
applies shall continue to be subject to all provisions of this Plan.
During the Restriction Period, the shares of the Company's Common Stock awarded
pursuant to this Section 8 shall be known as "Restricted Stock". The
Restricted Stock awarded hereunder may not be sold, exchanged, transferred,
pledged or otherwise encumbered or disposed of other than to the Company during
the Restriction Period.
(c) Early Termination of Restrictions. If a Participant dies, retires
under the terms of any Company retirement program or contract establishing
retirement provisions or conditions, or in the opinion of the Committee,
suffers a permanent disability, or if any other circumstance occurs which in
the opinion of the Committee, suffers a permanent disability, or if any other
circumstance occurs which in the opinion of the Committee warrants expiration
of the restrictions, the restrictions on any shares previously awarded to him
or her shall immediately expire, except that restrictions, if any, under the
Securities Act of 1933, as amended (the "Securities Act"), shall remain in full
force and effect. If, prior to the termination of the Restriction Period, a
Participant ceases to be employed by the Company for any reason other than
those described above, then unless otherwise determined by the Committee, all
Restricted Stock transferred to such Participant pursuant to this Plan shall be
forfeited and shall revert to the Company.
(d) Rights as a Shareholder. A Participant shall have, with respect to
the shares of Common Stock issued
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under a Restricted Stock Award, all of the rights of a shareholder of the
Company, including the right to vote the shares, and the right to receive any
cash dividends. Stock dividends issued with respect to the shares covered by a
Restricted Stock Award shall be treated as additional shares under the
Restricted Award and shall be subject to the same restrictions and other terms
and conditions that apply to shares under the Restricted Stock Award with
respect to which such dividends are issued.
9. STOCK-BASED AWARDS.
The Committee may grant awards of shares, share units, or cash payments valued
with reference to the Fair Market Value of Common Stock, including (without
limitation) performance shares, performance share units and tax-offset
payments, either alone or in addition to or in tandem with other Incentive
Awards under the Plan. Subject to the provisions of the Plan, the Committee
shall have complete discretion to determine the terms and conditions applicable
to such awards. Such terms and conditions may require, among other things,
continued employment and/or attainment of specified performance objectives.
The Committee shall determine whether awards granted under this Section 9 shall
be settled in cash, Common Stock or a combination of cash and Common Stock.
10. ADJUSTMENT PROVISIONS.
(a) If the outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are
distributed with respect to such shares of Common Stock or other securities,
through merger, consolidation, sale of all or substantially all the property of
the Company, reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other distribution with respect
to such shares of Common Stock or other securities, or other similar corporate
transactions or events affecting the Common Stock, an appropriate and
proportionate adjustment in order to preserve the benefits or potential
benefits
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intended to be made available to the Participants may be made in the discretion
of the Committee in any or all of the following: (i) the maximum number and
kind of shares provided in Section 3, (ii) the number and kind of shares or
other securities subject to the then-outstanding Incentive Awards, and (iii)
the price for each share or other unit of any other securities subject to then
outstanding Incentive Awards. Alternatively, such distribution may be made by
a payment in cash to a Participant.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon the sale of substantially all of the property or stock of the Company
to another corporation, or upon the occurrence of any event described in
Section 10(a), the securities, cash and other property which an Employee would
be entitled by reason of such transaction to receive with respect to Restricted
Stock then subject to any restrictions under the Plan shall be deposited with
the Company or its designee, and the securities, cash an other property so
deposited shall, except as the Committee may have otherwise determined, be held
subject to the same restrictions, terms and conditions under the Plan as shall
have been applicable to such shares on the effective date of such transaction.
(c) Adjustments under Section 10(a) may be made by the Committee, whose
determination as to what adjustments will be made and the extent thereof will
be final, binding, and conclusive. No fractional interests will be issued
under the Plan on account of any such adjustments.
11. GENERAL PROVISIONS.
(a) No Right to Continued Employment. Nothing in the Plan or in any
instrument executed pursuant to the Plan will confer upon any Participant any
right to continue in the employ of the Company or affect the right of the
Company to terminate the employment of any Participant at any time for any
reason.
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(b) Compliance with Applicable Laws. No shares of Common Stock will be
issued or transferred pursuant to an Incentive Award unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction
and by any stock exchanges upon which the Common Stock may be listed, have been
fully met. As a condition precedent to the issuance of shares pursuant to the
grant or exercise of an Incentive Award, the Company may require the
Participant to take any reasonable action to meet such requirements.
(c) No Rights to Shares Prior to Issuance or Transfer. No Participant and
no beneficiary or other person claiming under or through such Participant will
have any right, title or interest in or to any shares of Common Stock allocated
or reserved under the Plan or subject to any Incentive Award except as to such
shares of Common Stock, if any, that have been issued or transferred to such
Participant, beneficiary or other person including any shares of Restricted
Stock which have been issued but are being held in custody until the expiration
of the Restriction Period.
(d) Tax Withholdings. The Company may make such provisions as it deems
appropriate to withhold any taxes the Company determines it is required to
withhold, including withholding cash compensation, in connection with any
Incentive Award or may take such other action which in the opinion of the
Company is necessary to satisfy all its obligations. The Company may require
the Participant to satisfy any relevant tax requirements before authorizing any
issuance of Common Stock to the Participant.
The Committee may provide that, if and to the extent withholding of any
federal, state or local tax is required in connection with the exercise of an
option, the optionee may elect, at such time and in such manner as the
Committee shall prescribe, to have the Company hold back from the shares to be
delivered, stock having a value calculated to satisfy such withholding
obligations. Notwithstanding the foregoing, in the case of an optionee subject
to the reporting requirements of Section 16(a) of the Exchange Act, no such
election shall be effective unless made in compliance with any applicable
requirements of Rule 16b-3(e) or any successor Rule
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under the Exchange Act.
(e) Transferability and/or Encumbrance. Except under such rules and
regulations as the Committee may establish pursuant to the terms of the Plan,
no Incentive Award and no right under the Plan, contingent or otherwise, other
than Restricted Stock on which restrictions have lapsed, will be (i)
transferable by a Participant except by will or by the laws of descent and
distribution and will be exercisable during the Participant's lifetime only by
the Participant or his or her guardian or legal representative, or (ii) subject
to any encumbrance, pledge or charge of any nature. Notwithstanding the
foregoing, an Incentive Award may be transferred pursuant to the provisions of
a "qualified domestic relations order," within the meaning of the Code, and an
Incentive Award (other than an Incentive Stock Option) and/or any right under
the Plan associated therewith may be transferred by a Participant to an
immediate family member of the Participant. For purposes of this Plan, an
"immediate family member" shall mean the spouse, ancestors or lineal
descendants of the Participant or a trust for the benefit of one or more of the
foregoing.
(f) Death of Participant. In the event of the death of a Participant, his
or her option or other right granted pursuant to an Incentive Award shall be
exercisable any time prior to the expiration of the option or exercise period
or prior to the expiration of one year after the date of such Participant's
death, whichever occurs first, by the executors or administrators of the
Participant or by the person or persons to whom such Participant's rights shall
pass by such Participant's will, or by the laws of descent and distribution of
the state of his or her domicile at the time of death. Such exercise after the
death of a Participant shall be allowed only if, and to the extent that, such
Participant was otherwise entitled under this Plan to exercise the option at
the date of his or her death. To the extent that an option or other right to
an Incentive Award shall not have been exercised within the limited period
provided in this paragraph, all further rights to such Incentive Award shall
cease and terminate at the expiration of such period.
(g) Termination of Employment. In the event of the termination of a
Participant's employment other than
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by reason of his or her death or for cause, all rights of the Participant to
exercise his or her option or other Incentive Award which he or she was
entitled to exercise at the time of termination shall continue for 90 days
after termination or such other period as may be determined by the Committee.
Unless the Committee in its discretion shall determine otherwise, any option
which has not yet become exercisable in whole or in part at the time of
termination, will no longer be exercisable after such termination of
employment. If the Participant dies within said period without having fully
exercised his or her options or other rights granted pursuant to this Plan,
then the executors or administrators of the Participant or the person or
persons to whom such Participant's rights under the option shall pass by will,
or by the laws of descent and distribution of the state of his or her domicile
at the time of death, shall have the right to exercise such option or other
rights during the remainder of said period.
(h) Effect of Death or Termination on Holder of Restricted Stock.
Notwithstanding anything in Section 11(f) or (g) to the contrary, the effect of
death or termination of employment on the grantee of Restricted Stock shall be
determined in accordance with Section 8(c).
(i) Investment Representations and Restrictive Legends. If the Committee
in its sole discretion determines that such procedure is or may be desirable,
it may require the Participant, on any exercise or payment of an Incentive
Award, or any portion thereof, and as a condition to the Company's obligation
to deliver to the Participant certificates representing shares of Common Stock,
to execute and deliver to the Company a written statement, in form satisfactory
to the Company, representing and warranting that his or her purchase or receipt
of shares of Common Stock, is for his or her own account for investment and not
with a view to resale or distribution thereof and that any subsequent sale or
offer for sale of any of such shares shall be made pursuant to either (A) a
registration statement on an appropriate form under the Securities Act, which
has become effective and is current with respect to the shares being offered
and sold or (B) a specific exemption from the registration requirements of the
Securities Act, but in claiming such exemption the Participant shall, before
any sale or offer for sale of such shares, obtain a favorable written opinion
from counsel for or
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approved by the Company as to the availability of such exemption. The Company
may endorse an appropriate legend referring to the foregoing restrictions or
other restrictions which may be applied under the Plan on the certificate or
certificates representing any shares of Common Stock issued or transferred to a
Participant under any Incentive Award granted under the Plan.
(j) Consents or Approvals. If at any time the Board or the Committee
shall in its discretion determine that the listing, registration or
qualification of the shares of Common Stock covered by the Plan on any national
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the sale or transfer of shares of Common
Stock under the Plan, no shares will be delivered unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained or otherwise provided for, free of any conditions not
acceptable to the Board or the Committee.
12. AMENDMENT AND TERMINATION OF PLAN; AMENDMENT OF INCENTIVE AWARDS.
(a) The Board will have the power, in its discretion, to amend, suspend
or terminate the Plan at any time. No such amendment will, without approval of
the shareholders of the Company:
(i) Materially modify the requirements as to eligibility for participation
in the Plan;
(ii) Materially increase the benefits accruing to Participants under the
Plan;
(iii) Increase the number of shares of Common Stock subject to the Plan,
except as permitted in Section 10;
(iv) Permit the granting of Stock Options, Stock Appreciation Rights or
Stock-Based Awards under this Plan at
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an option price less than or based on less than 100% of the Fair Market Value
of the shares at the time the award is granted;
(v) Permit exercise of a Stock Option or Stock-Based Award unless full
payment for the shares as to which the option or right is exercised is made at
the time of purchase;
Provided, however, that notwithstanding anything to the contrary contained
herein or in any Stock Option agreement entered into pursuant hereto relating
to an Incentive Stock Option, this Plan and any such Stock Option agreement
shall be subject to amendment by action of the Board of Directors to the extent
necessary to comply with any applicable requirements of the Code relating to
favorable tax treatment of Incentive Stock Options.
(b) The Committee may refrain from designating any Participants or may
refrain from making any Incentive Awards, but such action shall not be deemed a
termination of the Plan. No Employee shall have any claim or right to be
granted Incentive Awards under the Plan.
13. GOVERNING LAW.
The Plan and all rights hereunder shall be construed and governed by the
internal laws of the State of Delaware.
14. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.
The Plan will become effective upon approval by the shareholders of Rite Aid
Corporation. The Plan will
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terminate, unless sooner terminated under Section 12, on July 9, 2000 or the
day before the tenth anniversary of the day on which the Plan is adopted by the
shareholders, whichever date is later.
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