UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 10, 2006 (April 4, 2006)
RITE AID CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-5742 23-1614034
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(State or Other Jurisdiction (Commission IRS Employer
of Incorporation) File Number) Identification No.)
30 Hunter Lane, Camp Hill, Pennsylvania 17011
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (717) 761-2633
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None
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On April 4, 2006, the Compensation Committee (the "Compensation
Committee") of the Board of Directors of Rite Aid Corporation ("Rite Aid")
discussed and approved the distribution of a bonus to store, field management
and corporate personnel, including the Named Executive Officers (as defined
below), in recognition of significant efforts and services to improve customer
satisfaction in Fiscal Year 2006. Mary Sammons (President and Chief Executive
Officer), James Mastrian (Chief Operating Officer ), Mark Panzer (Senior
Executive Vice President and Chief Marketing Officer), Kevin Twomey (Executive
Vice President and Chief Financial Officer) and Robert Sari (Executive Vice
President and General Counsel) were awarded $165,000, $85,250, $66,000, $24,933
and $22,000, respectively (Ms. Sammons and Messrs. Mastrian, Panzer, Twomey and
Sari being referred to herein, collectively, as the "Named Executive Officers").
On April 5, 2006, the Compensation Committee also approved the grant of
restricted stock awards to the Named Executive Officers and certain other
executive officers, effective as of April 5, 2006. The number of shares issued
to each of Ms. Sammons, Mr. Mastrian, Mr. Panzer, Mr. Twomey and Mr. Sari is
199,501 shares, 74,813 shares, 74,813 shares, 31,796 shares, 28,055 shares,
respectively. The shares of restricted stock were granted pursuant to either
Rite Aid's 2000 Omnibus Equity Plan or Rite Aid's 2004 Omnibus Equity Plan, each
of which was previously filed with the Securities and Exchange Commission. These
shares will vest 1/3 per year over three years commencing one year from the
date of grant, with the exception that Mr. Mastrian's shares vest in their
entirety on October 10, 2007, in each case, subject to continuous employment.
On April 5, 2006, the Compensation Committee also approved the
adoption of the 2007 Bonus Plan , a cash bonus plan for the Named Executive
Officers, other executive officers and key managers, and the Board of
Directors, upon the recommendation of the Compensation Committee, approved the
performance goals and target bonus percentages under the 2007 Bonus Plan. For
Fiscal Year 2007, the Board of Directors approved a payout matrix for bonuses
based on Rite Aid's attainment of Adjusted EBITDA (earnings, before interest,
taxes, depreciation, amortization and certain other adjustments) and customer
satisfaction targets. The Board established target bonus levels for each
participant that are defined as a percentage of base pay. Bonuses equal to a
multiple of a participant's target bonus will be paid based on Rite Aid's
achievement of the 2007 targets. A separate bonus is payable for achievement of
the customer satisfaction targets as well as the Adjusted EBITDA targets. 80%
of the target bonus is payable upon satisfaction of the Fiscal Year 2007
Adjusted EBITDA targets and 20% of the target bonus is payable on satisfaction
of the Fiscal Year 2007 customer satisfaction targets. Bonus payments under the
2007 Bonus Plan increase as performance levels increase between the minimum
($650 million) and the maximum ($740 million) Adjusted EBITDA targets and the
minimum (70%) and the maximum (85%) of customer satisfaction targets. Upon
satisfaction of the minimum Adjusted EBITDA target ($650 million), the
participant will receive 50% of the Adjusted EBITDA bonus target and upon
satisfaction of the maximum Adjusted EBITDA target ($740.0 million), the
participant will receive 200% of the Adjusted EBITDA bonus target, with
proportional increases between the minimum and maximum targets. Upon
satisfaction of the minimum customer satisfaction target, the participant will
receive 50% of the customer service bonus target and upon satisfaction of the
maximum customer satisfaction target, the participant will receive 200% of the
customer service bonus target, with proportional increases between the minimum
and maximum targets.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RITE AID CORPORATION
Dated: April 10, 2006 By: /s/ Robert B. Sari
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Name: Robert B. Sari
Title: Senior Vice President,
General Counsel and Secretary