Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 7, 2023, Rite Aid Corporation (the "Company") and Heyward Donigan,
the Company's President and Chief Executive Officer ("CEO"), mutually agreed to
terms pursuant to which Ms. Donigan ceased to serve as CEO and terminated
employment with the Company, effective immediately. Elizabeth (Busy) Burr, a
member of the Company's Board of Directors (the "Board"), was appointed as the
Company's interim CEO. It is anticipated that Ms. Burr will serve as interim CEO
until a permanent CEO is appointed.
Ms. Burr, age 61, has served as a member of our Board since 2019. Ms. Burr
served as President and Chief Commercial Officer at Carrot Inc., a digital
health care company with solutions that combine behavioral science, clinical
expertise, and proprietary technology, from 2019 through 2021. Ms. Burr served
as the Chief Innovation Officer and Vice President of Healthcare Trend and
Innovation at Humana from 2015 to 2018, where she led the design, build, and
adoption of new product platforms in digital health, provider experience, and
telemedicine. Ms. Burr was the Founder of Humana Health Ventures, Humana's
strategic venture investing practice. She served as Managing Director of Citi
Ventures, Citigroup's global venture group, from 2011 to 2015. Prior to
Citigroup, she spent seven years in investment banking at Morgan Stanley and
Credit Suisse First Boston. Ms. Burr previously served as the Vice President of
Global Brand Management at Gap, Inc., where she was responsible for aligning the
product, store, online, advertising, and merchandising efforts for the four Gap
brands around the world. Ms. Burr holds an M.B.A from Stanford University and a
B.A. in Economics from Smith College. Ms. Burr is a member of the boards of
directors of Mr. Cooper Group Inc., a company that provides mortgage servicing,
origination, and transaction-based services, Satellite Healthcare, a nonprofit
provider of kidney dialysis services, and SVB Financial Group, a company that
offers commercial, investment and private banking, asset management, private
wealth management, brokerage and investment services and funds management
services to companies in the technology, life sciences and health care, private
equity and venture capital, and premium wine industries.
Donigan Separation Agreement and Release
The Company entered into a separation agreement and release with Ms. Donigan
(the "Donigan Separation Agreement") in connection with her departure from the
Company on January 7, 2023. The circumstances of Ms. Donigan's termination of
employment qualify her for severance benefits under the terms of Ms. Donigan's
employment agreement with the Company, entered into on August 8, 2019 in
connection with her hire (the "Employment Agreement"). The Employment Agreement
was previously filed by the Company as Exhibit 10.1 to the Form 8-K on
August 12, 2019. In addition to the severance benefits provided under the
Donigan Separation Agreement, which are governed by Section 5.3 of the
Employment Agreement, Ms. Donigan will be reimbursed for her legal fees of up to
$10,000 pursuant to the terms of the Donigan Separation Agreement. The Company's
provision of the severance benefits under the Employment Agreement are subject
to Ms. Donigan's execution and nonrevocation of a release of claims in favor of
the Company and Ms. Donigan's compliance with certain restrictive covenant
provisions, each as provided by the Donigan Separation Agreement.
The above description of the Donigan Separation Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Donigan Separation Agreement, a copy of which is attached hereto as
Exhibit 10.1 and is incorporated into this Item 5.02 by reference.
Burr Offer Letter
The Company entered into an offer letter with Ms. Burr (the "Burr Offer
Letter"), in connection with her appointment as interim CEO, effective as of
January 7, 2023. The Board and Ms. Burr have agreed that Ms. Burr's base salary
for the term she serves as interim CEO is at a rate of $300,000 per month,
subject to applicable withholdings. Ms. Burr will not receive any other
compensation or benefits from the Company for serving as interim CEO and while
she is interim CEO, she will not receive the compensation payable to
non-employee members of the Board. For example, Ms. Burr will not participate in
or receive benefits under the Company's employee benefit plans and programs
(including, but not limited to, the Company's bonus incentive plans,
401(k) plan, group medical, dental and vision insurance plans). If Ms. Burr
serves as interim CEO for more than six (6) full months, the Board will review
the monthly salary and consider in good faith whether to increase the monthly
salary for interim CEO service in excess of six (6) months.
There are no other arrangements or understandings between Ms. Burr and any other
persons pursuant to which Ms. Burr was appointed as interim CEO of the Company.
There are no family relationships between Ms. Burr and any director or executive
officer of the Company, and she has no direct or indirect material interest in
any transaction required to be disclosed pursuant to Item 404(a) of Regulation
S-K.
The foregoing summary of the Burr Offer Letter does not purport to be complete
and is subject to, and qualified in its entirety by, the full text of the Burr
Offer Letter, a copy of which is attached hereto as Exhibit 10.2 and is
incorporated into this Item 5.02 by reference.
Board and Committee Changes
In connection with her ceasing to serve as President and CEO, Ms. Donigan has
resigned from the Board, effective immediately.
As a result of Ms. Burr's appointment as interim CEO, the Board appointed Robert
E. Knowling, Jr. to the Audit Committee of the Board to replace Ms. Burr. All
such changes were effective January 7, 2023.
A copy of the related press release announcing the CEO transition is attached
hereto as Exhibit 99.1
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1* Separation Agreement and Release between the Company and Heyward
Donigan, dated as of January 7, 2023.
10.2*† Employment Offer Letter between the Company and Elizabeth ("Busy")
Burr, dated as of January 7, 2023.
99.1* Press Release issued by Rite Aid Corporation dated January 9, 2023.
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL) document.
*Furnished herewith
† Certain portions of this exhibit have been redacted pursuant to Item 601(a)(6)
of Regulation S-K and marked by brackets and asterisks. The Company hereby
undertakes to furnish supplementally an unredacted copy of the exhibit upon
request by the Securities and Exchange Commission.
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