UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.    )

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Soliciting Material under §240.14a-12

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RITE AID CORPORATION

(Name of Registrant as Specified In Its Charter)

 

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Becoming a more efficient operator:
In Fiscal Year 2021, we extended all but $91 million of our calendar 2023 bond maturities to calendar 2025 and 2026, and ended the year with $1.7 billion in liquidity, which gives us ample flexibility to execute our strategic initiatives. As we executed our strategic plan, we increased revenues in both the retail pharmacy and pharmacy services segment, and grew market share1 in both retail and pharmacy in a highly competitive environment. Additionally, the Company implemented LEAN initiatives both to reduce working capital tied to inventory and improve our retail pharmacists’ productivity. We also reduced back office costs through consolidating administrative functions in our retail and pharmacy services lines of business into a more efficient structure.

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Enhancing our ESG practices:
We continue to make progress in our ESG efforts, including fleet fuel reduction, decreased energy usage, and our continued progress in eliminating chemicals of concern. In addition, we performed an enterprise climate risk assessment, responded to CDP’s climate change questionnaire, and invested in our associates through numerous program enhancements to keep them engaged. We are proud of the racial, ethnic, and gender diversity of our Board of Directors (88% of whom are racially diverse or female) and our executive leadership team (50% of whom are racially diverse or female), and are expanding our Diversity, Equity and Inclusion efforts in Fiscal Year 2022.

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On behalf of the Board of Directors, we would like to invite you to attend our virtual 2021 Annual Meeting of Stockholders, where we plan to share with you the progress we are making toward our vision and strategy for the Company.

Instructions for joining the meeting are contained in the section of the Proxy Statement titled “Information About the Annual Meeting and Voting.”

We look forward to continuing our work with the outstanding Rite Aid team to support the needs of our customers and drive growth, improved performance, and stockholder value. Thank you for your investment in Rite Aid.

May 20, 2021

Refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements” for a discussion of risks and uncertainties that could cause actual results to differ materially from those projected.

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Growth in market share was measured by IRI, a leading provider of market data and analytics, in areas where Rite Aid operates and excludes tobacco, cigarettes, greeting cards, and online sales.

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This Proxy Statement Summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, so please read the entire Proxy Statement carefully before voting. References to “Rite Aid,” “Rite Aid Corporation,” the “Company,” “we,” “us,” or “our” in this proxy statement and the accompanying notice and letters to stockholders refer to Rite Aid Corporation and/or its affiliates. Rite Aid Corporation, a Delaware corporation, owns multiple subsidiary companies which operate Rite Aid stores and pharmacies and other affiliated companies. The term “affiliates” means direct and indirect subsidiaries of Rite Aid Corporation and partnerships and joint ventures in which such subsidiaries are partners. References herein to “associates” refer to employees of our affiliates.

This proxy statement is being furnished to you by the Board of Directors (the “Board” or “Board of Directors”) of Rite Aid Corporation to solicit your proxy to vote your shares at our 2021 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held on July 7, 2021 at 11:30 a.m., Eastern Daylight Time, by live audio webcast at www.virtualshareholdermeeting.com/RAD2021.

The following proposals will be on the agenda for the Annual Meeting:

Our strategy is composed of three main pillars:

 

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​	​	Customers are taking notice as the look and feel of our stores are refreshed, our merchandising mix evolves to an assortment that best supports whole health, and perhaps most importantly, our trusted neighborhood pharmacists are empowered and qualified to consult not simply on traditional medicines, but alternative remedies as well. We’re seeking to redefine an industry, and aspire to get each one of our customers to thrive.”	​	​
​	​	—JIM PETERS, Chief Operating Officer	​	​

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leveraging the LEAN methodology to free up pharmacists’ time to consult with our customers on their whole health;

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modernizing our e-commerce infrastructure and online experience; and

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physically refreshing the exterior of our fleet of stores.

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This comprehensive approach is aimed at helping customers achieve a level of well-being that goes beyond traditional perceptions of healthy.

Elixir, our pharmacy benefits and services company (PBM), represents a significant growth opportunity for Rite Aid. In the past year, we have rebranded the business, built a stronger, integrated offering, and created operational alignment and synergies, positioning the organization for strong growth and improved profitability. We are establishing a clearly differentiated market leader through compelling health care services offerings and outstanding digital engagement, through the connection of over 2,500 Rite Aid retail stores, and over 60 Bartell Drugs retail stores, which Rite Aid acquired in Fiscal Year 2021. Elixir’s primary market differentiator is that it is the only payor-agnostic PBM with a retail pharmacy footprint and a health care analytics and engagement company, Health Dialog.

As a health care company with a retail footprint that operates in many communities throughout the country and engages over one million customers per day through our various lines of business, we believe we are uniquely positioned to continue making a meaningful difference in the lives of our customers, associates, and neighbors.

In the face of the unprecedented COVID-19 pandemic, Rite Aid has been on the front lines of health care delivery in many of the hardest-hit cities across America. Our response to this global crisis is closely tied to our corporate social responsibility efforts. We were proud to join the White House COVID-19 Response Working Group in March 2020 and help significantly expand the nation’s self-swab testing capacity. As of April 15, 2021, we had over 1,200 COVID-19 drive-thru testing locations where we offer free COVID-19 testing to anyone over age 4, regardless of symptomatic status.

In February 2021, Rite Aid joined the Federal Retail Pharmacy Program to provide coronavirus vaccines. At the outset, Rite Aid received federal allocations of the Pfizer and Moderna vaccines in seven jurisdictions. As of April 15, 2021, Rite Aid had administered approximately 2.5 million COVID-19 vaccines across 19 jurisdictions in nearly half of our stores and in nearly 700 clinics, including clinics for vulnerable or underserved populations.

Rite Aid also has undertaken efforts to educate our communities about COVID-19 testing, vaccine eligibility and availability, vaccine safety, and measures we take to keep our associates, customers, and communities safe through a COVID-19 information resource on our website, at www.riteaid.com/covid-19. Except as stated otherwise, information on our website is not considered part of this Proxy Statement.

 

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As of February 27, 2021.

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We have added 7 new directors to our Board since 2018, all of whom are either women or racially or ethnically diverse.

 

 

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We are proud to employ over 50,000 associates across the United States, including Puerto Rico. Our associates are key to the success of our transformation as they are at the center of supporting the whole health of our customers and communities. We are optimizing our workforce through enhanced communication and engagement through the following measures:

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annual and periodic pulse surveys in which more than 70% of our associates have participated;

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increased personal and professional associate development opportunities, including training on leadership, safety, compliance, and other critical business skills;

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discounted tuition and reimbursement programs for associates to pursue degrees at select colleges or universities;

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certification as an Accredited Provider of Continuing Pharmacy Education, which allows us to offer courses that count toward the continuing education licensing requirements of our pharmacists;

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offering an accredited pharmacy technician certification program;

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compensation and benefit programs to support, recognize and reward performance of our associates (including annual bonuses, 401(k) plans, health care benefits, paid time off, life and disability coverage, merchandise discounts, and many other services and programs);

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associate wellness programs and tools for whole health in areas such as mental health, disease management, and financial wellness; and

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an associate recognition program that incorporates financial incentives to celebrate the achievements of our teams and create a community experience for our workforce.

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Just as we are transforming our business, we are also transforming our approach to Diversity, Equity & Inclusion (DEI). We are being more intentional to ensure that we have not only a diverse workforce but an environment in which our talent can thrive. We are proud to be a part of diverse communities and to have a workforce that reflects the diversity of our customers and the communities in which we operate. As such, we believe that an inclusive and welcoming culture is essential, and our commitment to diversity comes from the top. We are proud to have a Board with 89% overall diversity, which is composed of 44% gender diversity and 44% ethnic/​racial diversity.

We are focused on strengthening our DEI infrastructure, which includes the development of a DEI team (a Center of Excellence) and a DEI integrated strategy that will address talent processes such as talent acquisition, talent development and talent management. A key focus will be to develop solutions that seek to enhance the work environment so our associates can perform to their best potential and provide an optimum customer experience. Our experienced Vice President of Diversity, Equity & Inclusion focuses on developing and executing our DEI strategy.

As of December 31, 2020, 67% of associates self-reported as female. In addition, associates self-reported their race/ethnicity as: White 56%; Hispanic 15%; Black 13%; Asian 11%; and Other 5%.

 

8 | RITE AID CORPORATION   2021 Proxy Statement

As discussed in more detail in the section on Corporate Governance and Board Matters below, Rite Aid is committed to integrating Environmental, Social, and Governance (ESG) initiatives into our operations, not only to create value for our stockholders, customers, and associates, but also because we are deeply invested in our communities, and our customers want to support a company that supports their safety and our environment.

In fiscal year 2021, we made a concerted effort to enhance our strategy and overall approach to sustainability. The strategy was influenced by reporting frameworks, conversations with stockholders, stakeholder expectations, and emerging trends. We identified several key areas of opportunity to expand our environmental, social and governance commitments, most notably around diversity, equity and inclusion, human capital management, climate change and board oversight of ESG matters.

 

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​	​	In 2021, Rite Aid was ranked 7th out of 50 of the largest retailers in North America for its management of toxic chemicals by the annual Who’s Minding the Store? Retailer Report Card.	​	​
​	​	View the retailer report card at retailerreportcard.com/grades	​	​
​	​	Website content is not incorporated into this proxy statement.	​	​

In 2020, our primary focus was to meet our goal of eliminating Evil 8 chemicals from the primary formulations of private brand products. As of March 2021, only 13 formulas (1% of our assortment) contained Evil 8 chemicals. We are actively transitioning out of or working with supplier partners to reformulate these last few items with safer alternatives.

We are proud of the progress we’ve made in reducing the presence of chemicals of concern, which is essential to the future success of our own brands. To that end, we’ve embarked on an ambitious, multi-year initiative to re-architect our own brands program where “clean ingredients” will not only be celebrated, but will be a core component of our positioning across brands and categories, including health, beauty, personal care, consumables, household and more.

 

10 | RITE AID CORPORATION   2021 Proxy Statement

Our By-Laws provide that the Board of Directors may be composed of up to 15 members, with the number to be fixed from time to time by the Board. The Board has fixed the number of directors at nine, and there are nine nominees for director at our Annual Meeting. All directors are elected annually.

The Board of Directors, based on the recommendation of the Nominating and Governance Committee, has nominated the following individuals to be elected directors at the Annual Meeting:

Each of the nominees for director to be elected at the Annual Meeting currently serves as a director of the Company. Each director elected at the Annual Meeting will hold office until the 2022 Annual Meeting of Stockholders and will serve until his or her successor is duly elected and qualified.

If any nominee at the time of election cannot serve and as a consequence another nominee is designated, then the proxies or their substitutes will have the discretion and authority to vote for such other nominee in accordance with their judgment, or the Board may reduce the size of the Board.

The Board is committed to ensuring that it is composed of a highly capable and diverse group of directors who are well-equipped to oversee the success of the business and effectively represent the interests of stockholders. The Board has significantly accelerated its efforts to change the composition of the Board over the past three years. As a result, approximately forty-four percent of the director nominees are racially or ethnically diverse and approximately forty-four percent of the director nominees are women. In addition to enhancing the Board’s racial, ethnic and gender diversity, these changes bring a diversity of thought and experience to the Board. All of the nominees of the Board, other than Ms. Donigan, are independent directors.

 

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Company By-Laws provide that the Chair of the Board must be a director who is independent under the NYSE listing standards and the Company’s Corporate Governance Guidelines. The Board believes that separation of the positions of Chair of the Board and Chief Executive Officer best serves the needs of the Company and its stockholders. The Board believes that Mr. Bodaken will continue to provide excellent independent leadership of the Board in his role as Chair.

For a director to be considered independent under the NYSE corporate governance listing standards, the Board of Directors must determine that the director does not have any direct or indirect material relationship with the Company, including any of the relationships identified in the NYSE independence standards. The Board considers all relevant facts and circumstances in making its independence determinations.

As a result of this review, the Board affirmatively determined that the following directors, including each director serving on the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee, satisfy the independence requirements of the NYSE listing standards:

The Board also previously determined that Marcy Syms, who served as a director until the 2020 annual meeting of stockholders, satisfied the independence requirements of the NYSE listing standards.

In addition, the Board determined that the members of the Audit Committee satisfy the additional independence requirements for audit committee members and that the members of the Compensation Committee satisfy the additional independence requirements for compensation committee members.

As an employee of the Company, Ms. Donigan is not an independent director.

 

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There is no family relationship between any of the nominees and executive officers of Rite Aid.

We recognize that good corporate governance is an important means of promoting the long-term interests of our stockholders, associates, customers, suppliers, and the community. The Board of Directors, including through the Nominating and Governance Committee, monitors corporate governance developments and proposed legislative, regulatory, and stock exchange corporate governance reforms.

Under the Company’s By-Laws, a nominee for director in uncontested elections of directors (as is the case for this Annual Meeting) will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election. In contested elections, directors will be elected by a plurality of votes cast.

Under the Company’s Corporate Governance Guidelines, a director who fails to receive the required number of votes for reelection in accordance with the By-Laws will, within five days following certification of the stockholder vote, tender his or her written resignation to the Chair of the Board for consideration by the Board, subject to the procedures set forth in the guidelines.

The Board has adopted a Code of Ethics that is applicable to our Chief Executive Officer and senior financial officers. The Board has also adopted a Code of Ethics and Business Conduct that applies to all of our officers, directors, and associates. Any amendment to either code or any waiver of either code for executive officers or directors will be disclosed promptly on our website at www.riteaid.com.

The Company’s directors, officers and other associates are prohibited from engaging in hedging or monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, with respect to our securities. Because hedging transactions might allow a director, officer or other associate to continue to own our securities, whether obtained through our equity compensation plans or otherwise, without the full risks and rewards of ownership, such hedging transactions are prohibited. Directors, officers and other associates are also prohibited from holding in a margin account, or otherwise pledging, Company securities as collateral for a loan.

The Board of Directors, as a whole and through the various committees of the Board, oversees the Company’s management of risk, focusing primarily on five areas of risk:

The Board considers and discusses risks in connection with operating, financial and strategic plans, specific approval matters, and special risk topics such as responses to the COVID-19 pandemic and prescription opioid abuse. The Board may delegate responsibility for oversight of selected risks to the appropriate Board committee as described below.

Management of the Company is responsible for developing and implementing the Company’s plans and processes for risk management. The Board believes that its leadership structure, described above, supports the risk oversight function of the Board. The Board of Directors, at least annually, reviews with management its

 

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plans and processes for managing risk. The Board also receives periodic updates from the Company’s compliance and internal assurance services departments with regard to the overall effectiveness of the Company’s compliance and internal audit programs and significant areas of risk to the Company, focusing on the five primary areas of risk set forth above as well as other areas of risk identified from time to time by either the Board, a Board committee, or management.

The Board delegated to the Audit Committee oversight of the Company’s compliance program, and therefore the Committee has the primary oversight role with respect to many of the risks related to the opioid crisis. Through the Audit Committee, the Board is committed to ensuring that the Company is developing solutions to curb prescription opioid abuse through the development and expansion of education, safe prescription drug disposal and pharmacy safeguards.

The Board and the Audit Committee also receive periodic updates from the Company’s Chief Financial Officer, Chief Information Officer, or Chief Information Security Officer on cybersecurity matters, including information services security and security controls over credit card, customer, associate, and patient data. These updates also include information regarding the Rite Aid Information Security Program, managed by Rite Aid’s Chief Information Security Officer, which is designed to protect information and critical resources from a wide range of threats in order to ensure business continuity, minimize business risk, and maximize return on investments and business opportunities. The objective in the development and implementation of the Information Security Program is to create effective administrative, technical, and physical safeguards in order to protect the data of Rite Aid and its subsidiaries and the data of any customers and clients of these entities. In addition, the Audit Committee focuses on assessing and mitigating financial reporting risks, including risks related to internal control over financial reporting as well as legal and regulatory compliance, cyber risk and enterprise risk management.

The Compensation Committee considers risks relating to the Company’s compensation programs and policies, reviews all incentive plans relative to established criteria and conducts an assessment to ensure that none of our incentive plans encourage excessive risk-taking by our executives or associates. The Compensation Committee reviews the risk profile and the relationship between the Company’s compensation programs to the overall risk profile of the Company. Some of the features of our compensation incentive programs that limit risk include:

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Delivery of compensation through an appropriate mix of base salary, short-term cash incentive awards, long-term awards, and benefits.

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Use of a mix of long-term incentive vehicles that reward both stock price appreciation and financial operating performance and have different risk profiles.

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Incorporation of measures in the performance awards to assess our ability to drive stock performance through profitability, leverage reduction and growth, and to compare our stock performance against the Russell 3000 Index (total stockholder return).

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Meaningful stock ownership requirements for executives.

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The Compensation Committee has considered the risks arising from the Company’s compensation policies and practices for its executives and associates and has concluded that the compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

 

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The Nominating and Governance Committee considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on the Committees. Through this periodic refreshment, the Nominating and Governance Committee considers, among other things, the benefits from continuity and depth of experience with the benefits of fresh perspectives and exposing our directors to different aspects of our business.

The Board of Directors held 10 meetings during fiscal year 2021. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings held by all committees on which such director served during the period for which such director served.

It is our policy that directors are invited and encouraged to attend the annual meeting of stockholders. All directors serving on the Board or nominated to serve on the Board at the time of the meeting attended the 2020 Annual Meeting of Stockholders.

 

24 | RITE AID CORPORATION   2021 Proxy Statement

The Nominating and Governance Committee identifies potential candidates by asking current directors and executive officers to notify the committee if they become aware of persons, meeting the criteria described below, who have had a change in circumstances that might make them available to serve on the Board—for example, retirement as a CEO or CFO of a public company or exiting government or military service. The Nominating and Governance Committee also, from time to time, may engage firms that specialize in identifying director candidates. Bari Harlam, who became an independent director in September 2020, was referred to the Nominating and Governance Committee by the director search firm Spencer Stuart.

The Nominating and Governance Committee will consider director candidates recommended by stockholders. In considering such recommendations, the Nominating and Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. The Nominating and Governance Committee may also take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held. To have a candidate considered by the Nominating and Governance Committee, a stockholder must submit the recommendation in writing and must include the following information:

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The name of the stockholder and evidence of the person’s ownership of Rite Aid stock, including the number of shares owned and the length of time of ownership; and

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The name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a Rite Aid director, and the person’s consent to be named as a director if selected by the Nominating and Governance Committee and nominated by the Board.

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The stockholder recommendation and information described above must be sent to Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011, Attention: Corporate Secretary. The Nominating and Governance Committee will accept recommendations of director candidates throughout the year. Generally, in order for a recommended director candidate to be considered for nomination to stand for election at an upcoming annual meeting of stockholders, the recommendation must be received by the Secretary not fewer than 120 days prior to the anniversary date of Rite Aid’s most recent annual meeting of stockholders. In the event an annual meeting is held on a date that is not within 25 days of such anniversary date, recommendations will be considered by the Nominating and Governance Committee in due course.

The Nominating and Governance Committee may review publicly available information, conduct an interview and/or check references to assess the person’s accomplishments and qualifications in light of the needs of the Board and the accomplishments and qualifications of any other candidates that the committee might be considering. The committee’s evaluation process does not vary based on whether or not a candidate is recommended by a stockholder, although, as stated above, the Board may take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held.

The Board seeks to maintain an engaged, independent Board with broad experience and judgment that is committed to representing the long-term interests of our stockholders. The Nominating and Governance Committee believes that the minimum qualifications for serving as a Rite Aid director are:

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that a candidate demonstrates, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of Rite Aid’s business and affairs, and

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that a candidate has an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities.

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In addition, the Nominating and Governance Committee examines a candidate’s specific experiences and skills, availability in light of other commitments, potential conflicts of interest, and independence from management and the Company. The Nominating and Governance Committee also takes into account a candidate’s ability to contribute to the diversity of background and experience represented by the Board. The Nominating and Governance Committee assesses its achievement of diversity through the review of Board composition as part of the Board’s annual self-assessment process.

In order to promote discussion among the non-management directors, executive sessions (meetings of non-management directors without management present) are held regularly. Mr. Bodaken, our Chair of the Board, presides at our executive sessions.

 

The Board has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may contact any member (or all members) of the Board, any Board committee, or any chair of any such committee by mail. Correspondence should be addressed to the Board of Directors or any such individual directors, or committee of directors by either name or title.

All communications received as set forth above will be opened by the Corporate Secretary for the purpose of determining whether the contents represent a legitimate communication to the directors. Such communications, other than business solicitations or advertisements, junk mail and mass mailings, new product suggestions, product complaints, product inquiries, resumes and other forms of job inquiries, spam, and surveys, will be distributed to the Board, the non-management directors, an individual director, or a committee of directors, as appropriate.

Rite Aid is committed to embedding sustainability throughout our business and the communities we serve. We are dedicated to integrating Environmental, Social and Governance (ESG) initiatives into our operations, striving to create long term value and meet the growing expectations of all stakeholders.

In 2019, Rite Aid formed a Corporate Sustainability Committee, with representation from multiple functional leaders within the organization, which produces our annual ESG report each June and evaluates our current ESG initiatives, risks and opportunities on a regular basis.

In 2020, we made a concerted effort to further enhance our strategy and overall approach to sustainability. Our strategy was influenced by reporting frameworks, engagements with investors, stakeholder expectations and emerging trends. We identified several key areas of opportunity to expand our environmental, social and governance commitments, most notably around climate change, board oversight of ESG matters, and diversity, equity and inclusion (which is discussed in more detail in the “Diversity, Equity and Inclusion Efforts” section of the Proxy Statement Summary above).

We continue to make significant investments to improve energy efficiency and fleet fuel economy. In 2020, we capitalized on our commitment to greater transparency and accountability around climate risk by reporting to the CDP climate change questionnaire for the first time, where we scored a B-. We have developed a formal climate change strategy, focused on three pillars: reducing energy demand, transitioning to lower carbon energy sources, and integrating climate risk into our business process. We performed our first climate risk assessment to assess and prepare for both the physical threat of climate change and a global economy’s transition to net zero. We also have adopted the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and will publish our first report aligned to the TCFD’s recommendations this year.

Governance and board oversight is an essential part of managing our sustainability agenda and aligning with our broader vision and business strategy. Our Corporate Sustainability Committee met twice last year and provided updates to the Board and, going forward, will provide quarterly updates to the Nominating and Governance Committee. The Corporate Sustainability Committee will continue to stay engaged with both our executive leadership team and the Board as our program continues to progress.

 

26 | RITE AID CORPORATION   2021 Proxy Statement

At Rite Aid, we take our role as a community health care provider very seriously. In that regard, the Board, along with the Company’s senior management, recognizes and is deeply concerned about the impact of the current opioid crisis on families and communities. We believe it is important to go beyond simply complying with state and federal laws and regulations to also raise awareness about important issues of prescription drug safety and drug abuse prevention and advocating for increased access to education, treatment and proper medication disposal. We have dedicated extensive efforts to considering how best to manage risks relating to the opioid crisis and remain committed to continuing to evaluate our programs and policies and to strengthen our risk management. We are committed to working with our customers, community groups, law enforcement and federal and state agencies to help combat the opioid crisis that is impacting families and communities throughout the United States.

 

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The Board regularly reviews corporate governance developments and will modify these materials and practices from time to time as warranted.

 

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Throughout the year, directors and executive officers must notify the Corporate Secretary and Chief Accounting Officer of any potential related person transactions as soon as they become aware of any such transaction. The Corporate Secretary and Chief Accounting Officer inform the Nominating and Governance Committee of any related person transaction of which they are aware. The Corporate Secretary and Chief Accounting Officer are responsible for conducting a preliminary analysis and review of potential related person transactions and presentation to the Nominating and Governance Committee for review, including provision of additional information to enable proper consideration by the Nominating and Governance Committee.

The Corporate Secretary and Chief Accounting Officer determine whether the proposed transaction should be submitted to the Nominating and Governance Committee for consideration at the next committee meeting or, if the Corporate Secretary and Chief Accounting Officer, in consultation with the Chief Executive Officer or Chief Financial Officer, determine that it is not practicable or desirable for the Company to wait until the next committee meeting, to the Chair of the Nominating and Governance Committee (who will possess delegated authority to act between committee meetings). As necessary, the Nominating and Governance Committee reviews approved related person transactions on a periodic basis throughout the duration of the transaction to ensure that the transactions remain in the best interests of the Company. The Nominating and Governance Committee may, in its discretion, engage outside counsel to review certain related person transactions. In addition, the Nominating and Governance Committee may request that the full Board of Directors consider the approval or ratification of related person transactions if the Nominating and Governance Committee deems it advisable.

The brother of the Company’s Executive Vice President, Chief Financial Officer, Matthew Schroeder, is a partner in the law firm of Littler Mendelson P.C. The Company paid the law firm approximately $476,000 in fiscal year 2021 for employment and labor legal services. These legal services are provided to Rite Aid on an arm’s length basis. Mr. Schroeder has never had any role or involvement in the supervision of these services provided to Rite Aid or in any decisions regarding the retention of Littler Mendelson. The Company’s relationship with Littler Mendelson pre-dates Mr. Schroeder becoming an executive officer of Rite Aid. The Nominating and Governance Committee has reviewed the Company’s ongoing relationship with Littler Mendelson to ensure that it remains in the best interests of the Company.

The sister of the Company’s Executive Vice President, Secretary and General Counsel, Paul Gilbert, is a partner in the law firm of Bradley Arant Boult Cummings LLP (“Bradley Arant”). The Company paid the law firm approximately $160,000 in fiscal year 2021 for certain opioid litigation-related matters. These legal services are provided to Rite Aid on an arm’s length basis. Mr. Gilbert has not had a role in the decision regarding the retention of Bradley Arant, which pre-dates Mr. Gilbert becoming an associate and executive officer of Rite Aid. The Nominating and Governance Committee has reviewed the Company’s ongoing relationship with Bradley Arant to ensure that it remains in the best interests of the Company.

 

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32 | RITE AID CORPORATION   2021 Proxy Statement

In fulfilling its oversight responsibilities, the Audit Committee met six times during fiscal year 2021.

During those meetings, the Audit Committee:

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Met with our internal auditors and independent registered public accounting firm, with and without management present, to discuss the overall scope and plans for their respective audits, the results of their examinations, their evaluations of our internal control over financial reporting and the overall quality of our financial reporting.

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Reviewed and discussed with management and our independent registered public accounting firm, for their respective purposes, the audited financial statements included in our Annual Report on Form 10-K for fiscal year 2021. The discussions included the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements and the Annual Report on Form 10-K for fiscal year 2021.

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Reviewed the unaudited interim financial statements and Forms 10-Q prepared each quarter by the Company.

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Received management representations that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.

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Reviewed the Audit Committee charter.

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Reviewed and discussed with our independent registered public accounting firm those matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.

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Discussed with our independent registered public accounting firm matters relating to their independence and received the written disclosures and the letter from our independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee has considered whether the level of non-audit related services provided by our independent registered public accounting firm is consistent with maintaining their independence.

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Pre-approved audit, other audit-related, and tax services performed by our independent registered public accounting firm.

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In addition to pre-approving the audit and other audit-related and tax services performed by our independent registered public accounting firm, the Audit Committee requests fee estimates associated with each proposed service. Providing a fee estimate for a service incorporates appropriate oversight and control of the independent registered public accounting firm relationship. On a quarterly basis, the Audit Committee reviews the status of services and fees incurred year-to-date against pre-approved services and fee estimates.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended February 27, 2021 for filing with the SEC.

Louis P. Miramontes, Chair
Elizabeth Burr
Arun Nayar

 

RITE AID CORPORATION   2021 Proxy Statement | 33