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How can I change my vote?

        You may revoke your proxy at any time before it is exercised by:

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Delivering to the Secretary a written notice of revocation, dated later than the proxy, before the vote is taken at the SpecialAnnual Meeting;



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Delivering to the Secretary an executed proxy bearing a later date, before the vote is taken at the SpecialAnnual Meeting;



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Submitting a proxy on a later date by telephone or via the Internet (only your last telephone or Internet proxy will be counted), before 11:59 p.m. Eastern Daylight Time on March 20,July 16, 2019; or



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Attending the SpecialAnnual Meeting and voting in person (your attendance at the SpecialAnnual Meeting, in and of itself, will not revoke the proxy).

        Any written notice of revocation, or later dated proxy, should be delivered to:

Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
Attention: James J. Comitale, Secretary

        Alternatively, you may hand deliver a written revocation notice, or a later dated proxy, to the Secretary at the SpecialAnnual Meeting before we begin voting.

        If your shares of Rite Aid common stock are held by a bank, broker, or other nominee, you must follow the instructions provided by the bank, broker, or other nominee if you wish to change your vote.

What is an "abstention" and how would it affect the vote?

        An "abstention" occurs when a stockholder sends in a proxy with explicit instructions to decline to vote regarding a particular matter. Abstentions are counted as present for purposes of determining a quorum. An abstention with respect to the election of directors is neither a vote cast "for" a nominee nor a vote cast "against" the nominee and, therefore, will have no effect on the outcome of the vote. Abstentions with respect to the ratification of Deloitte & Touche LLP as our independent registered public accounting firm, the advisory vote on compensation of our named executive officers, and the vote on the stockholder proposal will have the same effect as voting "against" the proposal.

What is a broker "non-vote" and how would it affect the vote?

        A broker non-vote occurs when a broker or other nominee who holds shares for the beneficial owner is unable to vote those shares for the beneficial owner because the broker or other nominee does not have discretionary voting power for the proposal and has not received voting instructions from the beneficial owner of the shares. Brokers will have discretionary voting power to vote shares for which no voting instructions have been provided by the beneficial owner only with respect to the ratification of Deloitte & Touche LLP as our independent registered public accounting firm. Brokers will not have such discretionary voting power to vote shares with respect to the election of directors, the advisory vote on the compensation of our named executive officers, and the vote on the stockholder proposal. Shares that are the subject of a broker non-vote are included for quorum purposes, but a broker non-vote with respect to a proposal will not be counted as a vote cast and will not be counted as a vote represented at the meeting and entitled to vote and, consequently, will have no effect on the outcome of the vote. Accordingly, it is particularly important that beneficial owners of Rite Aid shares instruct their brokers how to vote their shares.

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What are the quorum and voting requirements for the proposals?

        In deciding the proposals that are scheduled for a vote at the Annual Meeting, each holder of common stock as of the record date is entitled to one vote per share of common stock. In order to take action on the proposals, a quorum, consisting of the holders of 539,953,30526,914,351 shares (a majority of the aggregate number of shares of Rite Aid common stock) issued and outstanding and entitled to vote as of the record date for the SpecialAnnual Meeting, must be present in person or by proxy. This is referred to as a "quorum." Proxies marked "Abstain" and broker non-votes (as further discussed below) will be treated as shares that are present for purposes of determining the presence of a quorum.

        The affirmative voteProposal No. 1—Election of the holders of a majority of the shares entitled to vote at the Special Meeting is required to adopt and approve the reverse stock split proposal.Directors

        The affirmative vote of a majority of the total number of votes presentcast is required for the election of each director nominee named in personProposal No. 1. This means that the votes cast "for" that nominee must exceed the votes cast "against" that nominee. Any shares not voted (whether by abstention, broker non-vote or otherwise) will not be counted as votes cast and will have no effect on the outcome of the vote. For more information on the operation of our majority voting standard, see the section entitled "Board of Directors—Corporate Governance—Majority Voting Standard and Policy."

Proposal No. 2—Ratification of Independent Registered Public Accounting Firm

        The affirmative vote of a majority of the shares represented by proxy at the Special Meetingmeeting and entitled to vote is required for the ratification of Deloitte & Touche LLP as our independent registered public accounting firm in Proposal No. 2. Any shares represented and entitled to approvevote at the adjournmentmeeting and not voted (whether by abstention or otherwise) will have the same effect as a vote "against" the proposal.

Proposal No. 3—Advisory Vote on Compensation of Named Executive Officers

        The affirmative vote of a majority of the shares represented at the meeting and entitled to vote is required for the approval of the advisory vote on the compensation of our named executive officers in Proposal No. 3. Any shares represented and entitled to vote at the meeting and not voted (whether by abstention or otherwise) will have the same effect as a vote "against" the proposal. Any broker non-votes with respect to the advisory vote on the compensation of our named executive officers will not be counted as shares represented at the meeting and entitled to vote and, consequently, will have no effect on the outcome of the vote.

Proposal No. 4—Stockholder Proposal

        The affirmative vote of a majority of the shares represented at the meeting and entitled to vote is required for the approval of the stockholder proposal in Proposal No. 4. Any shares represented and entitled to vote at the meeting and not voted (whether by abstention or otherwise) will have the same effect as a vote "against" the stockholder proposal. Any broker non-votes with respect to the stockholder proposal will not be counted as shares represented at the meeting and entitled to vote and, consequently, will have no effect on the outcome of the vote.

What happens if a quorum is not present at the SpecialAnnual Meeting?

        If the shares present in person or represented by proxy at the SpecialAnnual Meeting are not sufficient to constitute a quorum, the stockholders by a vote of the holders of a majority of votes present in person or represented by proxy (which may be voted by the proxyholders) may, without further notice to any stockholder (unless a new record date is set), adjourn the meeting to a different time and place to permit further solicitations of proxies sufficient to constitute a quorum.

What is an "abstention" and how would it affect the vote?

        An "abstention" occurs when a stockholder sends in a proxy with explicit instructions to decline to vote regarding a particular matter. Abstentions are counted as present for purposesTable of determining a quorum. Abstentions with respect to the reverse stock split proposal and the adjournment proposal will have the same effect as a vote "Against" the proposals.

What is a broker "non-vote" and how would it affect the vote?Contents

        A broker non-vote occurs when a broker or other nominee who holds shares for another person does not vote on a particular proposal because that holder does not have discretionary voting power for the proposal and has not received voting instructions from the beneficial owner of the shares so the broker is unable to vote those uninstructed shares. Brokers will have discretionary voting power to vote on both proposals so we do not anticipate any broker non-votes.

        Because adoption and approval of the reverse stock split proposal requires a majority of the outstanding shares, a broker non-vote will have the same effect as a vote "Against" the reverse stock split proposal.

        Because approval of the adjournment proposal requires an affirmative vote of a majority of the votes present in person or represented by proxy at the Special Meeting, a broker non-vote will have no effect on the outcome of the vote with regards to the adjournment proposal.

Could other matters be decided at the Special Meeting?

        Other than the reverse stock split proposal and the adjournment proposal, no other matters will be presented for action by the stockholders at the Special Meeting.

Who will count the votes?

        Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election.

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Who will conduct the proxy solicitation and how much will it cost?

        We are soliciting proxies from stockholders on behalf of our Board and will pay for all costs incurred by it in connection with the solicitation. In addition to solicitation by mail, the directors, officers and associates of Rite Aid and its subsidiaries may solicit proxies from stockholders of Rite Aid in person or by telephone, facsimile, or email without additional compensation other than reimbursement for their actual expenses.

        We have retained Morrow Sodali, LLC, a proxy solicitation firm, to assist us in the solicitation of proxies for the SpecialAnnual Meeting. Rite Aid will pay Morrow Sodali LLC a fee of approximately $20,000, plus reasonable out-of-pocket expenses.

        Arrangements also will be made with brokerage firms and other custodians, nominees, and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and we will reimburse such custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses in connection with the forwarding of solicitation materials to the beneficial owners of our stock.

        If you have any questions or need assistanceabout voting your shares or attending the Annual Meeting, please call our Investor Relations Department at (717) 975-3710.

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STOCKHOLDER ENGAGEMENT, MANAGEMENT TRANSITION, AND BOARD REFRESHMENT

        Since the termination of the Albertsons transaction in August 2018 and following the 2018 Annual Meeting, we have engaged in enhanced stockholder outreach efforts. These efforts provided an opportunity for independent directors to hear from stockholders directly regarding their perspectives and concerns. In addition, management has communicated with many retail stockholders and received their feedback. We greatly value the insightful input about the Company that our stockholders have provided in these and other exchanges over the past ten months. The feedback from these efforts has been summarized, shared, and considered by the Nominating and Governance Committee and the full Board.

        Investors raised a number of concerns and the Board has taken significant steps to address these items. Specifically, the principal issues raised by our stockholders related to: (1) Board refreshment, (2) an evaluation of management, (3) corporate governance matters, and (4) the Company's sustainability efforts.

New Board Leadership and Composition

        In the course of our stockholder engagement meetings over the past ten months, stockholders expressed concerns regarding the lack of Board refreshment in recent years, as well as concerns regarding our Board governance. The Board reviewed its structure in light of the Company's current operating and governance environment and, effective at the 2018 Annual Meeting, Mr. Standley was succeeded as Chairman of the Board by Bruce G. Bodaken. Subsequently, in December 2018, the Board amended the Company's By-Laws to provide that the Chairman of the Board shall be a director who is independent under the NYSE listing standards and the Company's Corporate Governance Guidelines.

        The Board has significantly accelerated its efforts to change the composition of the Board. As part of this process, at the 2018 Annual Meeting, three of the eight independent directors did not stand for reelection and the Board nominated three new independent directors. As a continuation of this process, two new directors were appointed by the Board following the resignation of two of our directors in April 2019. The five directors who have joined the Board over the past eight months will continue to bring fresh perspectives to the Board. In addition, Mr. Standley has not been nominated for reelection at the Annual Meeting.

        As a result of these changes in the Board's composition, the average tenure of our independent directors has decreased from approximately eight years prior to the 2018 Annual Meeting to approximately four years, with a relatively even distribution among new directors and directors of longer tenure. Through the Board refreshment process, the Board has increased the racial and ethnic diversity on the Board, with half of the Board being racially and ethnically diverse following the Annual Meeting. The Board also made gender diversity a priority as part of its most recent phase of its refreshment, resulting in more than one-third of our Board being women following the Annual Meeting.

Management Transition

        One of the Board's most important tasks is choosing the Company's Chief Executive Officer. Following the 2018 Annual Meeting, the Board continued to engage in rigorous and thoughtful evaluation and discussion regarding the Chief Executive Officer and other management positions. In March 2019, the Company announced a leadership transition and organizational restructuring to better align its structure with the Company's operations and to reduce costs. As part of the leadership transition, the Company announced that the Board would be commencing a search process for a new Chief Executive Officer. Mr. Standley will continue to serve as Chief Executive Officer of the Company until the appointment of his successor but has not been nominated for reelection to the Board at the

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Annual Meeting. The Company also announced additional management changes, which were effective in March 2019, and consolidated additional senior leadership roles that resulted in the elimination of certain positions.

Additional Corporate Governance Changes

        Since the 2018 Annual Meeting, the Board has considered and taken action with respect to certain corporate governance practices. In discussions with stockholders, some stockholders expressed a desire for Rite Aid stockholders to have the right to call a special meeting. In addition, our Nominating and Governance Committee has been monitoring trends and developments relating to special meeting rights. As a result of these discussions and trends, in April 2019, the Board amended the Company's By-Laws to permit special meetings of the stockholders of the Company to be called by stockholders holding at least 20% of the Company's common stock.

        At the 2018 Annual Meeting, stockholders approved a proposal requesting that Rite Aid prepare a sustainability report describing the Company's environmental, social and governance ("ESG") risks and opportunities. The Company anticipates that a report describing the Company's ESG risks and opportunities will be released prior to the Annual Meeting. Additional details regarding the Company's consideration of sustainability matters and the related business initiatives the Company has undertaken in recent years are described in the section entitled "Board of Directors—Sustainability."

        At the 2018 Annual Meeting, stockholders approved a proposal requesting that Rite Aid prepare a report describing the corporate governance changes the Company has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis. The Company anticipates that a report describing the Company's approach to oversight of opioid matters will be released by October 1, 2019. Additional details regarding the Company's oversight of opioid matters and the related business initiatives the Company has undertaken in recent years are described in the section entitled "Board of Directors—Opioid Matter Oversight."

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

General

        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 eight effective as of the Annual Meeting, and there are eight nominees for director at our Annual Meeting.

Director Nominees

        The Board of Directors, based on the recommendation of the Nominating and Governance Committee, has nominated Bruce G. Bodaken, Elizabeth 'Busy' Burr, Robert E. Knowling, Jr., Kevin E. Lofton, Louis P. Miramontes, Arun Nayar, Katherine Quinn, and Marcy Syms 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. Mr. Standley will continue to serve as Chief Executive Officer of the Company until the appointment of his successor but has not been nominated for reelection at the Annual Meeting.

        Each director elected at the Annual Meeting will hold office until the 2020 Annual Meeting of Stockholders. Each director elected at the Annual Meeting will serve until his or her successor is duly elected and qualified.

        If any nominee at the time of election is unable or unwilling to serve or is otherwise unavailable for election, and as a consequence thereof other nominees are designated, then the persons named in the proxy or their substitutes will have the discretion and authority to vote or to refrain from voting for other nominees in accordance with their judgment.

RECOMMENDATION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE.

BOARD OF DIRECTORS

        The following table sets forth certain information as of May 31, 2019 with respect to our director nominees. If elected, the term of each of the following persons will expire at the 2020 Annual Meeting of Stockholders.

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Board Composition

        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. In addition, the Board believes that having directors with both longer and shorter tenures on the Board helps transition the knowledge of the more experienced directors while providing a broad, fresh set of perspectives and a Board with a diversity of experiences and viewpoints. As discussed in the section entitled "Stockholder Engagement, Management Transition, and Board Refreshment" above, the Board has significantly accelerated its efforts to change the composition of the Board over the past eight months. All of the nominees of the Board are independent directors.

        As a result of these changes in the Board's composition, the average tenure of our independent directors has decreased from approximately eight years prior to the 2018 Annual Meeting to approximately four years, with a relatively even distribution among new directors and directors of longer tenure. In addition, half of the Board will be racially and ethnically diverse following the Annual Meeting. The Board also made gender diversity a priority as part of its most recent phase of its refreshment, resulting in more than one-third of our Board being women following the Annual Meeting.

Director Tenure*		Board Racial and Ethnic Diversity*
Board Gender Diversity*

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        In assessing Board composition and selecting and recruiting director candidates, 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 considers a wide range of factors, including the size of the Board, the experience and expertise of existing Board members, other positions the director candidate has held or holds (including other

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board memberships), and the candidate's independence. In addition, the Nominating and Governance Committee takes into account a candidate's ability to contribute to the diversity of background and experience represented on the Board, and it reviews its effectiveness in balancing these considerations when assessing the composition of the Board. The Board and Nominating and Governance Committee will continue to evaluate the composition of the Board as a whole as part of its ongoing refreshment in the coming year.

        Since the 2018 Annual Meeting, the Nominating and Governance Committee sought to continue the process of recruiting additional Board members whose qualifications align with the Company's refreshment process and long-term strategy. After considering a number of candidates and comprehensively reviewing these candidates' abilities and qualifications in sourcing candidates to fill the vacancies on the Board due to Joseph B. Anderson's and Michael N. Regan's resignations, the Nominating and Governance Committee recommended Busy Burr and Katherine Quinn for appointment to the Board. The Board appointed both candidates as directors in April 2019.

        The chart below summarizes the qualifications, attributes, and skills for each of our director nominees. The fact that we do not list a particular experience or qualification for a director nominee does not mean that nominee does not possess that particular experience or qualification.

Director Biographies

        Following are the biographies for our director nominees, including information concerning the particular experience, qualifications, attributes, or skills that led the Nominating and Governance Committee and the Board to conclude that such person should serve on the Board:

        Bruce G. Bodaken.    Mr. Bodaken served as Chairman and Chief Executive Officer of Blue Shield of California from 2000 through 2012. Previously, Mr. Bodaken served as President and Chief Operating Officer of Blue Shield of California from 1995 to 2000, and as Executive Vice President and Chief Operating Officer from 1994 to 1995. Prior to joining Blue Shield of California, Mr. Bodaken served as Senior Vice President and Associate Chief Operating Officer of F.H.P., Inc., a managed care provider, from 1990 to 1994 and held various positions at F.H.P. from 1980 to 1990. Currently, Mr. Bodaken sits on the board of WageWorks, Inc., and is a member of its audit committee. He is also a director and member of the Compensation Committee of iRhythm Technologies, Inc.

        Mr. Bodaken brings to the Board in-depth knowledge of the health insurance and managed care industries and more than 20 years of executive leadership skills.

        Busy Burr.    Ms. Burr most recently served as the chief innovation officer and vice president of healthcare trend and innovation at Humana where she was responsible for driving the design, build and adoption of new product platforms in digital health, provider experience, and telemedicine to improve health outcomes, create superior member experiences, and improve health care costs. She also founded Humana's strategic investing practice, Humana Health Ventures. Prior to joining Humana in 2015, Ms. Burr was managing director of Citi Ventures and led large-scale business transformation efforts as the global head of Citi's Business Incubation Function-DesignWorks. Earlier in her career, Ms. Burr spent seven years in investment banking at Morgan Stanley and Credit Suisse First Boston and previously served as vice president of global brand management at Gap, Inc. Ms. Burr holds an MBA

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from Stanford University and a bachelor's degree in Economics from Smith College. Ms. Burr serves on the Boards of Mr. Cooper Group and Satellite Healthcare and is a member of the Smith College Business Network Advisory Board.

        Ms. Burr brings to the Board extensive experience in the health industry, innovation, business strategy and brand management. Her experience and insights in these areas are directly relevant to the Company's business.

        Robert E. Knowling, Jr.    Mr. Knowling is currently Chairman of Eagles Landing Partners, which specializes in helping senior management formulate strategy, lead organizational transformations, and re-engineer businesses. Mr. Knowling also serves as an advisor-coach to chief executive officers. Mr. Knowling previously served as Chief Executive Officer of Telwares, a JP Morgan Chase/One Equity Partners Private Equity-owned company from 2005 to 2009. From 2001 to 2005, Mr. Knowling was Chief Executive Officer of the New York City Leadership Academy, an independent nonprofit corporation created by Chancellor Joel I. Klein and Mayor Michael R. Bloomberg that is chartered with developing the next generation of principals in the New York City public school system. From 2001 to 2003, Mr. Knowling was Chairman and Chief Executive Officer of SimDesk Technologies, Inc. Prior to this, Mr. Knowling was Chairman, President and Chief Executive Officer of Covad Communications, a Warburg Pincus Private Equity-backed start-up company. Mr. Knowling currently serves on the board of directors of K12 Inc. and Roper Technologies Inc. Mr. Knowling previously served as a director of Convergys Corporation until 2018, Ariba, Inc. until 2012, Heidrick & Struggles International, Inc. until 2015, Hewlett-Packard Company until 2005, and The Immune Response Corporation until 2005.

        Mr. Knowling brings to the Board extensive experience in executive management and leadership roles, including experience leading companies through periods of high growth and organizational turnaround. In addition, his service on other boards of directors of a number of publicly-traded companies enables Mr. Knowling to share insights with the Board regarding corporate governance best practices.

        Kevin E. Lofton.    Mr. Lofton was named Chief Executive Officer of Chicago-based CommonSpirit Health ("CSH"), effective February 1, 2019. CSH is the result of a merger between Catholic Health Initiatives ("CHI") and Dignity Health. With $29 billion in revenues, CSH is one of the largest health delivery systems in the United States. Mr. Lofton joined CHI in 1998 and served as CEO from 2003 until January 2019. Mr. Lofton previously served as Chief Executive Officer of the UAB Hospital in Birmingham and Howard University Hospital in Washington, D.C. Mr. Lofton is also a director and member of the audit and compensation committees of Gilead Sciences, Inc.

        Mr. Lofton brings to the Board an in-depth knowledge and understanding of the healthcare industry and valuable executive leadership skills from senior management and leadership roles in healthcare systems and hospitals.

        Louis P. Miramontes.    Mr. Miramontes worked at KPMG LLP from 1976 to 2014, where he served in many leadership roles, including Managing Partner of the San Francisco office and Senior Partner for KPMG's Latin American region. Mr. Miramontes was also an audit partner directly involved with providing audit services to public and private companies, which included working with client boards of directors and audit committees regarding financial reporting, auditing matters, SEC compliance, and Sarbanes-Oxley regulations. Mr. Miramontes currently serves on the board of directors of Lithia Motors, Inc., one of the largest providers of personal transportation solutions in the U.S., and Oportun, Inc., a mission-driven financial services company.

        Mr. Miramontes brings to the Board extensive experience in accounting, financial reporting, and corporate governance. His experience as an audit partner provides useful insights into financial and regulatory matters relevant to the Company's business.

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        Arun Nayar.    Mr. Nayar retired in December 2015 as Executive Vice President and Chief Financial Officer of Tyco International, a $10+ billion fire protection and security company, where he was responsible for managing the company's financial risks and overseeing its global finance functions, including its tax, treasury, mergers and acquisitions, audit, and investor relations teams. Mr. Nayar joined Tyco as Senior Vice President and Treasurer in 2008 and was also Chief Financial Officer of Tyco's ADT Worldwide. From 2010 until 2012, Mr. Nayar was Senior Vice President, Financial Planning & Analysis, Investor Relations, and Treasurer. Prior to joining Tyco, Mr. Nayar spent six years at PepsiCo, Inc., most recently as Chief Financial Officer of Global Operations and, before that, as Vice President and Assistant Treasurer—Corporate Finance. Mr. Nayar currently serves on the Board of Directors of Bemis Company, Inc., a manufacturer of packaging products, and TFI International Inc., a leader in the transportation and logistics industry. Bemis Company, Inc. has announced a combination with Amcor Limited and has announced that Mr. Nayar will be a member of the board of the combined company, Amcor plc, upon consummation of the transaction. Mr. Nayar is also a Senior Advisor to McKinsey & Company and to a private equity firm, BC Partners. He also serves as a board member of privately-held GFL Environmental, a BC Partners portfolio company.

        Mr. Nayar brings over 35 years of financial experience to the Board. His experience as a chief financial officer provides useful insights into operational and financial metrics relevant to the Company's business.

        Katherine Quinn.    Ms. Quinn has served as vice chairman and chief administrative officer of U.S. Bancorp since April 2017 and is responsible for leading human resources, strategy, and corporate affairs at the company. Ms. Quinn joined U.S. Bancorp in 2013 as executive vice president and chief strategy and reputation officer. Prior to joining U.S. Bancorp, Ms. Quinn most recently served as senior vice president and chief marketing officer at Anthem, a health benefits company, where she directed the company's marketing, customer communications, digital, customer experience, and retail strategies. She previously served as Anthem's vice president of corporate marketing. Earlier in her career, Ms. Quinn served as chief marketing and strategy officer at a division of The Hartford, following leadership roles in strategy and product development at CIGNA and PacifiCare Health Systems, respectively. Ms. Quinn earned an MBA from University of Phoenix and a bachelor's degree from Hunter College. In addition to her role at U.S. Bancorp, Ms. Quinn presently serves as a member of the Board of Directors of Taylor Corporation and the Board of Trustees for both United Way U.S.A. and Fraser, a non-profit organization serving children and adults with special needs. She previously served as a member of the Board of Trustees for Minnesota Public Radio until May 2019.

        Ms. Quinn brings to the Board extensive experience in business strategy, marketing, customer experience, and health benefits. Her experience and insights in these areas are directly relevant to the Company's business.

        Marcy Syms.    Ms. Syms served as a director of Syms Corp, a chain of retail clothing stores, from 1983, when she was named President and COO, until 2012. Ms. Syms became CEO of Syms Corp in 1998 and was named Chair in 2010. In November 2011, Syms Corp and its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and ceased all retail operations. Ms. Syms is also a founding member of the board of directors of the Syms School of Business at Yeshiva University. Currently, Ms. Syms serves as President of the Sy Syms Foundation. Ms. Syms served as Founder and President of the TPD Group LLC, a multi-generational succession planning company, from 2013 to 2018. Ms. Syms is also a member of the board of directors of Benco Dental.

        Ms. Syms brings to the Board over 18 years of experience as a chief executive officer of a chain of retail stores, including an array of skills in strategic planning, marketing, and human resources matters similar to those faced by the Company.

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Board Leadership

        Mr. Bodaken became Chairman of the Board effective at the 2018 Annual Meeting. The Board has determined that Mr. Bodaken will continue to serve as Chairman of the Board.

        In December 2018, the Board amended the Company's By-Laws to provide that the Chairman of the Board shall 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 Chairman of the Board and Chief Executive Officer positions 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 Chairman.

        As Chairman, Mr. Bodaken's responsibilities subsume the responsibilities of the Lead Independent Director and include:

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presiding at all meetings of the Board, including executive sessions of the non-management directors;



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the authority to call meetings of the Board and of the non-management directors;



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serving as a liaison between the Chief Executive Officer and independent directors and facilitating communications between other members of the Board and the Chief Executive Officer (any director is free to communicate directly with the Chief Executive Officer; the Chair's role is to attempt to improve such communications if they are not entirely satisfactory);



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working with the Chief Executive Officer in the preparation of and approving Board meeting agendas and schedules, and the information to be provided to the Board;



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chairing the periodic review of the performance of the Chief Executive Officer;



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otherwise consulting with the Chief Executive Officer on matters relating to corporate governance and Board performance; and



•

if requested by major stockholders, ensuring that he is available, when appropriate, for consultation and direct communication.

Corporate Governance

        We recognize that good corporate governance is an important means of protecting the interests of our stockholders, associates, customers, suppliers, and the community. The Board of Directors, through the Nominating and Governance Committee, monitors corporate governance developments and proposed legislative, regulatory, and stock exchange corporate governance reforms. In April 2019, the Board enhanced our corporate governance by amending the Company's By-Laws to permit special meetings of stockholders of the Company to be called by stockholders holding at least 20% of the Company's common stock.

        Website Access to Corporate Governance Materials.    Our corporate governance information and materials, including our Corporate Governance Guidelines, current charters for each of the Audit Committee, Compensation Committee, Nominating and Governance Committee, and Executive Committee, our Code of Ethics for the CEO and Senior Financial Officers, our Code of Ethics and Business Conduct, our Stock Ownership Guidelines, and our Related Person Transaction Policy are posted on our website atwww.riteaid.com under the headings "Corporate Info—Governance" and are available in print upon request to Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011, Attention: Secretary. The information on our website is not, and shall not be deemed, a part of this proxy statement. The Board regularly reviews corporate governance developments and will modify these materials and practices from time to time as warranted.

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        Codes of Ethics.    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 atwww.riteaid.com under the headings "Corporate Info—Governance—Code of Ethics."

        Director Independence.    For a director to be considered independent under the NYSE corporate governance listing standards, the Board of Directors must affirmatively determine that the director does not have any direct or indirect material relationship with the Company, including any of the relationships specifically proscribed by the NYSE independence standards. The Board considers all relevant facts and circumstances in making its independence determinations. Only independent directors may serve on our Audit Committee, Compensation Committee, and Nominating and Governance Committee.

        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: Bruce G. Bodaken, Busy Burr, Robert E. Knowling, Jr., Kevin E. Lofton, Louis P. Miramontes, Arun Nayar, Katherine Quinn, and Marcy Syms. The Board also determined that Joseph B. Anderson and Michael N. Regan, who served as directors until April 2019, and David R. Jessick, Myrtle Potter, and Frank A. Savage, who served as directors until October 30, 2018, also satisfied the independence requirements of the NYSE listing standards. The Board also determined that the members of the Audit Committee satisfy the additional independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the additional NYSE independence requirements for audit committee members. In addition, the Board has determined that the members of the Compensation Committee satisfy the additional NYSE independence requirements for compensation committee members.

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

        Majority Voting Standard and Policy.    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. For this purpose, a contested election means any meeting of stockholders for which (i) the Secretary of the Company receives a notice that a stockholder (or group of stockholders) has nominated a person for election to the Board in compliance with the advance notice requirements for stockholder nominees for director or the proxy access requirements, in each case as set forth in the By-Laws and (ii) such nomination has not been withdrawn by such stockholder (or group of stockholders) on or prior to the 14^th day preceding the date the Company first mails its notice of meeting for such meeting to the stockholders.

        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 Chairman of the Board for consideration by the Board, subject to the procedures set forth in the guidelines.

Board Oversight of Risk Management

        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: operational, financial performance, financial reporting, legal and regulatory, and strategic and reputational.

        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,

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supports the risk oversight function of the Board. The Board of Directors, at least annually, reviews with management its plans and processes for managing risk. The Board also receives periodic updates from the Company's compliance and internal assurance services with regard to the overall effectiveness of the Company's risk management program 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.

        In addition, the Board and the Audit Committee 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 clients of these entities.

        In addition, other Board committees consider risks within their respective areas of responsibility and advise the Board of any significant risks. For example, the Compensation Committee considers risks relating to the Company's compensation programs and policies and the Audit Committee focuses on assessing and mitigating financial reporting risks, including risks related to internal control over financial reporting and legal and compliance risks.

Compensation-Related Risk Assessment

        The Compensation Committee 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. Together with executive management, the Compensation Committee has considered the risks arising from the Company's compensation programs for its executives and associates and has concluded that the compensation policies are not reasonably likely to have a material adverse effect on the Company.

        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 incentive programs that limit risk include:

•

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



•

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



•

Incorporation of measures in the performance awards to assess how efficiently and effectively we deploy our assets (return on net assets) and to compare our stock performance against the Russell 3000 Index (total stockholder return).



•

Stock ownership guidelines that promote executive stock ownership.

Committees of the Board of Directors

        The Board of Directors has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Executive Committee. Current copies of the charters for each of these committees are available on our website atwww.riteaid.com under the headings "Corporate Info—Governance—Corporate Governance Committees—Committee Charters."

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        The current members of the committees are identified in the following table.

        Audit Committee.    The Audit Committee, which held nine meetings during fiscal year 2019, currently consists of Louis P. Miramontes (Chair), Busy Burr, and Arun Nayar. The Board has determined that each of these individuals is an independent director under the NYSE listing standards and satisfies the additional independence requirements of Rule 10A-3 under the Exchange Act and the additional requirements of the NYSE listing standards for audit committee members. See the section entitled "Corporate Governance—Director Independence" above. The Board has determined that each of these individuals is also "financially literate" under the applicable NYSE listing standards. The Board has determined that both Louis P. Miramontes and Arun Nayar qualify as an "audit committee financial expert" as that term is defined under applicable SEC rules.

        The functions of the Audit Committee include the following:

•

Appointing, compensating, and overseeing our independent registered public accounting firm ("independent auditors");



•

Overseeing management's fulfillment of its responsibilities for financial reporting and internal control over financial reporting; and



•

Overseeing the activities of the Company's internal audit function.

        The independent auditors and internal auditors meet with the Audit Committee with and without the presence of management representatives. For additional information, see the section entitled "Audit Committee Report," as well as the Audit Committee's charter, which is posted on our website atwww.riteaid.com under the headings "Corporate Info—Governance—Corporate Governance Committees—Committee Charters."

        Compensation Committee.    The Compensation Committee, which held four meetings during fiscal year 2019, currently consists of Robert E. Knowling, Jr. (Chair), Louis P. Miramontes, and Katherine Quinn. The Board has determined that each of these individuals is an independent director under the NYSE listing standards and satisfies the additional independence requirements of the NYSE listing standards for compensation committee members. See the section entitled "Corporate Governance—Director Independence" above.

        The functions of the Compensation Committee include the following:

•

Administering Rite Aid's stock option and other equity incentive plans;



•

Reviewing and approving the base salaries of the Company's executive officers and reviewing and recommending to the Board the base salary of the CEO;



•

Reviewing and approving the Company's goals and objectives relevant to the incentive-based compensation of the Company's executive officers (including the CEO), evaluating the

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performance of the Company's executive officers (including the CEO) in light of these goals and objectives, and determining and approving the incentive-based compensation of the Company's executive officers (including the CEO) based on such evaluation;

•

Setting corporate performance targets under all annual bonus and long-term incentive compensation plans as appropriate and determining annually the individual bonus award opportunities for the Company's executive officers; and



•

Reviewing and approving all executive officers' employment agreements and severance arrangements.

        The Compensation Committee reviews the performance of the Company's executive personnel, including the Company's named executive officers, and develops and makes recommendations to the Board of Directors with respect to executive compensation policies. The Compensation Committee is empowered by the Board of Directors to award to executive officers appropriate bonuses, stock options, stock appreciation rights, and stock-based awards. The details of the processes and procedures for the consideration and determination of the compensation of our named executive officers are described in the section entitled "Executive Compensation—Compensation Discussion and Analysis." The objectives of the Compensation Committee are to support the achievement of desired Company performance, to provide compensation and benefits that will attract and retain superior talent, to reward performance, and to fix a portion of compensation to the outcome of the Company's performance.

        As provided in its charter, the Compensation Committee has the authority to engage an external compensation consultant and to determine the scope of any services provided. The Compensation Committee may terminate the engagement at any time. The external compensation consultant reports to the Compensation Committee Chair.

        Since June 2010, the Compensation Committee has utilized Exequity LLP as its independent consultant. With respect to fiscal year 2019, Exequity LLP reviewed recommendations and analysis prepared by management and provided advice and counsel to the Compensation Committee. Exequity LLP does not provide any other services to the Company. The Compensation Committee has assessed the independence of Exequity LLP, taking into consideration the factors set forth in the NYSE listing standards and SEC rules, and determined that the engagement of Exequity LLP does not raise any conflicts of interest.

        Nominating and Governance Committee.    The Nominating and Governance Committee, which held eight meetings during fiscal year 2019, currently consists of Kevin Lofton (Chair), Bruce G. Bodaken, and Marcy Syms. The Board has determined that each of these individuals is an independent director under the NYSE listing standards. See the section entitled "Corporate Governance—Director Independence" above.

        The functions of the Nominating and Governance Committee include the following:

•

Identifying and recommending to the Board individuals qualified to serve as Rite Aid directors;



•

Recommending to the Board individual directors to serve on committees of the Board;



•

Advising the Board with respect to matters of Board composition and procedures;



•

Developing and recommending to the Board a set of corporate governance principles applicable to Rite Aid and overseeing corporate governance matters generally;



•

Overseeing the annual evaluation of the Board and management; and



•

Reviewing and approving or ratifying related person transactions in which the Company is a participant.

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        Executive Committee.    The members of the Executive Committee currently are Bruce G. Bodaken (Chair), Arun Nayar, and John T. Standley. The Executive Committee did not meet during fiscal year 2019. The Executive Committee, except as limited by Delaware law, is empowered to exercise all of the powers of the Board of Directors.

Nomination of Directors

        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:

•

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



•

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.

        The stockholder recommendation and information described above must be sent to Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania 17011, Attention: 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 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 that a candidate demonstrate, 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 have an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities. 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.

        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 above, 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. As described above, the committee will also consider candidates recommended by stockholders.

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        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.

        Russell Reynolds Associates, an executive search consulting firm, assisted the Nominating and Governance Committee in sourcing director candidates as part of the continuation of the Board's accelerated refreshment process. With respect to the two additions to the Board in April 2019, Busy Burr and Katherine Quinn were both vetted and recommended by Russell Reynolds Associates to the Nominating and Governance Committee for the Committee's consideration for appointment as independent directors.

Executive Sessions of Non-Management Directors

        In order to promote discussion among the non-management directors, regularly scheduled executive sessions (i.e., meetings of non-management directors without management present) are held to review such topics as the non-management directors determine. Mr. Bodaken, our Chairman of the Board, presides at our executive sessions. The non-management directors met in executive session 14 times during fiscal year 2019.

Communications with the Board of Directors

        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 or electronically. To communicate with the Board of Directors, the non-management directors, a committee of directors, or any individual directors, including our Independent Chairman of the Board, correspondence should be addressed to the Board of Directors or any such individual directors, or committee of directors by either name or title. All such correspondence should be sent to Rite Aid Corporation, c/o Secretary, P.O. Box 3165, Harrisburg, Pennsylvania 17105. To communicate with any of the directors electronically, stockholders should go to our website atwww.riteaid.com. Under the headings "Corporate Info—Governance—Board of Directors—Contact the Board of Directors" you will find an on-line form, as well as an email address, that may be used for writing an electronic message to the Board, the non-management directors, any individual directors, or any committee of directors. Please follow the instructions on the website in order to send your message.

        All communications received as set forth above will be opened by the Secretary for the purpose of determining whether the contents represent a message to the directors, and depending on the facts and circumstances outlined in the communication, will be distributed to the Board, the non-management directors, an individual director, or a committee of directors, as appropriate. The Secretary will make sufficient copies of the contents to send to each director who is a member of the Board or of the committee to which the envelope or email is addressed.

Directors' Attendance at Board, Committee, and Annual Meetings

        The Board of Directors held 26 meetings during fiscal year 2019. Each incumbent director attended at least 75% of the aggregate of the 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.

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        It is our policy that directors are invited and encouraged to attend the annual meeting of stockholders. Eight of our nine directors serving on the Board or nominated to serve on the Board at the time of the meeting attended the 2018 Annual Meeting of Stockholders.

Sustainability

        At the 2018 Annual Meeting, stockholders approved a proposal requesting that Rite Aid prepare a sustainability report describing the Company's environmental, social, and governance (ESG) risks and opportunities. A report describing the Company's ESG risks and opportunities will be released prior to the Annual Meeting. When available, the report will be posted on our website atwww.riteaid.com under the headings "Corporate Info—Investor Relations."

        At Rite Aid, we are dedicated to integrating Environmental, Social, and Governance initiatives into our operations, not only to retain value for our shareholders, our customers, and our associates, but also because "integrity in all we do" is one of our core values.

        We have a corporate social responsibility committee comprised of senior level leadership stakeholders with cross functional representation within the Company. The corporate social responsibility committee produces our annual CSR report and leads progress on sustainability initiatives and programs throughout the company. Our corporate social responsibility committee provides corporate social responsibility updates to our Board.

        Our Code of Business Ethics and Conduct outlines our core values and describes additional corporate policies on ESG issues, including polices in the areas of, among others, customer and worker safety and environmental management, including energy and waste minimization. We expect our officers, directors, and associates to uphold the standards set forth in the Code of Business Ethics and Conduct at work every day.

        We conduct our business in compliance with applicable environmental, health, and safety regulations. We view conserving energy, avoiding the unnecessary generation of waste, and carrying out company activities in ways that preserve and promote a clean, safe, and healthy environment as the environmental and social sustainability priorities for our business.

        We view adopting green business principles as part of our overall business strategy and believe it is a conscientious decision for our business, our community, and the environment. Over the past five years, we have made significant investments in energy efficiency and waste reduction initiatives and have committed to building new and remodeled stores to meet or exceed the national building code standards for energy efficiency. For example, in striving to conserve energy and avoid the unnecessary generation of waste, we have installed LED lighting to reduce our annual electric consumption by 18 million KWh, completed a redesign of our Thrifty Ice Cream Plant in El Monte, California, which included upgrades to a safer refrigeration system and to lighting and HVAC systems to reduce our annual electric consumption by eight million kWh, and installed a 1098 kW solar system at our distribution center in Lancaster, California that produces 30% of the location's power needs. Over the past three years, we have seen a steady decrease in energy consumption in our retail stores and have reduced our total energy consumption in our retail stores during that period by 19,031,630 kWh on a comparable store basis. In addition, Rite Aid utilizes best-in-class architectural and engineering design firms that employ Building Council LEED™-accredited staff in order to help us develop our new store designs that meet or exceed the national building code standards for energy efficiency.

        We have established a Chemical Policy and, in 2018, we expanded our Restricted Substances List as part of our ongoing efforts to meet customer expectations for chemical management and product safety. We have been working closely with our supplier partners to eliminate eight chemicals of high concern from formulated private brand items since 2016, and we expect to eliminate these chemicals from our private brand items by 2020. We have also expanded our Restricted Substances List to bring

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the total number of restricted chemicals from eight to 69. To assist stakeholders in understanding the impact of these initiatives, in 2019 we will begin reporting progress towards 100% elimination of the eight chemicals of high concern from our private brand products and the number of new products launched in a year that are free of the eight chemicals of high concern. Our long-term goal is to extend the Chemical Policy to cover all of the products sold in our stores. In 2019, we plan to extend the chemical program to cover formulated products like over-the-counter medications, vitamins and supplements, as well as food and beverages.

        We have also implemented "Responsible Sourcing Guidelines" (and objectives) to promote supply chains that support responsible forest management, the appropriate use of recycled content and responsible sourcing, including transparency, protocols, and mechanisms to track the wood fiber in the supply chain from its origin to the forest products supplied to Rite Aid and its customers. Our initial goal is to address the largest volume of forest products used in Rite Aid's daily business operations, such as advertising circular papers, copy and print paper and the pharmacy bags and labels used by our pharmacy and distribution centers. We have already made significant progress in achieving our goal, with 100% of the paper purchased for our advertising circulars being sourced from responsibly managed, forest-based suppliers that are compliant with independent forest certification standards.

        Further information about our commitment to sustainability is available on our website under the headings "Corporate Info—Environmental Responsibility" and "Corporate Info—Chemical Policy."

Opioid Matter Oversight

        The Board, the Company's management, and the Company's employees recognize the opioid epidemic that is afflicting Americans across the United States as a serious public health issue, and we have publicly expressed our commitment to addressing opioid abuse in the communities we serve. At the 2018 Annual Meeting, stockholders approved a proposal requesting that Rite Aid prepare a report describing the corporate governance changes the Company has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis. The Company anticipates that a report describing the Company's approach to oversight of opioid matters will be released by October 1, 2019.

        The Board and management review the Company's plans and processes for managing risk at least annually. The Board oversees risk management and considers specific risk topics on an ongoing basis, including the risks associated with opioid medications. The Board also receives periodic updates from internal subject matter experts with regard to the overall effectiveness of the Company's risk management program 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 the Board, a Board committee, or management, and including risks related to opioid dispensing and the status of ongoing initiatives to combat addiction risk in the communities Rite Aid serves. In addition, each Board committee regularly reports to the full Board on risks within their respective areas of responsibility. For example, the Compensation Committee annually reviews the Company's compensation plans, programs, and policies as they relate to the Company's risk management. Rite Aid management will continue to keep the Board updated on a regular basis concerning opioid dispensing-related activities and initiatives to combat addiction.

        At Rite Aid, we take our role as a community healthcare provider very seriously. This means going beyond simply complying with state laws and regulations to also raise awareness about important issues like prescription drug safety and drug abuse prevention. We are also committed to raising awareness about important issues like drug abuse prevention and prescription drug safety while advocating for increased access to education, treatment, and proper medication disposal. As one of health care's most accessible practitioners, pharmacists are uniquely positioned to help educate their patients and communities about promoting prescription safety. We are committed to working with our customers,

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local law enforcement, community groups, and both federal and state agencies to help reduce the opioid epidemic that is impacting our communities throughout the United States. Rite Aid's comprehensive strategy to address opioid and other drug abuse and misuse includes:

•

Educating our patients so they understand the risks of opioid abuse starting with their first opioid prescription, including providing all patients with new opioid prescriptions with mandatory counseling on their prescription from Rite Aid pharmacists.



•

Making DisposeRx, a first-of-its-kind opioid disposal solution, available at all of Rite Aid's pharmacies nationwide. Rite Aid provides DisposeRx packets to patients with new opioid prescriptions and offers DisposeRx packets to patients with chronic opioid prescriptions every six months. DisposeRx packets contain a biodegradable powder that, when mixed with water in the prescription vial, dissolves drugs, forming a viscous gel which may be safely discarded in the trash.



•

Making naloxone, a medication that can be used to reverse the effects of an opioid overdose, available without a prescription at all of Rite Aid's pharmacies nationwide.



•

Supporting the Centers for Disease Control and Prevention guidelines for prescribing opioids, including limiting acute opioid prescriptions to a seven-day supply, limiting the daily dosage of opioids dispensed based on the strength of the opioid, and requiring the use of immediate-release formulations of opioids before extended-release opioids are dispensed.



•

Providing ongoing education and training of Rite Aid pharmacists, including risk factors for opioid abuse, how to identify symptoms of an overdose and what to do in the event of an overdose, an overview of the naloxone therapies available, and proper administration of each and recommendations for follow-up care.



•

Participating in prescription drug monitoring programs, assuring that all pharmacists are registered for the programs in their respective state(s) of practice, and including a "red flag" process for pharmacists to regularly review prescriptions for patients.



•

Adding resources on drug safety and disposal onwww.riteaid.com under the headings "Pharmacy & Immunizations—Drug Safety & Disposal." Visitors can search for a disposal site in their community, learn how to properly dispose of medication at home, access resources provided by the Food and Drug Administration and the Drug Enforcement Administration ("DEA"), and find information on treatment for drug abuse and addiction.



•

Continuing its process to identify physicians with questionable prescription writing practices and, when appropriate, proactively discontinuing filling controlled substances for certain prescribers.



•

Continuing to support National Take-Back Days to encourage our patients to bring their unused or unwanted medications to designated sites sponsored by local law enforcement and the DEA for proper handling.



•

Developing the KidsCents Safe Medication Disposal program that is supported through the Rite Aid Foundation, which provides medication disposal units, free of charge, to local and state law enforcement agencies and enables individuals to drop off unwanted or expired medications in secure, safe locations. The Rite Aid Foundation committed $1 million to this initiative and, to date, over 450 units have been installed across the country since the launch of the program in August 2017.



•

Adding 100 new Safe Medication Disposal units in select Rite Aid stores nationwide.



•

Through the Rite Aid Foundation, committing $1.7 million over three years in partnership with EVERFI, a leading education technology company, to educate high school students to make safe and healthy decisions about prescription drugs. The digital prescription drug abuse prevention

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course is the flagship initiative of the Prescription Drug Safety Network, the nation's first public-private initiative to combat prescription drug abuse by providing prevention education to schools.

        Further information about medication safety and disposal is available on our website under the headings "Pharmacy & Immunizations—Drug Safety & Disposal."

Directors' Compensation

        Each non-management director receives an annual payment of $100,000 in cash, payable quarterly in arrears. In addition, (i) the Lead Independent Director received an additional annual payment of $25,000 (for so long as the Board had a Lead Independent Director); (ii) the Independent Chairman of the Board receives an additional annual payment of $100,000; (iii) the Chair of the Audit Committee receives an additional annual payment of $20,000; (iv) the Chairs of the Compensation Committee and the Nominating and Governance Committee each receive an additional annual payment of $10,000; and (v) each member of the Audit Committee (other than the Chair) receives an additional annual payment of $10,000. Non-management directors also receive an annual award of restricted stock units valued at $120,000 (with the number of shares subject to the grant calculated by dividing 120,000 by the closing price of our common stock on the day before the date of grant, rounded to the nearest whole share). Prior to 2019, the annual grant provided for vesting with respect to 80% on the first anniversary of the grant and 10% on each of the second and third anniversaries of the grant. The Compensation Committee undertook a review of non-management director compensation in December 2018. The Compensation Committee engaged with independent compensation consultant Exequity LLP to provide a recommendation of our overall director compensation as compared to our new peer group as discussed in the section entitled "The Compensation Committee's Process—Assessment of Company performance." As a result of the recommendation to, and approval by, the Board of Directors, for fiscal year 2019 the amount of each of the annual cash retainer and annual stock-based award described above remain unchanged. The annual stock-based award for fiscal year 2019 vests on the date of grant and the shares subject to the grant become payable on a deferred basis upon the separation from service of the director. Directors who are officers and/or Rite Aid associates receive no separate compensation for service as directors or committee members. Directors are reimbursed for travel and lodging expenses associated with attending Board of Directors and Board committee meetings.

        Non-management directors are subject to our Stock Ownership Guidelines discussed on pages 51 to 52.

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DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2019

        The following Director Compensation Table sets forth fees, awards, and other compensation paid to or earned by our non-management directors who served during the fiscal year ended March 2, 2019:

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PROPOSAL NO. 2

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        The accounting firm of Deloitte & Touche LLP ("Deloitte & Touche") has been selected as the independent registered public accounting firm for the Company for the fiscal year ending February 29, 2020. Deloitte & Touche has audited the accounts and records of Rite Aid's proxy solicitor,Aid and its subsidiaries since 2000. Although the selection of accounting firms does not require ratification, the Board of Directors has directed that the appointment of Deloitte & Touche be submitted to the stockholders for ratification due to the significance of their appointment by calling (800) 662-5200 toll-free.the Company. If the stockholders do not ratify the appointment of Deloitte & Touche, the Audit Committee will consider the appointment of another independent registered public accounting firm. A representative of Deloitte & Touche will be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions.

RECOMMENDATION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020.

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PROPOSAL NO. 13

ADVISORY VOTE ON THE REVERSE STOCK SPLIT PROPOSAL

GeneralCOMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

        Rite Aid is asking stockholders to adopt and approve a proposed amendment to our Amended Restated CertificateIn accordance with the requirements of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction. Our Board of Directors has unanimously approved and declared advisable the proposed amendment, and recommends that our stockholders adopt and approve the proposed amendment. The foregoing descriptionSection 14A of the proposed amendment is a summary and is subject to the full text of the proposed amendment, which is attached toExchange Act, we are including in this proxy statement as Annex A.

        If stockholdersa resolution, subject to stockholder vote, to approve, this proposal,on a non-binding, advisory basis, the Boardcompensation of Directors will cause the Certificate of Amendment to be filed with the Delaware Secretary of State and effect the Reverse Stock Split and the Authorized Share Reduction only if the Board of Directors determines that the Reverse Stock Split and the Authorized Share Reduction would beour Named Executive Officers (as defined in the best interestssection entitled "Executive Compensation—Compensation Discussion and Analysis").

        Prior to voting, stockholders should carefully review our discussion of Rite Aidthe compensation of our Named Executive Officers, as presented in the Compensation Discussion and its stockholders. The Reverse Stock SplitAnalysis, tables, and Authorized Share Reduction could become effectivenarrative disclosure on pages 33 to 66, as soonwell as the business day immediately following the Special Meeting. The Boarddiscussion of Directors also may determine in its discretion not to effect the Reverse Stock Split and the Authorized Share Reduction and not to file the Certificate of Amendment. Rite Aid will not effect the Reverse Stock Split without also effecting the Authorized Share Reduction, and vice versa. No further action on the part of stockholders will be required to either implement or abandon the Reverse Stock Split or the Authorized Share Reduction.

        The proposed amendment, if effected, will effect a Reverse Stock Split of the outstanding shares of Rite Aid's common stock at a reverse stock split ratio of 1-for-10, 1-for-15 or 1-for-20, as determined by our Board of Directors at a later date. As of the February 5, 2019 record date, 1,079,906,609 shares of our common stock were issued and outstanding. Based on such number of shares of our common stock issued and outstanding, immediately following the effectiveness of the Reverse Stock Split (and without giving any effect to the payment of cash in lieu of fractional shares), we will have, depending on the reverse stock split ratio selected by our Board of Directors, issued and outstanding shares of stock as illustrated in the table under the caption "—Effects of the Reverse Stock Split and the Authorized Share Reduction—Effect on Shares of Common Stock".

        The proposed amendment will result in a reduction of the total number of shares of Rite Aid's common stock that Rite Aid is authorized to issue by a corresponding ratio. See "—Effects of the Reverse Stock Split and the Authorized Share Reduction—Effect on Shares of Common Stock" for the number of shares of common stock authorized but not outstanding or reserved that will remain available for issuance immediately following the effectiveness of the Reverse Stock Split and the Authorized Share Reduction.

        All holders of Rite Aid's common stock will be affected proportionately by the Reverse Stock Split and the Authorized Share Reduction.

        No fractional shares of common stock will be issuedmodifications made as a result of stockholder outreach efforts on pages 36 to 37, and the Reverse Stock Split. Instead, anydiscussion regarding the Compensation Committee on pages 17 to 18.

        The Company's primary compensation goals for our Named Executive Officers are to attract, motivate, and retain the most talented and dedicated executives and to align the interests of our Named Executive Officers with the interests of our stockholders. The Company's compensation programs are designed to reward our Named Executive Officers for the achievement of annual and long-term strategic and operational goals and the achievement of increased total stockholder who would have been entitled to receive a fractional share as a result of the Reverse Stock Split will receive cash payments in lieu of such fractional shares. Each common stockholder will holdreturn, while at the same percentagetime avoiding the encouragement of unnecessary or excessive risk-taking. The Company encourages stockholders to review the outstanding common stock immediately following the Reverse Stock Split as that stockholder did immediately prior to the Reverse Stock Split, except to the extent that the Reverse Stock Split results in stockholders receiving cash in lieu of fractional shares. The par value of our common stock will continue to be $1.00 per share (see "—Effects of the Reverse Stock Split and the Authorized Share Reduction—Reduction in Stated Capital").

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Reasons for the Reverse Stock Split and the Authorized Share Reduction

        Reverse Stock Split.     Our Board of Directors has determined that it isexecutive compensation disclosure in the best interestsCompensation Discussion and Analysis section and executive compensation tables in this proxy statement for complete details of Rite Aidits compensation program for its Named Executive Officers, changes made since the prior fiscal year, and its stockholdershow the program is designed to combine our shares of common stock at one of three reverse stock split ratios, as determined byachieve the Board of Directors at a later date, in order to reduce the number of shares of common stock outstanding. Our Board of Directors authorized the reverse split of our common stock with the primary intent of increasing the per share trading price of our common stock in order to meet the NYSE's price criteria for continued listing on that exchange. Our common stock is publicly traded and listed on the NYSE under the symbol "RAD." Accordingly, for these and other reasons discussed below, we believe that effecting the Reverse Stock Split is in Rite Aid's and our stockholders' best interests.Company's compensation objectives.

        On January 3, 2019, we were notified in writing by the NYSE that the average closing trading price of our common stock was below the criteria of the NYSE's continued listing standards, as the average per share closing price of our common stock over a consecutive 30-trading day period was less than $1.00. In the letter, the NYSE stated that we have a six-month cure period that started on January 3, 2019 to bring the price of our common stock and the 30-trading day average closing price of our common stock above $1.00. In the letter, the NYSE further stated that in the event a $1.00 share price and a $1.00 average share price over the preceding 30 trading days are not attained at the expiration of the six-month cure period, the NYSE will commence suspension and delisting procedures. The NYSE has reserved the right to reevaluate its continued listing determinations relating to companies who are notified of non-compliance like Rite Aid with respect to the NYSE's qualitative listing standards, including if our shares trade at sustained levels that are considered to be abnormally low. On January 7, 2019, we provided written notice to the NYSE of the Board of Directors' approval to pursue a reverse stock split in order to bring our share price and average share price back above $1.00 within the six-month cure period, if necessary.

        In addition to bringing the per share trading price of our common stock back above $1.00, we alsoWe believe that the Reverse Stock Split will makeCompany's compensation programs for its Named Executive Officers have operated to appropriately align pay with performance and enabled the Company to attract and retain talented executives within our common stock more attractiveindustry, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.

        We are asking our stockholders to indicate their support for the compensation of our Named Executive Officers as described in this proxy statement. This proposal, commonly known as a broader range"say-on-pay" proposal, gives you as a stockholder the opportunity to express your views on our fiscal year 2019 compensation for our Named Executive Officers. This vote is not intended to address any specific item of institutional and other investors,compensation; rather, the vote relates to the overall compensation of our Named Executive Officers as we have been adviseddescribed in this proxy statement in accordance with the compensation disclosure rules of the SEC.

        Accordingly, the following resolution is submitted for a stockholder vote at the Annual Meeting:

        "RESOLVED, that the current per share trading pricestockholders approve, on an advisory basis, the compensation paid to the Company's named executive officers, as disclosed in the Company's Proxy Statement for the 2019 Annual Meeting of our common stock may affect its acceptabilityStockholders pursuant to certain institutional investors, professional investors and other membersthe compensation disclosure rules of the investing public. Many brokerage housesSecurities and institutional investors have internal policiesExchange Commission, including the Compensation Discussion and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. In addition, some of those policies and practices may function to makeAnalysis, the processing of trades in low-priced stocks economically unattractive to brokers.

        Reducing the number of outstanding shares of our common stock through the Reverse Stock Split is intended, absent other factors, to increase the per share trading price of our common stock. However, other factors, such as our financial results, market conditionscompensation tables, and the market perceptionnarrative discussion."

        Although this is an advisory vote which will not be binding on the Compensation Committee or the Board, the Compensation Committee and the Board will carefully review the results of our business may adversely affect the per share trading pricestockholder vote. The Compensation Committee will consider stockholders' concerns and take them into account in future determinations concerning compensation of our common stock. As a result, there can be no assuranceits Named Executive Officers. The Board therefore recommends that you indicate your support for the Reverse Stock Split, if completed, will resultcompensation of the Company's Named Executive Offices in fiscal year 2019, as outlined in the intended benefits described above that the per share trading price of our common stock will increase following the Reverse Stock Split or that the per share trading price of our common stock will not decrease in the future.resolution.

        Authorized Share Reduction.     As a matter of Delaware law, the implementation of the Reverse Stock Split does not require a reduction in the total number of authorized shares of our common stock. However, if stockholders adopt and approve the amendment to the Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction and the Reverse Stock Split is implemented, the authorized number of shares of our common stock also would be reduced by a corresponding ratio.

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Criteria to be Used for Determining Whether to Implement Reverse Stock Split

        In determining whether to implement the Reverse Stock Split and which reverse stock split ratio to implement, if any, following receipt of stockholder approval of the amendment to our Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction, the Board of Directors may consider, among other things, various factors, such as:

•

the historical trading price and trading volume of our common stock;



•

the NYSE Continued Listing Standards requirements;



•

the then-prevailing trading price and trading volume of our common stock and the expected impact of the Reverse Stock Split on the trading market for our common stock in the short- and long-term; and



•

prevailing general market and economic conditions.

Certain Risks and Potential Disadvantages Associated with the Reverse Stock Split and the Authorized Share ReductionRECOMMENDATION

        We cannot assure you that the proposed Reverse Stock Split will increase our stock price.     We expect that the Reverse Stock Split will increase the per share trading price of our common stock. However, the effect of the Reverse Stock Split on the per share trading price of our common stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies is varied, particularly since some investors may view a reverse stock split negatively. It is possible that the per share trading price of our common stock after the Reverse Stock Split will not increase in the same proportion as the reduction in the number of our outstanding shares of common stock following the Reverse Stock Split, and the Reverse Stock Split may not result in a per share trading price that would attract investors who do not trade in lower priced stocks. In addition, although we believe the Reverse Stock Split may enhance the marketability of our common stock to certain potential investors, we cannot assure you that, if implemented, our common stock will be more attractive to investors. Even if we implement the Reverse Stock Split, the per share trading price of our common stock may decrease due to factors unrelated to the Reverse Stock Split, including our future performance. If the Reverse Stock Split is consummated and the per share trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split.

        The proposed Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs.     The liquidity of our common stock may be negatively impacted by the Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the per share trading price does not increase as a result of the Reverse Stock Split. In addition, if the Reverse Stock Split is implemented, it will increase the number of our stockholders who own "odd lots" of fewer than 100 shares of common stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock. Accordingly, the Reverse Stock Split may not achieve the desired results of increasing marketability of our common stock as described above.

Effective Time

        The effective time of the Reverse Stock Split and the Authorized Share Reduction (the "Effective Time"), if approved by stockholders and implemented by Rite Aid, will be the date and time set forth in the Certificate of Amendment that is filed with the Delaware Secretary of State. It is expected that such filing will take place promptly following the Special Meeting, assuming the stockholders approve the amendment. The Effective Time could occur as soon as the business day immediately following the Special Meeting. However, the exact timing of the filing of the amendment will be determined by our

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Board of Directors based on its evaluation as to when such action will be the most advantageous to the Company and our stockholders.

        If, at any time prior to the filing of the Certificate of Amendment with the Delaware Secretary of State, notwithstanding stockholder approval, and without further action by the stockholders, the Board of Directors, in its sole discretion, determines that it is in Rite Aid's best interests and the best interests of Rite Aid's stockholders to delay the filing of the Certificate of Amendment or abandon the Reverse Stock Split and the Authorized Share Reduction, the Reverse Stock Split and the Authorized Share Reduction may be delayed or abandoned.

Fractional Shares

        Stockholders will not receive fractional shares of common stock in connection with the Reverse Stock Split. Instead, the transfer agent will aggregate all fractional shares and sell them as soon as practicable after the Effective Time at the then-prevailing prices on the open market, on behalf of those stockholders who would otherwise be entitled to receive a fractional share as a result of the Reverse Stock Split. We expect that the transfer agent will conduct the sale in an orderly fashion at a reasonable pace and that it may take several days to sell all of the aggregated fractional shares of our common stock. After the transfer agent's completion of such sale, stockholders who would have been entitled to a fractional share will instead receive a cash payment from the transfer agent in an amount equal to their respective pro rata shares of the total proceeds of that sale net of any brokerage costs incurred by the transfer agent to sell such stock.

        Stockholders will not be entitled to receive interest for the period of time between the Effective Time and the date payment is made for their fractional share interest. You should also be aware that, under the escheat laws of certain jurisdictions, sums due for fractional interests that are not timely claimed after the funds are made available may be required to be paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds may have to obtain the funds directly from the state to which they were paid.

        If you believe that you may not hold sufficient shares of Rite Aid's common stock at the Effective Time to receive at least one share in the Reverse Stock Split and you want to continue to hold Rite Aid's common stock after the Reverse Stock Split, you may do so by either:

•

purchasing a sufficient number of shares of Rite Aid's common stock; or



•

if you have shares of Rite Aid's common stock in more than one account, consolidating your accounts;

in each case, so that you hold a number of shares of our common stock in your account prior to the Reverse Stock Split that would entitle you to receive at least one share of common stock in the Reverse Stock Split. Shares of our common stock held in registered form and shares of our common stock held in "street name" (that is, through a broker, bank or other holder of record) for the same stockholder will be considered held in separate accounts and will not be aggregated when effecting the Reverse Stock Split.

Effects of the Reverse Stock Split and the Authorized Share Reduction

General

        After the effective date of the Reverse Stock Split and the Authorized Share Reduction, if implemented by the Board of Directors, each stockholder will own a reduced number of shares of common stock. The principal effect of the Reverse Stock Split and the Authorized Share Reduction will be to proportionately decrease the number of outstanding shares of our common stock based on the reverse stock split ratio selected by our Board of Directors.

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        Voting rights and other rights of the holders of our common stock will not be affected by the Reverse Stock Split, other than as a result of the treatment of fractional shares as described above. For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately prior to the effectiveness of the Reverse Stock Split will generally continue to hold 2% (assuming there is no impact as a result of the payment of cash in lieu of issuing fractional shares) of the voting power of the outstanding shares of our common stock after the Reverse Stock Split. The number of stockholders of record will not be affected by the Reverse Stock Split (except to the extent any are cashed out as a result of holding fractional shares). If approved and implemented, the Reverse Stock Split may result in some stockholders owning "odd lots" of less than 100 shares of our common stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in "round lots" of even multiples of 100 shares. Our Board of Directors believes, however, that these potential effects are outweighed by the benefits of the Reverse Stock Split.

Effect on Shares of Common Stock

        The following table contains approximate information, based on share information as of February 5, 2019, relating to our outstanding common stock based on the proposed reverse stock split ratios and information regarding our authorized shares assuming that the proposal is approved and the Reverse Stock Split and the Authorized Share Reduction are implemented:

        After the effective date of the Reverse Stock Split that our Board of Directors elects to implement, our common stock would have a new committee on uniform securities identification procedures, or CUSIP number, a number used to identify our common stock.

        Our common stock is currently registered under Section 12(b) of the Securities Exchange Act of 1934, or the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act. The reverse stock split will not affect the registration of our common stock under the Exchange Act or the listing of our common stock on the NYSE. Following the reverse stock split, our common stock will continue to be listed on the NYSE under the symbol "RAD," although it will be considered a new listing with a new CUSIP number.

Effect on Preferred Stock

        Pursuant to our Amend and Restated Certificate of Incorporation, our capital stock consists of 20,000,000 shares of Preferred Stock, par value $1.00 per share, and 1,500,000,000 shares of common stock. The proposed amendment to our Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction would not impact the total authorized number of shares of preferred stock or the par value of the preferred stock.

Effect on Par Value

        The proposed amendments to our Amended and Restated Certificate of Incorporation will not affect the par value of our common stock, which will remain at $1.00.

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Reduction In Stated Capital

        As a result of the Reverse Stock Split, upon the Effective Time, the stated capital on our balance sheet attributable to our common stock, which consists of the par value per share of our common stock multiplied by the aggregate number of shares of our common stock issued and outstanding, will be reduced in proportion to the size of the Reverse Stock Split, subject to a minor adjustment in respect of the treatment of fractional shares, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Our stockholders' equity, in the aggregate, will remain unchanged.

Effect on Rite Aid's Stock Plans

        As of February 5, 2019, we had approximately 20,734,886 shares subject to stock options, 19,676,168 shares of unvested restricted stock and 1,290,750 shares subject to unvested restricted stock units (including performance-based units) outstanding under our stock incentive plans. Under our 2000 Omnibus Equity Plan (the "2000 Plan"), 2001 Omnibus Equity Plan (the "2001 Plan"), 2004 Omnibus Equity Plan (the "2004 Plan"), 2006 Omnibus Equity Plan (the "2006 Plan"), 2010 Omnibus Equity Plan (the "2010 Plan"), 2012 Omnibus Equity Plan (the "2012 Plan") and 2014 Omnibus Equity Plan (the "2014 Plan" and, together with the 2000 Plan, the 2001 Plan, the 2004 Plan, the 2006 Plan, the 2010 Plan and the 2012 Plan, the "Stock Plans"), the Compensation Committee of our Board of Directors (the "Compensation Committee") has sole discretion to determine the appropriate adjustment to the awards granted under our Stock Plans in the event of a reverse stock split. Accordingly, if the Reverse Stock Split is effected, the number of shares available for issuance under the 2014 Plan, as well as the number of shares subject to any outstanding award under the Stock Plans, and the exercise price, grant price or purchase price relating to any such award under the Stock Plans, are expected to be proportionately adjusted by the Compensation Committee to reflect the Reverse Stock Split. The Compensation Committee will also determine the treatment of fractional shares subject to stock options and other outstanding awards under the Stock Plans. In addition, pursuant to the authority provided under the Stock Plans, the Compensation Committee is expected to authorize the Company to effect any other changes necessary, desirable or appropriate to give effect to the Reverse Stock Split, including any applicable technical, conforming changes to our Stock Plans.

        For illustrative purposes only, if a 1-for-10 reverse stock split is effected, the 27,360,693 shares that remain available for issuance under the 2014 Plan as of February 5, 2019, are expected to be adjusted to 2,736,069 shares, subject to increase as and when awards made under the Stock Plans, expire or are forfeited and are returned per the terms of the Stock Plans. Further, for illustrative purposes only, if a 1-for-10 reverse stock split is effected, an outstanding stock option for 10,000 shares of common stock, exercisable at $7.08 per share, would be adjusted as a result of a 1-for-10 split ratio into an option exercisable for 1,000 shares of common stock at an exercise price of $70.80 per share.

No Going Private Transaction

        Notwithstanding the decrease in the number of outstanding shares following the proposed Reverse Stock Split, our Board of Directors does not intend for this transaction to be the first step in a "going private transaction" within the meaning of Rule 13e-3 of the Exchange Act.

Shares Held in Book-Entry and Through a Broker, Bank or Other Holder of Record

        If you hold registered shares of our common stock in a book-entry form, you do not need to take any action to receive your post-Reverse Stock Split shares of our common stock in registered book-entry form or your cash payment in lieu of fractional shares, if applicable. If you are entitled to post-Reverse Stock Split shares of our common stock, a transaction statement will automatically be sent to your address of record as soon as practicable after the Effective Time indicating the number of shares of our common stock you hold. In addition, if you are entitled to a payment of cash in lieu of fractional shares, a check will be mailed to you at your registered address as soon as practicable after the Effective Time. By signing and cashing this check, you will warrant that you owned the shares of Rite Aid's common stock for which you received a cash payment.

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        At the Effective Time, we intend to treat stockholders holding shares of our common stock in "street name" (that is, through a broker, bank or other holder of record) in the same manner as registered stockholders whose shares of our common stock are registered in their names. Brokers, banks or other holders of record will be instructed to effect the Reverse Stock Split for their beneficial holders holding shares of our common stock in "street name"; however, these brokers, banks or other holders of record may apply their own specific procedures for processing the Reverse Stock Split. If you hold your shares of our common stock with a broker, bank or other holder of record, and you have any questions in this regard, we encourage you to contact your holder of record.

Shares Held in Certificated Form

        If you hold any of your shares of our common stock in certificated form (the "Old Certificate(s)"), you will receive a transmittal letter from our transfer agent as soon as practicable after the Effective Time. The transmittal letter will be accompanied by instructions specifying how you can deliver your Old Certificate(s) so that you are in a position to freely trade your post-Reverse Stock Split shares of our common stock, which will be in a book-entry form, evidenced by a transaction statement that will be sent to your address of record as soon as practicable after your delivery of a letter of transmittal indicating the number of shares of our common stock you hold, together with any payment of cash in lieu of fractional shares to which you are entitled. Until surrendered as contemplated herein, a stockholder's Old Certificate(s) shall be deemed at and after the Effective Time to represent the number of full shares of our common stock resulting from the Reverse Stock Split.

YOU SHOULD NOT SEND YOUR OLD CERTIFICATES NOW. YOU SHOULD SEND THEM ONLY AFTER YOU RECEIVE THE LETTER OF TRANSMITTAL FROM OUR TRANSFER AGENT.

Vote Required

        Under Delaware law, the affirmative vote of the holders of a majority of the shares entitled to vote at the Special Meeting is required to adopt and approve the amendment to our Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction. Because adoption and approval of the amendment to our Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split and the Authorized Share Reduction requires a majority of the outstanding shares, an abstention with respect to the reverse stock split proposal will have the same effect as a vote "Against" the proposal.

        The Rite Aid Board of Directors recommends that you vote "FOR" the reverse stock split proposal.

No Appraisal Rights

        Under the Delaware General Corporation Law, our stockholders are not entitled to dissenter's rights or appraisal rights with respect to the reverse stock split described in this proposal and we will not independently provide our stockholders with any such rights.

Interest of Certain Persons in Matters to be Acted Upon

        No officer or director has any substantial interest, direct or indirect, by security holdings or otherwise, in the Reverse Stock Split or the Authorized Share Reduction that is not shared by all of our other stockholders.

Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split

        The following discussion is a general summary of certain U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to holders of our common stock that hold such stock as a

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capital asset for U.S. federal income tax purposes (generally, property held for investment). This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder, administrative rulings and judicial decisions as of the date hereof, all of which may change, possibly with retroactive effect, resulting in U.S. federal income tax consequences that may differ from those discussed below.

        This discussion applies only to holders that are U.S. Holders (as defined below) and does not address all aspects of federal income taxation that may be relevant to such holders in light of their particular circumstances or to holders that may be subject to special tax rules, including: (i) holders subject to the alternative minimum tax; (ii) banks, insurance companies, or other financial institutions; (iii) tax-exempt organizations; (iv) dealers in securities or commodities; (v) regulated investment companies or real estate investment trusts; (vi) partnerships (or other flow-through entities for U.S. federal income tax purposes and their partners or members); (vii) traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; (viii) U.S. Holders (as defined below) whose "functional currency" is not the U.S. dollar; (ix) persons holding our common stock as a position in a hedging transaction, "straddle," "conversion transaction" or other risk reduction transaction; (x) persons who acquire shares of our common stock in connection with employment or other performance of services; or (xi) U.S. expatriates. If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership.

        We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service ("IRS") regarding the U.S. federal income tax consequences of the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or a court would not sustain any such challenge. The following summary does not address any U.S. state or local or any foreign tax consequences, any estate, gift or other non-U.S. federal income tax consequences, or the Medicare tax on net investment income.

        EACH HOLDER OF COMMON STOCK SHOULD CONSULT SUCH HOLDER'S TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH HOLDER.

        For purposes of the discussion below, a "U.S. Holder" is a beneficial owner of shares of our common stock that for U.S. federal income tax purposes is: (1) an individual citizen or resident of the United States; (2) a corporation (including any entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state or political subdivision thereof; (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) the trust has a valid election in effect to be treated as a U.S. person.

        The Reverse Stock Split is intended to be treated as a "recapitalization" for U.S. federal income tax purposes. As a result, a U.S. Holder generally should not recognize gain or loss upon the Reverse Stock Split, except with respect to cash received in lieu of a fractional share of our common stock, as discussed below. A U.S. Holder's aggregate tax basis in the shares of our common stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of our common stock surrendered (excluding any portion of such basis that is allocated to any fractional share of our common stock), and such U.S. Holder's holding period in the shares of our common stock received should include the holding period in the shares of our common stock surrendered. Treasury regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of the shares of our common stock surrendered to the shares of our common stock received pursuant to

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the Reverse Stock Split. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

        A U.S. Holder that receives cash in lieu of a fractional share of our common stock pursuant to the Reverse Stock Split should recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. Holder's tax basis in the shares of our common stock surrendered that is allocated to such fractional share. Such capital gain or loss should be long term capital gain or loss if the U.S. Holder's holding period for our common stock surrendered exceeded one year at the Effective Time.

THE RITE AID BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE REVERSE STOCK SPLIT PROPOSAL.APPROVAL OF THE COMPENSATION OF ITS NAMED EXECUTIVE OFFICERS,
AS DISCLOSED IN THIS PROXY STATEMENT.

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STOCKHOLDER PROPOSAL

        We expect the following proposal (Proposal No. 4 on the proxy card) to be presented by stockholders at the Annual Meeting. The proposal and supporting statement may contain assertions about Rite Aid or other statements that we believe are incorrect. We have not attempted to refute all of these inaccuracies, and the Company is not responsible for the content of the proposal. The Board has recommended a vote against the proposal for the reasons set forth following the proposal.

PROPOSAL NO. 24

STOCKHOLDER PROPOSAL—SEEKING A BY-LAW AMENDMENT FOR A 10% OWNERSHIP
THRESHOLD FOR STOCKHOLDERS TO CALL SPECIAL MEETINGS

        Steven Krol, who owns approximately 12,763 shares of common stock (based on information provided to us by Mr. Krol and adjusted to reflect the reverse stock split that occurred in April 2019) and whose address will be provided by the Company promptly upon oral or written request, has notified us that he intends to present the following proposal at the Annual Meeting. The Board of Directors strongly opposes adoption of the proposal and asks stockholders to review the Board's response, which follows the proposal and the proponent's supporting statement below.

Stockholder Proposal and Supporting Statement

RESOLVED, shareholders recommend our board amend the bylaws and other necessary governing documents to give holders in the aggregate of 10% of our outstanding common stock the power to call a special shareholder meeting. Numerous Fortune 500 companies allow this, and in this percentage. This proposal does not impact the existing board/senior management's sole power to call such a special meeting, now denied other shareholders in our company by-laws, although otherwise permitted under Delaware law.

Special meetings allow shareholders to vote on important matters, such as electing new directors, that can arise between annual meetings, the lack of which can and have negatively impacted our stock price over the recent years. Our recent resignation of 3 directors could have easily occurred much sooner than the October 2018 Annual Meeting, which was already delayed more than 15 months since the prior Annual Meeting. Delaware law requires an Annual Meeting take place no later than 13 months from the previous Meeting. While our board has indicated a desire to continue to refresh the board, there appears no urgency to do so, and certainly not before an Annual Meeting.

The Albertsons merger announcement could have been abandoned soon after February 2018 at a Special Meeting, rather than wasting double digit millions of shareholder dollar assets to close a seriously flawed merger attempt, even according to ISS and Glass Lewis, which was not terminated until less than 24 hours before the vote! Millions of dollars in retention bonuses, and millions more in stock options bestowed on senior management recently could have likewise been avoided altogether.

The 2018 proxies revealed the board's private discussions with many of the top holders after the termination of the Albertsons merger, whose specific conversations were not divulged to all other stockholders. A special meeting, many months before this could have allowed all attending stockholders, large and small, their input with the board and places investors in a much better and timely position to ask for immediate improvements, such as director replacement.

Please vote "FOR" Proposal # 4 to increase management accountability to all its shareholders and enhance shareholder value.

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THE BOARD OF DIRECTORS' STATEMENT IN OPPOSITION

THE ADJOURNMENT BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"AGAINST" THIS
PROPOSAL FOR THE FOLLOWING REASONS:

        The Board believes this stockholder proposal is unnecessary as our stockholders already have the right to call special meetings.

        As discussed on pages 7 to 8 of this proxy statement, the Company has had a more robust stockholder engagement program in recent months. After carefully considering feedback from our stockholders, in April 2019, the Board amended our By-Laws to permit special meetings of the stockholders to be called by stockholders of record holding at least 20% of the Company's common stock. The Board believes that a 20% ownership threshold for the right to call special meetings strikes a reasonable and appropriate balance between enhancing stockholder rights and protecting against the risk that a small group of stockholders, including stockholders with special interests, could call special meetings.

        Allowing a small group of stockholders to call special meetings could be detrimental to the interests of a majority of our stockholders and other stakeholders. The Company's current 20% ownership threshold provides a reasonable number of stockholders with a meaningful right to require the Company to hold a special meeting without exposing the Company and its stockholders to unreasonable expense and disruption. These costs can be significant, including the costs of preparing and distributing proxy materials and the diversion of Board and management attention from the oversight and management of our business. Because special meetings require a considerable investment in resources, they should be limited to circumstances where a meaningful number of stockholders believe a matter is sufficiently urgent or extraordinary that it must be addressed between annual meetings. We believe a 20% threshold strikes the necessary balance between enhancing our stockholders' ability to act on important matters in between annual meetings and protecting the Company and other stockholders by allowing only a meaningful group of stockholders to exercise this right.

        The Board believes that the Company's current special meeting stockholder right should be evaluated in the context of our demonstrated commitment to best practices and accountability and responsiveness to our stockholders. Our governance practices, including ways to communicate with our Board, are described on pages 14 to 24 of this proxy statement. In particular, as described on page 20 of this proxy statement, 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 or electronically.

        We actively engage with our stockholders throughout the year, and we share feedback from those discussions with our entire Board. At times, our directors participate in those discussions and speak to stockholders directly. Following engagement with our stockholders, the Board accelerated the Board refreshment process, nominating three new independent directors at the 2018 Annual Meeting and appointing two new independent directors in April 2019. In addition, the Board has a history of being responsive to stockholders, amending our By-Laws in April 2015 to adopt a proxy access right and in December 2018 to require that the Chairman of the Board be an independent director. Additionally, following the 2018 annual meeting, the Company is working to produce reports on the Company's consideration of sustainability matters and the Company's approach to oversight of opioid matters, which are discussed on pages 21 to 24 of this proxy statement.

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        In view of the existing right of stockholders to call special meetings and our other sound governance practices that ensure accountability of the Board and management to stockholders, the Board believes this stockholder proposal is unnecessary and not in the best interests of stockholders.

RECOMMENDATION

FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "AGAINST" THE STOCKHOLDER PROPOSAL SEEKING A
BY-LAW AMENDMENT FOR A 10% OWNERSHIP THRESHOLD FOR STOCKHOLDERS TO CALL
SPECIAL MEETINGS.

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EXECUTIVE OFFICERS

        Officers are appointed annually by the Board of Directors and serve at the discretion of the Board of Directors. Set forth below is information, as of May 31, 2019, regarding the current executive officers of Rite Aid.

        John T. Standley.    Mr. Standley, Chief Executive Officer, has been Chief Executive Officer since June 2010 and was President from September 2008 until June 2013. Mr. Standley served as Chairman of the Board from June 21, 2012 through October 30, 2018. He was the Chief Operating Officer from September 2008 until June 2010. He also served as a consultant to Rite Aid from July 2008 to September 2008. From August 2005 through December 2007, Mr. Standley served as Chief Executive Officer and was a member of the board of directors of Pathmark Stores, Inc. From June 2002 to August 2005, he served as Senior Executive Vice President and Chief Administrative Officer of Rite Aid and, in addition, in January 2004 was appointed Chief Financial Officer of Rite Aid. He had served as Senior Executive Vice President and Chief Financial Officer of Rite Aid from September 2000 to June 2002 and had served as Executive Vice President and Chief Financial Officer of Rite Aid from December 1999 until September 2000. Mr. Standley served on the SUPERVALU INC. board of directors from May 2013 to July 2015 and on the board of directors of CarMax, Inc. from August 2017 to January 2018. Mr. Standley currently serves on the National Association of Chain Drug Stores' board of directors and is a member of the Board's Executive Committee.

        Bryan B. Everett.    Mr. Everett was appointed Chief Operating Officer as of March 12, 2019. Prior to his promotion to this position, Mr. Everett served as Chief Operating Officer of Rite Aid Stores since September 1, 2017. Prior to that position, Mr. Everett served as the Executive Vice President of Store Operations since joining the Company on August 3, 2015. Previously, Mr. Everett served as the Senior Vice President of Store Operations at Target Corporation, overseeing the support functions and strategy for all stores. From February 2011 to March 2014, Mr. Everett served as the Senior Vice President of Target stores in the north region, with responsibility for total operations of 457 stores. Mr. Everett held multiple senior leadership positions in stores, operations, and merchandising at Target since 2002. Prior to joining Target, Mr. Everett held leadership positions in the grocery industry with Aldi Foods and Fleming Wholesale.

        Jocelyn Z. Konrad.    Ms. Konrad was appointed Executive Vice President, Pharmacy and Retail Operations effective March 12, 2019, after serving in the role as Executive Vice President, Pharmacy since August 3, 2015. Prior positions at Rite Aid include Regional Pharmacy Vice President, President of Healthcare Initiatives and most recently, Group Vice President of Pharmacy Initiatives and Clinical Services. Prior to joining Rite Aid, Ms. Konrad served as a District Manager for Eckerd Pharmacy from 1997 through 2007. From 1992 to 1997, she served as a pharmacist for Thrift Drug Pharmacy. Ms. Konrad is a registered pharmacist and holds a Bachelor of Science degree from Philadelphia College of Pharmacy and Science.

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        Matthew Schroeder.    Mr. Schroeder was appointed Chief Financial Officer as of March 12, 2019. Prior to his promotion to this position, Mr. Schroeder served as Senior Vice President, Chief Accounting Officer and Treasurer of Rite Aid Corporation since 2017. Mr. Schroeder joined Rite Aid in 2000 as Vice President of Financial Accounting and served as Group Vice President of Strategy, Investor Relations and Treasurer from 2010 to 2017. Prior to joining the Company, Mr. Schroeder worked for Arthur Andersen, LLP, where he held several positions of increasing responsibility, including audit senior and audit manager. He also currently serves as treasurer and a member of the board of directors of The Rite Aid Foundation.

        Brian Hoover.    Mr. Hoover was appointed Chief Accounting Officer as of March 12, 2019. Prior to his promotion to this position, Mr. Hoover served as Group Vice President and Controller of the Company since 2017. Prior to that position, Mr. Hoover served as Vice President, Financial Reporting and Accounting from 2008 to 2017. Over the past 24 years, Mr. Hoover has served in various positions of increasing responsibility at the Company in financial analysis, category management and marketing, budgeting, and accounting.

        Ben Bulkley.    Mr. Bulkley was appointed Chief Executive Officer of EnvisionRxOptions as of February 21, 2019. Prior to joining the Company, he most recently served as chief executive officer and co-founder of Trellis Rx, a private equity-backed company that builds specialty pharmacies for health systems. Prior to Trellis Rx, Mr. Bulkley led the specialty businesses of Aetna Inc., including its pharmacy, behavioral health, and TPA businesses. Mr. Bulkley has also served as chief operating officer of Allscripts Health Solutions, Inc., a healthcare IT platform provider focused on connected care; senior vice president of global commercial operations at Invitrogen, a provider of life sciences technologies for disease research and drug discovery; and vice president and general manager of global services in the IT division of General Electric Company's Healthcare business.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

        We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our fiscal year 2019 executive compensation program for the individuals named below. We refer to these individuals throughout this Compensation Discussion and Analysis and the accompanying tables as our "Named Executive Officers."

Executive Summary

Our Company

        Rite Aid is the third largest retail drugstore chain in the United States based on revenues and number of stores and has Pharmacy Benefits Management ("PBM") operations through EnvisionRxOptions and its affiliates. As of March 2, 2019, we operated 2,469 retail drugstores in 18 states across the country.

        We, along with the retail pharmacy industry as a whole, continue to face challenges in relying significantly on third party payors. Over the past several years, third party payors, including the Medicare Part D plans and the state-sponsored Medicaid and related managed care Medicaid agencies, have changed the eligibility requirements of participants and have successfully reduced reimbursement rates, causing a reduction in our Adjusted EBITDA.

Significant Events

        Fiscal year 2019 was impacted by two significant events:

•

The Albertsons Companies, Inc. Transaction, and



•

The Walgreens Boots Alliance, Inc. ("WBA") Transactions.

        Additionally, after fiscal year end, we implemented a leadership transition plan that will significantly change our Named Executive Officers for fiscal year 2020.

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Albertsons Companies, Inc. Transaction

        On February 18, 2018, Rite Aid entered into an Agreement and Plan of Merger (the "Merger Agreement") with Albertsons Companies, Inc. and the Merger Subs. Based on the lack of our stockholder support, on August 8, 2018, Rite Aid, Albertsons, and the Merger Subs entered into a Merger Termination Agreement pursuant to which the parties mutually agreed to terminate the Merger Agreement. Subject to limited customary exceptions, the Merger Termination Agreement mutually released the parties from any claims of liability to one another relating to the contemplated merger. With the termination of the merger, Rite Aid is no longer subject to the interim operating covenants and restrictions in the Merger Agreement.

WBA Transactions

        On September 18, 2017, we entered into an Amended and Restated Asset Purchase Agreement ("APA") with WBA. Pursuant to the terms and subject to the conditions set forth in the APA, WBA agreed to purchase from Rite Aid 1,932 stores, three distribution centers, related inventory, and other specified assets and liabilities related thereto for a purchase price of approximately $4.375 billion, on a cash-free, debt-free basis.

        We completed the store transfer process in March of 2018, which resulted in the transfer of all 1,932 stores and related assets to WBA and have received cash proceeds of $4.157 billion. On September 13, 2018, we completed the sale of one of our distribution centers and related assets to WBA for proceeds of $61.2 million. The transfer of the two remaining distribution centers and related assets remains subject to minimal customary closing conditions applicable only to the distribution centers being transferred at such distribution center closings, as specified in the APA.

        We have agreed to provide transition services under the Transitional Services Agreement ("TSA") to WBA for up to three years after the initial closing of the sale. Under the terms of the TSA, we provide various services on behalf of WBA, including but not limited to the purchase and distribution of inventory and virtually all selling, general, and administrative activities. The initial term of the TSA was to continue until October 17, 2019. On May 1, 2019, WBA provided Rite Aid with written notice that it was extending the TSA for two additional six-month periods, which extends the end date of the TSA to October 17, 2020. Pursuant to the TSA, WBA paid TSA fees of $80.2 million during the fifty-two week period ended March 2, 2019 and $8.4 million in the fifty-two week period ended March 3, 2018, which are reflected as a reduction to selling, general, and administrative expenses.

Post Fiscal Year End Leadership Transition Plan

        As previously announced, since the close of the 2019 fiscal year, we have executed on a leadership transition plan and an organizational restructuring to better align our Company's structure with the Company's size and operations and to reduce costs. As part of the leadership transition, the Board has commenced a search process for a new CEO. John Standley will remain CEO until the appointment of his successor. Bryan Everett, Chief Operating Officer of Rite Aid Stores, has been promoted to Chief Operating Officer of the Company, succeeding Kermit Crawford, who has left the Company. Matt Schroeder, formerly our Chief Accounting Officer and Treasurer, has been promoted to Chief Financial Officer. Mr. Schroeder succeeded Darren Karst, who left the Company this spring after supporting a brief transition. Jocelyn Konrad, Executive Vice President, Pharmacy, has been promoted to Executive Vice President, Pharmacy and Retail Operations. In addition, the Company announced actions that will reduce managerial layers and consolidate roles across the organization, resulting in the elimination of approximately 400 full-time positions, or more than 20% of the corporate positions located at the Company's headquarters and across the field organization.

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Our Fiscal Year 2019 Performance Measures for Incentive Programs

        Despite our executive leadership team's continued focus on driving our business, we were faced with continued prescription reimbursement rate challenges that we were unable to fully offset, which is an issue that has also impacted the broader retail pharmacy industry and which has negatively impacted our Adjusted EBITDA. Additionally, the extended duration of the WBA merger and asset sale process, the establishment of TSA services, the attempted merger with Albertsons, and the resulting uncertainty had a negative impact on our fiscal year 2019 results. Below is additional detail related to key financial indicators used as performance measures in our incentive programs for fiscal year 2019. All amounts, unless stated otherwise, are for continuing operations:

•

Adjusted EBITDA was $563 million or 2.6% of revenues for fiscal year 2019 compared to $560 million or 2.6% of revenues for the prior year. See the discussion under the caption "Cash Incentive Bonuses" below for more detail on how Adjusted EBITDA was used. While overall Adjusted EBITDA was relatively neutral, the Retail Pharmacy segment improved by $17 million, which was offset by a $13 million reduction in the Pharmacy Services segment. The increase in the Retail Pharmacy Segment Adjusted EBITDA was driven primarily by the $80 million of fees earned through the TSA and paid by WBA, as well as by lower salaries and benefits, partially offset by lower front-end and pharmacy gross profit and increased distribution costs caused partially by the realignment of stores within our distribution network. The decrease in the Pharmacy Services segment Adjusted EBITDA was driven by compression in our commercial business and other operating investments to support current year and further growth. See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP.



•

Our return on net assets for fiscal year 2019 was –0.1% as compared to 0.8% for fiscal year 2018. This ratio is a measure of the effective deployment of our assets within our business.

Our Executive Compensation Philosophy

        We believe strongly that pay should align with performance, and this focus is reflected in our executive compensation programs. We seek to provide our Named Executive Officers with opportunities to earn total direct compensation (base salary, annual incentives, and long-term incentives) that is generally comparable to compensation levels provided to peer company executives and executives within other similarly sized retailers more broadly. With the compensation programs' strong focus on performance and the continued operating pressures related to the WBA and Albertsons transactions, prior to fiscal year 2019, we provided some of our executive officers with retention awards in an effort to retain them during the time of uncertainty. See the Wind-Down of Retention section on pages 49 to 50 for further discussion of these efforts.

        Because of our desire to reinforce a performance-based culture, the Company emphasizes a regular compensation mix that is comprised primarily of variable pay. As a result, base salary makes up the smallest portion of total direct compensation for the Named Executive Officers, with variable pay in the form of annual and long-term incentives comprising the large, remaining portion. The compensation mix varies by position, taking into account each position's ability to influence Company results, as well as competitive practice. See page 42 for a graphical representation of pay mix by executive.

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Consideration of Stockholder Votes on Executive Compensation

        In July of 2017, our stockholders voted to hold an advisory vote on executive compensation every year. Consistent with that vote, the Board resolved to hold an advisory "say-on-pay" vote every year in connection with its annual meeting of stockholders.

        At our 2018 Annual Meeting, held October 30, 2018 after the termination of the Albertsons transaction, approximately 16.5% of shares voted in favor of the compensation of our Named Executive Officers. The Compensation Committee took the disapproval of our executive compensation by our stockholders very seriously. The outcome of our 2018 say-on-pay vote was a clear signal that our stockholders took issue with some aspects of our executive compensation program, and we were determined to understand stockholder perspectives on this program and committed to making constructive changes in response.

        After the termination of the Albertsons transaction, we engaged in enhanced stockholder outreach efforts. Investors' main concern with matters of compensation was the use of retention awards and the mid-year adjustment to the fiscal year 2018 annual incentive performance target. At that time, while the Compensation Committee was focused on a performance-based culture, it also recognized the importance of keeping management engaged during a time of significant challenges, including supporting the TSA processes, and entering into the Albertsons Merger Agreement. The decision to use retention awards was also made with the knowledge that much of the previously granted performance-based awards were tracking below target metrics and had a high likelihood of not having any realizable value, which heightened the risk that we would be unable to attract and retain the talent needed to run our business. For a comparison of the Named Executive Officers' realized long-term performance pay to the compensation shown in the Summary Compensation Table disclosure, see the discussion under the caption "Realized Long-Term Incentive Awards" on pages 42 to 43.

        We have continued to engage with stockholders since August 2018 and following the 2018 Annual Meeting, including on compensation matters. Based on the "say-on-pay" voting results and the feedback we received from stockholders, the Company took action to review all compensation programs in place and incorporate design changes into the compensation structures to ensure stronger stockholder alignment going forward.

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As in the past, the Compensation Committee will continue to review the results of future advisory say-on-pay votes and will consider stockholder concerns and take them into account in future determinations regarding the compensation of our Named Executive Officers.

Our Fiscal Year 2019 Pay Decisions

        We used Adjusted EBITDA as the primary financial metric in our annual incentive plan and long-term performance awards in fiscal year 2019. We believe this was appropriate because EBITDA growth has historically shown a strong positive correlation with three-year and five-year total stockholder return for Rite Aid and its peer group and represented the best indicator of Rite Aid's operating performance based on our financial situation and corporate structure. In establishing performance measures for our fiscal year 2019 incentive programs, we recognized that there were substantial reductions in prescription reimbursement rates that would have to be overcome.

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        Our Consolidated Adjusted EBITDA (which consists of Adjusted EBITDA from continuing operations plus Adjusted EBITDA from the stores sold to Walgreens up to each store's respective sale date), for short-term incentive calculation purposes, for fiscal year 2019 was $563 million, which was below our annual plan target of $645 million, but above the threshold performance level of $548 million. Based on performance against the goal, and as described in more detail below under "Cash Incentive Bonuses," our Named Executive Officers were paid bonuses at 58% of target for fiscal year 2019 performance. See Appendix A for a reconciliation of our Adjusted EBITDA, which is a non-GAAP measure, to net income under GAAP.

        With respect to long-term performance awards, a return on net asset ratio continued to be a component of the performance assessment. The Compensation Committee believes that return on net assets is a key indicator of our corporate performance, as it measures how efficiently and effectively we deploy our assets (return on net assets) and focuses management on the need to improve the Company's financial condition over time. Additionally, the Compensation Committee has maintained a plan provision subjecting the long-term performance award to positive or negative modification based on our relative stockholder return versus the Russell 3000 Index over the three-year performance period.

        The performance targets for the long-term incentive awards granted to our Named Executive Officers in the form of performance stock in fiscal year 2019 are discussed in detail below. See "Long-Term Incentive Program—Performance Awards" on pages 47 to 49.

Objectives of Our Executive Compensation Program

        All of our executive compensation and benefits programs are within the purview of the Compensation Committee, which bases these programs on the same objectives that guide the Company in establishing all of its compensation programs. The Compensation Committee also administers the Company's equity incentive compensation plans. In establishing or approving the compensation of our Named Executive Officers in any given year, the Compensation Committee is generally guided by the following objectives:

•

Compensation should be based on the level of job responsibility, individual performance, and corporate performance, and should foster the long-term focus required for success in the retail drugstore industry. As associates progress to higher levels in the organization, an increasing proportion of their pay is linked to Company performance and stockholder returns and to longer-term performance because they are in a position to have greater influence on longer-term results.



•

Compensation should reflect the value of the job in the marketplace. To attract and retain a highly skilled, diverse work force, we must remain competitive with the pay of other employers who compete with us for talent.



•

Compensation should reward performance. Our programs should deliver compensation that is related to our corporate performance. Where corporate performance falls short of expectations, the programs should deliver lower-tier compensation. In addition, the objectives of pay-for-performance and retention must be balanced. Even in periods of temporary downturns in overall corporate performance, the programs should continue to ensure that successful, high-achieving associates will remain motivated and committed to the Company to support the stability and future needs of the Company.



•

To be effective, performance-based compensation programs should enable associates to easily understand how their efforts can affect their pay, both directly through individual performance accomplishments and indirectly through contributing to the Company's achievement of its strategic and operational goals.

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•

Compensation and benefit programs should reward performance relative to consistent measures and goals at all levels of the organization. While the programs and individual pay levels will always reflect differences in job responsibilities, geographies, and marketplace considerations, the overall structure of compensation and benefit programs should be broadly similar across the organization.



•

Compensation and benefit programs should attract and retain associates who are interested in a career at Rite Aid.

The Compensation Committee's Processes

        The Compensation Committee has established a number of processes to assist it in ensuring that the Company's executive compensation program is achieving its objectives. Among those are:

        Assessment of Company performance.    The Compensation Committee uses Company performance measures in two ways.

        First, in assessing the linkage between actual total compensation and performance, the Compensation Committee considers various measures of Company and industry performance, such as comparable store sales growth, EBITDA growth, return on sales, debt leverage ratios, return on average invested capital and net assets, and total stockholder return. In determining performance relative to the Company's peer group (as discussed further below), the Compensation Committee does not apply a formula or assign these performance measures relative weights. Instead, it makes a subjective determination after considering such measures collectively.

        Second, as described in more detail below, the Compensation Committee has established specific Company target incentive/award levels and performance measures that determine the size of payouts under the Company's two formula-based incentive programs—the annual cash incentive bonus program and performance awards granted under the Company's long-term incentive program.

        Assessment of competitive compensation levels.    The Compensation Committee, with the help of its independent compensation consultant Exequity LLP, assesses the Company's programs relative to a peer group of organizations and published survey data. The peer group, updated in fiscal year 2018 to reflect the reduction in size of Rite Aid following the planned divestiture of stores and distribution centers to WBA, was approved by the Compensation Committee in September 2017 after a comprehensive review. Because the Company has a limited number of publicly-traded direct competitors and because pharmacy sales (which account for over two-thirds of the Company's revenue) are governed by third-party contracts, we reviewed potential peers relative to multiple criteria including:

•

Competitors for executive talent, such as grocery store chains, discount department stores, pharmacy benefits managers, companies engaged in pharmaceutical distribution, and healthcare services organizations;



•

Competitors for investment capital, such as companies considered peers by financial analysts, companies with a similar capital structure or companies whose stock price movement correlated most directly with Rite Aid;



•

Companies with which Rite Aid competes for customers that have pharmacy operations, offer similar merchandise as Rite Aid, or provide healthcare services; and



•

Companies of similar size based on revenue, EBITDA as well as enterprise value.

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        The resulting peer companies, which are considered to be the best representation of our target labor market, are listed below.

Fiscal Year 2019 Peer Group

        The peer group was further reviewed, updated, and approved by the Compensation Committee in February 2019 to reflect the changes in the peer group, as a result of mergers and delisting of certain members of the fiscal year 2019 peer group, and further consideration of relevant size using Company comparisons to revenue, market capitalization, and EBITDA. Among other changes, we decided to remove CVS Health Corp. and Walgreens Boots Alliance, Inc. from the peer group, even though each organization is a direct competitor from both business and talent acquisition perspectives, because the Compensation Committee determined that these organizations are no longer appropriate peers given their significantly larger scope of operations.

Updated Fiscal Year 2020 Peer Group(1)

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        The Compensation Committee compares the compensation levels of Rite Aid's Named Executive Officers to peer company compensation levels in the aggregate, and also compares the pay of individual executives if the jobs are sufficiently similar to make the comparison meaningful. Had the updated fiscal year 2020 peer group been used for all fiscal year 2019 compensation decisions, the analysis would have supported like decisions being made.

        In addition to peer group data, the Compensation Committee reviews market data based on specific functional responsibility for each executive from published survey data. The survey analysis targets data from similarly sized retail organizations based on each executive's functional responsibility. The surveys used in the analysis include Mercer's2018 Executive Remuneration Suite, Mercer's2018 Retail Compensation and Benefits Survey, and Towers Watson's2018 Survey Report on Top Management Compensation.

        The Compensation Committee uses peer group and survey data primarily to ensure that the executive compensation program as a whole is competitive, meaning generally within 25% of the median range of comparative pay of the market when Rite Aid achieves targeted performance levels. The incentive plans were further designed in such a way that executives can earn above competitive levels for superior performance and below competitive levels if performance is below expectations. The Compensation Committee assesses overall alignment of the compensation program rather than benchmarking a specific target position with consideration of factors, such as Company and individual performance, how executive roles function within Rite Aid, concerns about executive retention, and availability of equity compensation. The Compensation Committee assesses Rite Aid's performance relative to its peer group on both a one- and three-year basis and observed alignment of performance with actual total direct compensation levels for the executives in the aggregate.

        In fiscal year 2019, management engaged Mercer, a compensation consultant, to provide management with compensation information for certain executive officers. Pursuant to the terms of its retention, Mercer reported directly to management, although the Compensation Committee did review recommendations and an analysis prepared by management and Mercer in determining fiscal year 2019 compensation for the Named Executive Officers.

        Total compensation review.    The Compensation Committee reviews each named executive's base pay, annual bonus, and long-term incentives annually with the guidance of the Compensation Committee's independent compensation consultant. Following the fiscal year 2019 review, the Compensation Committee determined that the target level and components of compensation for fiscal year 2019 were competitive and reasonable in the aggregate.

Components of Executive Compensation for Fiscal Year 2019

        For fiscal year 2019, the regular compensation program for our Named Executive Officers consisted of four primary components: (i) base salary, (ii) a cash incentive bonus opportunity under the Company's annual incentive bonus plan, (iii) long-term incentives consisting of restricted stock and performance-based restricted cash units, and (iv) a benefits package, including a supplemental executive retirement program ("SERP"). The Company terminated the SERP as of March of 2019. A significant portion of total compensation under the fiscal year 2019 program is variable, meaning a significant portion is subject to performance and is comprised of target annual incentives and target long-term incentives.

        The program was intended to appropriately balance the mix of cash and equity compensation, the mix of currently-paid and longer-term compensation, and the security of base benefits in a way that best furthers the compensation objectives discussed above. The chart below shows the overall mix of base salary, target annual incentives, target long-term incentives, and contributions under the SERP for Messrs. Standley, Crawford, Karst, Everett, and Ms. Konrad.

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Target Total Remuneration(1)

Compensation Component as a % of Total Remuneration for Fiscal Year 2019

(1)

Target Total Remuneration represents the sum of base salary, target annual incentives, target long-term incentives, and SERP contributions. Target Total Compensation does not include (i) the value of broad-based benefits provided to all employees, (ii) components of all other compensation (except the SERP) shown in the Summary Compensation Table, and (iii) retention awards. The Company terminated the SERP as of March of 2019.

Realized Long-Term Incentive Awards

        A significant portion of our long-term incentive awards are subject to performance metrics. This is an important aspect of our Named Executive Officers' and other executives' compensation aligning their interests with those of our stockholders. While equity-based awards are reported in the summary compensation table at target value in the year granted, the value realized is dependent on the actual performance over the measurement period. The realized value from our performance-based long-term

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equity awards where the measurement period ended during the current reported results are as noted in the chart below.

Base Salary

        Base salary is one element of an executive's annual cash compensation during employment. The value of base salary reflects the executive's long-term performance, skill set, and the market value of that skill set. In setting base salaries for fiscal year 2019, the Compensation Committee considered the following factors:

        Pay levels at comparable companies.    As noted above, the Compensation Committee uses peer group data to test for the reasonableness and competitiveness of base salaries, but it also exercises subjective judgment in view of the Company's compensation objectives.

        Internal relativity.    Meaning the relative pay differences for different job levels.

        Individual performance.    Except for increases associated with promotions or increased responsibility, increases in base salary for executives from year to year are generally limited to minimal adjustments to reflect individual performance.

        Consideration of the mix of overall compensation.    Consistent with our compensation objectives, as executives progress to higher levels in the organization, a greater proportion of overall compensation is directly linked to Company performance and stockholder returns. Mr. Standley's target total compensation, for example, is more heavily weighted toward short- and long-term incentive compensation (approximately 85% in the aggregate as shown in the bar chart above) than that of the other Named Executive Officers.

        The Compensation Committee reviewed the Named Executive Officers' base salaries in April of fiscal year 2019 and considered the principles described above under "The Compensation Committee's

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Processes" in establishing the Named Executive Officers' base salaries for the fiscal year as noted in the chart below.

Cash Incentive Bonuses

        The Company established an annual incentive plan in order to incentivize the Named Executive Officers to meet the Company's Adjusted EBITDA target for fiscal year 2019. The Compensation Committee establishes a target percentage of salary for each participant at the beginning of the fiscal year and approves the financial goals required for the Company to pay an award. Payouts for the Named Executive Officers are then determined by the Company's financial results for the year relative to the predetermined performance measures. As shown in the Summary Compensation Table under "Non-Equity Incentive Plan Compensation," incentives were paid to Named Executive Officers for fiscal year 2019 performance.

        Bonus targets.    Targets for each Named Executive Officer were determined based on job responsibilities, internal relativity, and peer group and survey data. The Compensation Committee's objective was to set bonus targets such that total annual cash compensation (including base salary and annual incentive assuming a target payout) was generally aligned with the market with a substantial portion of that compensation linked to corporate performance. Consistent with our executive compensation philosophy, individuals with greater job responsibilities had a greater proportion of their total cash compensation tied to Company performance through the incentive plan. The Compensation Committee, as a result, established the following targets for fiscal year 2019:

Annual Incentive Opportunity

        The Compensation Committee believes that using Adjusted EBITDA as the measure for the annual incentive plan appropriately encourages officers, including the Named Executive Officers, to focus on improving operating results which ultimately drive stockholder value. EBITDA growth has historically shown a strong positive correlation with three-year and five-year total stockholder return for Rite Aid and its peer group. The majority of Rite Aid's peer companies use an EBITDA measure in their annual incentive plans. Based on Rite Aid's current financial situation and capital structure, the Compensation Committee believes that Adjusted EBITDA is the best indicator of Rite Aid's operating performance. The measure is tracked regularly and is clearly understood by the officers. Officers can impact the measure by taking actions to improve the operating performance of our stores. In addition, the Company regularly communicates Adjusted EBITDA to the investment community.

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        Under the plan formula, payouts can range from 0% to 200% of bonus targets depending on Company performance. The Compensation Committee established an Adjusted EBITDA performance target of $645 million for fiscal year 2019, based on the financial plan targets. This performance level target, based on the financial plan, was 15% above our fiscal year 2018 performance of $560 million. Because of the recognized prescription reimbursement rate challenges, the Compensation Committee also established in the performance target for fiscal year 2019 a threshold at which management could be rewarded at 50% of bonus target at achievement of Adjusted EBITDA of $548 million (85% of target), and the Compensation Committee approved a maximum at which management could be rewarded at 200% of bonus target at achievement of Adjusted EBITDA of $710 million (110% of target).

        In fiscal year 2019, challenges caused by the uncertainty of the proposed Albertsons merger as well as the ultimate termination of the merger agreement, the WBA Transactions, as well as continued prescription reimbursement rate pressures all had a negative impact on our fiscal year 2019 results, and Rite Aid's actual Consolidated Adjusted EBITDA was $563 million, which was below the target performance level, but above the threshold performance level, resulting in bonus payments at 58% of the performance target. Consolidated Adjusted EBITDA consists of Adjusted EBITDA from continuing operations plus Adjusted EBITDA from the stores sold to Walgreens up to each store's respective sale date. As discussed in greater detail in Appendix A, we define Adjusted EBITDA as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, goodwill impairment, inventory write-downs related to store closings, debt retirements, the WBA merger termination fee, and other items (including stock-based compensation expense, merger and acquisition-related costs, severance and costs related to distribution center closures, gain or loss on sale of assets, and revenue deferrals related to our customer loyalty program). We reference this particular non-GAAP financial measure not only as a basis for incentive compensation but also in our corporate decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and external comparisons to competitors' historical operating performance.

Fiscal Year 2019 Annual Incentive Plan Performance Goal

Long-Term Incentive Program

        Long-term incentive target opportunity.    The purpose of the regular long-term incentive program is to support the long-term perspective necessary for continued success in our business and focus our Named Executive Officers on creating long-term, sustainable stockholder value. Our annual long-term

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incentive ("LTI") target opportunities for each Named Executive Officer as of the date of grant on January 4, 2019 are shown below:

Long-Term Incentive Target Opportunities

        The Compensation Committee reviewed available peer group data and found that the design of the long-term incentive program is reasonably aligned with general retail industry market practice. Target grant values for individual executive officers were established based on individual performance and internal relativity. Consistent with the Company's compensation philosophy, executive officers at higher levels received a greater proportion of total pay in the form of long-term incentives.

        Long-term incentive mix.    In fiscal year 2019 we used the following types of awards and increased the percentage of the award that is subject to performance:

        In determining the overall mix of long-term incentive vehicles, the following factors were considered:

•

Risk/reward tradeoffs:  Using multiple long-term incentive vehicles can balance the need for a strong performance-based program against risk to executives.



•

Performance measurement:  Using a combination of vehicles allows the Company to focus executives on both stock price appreciation and achievement of consistent operating results (as indicated by Adjusted EBITDA and other measures), which we believe leads to creation of value for stockholders.



•

Management of share usage and market practice:  Rite Aid considers market practice concerning both share usage and competitive long-term incentive levels. Rite Aid uses either a stock-based performance vehicle or a cash-based performance vehicle which is aligned with peer companies and retailers of similar size. The target LTI mix has been selected to align the compensation opportunity for executives and associates with our stockholder return.

        The Compensation Committee's process for setting grant dates is discussed below. On the approval date, those values are converted to the equivalent number of shares based on the closing price of the Company's common stock on the date of approval.

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        Grant timing.    The Compensation Committee has a policy that, in the normal course, annual long-term incentive awards (other than special or new hire grants) will be approved by the Compensation Committee once a year at its annual meeting held in connection with the annual stockholders' meeting, with a grant date equal to the later of the second business day after release of the Company's first quarter earnings or the date of approval. Grants are made to the Named Executive Officers at the same time as awards are made to all other associates as part of the annual grant process. With the delay in our fiscal year 2018 annual stockholders meeting and the changing of board members, resulting in new members of the Compensation Committee, the Committee took action in its December, 2018 meeting to grant fiscal year 2019 awards with an effective date of January 4, 2019.

        Special awards.    From time to time, the Company may make grants in addition to the annual equity grant, including those to Named Executive Officers. Typically, these grants include awards to new hires, promotional awards, or retention awards. Special awards can also be utilized to provide special performance incentives in connection with specific corporate or financial goals of the Company. No special awards were made to our Named Executive Officers in fiscal year 2019.

Performance Awards

        Performance awards granted to the Named Executive Officers under the regular long-term incentive program are in the form of units, which are denominated in a target number of shares and payable in Company stock or cash, if designated, or are denominated with a target unit value equal to $1.00. Company performance goals are established and achievable over the prescribed performance period. Payouts can range from 0% (for performance below threshold) to 250% of target (for performance at or above maximum). Performance awards are intended to align interests of executives with those of stockholders through the use of measures the Company believes drive its long-term success. Performance awards are normally granted annually and are structured as a targeted number of units based on the Company's achievement of specific performance levels with payout occurring after a three-year period.

2017 Performance Awards

        For the 2017 performance award grants (the "2017-2019 Plan"), the Compensation Committee based 80% of the award on the achievement of three-year (fiscal year 2017-fiscal year 2019) cumulative Adjusted EBITDA goals and the remaining 20% on three-year (fiscal year 2017-fiscal year 2019) return on net asset goals. The Compensation Committee also added a provision for each cycle, subjecting the award to modification based on our relative stockholder return versus the Russell 3000 Index over the respective three-year measuring periods. The Compensation Committee believes this provision further aligns the interests of our executives with those of our stockholders and adds an additional incentive for them to create sustainable long-term value for the Company.

        Under the 2017-2019 Plan, participants had the opportunity to earn shares of Rite Aid stock, contingent on cumulative Company financial performance for the three-year period spanning fiscal year 2017-fiscal year 2019. Such financial performance is based 80% on the Adjusted EBITDA goals and 20% on return on net asset goals. In addition, in order to further align the interests of our executives with those of our stockholders and add an additional incentive for them to create sustainable long-term value for the Company, the Compensation Committee also determined to subject the award to modification of +/–25% based on our relative stockholder return versus the Russell 3000 Index over the three-year measuring period. For fiscal years 2017-2019, actual Adjusted EBITDA of $1,871 million was below the three-year performance threshold of $3,135 million. Actual return on net assets was 1.5% compared to a target of 5.1%. Accordingly, no awards were earned under the 2017-2019 Plan.

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2018 Performance Awards

        For the 2018 performance award grants ("2018-2020 Plan"), the Compensation Committee also based 80% of the award on the achievement of Adjusted EBITDA goals and the remaining 20% on return on net assets performance. However, due to the significant uncertainty during the transition of our business in 2018, the 2018-2020 Plan financial performance goals are based on the accumulation of one-year goals set for 2019 and 2020 only. As in prior cycles, the Compensation Committee added a provision subjecting the award to modification based on our relative stockholder return versus the Russell 3000 Index over the full 2018-2020 performance period.

        Under the 2018-2020 Plan, participants have the opportunity to earn cash payments after the end of fiscal year 2020, contingent on performance relative to accumulated one-year Company financial performance goals for each of fiscal year 2019 and fiscal year 2020. Such financial performance is based 80% on the Adjusted EBITDA goals and 20% on return on net asset goals. The value of a unit is tied to the stock price with a maximum value of 300% of the grant date stock price. This aligns the interests of our executives with those of our stockholders. In addition, in order to further align the interests of our executives with those of our stockholders and add an additional incentive for them to create sustainable long-term value for the Company, the Compensation Committee also determined to subject the award to modification of +/– 25% based on our relative stockholder return versus the Russell 3000 Index over the three-year vesting period.

2019 Performance Awards

        For the 2019 performance award grants ("2019-2021 Plan"), the Compensation Committee also based 80% of the award on the achievement of Adjusted EBITDA goals and the remaining 20% on return on net assets performance. However, due to the delay in grant timing and the significant uncertainty during the transition of our business in 2019, as well as prescription reimbursement rate challenges, the 2019-2021 Plan financial performance goals are based on the accumulation of one-year goals set for 2020 and 2021 only. As in prior cycles, the Compensation Committee added a provision subjecting the award to modification based on our relative stockholder return versus the Russell 3000 Index over the full 2019-2021 performance period.

        Under the 2019-2021 Plan, participants have the opportunity to earn cash payments after the end of fiscal year 2021, contingent on performance relative to accumulated one-year Company financial performance goals for each of fiscal year 2020 and fiscal year 2021. Such financial performance is based 80% on the Adjusted EBITDA goals and 20% on return on net asset goals. The value of a unit is equal to $1.00. These performance targets align the interests of our executives with those of our stockholders. In addition, in order to further align the interests of our executives with those of our stockholders and add an additional incentive for them to create sustainable long-term value for the Company, the Compensation Committee also determined to subject the award to modification of +/– 25% based on our relative stockholder return versus the Russell 3000 Index over the three-year vesting period. As shown in the table below, payouts can range from 0% (for performance below threshold) to 250% of the target number of units (for performance at or above maximum). 37.5% of the target unit award can be earned for performance at threshold levels.

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2019-2021 Plan: Performance Units

Restricted Stock

        Restricted stock grants are intended to support retention of executives and focus them on long-term performance because they generally vest over a multi-year period (three years or longer) and are tied to the value of our stock. The risk profile of restricted stock is aligned with stockholders, as it can motivate executives to both increase and preserve stock price. The table below summarizes 2019 restricted stock awards:

2019 Restricted Stock Awards

Winding Down Retention Efforts in Fiscal Year 2019

        In addition to the fiscal year 2018 regular compensation program for the Named Executive Officers, Rite Aid also entered into individual retention agreements with each of the Named Executive Officers, as well as other key associates who are not named executive officers, to enhance employee retention and promote corporate performance, amidst significant volatility and uncertainty related to restructuring the company. The retention agreements with each Named Executive Officer, other than Messrs. Standley and Crawford, generally provided for the lump-sum payment of the retention awards

^(a)

Because Mr. Crawford did not commence employment with the Company until after the date the 2018- 2020 Plan was established, he did not participate in the 2018-2020 Plan. As previously disclosed, on his October 2, 2017 start date, Mr. Crawford received 1,000,000 stock options and 975,610 restricted shares.

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in equal installments on August 1, 2018 and May 1, 2019, subject to continued employment through such retention date or upon an earlier qualifying termination.

        The retention agreement with Mr. Crawford generally provided for the lump-sum payment of the retention award on October 1, 2019, subject to continued employment through such retention date or an earlier qualifying termination of employment. Mr. Crawford forfeited this award with his departure on March 12, 2019.

        The retention agreement with Mr. Standley generally provided for the lump-sum payment of the retention award (x) on the completion of the Albertson's merger if Mr. Standley has not been appointed to serve as chief executive officer of the combined company or (y) on the date that the Rite Aid Board of Directors determines that the transactions contemplated by the Merger Agreement will not be consummated, in each case, subject to continued employment through each such retention date or an earlier qualifying termination of employment. Due to the termination of the Merger Agreement on August 8, 2018, Mr. Standley received the $3,000,000 retention payment to which he was entitled under his retention agreement.

        Under the remaining retention agreements granted in fiscal year 2018, in the aggregate, Mr. Karst earned a retention payment of $830,250, Mr. Everett earned a retention payment of $600,000 and Ms. Konrad earned a retention payment of $450,000. 50% of the retention amount for each officer, other than Messers. Standley and Crawford, was paid in fiscal year 2019 based on continued employment on August 1, 2018, and the remaining 50% was paid based on continued employment on May 1, 2019.

        Based on stockholder discussions and clarity around the business strategy, Rite Aid did not enter into any new individual retention agreements for any of the Named Executive Officers in fiscal year 2019 and does not believe it will enter into any new retention agreements in fiscal year 2020.

Post-Retirement Benefits

        Supplemental Executive Retirement Program.    During fiscal year 2019, each of the Named Executive Officers received benefits under a defined contribution supplemental executive retirement plan or SERP. Under the SERP, Rite Aid credited each participant with a specific sum to an individual account established for each participant, on a monthly basis while the participant is employed. The amount credited was equal to 2% of the participant's annual base compensation. The participants are able to select among a choice of earnings indexes, and their accounts are credited with earnings that mirror the investment results of such indexes. Participants vested in their accounts at the rate of 20% per year for each calendar year of participation in the SERP at a five-year rolling rate with the entire account balance for each participant vesting upon death or total disability of the participant, termination without cause during the 12-month period following a "change in control" of the Company as defined in the SERP or upon termination of employment at age 60 or greater with at least five years of participation in the SERP. Effective February 25, 2019, the Company terminated the SERP such that there will be no future contributions or accruals as of March 2019. Existing SERP benefits have been fully vested and will be paid out in accordance with plan terms. SERP payments may be delayed due to certain tax rules or deferral elections made by the executive.

Other Post-Employment and Change in Control Benefits

        To attract highly skilled executives and to provide for certainty of rights and obligations, Rite Aid has historically provided employment agreements to its executive officers, including our Named Executive Officers. The terms of the employment agreements are described in more detail under the caption "Executive Employment Agreements." Additional information regarding the severance and change in control benefits provided under the employment agreements is described under the section entitled "Executive Compensation—Potential Payments Upon Termination or Change in Control."

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Deductibility Cap on Executive Compensation

        The Compensation Committee is aware that Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), treats certain elements of executive compensation in excess of $1,000,000 a year payable to our Chief Executive Officer and three other most highly compensated executives (and, effective beginning in 2018, our Chief Financial Officer) as an expense not deductible by the Company for federal income tax purposes. The exception providing that payments to these individuals in excess of the $1,000,000 limit will be deductible if such payments are performance-based was repealed beginning in 2018, as further described below.

        H.R.1, formally known as the "Tax Cuts and Jobs Act," enacted on December 22, 2017, substantially modifies Section 162(m) by, among other things, eliminating the performance-based exception to the $1 million deduction limit effective as of January 1, 2018. As a result, beginning in 2018, compensation paid to our Named Executive Officers in excess of $1 million will generally be nondeductible, whether or not it is performance-based. While the Compensation Committee plans to continue taking actions intended to limit the impact of Section 162(m), it also believes that tax deductibility is only one of several relevant considerations in setting compensation. Therefore, in order to maintain the flexibility to provide compensation programs for our Named Executive Officers that will best incentivize them to achieve our key business objectives and create sustainable long-term stockholder value, the Compensation Committee reserves the right to pay compensation that may not be deductible to the Company if it determines that doing so would be in the best interests of the Company.

        H.R.1 also includes a transition rule under which the changes to Section 162(m) described above will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not subsequently materially modified. To the extent applicable to our existing contracts and awards, the Compensation Committee may choose to avail itself of the transition rule.

Policy Regarding Recoupment of Certain Compensation

        The Company has adopted a formal compensation recovery or "clawback" policy for its executive officers, including all Named Executive Officers. Pursuant to this policy, the Board of Directors may seek to recoup certain incentive compensation, including cash bonuses and equity incentive awards paid based upon the achievement of financial performance metrics, from executives in the event that the Company is required to restate its financial statements.

Prohibition on Margin Accounts and Hedging and Similar Transactions

        Our executive officers and directors, including the Named Executive Officers, are subject to an insider trading policy that, among other things, prohibits them from holding Company securities in a margin account, and also prohibits them from engaging in put or call options, short selling, or similar hedging activities involving our stock. We prohibit these transactions because they may reduce the individual's incentive to improve our performance, focus the individual on short-term performance at the expense of long-term objectives, and misalign the individual's interests with those of our stockholders generally.

Director and Officer Stock Ownership Guidelines

        Our Stock Ownership Guidelines have been established in order to further the investment of our non-management directors, executive officers, and Senior Vice Presidents in the success of the Company and to encourage a long-term perspective in managing the Company. During the 2019 fiscal

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year, except for the Non-Management Directors which increased from two to five times annual cash retainer in our January 2019 board meeting, the stock ownership requirements were as follows:

        Effective as of April 10, 2019, we have revised our stock ownership guidelines to remove the reference to a specific number of shares to be held. The current stock ownership requirements are:

        Newly appointed or promoted executives who are or become subject to our Stock Ownership Guidelines and newly elected non-management directors have five years from the time they are appointed, promoted, or elected, as the case may be, to meet the stock ownership requirements. Currently, all of our Named Executive Officers have achieved the minimum holding ownership requirement or have not yet served for five years.

        For the purposes of determining stock ownership levels, the following forms of equity interests in the Company are included:

•

Shares owned outright by the participant or his or her immediate family members residing in the same household;



•

Restricted stock and restricted stock units whether or not vested; and



•

Shares underlying Rite Aid stock options whether or not vested.

        Restricted stock and restricted stock units, whether or not vested, and shares owned count as one (1) share equivalent per share beneficially owned and stock options, whether or not vested, count as one-half (.5) share equivalent per stock option.

        The Compensation Committee is responsible for interpreting and administering the Stock Ownership Guidelines, and may, from time to time, reevaluate and revise the Stock Ownership Guidelines, including when there are changes to the Company's capital structure or where implementation of the Stock Ownership Guidelines would cause a non-management director, executive officer, or Senior Vice President to incur a hardship due to his or her unique financial circumstances.

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COMPENSATION COMMITTEE REPORT

        The Compensation Committee of the Board of Directors has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and, based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Robert E. Knowling, Jr., Chair
Bruce G. Bodaken*
Louis P. Miramontes

*

Mr. Bodaken served on the Compensation Committee throughout our 2019 fiscal year and until April 10, 2019. Ms. Katherine Quinn joined the Compensation Committee and the Board on April 10, 2019, but did not participate in the review or recommendation of the Compensation Discussion and Analysis.

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SUMMARY COMPENSATION TABLE

        The following summary compensation table sets forth the cash and non-cash compensation for the fiscal years ended March 2, 2019, March 3, 2018, and March 4, 2017, respectively, paid to or earned by (i) our principal executive officer, (ii) our principal financial officer, and (iii) the three most highly compensated executive officers of the Company other than the principal executive officer or the principal financial officer who were serving at the end of the 2019 fiscal year (collectively, the "Named Executive Officers").