Rite Aid 2012 Annual Report Download - page 15

members of our board of directors, subject to adjustment based on its ownership position in us. On
April 20, 2012, the Jean Coutu Group announced that it had disposed of 56,000,000 of its
234,401,162 shares of our common stock. As a result of such sale, the Jean Coutu Group was required
to cause one of its designees to immediately resign from our board of directors and Andre Belzile
resigned from our board of directors effective April 23, 2012. Following Mr. Belzile’s resignation and
reduction of the size of our board of directors from eleven to ten members, the Jean Coutu Group will
continue to have the right to designate two members of our board of directors, subject to adjustment
for future reductions in its ownership position in us. Accordingly, Jean Coutu Group generally is, and is
expected to continue to be, able to significantly influence the outcome of all matters that come before
our board of directors. As a result of its significant interest in us, Jean Coutu Group may have the
power, subject to applicable law (including the fiduciary duties of the directors designated by Jean
Coutu Group), to significantly influence actions that might be favorable to Jean Coutu Group, but not
necessarily favorable to our financial condition and results of operations. In addition, the ownership
position and governance rights of Jean Coutu Group could discourage a third party from proposing a
change of control or other strategic transaction concerning us.
Conflicts of interest may arise between us and Jean Coutu Group, which may be resolved in a manner that
adversely affects our business, financial condition or results of operations.
Following the Brooks Eckerd acquisition, Jean Coutu Group has continued its Canadian
operations but no longer has any operations in the United States, and we currently have no operations
in Canada. Despite the lack of geographic overlap, conflicts of interest may arise between us and Jean
Coutu Group in areas relating to past, ongoing and future relationships, including corporate
opportunities, potential acquisitions or financing transactions, sales or other dispositions by Jean Coutu
Group of its interests in us and the exercise by Jean Coutu Group of its influence over our
management and affairs.
A number of the directors on our board of directors are persons who are also officers or directors
of Jean Coutu Group or its subsidiaries. Service as a director or officer of both Rite Aid and Jean
Coutu Group or its other subsidiaries could create conflicts of interest if such directors or officers are
faced with decisions that could have materially different implications for Rite Aid and for Jean Coutu
Group. Apart from the conflicts of interest policy contained in our Code of Ethics and Business
Conduct and applicable to our directors, we and Jean Coutu Group have not established any formal
procedures for us and Jean Coutu Group to resolve potential or actual conflicts of interest between us.
There can be no assurance that any of the foregoing conflicts will be resolved in a manner that does
not adversely affect our business, financial condition or results of operations.
We are dependent on our management team, and the loss of their services could have a material adverse effect
on our business and the results of our operations or financial condition.
The success of our business is materially dependent upon the continued services of our executive
management team. The loss of key personnel could have a material adverse effect on the results of our
operations, financial condition or cash flows. Additionally, we cannot assure you that we will be able to
attract or retain other skilled personnel in the future.
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