Rite Aid 2012 Annual Report Download - page 97

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 3, 2012, February 26, 2011 and February 27, 2010
(In thousands, except per share amounts)
12. Capital Stock (Continued)
preferred stock was converted into 27,137 common shares, at a conversion rate of $5.50 per share. The
remaining Series G preferred stock can be redeemed at the Company’s election after January 2009.
The Company has not elected to redeem the remaining Series G preferred stock as of March 3, 2012.
The Series H preferred stock pays dividends of 6% of liquidation preference and can be redeemed
at the Company’s election after January 2010. All dividends can be paid in either cash or in additional
shares of preferred stock, at the election of the Company. Any redemptions are at 105% of the
liquidation preference of $100 per share, plus accrued and unpaid dividends. The Series H shares are
convertible into common stock of the Company, at the holder’s option, at a conversion rate of $5.50
per share. The Company has not elected to redeem the Series H preferred stock as of March 3, 2012.
13. Stock Option and Stock Award Plans
The Company recognizes share-based compensation expense in accordance with ASC 718,
‘‘Compensation—Stock Compensation.’’ Expense is recognized over the requisite service period of the
award, net of an estimate for the impact of forfeitures. Operating results for fiscal 2012, 2011 and 2010
include $15,861, $17,336 and $23,794 of compensation costs related to the Company’s stock-based
compensation arrangements.
The Company reserved 22,000 shares of its common stock for the granting of stock options and
other incentive awards to officers and key associates under the 1990 Omnibus Stock Incentive Plan (the
1990 Plan), which was approved by the shareholders. Options may be granted, with or without stock
appreciation rights (‘‘SAR’’), at prices that are not less than the fair market value of a share of
common stock on the date of grant. The exercise of either a SAR or option automatically will cancel
any related option or SAR. Under the 1990 Plan, the payment for SARs will be made in shares, cash
or a combination of cash and shares at the discretion of the Compensation Committee.
In November 1999, the Company adopted the 1999 Stock Option Plan (the 1999 Plan), under
which 10,000 shares of common stock are authorized for the granting of stock options at the discretion
of the Board of Directors.
In December 2000, the Company adopted the 2000 Omnibus Equity Plan (the 2000 Plan) under
which 22,000 shares of common stock are reserved for granting of restricted stock, stock options,
phantom stock, stock bonus awards and other stock awards at the discretion of the Board of Directors.
In February 2001, the Company adopted the 2001 Stock Option Plan (the 2001 Plan) which was
approved by the shareholders under which 20,000 shares of common stock are authorized for granting
of stock options at the discretion of the Board of Directors.
In April 2004, the Board of Directors adopted the 2004 Omnibus Equity Plan, which was approved
by the shareholders. Under the plan, 20,000 shares of common stock are authorized for granting of
restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the
discretion of the Board of Directors.
In January 2007, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid
Corporation 2006 Omnibus Equity Plan. Under the plan, 50,000 shares of Rite Aid common stock are
97