Unassociated Document
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
FORM
11-K
x
|
ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
fiscal year ended December 31, 2009
o
|
TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from _____ to _____
Commission
file number 1-5742
A.
Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Rite
Aid Services, L.L.C. 401(k) Plan
B.
Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Rite Aid
Corporation
30 Hunter
Lane
Camp
Hill, Pennsylvania 17011
RITE
AID SERVICES, L.L.C. 401(k) PLAN
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Page
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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1
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FINANCIAL
STATEMENTS:
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Statements
of Net Assets Available for Benefits as of December 31, 2009 and
2008
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2
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Statement
of Changes in Net Assets Available for Benefits for the
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|
Year
Ended December 31, 2009
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3
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Notes
to Financial Statements as of December 31, 2009 and 2008, and for
the
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|
Year
Ended December 31, 2009
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4–12
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SUPPLEMENTAL
SCHEDULE —
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|
Form
5500, Schedule H, Line 4i — Schedule of Assets (Held at End of
Year)
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|
as
of December 31, 2009
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14
|
NOTE:
|
All
other schedules required by Section 2520.103-10 of the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Plan Administrator and Participants of
Rite Aid
Services, L.L.C. 401(k) Plan
Harrisburg,
Pennsylvania
We have
audited the accompanying statements of net assets available for benefits of the
Rite Aid Services, L.L.C. 401(k) Plan (the “Plan”) as of December 31, 2009 and
2008, and the related statements of changes in net assets available for benefits
for the year ended December 31, 2009. These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Plan’s internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our
opinion, such financial statements present fairly, in all material respects, the
net assets available for benefits of the Plan as of December 31, 2009 and 2008,
and the changes in net assets available for benefits for the year ended December
31, 2009 in conformity with accounting principles generally accepted in the
United States of America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) as of December 31, 2009, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the
responsibility of the Plan’s management. Such schedule has been subjected
to the auditing procedures applied in our audit of the basic 2009 financial
statements and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic 2009 financial statements taken as a
whole.
/s/
Deloitte & Touche LLP
Philadelphia,
Pennsylvania
June 28,
2010
RITE
AID SERVICES, L.L.C. 401(k) PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
AS
OF DECEMBER 31, 2009 AND 2008
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|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
|
Participant-directed
investments — at fair value
|
|
$ |
4,887,912 |
|
|
$ |
3,874,878 |
|
|
|
|
|
|
|
|
|
|
Contributions
receivable:
|
|
|
|
|
|
|
|
|
Employee
|
|
|
4,395 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total
contributions receivable
|
|
|
4,395 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
|
|
|
4,892,307 |
|
|
|
3,874,878 |
|
|
|
|
|
|
|
|
|
|
Adjustments
from fair value to contract value for fully
|
|
|
|
|
|
|
|
|
benefit-responsive
investment contracts
|
|
|
(39,324 |
) |
|
|
10,908 |
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
|
$ |
4,852,983 |
|
|
$ |
3,885,786 |
|
See notes
to financial statements.
RITE
AID SERVICES, L.L.C. 401(k) PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR
THE YEAR ENDED DECEMBER 31, 2009
ADDITIONS:
|
|
|
|
Employee
contributions
|
|
$ |
211,819 |
|
Employer
paid VCP settlement charges
|
|
|
2,503 |
|
Investment
income
|
|
|
83,647 |
|
Net
appreciation in fair value of investments
|
|
|
717,792 |
|
|
|
|
|
|
Total
additions
|
|
|
1,015,761 |
|
|
|
|
|
|
DEDUCTIONS:
|
|
|
|
|
Benefit
payments
|
|
|
47,164 |
|
Administrative
expenses
|
|
|
1,400 |
|
|
|
|
|
|
Total
deductions
|
|
|
48,564 |
|
|
|
|
|
|
INCREASE
IN NET ASSETS AVAILABLE FOR BENEFITS
|
|
|
967,197 |
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS — Beginning of year
|
|
|
3,885,786 |
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR BENEFITS — End of year
|
|
$ |
4,852,983 |
|
See notes
to financial statements.
RITE
AID SERVICES, L.L.C. 401(k) PLAN
NOTES
TO FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2009 AND 2008, AND FOR THE YEAR ENDED DECEMBER 31,
2009
1.
|
DESCRIPTION
OF THE PLAN
|
The
following brief description of the Rite Aid Services, L.L.C. 401(k) Plan
(the “Plan”) is provided for general informational purposes only. Participants
should refer to the Plan document for a more complete description of the Plan’s
provisions.
General — The Plan is a
defined contribution plan. An individual account is established for each
participant and provides benefits that are based on (a) amounts the
participant and Rite Aid Corporation (the “Company,” “Rite Aid” or “Plan
Sponsor”) contributed to a participant’s account, (b) investment earnings
(losses), and (c) any forfeitures allocated to the account, less any
administrative expenses charged to participant accounts, if any.
T. Rowe
Price Trust Company serves as Plan trustee with respect to all assets other than
Company stock. GreatBanc Trust Company serves as Plan trustee with respect to
Company stock. The Employee Benefits Administration Committee is the plan
administrator (“Plan Administrator”) and is responsible for the preparation of
the Plan’s financial statements.
Participation — Each
employee who is a member of the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America, Local 614 becomes eligible to
participate in the Plan after attaining age 21 and completing one year of
service (a twelve-month period when at least 1,000 hours are
credited).
Contributions —
Effective January 1, 2008, participants may elect to contribute up
to 70% of pretax annual compensation as defined in the Plan. Participants
age 50 and over may make additional pretax contributions as defined in the
Plan. A participant may also contribute, or roll over, amounts representing
distributions from another qualified defined benefit or defined contribution
plan. Effective June 16, 2001, the Plan Sponsor ceased making contributions
to the Plan pursuant to a collective bargaining agreement dated May 27,
2001. Employees continue to contribute as described above.
Investment Options — The
Plan provides participants with the option of investing the participant’s
account balances into various investment options offered by the Plan. The Plan
currently offers 18 mutual funds, 5 custom funds, 1 common/collective trust, a
stable value fund and Rite Aid Corporation common stock. Effective February 3,
2009, Rite Aid common stock is no longer available for new
contributions.
The
Plan’s custom funds are custom investment option created specifically for the
Plan by Northern Trust Global Advisors, Inc. The custom fund is an unregistered
custom account maintained by the trustee. The performance of the custom fund is
based on the performance of the underlying mutual funds which are registered in
the market.
Payment of Benefits —
Upon termination of service due to death, disability, or retirement, a
participant may elect to receive a lump-sum amount equal to the value of the
participant’s vested interest in the participant’s account, or installment
payments as determined by the Plan Administrator.
Loans — A participant may
elect to borrow against the participant’s vested balance at a reasonable rate of
interest as defined in the Plan document. A participant may borrow up to 50% of
the participant’s vested balance, with a maximum loan of $50,000. A participant
may only have one loan outstanding at any one time, with the exception that
participants may have up to two outstanding loans which were grandfathered at
the time the Plan was amended to no longer allow more than one
loan.
Vesting — A participant
is vested immediately in the participant’s voluntary contributions, plus actual
earnings (losses) thereon. Vesting in the Plan Sponsor’s contributions made
prior to June 16, 2001, is based on years of service, as defined in the
Plan document. A participant becomes fully vested in the Plan Sponsor
contributions upon the participant’s death, disability or attainment of normal
retirement age while employed, or the occurrence of a Plan termination. If not
vested earlier for one of the foregoing reasons, and not subject to other
exceptions described in the Plan document, a participant’s account becomes fully
vested upon the participant’s attainment of five years of service. When a
participant withdraws from the Plan prior to becoming fully vested, the
non-vested portion of the participant’s account is forfeited and credited to a
suspense account. The suspense account may be reallocated to participants in the
same manner as matching contributions.
Forfeited Accounts — At
December 31, 2009 and 2008, forfeited nonvested accounts totaled $380 and
$8,129, respectively. These forfeited amounts may, among other uses, be
used to reduce future employer contributions and pay certain administrative
expenses. During the year ended December 31, 2009, certain administrative
expenses were paid by forfeited nonvested accounts.
2.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
Basis of Accounting — The
accompanying financial statements are prepared on the accrual basis of
accounting and in accordance with accounting principles generally accepted in
the United States of America (“GAAP”).
Investment Valuation and Income
Recognition — The Plan’s investments are stated at fair value. Shares
of mutual funds are valued at quoted market prices, which represent the net
asset value of shares held by the Plan at year end. Custom funds are stated at
fair value which is based on the net asset value of participation units held by
the Plan at year-end and is calculated based on the shares held in underlying
mutual fund investments and the net asset value of those investments. Common
stock is valued at quoted market prices.
Common
collective trust funds are stated at fair value as determined by the issuer of
the common collective trust funds based on the fair market value of the
underlying investments.
The
stable value fund (“SVF”) includes two fully benefit-responsive synthetic
guaranteed investment contracts (“GIC”) whose underlying investments are stated
at fair value and then adjusted by the issuer to contract value. Fair value of
the underlying investments is determined by the issuer of the synthetic GIC
based on market prices and a fair value estimate of the wrapper contract. Fair
market value of the wrapper is estimated by converting the basis points assigned
to the wrap fees into dollars.
In
accordance with GAAP, the SVF is included at fair value in
participant-directed investments in the statements of net assets available for
benefits, and an additional line item is presented representing the adjustment
from fair value to contract value. The statement of changes in net assets
available for benefits is presented on a contract value basis.
Participant
loans are valued at the outstanding loan balances, which approximates fair
value.
The
common collective trust funds and the SVF may invest in fixed interest
insurance investment contracts, money market funds, corporate and government
bonds, mortgage-backed securities, bond funds, and other fixed income
securities. Participants may ordinarily direct the withdrawal or transfer of all
or a portion of their investment at contract value. Contract value represents
contributions made to the fund, plus earnings, less participant
withdrawals.
Purchases
and sales of securities are recorded on a trade-date basis. Realized gain or
loss on investment transactions is determined using the first-in, first-out
method; investment transactions are recorded at the trade date. Interest income
is recorded on the accrual basis. Dividends are recorded on the ex-dividend
date.
Management
fees and operating expenses charged to the Plan for investments in the mutual
funds are deducted from income earned on a daily basis and are not separately
reflected. Consequently, management fees and operating expenses are reflected as
a reduction of investment return for such investments.
The Plan
had 952 and 1,883 shares of Company common stock at December 31, 2009 and
2008, respectively.
Valuation of Investment(s)
Contracts — The Plan offers the SVF as an investment option. On
October 1, 2006, the Plan began to offer the T. Rowe Price SVF with the
Prudential SVF blended together as a single investment split fifty percent into
each of these underlying investments. These are trust products and are comprised
of group annuity insurance products issued by The Prudential Insurance Company
of America (“Prudential”) and by T. Rowe Price Retirement Plan Services
(“T. Rowe Price”) and a portfolio of assets owned by the Plan or designee.
Interest on the SVF is credited daily. T. Rowe Price calculated a blended rate
which was credited and compounded on a daily basis. The blended rate is based
upon the Prudential and T. Rowe Price rates and the 50%-50% asset split. The SVF
is deemed to be fully benefit responsive; therefore, it is presented at contract
value, which approximates fair value.
Administrative Expenses —
Plan fees and expenses related to account maintenance, transaction and
investment fund management are allocated to participant accounts. Under the
terms of the Plan document, costs relating to Plan administration may be paid by
the Plan Sponsor or paid from Plan forfeitures. For the year ended
December 31, 2009, the Plan Sponsor has paid substantially all
administrative expenses.
Use of Estimates —
The preparation of financial statements in conformity with GAAP requires
the Plan Administrator to make estimates and assumptions that affect the
reported amounts of net assets available for benefits at the date of the
financial statements and the reported changes to the Plan’s net assets available
for benefits during the reporting period. Actual results may differ from those
estimates and assumptions.
The Plan
invests in mutual funds, common/collective trusts, corporate stocks and the SVF.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit, and overall market volatility. Due to the level of risk
associated with certain investment securities, it is reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect the amounts reported in the financial
statements.
3.
|
FAIR
VALUE MEASUREMENTS
|
In
accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and
Disclosures (“ASC 820”), the Plan classifies its investments into
Level 1, which refers to securities valued using quoted prices from active
markets for identical assets; Level 2, which refers to securities not
traded on an active market but for which observable market inputs are readily
available; and Level 3, which refers to securities valued based on
significant unobservable inputs. Assets and liabilities are classified in their
entirety based on the lowest level of input that is significant to the fair
value measurement. The following table sets forth by level within the fair value
hierarchy a summary of the Plan’s investments measured at fair value on a
recurring basis at December 31, 2009.
In 2009,
FASB Staff Position (FSP) FAS 157-4, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly, was issued and later codified into ASC
820, which expanded disclosures and required that major category for debt and
equity securities in the fair value hierarchy table be determined on the basis
of the nature and risks of the investments.
In
September 2009, the FASB issued Accounting Standards Update No. 2009-12, Fair Value Measurements and
Disclosures (Topic 820): Investments in Certain Entities That Calculate Net
Asset per Share (or Its Equivalent) (“ASU 2009-12”), which amended ASC
Subtopic 820-10, Fair Value
Measurements and Disclosures — Overall. ASU 2009-12 is effective for the
first reporting period ending after December 15, 2009. ASU 2009-12 expands the
required disclosures for certain investments with a reported net asset value
(“NAV”). ASU 2009-12 permits, as a practical expedient, an entity holding
investments in certain entities that calculate net asset value per share or its
equivalent for which the fair value is not readily determinable, to measure the
fair value of such investments on the basis of that net asset value per share or
its equivalent without adjustment. ASU 2009-12 requires enhanced disclosures
about the nature and risks of investments within its scope. Such disclosures
include the nature of any restrictions on an investor’s ability to redeem its
investments at the measurement date, any unfunded commitments, and the
investment strategies of the investee. The adoption did not have a material
impact on the fair value determination and disclosure of applicable
investments.
|
|
|
December
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
Level
1:
|
|
|
|
|
|
|
|
Mutual
Funds:
|
|
|
|
|
|
|
|
T.
Rowe Price
|
Retirement
2025
|
|
$ |
408,381 |
|
|
$ |
294,488 |
|
T.
Rowe Price
|
Retirement
2020
|
|
|
366,166 |
|
|
|
293,083 |
|
T.
Rowe Price
|
Retirement
2015
|
|
|
291,240 |
|
|
|
227,488 |
|
T.
Rowe Price
|
Retirement
2030
|
|
|
228,809 |
|
|
|
160,612 |
|
T.
Rowe Price
|
Retirement
2010
|
|
|
154,598 |
|
|
|
139,575 |
|
T.
Rowe Price
|
International
Equity Index Fund
|
|
|
88,446 |
|
|
|
48,430 |
|
T.
Rowe Price
|
Retirement
2035
|
|
|
58,036 |
|
|
|
40,604 |
|
T.
Rowe Price
|
Retirement
2040
|
|
|
30,772 |
|
|
|
26,127 |
|
T.
Rowe Price
|
Extended
Equity Market Index Fund
|
|
|
11,142 |
|
|
|
14,419 |
|
T.
Rowe Price
|
Retirement
2005
|
|
|
6,850 |
|
|
|
5,500 |
|
T.
Rowe Price
|
Retirement
Income Fund
|
|
|
2,859 |
|
|
|
2,342 |
|
T.
Rowe Price
|
Retirement
2045
|
|
|
1,189 |
|
|
|
1,176 |
|
Dodge
& Cox
|
Balanced
Fund
|
|
|
446,766 |
|
|
|
315,204 |
|
Vanguard
|
Instl
Index Fund
|
|
|
268,702 |
|
|
|
178,064 |
|
Pimco
|
Total
Return Inst Fund
|
|
|
104,791 |
|
|
|
57,133 |
|
Vanguard
|
Small-Cap
Index Fund
|
|
|
38,892 |
|
|
|
29,332 |
|
Total
mutual funds
|
|
|
|
2,507,639 |
|
|
|
1,833,577 |
|
|
|
|
|
|
|
|
|
|
|
Custom
Funds:
|
|
|
|
|
|
|
|
|
|
Northern
Trust Global Advisors
|
Large-Cap
Growth Fund
|
|
|
243,826 |
|
|
|
154,089 |
|
Northern
Trust Global Advisors
|
International
Equity Fund
|
|
|
76,540 |
|
|
|
68,599 |
|
Northern
Trust Global Advisors
|
Mid-Cap
Fund
|
|
|
73,822 |
|
|
|
65,218 |
|
Northern
Trust Global Advisors
|
Small-Cap
Fund
|
|
|
40,675 |
|
|
|
33,961 |
|
Northern
Trust Global Advisors
|
Large-Cap
Value Fund
|
|
|
47,870 |
|
|
|
29,695 |
|
Total
custom funds
|
|
|
|
482,733 |
|
|
|
351,562 |
|
|
|
|
|
|
|
|
|
|
|
Company
Stock Fund
|
|
|
|
|
|
|
|
|
|
Rite
Aid Corporation
|
Company
Stock Fund
|
|
|
1,437 |
|
|
|
584 |
|
Total
Level 1
|
|
|
|
2,991,809 |
|
|
|
2,185,723 |
|
|
|
|
|
|
|
|
|
|
|
Level
2:
|
|
|
|
|
|
|
|
|
|
Stable
Value Fund Synthetic
|
|
|
|
|
|
|
|
|
|
Guaranteed
Investment Contract
|
|
|
|
|
|
|
|
|
|
Prudential
and T. Rowe Price
|
Stable
Value Fund
|
|
|
1,498,929 |
|
|
|
1,434,483 |
|
|
|
|
|
|
|
|
|
|
|
Common
and collective trust
|
|
|
|
|
|
|
|
|
|
T.
Rowe Price
|
Bond
Index Trust
|
|
|
706 |
|
|
|
4,042 |
|
Total
Level 2
|
|
|
|
1,499,635 |
|
|
|
1,438,525 |
|
|
|
|
|
|
|
|
|
|
|
Level
3:
|
|
|
|
|
|
|
|
|
|
Participant
notes
|
Loan
Fund
|
|
|
396,468 |
|
|
|
250,630 |
|
Total
Level 3
|
|
|
|
396,468 |
|
|
|
250,630 |
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$ |
4,887,912 |
|
|
$ |
3,874,878 |
|
The
following is a description of the valuation methodologies used for instruments
measured at fair value, as well as the general classification of such
instruments pursuant to the valuation hierarchy.
Common Stock – The Plan
measures its Rite Aid common stock using the stock’s quoted price, which is
available in an active market. Therefore, this investment is classified
within Level 1 of the valuation hierarchy.
Mutual Funds – The Plan measures its
mutual funds that are exchange-traded using the fund’s quoted price, which is in
an active market. Therefore, these investments are classified within Level
1 of the valuation hierarchy.
Custom Funds – Custom
funds are made up of two mutual funds. The Plan measures its mutual funds
that are exchange-traded using the fund’s quoted price. They are traded
daily based on observable fair value at a NAV that is recalculated daily.
Therefore, these investments are classified within Level 1 of the valuation
hierarchy.
Common and Collective Trusts
– The T. Rowe Price Bond Index Trust is priced at trust NAV per unit,
adjusted for trustee fees accrued daily (as applicable). Investments held
by the T. Rowe Price Bond Index Trust are stated at fair value in accordance
with ASC 820. Therefore, the Plan classifies common and collective trusts
as Level 2 securities in the fair value hierarchy.
Stable Value Fund – SVFs have
underlying investments that consist of cash equivalents, collective trust funds,
GICs, and alternative investment contracts. Cash equivalents are short
term investment funds that have a maturity of 90 days or less and are valued at
cost. The collective trust funds value is derived by their respective
NAV. The collective trust funds consist of bonds and asset-backed
securities whose value is derived from observable inputs based on the pricing of
similar instruments that are publicly traded. GICs are valued based
on their underlying securities, which consist of bonds whose value is derived
from observable inputs including London Interbank Offered Rate (“LIBOR”) forward
interest rate curves. The bonds are valued based on the pricing of similar
bonds that are publicly traded. In determining fair value, factors such as
the benefit-responsiveness of the investment contracts and the ability of the
parties to the investment contracts to perform in accordance with the terms of
the contracts; such inputs were not significant to the valuation.
Alternative investment contracts are valued based on their underlying
securities, which consists of common funds consisting of bonds and asset-backed
securities whose value is derived from observable inputs based on the pricing of
similar instruments that are publicly traded. Therefore, the Plan
classifies SVFs as Level 2 securities in the fair value
hierarchy.
Participant Loans –
Participant loans are stated at cost, which approximates fair
value.
The
following table is a reconciliation of assets measured at fair value on a
recurring basis using significant unobservable inputs (Level 3):
For the Year Ended
|
|
Participant
|
|
|
Total
|
|
December 31, 2008
|
|
Notes Receivable
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
$ |
222,520 |
|
|
$ |
222,520 |
|
|
|
|
|
|
|
|
|
|
Total
gains or losses (realized/unrealized)
|
|
|
– |
|
|
|
– |
|
Purchases,
sales, issuances and settlements — net
|
|
|
28,110 |
|
|
|
28,110 |
|
Transfers
in and/or out of Level 3
|
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Ending
balance
|
|
$ |
250,630 |
|
|
$ |
250,630 |
|
|
|
|
|
|
|
|
|
|
For
the Year Ended
|
|
Participant
|
|
|
Total
|
|
December
31, 2009
|
|
Notes
Receivable
|
|
|
Fair
Value
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
$ |
250,630 |
|
|
$ |
250,630 |
|
|
|
|
|
|
|
|
|
|
Total
gains or losses (realized/unrealized)
|
|
|
– |
|
|
|
– |
|
Purchases,
sales, issuances and settlements — net
|
|
|
145,838 |
|
|
|
145,838 |
|
Transfers
in and/or out of Level 3
|
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Ending
balance
|
|
$ |
396,468 |
|
|
$ |
396,468 |
|
4.
|
SYNTHETIC
GUARANTEED INVESTMENT CONTRACT
|
The Plan
provides a self managed stable value investment option to participants that
includes a synthetic GIC which simulates the performance of a GIC
through an issuer’s guarantee of a specific interest rate (the wrapper contract)
and a portfolio of financial instruments that are owned by the Plan. The
synthetic GIC includes underlying assets which are held in trust owned by
the Plan and utilizes a benefit-responsive wrapper contract. A portion of the
master trust’s SVF is issued by The Prudential Insurance Company of America
and a portion is managed by T. Rowe Price Associates, Inc. (“TRPA”). The TRPA
portion of the SVF consists of synthetic investment contracts which are
selected by TRPA and issued by banks and other financial institutions. TRPA also
manages the fixed income instruments underlying the investment contracts in its
portion of the SVF. The contract provides that participants execute Plan
transactions at contract value. Contract value represents contributions made to
the SVF, plus earnings, less participant withdrawals. The interest rates are
reset quarterly based on market rates of other similar investments, the current
yield of the underlying investments and the spread between the market value and
contract value. Certain events such as Plan termination or a Plan merger
initiated by the Plan Sponsor, may limit the ability of the Plan to transact at
contract value or may allow for the termination of the wrapper contract at less
than contract value. The Plan Sponsor does not believe that any events that may
limit the ability of the Plan to transact at contract value are
probable.
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Average
yields:
|
|
|
|
|
|
|
Based
on annualized earnings (1)
|
|
|
4.02 |
% |
|
|
4.80 |
% |
Based
on interest rate credited to participants (2)
|
|
|
4.43 |
|
|
|
4.25 |
|
|
(1)
|
Computed
by dividing the annualized one-day actual earnings of the contract on the
last day of the Plan year by the fair value of the investments on the same
date.
|
|
(2)
|
Computed
by dividing the annualized one-day earnings credited to participants on
the last day of the Plan year by the fair value of the investments on the
same date.
|
The
investments that represent 5% or more of the Plan’s assets at December 31, 2009
and 2008 are as follows:
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Stable
Value Fund
|
|
$ |
1,498,929 |
|
|
$ |
1,434,483 |
|
Dodge
& Cox Balanced Fund
|
|
|
446,766 |
|
|
|
315,204 |
|
T.
Rowe Price Retirement 2025
|
|
|
408,381 |
|
|
|
294,488 |
|
Participant
Loan Fund
|
|
|
396,468 |
|
|
|
250,630 |
|
T.
Rowe Price Retirement 2020
|
|
|
366,166 |
|
|
|
293,083 |
|
T.
Rowe Price Retirement 2015
|
|
|
291,240 |
|
|
|
227,488 |
|
Vanguard
Institutional Index Fund
|
|
|
268,702 |
|
|
|
178,064 |
|
Northern
Trust Global Advisors Large-Cap Growth Fund
|
|
|
** |
|
|
|
154,089 |
|
** -
below 5% of Plan assets at December 31, 2009
The
Plan’s investments (including gains and losses on investments bought and sold,
as well as held during the year) appreciated in value for the year ended
December 31, 2009, as follows:
Investments:
|
|
|
|
Rite
Aid corporate stock
|
|
$ |
1,956 |
|
Mutual
funds
|
|
|
534,057 |
|
Custom
funds
|
|
|
115,912 |
|
Common
and collective trusts
|
|
|
201 |
|
Stable
value funds
|
|
|
65,666 |
|
|
|
|
|
|
Net
appreciation in fair value of investments
|
|
$ |
717,792 |
|
The Plan
obtained its latest determination letter dated July 8, 2003, in which the
Internal Revenue Service (“IRS”) stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code
(“IRC”). The Plan has been amended since receiving the determination letter. The
Plan Administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC, including
the processes identified for remediation. Therefore, no provision for income
taxes has been included in the Plan’s financial statements.
Although
it has not expressed any intent to do so, the Plan Sponsor has the right under
the Plan to terminate the Plan subject to the provisions of ERISA. In the event
the Plan terminates, participants would become fully vested in their Plan
Sponsor contributions.
8.
|
PARTY-IN-INTEREST
TRANSACTIONS
|
Certain
Plan investments are shares of mutual funds managed by T. Rowe Price Trust
Company, the trustee and custodian of the Plan. The transactions related to such
investments qualify as party-in-interest transactions. The Plan has also
permitted investment in the common stock of the Plan Sponsor, and therefore
these transactions qualify as party-in-interest transactions. The Plan
Administrator does not consider Plan Sponsor contributions or benefits paid by
the Plan to be party-in-interest transactions.
The Plan
Administrator identified operational failures in the Plan, including a failure
to make certain deferral contributions. The Plan Administrator submitted a
Voluntary Correction Program filing with the IRS on December 23, 2008 requesting
a compliance statement and approval of the correction method for these
operational failures identified in the Plan. On August 5, 2009, the Plan
Administrator received a fully executed compliance statement containing IRS
approval of the correction methods submitted. The Plan Sponsor completed
all corrections in accordance with the compliance statement thereby eliminating
exposure to penalties, taxes or disqualification by the IRS. The
correction process was completed on November 30, 2009.
10.
|
RECONCILIATION
OF FINANCIALS TO FORM 5500
|
The
reconciliation of net assets available for benefits per the financial statements
to the Form 5500 as of December 31, 2009, is as follows.
Net
assets available for benefits per the financial statements at contract
value
|
|
$ |
4,852,983 |
|
Adjustment
from contract value to fair value for fully benefit-responsive investment
contracts
|
|
|
39,324 |
|
|
|
|
|
|
Net
assets available for benefits per Form 5500, Schedule H, Part I (line
L)
|
|
$ |
4,892,307 |
|
For the
year ended December 31, 2009, the following is a reconciliation of net
investment gain per the financial statements to the Form 5500:
Total
contributions
|
|
$ |
211,819 |
|
Employer
paid VCP settlement charges
|
|
|
2,503 |
|
Total
investment income
|
|
|
83,647 |
|
Net
appreciation in fair value of investments
|
|
|
717,792 |
|
Prior
year adjustment from fair value to contract value for
fully
|
|
|
|
|
benefit-responsive investment contracts
|
|
|
10,908 |
|
|
|
|
|
|
Current
year adjustment from fair value to contract value for
fully
|
|
|
|
|
benefit-responsive investment contracts
|
|
|
39,324 |
|
|
|
|
|
|
Total
gain per Form 5500, Schedule H, Part II (line 2d)
|
|
$ |
1,065,993 |
|
SUPPLEMENTAL
SCHEDULE
RITE
AID SERVICES, L.L.C. 401(k) PLAN
FORM
5500 — SCHEDULE H, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF
YEAR)
|
|
|
|
|
|
At
|
|
Identity of Issuer, Borrower,
|
|
|
Number
|
|
|
Fair Market
|
|
Lessor or Similar Party and Description
|
|
|
of Shares
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
Common
and collective trust:
|
|
|
|
|
|
|
|
*T.
Rowe Price
|
Bond
Index Trust
|
|
|
25 |
|
|
$ |
706 |
|
|
|
|
|
|
|
|
|
|
|
Total
common and collective trust
|
|
|
|
|
|
|
|
706 |
|
|
|
|
|
|
|
|
|
|
|
Mutual
Funds:
|
|
|
|
|
|
|
|
|
|
*T.
Rowe Price
|
Retirement
2025
|
|
|
38,490 |
|
|
|
408,381 |
|
*T.
Rowe Price
|
Retirement
2020
|
|
|
25,080 |
|
|
|
366,166 |
|
*T.
Rowe Price
|
Retirement
2015
|
|
|
27,295 |
|
|
|
291,240 |
|
*T.
Rowe Price
|
Retirement
2030
|
|
|
15,133 |
|
|
|
228,809 |
|
*T.
Rowe Price
|
Retirement
2010
|
|
|
11,082 |
|
|
|
154,598 |
|
*T.
Rowe Price
|
International
Equity Index Fund
|
|
|
7,954 |
|
|
|
88,446 |
|
*T.
Rowe Price
|
Retirement
2035
|
|
|
5,449 |
|
|
|
58,036 |
|
*T.
Rowe Price
|
Retirement
2040
|
|
|
2,031 |
|
|
|
30,772 |
|
*T.
Rowe Price
|
Extended
Equity Market Index Fund
|
|
|
869 |
|
|
|
11,142 |
|
*T.
Rowe Price
|
Retirement
2005
|
|
|
656 |
|
|
|
6,850 |
|
*T.
Rowe Price
|
Retirement
Income Fund
|
|
|
234 |
|
|
|
2,859 |
|
*T.
Rowe Price
|
Retirement
2045
|
|
|
118 |
|
|
|
1,189 |
|
Dodge
& Cox
|
Balanced
Fund
|
|
|
6,977 |
|
|
|
446,766 |
|
Vanguard
|
Instl
Index Fund
|
|
|
2,635 |
|
|
|
268,702 |
|
Pimco
|
Total
Return Inst Fund
|
|
|
9,703 |
|
|
|
104,791 |
|
Vanguard
|
Small-Cap
Index Fund
|
|
|
1,414 |
|
|
|
38,892 |
|
|
|
|
|
|
|
|
|
|
|
Total
mutual funds
|
|
|
|
|
|
|
|
2,507,639 |
|
|
|
|
|
|
|
|
|
|
|
Custom
Funds:
|
|
|
|
|
|
|
|
|
|
Northern
Trust Global Advisors
|
Large-Cap
Growth Fund
|
|
|
21,809 |
|
|
|
243,826 |
|
Northern
Trust Global Advisors
|
International
Equity Fund
|
|
|
4,980 |
|
|
|
76,540 |
|
Northern
Trust Global Advisors
|
Mid-Cap
Fund
|
|
|
5,732 |
|
|
|
73,822 |
|
Northern
Trust Global Advisors
|
Small-Cap
Fund
|
|
|
2,924 |
|
|
|
40,675 |
|
Northern
Trust Global Advisors
|
Large-Cap
Value Fund
|
|
|
4,305 |
|
|
|
47,870 |
|
|
|
|
|
|
|
|
|
|
|
Total
custom funds
|
|
|
|
|
|
|
|
482,733 |
|
|
|
|
|
|
|
|
|
|
|
Stable
Value Fund Synthetic
|
|
|
|
|
|
|
|
|
|
Guaranteed
Investment Contract:
|
|
|
|
|
|
|
|
|
|
Prudential
and *T. Rowe Price
|
Stable
Value Fund
|
|
|
113,235 |
|
|
|
1,498,929 |
|
|
|
|
|
|
|
|
|
|
|
Total
Stable Value Fund Synthetic Guaranteed Investment Contract
|
|
|
|
|
|
1,498,929 |
|
|
|
|
|
|
|
|
|
|
|
Company
Stock Fund:
|
|
|
|
|
|
|
|
|
|
*Rite
Aid Corporation
|
Company
Stock Fund
|
|
|
952 |
|
|
|
1,437 |
|
|
|
|
|
|
|
|
|
|
|
*Participant
notes
|
Loan
Fund**
|
|
|
|
|
|
|
396,468 |
|
|
|
|
|
|
|
|
|
|
|
Total
Assets Held at End of Year
|
|
|
|
|
|
|
$ |
4,887,912 |
|
*
Party-in-interest
** The
loans range in interest rates from 4.15% to 9.25% and expire through
2021.
SIGNATURES
The Plan. Pursuant to
the requirements of the Securities Exchange Act of 1934, the trustees (or other
persons who administer the employee benefit plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly
authorized.
RITE
AID SERVICES, L.L.C. 401(k) PLAN
|
|
|
By:
|
/s/ Kenneth Black
|
|
Kenneth
Black, not in his individual capacity, but solely
as
an authorized signatory for the Employee Benefits
Administration
Committee
|
Date: June
29, 2010
EXHIBIT
INDEX
Exhibit
Number
|
|
Description
|
23.1
|
|
Consent
of Independent Registered Public Accounting
Firm
|