Rite Aid Corporation (NYSE:RAD) Files An 8-K Entry into a Material Definitive Agreement
Item 5.03 Entry into a Material Definitive Agreement.
The information in Item 5.03 of this report is incorporated by reference in this Item 5.03.
Item 5.03 Material Modification to Rights of Security Holders.
On January3, 2018, Rite Aid Corporation (the “Company”) entered into a Tax Benefits Preservation Plan (the “Plan”) with Broadridge Corporate Issuer Solutions, as rights agent (the “Rights Agent”), and the Board of Directors (the “Board”) of the Company declared a dividend distribution of one right (a “Right”) for each outstanding share of common stock, par value $1.00 per share, of the Company (the “Common Stock”), to stockholders of record at the close of business on January16, 2018 (the “Record Date”). Each Right is governed by the terms of the Plan and entitles the registered holder to purchase from the Company a unit consisting of one one-thousandth of a share (a “Unit”) of SeriesJ Junior Participating Preferred Stock, par value $1.00 per share (the “SeriesJ Preferred Stock”), at a purchase price of $8.00 per Unit, subject to adjustment (the “Purchase Price”). The Plan is intended to help protect certain Company tax attributes, such as current year net operating loss and the net operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any loss or deduction attributable to a “net unrealized built-in loss” within the meaning of Section382 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, of the Company or any of its subsidiaries (collectively, “Tax Benefits”) by deterring any person from becoming a 5% Shareholder (as defined in the Plan).
Rights Certificates; Exercise Period
Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate rights certificates (“Rights Certificates”) will be distributed. Subject to certain exceptions specified in the Plan, the Rights will separate from the Common Stock and a distribution date (the “Distribution Date”) will occur upon the earlier of (i)ten (10)business days following a public announcement that an Acquiring Person (as defined in the Plan) has become a 5% Shareholder (the “Stock Acquisition Date”) and (ii)ten (10)business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person.
Until the Distribution Date, (i)the Rights will be evidenced by the Common Stock certificates (or, in the case of book entry shares, by the notations in the book entry accounts) and will be transferred with and only with such Common Stock, (ii)new Common Stock certificates issued after the Record Date will contain a notation incorporating the Plan by reference and (iii)the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. to the Plan, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of SeriesJ Preferred Stock will be issued.
The definition of “Acquiring Person” contained in the Plan contains several exemptions, including for (i)the Company; (ii)any of the Company’s subsidiaries; (iii)any employee benefit