Rite Aid Corporation (NYSE:RAD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On February18, 2018, Rite Aid Corporation (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Albertsons Companies,Inc. (“Parent”), Ranch Acquisition II LLC, a Delaware limited liability company and a wholly-owned direct subsidiary of Parent (“Merger Sub II”), and Ranch Acquisition Corp., a Delaware corporation and a wholly-owned direct subsidiary of Merger Sub II (“Merger Sub” and, together with Merger Sub II, the “Merger Subs”).
to the terms and subject to the conditions set forth in the Merger Agreement, (i)Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned direct subsidiary of Merger Sub II (the “Surviving Corporation”), and (ii)immediately following the Merger, the Surviving Corporation will merge with and into Merger Sub II (the “Subsequent Merger” and, together with the Merger, the “Mergers”), with Merger Sub II surviving the Subsequent Merger as a wholly-owned direct subsidiary of Parent (the “Surviving Company”).
At the effective time of the Merger, each share of the Company’s common stock, par value $1.00 per share (“Company Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Company Common Stock owned by Parent, Merger Sub or the Company (including treasury stock held by the Company), which will be cancelled) will be converted into the right to receive and become exchangeable for 0.1000 (the “Base Exchange Ratio”) of a fully paid and nonassessable share of Parent common stock, par value $0.01 per share (“Parent Common Stock”) (the “Base Consideration”), without interest, plus, at the election of the holder of Company Common Stock, either (i)an amount in cash equal to $0.1832 per share (the “Additional Cash Consideration” and, together with the Base Consideration, the “Cash Election Consideration”), without interest, or (ii)0.0079 (the “Additional Stock Election Exchange Ratio” and, together with the Base Exchange Ratio, the “Stock Election Exchange Ratio”) of a fully paid and nonassessable share of Parent Common Stock (the “Additional Stock Consideration” and, together with the Base Consideration, the “Stock Election Consideration”).
Subject to the terms of the Merger Agreement, at the Effective Time, each option to purchase Company Common Stock granted under any Company stock plan that is outstanding and unexercised immediately prior to the Effective Time (each, a “Company Stock Option”), whether or not then vested or exercisable, will be assumed by Parent and will be converted into a stock option to acquire a number of shares of Parent Common Stock (a “Parent Stock Option”), on the same terms and conditions as were applicable to such Company Stock Option immediately prior to the Effective Time (but taking into account any changes thereto provided for in the Merger Agreement), equal to the product of (i)the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time multiplied by (ii)the Base Exchange Ratio, with any fractional shares rounded down to the nearest whole number of shares after aggregating each individual holder’s Company Stock Options with the same exercise price. The exercise price per share of Parent Common Stock subject to each such Parent Stock Option will be an amount (rounded up to the nearest whole cent) equal to the quotient of (A)the