<PAGE>
Registration No. 333-
Post-Effective Amendment No. 1 to Registration No. 33-61185
Post-Effective Amendment No. 2 to Registration No. 33-63794
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
RITE AID CORPORATION
DELAWARE 23-1614034
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
30 HUNTER LANE
CAMP HILL, PENNSYLVANIA 17011
(212) 695-4400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
FRANKLIN C. BROWN
Executive Vice President and General Counsel
30 Hunter Lane
Camp Hill, Pennsylvania 17011
(717) 761-2633
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Elliot S. Gerson, Esq. Robert A. Profusek, Esq.
Rite Aid Corporation Jones, Day, Reavis & Pogue
30 Hunter Lane 599 Lexington Avenue
Camp Hill, Pennsylvania 17011 New York, New York 10022
(212) 326-3939
--------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
--------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [x]
---------------------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT (1)(2) PRICE (1)(2)(3)(4) FEE
- --------------------------- ------------- --------------- ------------------ ------------
<S> <C> <C> <C> <C>
Debt Securities (5)
Common Stock, par value $1.00 per share (5)
Preferred Stock, par value $1.00 per share(5)
Warrants
Total $600,000,000 (6) $600,000,000 $181,818.18(7)
===========================================================================================================================
</TABLE>
(1) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies. Such amount
represents the aggregate offering price of the securities registered
hereunder and the exercise price of any securities issuable upon exercise of
Warrants. If any securities are issued at an original issue discount, or
with a principal amount denominated in a foreign currency or currency unit,
then such greater amount as shall result in an aggregate initial offering
price of $600,000,000.
(2) Not specified as to each class of securities to be registered, pursuant to
General Instruction II.D. of Form S-3.
(3) Estimated for the sole purpose of computing the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933. The proposed maximum offering
price per unit will be determined from time to time by the Registrant in
connection with the issuance by the Registrant of the securities registered
hereunder.
(4) The number of shares of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) of the Securities Act of 1933.
(5) Also includes such indeterminate number of shares of Preferred Stock and
Common Stock as may be issued upon conversion of or exchange for any Debt
Securities or Preferred Stock that provide for conversion or exchange into
other securities.
(6) There is being registered hereunder such principal amount of securities as
may from time to time be issued at indeterminate prices, but with an
aggregate initial offering price not to exceed $600,000,000.
(7) In addition to the securities registered hereby, pursuant to Rule 429 of the
Securities Act of 1933, as amended, the Prospectus included herein also
covers $25,000,000 of unsold Debt Securities and Warrants to Purchase Debt
Securities from a previous registration statement (No. 33-63794) of the
Registrant, and $375,000,000 of unsold Debt Securities and Warrants to
Purchase Debt Securities from a previous registration statement (No. 33-
61185) of the Registrant, as to which registration fees of $7,812.50 and
$129,310.34, respectively, were paid.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED
HEREIN ALSO RELATES TO $25,000,000 PRINCIPAL AMOUNT OF DEBT SECURITIES AND
WARRANTS TO PURCHASE DEBT SECURITIES REGISTERED UNDER REGISTRATION STATEMENT NO.
33-63794 AND $375,000,000 PRINCIPAL AMOUNT OF DEBT SECURITIES AND WARRANTS TO
PURCHASE DEBT SECURITIES REGISTERED UNDER REGISTRATION STATEMENT NO 33-61185.
---------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
---------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
RITE AID CORPORATION
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 1996
$1,000,000,000
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
----------------------------
Rite Aid Corporation (the "Company") may offer from time to time, together
or separately, (i) debt securities ("Debt Securities") consisting of notes,
debentures or other evidences of indebtedness in one or more series, (ii) shares
of its Common Stock, par value $1.00 per share (the "Common Stock"), (iii)
shares of its Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), and (iv) warrants to purchase Debt Securities, Common Stock or
Preferred Stock, or any combination thereof, as may be designated by the Company
at the time of the offering (the "Warrants") in amounts, at prices and on terms
to be determined at the time of the offering. The Debt Securities, Common
Stock, Preferred Stock and Warrants are collectively called the "Securities".
The Securities may be offered in separate series or issuances at an
aggregate initial public offering price not to exceed $1,000,000,000 (but not to
exceed $600,000,000 of Securities other than Debt Securities and warrants to
purchase Debt Securities) or, if applicable, the equivalent thereof in other
currencies, at prices and on terms to be determined at the time or times of
offering.
The specific terms of the Securities with respect to which this Prospectus
is being delivered are set forth in the accompanying Prospectus Supplement and
include, where applicable, (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, purchase price, maturity, rate (or
method of calculation thereof) and time of payment of interest, if any, any
conversion or exchange provisions, any redemption provisions, any subordination
provisions and any other specific terms of the Debt Securities offered hereby
not set forth herein under the caption "Description of Debt Securities" in this
Prospectus, and any listing thereof on a securities exchange; (ii) in the case
of Common Stock, the number of shares and any initial public offering price;
(iii) in the case of Preferred Stock, the number of shares, the specific title,
the aggregate amount, any dividend (including the method of calculating payment
of dividends), seniority, liquidation, redemption, voting and other rights, any
terms for any conversion or exchange into other Securities, any listing on a
securities exchange, the initial public offering price and any other terms; and
(iv) in the case of Warrants, the designation and number, the exercise price,
any listing of the Warrants or the underlying Securities on a securities
exchange and any other terms in connection with the offering, sale and exercise
of the Warrants. Any statement contained in this Prospectus will be deemed to
be modified or superseded by any inconsistent statement contained in the
accompanying Prospectus Supplement.
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") and the Pacific Stock Exchange ("PSE") under the trading symbol "RAD".
Any Common Stock sold pursuant to a Prospectus Supplement will be listed on the
NYSE and the PSE, subject to official notice of issuance.
----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------
The Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved in
the sale of the Securities in respect of which this Prospectus is being
delivered, the names of such underwriters, dealers or agents and any applicable
commissions or discounts are set forth in or may be calculated from the
Prospectus Supplement with respect to such Securities.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
----------------------------
The date of this Prospectus is November 20, 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITERS, DEALERS OR AGENTS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60606. Copies of such materials can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such material can also be inspected
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005 and at the offices of the Pacific Stock Exchange, 301 Pine Street,
San Francisco, California 94109, on which the Company's Common Stock is listed.
The Commission maintains a Web site that contains reports, proxy statements and
other information filed electronically by the Company with the Commission which
can be accessed over the Internet at http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Act"). This Prospectus omits certain of the information contained in the
Registration Statement, and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the Securities offered hereby. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to such copy filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits thereto may be inspected without charge
at the office of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in and made a part of this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended March 2,
1996, which incorporates by reference certain portions of the Company's 1996
Annual Report to Stockholders;
2. The Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended June 1, 1996 and August 31, 1996;
3. The Company's Current Report on Form 8-K dated April 29, 1996;
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated July 18, 1991 filed under
the Exchange Act under File No. 2-28883, including any amendments and reports
filed for the purpose of updating such description;
5. The Company's Joint Proxy Statement/Prospectus dated November 12, 1996;
6. Thrifty PayLess Holdings, Inc.'s Annual Report on Form 10-K for the
fiscal year ended October 1, 1995; and
7. Thrifty PayLess Holdings, Inc.'s Quarterly Reports on Form 10-Q for the
fiscal quarters ended December 31, 1995, March 31, 1996 and June 30, 1996.
2
<PAGE>
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, on the written or oral request of
any such person, a copy of any or all of the documents incorporated herein by
reference (other than exhibits). Requests for such copies should be directed to
the Secretary, Rite Aid Corporation, 30 Hunter Lane, Camp Hill, Pennsylvania
17011 (telephone: (717) 761-2633).
THE COMPANY
The Company is one of the largest retail drug store chains in the United
States. As of August 31, 1996, the Company operated 2,796 drug stores,
averaging within a range of approximately 7,200 to 11,000 square feet per store
in size, in 21 states and the District of Columbia and employed over 36,000
employees. Pharmacy service forms the core of the Company's business, with
prescriptions accounting for 56.4% of drug store sales in the 26 week period
ended August 31, 1996. The Company's drug stores cater to convenience, offering
a full selection of health and personal care products, seasonal merchandise and
a large private label product line. Express mail with complementary services
and one-hour photo departments have recently been added in select locations.
The Company's Eagle managed care subsidiary markets prescription plans and sells
other managed health care services to large employers and government-sponsored
employee benefit programs.
The Company's strategy is to operate drug stores in large, fast-growing
metropolitan areas. Following the proposed merger of Thrifty PayLess Holdings,
Inc. ("Thrifty Payless") into the Company (the "Merger"), and giving effect to
the Southeast Dispositions described below, the Company will be the largest drug
store operator in the United States in terms of store count, operating in 26
states. Of the 50 largest metropolitan statistical areas in the United States,
the Company will operate in 25 and will be the largest or second largest drug
store operation in 21 of those metropolitan areas. In connection with the
announcement of the Merger, the Company also announced that it plans to dispose
of all of its 270 stores in Alabama, Florida, Georgia and North and South
Carolina (collectively, the "Southeast Dispositions"), and that in connection
therewith the Company entered into an agreement to sell its approximately 200
stores in North and South Carolina to Thrift Drug, Inc. As soon as is
reasonably practicable following the Merger, the Company expects to rename all
Thrifty PayLess stores "Rite Aid" and integrate them with the Company's
operations, to refinance substantially all of Thrifty PayLess' existing debt (to
the extent practicable), to close Thrifty PayLess' Wilsonville, Oregon
headquarters and to divest Thrifty PayLess' Bi-Mart membership discount stores.
The Company is a Delaware corporation with its principal executive offices
located at 30 Hunter Lane, Camp Hill, Pennsylvania 17011. The telephone number
of Rite Aid at such offices is (717) 761-2633.
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus Supplement,
the net proceeds from the sale of the Securities offered hereby will be used for
general corporate purposes, which could include acquisitions and the refinancing
of indebtedness in connection therewith, including the Merger. Any specific
proposed use of proceeds of the sale of Securities will be described in a
Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), between the Company and First Trust of New York, National
Association, as Trustee (the "Trustee"). The Subordinated Debt Securities are to
be issued under an Indenture (the "Subordinated Indenture"), between the Company
and the Trustee. The Senior Indenture and the Subordinated Indenture are
sometimes referred to together as the "Indenture." Copies of the Senior
Indenture and the Subordinated Indenture have been filed as exhibits to the
Registration Statement. The following summary of certain general provisions of
the Senior Indenture and the Subordinated Indenture and the Debt Securities does
not purport to be complete and is subject to, and is qualified in its entirety
3
<PAGE>
by reference to, the provisions of the Senior Indenture or the Subordinated
Indenture, as the case may be, including the definitions therein of certain
terms. The Senior Indenture and the Subordinated Indenture are identical in all
respects except as otherwise indicated below.
The particular terms of the Debt Securities offered by any Prospectus
Supplement (the "Offered Debt Securities") and the extent, if any, to which such
general provisions may apply to the Offered Debt Securities will be described in
the Prospectus Supplement relating to such Offered Debt Securities. The
Prospectus Supplement relating to the Offered Debt Securities will also set
forth whether the Offered Debt Securities are Senior Debt Securities or
Subordinated Debt Securities.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be issued
thereunder and provides that Debt Securities may be issued thereunder up to the
aggregate principal amount which may be authorized from time to time. In
addition to the ability to issue Debt Securities with terms different from those
of Debt Securities previously issued, the Indenture provides the Company with
the ability to "reopen" a previous issue of a series of Debt Securities and
issue additional Debt Securities of such series. The Debt Securities may be
issued from time to time in one or more series. Unless otherwise specified in
the Prospectus Supplement, the Senior Debt Securities will be unsecured and will
rank equally with all other unsecured and unsubordinated indebtedness of the
Company. The Subordinated Debt Securities will be subordinated in right of
payment to the prior payment in full of the Senior Indebtedness (as defined) of
the Company, as described below under "Subordination of Subordinated Debt
Securities" and in a Prospectus Supplement applicable to an offering of
Subordinated Debt Securities.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of the
Offered Debt Securities: (i) the designation, aggregate principal amount (and
any limit on the aggregate principal amount of the Offered Debt Securities) and
authorized denominations of the Offered Debt Securities; (ii) the price (which
may be expressed as a percentage of the aggregate principal amount thereof) at
which the Offered Debt Securities will be issued; (iii) the date or dates on
which the principal of the Offered Debt Securities will be payable; (iv) the
rate or rates per annum (which may be fixed, floating or adjustable) at which
the Offered Debt Securities will bear interest, if any, or the formula pursuant
to which such rate or rates shall be determined; (v) the date from which such
interest, if any, on the Offered Debt Securities will accrue, the dates on which
such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence and the Regular Record Dates for such Interest
Payment Dates, if any, and the Person to whom any interest on the Offered Debt
Securities will be payable, if other than the Person in whose name such Offered
Debt Securities are registered on any Regular Record Date; (vi) any optional or
mandatory sinking fund provisions; (vii) the date, if any, after which and the
price or prices at which the Offered Debt Securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed at the option of the
Company or the Holder and any other terms and provisions of such optional or
mandatory redemptions; (viii) if applicable, the terms of any right to convert
or exchange the Offered Debt Securities into Common Stock of the Company; (ix)
if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Offered Debt Securities of the series will be issuable;
(x) if other than the principal amount thereof, the portion of the principal
amount of Offered Debt Securities which will be payable upon declaration of
acceleration of maturity thereof or provable in bankruptcy; (xi) the currency or
currencies, including composite currencies and currency units, in which payment
of the principal of (and premium, if any) and interest, if any, on the Offered
Debt Securities will be payable (if other than the currency of the United States
of America), which unless otherwise specified will be the currency of the United
States of America as at the time of payment is legal tender for payment of
public or private debts; (xii) if the principal of (and premium, if any), or
interest, if any, on the Offered Debt Securities are to be payable, at the
election of the Company or any Holder thereof, in a coin, currency or currency
unit other than that in which the Offered Debt Securities of the series are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made; (xiii) if such securities are
to be denominated in a currency or currencies, including composite currencies
and currency units, other than the currency of the United States of America,
the equivalent price in the currency of the United States of America for
purposes of determining the voting rights of Holders of such Debt Securities as
Outstanding Securities under the Indenture; (xiv) if the amount of payments of
principal of (and premium, if any), or portions thereof, or interest, if any,
on the Offered
4
<PAGE>
Debt Securities may be determined with reference to an index, formula or other
method, the manner in which such amounts will be determined; (xv) whether the
Offered Debt Securities shall be issued in whole or in part in the form of a
Global Security or Securities; the terms and conditions, if any, upon which such
Global Security or Securities may be exchanged in whole or in part for other
definitive Debt Securities; and the depositary for such Global Security or
Securities, which depositary must be a clearing agency registered under the
Exchange Act; (xvi) any authenticating or paying agents, registrars, conversion
agents or any other agents with respect to the Offered Debt Securities; or
(xvii) any additional terms relating to the Offered Debt Securities (which may
not be inconsistent with the Indenture).
Unless otherwise indicated in the Prospectus Supplement relating thereto, the
Debt Securities will be issued only in fully registered form, without coupons,
in denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any transfer or exchange of the Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Sections 3.2, 3.5.)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal, premium, if any, and interest, if any, will be payable and the Debt
Securities will be transferable and convertible, if applicable, at the corporate
trust office of the Trustee. Unless other arrangements are made, interest will
be paid by checks mailed to the Holders at their registered addresses. (Sections
3.5, 10.2.) Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
The rights of the Company, and hence the right of creditors of the Company
(including the Holders of Debt Securities), to participate in any distribution
of the assets of any subsidiary upon its liquidation or reorganization or
otherwise is necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of the Company itself as a creditor
of the subsidiary may be recognized.
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets. These risks will vary
depending upon the currency or currencies involved. If applicable, these risks
will be more fully described in the Prospectus Supplement relating thereto.
CERTAIN RESTRICTIONS
Absence of Certain Protections in the Indenture. The Indenture does not
contain any provisions that permit the Holders of the Debt Securities to require
prepayment in the event of a change in the management or control of the Company,
or that afford Holders of the Debt Securities protection in the event of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving the Company that may adversely affect Holders of the Debt
Securities (except to the limited extent that the covenants described below
might affect the Company's ability to consummate such transactions). Any such
provisions applicable to a particular series of Offered Debt Securities will be
described in the applicable Prospectus Supplement and a reference thereto (or
the absence thereof) will be included in the cover page therefor.
General. The various restrictive provisions of the Indenture applicable to
the Company and its Restricted Subsidiaries do not apply to Unrestricted
Subsidiaries. The assets and indebtedness of Unrestricted Subsidiaries are not
consolidated with those of the Company and its Restricted Subsidiaries in
calculating Consolidated Net Tangible Assets under the Senior Indenture and
Investments by the Company or by its Restricted Subsidiaries in Unrestricted
Subsidiaries are excluded in computing Consolidated Net Tangible Assets.
"Unrestricted Subsidiaries" are those Subsidiaries which are designated as
Unrestricted Subsidiaries by the Board of Directors from time to time pursuant
to the Indenture (in each case, unless and until designated as Restricted
Subsidiaries by the Board of Directors pursuant to the Indenture). "Restricted
Subsidiaries" are all Subsidiaries other than Unrestricted Subsidiaries. A
"Wholly-owned Restricted Subsidiary" is a Restricted Subsidiary all of the
outstanding Funded Debt and capital stock of which (except directors' qualifying
shares) is owned by the Company and its other Wholly-owned
5
<PAGE>
Restricted Subsidiaries. (Section 1.1 of the Senior Indenture and, in relation
to the designation of Restricted Subsidiaries and Unrestricted Subsidiaries,
Section 1.1 of the Subordinated Indenture.)
An Unrestricted Subsidiary may not be designated a Restricted Subsidiary if it
has any Secured Debt, Funded Debt or Attributable Debt unless immediately
thereafter the Company and its Restricted Subsidiaries would be permitted to
incur such debt under the terms of the Senior Indenture. (Section 10.11(a) of
the Senior Indenture.)
Restrictions Upon Secured Debt. Neither the Company nor a Restricted
Subsidiary is permitted to incur or guarantee certain indebtedness secured by
any lien, mortgage, pledge or other encumbrance on its property without equally
and ratably securing the Senior Debt Securities. This restriction does not apply
to certain permitted encumbrances described in the Senior Indenture, including
purchase money mortgages, encumbrances existing on property at the time it is
acquired by the Company or a Restricted Subsidiary or created within 24 months
of the date of such acquisition, conditional sales and similar agreements and
the extension, renewal or refunding of any of the foregoing. Section 10.10(d)
of the Senior Indenture also permits other indebtedness secured by encumbrances
not otherwise specifically permitted which, together with Attributable Debt
respecting existing Sale and Leaseback Transactions (excluding Sale and
Leaseback Transactions entered into in respect of property acquired by the
Company or a Restricted Subsidiary not more than 24 months prior to the date
such Transaction is entered into), and unsecured Funded Debt of Subsidiaries,
incurred or entered into, as the case may be, after the date of the Senior
Indenture, would not at the time exceed 20% of the Consolidated Net Tangible
Assets of the Company and its Restricted Subsidiaries. (Section 10.10 of the
Senior Indenture.)
Under the Indenture, (i) "Consolidated Net Tangible Assets" means the total
amount of assets on a consolidated balance sheet of the Company and its
Restricted Subsidiaries (less applicable reserves and other properly deductible
items and after excluding any investments made in Unrestricted Subsidiaries or
in corporations while they were Unrestricted Subsidiaries but which are not
Subsidiaries at the time of computation) after deducting (a) all liabilities and
liability items, including amounts in respect of obligations under leases (or
guarantees thereof) which under generally accepted accounting principles would
be included on such balance sheet, except Funded Debt, capital stock and
surplus, surplus reserves and provisions for deferred income taxes and (b)
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles (Section 1.1 of the Senior Indenture); (ii)
"Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed, whether secured or unsecured, maturing more
than one year after the date of determination thereof and any indebtedness,
regardless of its term, renewable pursuant to the terms thereof or of a
revolving credit or similar agreement effective for more than one year after the
date of the creation of the indebtedness, which would, in accordance with
generally accepted accounting practice, be classified as funded debt, excluding
(a) indebtedness for which money in satisfaction thereof has been deposited in
trust, (b) certain guarantees arising in the ordinary course of business and (c)
liabilities resulting from capitalization of lease rentals (Section 1.1 of the
Senior Indenture); and (iii) "Secured Debt" means indebtedness for money
borrowed which is secured by a lien on property of the Company or any Restricted
Subsidiary, excluding certain guarantees arising in the ordinary course of
business. (Section 1.1 of the Senior Indenture.)
Restrictions Upon Sales with Leases Back. The Company is not permitted, and
may not permit a Restricted Subsidiary, to sell (except to the Company or one or
more Wholly-owned Restricted Subsidiaries) any manufacturing plant, warehouse,
retail store or equipment owned and operated by the Company or a Restricted
Subsidiary on or after the date of the Senior Indenture with the intention that
the Company or any Restricted Subsidiaries take back a lease thereof, except a
lease for a period, including renewals, of not more than 24 months by the end of
which period it is intended that the use of such property by the lessee will be
discontinued, except (i) where the Company would be entitled under Section
10.10(d) of the Senior Indenture to incur additional secured indebtedness not
otherwise specifically permitted by the Senior Indenture in an amount equal to
the Attributable Debt respecting such Sale and Leaseback Transaction, (ii) where
the Sale and Leaseback Transaction is entered into in respect of property
acquired by the Company or a Restricted Subsidiary within 24 months of such
acquisition, or (iii) where the Company within 120 days of entering into the
Sale and Leaseback Transaction applies to the retirement of its Secured Debt an
amount equal to the greater of (a) the net proceeds of the sale of the property
leased pursuant to such Transaction or (b) the fair market value of the
property so leased. (Section 10.9 of the Senior Indenture.)
6
<PAGE>
Restrictions Upon Funded Debt of Restricted Subsidiaries. Restricted
Subsidiaries are prohibited from becoming liable for any unsecured Funded Debt
except where the Company would be entitled under Section 10.10(d) of the Senior
Indenture to incur additional secured indebtedness not otherwise specifically
permitted by the Senior Indenture in an amount equal to such Funded Debt and
except for certain extensions, refunding and renewals of Funded Debt. (Section
10.8 of the Senior Indenture.)
Restrictions Upon Merger and Sale of Assets. The Senior Indenture provides
that no merger of the Company with or sale of the Company's property
substantially as an entirety to any other corporation shall be made if, as a
result, properties or assets of the Company would become subject to a mortgage
or lien which would not be permitted by the Senior Indenture, unless the Senior
Debt Securities shall be equally and ratably secured with such obligations.
(Section 8.1 of the Senior Indenture.) Any successor entity must be a
corporation organized in the United States and, immediately after giving effect
to a merger or consolidation, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing. (Section 8.1.)
Although the amount of the Company's property that will constitute a sale of
such property "substantially as an entirety" is not readily quantifiable, a
determination as to whether such a sale has occurred will depend on the
percentage of operating and total assets transferred, among other measurements,
and other facts and circumstances of the transaction. In any particular
transaction, the determination of whether such a sale has occurred will be made
by the Company, and the Company will give notice of such occurrence to the
Holders of the Debt Securities. Because of the uncertainty regarding whether a
particular sale will constitute a sale of property "substantially as an
entirety," Holders will not be able to determine for themselves whether such a
transaction has occurred and will have to rely on the Company's determination.
If such a transaction occurs, the person to which such amount of the Company's
property is transferred shall enter into a supplemental Indenture satisfactory
in form to the Trustee.
MODIFICATION OF THE INDENTURE
The Indenture and the rights of the Holders may be modified by the Company
only with the consent of the Holders of not less than a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected by
the modification; but no modification altering the terms of payment of principal
or interest, changing the place or medium of payment of principal or interest,
impairing the rights of Holders to institute suit for payment, adversely
changing the right to convert or exchange any Debt Security, including
decreasing the conversion rate or increasing the conversion price of such Debt
Security (if applicable), reducing the percentage required for modification or,
in the case of the Subordinated Indenture, modifying the subordination
provisions in a manner adverse to the Holders of the Subordinated Debt
Securities will be effective against any Holder without his, her or its consent.
(Section 9.2.)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to the Debt Securities
of any series as being any one of the following events: (i) default for 30 days
in any payment of interest upon any Security of that series when due (in the
case of the Subordinated Indenture, whether or not payment is prohibited by the
provisions described under the heading "Subordination of Subordinated Debt
Securities" below), (ii) default in any payment of principal of (or premium, if
any) upon any Security of that series when due (in the case of the Subordinated
Indenture, whether or not payment is prohibited by the provisions described
under the heading "Subordination of Subordinated Debt Securities" below), (iii)
default for 60 days after appropriate notice in the performance of any other
covenant in the Debt Securities of that series or the Indenture (other than a
covenant included in the Indenture solely for the benefit of any series of Debt
Securities other than that series), (iv) certain events in bankruptcy,
insolvency or reorganization, or (v) certain events of default resulting in the
acceleration of the maturity of the related indebtedness aggregating in excess
of $10,000,000 under any mortgages, indentures (including the Indenture) or
instruments under which the Company may have issued, or by which there may have
been secured or evidenced, any other indebtedness (including Debt Securities of
any series) of the Company. In case an Event of Default shall occur and be
continuing with respect to the Debt Securities of any series, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Debt
Securities then outstanding of that series may declare the principal
7
<PAGE>
of the Debt Securities of such series (or, if the Debt Securities of that series
were issued as discounted Debt Securities, such portion of the principal as may
be specified in the terms of that series) and the accrued interest thereon, if
any, to be due and payable. Any Event of Default with respect to the Debt
Securities of any series which has been cured may be waived by the Holders of a
majority in aggregate principal amount of the Debt Securities of that series
then outstanding. (Sections 5.1, 5.2, 5.13.)
The Indenture requires the Company to file annually with the Trustee a written
statement signed by an officer of the Company as to the absence of certain
defaults under the terms of the Indenture. The Indenture provides that the
Trustee may withhold notice to the Holders of any default (except in payment of
principal or premium, if any, or interest) if it considers it in the interest of
the Holders to do so. (Sections 6.2 and 10.13 of the Senior Indenture and
Sections 6.2 and 10.10 of the Subordinated Indenture.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Indenture
provides that the Trustee shall be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of
Holders unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for indemnification and certain other
rights of the Trustee, the Indenture provides that the Holders of a majority in
principal amount of the Debt Securities of any series then outstanding shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. (Sections 5.12, 6.3.)
CONVERSION RIGHTS
The terms on which Debt Securities of any series are convertible into or
exchangeable for Common Stock of the Company will be set forth in the Prospectus
Supplement relating thereto. Such terms shall include provisions as to whether
conversion or exchange is mandatory, at the option of the holder or at the
option of the Company, and may include provisions pursuant to which the number
of shares of Common Stock of the Company to be received by the holders of Debt
Securities would be calculated according to the market price of Common Stock of
the Company as of a time stated in the Prospectus Supplement. (Article
Thirteen.)
DEFEASANCE AND DISCHARGE
The terms of the Indenture provide the Company with the option to be
discharged from any and all obligations with respect to a particular series of
Debt Securities, including, in the case of Subordinated Debt Securities, the
provisions described under the heading "Subordination of Subordinated Debt
Securities" herein (except for certain obligations to register the transfer or
exchange of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and hold moneys for payment in trust)
upon the deposit with the Trustee, in trust, of money or U.S. Government
Obligations (as defined) (or Foreign Government Obligations (as defined) in case
of Debt Securities denominated in foreign currencies), or both, which through
the payment of interest and principal thereof in accordance with their terms
will provide money in an amount sufficient to pay any installment of principal
(and premium, if any) and interest on and any mandatory sinking fund payments in
respect of such Debt Securities on the Stated Maturity of such payments or on
the applicable Redemption Date in accordance with the terms of the Indenture and
such Debt Securities. Such option may only be exercised if the Company has
received from, or there has been published by, the United States Internal
Revenue Service a ruling to the effect that such a discharge will not be deemed,
or result in, a taxable event with respect to Holders of such series of Debt
Securities. (Section 4.3.)
DEFEASANCE OF CERTAIN COVENANTS
The terms of the Indenture provide the Company with the option to have the
occurrence of events described in (c) or (e) under the heading "Events of
Default" above no longer be Events of Default and, in the case of Senior Debt
Securities, to omit to comply with certain of the covenants described under the
heading "Certain Restrictions" above, and, in the case of Subordinated Debt
Securities, the provisions described under the heading "Subordination of
Subordinated Debt Securities" below will no longer be applicable, in each case,
with respect to a particular series
8
<PAGE>
of Debt Securities. The Company, in order to exercise such option, will be
required to deposit with the Trustee money or U.S. Government Obligations (or
Foreign Government Obligations (as defined) in case of Debt Securities
denominated in foreign currencies), or both, which through the payment of
interest and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay principal (and premium, if any) and interest on
and any mandatory sinking fund payments in respect of such Debt Securities on
the Stated Maturity of such payments or on the applicable Redemption Date in
accordance with the terms of the Indenture and such Debt Securities. The Company
will also be required to deliver to the Trustee an opinion of counsel to the
effect that the deposit and related covenant defeasance will not cause the
Holders of such series of Debt Securities to recognize income, gain or loss for
federal income tax purposes. (Section 10.12 of the Senior Indenture and Section
10.9 of the Subordinated Indenture.)
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its defeasance option, payment of such Debt Securities
may not be accelerated because of an Event of Default. If the Company exercises
its covenant defeasance option, payment of such Debt Securities may not be
accelerated by reference to the provisions described in the preceding paragraph.
In the event the Company omits to comply with its remaining obligations with
respect to such Debt Securities under the Indenture after exercising its
covenant defeasance option and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations (or Foreign Government Obligations in case of Debt
Securities denominated in foreign currencies) on deposit with the Trustee may be
insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable in respect of such payments. (Sections 4.3 and 10.12
of the Senior Indenture and Sections 4.3 and 10.9 of the Subordinated
Indenture.)
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be subordinated in right of payment, as
set forth in the Subordinated Indenture, to the prior payment in full of all
existing and future Senior Indebtedness of the Company. (Section 14.1 of the
Subordinated Indenture.) "Senior Indebtedness" means the principal of (and
premium, if any) and interest on (including interest accruing after the filing
of a petition initiating any proceeding pursuant to any bankruptcy law, but only
to the extent allowed or permitted to the holder of such Debt against the
bankruptcy or any other insolvency estate of the Company in such proceeding) or
accrued original issue discount on and other amounts due on or in connection
with any Debt incurred, assumed or guaranteed by the Company, whether presently
outstanding or hereafter incurred, assumed or guaranteed, and all renewals,
extensions and refundings of any such Debt; provided however, that the following
will not constitute Senior Indebtedness: (i) any Debt which expressly provides
(a) that such Debt shall not be senior in right of payment to the Subordinated
Debt Securities or (b) that such Debt shall be subordinated to any other Debt of
the Company, unless such Debt expressly provides that such Debt shall be senior
in right of payment to the Subordinated Debt Securities; (ii) any Debt of the
Company in respect of the Subordinated Debt Securities; (iii) any Debt or
liability for compensation to employees, for goods or materials purchased in the
ordinary course of business or for services; (iv) any Debt of the Company to any
subsidiary for money borrowed or advanced from such subsidiary; and (v) any
liability for federal, state, local or other taxes owed or owing by the Company.
"Debt" means (a) all indebtedness for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of the borrower or only to
a portion thereof and including all indebtedness evidenced by notes, bonds,
debentures or other securities sold for money), (b) all indebtedness incurred or
assumed in the acquisition (whether by way of purchase, merger, consolidation or
otherwise) of any business, real property or other assets (except assets other
than real property acquired in the ordinary course of the conduct of the
acquirer's usual business), (c) all Capital Lease Obligations, (d) Hedging
Obligations, (e) guarantees of indebtedness described in clauses (a), (b), (c)
or (d) of any other person, and (f) renewals, extensions, refundings, deferrals,
restructurings, amendments and modifications of any such indebtedness
(including, without limitation, exchange offers), obligation or guarantee.
By reason of the subordination described herein, in the event of insolvency,
upon any distribution of the assets of the Company, (i) the Holders of
Subordinated Debt Securities are required to pay over their share of such
distribution to the trustee in bankruptcy, receiver or other person distributing
the assets of the Company for
9
<PAGE>
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all holders of Senior Indebtedness in full and (ii)
unsecured creditors of the Company who are not Holders of Subordinated Debt
Securities or holders of Senior Indebtedness of the Company may recover less,
ratably, than holders of Senior Indebtedness of the Company and may recover
more, ratably, than the Holders of Subordinated Debt Securities. (Section 14.2
of the Subordinated Indenture.)
In the event that any Subordinated Debt Securities are declared due and
payable prior to their Stated Maturity by reason of the occurrence of an Event
of Default, then the Company is obligated to notify promptly holders of Senior
Indebtedness of such acceleration. The Company may not pay the Subordinated Debt
Securities until 120 days have passed after such acceleration occurs and may
thereafter pay the Subordinated Debt Securities if the terms of the Indenture
otherwise permit payment at that time. (Section 14.3 of the Subordinated
Indenture.)
No payment of the principal, premium, if any, or interest with respect to any
Subordinated Debt Securities may be made, nor may the Company acquire any
Subordinated Debt Securities except as set forth in the Indenture, if any
default with respect to Senior Indebtedness occurs and is continuing that
permits the acceleration of the maturity thereof and the Company has actual
knowledge of the default, unless (i) 120 days pass after notice of the default
is given to the Trustee and such default is not then the subject of judicial
proceedings or the default with respect to the Senior Indebtedness is cured
(including, without limitation, by the payment of such Senior Indebtedness in
full) or waived and (ii) the terms of the Indenture otherwise permit the payment
or acquisition of Subordinated Debt Securities at that time. The Company is
required to give the Trustee notice of a default with respect to Senior
Indebtedness within five Business Days after the Company has actual knowledge of
the default or potential default. (Section 14.4 of the Subordinated Indenture.)
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness, which may include indebtedness that is senior to
the Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities, when issued, will constitute Senior
Indebtedness.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
GLOBAL SECURITIES
Securities of a series may be issued in whole or in part in the form of one or
more Global Securities that will be deposited with, or on behalf of, a
depositary identified in the Prospectus Supplement relating to such series.
Global Securities will be issued in registered form and in either temporary or
permanent form. Unless and until it is exchanged for Debt Securities in
definitive form, a temporary Global Security may not be transferred except as a
whole by the depositary for such Global Security to a nominee of such depositary
or any such nominee to a successor of such depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series of
Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to any
depositary arrangements.
Upon the issuance of a Global Security, the depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Securities represented by such Global
Security. Such accounts shall be designated by the underwriters or agents with
respect to such Securities or by the Company if such Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the depositary for
such Global Security or its nominee ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the depositary (with respect to
participants' interests) for such Global Security or by participants or persons
that hold through participants (with respect to beneficial owners' interests).
10
<PAGE>
CONCERNING THE TRUSTEE
First Trust of New York, National Association is the Trustee under the Senior
Indenture, the Subordinated Indenture and the Company's Indenture dated as of
July 2, 1984 and has been appointed by the Company as initial Security Registrar
and Paying Agent with regard to the Debt Securities.
DESCRIPTION OF CAPITAL STOCK
The following statements with respect to the capital stock of the Company are
subject to the detailed provisions of the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), and By-Laws, as
amended (the "By-Laws"). These statements do not purport to be complete, or to
give full effect to the provisions of statutory or common law, and are subject
to, and are qualified in their entirety by reference to, the terms of the
Certificate of Incorporation and the By-Laws. The Certificate of Incorporation
and the By-Laws are filed as exhibits to the Registration Statement of which
this Prospectus is a part.
GENERAL
The authorized capital stock of the Company consists of 240,000,000 shares of
Common Stock, par value $1.00 per share, and 20,000,000 shares of Preferred
Stock, par value $1.00 per share. If the Merger becomes effective, the Company's
authorized Common Stock will be increased to 300,000,000 shares. The
Certificate of Incorporation authorizes the Company's Board of Directors to
provide for the issuance, from time to time, of series of preferred stock, to
establish the number of shares to be included in any such series and to fix the
designations, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. No shares of
Preferred Stock of the Company are outstanding as of the date hereof.
VOTING RIGHTS
Each holder of Common Stock is entitled to one vote for each share registered
in his name on the books of the Company on all matters submitted to a vote of
stockholders. Except as otherwise provided by law, the holders of Common Stock
vote as one class. The shares of Common Stock do not have cumulative voting
rights. As a result, subject to the voting rights, if any, of the holders of any
shares of the Company's preferred stock which may at the time be outstanding,
the holders of Common Stock entitled to exercise more than 50% of the voting
rights in an election of directors can elect 100% of the directors to be elected
in a particular year if they choose to do so. In such event, the holders of the
remaining Common Stock voting for the election of directors will not be able to
elect any persons to the Board of Directors.
DIVIDEND RIGHTS
Subject to the rights of the holders of any shares of the Company's preferred
stock which may at the time be outstanding, holders of Common Stock are entitled
to such dividends as the Board of Directors may declare out of funds legally
available therefor.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
Subject to the prior rights of creditors and the holders of outstanding
preferred stock, if any, the holders of the Common Stock are entitled in the
event of liquidation, dissolution or winding up to share pro rata in the
distributions of all remaining assets.
The Common Stock is fully paid and is not liable to any calls or assessments
and is not convertible into any other securities. There are no redemption or
sinking fund provisions applicable to the Common Stock, and the Certificate of
Incorporation provides that there shall be no preemptive rights.
Harris Trust Company of New York acts as transfer agent and registrar for the
Common Stock.
11
<PAGE>
CHANGE OF CONTROL
The provisions of the Certificate of Incorporation summarized in the
succeeding paragraphs may be deemed to have an anti-takeover effect and may
delay, deter or prevent a tender offer or takeover attempt that a stockholder
might consider to be in such stockholder's best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.
The Board of Directors of the Company is divided into three classes that are
elected for staggered three-year terms.
Pursuant to the Certificate of Incorporation, the Board of Directors by
resolution may establish one or more series of Company preferred stock having
such number of shares, designation, relative voting rights, dividend rates,
liquidation and other rights, preferences and limitations as may be fixed by the
Board of Directors without any further stockholder approval. Such rights,
preferences, privileges and limitations as may be established could have the
effect of impeding or discouraging the acquisition of control of the Company.
In addition, the Certificate of Incorporation provides that the affirmative
vote of no less than 75% of the outstanding voting stock of the Company, voting
as one class, shall be required for the adoption or authorization of certain
Business Combinations (as defined below) with a Related Person (as defined
below). Such vote will not be required if (i) the agreement to effectuate the
Business Combination with a Related Person is approved by a majority of the
Continuing Directors (as defined below), even if such majority does not
constitute a quorum of the Board of Directors then in office, or (ii) the
Business Combination satisfies certain minimum price criteria and procedural
requirements which are intended to assure an adequate and fair price under the
circumstances.
A "Business Combination" includes: (i) any merger or consolidation of the
Company with or into any Related Person; (ii) the sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a series
of transactions) to or with any Related Person of any assets of the Company or
any subsidiary thereof having an aggregate fair market value of $15,000,000 or
more; (iii) the issuance or transfer by the Company or any subsidiary thereof
(in one transaction or a series of transactions) of any securities of the
Company or any subsidiary thereof to any Related Person in exchange for cash,
securities or other property (or a combination thereof) having an aggregate fair
market value of $15,000,000 or more; (iv) the adoption of any plan or proposal
for the liquidation or dissolution of the Company proposed by or on behalf of
any Related Person; or (v) any reclassification or recapitalization of
securities of the Company if the effect, directly or indirectly, of such
transaction is to increase the relative voting power of any Related Person. A
"Related Person" includes any person, together with any affiliate or associate
of such person, which has beneficial ownership, directly or indirectly, of
shares of stock of the Company entitling such person to exercise more than ten
percent (10%) of the total voting power of all classes of stock of the Company
entitled to vote in elections of directors, considered as one class, together
with the successors and assigns of any such person in any transaction or series
of transactions not involving a public offering of the Company stock within the
meaning of the Securities Act. A "Continuing Director" is a member of the Board
of Directors who was not affiliated with the Related Person and was a member of
the Board of Directors prior to the time that the Related Person acquired the
last shares of stock of the Company entitling such Related Person to exercise,
in the aggregate, in excess of ten percent (10%) of the total voting power of
all classes of stock of the Company entitled to vote in elections of directors,
or a person recommended to succeed a Continuing Director by a majority of
Continuing Directors.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities, Common
Stock, Preferred Stock, or any combination thereof. Warrants may be issued
independently, together with any other Securities offered by a Prospectus
Supplement, and may be attached to or separate from such Securities. Warrants
may be issued under warrants agreements (each, a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the applicable
Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will act solely
as an agent of the Company in connection with the Warrants of a particular
series and will not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Warrants. The following sets forth
12
<PAGE>
certain general terms and provisions of the Warrants offered hereby. Further
terms of the Warrants and the applicable Warrant Agreement will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the Warrants
in respect of which this Prospectus is being delivered, including, where
applicable, the following: (i) the title of such Warrants; (ii) the aggregate
number of such Warrants; (iii) the price or prices at which such Warrants will
be issued; (iv) the designation, number and terms of the Debt Securities, Common
Stock, Preferred Stock, or combination thereof, purchasable upon exercise of
such Warrants; (v) the designation and terms of the other Securities, if any,
with which such Warrants are issued and the number of such Warrants issued with
each such Security; (vi) the date, if any, on and after which such Warrants and
the related underlying Securities will be separately transferable; (vii) the
price at which each underlying Security purchasable upon exercise of such
Warrants may be purchased; (viii) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (ix) the
minimum amount of such Warrants which may be exercised at any one time; (x)
information with respect to book-entry procedures, if any; (xi) a discussion of
any applicable federal income tax considerations; and (xii) any other terms of
such Warrants, including terms, procedures and limitations relating to the
transferability, exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents, including on a
continuing basis. The Prospectus Supplement with respect to the Securities being
offered thereby sets forth the terms of the offering of such Securities,
including the name or names of any underwriters, the purchase price of such
Securities and the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price, any discounts or concessions allowed or reallowed or paid
to dealers and any securities exchanges on which such Securities may be listed.
Only underwriters so named in the Prospectus Supplement are deemed to be
underwriters in connection with the Securities offered thereby.
The distribution of the Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices relating to such prevailing
market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them and any profit on the resale of Securities by them may be
deemed to be underwriting discounts and commissions under the Act. Any such
underwriter or agent will be identified, and any such compensation will be
described, in a Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain civil liabilities,
including liabilities under the Act.
If so indicated in the Prospectus Supplement, the Company will authorize the
underwriters to solicit offers by certain institutions to purchase Securities
from the Company at the public offering price set forth in the Prospectus
Supplement pursuant to Delayed Delivery Contracts providing for payment and
delivery on the date stated in the Prospectus Supplement. Each such contract
will be for an amount not less than, and unless the Company otherwise agrees,
the aggregate principal amount of Securities sold pursuant to such contracts
shall not be more than, the respective amounts stated in the Prospectus
Supplement. Institutions with whom such contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions, but shall in all cases be subject to the approval of the Company.
Delayed Delivery Contracts will not be subject to any conditions except that the
purchase by an institution of the Securities covered thereby shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject.
13
<PAGE>
The Underwriting Agreement entered into with respect to any Securities sold
through underwriters provides that the obligations of the underwriter or
underwriters will be subject to certain conditions precedent and that the
underwriters will be obligated to purchase all of the Securities covered by the
applicable Prospectus Supplement if any are purchased.
LEGAL OPINIONS
The validity of the Securities offered hereby has been passed upon for the
Company by Jones, Day, Reavis & Pogue, 599 Lexington Avenue, New York, New York
10022. Certain legal matters in connection with the offering to which this
Prospectus relates will be passed upon for the Company by Franklin C. Brown,
Esq., General Counsel for the Company.
EXPERTS
The consolidated financial statements and schedule of the Company and its
subsidiaries as of March 2, 1996 and March 4, 1995, and for each of the years in
the three-year period ended March 2, 1996, have been incorporated by reference
herein and in the registration statement in reliance upon the reports of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the March 4, 1995
consolidated financial statements refers to a change in the method
of accounting for investments.
With respect to the unaudited interim financial information of the Company and
subsidiaries for the periods ended June 1, 1996 and August 31, 1996,
incorporated by reference herein, the independent certified public accountants
have reported that they applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
reports included in the Company's quarterly reports on Form 10-Q for the
quarters ended June 1, 1996 and August 31, 1996, and incorporated by reference
herein, state that they did not audit and they do not express an opinion on the
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their report on the
unaudited interim financial information because that report is not a "report" or
a "part" of the registration statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements and schedule of Thrifty PayLess
Holdings, Inc. and subsidiaries as of October 1, 1995 and October 2, 1994 and
for each of the years in the three-year period ended October 1, 1995, have been
incorporated by reference in this Prospectus in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC registration fee............. $181,800
Accountants' fees and expenses... 35,000
Attorneys' fees and expenses..... 50,000
Printing and engraving expenses.. 25,000
Trustee's fees................... 10,000
Blue Sky fees and expenses....... 25,000
Miscellaneous.................... 10,000
--------
Total........................ $336,800
========
</TABLE>
Except for the SEC registration fee, all expenses are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation -- a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement, or otherwise. Article
Tenth of the Company's Certificate of Incorporation and Article VII of the
Company's By-laws provide for the indemnification of its directors and officers
as authorized by Section 145 of the Delaware General Corporation Law.
Article Tenth of the Company's Certificate of Incorporation provides that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for any breach of his fiduciary duty as a
director except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions that are
not in good faith or involve intentional misconduct or a knowing violation of
the law, (iii) under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit.
The directors and officers of the Company and its subsidiaries are insured
(subject to certain exceptions and deductions) against liabilities which they
may incur in their capacity as such including liabilities under the Securities
Act of 1933, under liability insurance policies carried by the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
1 -- Form of Underwriting Agreement (incorporated by reference to
Exhibit 1 to Registration Statement File No. 33-63794).
4(a) -- Certificate of Incorporation of the Company, dated April 9, 1968,
together with amendments filed August 21, 1969, July 15, 1971,
July 20, 1976, July 8, 1981 and
II-1
<PAGE>
July 27, 1983 (incorporated by reference to Exhibit (3) to the
Company's Registration Statement on Form 8 filed July 2, 1984);
amendment filed July 18, 1986 (incorporated by reference to the
Company's Annual Report of Form 10-K dated May 26, 1987);
amendment filed July 14, 1987 (incorporated by reference to the
Company's Annual Report on Form 10-K dated May 27, 1988); and
amendment filed September 2, 1993 (incorporated by reference to
the Company's Annual Report on Form 10-K dated May 31, 1995).
4(b) -- By-laws of the Company (incorporated by reference to Exhibit 3(a)
to the Company's Registration Statement on Form S-1 filed April
26, 1968) and Amendments to By-laws (incorporated by reference to
Exhibit (3) to the Company's Form 10-K filed May 29, 1983).
4(c) -- Form of Indenture for Senior Debt Securities, between the Company
and First Trust of New York, National Association, as Trustee
(incorporated by reference to Exhibit 4(a) to Registration
Statement File No. 33-63794).
4(d) -- Form of Indenture for Subordinated Debt Securities, between the
Company and First Trust of New York, National Association, as
Trustee (incorporated by reference to Exhibit 4(b) to
Registration Statement File No. 33-63794).
4(e) -- Supplemental Indenture (to be filed, as applicable to a
particular offering of Debt Securities, as an exhibit to a
Current Report on Form 8-K and incorporated herein by reference
thereto).
4(f) -- The form or forms of Securities with respect to each particular
series of Securities registered hereunder will be filed as an
exhibit to a Current Report on Form 8-K and incorporated herein
by reference thereto.
5 -- Form of opinion and consent of Jones, Day, Reavis & Pogue.
12 -- Ratio of Earnings to Fixed Charges.
15 -- Letter of KPMG Peat Marwick LLP regarding unaudited interim
financial information.
23(a) -- Consent of KPMG Peat Marwick LLP with respect to the Company.
23(b) -- Consent of KPMG Peat Marwick LLP with respect to Thrifty PayLess.
23(c) -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5
hereto).
24 -- Power of Attorney.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or
II-2
<PAGE>
in the aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification (other than pursuant to the insurance
described in Item 15 above) for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Camp Hill, State of Pennsylvania, on November 20,
1996.
RITE AID CORPORATION
By /s/ Martin L. Grass
------------------------------------
Martin L. Grass
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------- ------------------------- -----------------
/s/Martin L. Grass Chairman of the Board November 20, 1996
- ---------------------- and Chief Executive
Martin L. Grass Officer
(Principal Executive
Officer)
* President, Chief November 20, 1996
- ---------------------- Operating Officer and
Timothy J. Noonan Director
* Executive Vice President November 20, 1996
- ---------------------- (Principal Financial
Frank M. Bergonzi Officer and Principal
Accounting Officer)
II-4
<PAGE>
* Executive Vice President, November 20, 1996
- ---------------------- and Director
Franklin C. Brown
* Director November 20, 1996
- ----------------------
Henry Taub
* Director November 20, 1996
- ----------------------
Alex Grass
* Director November 20, 1996
- ----------------------
Nancy A. Lieberman
*The undersigned by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named persons.
/s/ Martin L. Grass
---------------------
Martin L. Grass
Attorney-in-fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- --------------------------- -------------------------------------- -------------------------------------
<S> <C> <C> <C>
1 - Form of Underwriting Agreement
(incorporated by reference to
Exhibit 1 to Registration Statement
File No. 33-63794).
4(a) - Certificate of Incorporation of the
Company, dated April 9, 1968,
together with amendments filed
August 21, 1969, July 15, 1971,
July 20, 1976, July 8, 1981 and
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- --------------------------- -------------------------------------- -------------------------------------
<S> <C> <C> <C>
July 27, 1983 (incorporated by
reference to Exhibit (3) to the
Company's Registration Statement on
Form 8 filed July 2, 1984);
amendment filed July 18, 1986
(incorporated by reference to the
Company's Annual Report of Form
10-K dated May 26, 1987); amendment
filed July 14, 1987 (incorporated
by reference to the Company's
Annual Report on Form 10-K dated
May 27, 1988); and amendment filed
September 2, 1993 (incorporated by
reference to the Company's Annual
Report on Form 10-K dated May 31,
1995).
4(b) - By-laws of the Company
(incorporated by reference to
Exhibit 3(a) to the Company's
Registration Statement on Form S-1
filed April 26, 1968) and
Amendments to By-laws (incorporated
by reference to Exhibit (3) to the
Company's Form 10-K filed May 29,
1983).
4(c) - Form of Indenture for Senior Debt
Securities, between the Company and
First Trust of New York, National
Association, as Trustee
(incorporated by reference to
Exhibit 4(a) to Registration
Statement File No. 33-63794).
4(d) - Form of Indenture for Subordinated
Debt Securities, between the
Company and First Trust of New
York, National Association, as
Trustee (incorporated by reference
to Exhibit 4(b) to Registration
Statement File No. 33-63794).
4(e) - Supplemental Indenture (to be
filed, as applicable to a
particular offering of Debt
Securities, as an exhibit to a
Current Report on Form 8-K and
incorporated herein by reference
thereto).
4(f) - The form or forms of Securities
with respect to each particular
series of Securities registered
hereunder will be filed as an
exhibit to a Current Report on Form
8-K and incorporated herein by
reference thereto.
5 - Form of opinion and consent of Jones, Day,
Reavis & Pogue.
12 - Ratio of Earnings to Fixed Charges.
15 - Letter of KPMG Peat Marwick LLP
regarding unaudited interim
financial information.
23(a) - Consent of KPMG Peat Marwick LLP
with respect to the Company.
23(b) - Consent of KPMG Peat Marwick LLP
with respect to Thrifty PayLess
23(c) - Consent of Jones, Day, Reavis &
Pogue (included in Exhibit 5
hereto).
24 - Power of Attorney.
</TABLE>
<PAGE>
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
599 Lexington Avenue
New York, New York 10022
November , 1996
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
Re: Registration on Form S-3 of up to $600,000,000
of Securities of Rite Aid Corporation
----------------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Rite Aid Corporation, a Delaware corporation
(the "Company"), in connection with the authorization of the possible issuance
and sale from time to time by the Company of (i) certain debt securities of the
Company (the "Debt Securities"), (ii) shares of the Company's common stock, par
value $1.00 per share (the "Common Stock"), (iii) shares of one or more series
of the Company's preferred stock, par value $1.00 per share (the "Preferred
Stock"), and (iv) certain warrants to purchase Debt Securities, Common Stock,
Preferred Stock, or a combination thereof (the "Warrants"), in each case as
contemplated by the Company's Registration Statement on Form S-3 (File No. 333-
) (the "Registration Statement"). The Debt Securities, Common Stock, Preferred
Stock, and Warrants are collectively referred to herein as the "Securities."
Except as otherwise defined herein, capitalized terms that are defined in the
Registration Statement are used herein as so defined.
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion. Based on such examination and on
the assumptions set forth below, we are of the opinion that:
1. The Debt Securities, when (a) duly executed by the Company and
authenticated by the Trustee in accordance with the provisions of
the Indenture and issued and sold in accordance with the
Registration Statement and (b) delivered to the purchaser or
purchasers thereof upon receipt by the Company of such lawful
consideration therefor as the Company's Board of Directors (or a
duly authorized committee thereof or a duly authorized officer of
the Company) may determine, will be valid and binding obligations of
the Company.
2. The Common Stock, when (a) issued and sold in accordance with the
Registration Statement and (b) delivered to the purchaser or
purchasers thereof upon receipt by the Company of such lawful
consideration therefor as the Company's Board of Directors (or a
duly authorized committee thereof or a duly authorized officer of
the Company) may determine, assuming that the Company at such time
has authorized but unissued shares of Common Stock remaining under
its
<PAGE>
Rite Aid Corporation
November __, 1996
Page 2
Certificate of Incorporation, will be validly issued, fully paid and
nonassessable.
3. The Preferred Stock, when (a) issued and sold in accordance with the
Registration Statement and the provisions of an applicable
Certificate of Designation that has been duly adopted by the Board
of Directors of the Company and duly filed in accordance with
Delaware law and (b) delivered to the purchaser or purchasers
thereof upon receipt by the Company of such lawful consideration
therefor as the Company's Board of Directors (or a duly authorized
committee thereof or a duly authorized officer of the Company) may
determine, will be validly issued, fully paid and nonassessable.
4. The Warrants, when (a) issued and sold in accordance with the
Registration Statement and the provisions of an applicable Warrant
Agreement and (b) delivered to the purchaser or purchasers thereof
upon receipt by the Company of such lawful consideration therefor as
the Company's Board of Directors (or a duly authorized committee
thereof or a duly authorized officer of the Company) may determine,
will be valid and binding obligations of the Company.
In rendering the foregoing opinions, we have assumed that (i) the
definitive terms of each class and series of the Securities not presently
provided for in the Indenture or the Company's Certificate of Incorporation will
have been established in accordance with all applicable provisions of law, the
Indenture, the Company's Certificate of Incorporation and By-Laws, and the
authorizing resolutions of the Company's Board of Directors, and reflected in
appropriate documentation approved by us and, if applicable, duly executed and
delivered by the Company and any other appropriate party, (ii) the interest rate
on the Debt Securities will not be higher than the maximum lawful rate permitted
from time to time under applicable law, (iii) any Securities consisting of
Common Stock or Preferred Stock, and any Common Stock or Preferred Stock for or
into which any other Securities are exercisable, exchangeable or convertible,
will have been duly authorized and reserved for issuance, (iv) each Warrant
Agreement will have been duly authorized, executed and delivered by, and will
constitute a valid and binding obligation of, each party thereto, (v) the
Registration Statement, and any amendments thereto, will have become effective,
(vi) a Prospectus Supplement describing each class or series of Securities
offered pursuant to the Registration Statement will have been filed with the
Commission, (vii) the resolutions authorizing the Company to register, offer,
sell, and issue the Securities will remain in effect and unchanged at all times
during which the Securities are offered, sold, or issued by the Company, and
(viii) all Securities will be issued in compliance with applicable federal and
state securities laws.
In rendering the foregoing opinion, we have relied as to certain factual
matters upon certificates of officers of the Company, and we have not
independently checked or verified the accuracy of the statements contained
therein. In rendering the foregoing opinion, our examination of matters of law
has been limited to the laws of the State of New York, the General Corporation
Law of the State of Delaware, and the federal laws of the United States of
America, as in effect on the date hereof.
We understand that prior to offering for sale any Securities you will
advise us in writing of the terms of such offering and of such
<PAGE>
Rite Aid Corporation
November __, 1996
Page 3
Securities, will afford us an opportunity to review the operative documents
(including the applicable Prospectus Supplement) pursuant to which the
Securities are to be offered, sold, and issued, and will file as an exhibit to
the Registration Statement such supplement or amendment to this opinion (if any)
as we may reasonably consider necessary or appropriate by reason of the terms of
such Securities or any changes in the Company's capital structure or other
pertinent circumstances.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to us in the Prospectus under the
caption "Validity of Securities."
Very truly yours,
<PAGE>
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
RITE AID CORPORATION
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
26 WEEKS YEAR ENDED
ENDED
AUGUST 31, MARCH 2, MARCH 4, FEB 26, FEB 27, FEB 29,
1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest Expense..... $ 37,199 $ 68,341 $ 42,300 $ 28,683 $ 29,387 $ 37,463
Interest Portion of Net
Rental Expense(1).. 29,240 52,080 40,424 40,427 37,659 34,939
------- ------- ------- ------- ------- -------
Fixed Charges Before
Capitalized
Interest........... 66,439 120,421 82,724 69,110 67,046 72,402
Capitalized Interest. 850 1,948 373 217 445 721
------- ------- ------- ------- ------- -------
Total Fixed Charges.. $ 67,289 $122,369 $ 83,097 $ 69,327 $ 67,491 $ 73,123
======= ======= ======= ======= ======= =======
Earnings
Income from Continuing
Operations Before
Income Taxes....... $109,909(3) $256,202 $231,464 $ 45,670(2) $200,569 $187,202
Fixed Charges Before
Capitalized Interest
(per above)........ 66,439 120,421 82,724 69,110 67,046 72,402
------- ------- ------- ------- ------- -------
Total Adjusted
Earnings........... $176,348 $376,623 $314,188 $114,780 $267,615 $259,604
======= ======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges........ 2.62 3.08 3.78 1.66 3.97 3.55
</TABLE>
(1) The interest portion of the net rental expense is estimated to be equal to
one-third of the minimum rental expense for the period.
(2) Income from continuing operations before income taxes for fiscal year 1994
includes a $149,196,000 one-time, pre-tax provision for corporate
restructuring and other charges.
(3) Income from continuing operations before income taxes for the twenty-six
week period ended August 31, 1996 includes a $16,057,000 one-time, pre-tax
provision for costs related to the attempted Revco, D.S., Inc. acquisition.
<PAGE>
EXHIBIT 15
Rite Aid Corporation
Camp Hill, Pennsylvania
Gentlemen:
Re: Registration Statement No. 333-
With respect to the subject registration statement, we acknowledge our
awareness of the use therein of our reports dated July
12, 1996 and October 4, 1996 related to our reviews of interim financial
information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports
are not considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
November 19, 1996
<PAGE>
EXHIBIT 23(a)
Consent of Independent Certified Public Accountants
We consent to the use of our audit reports dated April 24, 1996 on the
consolidated financial statements and schedule of Rite Aid Corporation and
subsidiaries as of March 2, 1996 and March 4, 1995 and for each of the years in
the three-year period then ended incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus. Our reports
refer to a change in the method of accounting for investments in fiscal year
1995.
/s/ KPMG Peat Marwick LLP
Harrisburg, Pennsylvania
November 19, 1996
<PAGE>
Exhibit 23(b)
Consent of Independent Certified Public Accountants
---------------------------------------------------
We consent to the use of our audit report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Portland, Oregon
November 19, 1996.
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
By signing below, I hereby constitute and appoint Martin L. Grass,
Franklin C. Brown, and Elliot S. Gerson, or any of them, my true and lawful
attorneys and agents, with full power of substitution and resubstitution, to do
any and all acts and things and to execute any and all instruments in my name
and behalf in my capacities as director and/or officer of Rite Aid Corporation,
a Delaware corporation (the "Company"), which said attorneys and agents, or
any of them, may deem necessary or advisable or which may be required to enable
the Company to comply with the Securities Act of 1933, as amended (the
"Securities Act"), and any rules, regulations or requirements of the Securities
and Exchange Commission in respect thereof, in connection with a Registration
Statement on Form S-3 (or any other appropriate form) of the Company,
post-effective amendments to previous Registration Statements on Form S-3 of the
Company and any abbreviated registration statement relating thereto permitted
pursuant to Rule 462(b) under the Securities Act for the purpose of registering
pursuant to the Securities Act debt and equity securities of the Company having
an aggregate offering price not to exceed $1.0 billion, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign for me, in my name and behalf in my capacities as director
and/or officer of the Company (individually or on behalf of the Company), such
Registration Statement, such post-effective amendments and any such abbreviated
registration statement, and any and all amendments and supplements thereto, and
to file the same, with all exhibits thereto and other instruments or documents
in connection therewith, with the Securities and Exchange Commission, and hereby
ratify and confirm all that said attorneys and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of
November 18, 1996.
/s/ Martin L. Grass
- ----------------------
/s/ Timothy J. Noonan /s/ Henry Taub /s/ Alex Grass
- ---------------------- --------------------- ---------------------
Timothy J. Noonan Henry Taub Alex Grass
/s/ Franklin C. Brown /s/ Frank M. Bergonzi /s/ Nancy A. Lieberman
- ---------------------- --------------------- ----------------------
Franklin C. Brown Frank M. Bergonzi Nancy A. Lieberman
