<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-21207
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 10, 1997)
3,410,256 Shares
Rite Aid Corporation
COMMON STOCK
------------
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS RELATE TO
3,410,256 SHARES (THE "SHARES") OF COMMON STOCK, PAR VALUE $1.00 PER SHARE
(THE "COMMON STOCK"), OF RITE AID CORPORATION, A DELAWARE CORPORATION
(THE "COMPANY"), OFFERED HEREBY (THE "OFFERING") BY THE SELLING
STOCKHOLDERS NAMED HEREIN (THE "SELLING STOCKHOLDERS"), AND SOLD BY
THE UNDERWRITER NAMED BELOW. SEE "SELLING STOCKHOLDERS" AND "THE
UNDERWRITER" HEREIN. THE COMPANY WILL NOT RECEIVE ANY PROCEEDS
FROM THE SALE OF THE SHARES OFFERED HEREBY. THE COMMON STOCK
IS LISTED ON THE NEW YORK STOCK EXCHANGE (THE "NYSE") AND
THE PACIFIC STOCK EXCHANGE (THE "PSE") UNDER THE SYMBOL
"RAD." ON FEBRUARY 10, 1997, THE REPORTED LAST SALES
PRICE OF THE COMMON STOCK ON THE NYSE WAS $41 1/2
PER SHARE.
----------------
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 SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The Shares will be purchased from each of the Selling Stockholders by Morgan
Stanley & Co. Incorporated (the "Underwriter") at a price of $40.385 per share
(resulting in $137,723,189 aggregate net proceeds (before expenses) to the
Selling Stockholders). The Company will pay certain expenses of the Offering
estimated at $200,000.
The Shares may be offered by the Underwriter from time to time in one or
more transactions (which may involve block transactions) on the NYSE or on
other national securities exchanges on which the Common Stock is traded, in
the over-the-counter market, through negotiated transactions or otherwise at
market prices prevailing at the time of the sale or at prices otherwise
negotiated, subject to prior sale, when, as and if delivered to and accepted
by the Underwriter. See "The Underwriter."
The Company and each of the Selling Stockholders (severally and not jointly)
have agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
----------------
The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriter named herein and subject to approval of certain legal matters
by Cravath, Swaine & Moore, counsel for the Underwriter. It is expected that
delivery of the Shares will be made on or about February 19, 1997 at the
office of Morgan Stanley & Co. Incorporated, New York, N.Y., against payment
therefor in immediately available funds.
----------------
MORGAN STANLEY & CO.
Incorporated
February 11, 1997
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDERS OR THE UNDERWRITER. THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY
TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds.................. S-3
Selling Stockholders............. S-3
Price Range of Common Stock and
Dividends....................... S-4
The Underwriter.................. S-4
Legal Matters.................... S-5
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.............. 2
Incorporation of Certain Documents
by Reference...................... 2
The Company........................ 3
Use of Proceeds.................... 3
Selling Stockholders............... 4
Description of Capital Stock....... 5
Plan of Distribution............... 7
Legal Matters...................... 7
Experts............................ 8
Certain Forward-Looking State-
ments............................. 8
</TABLE>
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NYSE, THE PSE OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to shares of
Common Stock owned by the Selling Stockholders as of the date of, and as
adjusted to reflect, the sale of the Shares offered hereby.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
OWNERSHIP PRIOR TO SHARES OF OWNERSHIP AFTER
THE OFFERING(1) COMMON STOCK THE OFFERING(1)
-------------------- OFFERED -----------------
NAMES OF SELLING STOCKHOLDERS NUMBER PERCENTAGE HEREBY NUMBER PERCENTAGE
----------------------------- --------- ---------- ------------ ------ ----------
<S> <C> <C> <C> <C> <C>
BankAmerica Capital
Corporation.................. 791,772 * 791,772 0 0%
Landmark Equity Partners III,
L.P. ........................ 1,060,409 * 1,060,409 0 0
Landmark Equity Partners IV,
L.P. ........................ 56,555 * 56,555 0 0
Midland Montagu Private Equity
Inc. ........................ 353,470 * 353,470 0 0
O&M Investment Partners....... 42,014 * 34,621 7,393 *
Robert Fleming Nominees
Limited...................... 53,020 * 53,020 0 0
The Nippon Credit Bank, Ltd. . 176,735 * 176,735 0 0
Wells Fargo & Company......... 883,674 * 883,674 0 0
--------- --------- -----
Total..................... 3,417,649 3,410,256 7,393
========= ========= =====
</TABLE>
- --------
* Less than 1%.
(1) Based on 122,783,236 shares of Common Stock outstanding on January 31,
1997, which includes shares of Common Stock issuable as a result of the
Thrifty Payless Merger (as that term is defined in the Prospectus) upon
surrender of the certificates formerly representing shares of Thrifty
PayLess Holdings, Inc. common stock.
S-3
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The shares of the Common Stock are listed and principally traded on the NYSE
and PSE and quoted under the trading symbol "RAD." The following table sets
forth, for the quarters indicated, the high and low sales prices of the Common
Stock on the NYSE as reported on the Dow Jones News Service.
<TABLE>
<CAPTION>
PERIOD ENDED HIGH LOW
------------ ------- -------
<S> <C> <C>
Fiscal Year Ended March 4, 1995:
Quarter Ended May 28, 1994.................................... $20 3/8 $18 1/8
Quarter Ended August 27, 1994................................. 21 1/2 18 7/8
Quarter Ended November 26, 1994............................... 24 20
Quarter Ended March 1, 1995................................... 26 3/8 21 5/8
Fiscal Year Ended March 2, 1996:
Quarter Ended June 3, 1995.................................... $25 3/4 $ 22
Quarter Ended September 2, 1995............................... 29 1/2 24
Quarter Ended December 2, 1995................................ 32 5/8 26 1/4
Quarter Ended March 2, 1996................................... 34 3/8 30
Fiscal Year Ended March 1, 1997:
Quarter Ended June 1, 1996.................................... $34 1/2 $28 5/8
Quarter Ended August 31, 1996................................. 33 5/8 27 1/4
Quarter Ended November 30, 1996............................... 40 7/8 31 3/8
Quarter Ended March 1, 1997 (through February 10, 1997)....... 42 1/8 37 5/8
</TABLE>
On February 10, 1997, the last sales price reported for the Common Stock on
the NYSE was $41 1/2 per share. Prospective purchasers of Shares are urged to
obtain current quotations for the market price of the Common Stock.
The Company has paid regular quarterly dividends on the Common Stock since
1968. Beginning with the dividend payable on January 27, 1997 to stockholders
of record on January 20, 1997, the quarterly dividend has been increased to
$0.20 per share. Such rate was $0.15 per share for each of the fiscal quarters
in the table above through the fiscal quarter ended November 26, 1994, $0.17
per share for each of the subsequent fiscal quarters through the fiscal
quarter ended December 2, 1995 and $0.185 per share for each of the subsequent
fiscal quarters through the fiscal quarter ended November 30, 1996. The
payment of dividends on the Common Stock is at the discretion of the Company's
Board of Directors and is subject to customary limitations thereon.
THE UNDERWRITER
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), Morgan Stanley
& Co. Incorporated (the "Underwriter") has agreed to purchase, and each of the
Selling Stockholders has agreed to sell to the Underwriter, the Shares.
The Underwriting Agreement provides that the obligation of the Underwriter
to pay for and accept delivery of the Shares is subject to the approval of
certain legal matters by its counsel and to certain other conditions. The
obligation of the Underwriter to purchase the Shares sold by any Selling
Stockholder is conditioned upon the satisfaction of all the conditions to the
Underwriter's obligation to purchase the Shares sold by the other Selling
Stockholders; provided, however, that this condition will be deemed to be
satisfied if all of the conditions to the Underwriter's obligation to purchase
at least 3,000,000 Shares in the aggregate from all Selling Stockholders have
been satisfied and the number of Shares with respect to which the conditions
to the Underwriter's obligation to purchase have not been satisfied is 300,000
or less.
It is expected that all or a substantial portion of the Shares may be sold
by the Underwriter to purchasers in one or more transactions (which may
involve block transactions) on the NYSE or on other national securities
exchanges on which the Common Stock is traded or otherwise. The distribution
of the Shares may also be
S-4
<PAGE>
effected from time to time in special offerings, exchange distributions and/or
secondary distributions pursuant to and in accordance with the rules of the
NYSE or such other exchanges, in the over-the-counter market, in negotiated
transactions through the writing of options on the Shares (whether such
options are listed on an options exchange or otherwise), or in a combination
of such methods at prevailing market prices or at negotiated prices. The
Underwriter may effect such transactions by selling Shares to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the Underwriter and/or the purchasers of such
Shares for whom they may act as agents or to whom they may sell as principal.
In connection with the sale of the Shares, the Underwriter will receive
compensation in the form of commissions or discounts and may receive
compensation from purchasers of the Shares for whom they may act as agent or
to whom they may sell as principal in the form of commissions or discounts, in
each case in amounts which will not exceed those customary in the types of
transactions involved. The Underwriter and dealers that participate in the
distribution of the Shares may be deemed to be underwriters, and any discounts
received by them from the Selling Stockholders and any compensation received
by them on resale of the Shares by them may be deemed to be underwriting
discounts and commissions under the Securities Act.
The Underwriter has represented and agreed that (i) it has not offered or
sold, and will not offer or sell, in the United Kingdom, by means of any
document, any Shares other than to persons whose ordinary business it is to
buy or sell shares or debentures, whether as principal or agent (except under
circumstances which do not constitute an offer to the public within the
meaning of the Public Offering of Securities Regulation 1995); (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Shares in, from or otherwise involving the United Kingdom; and (iii) it has
only issued or passed on, and will only issue and pass on to any person in the
United Kingdom, any document received by it in connection with the issue of
the Shares if that person is of a kind described in Article 11(3) of the
Financial Services Act 1996 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the document may otherwise lawfully be issued or
passed on.
Except with respect to the United States, no action has been taken by the
Company or the Underwriter that would permit a public offering of the Shares
in any country or jurisdiction where action for that purpose is required.
Accordingly, the Shares may not be offered, sold or delivered, directly or
indirectly, and neither this document not any offering circular, prospectus,
form of application, advertisement or other offering material may be
distributed or published in any other such country or jurisdiction except
under circumstances that will result in compliance with any applicable laws
and regulations.
Purchasers of the Shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the public offering price.
The Company and each of the Selling Stockholders (severally and not jointly)
have agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act, or contribute to payments
which the Underwriter may be required to make in respect thereof.
LEGAL MATTERS
Certain legal matters in connection with the offering to which this
Prospectus Supplement and the accompanying Prospectus relates will be passed
upon for the Company by Elliot S. Gerson, Esq., Senior Vice President and
Assistant Chief Legal Counsel for the Company and by Jones, Day, Reavis &
Pogue, New York, New York. Certain legal matters will be passed on for the
Underwriter by Cravath, Swaine & Moore, New York, New York.
S-5
<PAGE>
PROSPECTUS
RITE AID CORPORATION
9,344,571 SHARES
COMMON STOCK
----------------
This Prospectus relates to 9,344,571 shares (the "Shares") of Common Stock,
par value $1.00 per share ("Common Stock"), of Rite Aid Corporation ("Rite
Aid" or the "Company"), which may be offered by the selling stockholders named
herein (the "Selling Stockholders") from time to time. The Company will
receive no part of the proceeds from sales of the Shares offered hereby.
The Common Stock is listed on the New York Stock Exchange (the "NYSE") and
the Pacific Stock Exchange ("PSE") under the trading symbol "RAD." On February
10, 1997, the closing price of the Common Stock on the NYSE was $41.50 per
share.
The Shares will be sold either directly by the Selling Stockholders or
through underwriters, brokers, dealers, or agents. At the time any particular
offer of Shares is made, if and to the extent required, the specific number of
Shares offered, the offering price, and the other terms of the offering,
including the names of any underwriters, brokers, dealers or agents involved
in the offering and the compensation, if any, of such underwriters, brokers,
dealers or agents, will be set forth in a supplement to this Prospectus (a
"Prospectus Supplement"). Any statement contained in this Prospectus will be
deemed to be modified or superseded by any inconsistent statement contained in
any Prospectus Supplement delivered herewith.
Unless this Prospectus is accompanied by a Prospectus Supplement stating
otherwise, offers and sales may be made pursuant to this Prospectus only in
ordinary broker's transactions made on the NYSE or PSE in transactions
involving ordinary and customary brokerage commissions.
The Company will bear all expenses incurred in connection with offers and
sales of the Shares pursuant to this Prospectus, except the Selling
Stockholders will pay any underwriting discounts and commissions, and transfer
taxes incurred in connection therewith.
-----------
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 date of this Prospectus is February 10, 1997.
<PAGE>
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 NYSE, 20 Broad Street, New York, New
York 10005 and at the offices of the PSE, 301 Pine Street, San Francisco,
California 94109, on which exchanges 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
"Securities 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 thereto for further information
with respect to the Company and the Common Stock 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: (i) the
Company's Annual Report on Form 10-K for the year ended March 2, 1996; (ii)
the Company's Quarterly Reports on Form 10-Q for the periods ended June 1,
1996, August 31, 1996 and November 30, 1996; and (iii) the Company's Current
Reports on Form 8-K dated April 29, 1996, December 12, 1996, December 16,
1996, December 17, 1996, January 10, 1997 and January 16, 1997.
All documents subsequently filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Shares made hereby 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. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests
should be directed to the Secretary, Rite Aid Corporation, 30 Hunter Lane,
Camp Hill, Pennsylvania 17011 (telephone: (717) 761-2633).
2
<PAGE>
THE COMPANY
The following summary of the business of the Company is qualified in its
entirety by and should be read together with the more detailed information and
financial statements incorporated by reference in this Prospectus. See
"Incorporation of Certain Documents by Reference."
The Company is one of the largest retail drugstore chains in the United
States. As of November 30, 1996, the Company operated 2,788 drugstores,
averaging within a range of approximately 7,200 to 11,000 square feet per
store in size, in 20 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 56.8% of drugstore sales in the 39 week
period ended November 30, 1996. The Company's drugstores 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.
On December 12, 1996, Rite Aid acquired Thrifty PayLess Holdings, Inc.
("Thrifty PayLess") pursuant to a merger of Thrifty PayLess into Rite Aid (the
"Thrifty PayLess Merger"). Pursuant to the Thrifty PayLess Merger, among other
things, each share of Thrifty PayLess common stock was converted into the
right to receive 0.65 share of Common Stock of Rite Aid, and Thrifty PayLess
was merged into Rite Aid.
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
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Stockholders.
3
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information as of the date of this
Prospectus with respect to shares of Common Stock owned by the Selling
Stockholders which are covered by this Prospectus. The number of Shares
offered pursuant to this Prospectus for the account of each of the Selling
Stockholders equals the total number of Shares owned by each of the Selling
Stockholders as of the date of this Prospectus.
<TABLE>
<CAPTION>
COMMON STOCK
OWNERSHIP
PRIOR TO THE
OFFERING(2)
--------------------
NAMES OF SELLING STOCKHOLDERS(1) NUMBER PERCENTAGE
-------------------------------- --------- ----------
<S> <C> <C>
American Manufacturers Mutual Insurance Company..... 42,416 *
American Motorists Insurance Company................ 56,555 *
BankAmerica Capital Corporation..................... 791,772 *
BT Investment Partners, Inc. ....................... 176,735 *
Chemical Investments, Inc. ......................... 176,735 *
Citicorp North America, Inc. ....................... 883,674 *
Jackson W. Goodall Jr. & Mary E. Goodall, Trustees
of the Goodall Family Trust DTD 2/9/83............. 40,848 *
Kemper Reinsurance Company.......................... 56,555 *
Landmark Equity Partners III, L.P. ................. 1,060,409 *
Landmark Equity Partners IV, L.P. .................. 56,555 *
Leonard Green & Associates, L.P.(3)................. 1,842,381 1.5%
Lumbermens Mutual Casualty Company.................. 141,388 *
Merchant Banking L.P. No. IV........................ 12,269 *
Merrill Lynch LP Holdings, Inc. .................... 93,772 *
Midland Montagu Private Equity Inc.................. 353,470 *
O&M Investment Partners............................. 42,014 *
Pruco Life Insurance Company........................ 70,694 *
Robert Fleming Nominees Limited..................... 53,020 *
South Ferry #2, L.P. ............................... 106,041 *
The Nippon Credit Bank, Ltd. ....................... 176,735 *
The Prudential Insurance Company of America......... 1,343,185 1.1%
UBS Capital LLC..................................... 883,674 *
Wells Fargo & Company............................... 883,674 *
---------
Total........................................... 9,344,571
=========
</TABLE>
- --------
* Less than 1%.
(1) Includes any distributees, pledgees, donees, transferees or other
successors in interest of any Selling Stockholders. Information concerning
the identity of any such persons and their sales of shares of Common Stock
will be set forth in an amendment or supplement to this Prospectus. See
"Plan Of Distribution."
(2) Based on 122,783,236 shares of Common Stock outstanding on January 31,
1997, which includes shares of Common Stock issuable as a result of the
Thrifty PayLess Merger upon surrender of the certificates formerly
representing shares of Thrifty PayLess common stock.
(3) Leonard I. Green, who became a member of the Board of Directors of the
Company on January 8, 1997 controls an entity which is a general partner
of Leonard Green & Associates, L.P.
4
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The statements set forth under this heading with respect to Rite Aid's
Restated Certificate of Incorporation (the "Rite Aid Charter"), Rite Aid's By-
laws (the "Rite Aid By-laws") and the Delaware General Corporation Law (the
"DGCL"), are brief summaries thereof and do not purport to be complete. Such
statements are subject to the detailed provisions of the Rite Aid Charter, the
Rite Aid By-laws and the DGCL. See "Available Information."
Under the Rite Aid Charter, Rite Aid's authorized capital stock consists of
300,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock,
par value $1.00 per share ("Preferred Stock").
PREFERRED STOCK
No shares of Preferred Stock are issued or outstanding. The Board of
Directors of Rite Aid (the "Board") is authorized to issue Preferred Stock in
one or more series and to determine liquidation preferences, voting rights,
dividend rights, conversion rights and redemption rights thereof. The ability
of the Board to issue and set the terms of Preferred Stock could have the
effect of making it more difficult for a third person to acquire, or of
discouraging a third person from attempting to acquire, control of Rite Aid.
COMMON STOCK
There are 122,783,236 shares of Common Stock issued and outstanding as of
January 31, 1997, which includes shares of Common Stock issuable as a result
of the Thrifty PayLess Merger upon surrender of the certificates formerly
representing shares of Thrifty PayLess common stock. On such date, an
additional 6,532,169 shares of Common Stock were issued and held in the
treasury of Rite Aid, 5,953,266 shares were reserved for issuance pursuant to
the terms of Rite Aid's convertible debt and 6,246,514 shares of Common Stock
were reserved for issuance under Rite Aid's 1990 Omnibus Stock Incentive Plan.
The holders of Common Stock are entitled to receive ratably, from funds
legally available for the payment thereof, dividends when and as declared by
resolution of the Board, subject to any preferential dividend rights granted
to the holders of any outstanding Preferred Stock.
Each holder of Common Stock is entitled to one vote in respect of each share
of such stock. Holders of Common Stock do not have preemptive, subscription,
redemption or conversion rights. The outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable.
CHARTER PROVISIONS
The Rite Aid Charter specifies that the Board shall be divided into three
classes, as nearly equal in number as possible, and shall consist of not less
than three nor more than 15 directors elected for three year staggered terms.
The Rite Aid By-laws provide that the number of directors on the Board may be
fixed by the Board only, or if the number is not fixed, the number will be
seven. The number of directors may be increased or decreased by the Board
only. In the interim period between annual meetings of stockholders or of
special meetings of stockholders, vacancies and newly created directorships
may be filled by the Board. Any directors so elected will hold office until
the next election of the class to which such directors have been elected. The
Board currently consists of 12 directors.
The Rite Aid Charter requires that any mergers, consolidations, asset
dispositions and other transactions involving a beneficial owner of 10% or
more of the voting power of the then outstanding classes of stock entitled to
vote in the election of directors (the "Voting Stock") be approved, unless
certain conditions are satisfied, by the affirmative vote of the holders of
shares representing not less than 75% of the Voting Stock. These special
voting requirements do not apply if the transaction is approved by a majority
of the Continuing Directors (as defined below) or the consideration offered to
the stockholders of Rite Aid meets specified fair price standards
5
<PAGE>
(including related procedural requirements as to the form of consideration and
continued payment of dividends). "Continuing Director" as defined in the Rite
Aid Charter means a member of the Board who was not affiliated with a Related
Person (as defined below) and was a member of the Board prior to the time that
the Related Person acquired the last shares of Common Stock entitling such
Related Person to exercise, in the aggregate, in excess of 10% of the total
voting power of all classes of Voting Stock, or any individual, corporation,
partnership, person or other entity ("Person") recommended to succeed a
Continuing Director by a majority of Continuing Directors. "Related Person" as
defined in the Rite Aid Charter means any Person, affiliate or associate of
such Person, which has beneficial ownership directly or indirectly of shares
of stock of Rite Aid entitling such Person to exercise more than 10% of the
total voting power of all classes of Voting Stock.
The Rite Aid Charter also provides that any corporate action either (i)
taken at a special meeting of stockholders called by the Board, a majority of
whose members are not Continuing Directors or (ii) approved by written consent
of stockholders, shall require the approval of not less than 75% of the then
outstanding Voting Stock.
CHANGE OF CONTROL
Section 203 of the DGCL prohibits generally a public Delaware corporation,
including Rite Aid, from engaging in a Business Combination (as defined below)
with an Interested Stockholder (as defined below) for a period of three years
after the date of the transaction in which an Interested Stockholder became
such, unless: (i) the board of directors of such corporation approved, prior
to the date such Interested Stockholder became such, either such Business
Combination or such transaction; (ii) upon consummation of such transaction,
such Interested Stockholder owns at least 85% of the voting shares of such
corporation (excluding specified shares); or (iii) such Business Combination
is approved by the board of directors of such corporation and authorized by
the affirmative vote (at an annual or special meeting and not by written
consent) of at least 66 2/3% of the outstanding voting shares of such
corporation (excluding shares held by such Interested Stockholder). A
"Business Combination" includes (i) mergers, consolidations and sales or other
dispositions of 10% or more of the assets of a corporation to or with an
Interested Stockholder, (ii) certain transactions resulting in the issuance or
transfer to an Interested Stockholder of any stock of such corporation or its
subsidiaries and (iii) certain other transactions resulting in a financial
benefit to an Interested Stockholder. An "Interested Stockholder" is a person
who owns (or, if such person is an affiliate or associate of the corporation,
within a three-year period did own) 15% or more of a corporation's stock
entitled to vote generally in the election of directors and, the affiliates
and associates of such person.
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PLAN OF DISTRIBUTION
The Selling Stockholders or their respective distributees, pledgees, donees,
transferees or other successors in interest may offer Shares from time to time
depending on market conditions and other factors, in one or more transactions
on the NYSE or other national securities exchanges on which the Shares are
traded, in the over-the-counter market or otherwise, at market prices
prevailing at the time of sale, at negotiated prices or at fixed prices. The
Shares may be offered in any manner permitted by law, including through
underwriters, brokers, dealers or agents, and directly to one or more
purchasers. Sales of Shares may involve (i) sales to underwriters who will
acquire Shares for their own account and resell them in one or more
transactions at fixed prices or at varying prices determined at time of sale,
(ii) block transactions in which the broker or dealer so engaged will attempt
to sell the Shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction, (iii) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account, (iv)
an exchange distribution in accordance with the rules of any such exchange,
and (v) ordinary brokerage transactions and transactions in which a broker
solicits purchasers. Brokers and dealers may receive compensation in the form
of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or purchasers of Shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling
Stockholders and any broker or dealer that participates in the distribution of
Shares may be deemed to be underwriters and any commissions received by them
and any profit on the resale of Shares positioned by a broker or dealer may be
deemed to be underwriting discounts and commissions under the Securities Act.
In the event any Selling Stockholder engages an underwriter in connection with
the sale of the Shares, to the extent required, a Prospectus Supplement will
be distributed, which will set forth the number of Shares being offered and
the terms of the offering, including the names of the underwriters, any
discounts, commissions and other items constituting compensation to
underwriters, dealers or agents, the public offering price and any discounts,
commissions or concessions allowed or reallowed or paid by underwriters to
dealers.
Pursuant to the Stockholder Agreement, dated as of October 13, 1996 (the
"Stockholder Agreement"), by and between the Company and Green Equity
Investors, L.P. ("GEI") the Company will pay all registration expenses in
connection with all registrations of the Shares upon the written request of
GEI, and GEI will pay (i) any fees or disbursements of the counsel to the
Selling Stockholders in connection with the registration of their Shares and
(ii) all underwriting discounts and commissions and transfer taxes, if any,
and other fees, costs and expenses of the Selling Stockholders relating to the
sale or disposition of the Selling Stockholders' Shares. GEI and the Company
have agreed to indemnify each other against certain civil liabilities,
including certain liabilities under the Securities Act. GEI has advised the
Company that it anticipates that each Selling Stockholder will pay or
reimburse GEI for those fees, costs, expenses and indemnifications for which
GEI is responsible under the Stockholder Agreement, as described in the
preceding two sentences, and which relate to such Selling Stockholder's
Shares.
LEGAL MATTERS
Certain legal matters in connection with the validity of the Shares offered
hereby have been passed upon for the Company by Elliot S. Gerson, Esq., Senior
Vice President and Assistant Chief Legal Counsel for the Company.
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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, August 31, 1996 and
November 30, 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, August 31, 1996 and November
30, 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 of Thrifty PayLess and subsidiaries as
of September 29, 1996 and October 1, 1995 and for each of the years in the
three-year period ended September 29, 1996, 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.
CERTAIN FORWARD-LOOKING STATEMENTS
This Prospectus (including the documents incorporated or deemed incorporated
by reference herein) contains certain forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995) and
information relating to the Company and Thrifty PayLess that are based on the
beliefs of the management of the Company as well as assumptions made by and
information currently available to the management of the Company. When used in
this Prospectus, the words "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to the Company, Thrifty
PayLess or the management of the Company, identify forward-looking statements.
Such statements, which include, without limitation, the matters set forth
herein under the caption "The Company," reflect the current views of the
Company with respect to future events, the outcome of which is subject to
certain risks, including among others (i) competition from other drugstore
chains, supermarkets, membership clubs and other retailers as well as third-
party plans and mail order providers, (ii) the continued efforts of third-
party payors to reduce prescription drug costs, and (iii) possible federal and
state health care reform initiatives to reduce governmental health costs. The
forward-looking statements referred to above are also subject to uncertainties
and assumptions relating to the operations and results of operations of the
Company following the Thrifty PayLess Merger, including the Company's ability
successfully to integrate the operations of the Company and Thrifty PayLess
(particularly in light of the different merchandising strategies and store
sizes and the geographic separation of the two chains) while continuing to
manage the day-to-day business of the combined company, pricing pressures,
shifts in market demand and general economic conditions, all of which are
factors that may affect the timing and realization of costs savings and other
synergistic benefits of the Thrifty PayLess Merger assumed by the Company.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results or outcomes may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended.
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