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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
DATED March 2, 2017

[    ·    ], 2017
Dear Stockholder:

        You are cordially invited to attend a special meeting of stockholders of Rite Aid Corporation, which we refer to as Rite Aid, to be held on [    ·    ], 2017 at [    ·    ], at [    ·    ], [    ·    ] time.

        At the special meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of October 27, 2015, which we refer to as the original merger agreement, as amended by Amendment No. 1 thereto, dated January 29, 2017, which we refer to as the merger agreement amendment, among Walgreens Boots Alliance, Inc., which we refer to as WBA, Victoria Merger Sub, Inc., which we refer to as Merger Sub and which is a wholly owned direct subsidiary of WBA, and Rite Aid. We refer to the original merger agreement, as amended by the merger agreement amendment, as the merger agreement. Pursuant to the terms of the merger agreement, Merger Sub will merge with and into Rite Aid, with Rite Aid surviving the merger as a wholly owned direct subsidiary of WBA. You also will be asked to consider and vote on a non-binding advisory proposal to approve compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and a proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

        If the merger is completed, you will be entitled to receive a maximum of $7.00 in cash and a minimum of $6.50 in cash, without interest, for each share of our common stock you own (unless you have properly exercised your appraisal rights with respect to such shares). The exact price per share will be determined based on the number of stores of Rite Aid, WBA and their respective subsidiaries that are required to be divested by the Federal Trade Commission, which we refer to as the FTC. The price will be $7.00 per share if 1,000 stores or fewer are required to be divested and will be $6.50 per share if 1,200 stores (or more, should WBA agree to sell more) are required to be divested. If the required number of stores to be divested falls between 1,000 and 1,200 stores, then there will be a pro-rata adjustment of the price per share. If the price is $7.00 per share, this represents (i) a premium of approximately 15.1% (or 6.9% if the price is $6.50 per share) to Rite Aid's closing stock price on October 26, 2015, the last trading day prior to the date on which public announcement of the execution of the original merger agreement was made and (ii) a premium of approximately 12.2% (or 4.2% if the price is $6.50 per share) to the volume weighted average share price of our common stock during the thirty (30) days ended October 26, 2015.

        Rite Aid's Board of Directors, after considering the reasons more fully described in this proxy statement, determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Rite Aid and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement. The Board of Directors recommends that you vote (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

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        Rite Aid agreed to reduce the purchase price from the original merger agreement and make other changes to the original merger agreement because the parties were unable to obtain FTC clearance by the "end date" in the original merger agreement, and the Board of Directors believed, for the reasons described in the enclosed proxy statement, that it was in the best interests of Rite Aid stockholders to agree to a reduced price and other amended terms, rather than terminate the original merger agreement and continue as a stand-alone company. The merger agreement amendment necessitates a new vote on the merger, so despite the fact that you may have voted on the original merger agreement in connection with the February 4, 2016 special meeting of stockholders, Rite Aid is asking for your vote again.

        The enclosed proxy statement provides detailed information about the special meeting, the merger agreement, the changes to the original merger agreement and the merger. A copy of the original merger agreement is attached as Annex A to the proxy statement and a copy of the merger agreement amendment is attached as Annex B to the proxy statement. The proxy statement also describes the actions and determinations of our Board of Directors in connection with its evaluation of the merger agreement and the merger. We encourage you to read the proxy statement and its annexes, including the original merger agreement and the merger agreement amendment, carefully and in their entirety. You may also obtain more information about Rite Aid from documents we file with the U.S. Securities and Exchange Commission from time to time.

        Whether or not you plan to attend the special meeting in person, please complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or grant your proxy electronically over the Internet or by telephone. If you attend the special meeting and vote in person by ballot, your vote will revoke any proxy that you have previously submitted. If you hold your shares in "street name," you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you will receive from your broker, bank or other nominee.

        Your vote is very important, regardless of the number of shares that you own. We cannot complete the merger unless the proposal to adopt the merger agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of our common stock. The failure of any stockholder to vote in person by ballot at the special meeting, to submit a signed proxy card or to grant a proxy electronically over the Internet or by telephone will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

        If you have any questions or need assistance voting your shares of our common stock, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200 toll free.

        On behalf of our Board of Directors, I thank you for your support and appreciate your consideration of this matter.

        Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

        The accompanying proxy statement is dated [    ·    ], 2017 and, together with the enclosed form of proxy card, is first being mailed to stockholders of Rite Aid on or about [    ·    ], 2017.

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION
DATED March 2, 2017

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
YOUR VOTE IS VERY IMPORTANT. PLEASE VOTE YOUR SHARES PROMPTLY.

        Notice is hereby given that a special meeting of stockholders of Rite Aid Corporation, a Delaware corporation, which we refer to as Rite Aid, will be held on [    ·    ], 2017, at [    ·    ], at [    ·    ], [    ·    ] time for the following purposes:

        1.     To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated as of October 27, 2015, which we refer to as the original merger agreement, as amended by Amendment No. 1 thereto, dated as of January 29, 2017, which we refer to as the merger agreement amendment, among Walgreens Boots Alliance, Inc., which we refer to as WBA, Victoria Merger Sub, Inc., which we refer to as Merger Sub and which is a wholly owned direct subsidiary of WBA, and Rite Aid, as it may be amended from time to time (a copy of the original merger agreement is attached as Annex A to the proxy statement accompanying this notice and a copy of the merger agreement amendment is attached as Annex B to the proxy statement accompanying this notice; we refer to the original merger agreement, as amended by the merger agreement amendment, as the merger agreement);

        2.     To consider and vote on the proposal to approve, by means of a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger contemplated by the merger agreement;

        3.     To consider and vote on the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting; and

        4.     To transact any other business that may properly come before the special meeting or any adjournment or postponement of the special meeting.

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the proposal to adopt the merger agreement. The affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon is required to approve the proposal to approve one or more adjournments of the special meeting. The affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon is required to approve the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, but will not have any effect on the adjournment proposal or the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, but will not have any effect on the adjournment proposal or the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable to Rite Aid's named executive officers in connection with the merger. Abstentions will have the same effect as a vote "AGAINST" the proposal to adopt the merger

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agreement, the adjournment proposal and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

        Only stockholders of record as of the close of business on [    ·    ], 2017 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournment or postponement thereof. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 30 Hunter Lane, Camp Hill, Pennsylvania 17011, during regular business hours for a period of at least ten (10) days before the special meeting and at the place of the special meeting during the meeting.

        Stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of Rite Aid common stock if they deliver a demand for appraisal before the vote is taken on the merger agreement and comply with all applicable requirements under Delaware law. The relevant section of Delaware law regarding appraisal rights in effect as of the date of the original merger agreement, not including the August 1, 2016 amendments to Delaware law, are summarized herein and reproduced in their entirety in Annex D to the accompanying proxy statement.

        The Board of Directors recommends that you vote (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Dated: [    ·    ], 2017

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YOUR VOTE IS IMPORTANT

        WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) THROUGH THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the special meeting. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such broker, bank or other nominee, which is considered the stockholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account. Your broker, bank or other nominee cannot vote on any of the proposals, including the proposal to adopt the merger agreement, without your instructions.

        If you fail to return your proxy card, to grant your proxy electronically over the Internet or by telephone, or to vote by ballot in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If you are a stockholder of record, voting in person by ballot at the special meeting will revoke any proxy that you previously submitted. If you hold your shares through a broker, bank or other nominee, you must obtain from the record holder a valid legal proxy issued in your name in order to vote in person at the special meeting.

        We encourage you to read the accompanying proxy statement, including all documents incorporated by reference into the accompanying proxy statement, and annexes to the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Banks and Brokerage Firms Call: (203) 658-9400
Stockholders Call Toll Free: (800) 662-5200
Email: rad.info@morrowsodali.com

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SUMMARY

        This summary highlights selected information from this proxy statement related to the merger of Merger Sub with and into Rite Aid with Rite Aid surviving as a wholly owned direct subsidiary of WBA, which transaction we refer to as the merger. This summary may not contain all of the information that is important to you. To understand the merger more fully and for a more complete description of the legal terms of the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement, including the original merger agreement and the merger agreement amendment, and the documents incorporated by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page 143. The original merger agreement is attached as Annex A to this proxy statement and the merger agreement amendment is attached as Annex B to this proxy statement.

        Except as otherwise specifically noted in this proxy statement or as the context otherwise requires, "Rite Aid," or "we," "our," "us" and similar words in this proxy statement refer to Rite Aid Corporation including, in certain cases, its subsidiaries. Throughout this proxy statement we refer to Walgreens Boots Alliance, Inc. as WBA and to Victoria Merger Sub, Inc. as Merger Sub. In addition, throughout this proxy statement we refer to (i) the original Agreement and Plan of Merger, dated as of October 27, 2015, among WBA, Merger Sub and Rite Aid, as the original merger agreement, (ii) Amendment No. 1 to the Agreement and Plan of Merger, dated January 29, 2017, among WBA, Merger Sub and Rite Aid, as the merger agreement amendment, and (iii) the original merger agreement, as amended by the merger agreement amendment, as the merger agreement.

Parties Involved in the Merger (page 37)

Rite Aid Corporation

        Rite Aid is a leading retail drugstore chain in the United States. As of February 1, 2017, Rite Aid operated nearly 4,600 stores in 31 states across the country and in the District of Columbia.

        Rite Aid sells prescription drugs and a wide assortment of other merchandise, which Rite Aid calls "front-end" products. Front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products.

        On June 24, 2015, we completed our acquisition of Envision Topco Holdings, LLC which we refer to as EnvisionRx, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of February 10, 2015, by and among Rite Aid, Eagle Merger Sub 1 LLC, Eagle Merger Sub 2 LLC, TPG VI Envision BL, LLC, Envision Topco Holdings, LLC and Shareholder Representative Services LLC, in its capacity as sellers' representative, which we refer to as the EnvisionRx Agreement. EnvisionRx is a full-service pharmacy services provider. EnvisionRx provides both transparent and traditional pharmacy benefit manager options through its EnvisionRx and MedTrak pharmacy benefit managers, respectively. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to a leading cash pay infertility discount drug program via Design Rx; an innovative claims adjudication software platform in Laker Software; and a national Medicare Part D prescription drug plan through Envision Insurance Company's EnvisionRx Plus Silver product for the low income auto-assign market and its Clear Choice product for the chooser market. EnvisionRx operates as our 100 percent owned subsidiary.

        Rite Aid was incorporated in Delaware on April 15, 1968. Rite Aid's common stock is currently listed on the New York Stock Exchange, which we refer to as the NYSE, under the symbol "RAD."

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Walgreens Boots Alliance, Inc.

        WBA is the first global, pharmacy-led health and wellbeing enterprise with net sales of $117.4 billion in the fiscal year ended August 31, 2016. Together with its equity method investments, WBA employs more than 400,000 people and has over 13,200 stores in 11 countries and a pharmaceutical wholesale and a distribution network that includes over 390 distribution centers delivering to more than 230,000 pharmacies, doctors, health centers and hospitals each year.

        WBA's portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Botanics, Liz Earle and Soap & Glory.

        WBA was created through the combination of Walgreen Co. and Alliance Boots GmbH in December 2014. WBA was incorporated in Delaware in 2014 and is the successor of Walgreen Co., an Illinois corporation, which was formed in 1909 as a successor to a business founded in 1901. Its principal executive offices are located at 108 Wilmot Road, Deerfield, Illinois 60015. WBA's common stock trades on the NASDAQ Stock Market under the symbol "WBA."

Victoria Merger Sub, Inc.

        Merger Sub is a Delaware corporation and a wholly owned subsidiary of WBA, formed on October 23, 2015 for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist.

Certain Effects of the Merger on Rite Aid (page 38)

        Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into Rite Aid, with Rite Aid continuing as the Surviving Corporation and a wholly owned direct subsidiary of WBA. Throughout this proxy statement, we use the term Surviving Corporation to refer to Rite Aid as the surviving corporation following the merger. If the merger is completed, you will not own any shares of the capital stock of the Surviving Corporation, and instead will only be entitled to receive the merger consideration, as described under "Proposal 1: Adoption of the Merger Agreement—Merger Consideration" beginning on page 112.

Effect on Rite Aid if the Merger is Not Completed (page 39)

        If the merger agreement is not adopted by Rite Aid stockholders or if the merger is not completed for any other reason, Rite Aid stockholders will not receive any payment for their shares of common stock. Instead, Rite Aid will remain a public company, Rite Aid's common stock will continue to be listed and traded on the NYSE and registered under the Securities Exchange Act of 1934, which we refer to as the Exchange Act, and Rite Aid will continue to file periodic reports with the U.S. Securities and Exchange Commission, which we refer to as the SEC.

        Under certain specified circumstances, Rite Aid will be required to pay WBA a termination fee upon the termination of the merger agreement or will be entitled to receive a termination fee from WBA, as described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134. If the merger agreement is terminated because stockholders do not approve the merger, no termination fee will be payable by WBA to Rite Aid.

Merger Consideration (page 39)

        At the time at which the merger will become effective, which we refer to as the effective time of the merger, each share of Rite Aid common stock issued and outstanding immediately prior to the

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effective time of the merger (other than shares owned by (i) WBA, Merger Sub or Rite Aid (which will be cancelled), (ii) stockholders who have properly exercised and perfected appraisal rights under Delaware law, or (iii) any direct or indirect wholly owned subsidiary of Rite Aid or WBA; collectively we refer to all such shares in this proxy statement as excluded shares) will be converted into the right to receive the per share merger consideration (as described below), and will cease to be outstanding, will automatically be cancelled and will cease to exist, and each certificate that immediately prior to the effective time of the merger represented any of the shares of Rite Aid common stock (other than the excluded shares) or non-certificated shares held in book-entry form representing any such Rite Aid common stock will thereafter represent only the right to receive the per share merger consideration.

        We refer to the per share merger consideration as an amount (as adjusted below) equal to a maximum of $7.00 per share in cash, without interest; provided that to the extent WBA agrees to, or consummates, a divestiture action (as defined in the merger agreement) involving the sale, transfer, disposal, divestiture or hold separate of more than 1,000 retail stores of WBA and its subsidiaries and Rite Aid and its subsidiaries, which we refer to as the divested stores, the per share merger consideration will be reduced by $0.0025 per share for each divested store in excess of 1,000 divested stores; provided, further, that in no event will the per share merger consideration be less than $6.50 per share.

        As described under "Proposal 1: Adoption of the Merger Agreement—Merger Consideration—Exchange Procedures" beginning on page 113, at or prior to the effective time of the merger, WBA will deposit, or cause to be deposited, with a paying agent selected by WBA and reasonably acceptable to Rite Aid, which we refer to as the paying agent, a cash amount in immediately available funds sufficient in the aggregate to provide all funds necessary to pay the aggregate per share merger consideration.

        After the merger is completed, under the terms of the merger agreement, you will have the right to receive the per share merger consideration, but you no longer will have any rights as a Rite Aid stockholder as a result of the merger (except for the right to receive the per share merger consideration and except that stockholders who properly exercise and perfect their demand for right of appraisal will instead have the right to receive a payment for the "fair value" of their shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described under "The Merger—Appraisal Rights" beginning on page 102).

Changes to the Original Merger Agreement Pursuant to the Merger Agreement Amendment (page 40)

        The original merger agreement was amended pursuant to the merger agreement amendment to, among other things, (i) reduce the per share merger consideration from $9.00 per share to a range of $6.50 to $7.00 per share; (ii) increase the number of stores that WBA is required to divest, to the extent necessary to obtain the required regulatory approvals, from 1,000 stores to 1,200 stores; (iii) require that WBA sell, transfer, dispose of, divest, license or hold separate Rite Aid's portfolio of trademarks and related intellectual property (including domain names) containing the "Rite Aid" name and logo, except that WBA and its subsidiaries (including Rite Aid and its subsidiaries after the closing) will be entitled to a royalty-free exclusive license thereto for a specified period, which we refer to collectively as the Rite Aid Brand Rights; (iv) extend the end date from January 27, 2017 to July 31, 2017; (v) provide for a reduced $162.5 million termination fee payable by WBA to Rite Aid in the event that the merger agreement is terminated and the termination fee is payable but Rite Aid fails to satisfy the Adjusted EBITDA (as such term is defined in the merger agreement) threshold specified in the material adverse effect definition in the merger agreement; (vi) reduce the Adjusted EBITDA (as such term is defined in the merger agreement) threshold in the material adverse effect definition in the merger agreement from $1.075 billion to $1 billion; (vii) acknowledge that each party has complied with its obligations pursuant to the covenant requiring the parties to use their reasonable best efforts to consummate the transaction and specifying their obligations in connection with seeking regulatory

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approval of the merger, which we refer to as the antitrust efforts covenant, and that no material adverse effect has occurred from the date of the original merger agreement to the date of the merger agreement amendment; (viii) revise the no material adverse effect closing condition to be measured from the date of the merger agreement amendment rather than from the date of the original merger agreement; (ix) remove Rite Aid's obligation to reimburse WBA's expenses in certain circumstances specified in the original merger agreement; and (x) require that WBA sell, transfer, dispose of, divest or hold separate certain Rite Aid distribution centers, inventory related thereto and certain administrative assets.

The Special Meeting (page 32)

Date, Time and Place

        The special meeting of our stockholders will be held on [    ·    ], 2017 at [    ·    ], at [    ·    ],[    ·    ] time.

Purpose

        At the special meeting, we will ask our stockholders of record as of the close of business on [    ·    ], 2017, which we refer to as the record date, to vote on proposals (i) to adopt the merger agreement, (ii) to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger, and (iii) to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Record Date; Shares Entitled to Vote

        You are entitled to vote at the special meeting if you owned shares of our common stock on the record date. You will have one vote at the special meeting for each share of our common stock you owned at the close of business on the record date.

Quorum

        As of the record date, there were approximately [    ·    ] shares of Rite Aid common stock outstanding and entitled to be voted at the special meeting. A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, [    ·    ] shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.

Required Vote

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to adopt the merger agreement. Approval of the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon.

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Share Ownership of Rite Aid Directors and Executive Officers

        At the close of business on [    ·    ], 2017, the record date, Rite Aid directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [    ·    ] shares of Rite Aid common stock (excluding any shares of Rite Aid common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately [    ·    ]% of the outstanding shares of Rite Aid common stock on that date. Our directors and executive officers have informed us that they currently intend to vote all of their shares of Rite Aid common stock (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

Voting of Proxies

        Any Rite Aid stockholder of record entitled to vote at the special meeting may submit a proxy by returning a signed proxy card by mail or voting electronically over the Internet or by telephone, or may vote in person by appearing at the special meeting. If you are a beneficial owner and hold your shares of Rite Aid common stock in "street name" through a broker, bank or other nominee, you should instruct your broker, bank or other nominee on how you wish to vote your shares of Rite Aid common stock using the instructions provided by your broker, bank or other nominee. Under applicable stock exchange rules, if you fail to instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee only has discretion to vote your shares on routine matters. Proposals 1, 2 and 3 in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. Therefore, it is important that you cast your vote or instruct your broker, bank or other nominee on how you wish to vote your shares.

        If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy, signing another proxy card with a later date and returning it to us prior to the special meeting or attending the special meeting and voting in person. If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote; or contact our proxy solicitor, Morrow Sodali LLC at (800) 662-5200.

Recommendation of Our Board of Directors and Reasons for the Merger (page 74)

        The Board of Directors, after considering various factors described herein, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Rite Aid and its stockholders, and approved, adopted and declared advisable the merger agreement and the transactions contemplated by the merger agreement.

        The Board of Directors unanimously recommends that you vote (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

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Opinion of Rite Aid's Financial Advisor (page 80)

        In connection with the merger, Rite Aid's financial advisor, Citigroup Global Markets Inc., which we refer to as Citi, delivered a written opinion, dated January 29, 2017, to the Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, of the per share merger consideration to be received by holders of Rite Aid common stock pursuant to the merger agreement. The full text of Citi's written opinion, dated January 29, 2017, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, is attached as Annex C to this proxy statement and is incorporated herein by reference. The description of Citi's opinion set forth below is qualified in its entirety by reference to the full text of Citi's opinion. Citi's opinion was provided for the information of the Board of Directors (in its capacity as such) in connection with its evaluation of the per share merger consideration from a financial point of view and did not address any other aspects or implications of the merger. Citi expressed no view as to, and its opinion did not address, the underlying business decision of Rite Aid to effect the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for Rite Aid or the effect of any other transaction Rite Aid might engage in or consider. Citi's opinion is not intended to be and does not constitute a recommendation as to how any stockholder should vote or act on any matters relating to the merger or otherwise.

Financing of the Merger (page 99)

        WBA's obligation to complete the merger is not subject to the receipt of financing. Concurrently with the signing of the original merger agreement, WBA entered into a bridge facility commitment letter, which we refer to as the Signing Date Commitment Letter, dated October 27, 2015 and amended and restated as of November 19, 2015, with UBS Securities LLC and UBS AG, Stamford Branch providing for a $12.8 billion fully-committed senior unsecured bridge loan facility. On December 18, 2015, WBA entered into (a) a bridge term loan credit agreement with the lenders party thereto and UBS AG, as administrative agent, which we refer to as the Expired Bridge Credit Agreement, (b) a term loan credit agreement with the lenders party thereto and Bank of America, N.A., as administrative agent, which we refer to as the Expired Term Loan Credit Agreement, and (c) a term loan credit agreement with the lenders party thereto and Sumitomo Mitsui Banking Corporation, as administrative agent, which, together with the Expired Bridge Credit Agreement and Expired Term Loan Credit Agreement, we refer to as the Expired Credit Agreements. The Signing Date Commitment Letter and the commitments contemplated thereby terminated upon WBA entering into the Expired Credit Agreements. The Expired Credit Agreements expired on January 27, 2017, which date was the original end date under the original merger agreement prior to the execution of the merger agreement amendment.

Backstop Commitment Letter and Credit Agreement

        Following the execution of the merger agreement amendment, on January 30, 2017, WBA entered into a backstop facility commitment letter, which we refer to as the Backstop Commitment Letter, with HSBC Securities (USA) Inc., HSBC Bank USA, National Association, and HSBC Bank plc, which, collectively, we refer to as HSBC, providing for commitments in an aggregate principal amount of up to $5,000,000,000, which commitments were intended to replace a portion of the expired commitments in respect of the Expired Credit Agreements.

        Pursuant to the terms of the Backstop Commitment Letter, HSBC committed to enter into the Backstop Credit Agreement (as defined below) as promptly as practicable (and in any event, within one business day) following the effectiveness of the Backstop Commitment Letter. Accordingly, WBA entered into a backstop bridge term loan credit agreement, dated January 31, 2017, with the lenders party thereto and HSBC, as administrative agent, which is a 364-day unsecured bridge term loan facility

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with aggregate commitments equal to $5,000,000,000, which we refer to as the Backstop Credit Agreement.

        The ability of WBA to request the making of loans under the Backstop Credit Agreement is subject to the satisfaction (or waiver) of certain conditions set forth therein (including, among other things, the delivery of an officer's certificate certifying the accuracy of certain representations and warranties set forth in and the absence of certain defaults under the Backstop Credit Agreement). Loans will be available under the Backstop Credit Agreement in U.S. Dollars.

        The commitments of the lenders to make such term loans under the Backstop Credit Agreement expire upon the earliest of (i) the date of the consummation of the merger with or without the funding of the loans under the Backstop Credit Agreement, (ii) prior to the time of the consummation of the merger, the termination of the merger agreement by WBA or with the written consent of WBA in accordance with its terms (other than with respect to provisions therein that expressly survive termination), (iii) 11:59 p.m. (New York time) on July 31, 2017 and (iv) the date of termination in full of the commitments thereunder by mutual agreement of the parties thereto.

        Borrowings under the Backstop Credit Agreement will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate, or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. WBA will also pay certain customary fees.

Revolving Credit Agreement

        On February 1, 2017, WBA entered into a revolving credit agreement with Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., U.S. Bank National Association and JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A. as administrative agent, which we refer to as the Revolving Credit Agreement. The Revolving Credit Agreement is a revolving credit facility with aggregate commitments equal to $1,000,000,000 with a facility termination date of the earlier of (a) 364 days following the effective date of the Revolving Credit Agreement, subject to the extension thereof pursuant to the Revolving Credit Agreement, and (b) the date of termination in whole of the aggregate commitment pursuant to the Revolving Credit Agreement.

        The ability of WBA to request the making of loans under the Revolving Credit Agreement to be used for any purpose (including general corporate purposes) is subject to the satisfaction (or waiver) of certain customary conditions set forth therein (including a separate set of customary "limited conditions" applicable to any loans made thereunder for the sole purpose of financing the merger). Loans will be available under the Revolving Credit Agreement in U.S. Dollars.

        Borrowings under the Revolving Credit Agreement will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. In addition, WBA will also pay to the lenders under the Revolving Credit Agreement certain customary fees.

Term Loan Credit Agreements

        On February 22, 2017, WBA entered into (a) a Term Loan Credit Agreement we refer to as the Syndicated Credit Agreement with the lenders party thereto and Bank of America, N.A., as administrative agent and (b) a Term Loan Credit Agreement we refer to as the Sumitomo Credit Agreement which, together with the Syndicated Credit Agreement, we refer to as the Term Loan Credit Agreements, and which Term Loan Credit Agreements together with the Backstop Credit Agreement and Revolving Credit Agreement, we refer to as the Credit Agreements, with Sumitomo Mitsui Banking Corporation, as lender and administrative agent. In connection therewith, as of such

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date of entering into the Term Loan Credit Agreements the commitments available under the Backstop Credit Agreement were automatically reduced to zero.

        The Syndicated Credit Agreement is a two-tranche unsecured term loan facility, with the first tranche maturing October 27, 2019 and the second tranche maturing October 27, 2021. The aggregate commitments of all lenders under the Syndicated Credit Agreement are equal to $4.8 billion, provided that WBA may increase the commitments available under either of the tranches of the Syndicated Credit Agreement at any time prior to the funding date thereunder by up to $450 million, subject to obtaining commitments from existing lenders and/or new lenders selected by WBA and reasonably acceptable to Bank of America, N.A., as administrative agent.

        The Sumitomo Credit Agreement is a two-tranche unsecured term loan facility (each tranche in an amount of $500 million), with the first tranche maturing on the first anniversary of the funding date thereunder and the second tranche maturing on the earlier of the first anniversary of the funding date thereunder and March 30, 2018. The aggregate commitments under the Sumitomo Credit Agreement are equal to $1.0 billion.

        The ability of WBA to request the making of loans under each Term Loan Credit Agreement is subject to the satisfaction (or waiver) of certain conditions set forth therein (including, among other things, the delivery of an officer's certificate certifying the accuracy of certain representations and warranties set forth in and the absence of certain defaults under each Term Loan Credit Agreement).

        The commitments of the lenders to make such term loans under the Term Loan Credit Agreements expire upon the earliest of (i) the date of the consummation of the merger with or without the funding of the loans under each Term Loan Credit Agreement, (ii) prior to the time of the consummation of the merger, the termination of the merger agreement by WBA or with the written consent of WBA in accordance with its terms (other than with respect to provisions therein that expressly survive termination), (iii) 11:59 p.m. (New York time) on July 31, 2017; provided that WBA may extend such date to October 31, 2017 on prior written notice to the applicable Administrative Agent and lenders; provided further that such notice may not be delivered prior to the earlier of (1) July 24, 2017 and (2) the date of any amendment or extension of the end date in the merger agreement beyond July 31, 2017 and (iv) the date of termination in full of the commitments thereunder by mutual agreement of the parties thereto.

        Loans will be available under each Term Loan Credit Agreement in U.S. Dollars. Borrowings under the Term Loan Credit Agreements will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. In addition, WBA will also pay to the lenders under the Term Loan Credit Agreements certain customary fees.

        WBA currently expects (a) to finance the merger consideration and/or the refinancing of a portion of the indebtedness of Rite Aid and, if necessary, the WBA 2018 Notes, the WBA 2021 Notes and the WBA 2023 Notes (each as defined below) and (b) to pay related fees and expenses with a combination of (i) existing cash on WBA's balance sheet, (ii) loans under the Credit Agreements and/or (iii) the issuance of new debt securities.

        Each Credit Agreement contains representations and warranties and affirmative, negative and financial covenants and events of default, in each case, that are customary for unsecured financings of this type and substantially consistent with those of the Expired Credit Agreements, which representations and warranties and affirmative and negative covenants in the case of the Term Loan Credit Agreements will not be in effect until the funding of the loans under the applicable Term Loan Credit Agreement and in the case of the Revolving Credit Agreement will be in effect from the date of effectiveness of the Revolving Credit Agreement.

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        The foregoing description of the Backstop Credit Agreement, Revolving Credit Agreement and Term Loan Credit Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the applicable Credit Agreement.

$6.0 Billion Issuance of Notes

        On June 1, 2016, WBA completed the public offering and issuance of $1,250,000,000 aggregate principal amount of 1.750% notes due 2018, which we refer to as the WBA 2018 Notes, $1,500,000,000 aggregate principal amount of 2.600% notes due 2021, which we refer to as the WBA 2021 Notes, $750,000,000 aggregate principal amount of 3.100% notes due 2023, which we refer to as the WBA 2023 Notes, $1,900,000,000 aggregate principal amount of 3.450% notes due 2026, which we refer to as the WBA 2026 Notes, and $600,000,000 aggregate principal amount of 4.650% notes due 2046, which we refer to as the WBA 2046 Notes.

        In the event that the merger is not consummated (or if the merger agreement is terminated) on or prior to June 1, 2017, then WBA will be required to redeem the WBA 2018 Notes, the WBA 2021 Notes and the WBA 2023 Notes (but not the WBA 2026 Notes or the WBA 2046 Notes) at a redemption price per note equal to 101% of the principal amount thereof, plus accrued and unpaid interest from and including the most recent date to which interest has been paid to, but excluding, the date of redemption.

Treatment of Equity and Equity-Based Awards (page 112)

        The merger agreement provides that Rite Aid's equity awards that are outstanding immediately prior to the effective time of the merger will be subject to the following treatment at the effective time of the merger:

Treatment of Options

        Upon completion of the merger, each vested option to purchase Rite Aid common stock (including any option subject to accelerated vesting upon completion of the merger) with a per share exercise price less than the per share merger consideration that is outstanding immediately prior to the completion of the merger, which we refer to as a cash-out option, will be cancelled and converted into the right to receive, without interest, an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such cash-out option and (y) the excess, if any, of the per share merger consideration (which will range from $6.50 to $7.00) over the per share exercise price of such cash-out option, less applicable withholding taxes.

        Upon completion of the merger, each unvested option to purchase Rite Aid common stock, and each vested option to purchase Rite Aid common stock with a per share exercise price equal to or greater than the per share merger consideration (which will range from $6.50 to $7.00), that is outstanding immediately prior to the completion of the merger, which we refer to as a rollover option, will be converted into an option to acquire, on the same terms and conditions as were applicable immediately prior to the completion of the merger, a number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock subject to such rollover option and (y) a fraction, the numerator of which is the per share merger consideration (which will range from $6.50 to $7.00) and the denominator of which is the volume weighted average trading price of WBA common stock on the five (5) consecutive trading days immediately preceding the closing date of the merger, which fraction we refer to as the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares after aggregating each individual holder's option with the same exercise price. The exercise price of each converted rollover option will be equitably adjusted to be equal to the quotient (rounded up to the nearest whole cent) of (x) the exercise price per share of Rite Aid common stock subject to such rollover option and (y) the conversion ratio (rounded up to the nearest whole cent).

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Treatment of Restricted Stock and Performance Stock Units

        Upon completion of the merger, each share of Rite Aid restricted stock and each Rite Aid performance stock unit that is outstanding immediately prior to the completion of the merger, which we refer to as a rollover stock award, will be converted into a WBA restricted share award or a WBA performance stock unit, as applicable, relating to the number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock relating to such rollover stock award (which, in the case of performance stock units for which the applicable performance period has not completed, will be the target number of shares) and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares (with such rounding applied on an aggregate basis to each individual holder), and with each such converted rollover stock award generally subject to the same terms and conditions as were applicable immediately prior to the completion of the merger. With respect to each rollover stock award that is a performance stock unit, following the completion of the merger: (i) the performance goals or conditions will not apply with respect to a pro rata portion of such award (with such portion based on the number of days elapsed in the performance period through the completion of the merger), and such portion of the rollover stock award will continue to be subject to service-based vesting on the same schedule as applied prior to the completion of the merger, and (ii) the remaining portion of the performance stock unit will continue to be subject to performance-based vesting (based on the achievement of adjusted performance goals) and service-based vesting on the same schedule as applied prior to the completion of the merger.

Treatment of Restricted Stock Units

        Upon completion of the merger, each Rite Aid restricted stock unit outstanding immediately prior to the completion of the merger, whether or not vested, will automatically be cancelled and converted into the right to receive an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such restricted stock unit and (y) the per share merger consideration (which will range from $6.50 to $7.00), less applicable withholding taxes.

Treatment Under Rite Aid Stock Plans

        Pursuant to the terms of Rite Aid's stock plans, the vesting of each rollover option and rollover stock award outstanding as of the date of the original merger agreement, including the rollover options and rollover stock awards then held by any executive officer, will accelerate and vest (with any performance conditions deemed achieved at target levels) upon the occurrence of both (i) a change in control and (ii) a qualifying termination during the two (2) year period following a change in control, which we refer to as "double-trigger" vesting. The merger will be treated as a change in control for purposes of Rite Aid's stock plans with respect to any rollover options and rollover stock awards that are granted prior to the date of the original merger agreement, but will not be treated as a change in control for purposes with respect to any rollover options and rollover stock awards that are granted following the date of the original merger agreement and prior to completion of the merger (which will be subject to the vesting provisions of the executive officer's employment agreement, as described below).

Interests of the Directors and Executive Officers of Rite Aid in the Merger (page 89)

        When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be different from, or in addition to, your interests as a stockholder. The Board of Directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the

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merger agreement be adopted by the stockholders of Rite Aid. These interests may include the following:

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Continued indemnification and directors' and officers' liability insurance to be provided by the Surviving Corporation.



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The treatment of outstanding equity awards described above under "Summary—Treatment of Equity and Equity-Based Awards" beginning on page 9.



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The entitlement of Rite Aid's executive officers to receive payments and benefits upon certain terminations of employment under their respective employment agreements with Rite Aid, as follows:



•

Triggering Events. During the term of the employment agreements, the employment agreements provide that each executive officer will be entitled to receive a severance benefit under his or her employment agreement if (i) the officer is terminated other than for cause or (ii) the officer resigns with good reason (as such terms are defined in the employment agreements), which we refer to as a qualifying termination.



•

Reimbursement of Certain Taxes. Contingent on the closing, the employment agreement with Mr. Standley provides for the reimbursement of taxes incurred as a result of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code.



•

Benefits. In the circumstances described above under "Summary—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Triggering Events" beginning on page 11, except as described below, each named executive officer and each other executive officer who is party to an employment agreement will receive:



•

Cash Severance. Cash severance equal to two times the executive's annual base salary and target annual bonus for each of Messrs. Standley, Martindale, Karst and Donley, and cash severance equal to two times the executive's annual base salary for each of Messrs. Montini, Abelman, Everett and Ms. Konrad.



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Pro Rata Bonus. Under the employment agreements with Messrs. Standley, Martindale, Karst, and Donley, a pro rata target annual bonus to the extent that such targets have been achieved or exceeded for the fiscal year (based on the number of days in the fiscal year prior to termination).



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Health Benefit Continuation. Two (2) years of continued coverage under the surviving company's health and medical plans for the executive and his or her qualifying dependents.



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Accelerated Vesting of Certain Outstanding Equity Awards.



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The employment agreement with Mr. Standley provides for the accelerated vesting of then-outstanding unvested options upon the occurrence of a change in control. The merger is expected to constitute a change in control for the purposes of Mr. Standley's employment agreement. Of the unvested options that would be subject to accelerated vesting in connection with the merger, 766,255 options have an exercise price that exceeds a per share merger consideration of $7.00 and will be treated as rollover options. Mr. Standley's employment agreement further provides that, upon a qualifying termination, all outstanding restrictions with respect to any restricted stock awards will lapse to the extent the restrictions would have lapsed had Mr. Standley remained employed by Rite Aid for a period of three (3) years following the date of such termination.

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The employment agreements with each of the other executive officers provide that, upon a qualifying termination, all restrictions with respect to any restricted stock awards will lapse to the extent the restrictions would have lapsed had the executives remained employed by Rite Aid for a period of two (2) years following the date of such termination.



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The entitlement of Rite Aid's executive officers to accelerated vesting of the unvested portion of their individual account balances under Rite Aid's supplemental executive retirement plan upon a termination without cause within twelve (12) months of the completion of the merger.



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The entitlement of Messrs. Abelman, Donley, Everett, Karst and Montini and Ms. Konrad to receive a lump-sum payment of, or the lapse of a repayment obligation regarding, their respective retention awards on the one hundred and twentieth (120th) day following the closing of the merger or upon an earlier qualifying termination.



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The fact that, following the request of WBA, at the recommendation of Jones Day in connection with the review by the Federal Trade Commission, which we refer to as the FTC, of the merger and the divestiture to Fred's, Inc., which we refer to as Fred's, in order to enhance the management team of Fred's and provide continuity of management following the acquisition of the stores and assets to be purchased by Fred's from the Company, and at the direction of the Board of Directors, some of our executive officers and officers are discussing and/or in the future may discuss or enter into agreements with Fred's or any of Fred's affiliates regarding employment with, or service on the board of directors of, or the right to purchase or participate in the equity of, Fred's or one or more of Fred's affiliates.



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The fact that prior to or following the closing, some of our executive officers have discussed and/or in the future may discuss or enter into agreements with WBA or Merger Sub or any of their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, WBA or the Surviving Corporation or one or more of their respective affiliates.

        If the proposal to adopt the merger agreement is approved by our stockholders and the merger closes, under the terms of the merger agreement, any shares of Rite Aid common stock held by our directors and executive officers, including such shares held following the vesting or settlement of equity and equity-based awards, will be treated in the same manner as outstanding shares of common stock held by all other stockholders of Rite Aid entitled to receive the per share merger consideration.

Appraisal Rights (page 102)

        If the merger agreement is adopted by Rite Aid stockholders, stockholders who do not vote in favor of the proposal to adopt the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL. This means that holders of Rite Aid common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Rite Aid common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process.

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares.

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        To exercise your appraisal rights, you must submit a written demand for appraisal to Rite Aid before the vote is taken on the proposal to adopt the merger agreement, you must not submit a blank proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of Rite Aid common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights in effect as of the date of the original merger agreement, not including the August 1, 2016 DGCL amendments, are described in further detail in this proxy statement, and the relevant section of the DGCL regarding such appraisal rights is reproduced and attached as Annex D to this proxy statement. If you hold your shares of Rite Aid common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank or other nominee.

U.S. Federal Income Tax Consequences of the Merger (page 106)

        The receipt of cash for shares of Rite Aid common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. The receipt of cash by a U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106) in exchange for such U.S. Holder's shares of Rite Aid common stock in the merger generally will result in the recognition of gain or loss in an amount measured by the difference between the cash such U.S. Holder receives in the merger and such U.S. Holder's adjusted tax basis in the shares of Rite Aid common stock surrendered in the merger. A Non-U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106) generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States. Stockholders should refer to the discussion under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106 and consult their tax advisors concerning the U.S. federal income tax consequences relating to the merger in light of their particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Regulatory Approvals (page 108)

General

        Rite Aid and WBA have agreed to use their reasonable best efforts to take, and to assist and cooperate with each other in taking, all actions and to use their reasonable best efforts to do all things reasonably necessary, proper or advisable, to consummate the merger and the other transactions contemplated by the merger agreement, subject to certain specified limitations under the merger agreement. These approvals include approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act. Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the closing of the merger not being satisfied.

HSR Act and U.S. Antitrust Matters

        Under the merger agreement, the merger cannot be completed until the applicable waiting periods under the HSR Act (and any extension thereof) have expired or been terminated. Rite Aid and WBA filed their respective HSR Act notifications on November 10, 2015, resulting in an initial waiting period ending on December 10, 2015. On December 10, 2015, the FTC issued a Request for Additional

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Information and Documentary Material, which we refer to as a second request, to each of Rite Aid and WBA. The effect of the second request is to extend the waiting period imposed by the HSR Act until thirty (30) days after Rite Aid and WBA have substantially complied with the second request, unless such waiting period is extended voluntarily by the parties or terminated earlier by the FTC. For a more detailed description of the status of the FTC review and divestiture process, see "The Merger—Background of the Merger" beginning on page 40. In addition to the review of the merger by the FTC, certain state attorneys general are also reviewing the merger. Rite Aid and WBA are cooperating with the FTC and the state attorneys general.

Other Regulatory Approvals

        Approval (or non-objection, grant of exemption or, in certain circumstances, alternative resolution, as the case may be) has been or will be sought from (i) the state insurance regulator in the State of Ohio for the change of control of Envision Insurance Company, (ii) the Department of Managed Health Care of the State of California with respect to the change of control of Envision Insurance Company as a Knox-Keene licensed health care service plan, (iii) the Board of Pharmacy of the State of California with respect to (A) a change in ownership of Orchard Pharmaceutical Services, LLC and (B) the transfer of certain other licenses, (iv) the Insurance Department of the State of Texas with respect to the change of control of Rite Aid's subsidiary licensed as a third-party administrator in Texas, and (v) the state insurance regulator in the State of Utah with respect to the change of ownership of Rite Aid's subsidiary licensed as a health discount program operator. In addition, a response letter from the Department of Insurance of the State of Missouri has been or will be sought confirming that the merger falls below the threshold requirements for filing a Form E (pre-acquisition notification form regarding the potential competitive impact of a proposed merger) in Missouri. To obtain these approvals, WBA, or the applicable Rite Aid subsidiary, as the case may be, has filed or will file, acquisition of control and material modification or similar statements, notices or applications (or requests for grants of exemption relating thereto), as required by the insurance and health care laws and regulations of each applicable state or jurisdiction. In addition, either prior to or following the completion of the merger, WBA or Rite Aid will be required to make change of control notification filings with various state regulators pursuant to applicable insurance and health care laws and regulations (none of which notification filings are conditions to the completion of the merger).

Legal Proceedings Regarding the Merger (page 109)

        As of March 1, 2017, Rite Aid was aware of ten (10) putative class action lawsuits that were filed by purported Rite Aid stockholders against Rite Aid, the directors of Rite Aid, WBA and Merger Sub, challenging the transactions contemplated by the merger agreement. For a more detailed description of the litigation, see "The Merger—Legal Proceedings Regarding the Merger" beginning on page 109.

No Solicitation (page 120)

        Except as otherwise provided in the merger agreement, Rite Aid may not, and has agreed to cause its subsidiaries and its and its subsidiaries' directors, officers and employees not to, and has agreed to instruct its and its subsidiaries' representatives not to, directly or indirectly:

•

initiate, solicit, knowingly encourage, knowingly induce or knowingly facilitate the making of any acquisition proposal or any inquiry, offer or proposal that would reasonably be expected to lead to an acquisition proposal;



•

engage or otherwise participate in any negotiations or discussions (other than, in response to a bona fide acquisition proposal or other inquiry, offer or proposal after the date of the merger agreement amendment that was not initiated, solicited, encouraged or facilitated in, and did not otherwise result from a, material violation of the merger agreement, contacting such person and

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its advisors for the purpose of clarifying the material terms of any such acquisition proposal or inquiry, offer or proposal and the likelihood and timing of consummation thereof) concerning, or provide access to its properties, books and records or any confidential or nonpublic information or data to any person in connection with, relating to or for the purpose of encouraging or facilitating an acquisition proposal or any inquiry, offer or proposal that would reasonably be expected to lead to an acquisition proposal;

•

approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any acquisition proposal; or



•

execute or enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement or similar written or oral agreement relating to any acquisition proposal or superior proposal.

        At any time after the parties entered into the merger agreement amendment and before obtaining the second stockholder approval (to which this proxy statement relates) for the proposal to adopt the merger agreement in the event that Rite Aid receives a bona fide acquisition proposal from any third party in circumstances not otherwise involving a breach of the merger agreement by Rite Aid and that the Board of Directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal Rite Aid may:

•

furnish information with respect to Rite Aid to the party making such acquisition proposal pursuant to a confidentiality agreement, which we refer to as an acceptable confidentiality agreement, on terms (including standstill restrictions) substantially no less restrictive to such party than those contained in the confidentiality agreement entered into by Rite Aid and WBA, dated March 3, 2015, which we refer to as the confidentiality agreement, provided that such standstill restrictions need not restrict the person making such acquisition proposal from making an acquisition proposal to Rite Aid; and



•

engage in discussions or negotiations with such party regarding such acquisition proposal.

Change of Recommendation (page 121)

        The Board of Directors has made the recommendation that the holders of Rite Aid shares vote "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger.

        The merger agreement provides that the Board of Directors may generally not effect a change of recommendation unless, prior to obtaining the second stockholder approval (to which this proxy statement relates), a bona fide acquisition proposal is made after the parties entered into the merger agreement amendment and the Board of Directors determines in good faith, after consultation with its financial advisor and outside legal counsel, that such acquisition proposal constitutes a superior proposal and determines in good faith, after consultation with its outside legal counsel, that the failure to effect a change of recommendation would be reasonably likely to be inconsistent with the Board of Directors' fiduciary duties under applicable law (provided that the acquisition proposal was not initiated, solicited, encouraged or facilitated in, and did not otherwise result from a, material violation of the merger agreement by Rite Aid).

        If the Board of Directors effects a change of recommendation under the merger agreement, WBA may terminate the merger agreement and receive a termination fee from Rite Aid as further described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134.

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Conditions to the Closing of the Merger (page 130)

        The following are some of the conditions that must be satisfied or, where permitted by law, waived before the merger may be consummated:

•

the second approval (to which this proxy statement relates) of the proposal to adopt the merger agreement by the requisite affirmative vote of Rite Aid's stockholders;



•

the expiration or termination of the applicable waiting periods under the HSR Act (and any extension thereof) (see "The Merger—Regulatory Approvals for the Merger" beginning on page 108);



•

the consummation of the merger not being restrained, enjoined, rendered illegal or otherwise prevented or prohibited by any law or order of any governmental authority;



•

the accuracy of the representations and warranties of Rite Aid, WBA and Merger Sub in the merger agreement, subject in some instances to materiality or "material adverse effect" qualifiers, as of the date of the original merger agreement and the closing date of the merger;



•

the performance in all material respects (or, with respect to Rite Aid's specified obligations relating to incurring indebtedness, in all respects) by Rite Aid, on the one hand, and WBA and Merger Sub, on the other hand, of their respective obligations under the merger agreement at or prior to the closing;



•

since the date of the merger agreement amendment, there not having occurred any event, development, circumstance, change, effect, condition or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a "material adverse effect" with respect to Rite Aid, including any event, development, circumstance, change, effect, condition or occurrence that results in, at the earlier of the end date or the closing, Rite Aid's last twelve (12) months Adjusted EBITDA (as such term is defined in the merger agreement) being less than $1 billion, in each case determined as of the end of the last fiscal month ended prior to the end date or the closing, as applicable, for which internal financial statements of Rite Aid are available; and



•

the receipt by Rite Aid and WBA of a certificate of the Chief Executive Officer or the Chief Financial Officer of the other party, certifying that the respective conditions relating to such party set forth in the preceding bullet points have been satisfied.

Termination of the Merger Agreement (page 132)

        The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger:

•

by the mutual written consent of WBA and Rite Aid;



•

by either WBA or Rite Aid:



•

if any court of competent jurisdiction or other governmental entity has issued a legal restraint which prevents, makes illegal, prohibits, restrains or enjoins the consummation of the merger and such legal restraint is or becomes final and nonappealable, except that this termination right will not be available to a party whose breach of the merger agreement was the primary cause of, or primarily resulted in, the issuance of such legal restraint;



•

if the effective time of the merger has not occurred on or before July 31, 2017, except that this termination right will not be available to a party whose breach of the merger agreement was the primary cause of, or primarily resulted in, the failure of the effective time of the merger to occur before July 31, 2017; or

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•

if Rite Aid's stockholders do not adopt the merger agreement and the transactions contemplated thereby at the second stockholders meeting (to which this proxy statement relates) or at any adjournment or postponement of the second stockholders meeting at which a vote on the adoption of the merger agreement was taken.



•

by Rite Aid:



•

if there has been a breach of any representation, warranty, covenant or agreement by WBA or Merger Sub, or if any such representation or warranty has become inaccurate, such that the closing conditions relating to the accuracy of the representations and warranties of WBA and Merger Sub and performance of the obligations of WBA and Merger Sub would not be satisfied, and such breach or inaccuracy has not been cured within thirty (30) days after the receipt of notice thereof or such breach or inaccuracy is not reasonably capable of being cured within such period; or



•

prior to obtaining the second Rite Aid stockholder approval (to which this proxy statement relates), if (i) the Board of Directors has, after complying with its non-solicitation obligations, entered into a definitive agreement in connection with a superior proposal concurrently with such termination and (ii) Rite Aid pays to WBA the termination fee under the merger agreement of $325 million.



•

by WBA:



•

if there has been a breach of any representation, warranty, covenant or agreement by Rite Aid, or if any such representation or warranty has become inaccurate, such that the closing conditions relating to the accuracy of the representations and warranties of Rite Aid and performance of the obligations of Rite Aid would not be satisfied, and such breach or inaccuracy has not been cured within thirty (30) days after the receipt of notice thereof or such breach or inaccuracy is not reasonably capable of being cured within such period;



•

if prior to obtaining stockholder approval of the merger agreement and the transactions contemplated thereby, the Board of Directors effects a change of recommendation; or



•

if a material adverse effect has occurred as a result of Rite Aid's failure to satisfy the Adjusted EBITDA test set forth in clause (B) of the definition of material adverse effect as of the end date or as of the date on which the closing is required to occur.

Termination Fees (page 134)

        Under the merger agreement, Rite Aid will be required to pay to WBA a termination fee of $325 million if the merger agreement is terminated under specified circumstances. Under the merger agreement, WBA will be required to pay Rite Aid a termination fee of $325 million if the merger agreement is terminated under specified circumstances, which will be reduced to $162.5 million under specified circumstances.

        In no event will Rite Aid or WBA be required to pay the termination fees described above on more than one occasion.

Expenses (page 134)

        Except as specified in the merger agreement, each party will bear its own expenses in connection with the merger agreement and the transactions contemplated thereby.

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Specific Performance (page 135)

        The parties are entitled to injunctions, specific performance and other equitable relief to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms of the merger agreement in addition to any other remedy to which they are entitled at law or equity.

Market Prices and Dividend Data (page 138)

        Rite Aid's common stock is listed on the NYSE under the symbol "RAD." On October 26, 2015, the last trading day prior to the date on which the public announcement of the execution of the original merger agreement was made, the closing price of our common stock was $6.08 per share. On January 27, 2017, the last trading day prior to the date on which the public announcement of the execution of the merger agreement amendment was made, the closing price of our common stock was $6.93 per share. Rite Aid believes that the January 27, 2017 stock price is not an accurate reflection of the value of Rite Aid because such stock price reflected market expectations of the likelihood that the merger would occur on the terms of the original merger agreement and did not reflect the value of Rite Aid as an independent company. On [    ·    ], 2017, the latest practicable trading day before the printing of this proxy statement, the closing price of our common stock on the NYSE was $[    ·    ] per share.

        Under the terms of the merger agreement, from the date of the original merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement, we may not declare or pay quarterly cash dividends on our common stock without WBA's written consent. Under our current dividend policy, we have never declared or paid any cash dividends on our capital stock and have retained any future earnings to support operations and to finance the growth and development of our business.

        Neither the SEC nor any state securities regulatory agency has approved or disapproved of the transactions described in this document, including the merger, or determined if the information contained in this document is accurate or adequate. Any representation to the contrary is a criminal offense.

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QUESTIONS AND ANSWERS

        The following questions and answers are intended to address some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Rite Aid stockholder. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, including the original merger agreement and the merger agreement amendment, and the documents we incorporate by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page 143. The original merger agreement is attached as Annex A to this proxy statement and the merger agreement amendment is attached as Annex B to this proxy statement.

Q:

Why am I receiving these materials?

A:

The Board of Directors is furnishing this proxy statement and form of proxy card to the holders of Rite Aid common stock in connection with the solicitation of proxies to be voted at a special meeting of stockholders or at any adjournments or postponements of the special meeting.

Q:

When and where is the special meeting?

A:

The special meeting will take place on [    ·    ], 2017, at [    ·    ], at [    ·    ],[    ·    ] time.

Q:

Who is entitled to vote at the special meeting?

A:

Only Rite Aid stockholders of record as of the close of business on [    ·    ], 2017 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each holder of Rite Aid common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of Rite Aid common stock that such holder owned as of the record date.

Q:

May I attend the special meeting and vote in person?

A:

Yes. All stockholders as of the record date may attend the special meeting and vote in person. Seating will be limited. Stockholders will need to present proof of ownership of Rite Aid common stock, such as a recent bank or brokerage account statement, and a form of personal identification to be admitted to the special meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the special meeting. Even if you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy card or vote electronically over the Internet or via telephone to ensure that your shares will be represented at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you hold your shares in "street name," because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid legal proxy from your broker, bank or other nominee.

Q:

Why is there a second special meeting relating to the merger?

A:

Rite Aid agreed to reduce the purchase price from the original merger agreement and make other changes to the original merger agreement because the parties were unable to obtain FTC clearance by the "end date" in the original merger agreement, and the Board of Directors believed, for the reasons described in this proxy statement, that it was in the best interests of Rite Aid stockholders to agree to a reduced price and other amended terms, rather than terminate the original merger agreement and continue as a stand-alone company. The merger agreement

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amendment necessitates a new vote on the merger, so despite the fact that you may have voted on the original merger agreement in connection with the February 4, 2016 special meeting of stockholders, Rite Aid is asking for your vote again.

Q:

What am I being asked to vote on at the special meeting?

A:

You are being asked to consider and vote on the following proposals:

•

To adopt the merger agreement, pursuant to which Merger Sub will merge with and into Rite Aid, and Rite Aid will become a wholly owned direct subsidiary of WBA;

•

To approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger; and

•

To approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Q:

What is the proposed merger and what effects will it have on Rite Aid?

A:

The proposed merger is the acquisition of Rite Aid by WBA pursuant to the merger agreement. If the proposal to adopt the merger agreement is approved by the requisite number of holders of Rite Aid common stock and the other closing conditions under the merger agreement have been satisfied or waived, Merger Sub will merge with and into Rite Aid, with Rite Aid continuing as the Surviving Corporation. As a result of the merger, Rite Aid will become a wholly owned direct subsidiary of WBA. Rite Aid expects to de-list its common stock from the NYSE and de-register its common stock under the Exchange Act as soon as reasonably practicable following the effective time of the merger. Thereafter, Rite Aid would no longer be a publicly traded company. However, Rite Aid may continue to voluntarily file periodic reports with the SEC to the extent it is required to do so pursuant to any of its indentures that remain effective after the closing of the merger. WBA may take actions to modify these continued reporting obligations, and pursuant to the merger agreement, Rite Aid is obligated to assist with any of these actions. If the merger is completed, you will not own any shares of the capital stock of the Surviving Corporation, and instead will only be entitled to receive the per share merger consideration.

Q:

What changes were made to the original merger agreement pursuant to the merger agreement amendment?

A:

The original merger agreement was amended pursuant to the merger agreement amendment to, among other things, (i) reduce the per share merger consideration from $9.00 per share to a range of $6.50 to $7.00 per share; (ii) increase the number of stores that WBA is required to divest, to the extent necessary to obtain the required regulatory approvals, from 1,000 stores to 1,200 stores; (iii) require that WBA sell, transfer, dispose of, divest, license or hold separate the Rite Aid Brand Rights; (iv) extend the end date from January 27, 2017 to July 31, 2017; (v) provide for a reduced $162.5 million termination fee payable by WBA to Rite Aid in the event that the merger agreement is terminated and the termination fee is payable but Rite Aid fails to satisfy the Adjusted EBITDA (as such term is defined in the merger agreement) threshold specified in the material adverse effect definition in the merger agreement; (vi) reduce the Adjusted EBITDA (as such term is defined in the merger agreement) threshold in the material adverse effect definition in the merger agreement from $1.075 billion to $1 billion; (vii) acknowledge that each party has complied with its obligations pursuant to the antitrust efforts covenant and that no material adverse effect has occurred from the date of the original merger agreement to the date of the merger agreement amendment; (viii) revise the no material adverse effect closing condition to be measured from the date of the merger agreement amendment rather than from the date of the

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original merger agreement; (ix) remove Rite Aid's obligation to reimburse WBA's expenses in certain circumstances specified in the original merger agreement; and (x) require that WBA sell, transfer, dispose of, divest or hold separate certain Rite Aid distribution centers, inventory related thereto and certain administrative assets.

Q:

What will I receive if the merger is completed?

A:

Upon completion of the merger, you will be entitled to receive the per share merger consideration of a maximum of $7.00 in cash and a minimum of $6.50 in cash, without interest and less any applicable withholding taxes, for each share of common stock that you own, unless you have properly exercised and perfected and not withdrawn your demand for appraisal rights under the DGCL with respect to such shares. The exact price per share will be determined based on the number of stores required to be divested by the FTC. The price will be $7.00 per share if 1,000 stores or fewer are required to be divested and will be $6.50 per share if 1,200 stores (or more, should WBA agree to sell more) are required to be divested. If the number of stores required to be divested falls between 1,000 and 1,200 stores, then there will be a pro-rata adjustment of the price per share. For example, if you own 100 shares of common stock, you will receive $700.00 in cash in exchange for your shares of common stock, less any applicable withholding taxes, if 1,000 stores or fewer are required to be divested and $650.00 in cash in exchange for your shares of common stock, less any applicable withholding taxes, if 1,200 stores (or more, should WBA agree to sell more) are required to be divested. If the number of stores required to be divested falls between 1,000 and 1,200 stores, then there will be a pro-rata adjustment and you will receive between $650.00 and $700.00. In no case will you own shares in the Surviving Corporation.

Q:

How does the per share merger consideration compare to the market price of Rite Aid common stock prior to the dates on which the public announcements of the original merger agreement and the merger agreement amendment were made?

A:

If the price is $7.00 per share, this represents (i) a premium of approximately 15.1% to Rite Aid's closing stock price on October 26, 2015, the last trading day prior to the date on which public announcement of the execution of the original merger agreement was made, (ii) a premium of approximately 1.0% to Rite Aid's closing stock price on January 27, 2017, the last trading day prior to the date on which public announcement of the execution of the merger agreement amendment was made, (iii) a premium of approximately 12.2% to the volume weighted average share price of our common stock during the thirty (30) days ended October 26, 2015 and (iv) a discount of approximately 9.0% to the volume weighted average share price of our common stock during the thirty (30) days ended January 27, 2017. If the price is $6.50 per share, this represents (i) a premium of approximately 6.9% to Rite Aid's closing stock price on October 26, 2015, the last trading day prior to the date on which public announcement of the execution of the original merger agreement was made, (ii) a discount of approximately 6.2% to Rite Aid's closing stock price on January 27, 2017, the last trading day prior to the date on which public announcement of the execution of the merger agreement amendment was made, (iii) a premium of approximately 4.2% to the volume weighted average share price of our common stock during the thirty (30) days ended October 26, 2015 and (iv) a discount of approximately 15.5% to the volume weighted average share price of our common stock during the thirty (30) days ended January 27, 2017. Rite Aid believes that the premium or discount of the per share merger consideration relative to the January 27, 2017 stock price is not an accurate reflection of the value of the transaction because such stock price reflected market expectations of the likelihood that the merger would occur on the terms of the original merger agreement and did not reflect the value of Rite Aid as an independent company.

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Q:

Why was the original merger agreement amended to, among other things, reduce the per share merger consideration?

A:

If the original merger agreement end date was not extended, either WBA or Rite Aid could have terminated the original merger agreement at any time after January 27, 2017. During the course of negotiations relating to extending the original merger agreement on January 24, 2017, WBA informed Rite Aid that it was not willing to agree to a long-term (beyond March 31, 2017) extension of the merger agreement or increased divestiture obligations without a decrease in the purchase price. Rite Aid was therefore faced with the choice of reducing the purchase price and negotiating additional divestiture obligations intended to maximize the likelihood of FTC approval of the transaction, extending the merger agreement for a short amount of time but possibly not being entitled to the $325 million termination fee at the extended end date if Rite Aid failed to satisfy the Adjusted EBITDA threshold in the material adverse effect closing condition to the original merger agreement, or refusing to reduce the purchase price and allowing WBA to terminate the original merger agreement, receive the termination fee that WBA would be required to pay to Rite Aid upon such termination, and then operate the business as a stand-alone company. The Board of Directors considered Rite Aid's options and the proposed terms of the merger agreement amendment, and unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to, and in the best interests of Rite Aid and its stockholders, and approved, adopted and declared advisable the merger agreement and the transactions contemplated thereby. A more complete description of the background of the negotiations relating to the merger agreement amendment is provided under "The Merger—Background of the Merger" beginning on page 40 of this proxy statement and a more complete description of the factors that the Board of Directors considered and reasons for the merger is provided under "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger" beginning on page 74 of this proxy statement.

Q:

What do I need to do now?

A:

We encourage you to read this proxy statement, the annexes to this proxy statement, including the original merger agreement and the merger agreement amendment, and the documents we refer to in this proxy statement carefully and consider how the merger affects you. Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the special meeting. If you hold your shares in "street name," please refer to the voting instruction forms provided by your broker, bank or other nominee to vote your shares.

Q:

Should I send in my stock certificates now?

A:

No. After the merger is completed, under the terms of the merger agreement, you will receive shortly thereafter the letter of transmittal instructing you to send your stock certificates to the paying agent in order to receive the cash payment of the per share merger consideration for each share of your common stock represented by the stock certificates. You should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled upon completion of the merger. Please do not send in your stock certificates now.

Q:

What happens if I sell or otherwise transfer my shares of Rite Aid common stock after the record date but before the special meeting?

A:

The record date for the special meeting is earlier than the date of the special meeting and the date the merger is expected to be completed. If you sell or transfer your shares of your common stock after the record date but before the special meeting, unless special arrangements (such as the provision of a proxy) are made between you and the person to whom you sell or otherwise transfer

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your shares and each of you notifies Rite Aid in writing of such special arrangements, you will transfer the right to receive the per share merger consideration, if the merger is completed, to the person to whom you sell or transfer your shares of our common stock, but you will retain your right to vote these shares at the special meeting. Even if you sell or otherwise transfer your shares of common stock after the record date, we encourage you to complete, date, sign and return the enclosed proxy card or vote via the Internet or telephone.

Q:

How does Rite Aid's Board of Directors recommend that I vote?

A:

The Board of Directors, after considering the various factors described under "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger" beginning on page 74, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Rite Aid and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement.

The Board of Directors recommends that you vote (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

Q:

What happens if the merger is not completed?

A:

If the merger agreement is not adopted by Rite Aid stockholders or if the merger is not completed for any other reason, Rite Aid stockholders will not receive any payment for their shares of common stock. Instead, Rite Aid will remain an independent public company, your common stock in Rite Aid will continue to be listed and traded on the NYSE and registered under the Exchange Act and Rite Aid will continue to file periodic reports with the SEC.

Under specified circumstances, Rite Aid will be required to pay WBA a termination fee upon the termination of the merger agreement or will be entitled to receive a termination fee from WBA, as described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134. If the merger agreement is terminated because stockholders do not approve the merger, no termination fee will be payable by WBA to Rite Aid.

Q:

Do any of Rite Aid's directors or officers have interests in the merger that may differ from those of Rite Aid stockholders generally?

A:

In considering the recommendation of the Board of Directors with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally. The Board of Directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of Rite Aid. For a description of the interests of our directors and executive officers in the merger, see "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger" beginning on page 89.

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Q:

What vote is required to adopt the merger agreement?

A:

The affirmative vote of the holders of a majority of the outstanding shares of our common stock is required to approve the proposal to adopt the merger agreement.

The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. An abstention will also have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

As of [    ·    ], 2017, the record date for determining who is entitled to vote at the special meeting, there were approximately [    ·    ] shares of Rite Aid common stock issued and outstanding. Each holder of Rite Aid common stock is entitled to one vote per share of stock owned by such holder as of the record date.

Q:

What vote is required to approve the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger?

A:

Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of our common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon.

The failure of any stockholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the special meeting will not have any effect on the adjournment proposal or the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will not have any effect on the adjournment proposal or the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. An abstention will have the same effect as a vote "AGAINST" the adjournment proposal and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

Q:

What happens if the non-binding advisory proposal to approve compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger is not approved?

A:

Approval, on a non-binding, advisory basis, of compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger is not a condition to completion of the merger. The vote is an advisory vote and is not binding. Accordingly, regardless of the outcome of the advisory vote, if the merger is completed, Rite Aid may still pay such compensation to its named executive officers in accordance with the terms and conditions applicable to such compensation.

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Q:

What constitutes a quorum?

A:

As of the record date, there were [    ·    ] shares of our common stock outstanding and entitled to be voted at the special meeting. The presence, either in person or represented by proxy, of the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting will constitute a quorum at the special meeting. As a result, in order to have a quorum at the special meeting, at least [    ·    ] shares of our common stock must be represented by stockholders present in person or by proxy at the special meeting. Abstentions (which are described below) will count for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers, banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of Rite Aid common stock held in "street name" does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. If there are any broker non-votes, then such broker non-votes will count for the purpose of determining the presence of a quorum for the transaction of business at the special meeting.

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

If your shares are registered directly in your name with our transfer agent, Broadridge Financial Solutions, Inc., you are considered, with respect to those shares, to be the "stockholder of record." In this case, this proxy statement and your proxy card have been sent directly to you by Rite Aid.

If your shares are held through a broker, bank or other nominee, you are considered the "beneficial owner" of the shares of Rite Aid common stock held in "street name." In that case, this proxy statement has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares by following their instructions for voting. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid legal proxy from your broker, bank or other nominee.

Q:

How may I vote?

A:

If you are a stockholder of record, there are four ways to vote:

•

By attending the special meeting and voting in person by ballot;

•

By visiting the Internet at the address on your proxy card;

•

By calling toll-free (within the U.S. or Canada) at the phone number on your proxy card; or

•

By completing, dating, signing and returning the enclosed proxy card in the accompanying prepaid reply envelope.

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your shares of common stock, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet or by telephone. Please be aware that, although there is no charge for voting your shares, if you vote electronically over the Internet or

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by telephone, you may incur costs such as telephone and Internet access charges for which you will be responsible.

Even if you plan to attend the special meeting in person, you are strongly encouraged to vote your shares of common stock by proxy. If you are a stockholder of record or if you obtain a valid legal proxy to vote shares which you beneficially own, you may still vote your shares of common stock in person at the special meeting even if you have previously voted by proxy. If you are present at the special meeting and vote in person, your previous vote by proxy will not be counted.

If your shares are held in "street name" through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or electronically over the Internet or by telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or via telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee.

Q:

If my broker holds my shares in "street name," will my broker vote my shares for me?

A:

Not without your direction. Your broker, bank or other nominee will only be permitted to vote your shares on any proposal only if you instruct your broker, bank or other nominee on how to vote. Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers, banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of Rite Aid common stock held in "street name" does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. If there are any broker non-votes, then such broker non-votes will be counted as a vote "AGAINST" the proposal to adopt the merger agreement, but will have no effect on the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. Therefore, it is important that you instruct your broker, bank or other nominee on how you wish to vote your shares.

Q:

May I change my vote after I have mailed my signed proxy card or otherwise submitted my vote by proxy?

A:

Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

•

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;

•

Delivering a written notice of revocation to our Secretary;

•

Signing another proxy card with a later date and returning it to us prior to the special meeting; or

•

Attending the special meeting and voting in person.

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If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote; or contact our proxy solicitor, Morrow Sodali LLC at (800) 662-5200. You may also vote in person at the special meeting if you obtain a valid legal proxy from your broker, bank or other nominee.

Q:

What is a proxy?

A:

A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of Rite Aid common stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of Rite Aid common stock is called a "proxy card." The Board of Directors has designated John T. Standley and James J. Comitale, and each of them with full power of substitution, as proxies for the special meeting.

Q:

If a stockholder gives a proxy, how are the shares voted?

A:

Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted "FOR" or "AGAINST" or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

If you properly sign and return your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted as recommended by the Board of Directors with respect to each proposal.

Q:

What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or vote via the Internet or telephone with respect to) each proxy card and voting instruction card that you receive.

Q:

Who will count the votes?

A:

All votes will be counted by the independent inspector of election appointed for the special meeting.

Q:

Where can I find the voting results of the special meeting?

A:

Rite Aid intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC within four (4) business days following the special meeting. All reports that Rite Aid files with the SEC are publicly available when filed. See "Where You Can Find More Information" beginning on page 143 of this proxy statement.

Q:

Will I be subject to U.S. federal income tax upon the exchange of Rite Aid common stock for cash pursuant to the merger?

A:

If you are a U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106), the exchange of Rite Aid common stock for cash pursuant

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to the merger generally will require you to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash you received pursuant to the merger and your adjusted tax basis in the shares of our common stock surrendered in exchange therefor. A Non-U.S. Holder (as defined under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106) generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the merger unless such Non-U.S. Holder has certain connections to the United States. Because particular circumstances may differ, we recommend that you consult your tax advisor to determine the U.S. federal income tax consequences relating to the merger in light of your own particular circumstances and any consequences arising under the laws of any state, local or foreign taxing jurisdiction. A more complete description of the U.S. federal income tax consequences of the merger is provided under "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page 106 of this proxy statement.

Q:

What will the holders of outstanding Rite Aid equity awards receive in the merger?

A:

Upon completion of the merger, each cash-out option will be converted into the right to receive, without interest, an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such cash-out option and (y) the excess, if any, of the per share merger consideration (which will range from $6.50 to $7.00) over the per share exercise price of such cash-out option, less applicable withholding taxes.

Upon completion of the merger, each rollover option will be converted into an option to acquire, on the same terms and conditions as were applicable immediately prior to the completion of the merger, a number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock subject to such rollover option and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares after aggregating each individual holder's option with the same exercise price. The exercise price of each rollover option will be equitably adjusted to be equal to the quotient (rounded up to the nearest whole cent) of (x) the exercise price per share of Rite Aid common stock subject to such rollover option and (y) the conversion ratio (rounded up to the nearest whole cent).

Upon completion of the merger, each rollover stock award will be converted into a WBA restricted share award or a WBA performance stock unit, as applicable, relating to the number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock relating to such rollover stock award (in the case of performance stock units for which the applicable performance period has not completed, the target number of shares) and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares (with such rounding applied on an aggregate basis to each individual holder), and with each such converted rollover stock award generally subject to the same terms and conditions as were applicable immediately prior to the completion of the merger. With respect to each rollover stock award that is a performance stock unit, following the completion of the merger (i) the performance goals or conditions will not apply with respect to a pro rata portion of such award (with such portion based on the number of days elapsed in the performance period through the completion of the merger), and such portion of the rollover stock award will continue to be subject to service-based vesting on the same schedule as applied prior to the completion of the merger, and (ii) the remaining portion of the performance stock unit will continue to be subject to performance-based vesting (based on the achievement of adjusted performance goals) and service-based vesting on the same schedule as applied prior to the completion of the merger.

Upon completion of the merger, each Rite Aid restricted stock unit outstanding immediately prior to the completion of the merger will automatically be cancelled and converted into the right to receive an amount in cash equal to the product of (x) the total number of shares of Rite Aid

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common stock subject to such restricted stock unit and (y) the per share merger consideration (which will range from $6.50 to $7.00), less applicable withholding taxes.

Q:

When do you expect the merger to be completed?

A:

While there is no assurance that the merger will close, we are working toward completing the merger by July 31, 2017. However, the exact timing of completion of the merger cannot be predicted because the completion of the merger is subject to conditions, including, among other things, adoption of the merger agreement by our stockholders and the receipt of regulatory approvals.

Q:

Am I entitled to appraisal rights under the DGCL?

A:

If the merger is adopted by Rite Aid's stockholders, stockholders who do not vote (whether in person or by proxy) in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of Rite Aid common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Rite Aid common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights in effect as of the date of the original merger agreement, not including the August 1, 2016 DGCL amendments, are described in further detail in this proxy statement, and the relevant section of the DGCL regarding such appraisal rights is reproduced and attached as Annex D to this proxy statement.

Q:

Why does the per share merger consideration reflect a range from $6.50 to $7.00 as opposed to a single price per share?

A:

Rite Aid and WBA agreed to increase the maximum number of stores that WBA was required to divest from 1,000 stores to 1,200 stores under the merger agreement amendment. The per share merger consideration was amended to be a range of $6.50 to $7.00 as opposed to a single price per share to provide Rite Aid stockholders with potential upside in the merger if the FTC required 1,000 or fewer stores to be divested. A range also addressed WBA's concerns regarding paying a single price despite the risk that WBA might not be able to obtain its full expected benefits of the transaction in scenarios where more than 1,000 stores were required to be divested.

Q:

When will stockholders know the exact price of the per share merger consideration within the range of $6.50 to $7.00?

A:

Rite Aid will announce the exact price of the per share merger consideration after an FTC consent order specifying the number of stores to be divested is finalized. It is unlikely that the exact per share merger consideration will be known before Rite Aid stockholders vote on adoption of the merger agreement. Stockholders' votes should be made with the assumption that the exact price per share could be any amount within the range of $6.50 to $7.00.

Q:

Is it possible for stockholders to reject the merger agreement amendment and return to the terms of the original merger agreement?

A:

No, approval of the merger agreement (as amended) is a condition to closing the merger. If the merger agreement (as amended) is not adopted by Rite Aid stockholders or if the merger is not

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completed for any other reason, Rite Aid stockholders will not receive any payment for their shares of common stock. Instead, Rite Aid will remain an independent public company, your common stock in Rite Aid will continue to be listed and traded on the NYSE and registered under the Exchange Act and Rite Aid will continue to file periodic reports with the SEC.

Under specified circumstances, Rite Aid will be required to pay WBA a termination fee upon the termination of the merger agreement or will be entitled to receive a termination fee from WBA, as described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134. If the merger agreement is terminated because stockholders do not approve the merger, no termination fee will be payable by WBA to Rite Aid.

Q:

Who can help answer my questions?

A:

If you have any questions concerning the merger, the special meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Banks and Brokerage Firms Call: (203) 658-9400
Stockholders Call Toll Free: (800) 662-5200
Email: rad.info@morrowsodali.com

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FORWARD-LOOKING STATEMENTS

        This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, contain "forward-looking statements" that do not directly or exclusively relate to historical facts. You can typically identify forward-looking statements by the use of forward-looking words, such as "may," "could," "should," "estimate," "project," "forecast," "intend," "expect," "anticipate," "believe," "target," "plan," "providing guidance" and similar expressions that are intended to identify information that is not historical in nature. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filing on Form 10-K and subsequent periodic and interim reports, factors and matters described or incorporated by reference in this proxy statement, and the following factors:

•

the inability to consummate the merger due to the failure to obtain stockholder approval to adopt the merger agreement or failure to satisfy the other conditions to the completion of the merger, including receipt of required regulatory approvals;



•

the risk that a governmental entity may prohibit, delay or refuse to grant approval, including antitrust approval, for the consummation of the merger or may require conditions, limitations or restrictions in connection with such approvals, including the risk that the FTC may not approve the transaction despite the changes the parties to the merger agreement and to the Asset Purchase Agreement, dated as of December 19, 2016, by and among Rite Aid, Fred's (solely for the purposes set forth in the asset purchase agreement), AFAE, LLC, a subsidiary of Fred's which we refer to as the Divestiture Buyer, and WBA (solely for the purposes set forth in the asset purchase agreement), which we refer to as the asset purchase agreement, are willing to make;



•

the risk that the parties to the asset purchase agreement may not receive regulatory approval or be able to consummate the transactions contemplated by the asset purchase agreement in a timely manner or at all considering various closing conditions in the asset purchase agreement;



•

the risk that stockholders may receive the bottom of the price range for the per share merger consideration;



•

the risk that the merger agreement may be terminated in certain circumstances that require us to pay WBA a termination fee of $325 million;



•

risks that the proposed merger disrupts our current plans and operations or affects our ability to retain or recruit key employees;



•

the continuing effect of the merger, including the effect of the announcement of the merger agreement amendment, on Rite Aid's business relationships (including, without limitation, customers and suppliers), operating results and business generally, and the risk that there may be a material adverse change of Rite Aid as a result of uncertainty surrounding the transaction;



•

the amount of the costs, fees, expenses and charges related to the merger agreement or the merger;



•

risks related to diverting management's or employees' attention from ongoing business operations;



•

risks associated with the financing of the transaction;



•

the risk that our stock price may decline significantly if the merger is not completed;



•

risks related to obtaining the requisite consents to the merger and the risk that such consents might not be received;

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•

the risk that the merger may not be consummated in a timely manner, if at all;



•

risks related to other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange or interest rates or credit ratings, changes in tax laws, regulations, rates and policies or competitive development;



•

the risk that changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder may occur;



•

the risk that provider and state contract changes may occur;



•

the risk of reduction in provider payments by commercial or governmental payors;



•

the nature, cost and outcome of pending and future litigation and other legal proceedings, including any such proceedings related to the merger and instituted against us and others; and



•

the fact that Rite Aid's stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of Rite Aid's current strategy as an independent company.

        These factors could cause Rite Aid's plans with respect to the merger, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by the forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this document are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of the particular statement. No assurance can be given that these are all of the factors that could cause actual results to vary materially from those described in the forward-looking statements.

        All of the forward-looking statements we make in this proxy statement are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information contained under the headings "Risk Factors" and information in our consolidated financial statements and notes thereto included in our most recent filing on Form 10-K and subsequent periodic and interim report filings (see "Where You Can Find More Information" beginning on page 143).

        Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Rite Aid stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

THE SPECIAL MEETING

        The enclosed proxy is solicited on behalf of the Board of Directors for use at the special meeting of stockholders or at any adjournments or postponements thereof.

Date, Time and Place

        We will hold the special meeting on [    ·    ], 2017 at [    ·    ], at [    ·    ], [    ·    ] time.

Purpose of the Special Meeting

        At the special meeting, we will ask our stockholders of record as of the record date to vote on proposals (i) to adopt the merger agreement, (ii) to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger, and (iii) to approve one or more adjournments of the special meeting to a

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later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

Record Date; Shares Entitled to Vote; Quorum

        Only stockholders of record as of the close of business on [    ·    ], 2017 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 30 Hunter Lane, Camp Hill, Pennsylvania 17011, during regular business hours for a period of at least ten (10) days before the special meeting and at the place of the special meeting during the special meeting.

        As of the record date, there were approximately [    ·    ] shares of Rite Aid common stock outstanding and entitled to be voted at the special meeting.

        A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting, either present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, [    ·    ] shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum.

        In the event that a quorum is not present at the special meeting, it is expected that the meeting would be adjourned or postponed to a later date to solicit additional proxies.

Vote Required; Abstentions and Broker Non-Votes

        The affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote thereon is required to approve the proposal to adopt the merger agreement. Adoption of the merger agreement by our stockholders is a condition to the closing of the merger.

        Approval of the proposal to approve one or more adjournments of the special meeting, whether or not a quorum is present, requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon. Approval of the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon.

        If a Rite Aid stockholder abstains from voting, the abstention will have the same effect as if the stockholder voted "AGAINST" the proposal to adopt the merger agreement, the adjournment proposal and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

        If you hold your shares in "street name," the failure to instruct your broker, bank or other nominee on how to vote your shares will count as a vote "AGAINST" the proposal to adopt the merger agreement, but will have no effect on the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

        Broker non-votes are shares held by a broker, bank or other nominee that are present in person or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares on how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers,

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banks and other nominee holders of record do not have discretionary voting authority with respect to any of the three proposals, if a beneficial owner of shares of Rite Aid common stock held in "street name" does not give voting instructions to the broker, bank or other nominee with respect to any of the proposals, then those shares will not be present in person or represented by proxy at the special meeting. If there are any broker non-votes, then such broker non-votes will be counted as a vote "AGAINST" the proposal to adopt the merger agreement, but will have no effect on the proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting and the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

Shares Held by Rite Aid's Directors and Executive Officers

        As of the record date, Rite Aid directors and executive officers beneficially owned and were entitled to vote, in the aggregate, [    ·    ] shares of Rite Aid common stock (excluding any shares of Rite Aid common stock that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately [    ·    ]% of the outstanding shares of Rite Aid common stock on that date. The directors and executive officers of Rite Aid have informed Rite Aid that they currently intend to vote all of their shares of Rite Aid common stock (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

Voting of Proxies

        If your shares are registered in your name with our transfer agent, Broadridge Financial Solutions, Inc., you may cause your shares to be voted by returning a signed proxy card, or you may vote in person at the special meeting. Additionally, you may submit electronically over the Internet or by phone a proxy authorizing the voting of your shares by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

        If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting in person. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

        Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement. No proxy that is specifically marked against the proposal to adopt the merger agreement will be voted in favor of the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by

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Rite Aid to its named executive officers in connection with the merger, unless it is specifically marked "FOR" the approval of such proposal.

        If your shares are held in "street name" through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or by the Internet or telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee. Under applicable stock exchange rules, brokers, banks or other nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or other nominee on how to vote your shares with respect to such matters. Proposals 1, 2 and 3 in this proxy statement are non-routine matters, and brokers, banks and other nominees therefore cannot vote on these proposals without your instructions. If you do not return your broker's, bank's or other nominee's voting form, do not vote via the Internet or telephone through your broker, bank or other nominee, if applicable, or do not attend the special meeting and vote in person with a proxy from your broker, bank or other nominee, such actions will have the same effect as if you voted "AGAINST" the proposal to adopt the merger agreement but will not have any effect on the adjournment proposal or the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

Revocability of Proxies

        If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:

•

Submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;



•

Delivering a written notice of revocation to our Secretary;



•

Signing another proxy card with a later date and returning it to us prior to the special meeting; or



•

Attending the special meeting and voting in person.

        Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m., Eastern time on [    ·    ], 2017. If you have submitted a proxy, your appearance at the special meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

        If you hold your shares of common stock in "street name," you should contact your broker, bank or other nominee for instructions regarding how to change your vote; or contact our proxy solicitor, Morrow Sodali LLC at 800-662-5200. You may also vote in person at the special meeting if you obtain a valid legal proxy from your broker, bank or other nominee. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow Rite Aid stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned.

Board of Directors' Recommendation

        The Board of Directors, after considering various factors described under "The Merger—Recommendation of Our Board of Directors and Reasons for the Merger" beginning on page 74, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Rite Aid and its

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stockholders, and approved, adopted and declared advisable the merger agreement and the transactions contemplated by the merger agreement.

        The Board of Directors unanimously recommends that you vote (i) "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger, (ii) "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger and (iii) "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

Solicitation of Proxies

        The expense of soliciting proxies in the enclosed form will be borne by Rite Aid. We have retained Morrow Sodali LLC, a proxy solicitation firm, to solicit proxies in connection with the special meeting at a cost of approximately $20,000 plus expenses. In addition, we may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by some of our directors, officers and employees, personally or by telephone, facsimile or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Completion of the Merger

        Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the proposal to adopt the merger agreement, we anticipate that the merger will be consummated by July 31, 2017.

Rights of Stockholders Who Seek Appraisal

        If the merger is adopted by Rite Aid stockholders, stockholders who do not vote in favor of the adoption of the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL. This means that holders of Rite Aid common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the "fair value" of the shares of Rite Aid common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process.

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares.

        To exercise your appraisal rights, you must submit a written demand for appraisal to Rite Aid before the vote is taken on the adoption of the merger agreement, you must not submit a proxy or otherwise vote in favor of the proposal to adopt the merger agreement and you must continue to hold the shares of Rite Aid common stock of record through the effective time of the merger. Your failure to follow the procedures specified under the DGCL will result in the loss of your appraisal rights. The DGCL requirements for exercising appraisal rights in effect as of the date of the original merger agreement, not including the August 1, 2016 DGCL amendments, are described in further detail in this proxy statement, and the relevant section of the DGCL regarding such appraisal rights is reproduced and attached as Annex D to this proxy statement. If you hold your shares of Rite Aid common stock

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through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such broker, bank or other nominee.

Other Matters

        At this time, we know of no other matters to be submitted at the special meeting.

Householding of Special Meeting Materials

        We may send a single copy of this proxy statement to any household at which two or more stockholders reside in accordance with SEC rules, unless we have received contrary instructions. Each stockholder in the household will continue to receive a separate proxy card. This process, known as "householding," reduces the volume of duplicate information received at your household and helps to reduce our expenses.

        If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate proxy statement, please notify your broker or direct your written request to Rite Aid Corporation, Attention: Byron Purcell, Senior Director, Treasury Services & Investor Relations, 30 Hunter Lane, Camp Hill, PA 17011, or by telephone at (717) 975-5809. We will promptly deliver upon written or oral request a separate copy of the proxy statement to a stockholder at a shared address to which a single copy of the proxy statement was delivered. Stockholders who currently receive multiple copies of the proxy statement at their addresses and would like to request "householding" of their communications should contact their broker.

THE MERGER

        This discussion of the merger is qualified in its entirety by reference to the original merger agreement and the merger agreement amendment, which are attached to this proxy statement as Annex A and Annex B, respectively, and which are incorporated into this proxy statement by reference. You should read the entire original merger agreement and merger agreement amendment carefully as they are the legal documents that govern the merger.

Parties Involved in the Merger

Rite Aid Corporation

30 Hunter Lane
Camp Hill, PA 17011
Phone: (717) 761-2633

        Rite Aid is a leading retail drugstore chain in the United States. As of February 1, 2017, Rite Aid operated nearly 4,600 stores in 31 states across the country and in the District of Columbia.

        Rite Aid sells prescription drugs and a wide assortment of other merchandise, which Rite Aid calls "front-end" products. Front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products.

        On June 24, 2015, we completed our acquisition of EnvisionRx, pursuant to the terms of the EnvisionRx Agreement. EnvisionRx is a full-service pharmacy services provider. EnvisionRx provides both transparent and traditional pharmacy benefit manager options through its EnvisionRx and MedTrak pharmacy benefit managers, respectively. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to a leading cash pay infertility discount drug program via Design Rx; an innovative claims adjudication software platform in

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Laker Software; and a national Medicare Part D prescription drug plan through Envision Insurance Company's EnvisionRx Plus Silver product for the low income auto-assign market and its Clear Choice product for the chooser market. EnvisionRx operates as our 100 percent owned subsidiary.

        Rite Aid was incorporated in Delaware on April 15, 1968. Rite Aid's common stock is currently listed on the NYSE under the symbol "RAD."

Walgreens Boots Alliance, Inc.

108 Wilmot Road
Deerfield, IL 60015
Phone: (847) 315-2500

        WBA is the first global, pharmacy-led health and wellbeing enterprise with net sales of $117.4 billion in the fiscal year ended August 31, 2016. Together with its equity method investments, WBA employs more than 400,000 people and has over 13,200 stores in 11 countries and a pharmaceutical wholesale and a distribution network that includes over 390 distribution centers delivering to more than 230,000 pharmacies, doctors, health centers and hospitals each year.

        WBA's portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Botanics, Liz Earle and Soap & Glory.

        WBA was created through the combination of Walgreen Co. and Alliance Boots GmbH in December 2014. WBA was incorporated in Delaware in 2014 and is the successor of Walgreen Co., an Illinois corporation, which was formed in 1909 as a successor to a business founded in 1901. Its principal executive offices are located at 108 Wilmot Road, Deerfield, Illinois 60015. WBA's common stock trades on the NASDAQ Stock Market under the symbol "WBA."

Victoria Merger Sub, Inc.

        Merger Sub is a Delaware corporation and a wholly owned subsidiary of WBA, formed on October 23, 2015 for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist.

Certain Effects of the Merger on Rite Aid

        Upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into Rite Aid, with Rite Aid continuing as the Surviving Corporation and a wholly owned direct subsidiary of WBA. Rite Aid expects to de-list its common stock from the NYSE and de-register its common stock under the Exchange Act as soon as reasonably practicable following the effective time of the merger. Thereafter, Rite Aid would no longer be a publicly traded company. However, Rite Aid may continue to voluntarily file periodic reports with the SEC to the extent it is required to do so pursuant to any of its indentures that remain effective after the closing of the merger. WBA may take actions to modify these continued reporting obligations, and pursuant to the merger agreement, Rite Aid is obligated to assist with any of these actions. If the merger is completed, you will not own any shares of the capital stock of the Surviving Corporation, and instead will only be entitled to receive the merger consideration, as described under "Proposal 1: Adoption of the Merger Agreement—Merger Consideration" beginning on page 112.

        The effective time of the merger will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (or at such later time as Rite Aid and WBA may agree and specify in the certificate of merger).

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Effect on Rite Aid if the Merger is Not Completed

        If the merger agreement is not adopted by Rite Aid stockholders or if the merger is not completed for any other reason, Rite Aid stockholders will not receive any payment for their shares of common stock. Instead, Rite Aid will remain a public company, Rite Aid's common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and Rite Aid will continue to file periodic reports with the SEC.

        Furthermore, if the merger is not consummated, and depending on the circumstances that would have caused the merger not to be consummated, it is likely that the price of Rite Aid's common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Rite Aid's common stock would return to the price at which it trades as of the date of this proxy statement or to the price at which it traded as of the date of the announcement of the original merger agreement or merger agreement amendment.

        Accordingly, if the merger is not consummated, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of Rite Aid common stock. If the merger is not consummated, the Board of Directors will continue to evaluate and review Rite Aid's business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to enhance stockholder value. If the merger agreement is not adopted by Rite Aid's stockholders or if the merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to Rite Aid will be offered or that Rite Aid's business, prospects or results of operation will not be adversely impacted.

        In addition, under certain specified circumstances, Rite Aid will be required to pay WBA a termination fee upon the termination of the merger agreement or will be entitled to receive a termination fee from WBA, as described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134. If the merger agreement is terminated because stockholders do not approve the merger, no termination fee will be payable by WBA to Rite Aid.

Merger Consideration

        At the effective time of the merger, each share of Rite Aid common stock issued and outstanding immediately prior to the effective time of the merger (other than excluded shares) will be converted into the right to receive the per share merger consideration, and will cease to be outstanding, will automatically be cancelled and will cease to exist, and each certificate that immediately prior to the effective time of the merger represented any of the shares of Rite Aid common stock (other than the excluded shares) or non-certificated shares held in book-entry form representing any such Rite Aid common stock will thereafter represent only the right to receive the per share merger consideration. As described under "Proposal 1: Adoption of the Merger Agreement—Merger Consideration—Exchange Procedures" beginning on page 113, at or prior to the effective time of the merger, WBA will deposit, or cause to be deposited, with the paying agent, a cash amount in immediately available funds sufficient in the aggregate to provide all funds necessary to pay the aggregate per share merger consideration. After the effective time of the merger, once a stockholder has provided the paying agent with his or her stock certificates or book-entry shares, as applicable, and the other items specified by the paying agent, the paying agent will promptly pay the stockholder the per share merger consideration.

        After the merger is completed, under the terms of the merger agreement, you will have the right to receive the per share merger consideration, but you no longer will have any rights as a Rite Aid stockholder as a result of the merger (except for the right to receive the per share merger consideration and except that stockholders who properly exercise and perfect their demand for right of appraisal will instead have the right to receive a payment for the "fair value" of their shares as

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determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described under "The Merger—Appraisal Rights" beginning on page 102).

Changes to the Original Merger Agreement Pursuant to the Merger Agreement Amendment

        The original merger agreement was amended pursuant to the merger agreement amendment to, among other things, (i) reduce the per share merger consideration from $9.00 per share to a range of $6.50 to $7.00 per share; (ii) increase the number of stores that WBA is required to divest, to the extent necessary to obtain the required regulatory approvals, from 1,000 stores to 1,200 stores; (iii) require that WBA sell, transfer, dispose of, divest, license or hold separate the Rite Aid Brand Rights; (iv) extend the end date from January 27, 2017 to July 31, 2017; (v) provide for a reduced $162.5 million termination fee payable by WBA to Rite Aid in the event that the merger agreement is terminated and the termination fee is payable but Rite Aid fails to satisfy the Adjusted EBITDA (as such term is defined in the merger agreement) threshold specified in the material adverse effect definition in the merger agreement; (vi) reduce the Adjusted EBITDA (as such term is defined in the merger agreement) threshold in the material adverse effect definition in the merger agreement from $1.075 billion to $1 billion; (vii) acknowledge that each party has complied with its obligations pursuant to the antitrust efforts covenant and that no material adverse effect has occurred from the date of the original merger agreement to the date of the merger agreement amendment; (viii) revise the no material adverse effect closing condition to be measured from the date of the merger agreement amendment rather than from the date of the original merger agreement; (ix) remove Rite Aid's obligation to reimburse WBA's expenses in certain circumstances specified in the original merger agreement; and (x) require that WBA sell, transfer, dispose of, divest or hold separate certain Rite Aid distribution centers, inventory related thereto and certain administrative assets.

Background of the Merger

        Note that the portion of this "Background of the Merger" covering the period beginning in 2012 and ending on October 27, 2015 (the date of the original merger agreement with WBA) is the same as the disclosure provided in the definitive proxy statement filed on December 21, 2015 relating to the original merger agreement.

        We refer to generally accepted accounting principles as applied in the United States as GAAP. This "Background of the Merger" section includes periodic information about Adjusted EBITDA, a non-GAAP financial measure. Rite Aid uses this non-GAAP financial measure in assessing its performance in addition to net income, the most directly comparable GAAP financial measure. Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare Rite Aid's operating performance with its competitors. Adjusted EBITDA should not be considered in isolation from, and is not intended to represent alternative measures of, operating results as determined in accordance with GAAP. Rite Aid's definition of Adjusted EBITDA may not be comparable to similarly titled measurements reported by other companies and is not identical to similar terms in Rite Aid's debt facilities or the merger agreement. A reconciliation of Adjusted EBITDA to net income is included in Annex E hereto.

        The Board of Directors regularly reviews and assesses Rite Aid's performance, risks, opportunities and strategy at board meetings. Additionally, the Board of Directors and Rite Aid management regularly review and evaluate the possibility of pursuing various strategic alternatives and relationships as part of Rite Aid's ongoing efforts to strengthen its businesses and maximize value for its stockholders, taking into account economic, regulatory, competitive and other conditions. From time to time, at Rite Aid's request, Citi, a financial advisor to Rite Aid, has assisted Rite Aid management and the Board of Directors in evaluating various potential strategic alternatives available to Rite Aid. Additionally, Rite Aid management sends monthly financial updates to the Board of Directors, including updates on Rite Aid's Adjusted EBITDA. These updates compare Rite Aid's actual performance to the prior year's performance and budget. Mr. John Standley, Chief Executive Officer of Rite Aid, also regularly speaks with the lead independent director of the Board of Directors to provide him with updates on Rite Aid's financial performance.

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        Throughout 2012, 2013 and the first half of 2014, the Board of Directors met from time to time to discuss any approaches directed to Rite Aid, as well as outreaches made by Rite Aid, concerning potential strategic transactions, in each case with a number of third parties, which included, among others, discussions with retailers, including retailers that operate pharmacies, and pharmacy benefit management companies, which we refer to as PBMs, and companies that operate PBMs relating to an acquisition of, or business combination involving, Rite Aid. During this period, Rite Aid management kept the Board of Directors apprised of the status of discussions with any third parties regarding a potential business combination transaction.

        On August 27, 2012, at the request of Rite Aid, Mr. Standley and other members of Rite Aid management, together with a representative from Citi, met with representatives of Party A and discussed, among other things, a potential business combination transaction between Rite Aid and Party A. During this meeting, Party A informed Rite Aid that it was not interested in exploring such a transaction with Rite Aid.

        In early 2013, representatives of a financial advisor to Party B approached Rite Aid to explore a potential business combination transaction between Rite Aid and Party B. After several meetings among representatives of Party B, Rite Aid and their respective advisors during the first half of 2013, Party B informed Rite Aid that it was not interested in continuing with discussions regarding a potential business combination transaction with Rite Aid.

        In the summer of 2013, Rite Aid management contacted Party C to discuss a possible business combination transaction. On July 29, 2013, Rite Aid and Party C executed a confidentiality agreement to protect confidential information of Rite Aid. Following Party C's due diligence review through the fall of 2013, representatives of Party C advised Rite Aid that Party C was not interested in a potential business combination transaction with Rite Aid and would only consider acquiring certain assets of Rite Aid. Rite Aid determined that it was not in Rite Aid's interests to proceed with an asset sale transaction with Party C at that time.

        In the first half of 2014 through the summer of 2014, Mr. Standley, together with representatives of Citi, had discussions with representatives of Party D regarding a potential business combination transaction between Rite Aid and Party D.

        On August 15, 2014, Rite Aid and Party D executed a confidentiality agreement obligating Rite Aid to protect confidential information of Party D. Subsequently, Rite Aid began conducting a due diligence review of Party D.

        With the Board of Directors generally apprised of Rite Aid management's ongoing exploration of third-party interest in pursuing a business combination transaction, over the course of a series of discussions during the month of August 2014, Mr. Standley discussed various strategic alternatives with a senior executive of Party E. During these discussions, Mr. Standley concluded that Party E was not interested in exploring a potential business combination transaction with Rite Aid.

        On September 30, 2014, the Board of Directors met in-person at a regular meeting, which was attended by members of Rite Aid management and representatives of Citi. Rite Aid management and Citi provided their respective views on the current state of, and prospects for, the retail drugstore sector, as well as Rite Aid in particular, and potential strategic alternatives available to Rite Aid, including remaining an independent company as well as potential business combinations and sale and acquisition transactions, including, among others, the potential acquisition of EnvisionRx and potential business combination transactions with Party D and Party F, including potential synergy opportunities. At this meeting, Citi informed the Board of Directors as to the nature of Citi's existing and previous relationship with Party D. Following this discussion, the Board of Directors directed Rite Aid management to continue exploratory discussions with Party D and to continue engaging with other

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parties that may be potentially interested in pursuing a strategic transaction, including EnvisionRx and Party F.

        Shortly thereafter, Mr. Standley called a senior executive of Party F to explore a potential strategic transaction with Party F. Party F declined to consider exploration of a potential strategic transaction between Party F and Rite Aid.

        As directed by the Board of Directors at the September 30, 2014 meeting, Mr. Standley also continued discussions with representatives of Party D regarding a potential strategic transaction with Party D.

        On October 9, 2014, Rite Aid submitted a letter of interest to Party D setting forth certain preliminary terms for exploring a possible business combination transaction, including, among other terms, Rite Aid stockholders owning proportionate interests in the combined company, adjusted to provide for a control premium for Rite Aid stockholders and with the combined company's board composition reflecting such proportionate ownership.

        Also on October 9, 2014, as a continuation of ongoing discussions regarding a strategic partnership with EnvisionRx, Mr. Standley and other representatives of Rite Aid met in-person with representatives of EnvisionRx to discuss a potential strategic partnership with EnvisionRx. During this meeting, the companies discussed a potential sale of EnvisionRx to Rite Aid.

        On October 14, 2014, Rite Aid and Party D executed a confidentiality agreement, in addition to one previously executed on August 15, 2014, obligating Party D to protect the confidential information of Rite Aid.

        Beginning on October 22, 2014, representatives of Jones Day, antitrust counsel to Rite Aid, together with antitrust counsel to Party D and third-party economic experts, began their review and discussions regarding possible regulatory issues relating to a potential business combination transaction between Rite Aid and Party D.

        In the third week of October 2014, in response to inquiries from Rite Aid management, a representative of EnvisionRx contacted Mr. Standley and communicated that EnvisionRx would consider a proposal from Rite Aid regarding a potential acquisition of EnvisionRx by Rite Aid.

        On October 23, 2014, representatives of Rite Aid and Party D and their respective advisors had a telephonic meeting to discuss organizational matters relating to a potential business combination transaction between Rite Aid and Party D.

        On October 29, 2014, with the Board of Directors generally apprised of the development of discussions between Rite Aid management and EnvisionRx, Rite Aid submitted a non-binding preliminary indication of interest to EnvisionRx, subject to various conditions, including Rite Aid conducting a due diligence review of EnvisionRx.

        On November 5, 2014, Mr. Standley and other members of Rite Aid management met in-person with the Chief Executive Officer and another representative of Party G to discuss, among other things, strategic alternatives involving Rite Aid and Party G. During this meeting, Rite Aid and Party G agreed to continue their exploration of a potential business combination transaction after further internal analysis and review with their respective boards of directors.

        Throughout the summer and fall of 2014, Rite Aid management kept the Board of Directors generally apprised of Rite Aid management's ongoing exploration of third-party interest in pursuing a potential business combination transaction.

        At a special telephonic meeting of the Board of Directors on December 5, 2014, which was attended by members of Rite Aid management and representatives of Citi, Mr. Standley informed the Board of Directors that Party D had not formally responded to Rite Aid's letter of interest submitted

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on October 9, 2014. Mr. Standley also reviewed with the Board of Directors his preliminary discussions with representatives of Party G regarding exploring a potential acquisition of or business combination transaction with Rite Aid. Mr. Standley also updated the Board of Directors on the status of communications with EnvisionRx regarding a potential acquisition transaction. At the request of Mr. Standley, Citi discussed with the Board of Directors preliminary financial matters related to a potential acquisition of EnvisionRx. After discussion, the Board of Directors authorized Rite Aid management to communicate Rite Aid's continued interest in acquiring EnvisionRx for $2 billion, subject to the remaining terms indicated in Rite Aid's October 29, 2014 preliminary indication of interest.

        During the first week of January 2015, representatives of Party D approached Mr. Standley to express Party D's interest in re-engaging in discussions to explore a potential business combination transaction with Rite Aid. In response, Mr. Standley communicated that Rite Aid was in the process of considering another transaction (which was the acquisition of EnvisionRx) but that he would review Party D's proposal with the Board of Directors.

        In early 2015, with the Board of Directors generally apprised of Rite Aid management's ongoing exploration of third-party interest in pursuing a potential business combination transaction, Mr. Standley contacted Mr. Stefano Pessina, WBA's Executive Vice Chairman and Acting Chief Executive Officer at that time, to request a meeting with WBA's management to discuss a potential business combination transaction between Rite Aid and WBA.

        On January 9, 2015, the Board of Directors held a special telephonic meeting which was attended by members of Rite Aid management and representatives of Citi, Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to Rite Aid, which we refer to as Skadden, and Moelis & Company LLC, which we refer to as Moelis, which had been retained by Rite Aid in light of Party D's expression of interest in re-engaging in discussions, Citi's ongoing relationship with Party D and Rite Aid management's view that the Board of Directors should consider, given the status of discussions with each party at that time, whether to suspend discussions with EnvisionRx to further explore a potential combination transaction with Party D. Mr. Standley updated the Board of Directors regarding Party D's renewed interest in exploring a possible business combination transaction with Rite Aid. Citi and Moelis each discussed with the Board of Directors preliminary financial matters relating to a potential transaction with Party D and Rite Aid management's business and strategic rationale for a potential transaction with Party D as compared to an acquisition of EnvisionRx. The representatives of Skadden then discussed in detail with the directors their fiduciary duties in considering alternative transactions, including evaluating the benefits and risks to Rite Aid and its stockholders of each transaction and the merits of each transaction as compared to other potential strategic alternatives for Rite Aid. The Board of Directors, Rite Aid management and advisors engaged in a discussion about potential transactions with Party D and EnvisionRx, including, among other things, the business, strategic and potential value creation rationales for each transaction, the regulatory issues associated with each transaction, the assessment of the potential interest of third parties in acquiring Rite Aid and the potentially transformative nature of a transaction with Party D. After discussion, the Board of Directors directed Rite Aid management to re-engage in discussions with Party D to explore further the potential for a transaction with Party D and, at that time, suspend its consideration of the EnvisionRx transaction. The Board of Directors also directed Rite Aid management to continue to explore other potential strategic alternatives, including a possible transaction with WBA.

        On January 12, 2015, during an in-person meeting, Mr. Standley and Mr. Pessina discussed a potential business combination transaction between Rite Aid and WBA. During this meeting, Mr. Pessina agreed to continue discussing a potential transaction between the two companies in the following weeks, and communicated that WBA would require an agreement from Rite Aid to negotiate exclusively with WBA as a condition to continuing discussions.

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        Between January 12 and January 16, 2015, representatives of Rite Aid and Party D and their respective advisors held several telephonic meetings to discuss further the potential synergies that might be realized in a business combination transaction between Party D and Rite Aid.

        On January 15, 2015, representatives of Rite Aid and Party D and their respective advisors held an in-person meeting to discuss the strategic rationale, risks and opportunities in a potential merger of Party D and Rite Aid, including, among other things, costs and revenue synergies of the potential combined company. During this meeting, representatives of Party D indicated that Party D was reconsidering its interest at that time in continuing with discussions regarding a potential business combination transaction between the parties.

        On January 17, 2015, Party D's representatives informed Rite Aid that Party D would not be in a position to pursue a transaction with Rite Aid at that time and would not be able to re-engage in discussions with Rite Aid regarding a potential business combination transaction for at least several months.

        On January 19, 2015, the Board of Directors held a special telephonic meeting which was attended by members of Rite Aid management and representatives of Citi, Moelis and Skadden to discuss Party D's decision not to pursue a transaction with Rite Aid. Mr. Standley reported to the Board of Directors on his meeting with Mr. Pessina on January 12, 2015 regarding a potential business combination transaction with WBA, including that WBA would require an agreement from Rite Aid to negotiate exclusively with WBA as a condition to continuing discussions. The Board of Directors discussed at length potential strategic alternatives, including, among others, a potential transaction with WBA. Moelis and Citi discussed certain financial matters, including Rite Aid management's financial and strategic rationales, regarding a transaction with EnvisionRx, as well as the status of, and Rite Aid management's financial and strategic rationales regarding, a transaction with Party D. In addition, the Board of Directors discussed the relative merits and benefits and risks for Rite Aid and its stockholders of potential transactions with Party D, Party G and WBA and of remaining independent. Mr. Standley advised the Board of Directors of a proposed telephonic meeting scheduled the next day with Party G's Chief Executive Officer, at the request of the Chief Executive Officer of Party G, to follow-up on their discussions on November 5, 2014. The Board of Directors also discussed whether to re-engage with EnvisionRx with respect to a potential strategic transaction and the impact that an acquisition of EnvisionRx could have on a potential transaction with Party D, Party G, WBA or another potential acquiror of Rite Aid. The Board of Directors determined that it would be in the best interests of Rite Aid stockholders to pursue a transaction with EnvisionRx and authorized Rite Aid management to re-engage in discussions with EnvisionRx regarding a potential transaction with EnvisionRx, which discussions continued during the remainder of January and early February 2015.

        Also on January 19, 2015, representatives of Jones Day, antitrust counsel to Party D and third-party economic experts were instructed to cease their review on a preliminary basis of possible regulatory issues related to a potential business combination transaction between Party D and Rite Aid.

        On January 20, 2015, Mr. Standley had a telephonic meeting with Party G's Chief Executive Officer. During this meeting, the Chief Executive Officer of Party G indicated Party G was not interested in pursuing a business combination transaction with Rite Aid.

        On January 21, 2015, as authorized by the Board of Directors during the January 19, 2015 meeting, Mr. Standley had a telephonic meeting with a representative of EnvisionRx to inform EnvisionRx of Rite Aid's continued interest in acquiring EnvisionRx.

        On February 9, 2015, the Board of Directors held a special telephonic meeting to discuss potential transactions with EnvisionRx and WBA. Members of Rite Aid management and representatives of Citi and Skadden also attended. During this meeting, Mr. Standley reviewed with the Board of Directors his previous discussions with WBA regarding a potential acquisition of Rite Aid by WBA, including the

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impact that an acquisition of EnvisionRx could have on a potential transaction with WBA or another possible acquiror of Rite Aid. Among other matters, representatives of Skadden discussed in detail with the directors their fiduciary duties in considering alternative transactions, including with EnvisionRx and WBA. The Board of Directors further discussed having a thorough review process to assess the benefits and risks to Rite Aid and its stockholders of any potential transactions, the merits of the transactions as compared to other potential strategic alternatives for Rite Aid, including a potential sale of control or merger transaction, the level of potential interest of third parties in a sale or business combination transaction with Rite Aid, and the impact of pursuing an acquisition of EnvisionRx on such a potential sale or business combination transaction.

        The Board of Directors, Rite Aid management and advisors discussed the significant cost and revenue synergies for Rite Aid and potential value for its stockholders that could result from a transaction with EnvisionRx and that, based on Rite Aid's previous discussions with other parties, there was no certainty that Rite Aid could enter into an alternative strategic transaction with WBA or another party. After further consideration, the Board of Directors unanimously agreed that Rite Aid should proceed with negotiating the final terms of a merger agreement with EnvisionRx.

        After further negotiations and final authorization by the Board of Directors, Rite Aid and EnvisionRx entered into a merger agreement on February 10, 2015 pursuant to which Rite Aid would acquire EnvisionRx.

        Following Mr. Standley and Mr. Pessina's discussion on January 12, 2015 and continuing through February 2015, representatives of Rite Aid and WBA had several discussions to explore further a potential business combination transaction between Rite Aid and WBA, including among other things, discussions regarding the form of consideration and transaction structure.

        On March 3, 2015, Rite Aid and WBA entered into a mutual confidentiality agreement to allow the parties to begin due diligence and continue discussions.

        On March 5, 2015, at WBA's request, members of Rite Aid's and WBA's respective management met in-person in Palm Beach, Florida. During this meeting, representatives of WBA expressed WBA's interest in exploring a potential business combination transaction with Rite Aid.

        In the weeks following the meeting on March 5, 2015, representatives of Rite Aid and WBA continued with discussions regarding a potential business combination transaction, including, among other things, discussions relating to the permitted scope of WBA's due diligence of Rite Aid to complete its synergies analysis. During those discussions, Mr. Pessina proposed a two-step transaction to complete WBA's acquisition of Rite Aid, with the sale of a subset of Rite Aid stores to WBA as the first step followed by WBA's acquisition of Rite Aid's outstanding stock for an all or primarily cash price. Mr. Standley communicated that he would review WBA's proposal with the Board of Directors.

        From mid-April 2015 through June 2015, WBA and its advisors continued with its due diligence review to complete its synergies analysis. Prior to this, Rite Aid management had kept the Board of Directors generally apprised of developments with WBA since preliminary discussions first began in early 2015.

        On May 8, 2015, Rite Aid received a non-binding, preliminary indication of interest from WBA, which we refer to as the WBA Initial Proposal. The WBA Initial Proposal included a purchase price for all of Rite Aid's outstanding shares of $9.00 per share in all or primarily cash with the remainder in WBA's stock (representing a premium of approximately 14.5% to Rite Aid's closing stock price on May 7, 2015), subject to, among other things, confirmatory due diligence on, among other things, Rite Aid's capital structure, Rite Aid's meeting or exceeding analyst projections for financial results, the expected synergy potential from the transaction and validation of the potential value of net operating losses, which we refer to as NOLs. In the WBA Initial Proposal, WBA proposed a two-step transaction, as had been proposed in previous discussions between the parties, with the sale of a subset of Rite Aid

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stores to WBA as the first step. WBA also requested a 60-day period in which Rite Aid would be required to negotiate exclusively with WBA, and requested that Rite Aid terminate any ongoing discussions with any other parties and inform WBA of any unsolicited approaches Rite Aid might receive during the exclusivity period.

        On May 9, 2015, Mr. Pessina called Mr. Standley to indicate that certain factors, including WBA's due diligence of Rite Aid, the takeover speculation in Rite Aid's stock price and the market pressures in the retail drugstore industry, affected the purchase price and limited the premium that WBA would pay for Rite Aid. Also on May 9, 2015, a member of Rite Aid management expressed Rite Aid's disappointment with the WBA Initial Proposal to a representative of WBA, but informed the WBA representative that Rite Aid management would review the WBA Initial Proposal with the Board of Directors.

        On May 11, 2015, the Board of Directors held a special telephonic meeting which was attended by members of Rite Aid management and representatives of Citi and Skadden to discuss the WBA Initial Proposal and discuss and authorize the Board of Directors' proposed response to the WBA Initial Proposal. As previously reviewed with the Board of Directors, representatives of Skadden then discussed in detail with the directors their fiduciary duties in considering a transaction with WBA and the consequences of agreeing to exclusive negotiations with WBA, including, among other things, impacting Rite Aid's ability to solicit or consider transaction proposals from other bidders. After discussion of the WBA Initial Proposal with Rite Aid management and advisors, the Board of Directors determined that Rite Aid management should negotiate for a higher price. The Board of Directors also reviewed a draft of Rite Aid's response to such proposal, agreed on other responses to the WBA Initial Proposal and approved the form of the proposed response to the WBA Initial Proposal. The Board of Directors authorized Rite Aid management to proceed with discussions with WBA on the terms discussed at the meeting, but instructed Rite Aid management not to grant exclusivity.

        The following day, on May 12, 2015, Rite Aid provided a written response to WBA, which we refer to as the Initial Rite Aid Response to WBA, seeking a higher purchase price than was proposed in the WBA Initial Proposal. The response also outlined Rite Aid's position on key points regarding the WBA Initial Proposal, including, among other things, that Rite Aid was willing to continue to evaluate a two-step transaction structure to determine if it was a viable alternative, that Rite Aid was not in a position to enter into exclusive negotiations with WBA, that Rite Aid could not provide WBA the right to purchase stores from Rite Aid if the second step of the transaction was not consummated and that any transaction would need to be structured to address regulatory risk for Rite Aid stockholders.

        Shortly after receipt of the Initial Rite Aid Response to WBA, a representative of WBA contacted a member of Rite Aid management to reiterate WBA's request for a 60-day period in which Rite Aid would be required to negotiate exclusively with WBA, during which WBA and Rite Aid would seek to complete due diligence and negotiate a definitive merger agreement.

        On May 14, 2015, the Board of Directors held a special telephonic meeting with members of Rite Aid management and representatives of Citi, Skadden and Jones Day to discuss the potential WBA transaction. Mr. Standley again reviewed with the Board of Directors the WBA Initial Proposal and the Initial Rite Aid Response to WBA, including WBA's request for exclusivity. Citi discussed with the Board of Directors preliminary financial and related matters regarding a potential transaction with WBA, including, among other things, Rite Aid management's internal financial projections and initial perspectives regarding potential synergies in a transaction with WBA, Rite Aid's share price trading history, research analyst ratings and estimates, and certain transaction metrics. The Board of Directors also discussed a potential response to WBA's proposed purchase price of $9.00 per share. Rite Aid management and Citi suggested that Rite Aid continue to seek a higher purchase price from WBA, but also expressed their view that they did not expect that WBA would be willing to increase its current

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proposed price significantly. As previously had been reviewed with the Board of Directors, representatives of Skadden then discussed in detail with the directors their fiduciary duties in reviewing a transaction with WBA and the considerations in deciding whether to agree to exclusive negotiations. The Board of Directors, Rite Aid management and advisors further discussed synergy estimates, their views as to the seriousness of WBA's interest in pursuing a transaction with Rite Aid, Rite Aid management's and Citi's views, based on discussions to date, that none of the other parties with which Rite Aid had discussions previously regarding a potential business combination transaction would likely be a viable acquiror of Rite Aid at that time, and the benefits and risks of soliciting potential interest of other parties in a possible business combination transaction with Rite Aid in terms of maximizing stockholder value. After further discussion, the Board of Directors authorized Rite Aid management to continue to negotiate with WBA the terms of a potential sale transaction as reviewed with the Board of Directors and to further evaluate whether to conduct a "pre-market" check to determine whether any other parties might be interested in pursuing a transaction with Rite Aid as discussions with WBA progressed.

        During the week of May 17, 2015, Mr. Standley and Mr. Pessina continued their discussions about possible terms of a transaction and, as directed by the Board of Directors in the May 14, 2015 meeting, Mr. Standley expressed Rite Aid's request that, among other things, WBA increase its proposed per share price to a $11.00 to $12.00 per share range, and view that any definitive agreement would need to provide for a high degree of certainty in terms of WBA's obligation to obtain antitrust approvals. Mr. Standley informed Mr. Pessina that the Board of Directors had determined that it was not prepared to agree to exclusive negotiations but might consider some form of commitment at a later stage of discussions if and when appropriate and that Rite Aid management and advisors believed the two-step transaction structure proposed by WBA was not viable. Throughout these discussions, an agreement on purchase price remained unresolved.

        On May 21, 2015, a member of WBA management requested that members of Rite Aid's and WBA's respective management meet in-person to further discuss the two-step transaction structure proposed by WBA. In response, the Rite Aid management representative informed the WBA management representative that Rite Aid believed the two-step transaction structure proposed by WBA was not viable and that WBA's proposed purchase price remained too low.

        On May 26, 2015, members of Rite Aid management and WBA management had a telephonic meeting, during which a Rite Aid representative reiterated to WBA management that Rite Aid believed the two-step transaction structure was not viable.

        On June 15, 2015, the Board of Directors held a special telephonic meeting with members of Rite Aid management and representatives of Citi and Skadden and, among other things, further discussed WBA's proposal to structure a two-step transaction. The Board of Directors instructed Mr. Standley to ask Mr. Pessina for WBA's best price for a one-step transaction. Through the remainder of June 2015 and continuing into July 2015, WBA and its advisors continued a due diligence review to complete WBA's synergies analysis.

        On June 17, 2015, Mr. Standley contacted Mr. Pessina to inform him that Rite Aid would not consider the two-step transaction structure proposed by WBA and that WBA should propose its best price for a one-step transaction.

        On July 8, 2015, a representative of Party D contacted Mr. Standley to inform him of Party D's interest in potentially re-engaging with Rite Aid in discussions regarding a potential business combination transaction involving Party D and Rite Aid.

        As a result of the discussion on July 8, 2015, with the Board of Directors generally apprised of the developments regarding Party D's potential interest in re-engaging with Rite Aid, during the period between July 9 and July 15, 2015, representatives of Rite Aid, Citi and Party D resumed discussions

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regarding a potential business combination transaction, with negotiations focused on the relative pro forma ownership of the stockholders of Rite Aid and Party D (and the implied exchange ratio premium for Rite Aid stockholders) in the combined company.

        On July 15, 2015, representatives of Party D met with members of Rite Aid management and a representative of Citi and orally communicated a preliminary indication of interest to Rite Aid, which we refer to as the Party D Proposal. The Party D Proposal included, among other things, a range of pro forma ownership of each party's stockholders in the combined company and a requirement for a sizeable equity issuance by the combined company, and did not include a range of implied values for Rite Aid or its shares.

        Over the several following days, representatives of Rite Aid and Party D held meetings to discuss the Party D Proposal. During these meetings, the representatives of Rite Aid and Party D discussed, among other things, the potential pro forma ownership of each party's stockholders in the combined company and governance matters, including with respect to ensuring that the stockholders of Party D would not be able to exercise control over the combined company.

        On July 17, 2015, at the requests of Rite Aid and Party D, Citi and Party D's financial advisor commenced a review of potential synergies, the pro forma capital structure, the feasibility and impact of a proposed equity issuance by Party D on the combined company, and the potential utilization of Rite Aid's NOLs by the combined company in connection with a potential business combination transaction involving Rite Aid and Party D. This review continued from July 21 through early August 2015.

        On July 30, 2015, Mr. Standley and a senior executive of Party H had a telephonic meeting to discuss, among other things, potential strategic alternatives between Rite Aid and Party H. During this meeting, the senior executive of Party H informed Mr. Standley that Party H was not interested in exploring a potential business combination transaction with Rite Aid.

        Also on July 30, 2015, at WBA's request, and with the Board of Directors generally apprised of the developments regarding WBA's continued interest in exploring a potential business combination transaction, members of Rite Aid's and WBA's respective management met in-person in Jackson Hole, Wyoming. During this meeting, WBA communicated an increased proposed purchase price of $9.90 per share, all or primarily in cash, for shares of Rite Aid common stock. As previously directed by the Board of Directors during its meeting on June 15, 2015, Rite Aid management expressed Rite Aid's willingness to consider a price of $10.25 per share, all or primarily in cash (which represented a premium of approximately 14.5% to Rite Aid's closing stock price on July 16, 2015), subject to there being a high degree of certainty of closing the transaction. Rite Aid and WBA discussed other key transaction terms, including, among others, the amount of Rite Aid's termination fee if Rite Aid were to terminate the transaction to accept a superior acquisition proposal, WBA's request for an exclusive negotiation period, WBA's requisite level of efforts to obtain antitrust approvals, including the number of store divestitures WBA would be required to accept in order to obtain such approvals, and the reverse termination fee WBA would be required to pay if it did not obtain antitrust approvals. In addition, WBA indicated in this meeting that it would no longer continue to pursue a two-step transaction structure.

        On August 2, 2015, the Board of Directors held a special telephonic meeting to discuss with members of Rite Aid management and representatives from Citi and Skadden, among other things, the status of discussions with Party D and WBA, other potential strategic alternatives, other parties that might potentially be interested in an acquisition of or business combination transaction with Rite Aid, previous discussions with such parties that had declined to pursue a transaction with Rite Aid, the strategic, business and potential value creation rationale for and terms of the Party D and WBA transactions and relative benefits and risks for Rite Aid and its stockholders, and Citi's preliminary financial perspectives concerning these transactions. Citi again discussed with the Board of Directors

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the nature of its relationship with Party D, including its existing and previous roles on matters involving Party D, and in light of Citi's changed relationship with Party D since January 2015, the Board of Directors did not believe there was a need to retain a second financial advisor at this time. The representatives of Skadden then reviewed with the Board of Directors legal issues with respect to the current proposals including, among other things, the directors' fiduciary duties, consideration of WBA's request for a period of exclusive negotiations and the amount and triggers for the payment to WBA of a termination fee in the event Rite Aid accepted a superior acquisition proposal and terminated the definitive merger agreement. A discussion then followed regarding the possibility of discussions with other potentially interested parties, including Party A, Party C, Party G and another potential party, Party I, with Rite Aid management and Citi expressing their view that such parties were not likely to be viable acquirors of Rite Aid at that time, noting that Party C was currently engaged in a publicly announced transformative transaction. The Board of Directors determined that Rite Aid should continue discussions with Party D and WBA, renew contacts with Party A and Party G and approach Party I to determine its possible interest in pursuing an acquisition of or business combination with Rite Aid.

        On August 3, 2015, Rite Aid received a revised non-binding preliminary indication of interest from WBA, which we refer to as the WBA Revised Proposal, and a draft exclusivity agreement from WBA's outside counsel, Simpson Thacher & Bartlett LLP, which we refer to as Simpson Thacher. The terms of the WBA Revised Proposal included, among others, WBA's conditioning its proposal on Rite Aid's meeting or exceeding analyst projections for financial results, WBA's validation of potential synergies to be realized in the transaction and the value of Rite Aid's NOLs, the absence of material undisclosed liabilities or change-in-control payments, a proposal regarding the provisions limiting Rite Aid's ability to solicit and consider competing acquisition transactions in the definitive merger agreement, and providing for Rite Aid to pay a termination fee in the event a superior acquisition proposal were accepted, and a WBA reverse termination fee in the event WBA did not obtain required antitrust approvals. WBA's proposed purchase price was not specified in this proposal. WBA's draft exclusivity agreement proposed that Rite Aid would negotiate exclusively with WBA for a period of 60 days, with an option for WBA to extend such period for 30 additional days, to conduct due diligence and negotiate a definitive acquisition agreement with Rite Aid.

        Also on August 3, 2015, Jones Day and Weil, Gotshal & Manges LLP, antitrust counsel to WBA, which we refer to as Weil, discussed potential regulatory matters.

        Rite Aid provided WBA with its comments to the WBA Revised Proposal on August 6, 2015, which we refer to as the Rite Aid Response to the WBA Revised Proposal, consistent with guidance previously provided by the Board of Directors. Proposed changes included, among others, declining to commit to an exclusive negotiation period and counterproposals regarding regulatory approval and deal protection terms. Rite Aid also provided WBA with preliminary financial information regarding Rite Aid's capital structure at that time.

        On August 7, 2015, representatives of Rite Aid management and WBA management discussed the Rite Aid Response to the WBA Revised Proposal. WBA management advised that while WBA was prepared to work to complete due diligence and negotiations within 30 days, WBA would require, in lieu of an exclusive negotiations agreement, as a condition to continuing discussions, that Rite Aid enter into a notification agreement, which we refer to as the Notification Agreement, requiring Rite Aid to advise WBA of any alternative acquisition and other alternative transaction proposals or discussions concerning such a transaction that it engaged in, initiated or received during the term of the Notification Agreement. A representative of Rite Aid management responded that Rite Aid management would need to discuss the concept of such a Notification Agreement with the Board of Directors and informed WBA that their respective counsel would need to discuss as well.

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        On August 7, 2015, Simpson Thacher provided Skadden with a draft of the Notification Agreement, and Skadden and Simpson Thacher discussed the draft agreement.

        On August 8, 2015, members of WBA management called members of Rite Aid management to advise Rite Aid again that WBA would not pursue further discussions with Rite Aid unless Rite Aid entered into the Notification Agreement. Members of Rite Aid management responded that the Board of Directors would consider the Notification Agreement at its meeting scheduled for August 11, 2015.

        Also on August 8, 2015, consistent with the direction provided by the Board of Directors, a representative of Citi contacted a representative of Party I to inquire if Party I might have interest in a potential acquisition of or business combination transaction with Rite Aid. The representative of Party I responded that Party I would provide a response regarding whether Party I might have any interest in such a transaction within the following few days.

        On August 10, 2015, at the direction of the Board of Directors, a representative of Citi contacted a representative of Party A to inquire if Party A had interest in a potential acquisition of or business combination with Rite Aid. The Party A representative responded that Party A was likely not interested in such a transaction with Rite Aid and would confirm that position with other members of Party A management.

        Also on August 10, 2015, Party D orally communicated to Citi a revised preliminary, non-binding indication of interest regarding a possible business combination with Rite Aid. The terms included, among others, a revised proposal by Party D on the pro forma ownership of the combined company by Rite Aid stockholders, and did not include an implied value for Rite Aid or its shares.

        On August 11, 2015, the Board of Directors held a special telephonic meeting, at which members of Rite Aid management and representatives of Citi and Skadden were present. At this meeting, the Board of Directors was updated on the status of discussions with WBA, Party A, Party D, Party G and Party I, the strategic, business and potential value creation rationales for potential transactions with Party D and WBA (the only two parties with which Rite Aid was actively involved in discussions at such time) and potential legal, fiduciary and regulatory issues with respect to the potential transactions with Party D and WBA, including potential fiduciary issues relating to whether Rite Aid should enter the Notification Agreement with WBA in light of Rite Aid's discussions with Party D and other parties about potential acquisition and business combination transactions. Citi discussed certain financial matters, including the revised terms of each of the potential transactions with Party D and WBA, and also provided an update on discussions with two other potential transaction partners, Party A and Party I. The Citi representatives and Mr. Standley noted that Party A had communicated that it would likely have no interest and would confirm its position, that Rite Aid was still awaiting Party I's response and that Mr. Standley was scheduled to speak with the Chief Executive Officer of Party G the next day. The Board of Directors, Rite Aid management and advisors discussed considerations relating to the proposed Notification Agreement in the context of a potential sale of Rite Aid to various potential acquirors or other counterparties to a business combination transaction, a comparison of key transaction terms, benefits and transaction consummation and other risks, certain regulatory and governance considerations relating to the proposed transactions, the potential pro forma impact of a transaction with WBA or Party D, and the difficulties in seeking to pursue both transactions at the same time. After further discussion, the Board of Directors determined that, based on discussions then to date, an all or primarily in cash offer from WBA to acquire Rite Aid at an acceptable price together with a commitment from WBA to divest up to 1,000 Rite Aid or WBA stores if required to obtain antitrust approvals and subject to satisfactory resolution of other terms would represent a more attractive transaction for Rite Aid stockholders than Party D's then-current oral proposal. The Board of Directors believed, given the preliminary and verbal nature of Party D's then-current proposal, and with a number of threshold issues remaining unresolved, Party D's then-current proposal had greater uncertainty with respect to closing than WBA's proposal and offered Rite Aid stockholders a likely

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lower value than a $10.00 per share price all or primarily in cash from WBA given, among other things, the uncertainty in estimating the pro forma implied value for Rite Aid stockholders of Party D's then-current proposal due to the fact that, among other things, (1) the dilutive impact of Party D's proposed equity issuance remained unknown, (2) the valuation of the combined company and value of Rite Aid stockholders' proposed pro forma ownership in the combined company depended on the value of Party D's business, which was not a publicly traded business, and (3) there were long-term business and execution risks associated with the proposed business combination with Party D. The Board of Directors instructed Rite Aid management to negotiate the remaining threshold terms with WBA as discussed, including seeking a purchase price in the range of $10.00 to $10.25 per share and a commitment from WBA to divest up to 1,000 Rite Aid or WBA stores if required to obtain antitrust approvals, before responding to Party D's proposal. The Board of Directors also instructed Rite Aid management to await the outcome of Rite Aid's communications with other potential acquirors, Party A, Party G and Party I, and if no such other party indicated interest in pursuing a transaction with Rite Aid, to negotiate the terms of the Notification Agreement with WBA, as reviewed with the Board of Directors.

        Following the board meeting, Mr. Standley called the Chief Executive Officer of Party G to determine whether Party G might have any interest in a potential acquisition of or business combination with Rite Aid. The Chief Executive Officer of Party G responded that he would discuss this with Party G's lead director and then advise Mr. Standley of Party G's position.

        Also on August 11, 2015, Party I emailed a representative of Citi to request that Rite Aid sign a confidentiality agreement to explore a potential business combination transaction.

        Later that day, as directed by the Board of Directors at the August 11, 2015 meeting, Mr. Standley called Mr. Pessina and communicated updated proposed terms to the Rite Aid Response to the WBA Revised Proposal. Rite Aid's revised terms included, among others, an all or primarily in cash purchase price of $10.25 per share of Rite Aid common stock, WBA's agreement to divest up to 1,000 Rite Aid or WBA stores if required to obtain antitrust approvals, and completion of due diligence and negotiation of a merger agreement within 30 days after commencing diligence. Mr. Pessina responded with a counterproposal, providing for an all or primarily in cash purchase price of $10.00 per share of Rite Aid common stock, WBA's commitment to divest up to 750 stores if required to obtain antitrust approvals, and an agreement that Rite Aid would agree to exclusive negotiations for a short period in the event that following the initial 30-day negotiation period the parties were close to reaching agreement on a definitive acquisition agreement. Mr. Standley responded that the Board of Directors might be willing to consider a purchase price of $10.10 per share provided WBA committed to divesting up to 1,000 Rite Aid or WBA stores if required to obtain antitrust approvals and subject to satisfactory resolution of other terms. Mr. Standley and Mr. Pessina agreed to discuss the revised proposals with members of their respective boards of directors.

        Following discussions among members of Rite Aid management and representatives of Skadden and Citi regarding the likely level of Party I's interest based on discussions to date in pursuing a business combination transaction with Rite Aid, at Rite Aid's direction, a representative of Citi contacted a representative of Party I to inform Party I that it should rely on public information in its initial evaluation of whether it might have any interest in a potential business combination with Rite Aid.

        From August 11, 2015 to August 16, 2015, Mr. Standley and Mr. Pessina held multiple telephonic meetings to negotiate the terms of a potential transaction. During these discussions, Mr. Pessina indicated that WBA would be willing to proceed with negotiating a transaction on the basis of an all or primarily in cash price of $10.00 per share of Rite Aid common stock, a 1,000 store divestiture limitation if required in connection with obtaining antitrust approvals, a termination fee payable by Rite Aid in the event Rite Aid accepted an alternative acquisition proposal and a reverse termination

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fee payable by WBA if WBA did not obtain antitrust approvals for the transaction, each equal to 3% of Rite Aid's transaction equity value, and the execution by the parties of the Notification Agreement in its negotiated form. Mr. Standley advised Mr. Pessina that, among other things, the amount of the termination fees would need to remain subject to further negotiation after taking into consideration other relevant transaction, deal protection and regulatory terms in the definitive acquisition agreement. Mr. Standley further indicated that he was not authorized by the Board of Directors to enter into the Notification Agreement or to agree to any subsequent period of exclusive negotiations, but that he would discuss such matters as appropriate with the Board of Directors. During this week, at Rite Aid's direction, representatives of Citi also had telephonic meetings with representatives of WBA regarding the proposed terms of the transaction.

        On August 12, 2015, Skadden sent comments to the draft Notification Agreement to Simpson Thacher.

        Also on August 12, 2015, at Rite Aid's direction, a representative of Citi informed a representative of Party D on behalf of the Board of Directors that Rite Aid was in the process of considering another transaction and would provide an update to Party D during the week of August 17, 2015 regarding whether Rite Aid remained interested in proceeding with the negotiation of a possible transaction with Party D.

        On August 13, 2015, a representative of Party A informed a representative of Citi that Party A was not interested in exploring a transaction with Rite Aid. Later that day, a representative of Party I also informed a representative of Citi that Party I was not interested in exploring a transaction with Rite Aid.

        On August 13 and 14, 2015, Simpson Thacher and Skadden exchanged comments on the Notification Agreement.

        On August 15, 2015, Party G's Chief Executive Officer informed Mr. Standley that Party G was not interested in a transaction with Rite Aid.

        On August 16, 2015, the Board of Directors held a special telephonic meeting, at which members of Rite Aid management and representatives of Citi and Skadden were present. Mr. Standley and representatives of Citi updated the Board of Directors on the status of discussions with Party A, Party D, Party G, Party I and WBA, noting that each of Party A, Party G and Party I had communicated that it was not interested in pursuing a transaction with Rite Aid. In connection with the Board of Directors' evaluation if there were any other potential transactional parties potentially interested in a transaction with Rite Aid, as previously discussed, Citi noted that Party C, another potential acquiror, was currently engaged in a publicly announced transformative transaction and that an acquisition of Rite Aid by Party C was therefore viewed as likely not viable at that time. Rite Aid management and Citi further provided their respective views to the Board of Directors that Party A, Party D, Party G and Party I were believed to be the most logical parties that would be in a position to acquire Rite Aid. Citi also indicated that it believed that private equity firms would likely not be as competitive in acquiring Rite Aid as a strategic buyer. Representatives of Citi and Rite Aid management discussed with the Board of Directors Rite Aid's current stock price, which had closed at $9.08 per share on August 14, 2015. Citi provided the Board of Directors its view that Rite Aid's then current stock price likely reflected in part the impact of takeover speculation resulting from published research reports identifying Rite Aid as an acquisition target. The representatives of Skadden reviewed with the Board of Directors the legal and fiduciary issues relating to both transactions, including determining whether or not to enter into the Notification Agreement with WBA. After further discussion regarding WBA's willingness to proceed on the basis of an all or primarily in cash offer of $10.00 per share together with a commitment from WBA to divest up to 1,000 Rite Aid or WBA stores if required to obtain antitrust approvals and subject to satisfactory resolution of other terms, the Board of Directors directed Rite Aid management to enter into the Notification Agreement with WBA on the

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terms reviewed with the Board of Directors and with any amendments or modifications that were advisable before execution thereof and expressed consensus that Rite Aid management and advisors should proceed with diligence and negotiation of a potential transaction with WBA and to suspend discussions with Party D during the term of the Notification Agreement.

        After the board meeting, as directed by the Board of Directors, a representative of Citi informed a representative of Party D that Rite Aid was in the process of considering an alternative transaction and would provide an update to Party D at a later date as to whether Rite Aid was interested in exploring a possible business combination transaction with Party D.

        After further negotiations on August 18, 2015, WBA and Rite Aid entered into the Notification Agreement.

        On August 18, 2015, at Rite Aid's direction, a representative of Citi informed a representative of Party D that Rite Aid would be proceeding with negotiations involving another party.

        On August 20, 2015, Rite Aid provided WBA and its advisors with access to a virtual data site established by Rite Aid, and WBA began conducting a due diligence review of materials provided by Rite Aid in the virtual data site. On September 2, 2015, Skadden received an initial draft of the merger agreement from Simpson Thacher.

        On September 11, 2015, Skadden sent comments on the draft merger agreement to Simpson Thacher. Among other things, the comments focused on WBA's required effort to obtain antitrust approvals, WBA's commitment to obtain debt financing and deal protection terms.

        On September 12, 2015, Mr. Standley called Mr. Pessina to discuss the antitrust approvals and other key provisions in the merger agreement. Mr. Pessina communicated to Mr. Standley that WBA's current analysis of the acquisition, which was still ongoing, had reaffirmed WBA's view that a portion of the merger consideration might need to be in the form of WBA stock.

        On September 17, 2015, the notification period under the Notification Agreement expired and WBA did not thereafter pursue renegotiation of the term of such agreement. On September 18, 2015, Skadden received a revised draft of the merger agreement from Simpson Thacher.

        On September 21, 2015, members of Rite Aid's and WBA's respective management, Skadden and Simpson Thacher, negotiated the open issues in the draft merger agreement. On September 22, 2015, Simpson Thacher informed Skadden that it did not have the authority to further negotiate the merger agreement on WBA's behalf since the parties had reached an impasse in the negotiation of certain key terms and that Simpson Thacher had been instructed to request that Skadden prepare a revised draft of the merger agreement to reflect Rite Aid's current positions. As a result of this discussion, later that same day, a representative of Rite Aid management contacted a representative of WBA management to inform WBA that Rite Aid did not believe it would be productive for Skadden to prepare a revised draft of the merger agreement without further discussing WBA's positions with Simpson Thacher and that WBA should contact Rite Aid when it was prepared to proceed with further discussions regarding the merger agreement.

        During the third week of September 2015, given Rite Aid management's concern that it was possible WBA may no longer be prepared to pursue a transaction with Rite Aid on acceptable terms, at Rite Aid's direction, a representative of Citi contacted a representative of Party D regarding the possibility of exploring a potential business combination transaction. In response, Party D indicated that it was pursuing an alternative strategic direction and would not be in a position to discuss a potential transaction with Rite Aid until after completion of its alternative plan.

        On September 24, 2015, the Board of Directors held a special telephonic meeting at which members of Rite Aid management and representatives of Citi, Skadden and Jones Day were present. Mr. Standley discussed with the Board of Directors Rite Aid's stock price, which had declined by

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approximately 19% since Rite Aid's second quarter earnings announcement on September 17, 2015 and approximately 25% since reaching its 52-week closing day high on August 5, 2015. Rite Aid management and Citi expressed their respective views that Rite Aid's stock price decline in part may have been a result of Rite Aid's updated fiscal year 2016 guidance, announced on September 17, 2015, to reflect more recent sales trends. Rite Aid management and Citi also noted the overall recent decline in equity markets, in particular in the health care sector, and the magnified impact that this decline and Rite Aid's updated guidance may have had on Rite Aid's stock price given Rite Aid's leverage position relative to its peers. Mr. Standley also updated the Board of Directors on the status of negotiations with WBA, including the exchange of drafts of the merger agreement as well as the subsequent telephonic meetings among principals and legal counsel to negotiate terms, WBA's progress in obtaining financing for the transaction and Mr. Standley's view that WBA may seek to renegotiate its proposed purchase price in light of the recent decline in Rite Aid's stock price. Representatives of Skadden then described to the Board of Directors the impasse reached between the parties on certain key issues in WBA's draft merger agreement. Mr. Standley and Citi also provided an update on potential strategic alternatives for Rite Aid, including Citi's recent discussion with a representative of Party D. The Board of Directors provided Rite Aid management and advisors with guidance on the basis on which certain of the open issues might be resolved.

        Between September 25 and September 28, 2015, Skadden and Simpson Thacher resumed negotiations regarding the draft merger agreement.

        On October 6 and October 7, 2015, representatives from Rite Aid, WBA, Skadden and Simpson Thacher met in New York to discuss the outstanding issues in the merger agreement. During these meetings, representatives of WBA communicated WBA's need for flexibility in the rapidly changing retail drugstore and health care industry to potentially pursue other transactions during the period between entering into a transaction with Rite Aid and closing such transaction, with the understanding that WBA would agree not to acquire any retail pharmacies that would reasonably be expected to result in a material delay in obtaining, or materially increase the risk of not obtaining, antitrust approvals of the WBA/Rite Aid transaction being negotiated. In response, representatives of Rite Aid indicated that this proposal exposed Rite Aid to deal uncertainty and timing risk and that Rite Aid would need adequate protections against a material delay or risk regarding the receipt of requisite regulatory approvals. Representatives of WBA also proposed a limitation on Rite Aid's ability to incur indebtedness under its existing credit facilities, and communicated WBA's need for additional protections against a deterioration in Rite Aid's earnings between signing of the merger agreement and closing. The representatives of Rite Aid expressed their concern that such ability of WBA to pursue other transactions and limitations on the incurrence of debt and any additional protections for earnings deterioration might adversely impact the certainty of closing the transaction with Rite Aid and that Rite Aid would need adequate protections against material delays or risks in the receipt of requisite regulatory approvals. At the end of the two-day meeting, after further discussing the parties' positions on these and other open issues (other than price, which was not discussed during these meetings), the WBA team communicated that it believed the parties were at an impasse. The parties agreed to suspend their discussions with multiple business issues outstanding. On the evening of October 7, 2015, Rite Aid suspended WBA's access to the virtual data site.

        On October 8, 2015, Mr. Standley called Mr. Pessina to discuss the open business issues, including certain actions WBA would have to agree to undertake in order to obtain antitrust approvals, and the limitation on WBA's right to pursue other transactions that could delay or jeopardize obtaining antitrust approvals before the closing. Over the following days, representatives of Rite Aid and WBA management had subsequent discussions regarding WBA's need for additional protections against a deterioration in Rite Aid's earnings between signing of the merger agreement and closing, including a potential limitation on the reduction in Rite Aid's earnings before interest, taxes, depreciation and amortization, which we refer to as EBITDA (and with adjustments to be determined), and other open business issues.

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        On October 12, 2015, in response to the concerns that representatives of WBA had raised the prior week and Mr. Pessina had raised during his discussion with Mr. Standley on October 8, 2015, Rite Aid provided WBA with a preliminary proposal regarding the terms under which WBA would have the flexibility to pursue other transactions.

        On October 13, 2015, representatives of WBA communicated to representatives of Rite Aid that Rite Aid's preliminary proposal did not provide WBA with sufficient flexibility to pursue other transactions. The parties' representatives then discussed other potential ways to resolve this issue.

        On October 14, 2015, the board of directors of WBA held a meeting to discuss, among other things, the potential acquisition of Rite Aid by WBA. After the meeting, Mr. Barry Rosenstein, a director of WBA, called a representative of Citi and communicated that WBA's board was confident that WBA and Rite Aid could reach agreement on the contemplated merger agreement terms but that, based on the decline in Rite Aid's stock price (which had closed at $6.13 on October 13, 2015 compared to a closing day high of $9.32 per share on August 5, 2015), WBA would only be willing to acquire Rite Aid for a price in the range of $8.00 to $9.00 per share of Rite Aid common stock, all or primarily in cash, with the final price ultimately dependent on whether other outstanding key merger agreement issues were resolved on terms favorable to WBA.

        On October 15, 2015, Mr. Pessina called Mr. Standley to reiterate that, based on WBA's due diligence review of Rite Aid, the significant decline in Rite Aid's stock price, the general decline in the trading multiples of firm value to EBITDA of companies comparable to Rite Aid and changes in the market trends in the retail drugstore industry, WBA could not justify paying the premium represented by its $10.00 per share proposal and would need to revise its purchase price proposal to a range of $8.00 to $9.00 per share of Rite Aid common stock, all or primarily in cash, which would represent a premium of approximately 32% to 49% to Rite Aid's closing stock price on October 14, 2015, as compared to a premium of approximately 65% if the purchase price proposal remained at $10.00 per share. In response, Mr. Standley informed Mr. Pessina that he did not believe the Board of Directors would be willing to proceed with a transaction within such range. Mr. Pessina proposed that the management and advisors of each company meet in London, England during the following week in an effort to reach agreement on the transaction terms.

        The Board of Directors held a special telephonic meeting on October 17, 2015, which was also attended by members of Rite Aid management and representatives of Citi, Skadden and Jones Day. Mr. Standley and representatives of Skadden reviewed the status of discussions with WBA since the last board meeting, including the suspension of formal discussions with WBA on October 7, 2015 and subsequent telephonic meetings between members of Rite Aid management and WBA management.

        A discussion then followed regarding the outstanding threshold issues in the merger agreement, including WBA's lower proposed purchase price in light of the decline in Rite Aid's stock price, WBA's concerns about agreeing to undertake certain actions to obtain required antitrust approvals, WBA's stated need to be able to pursue other transactions between signing of the merger agreement and closing, WBA's proposals to limit Rite Aid's ability to incur indebtedness under existing credit facilities and the potential reduction in Rite Aid's EBITDA between signing of the merger agreement and closing, and a number of employee benefit matters including, among others, Rite Aid's adoption of a retention and severance program following the announcement of a business combination transaction.

        At Mr. Standley's request, Citi discussed preliminary updated financial and market perspectives relating to Rite Aid and financial aspects of the transaction, including, among other things, the volatility and decrease in Rite Aid's stock price, the decrease in the EBITDA trading multiples of selected publicly traded companies and the median EBITDA multiple implied by Rite Aid's historical EBITDA trading multiples, the potential impact of these aspects on Rite Aid's value and the transaction, and implied multiples of selected precedent retail drugstore transactions.

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        Following this discussion, a representative of Jones Day reviewed with the Board of Directors the remaining unresolved antitrust issues in the negotiations and the process for obtaining antitrust approvals.

        Following these discussions, the Board of Directors directed Rite Aid management to attempt to resolve the issues remaining in the merger agreement with WBA at the proposed meeting in London, on the basis reviewed with the Board of Directors. In making such determination, the Board of Directors considered in consultation with Rite Aid management and advisors, among other things, changes in the market trends in the retail drugstore industry since the time that WBA had made its initial $10.00 per share proposal, including the approximate 32% decline in Rite Aid's stock price since its closing day high on August 5, 2015, the EBITDA multiples implied by WBA's current proposal range as compared to relevant precedent retail drugstore transactions, Rite Aid's business, strategic and value creation prospects if it continued to operate on a stand-alone basis, the current challenges within the retail drugstore industry, including, among others, the fact that reimbursement rates continue to be driven down, Rite Aid's ability to participate in Medicare Part D and other commercial networks, other risks to Rite Aid's future performance, and potential compromise positions on outstanding issues that would preserve an acceptable level of certainty for Rite Aid and its stockholders that the transaction, if entered into, would close.

        From October 19, 2015 until the afternoon of October 21, 2015, representatives from Rite Aid, Citi, Skadden, WBA and Simpson Thacher met in London to discuss the open key terms in the merger agreement. At the end of the meeting, WBA and Rite Aid agreed in principle, subject to approval by the companies' respective boards of directors, that WBA would be able to engage in certain permitted transactions, other than with a retail pharmacy, after the seven-month anniversary of the agreement and prior to the closing of the transaction, provided that the termination fee payable by WBA to Rite Aid would double in amount if such a permitted transaction was consummated between the seven (7) month anniversary of the agreement and the twelve (12) month anniversary of the agreement and that Rite Aid would not be deemed to be in breach of its representations or interim operating covenants or to have failed to satisfy a closing condition to the extent such breach was a result of, or attributable to, such permitted transaction. The companies also agreed in principle, subject to approval of their respective boards of directors, that there would be a limit on Rite Aid's permitted borrowings under its existing credit facilities and a limit on any reduction in Rite Aid's EBITDA at the closing of the transaction. The companies also agreed to specific actions that WBA would be required to undertake in connection with obtaining antitrust approvals. Also at the meeting, WBA informed Rite Aid that it was prepared to pay a purchase price of $9.00 per share all-cash (which represented a premium of approximately 42% to Rite Aid's closing stock price on October 20, 2015), subject to finalization of due diligence and agreement on the remaining terms of the merger agreement, as well as approval by each party's board of directors.

        On October 21, 2015, Rite Aid granted WBA and its advisors renewed access to the virtual data site.

        Between October 21 and October 25, 2015, representatives of Skadden and Simpson Thacher exchanged drafts of the merger agreement and continued to discuss open issues and WBA continued its due diligence review.

        The Board of Directors held a special telephonic meeting on October 25, 2015, with members of Rite Aid management and representatives of Citi, the Board of Directors' independent consultant on compensation matters, Skadden and Jones Day present. At this meeting, Mr. Standley and the representatives of Skadden and Jones Day reviewed the status of discussions with WBA, the efforts of Rite Aid management and advisors to resolve outstanding issues in the merger agreement since the last board meeting on the basis previously reviewed with the Board of Directors. The representatives of Skadden described those provisions that were still being negotiated and indicated that Skadden would

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provide an update on further negotiations at the Board of Directors' next meeting scheduled for October 27, 2015.

        A discussion then continued regarding the resolution of remaining open issues as of the last board meeting, including the purchase price and form of consideration, provisions relating to WBA's obligation to obtain required antitrust approvals and consequences of its inability to do so, and the limitations on Rite Aid's ability to incur debt and reduction in Rite Aid's EBITDA between signing of the merger agreement and closing. With respect to the limitation on Rite Aid's indebtedness and reduction in Rite Aid's EBITDA between signing of the merger agreement and closing, Rite Aid management advised the Board of Directors that it was comfortable with the limitations subject to certain adjustments to the definition of EBITDA.

        Representatives of Skadden then discussed in detail with the directors their fiduciary duties in considering a transaction with WBA, as previously reviewed with the Board of Directors.

        Representatives of Skadden, the Board of Directors' independent consultant on compensation matters and the compensation committee of the Board of Directors, which we refer to as the Compensation Committee, then reviewed with the Board of Directors certain proposed compensation arrangements, including entering into, amending and authorizing such compensation arrangements for certain executives, which had been reviewed and discussed by the Compensation Committee of the Board of Directors with representatives of Skadden and the Board of Directors' independent consultant on compensation matters at a prior meeting of the Compensation Committee and recommended to the Board of Directors such compensation arrangements for approval and authorization. After discussion, the independent directors of the Board of Directors present unanimously adopted resolutions to enter into, amend and authorize such compensation arrangements. The compensation arrangements authorized and approved by the Board of the Directors during this meeting are described below under "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger" beginning on page 89.

        At the request of the Board of Directors, Citi indicated that, assuming no material changes in the information considered, it believed it would be in a position to render an opinion to the Board of Directors regarding the proposed merger consideration from a financial point of view if asked to do so at the upcoming October 27, 2015 board meeting based on terms and discussions at that time. Representatives of Skadden also reviewed and discussed with the Board of Directors in detail the proposed terms of the merger agreement and the material terms of WBA's financing commitment.

        Mr. Standley then reviewed with the Board of Directors, management's business, strategic, financial and stockholder value creation rationale for the transaction, including, among other things, the current environment in the retail drugstore industry, including the trend of consolidation in the healthcare industry and increased competition, Rite Aid's ability to participate in Medicare Part D and other commercial networks, the all-cash merger consideration that would provide certainty of value and liquidity to Rite Aid stockholders while eliminating long-term business and execution risk, and Rite Aid's leveraged balance sheet limiting its ability to compete effectively with other retail drugstore companies with greater financial resources to invest in the expansion of their businesses.

        Between October 25 and October 27, 2015, representatives of Skadden and Simpson Thacher exchanged several drafts of the merger agreement and continued to negotiate remaining open issues and WBA completed its due diligence.

        On October 27, 2015, the Board of Directors held a regular meeting at Rite Aid's headquarters in Camp Hill, Pennsylvania that was also attended by members of Rite Aid management and representatives of Citi, Skadden and Jones Day. At the meeting, representatives of Skadden reviewed in detail with the Board of Directors its fiduciary duties in considering the transaction.

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        Citi then reviewed its financial analysis of the merger consideration with the Board of Directors and rendered its oral opinion, confirmed by delivery of a written opinion dated October 27, 2015, to the Board of Directors to the effect that, as of that date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Citi as set forth in its written opinion, the merger consideration of $9.00 per share in cash to be received by the holders of Rite Aid common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders.

        Mr. Standley and the representatives of Skadden and Jones Day then reviewed with the Board of Directors the final terms of the transaction and discussed the proposed resolutions of the final issues in the merger agreement, including, among others, the obligations of WBA to obtain regulatory approvals and consequences if it were unable to obtain such approvals. Representatives of Skadden also reviewed with the Board of Directors the possible amendment of Rite Aid's bylaws to adopt a forum selection bylaw provision.

        Following this review, Mr. Standley again reviewed with the Board of Directors management's business, strategic, financial and stockholder value creation rationale for the transaction, including, among other things, the all-cash merger consideration which would provide certainty of value and liquidity to Rite Aid stockholders, enabling them to realize the value that had been created at Rite Aid in recent years, while eliminating long-term business and execution risk, Rite Aid's historical stock prices and the fact that the last twelve (12) months Adjusted EBITDA (as reported by Rite Aid in its public filings and defined under "The Merger—Financial Forecast—Forecast" beginning on page 87) multiple implied by WBA's purchase price would be one of the highest among relevant precedent retail drugstore transactions, the current environment in the retail drugstore industry, including the trend of consolidation in the healthcare industry and increased competition, Rite Aid's ability to participate in Medicare Part D and other commercial networks, the challenges and risks of continuing as a stand-alone company, Rite Aid's efforts to seek other potential buyers for Rite Aid and the fact that no party other than WBA was prepared to pursue an acquisition of Rite Aid at that time and the belief that no other alternative transactions would create greater value for Rite Aid stockholders than the transaction with WBA.

        Following an executive session of the independent directors, the Board of Directors unanimously (with one director absent due to medical reasons) determined that the merger agreement and the transactions contemplated by the merger agreement were advisable, fair to, and in the best interests of Rite Aid and its stockholders, approved, adopted and declared advisable the merger agreement and the transactions contemplated thereby, and resolved, subject to the terms of the merger agreement, to recommend that Rite Aid stockholders approve the merger agreement and the transactions contemplated thereby. In addition, the Board of Directors unanimously (with one director absent due to medical reasons) adopted resolutions to amend the Amended and Restated By-laws of Rite Aid to add an exclusive forum provision.

        Following the meeting, in the late afternoon of October 27, 2015, Rite Aid and WBA executed the merger agreement (which hereinafter we refer to as the original merger agreement). That same afternoon, Rite Aid and WBA issued a joint press release publicly announcing the execution of the original merger agreement.

        After the execution of the original merger agreement, Rite Aid management continued to send monthly financial updates to the Board of Directors, including updates on Rite Aid's Adjusted EBITDA. These updates compared Rite Aid's actual performance to the prior year's performance and budget. Mr. Standley also continued to regularly speak with the lead independent director of the Board of Directors to provide him with updates on the FTC review process as conveyed by WBA and/or Jones Day and Rite Aid's financial performance.

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        Following the date of the execution of the original merger agreement, Rite Aid generally was prohibited from soliciting alternative acquisition proposals, or engaging in negotiations or discussions with third parties concerning alternative acquisition proposals under the terms of the original merger agreement. Up until the time that stockholder approval was obtained to adopt the original merger agreement, Rite Aid would have been permitted to furnish certain information and engage in discussions or negotiations with a third party regarding an alternative acquisition proposal that could have been superior to the merger with WBA, in certain circumstances, subject to certain exceptions described in more detail in the original merger agreement. However, this right was not exercised because no alternative acquisition proposals were received from the date of the execution of the original merger agreement until the date of the special meeting of stockholders on February 4, 2016.

        Rite Aid and WBA filed notification and report forms with the U.S. Department of Justice and the FTC pursuant to the HSR Act, on November 10, 2015. As a result, the waiting period under the HSR Act with respect to the merger was scheduled to expire at 11:59 p.m. on December 10, 2015, unless a request for additional information was received prior to the expiration.

        On December 10, 2015, as expected, Rite Aid and WBA each received a second request from the FTC in connection with the merger. The second request was issued under the HSR Act, which Jones Day advised Rite Aid is a standard part of the regulatory process in connection with the FTC's review. Rite Aid, WBA, Jones Day and Weil began cooperating with the FTC Staff shortly after announcement of the original merger agreement, and continued to work with the FTC Staff to try to resolve the FTC Staff's questions about the proposed transaction over the course of the next several months.

        On December 17, 2015, Rite Aid reported its financial position and results of operations as of and for the third quarter of its 2016 fiscal year. Rite Aid reported revenues of $8.2 billion (compared to revenues of $6.7 billion in the third quarter of Rite Aid's 2015 fiscal year), net income of $59.5 million (compared to net income of $104.8 million in the third quarter of Rite Aid's 2015 fiscal year) and Adjusted EBITDA of $373.2 million (compared to Adjusted EBITDA of $332.8 million in the third quarter of Rite Aid's 2015 fiscal year).

        Throughout 2016, Jones Day and Weil discussed with the FTC Staff, either telephonically or in person, the merits of the transaction, the proposed synergies and potential remedies, including the potential divestiture of retail stores. Rite Aid and WBA provided additional data and documents in response to various requests from the FTC Staff. From January to April 2016, Rite Aid and WBA provided documents in response to the second request, and volumes of data related thereto. These materials were provided after Jones Day and Weil had extensive discussions with the FTC Staff on a range of topics, including discussions about Rite Aid's and WBA's data systems and document retention. Jones Day provided regular updates to Rite Aid's management on the materials provided in response to the second request.

        On January 20, 2016, the Board of Directors held a telephonic board meeting to discuss the latest updates on the merger, including the status of the proxy solicitation process to obtain stockholder approval of the original merger agreement at the special meeting of stockholders scheduled for February 4, 2016. Jones Day also provided updates on the FTC approval process, including that Jones Day and Weil continued to work with the FTC Staff to try to resolve the FTC Staff's questions about the proposed transaction. Rite Aid management then discussed the financial condition of Rite Aid in the fiscal year to date.

        On February 4, 2016, Rite Aid held a special meeting of stockholders and approximately 97% of the votes cast at such special meeting voted in favor of the adoption of the original merger agreement, which represented approximately 72% of Rite Aid's total outstanding shares of common stock as of the December 18, 2015 record date for such meeting and constituted a majority of the outstanding shares of Rite Aid common stock entitled to vote at the special meeting, as required to adopt the original merger agreement under the General Corporation Law of the State of Delaware. Following the

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approval and adoption of the original merger agreement by Rite Aid's stockholders, pursuant to the terms of the original merger agreement, Rite Aid was no longer permitted to engage in discussions or negotiations with a third party regarding an alternative acquisition proposal that could have been superior to the merger with WBA.

        On February 17, 2016, the Board of Directors held a scheduled meeting. At this meeting, members of management provided a business and financial update, including a discussion of Rite Aid's financial performance during the third quarter of fiscal year 2016, Rite Aid's projected financial performance during the fourth quarter of fiscal year 2016 and Rite Aid's fiscal year 2017 financial plan. Mr. Standley provided the Board of Directors with updates on the status of the merger and the FTC approval process.

        On March 2, 2016, the Board of Directors held a telephonic board meeting to discuss the merger and the financial condition of Rite Aid since the last board meeting. Mr. Standley provided the Board of Directors with the latest updates on the merger and the FTC approval process. Members of Rite Aid management then discussed Rite Aid's financial performance and noted to the Board of Directors that the annual generic drug purchasing bid was short of expectations and that the fiscal year 2017 Annual Operating Plan would be revised due to that shortfall. The Board of Directors unanimously approved the Annual Operating Plan as adjusted.

        In March 2016, WBA engaged Bank of America Merrill Lynch, which we refer to as BAML, to act as WBA's exclusive financial advisor in connection with any divestiture of assets of Rite Aid or WBA, which we refer to as the divestiture assets. The original merger agreement contemplated the divestiture of up to 1,000 WBA or Rite Aid retail stores.

        On April 7, 2016, Rite Aid reported its financial position and results of operations as of and for the fourth quarter of its 2016 fiscal year and for its 2016 fiscal year as a whole. For the 2016 fiscal fourth quarter, Rite Aid reported revenues of $8.3 billion (compared to revenues of $6.8 billion in the fourth quarter of Rite Aid's 2015 fiscal year), net income of $65.6 million (compared to net income of $1,835.0 million in the fourth quarter of Rite Aid's 2015 fiscal year) and Adjusted EBITDA of $383.0 million (compared to Adjusted EBITDA of $343.3 million in the fourth quarter of Rite Aid's 2015 fiscal year). For the full 2016 fiscal year, Rite Aid reported revenues of $30.7 billion (compared to revenues of $26.5 billion in Rite Aid's 2015 fiscal year), net income of $165.5 million (compared to net income of $2,109.2 million in Rite Aid's 2015 fiscal year) and Adjusted EBITDA of $1,402.3 million (compared to Adjusted EBITDA of $1,322.8 million in Rite Aid's 2015 fiscal year).

        On April 12, 2016, the Board of Directors held a telephonic board meeting to discuss the merger and the financial condition of Rite Aid since the last board meeting. Mr. Standley provided updates on the status of the merger and the FTC approval process. Members of Rite Aid management then discussed Rite Aid's financial performance to date in fiscal year 2017, including as compared to Rite Aid's performance in fiscal year 2016, and noted to the Board of Directors that Rite Aid was behind its financial plan for fiscal year 2017 mainly due to higher than planned costs of generic drugs.

        Beginning in late April 2016, the FTC Staff began identifying geographic areas of interest to Weil and Jones Day. This continued through August 2016. Beginning in late May and continuing through August, Weil, Jones Day and economists retained by Rite Aid and WBA prepared, and Weil and Jones Day submitted to the FTC Staff, more than twenty (20) advocacy papers addressing these areas of interest. Economists retained by both Rite Aid and WBA also prepared and submitted various econometric analyses responding to the FTC Staff's areas of interest. Jones Day provided regular updates to Rite Aid's management on the FTC's questions and ongoing analysis.

        Over the course of the next several months, Rite Aid, WBA, Jones Day and Weil continued to respond to the FTC Staff and WBA and Weil worked to establish a divestiture process that they believed would potentially satisfy the FTC Staff's questions about the transaction and discussed the

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divestiture process with Jones Day. Jones Day advised Rite Aid that the FTC Staff's questions were of the type and nature expected under the circumstances. Weil developed a divestiture framework that could be presented for approval by the FTC and discussed the divestiture framework with Jones Day. Jones Day advised Rite Aid that the development of a divestiture framework and the presentation of such framework to the FTC is a typical event in an FTC review process. Pursuant to the terms of the original merger agreement, WBA had the right to, and was required to, make all strategic decisions and lead all discussions, negotiations and other proceedings, and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals, or waivers that may be sought by or from, the FTC or other governmental entities, including determining the strategy for contesting, litigating or otherwise responding to objections to, or proceedings challenging, the merger with Rite Aid (subject to good faith consultations with Rite Aid). WBA informed Rite Aid that in April 2016, BAML contacted approximately 20 parties regarding interest in a potential acquisition of some or all of the divestiture assets. These parties included other retail pharmacy operators, other industry participants, and private equity sponsors. Over the next several months, WBA and Rite Aid entered into confidentiality agreements with eighteen (18) potential purchasers of divestiture assets.

        As Jones Day had previously advised management and the Board of Directors, as in all mergers that require a remedy, the FTC Staff typically analyzes whether the proposed transaction will have anticompetitive effects in violation of Section 7 of the Clayton Act. Once the FTC Staff determines that anticompetitive effects are likely, it will discuss with the parties its findings. Typically, the parties then propose an acceptable remedy that will maintain or restore competition in the markets affected by the merger. In this case, WBA proposed the divestiture of certain Rite Aid stores as a cure to maintain or restore competition in certain areas. In connection with a proposed divestiture, the FTC Staff typically assesses whether the proposed buyer is able to maintain or restore competition in the relevant market after acquiring the divested assets. The FTC Staff evaluates a proposed buyer to determine whether it has (1) the financial capability and incentives to acquire and operate the assets, and (2) the competitive ability to maintain or restore competition in the market.

        On June 16, 2016, Rite Aid reported its financial position and results of operations as of and for the first quarter of its 2017 fiscal year. Rite Aid reported revenues of $8.2 billion (compared to revenues of $6.6 billion in the first quarter of Rite Aid's 2016 fiscal year), a net loss of $4.6 million (compared to net income of $18.8 million in the first quarter of Rite Aid's 2016 fiscal year) and Adjusted EBITDA of $286.0 million (compared to Adjusted EBITDA of $299.3 million in the first quarter of Rite Aid's 2016 fiscal year). Adjusted EBITDA for the retail pharmacy segment was $244.8 million (compared to Adjusted EBITDA of $299.3 million in the first quarter of Rite Aid's 2016 fiscal year). The decline in Adjusted EBITDA for the retail pharmacy segment was driven by lower pharmacy reimbursement rates that were not offset by expected pharmacy purchasing efficiencies. Prescription counts were also trending lower than expected.

        On June 22, 2016, the Board of Directors held a scheduled meeting. Mr. Standley provided the Board of Directors with updates on the status of the merger and the FTC approval process. At this meeting, members of Rite Aid management provided a business update and emphasized that pharmacy reimbursement pressure had a negative impact on Rite Aid's performance. The Board of Directors also reviewed Rite Aid's first quarter results of operations, including a financial report that highlighted, among other things, the year-over-year decline in retail segment Adjusted EBITDA of $54.4 million, which was primarily attributable to lower pharmacy reimbursement rates that were not offset by expected pharmacy purchasing efficiencies.

        During July and August 2016, Rite Aid management sent memoranda to the Board of Directors containing updates on the status of the FTC review process. Mr. Standley also continued to regularly speak with the lead independent director of the Board of Directors to provide him with updates on the FTC review process and Rite Aid's financial performance.

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        WBA informed Rite Aid that on September 8, 2016, BAML first allowed access to a virtual data site containing extensive due diligence information about a package of divestiture assets being offered to potential purchasers. Access to the data room was given to eighteen (18) potential purchasers along with a bid process letter requiring bids to be submitted by September 26, 2016. Following the receipt of bids from various potential purchasers, based upon a variety of factors, including, among other things, the willingness and ability of each potential purchaser to purchase all of the divestiture assets being offered and the perceived likelihood that each potential purchaser would be deemed an acceptable purchaser of the divestiture assets by the FTC, WBA determined to pursue more intensive discussions and negotiations with three potential purchasers, Party J, Party K and Fred's. Weil and Jones Day believed that the FTC would be more inclined to approve one buyer that would purchase all of the divestiture assets rather than multiple buyers that would purchase a portion of the divestiture assets.

        On September 22, 2016, Rite Aid reported its financial position and results of operations as of and for the second quarter of its 2017 fiscal year. Rite Aid reported revenues of $8.0 billion (compared to revenues of $7.7 billion in the second quarter of Rite Aid's 2016 fiscal year), net income of $14.8 million (compared to net income of $21.5 million in the second quarter of Rite Aid's 2016 fiscal year) and Adjusted EBITDA of $312.7 million (compared to Adjusted EBITDA of $346.8 million in the second quarter of Rite Aid's 2016 fiscal year). Adjusted EBITDA for the retail pharmacy segment was $262.6 million (compared to Adjusted EBITDA of $313.6 million in the second quarter of Rite Aid's 2016 fiscal year). The decline in Adjusted EBITDA for the retail pharmacy segment was primarily due to lower pharmacy reimbursement rates and prescription counts that were trending lower than expected.

        Pursuant to the terms of the original merger agreement, if the merger had not occurred on or before an "end date" of October 27, 2016, either Rite Aid or WBA could terminate the original merger agreement, subject to certain exceptions. Alternatively, either party had the right to extend such end date to January 27, 2017. In connection with its consideration of extending the end date pursuant to the terms of the original merger agreement, Rite Aid held a telephonic board meeting on September 30, 2016. Members of Rite Aid's management, Skadden, Jones Day and Citi also joined the board meeting. Rite Aid management and Jones Day updated the Board of Directors on the status of the FTC review process and the divestiture process as reported on by Weil. Mr. Standley described the process for extending the merger agreement until January 27, 2017, including explaining that either WBA or Rite Aid could unilaterally extend the end date. Mr. Standley noted that Rite Aid management and its advisors would provide additional updates and the Board of Directors could continue to discuss these matters and determine whether to elect to extend the end date at subsequent board meetings before the October 27, 2016 end date. The Board of Directors and management also discussed Rite Aid's recent financial performance, including the challenges faced by Rite Aid as a result of lower pharmacy reimbursement rates. The Board of Directors also discussed actions that Rite Aid management was taking to improve performance in light of challenging market conditions, including operating the business as efficiently as possible while pursuing key growth opportunities, subject to the constraints of the operating covenants in the original merger agreement.

        In October and early November 2016, WBA and Rite Aid had extensive due diligence meetings, focused on matters relating to the transition of full operation of the divestiture assets, with each of Party J, Party K and Fred's. WBA also had extensive negotiations with each of the three potential purchasers. During this period, WBA entered into agreements with each of the three potential purchasers whereby WBA agreed, subject to certain limitations, to reimburse the expenses incurred by each of the potential purchasers in connection with their continuing participation in the divestiture assets sale process.

        On October 14, 2016, the Board of Directors held a telephonic board meeting to discuss the latest updates on the FTC review process and the divestiture sale process and to further discuss the potential end date extension. Members of management and representatives of Skadden and Jones Day joined the

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meeting. Representatives of Jones Day and members of management informed the Board of Directors that WBA reported that it was planning to focus its efforts on one divestiture buyer that WBA would select to bring to the FTC for approval first while it continued to negotiate with other bidders. Members of management also updated the Board of Directors about Rite Aid's financial performance, primarily related to the pressure on reimbursement rates, which negatively impacted Rite Aid's Adjusted EBITDA. Management discussed that Adjusted EBITDA for the last twelve (12) months was still above the Adjusted EBITDA threshold in the definition of material adverse effect in the original merger agreement and would likely remain above the threshold through the end date if extended to January 27, 2017. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold. The Board of Directors decided to hold another meeting, in the next several days, to determine whether to extend the end date.

        On October 18, 2016, WBA updated Rite Aid management with respect to the status of its divestiture process. No divestiture transaction had been entered into yet, and WBA believed the parties still needed to make substantial progress with multiple potential buyers in order to determine the best path forward.

        Also on October 18, 2016, the Board of Directors held another telephonic board meeting to discuss further the FTC review process, the divestiture sale process and the potential end date extension. Jones Day reported that the FTC's review continued, and to the extent the FTC would approve any proposed plan, in Jones Day's judgment this could not occur by the October 27 end date. Representatives of Skadden described the mechanics of the original merger agreement for extension of the end date from October 27, 2016 to January 27, 2017, including reminding the Board of Directors that WBA would be obligated to pay a termination fee if the original merger agreement were terminated after the end date in certain circumstances. Skadden also informed the Board of Directors that Simpson Thacher had indicated that WBA intended to exercise its right to extend the end date (which either party had the right to do unilaterally), but preferred to publicly announce that the parties jointly had agreed to extend, if the Board of Directors was willing to approve an extension.

        Citi then discussed trends in the broader equity market, trends in retail pharmacy sector equities and Rite Aid's performance since announcement of the original merger agreement. Citi noted that, since the announcement of the transaction in October 2015, the stock market remained volatile but the broader market had recovered from a downturn shortly after the October 2015 transaction announcement date, and that the S&P 500 had increased by approximately 3.0% from the October 2015 transaction announcement date to October 14, 2016. However, Citi noted that calendar year 2016 earnings estimates for selected public companies in the retail pharmacy sector generally had declined, and retail pharmacy equities generally had underperformed relative to the broader market, since the October 2015 transaction announcement date. Citi also noted that the next twelve (12) months EBITDA trading multiples for selected public companies in the retail pharmacy sector generally had declined relative to such multiples as of the October 2015 transaction announcement date. Rite Aid management then provided a financial and business update to the Board of Directors. Management reviewed the performance of Rite Aid's pharmacy business and its front end business, including that Rite Aid's prescription volume was trending lower and pharmacy margins were declining, primarily due to significantly reduced pharmacy reimbursement rates. Management reiterated its intention to control costs to the extent advisable and allowed by the interim operating covenants of the original merger agreement to try to help mitigate these issues. Management discussed that Rite Aid's Adjusted EBITDA for the last twelve (12) months was still above the Adjusted EBITDA threshold in the definition of material adverse effect in the original merger agreement, and was currently forecasted to stay above the threshold through the January 27, 2017 end date. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold.

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        The representatives of Skadden then discussed in detail with the directors their fiduciary duties in considering whether to extend the end date, including duties with respect to evaluating the benefits and risks to Rite Aid and its stockholders of extending the end date and considering the merits of such extension as compared to other potential strategic alternatives for Rite Aid. The Board of Directors discussed that, given the financial performance and outlook for Rite Aid, among other matters, it was in the best interest of Rite Aid's stockholders to extend the end date of the original merger agreement in order to attempt to obtain the highest value reasonably available for Rite Aid's stockholders. After additional discussion, the Board of Directors unanimously (among directors present) determined that the extension of the end date was advisable and in the best interests of Rite Aid and its stockholders, in order to provide additional time to obtain FTC approval and close the transaction, and approved such extension to January 27, 2017.

        On October 19, 2016, WBA and its advisors provided additional updates on the status of the divestiture process, including the status of its discussions with, and its evaluation of, the potential bidders, to Rite Aid and its advisors, and each of WBA and Rite Aid signed a letter documenting its agreement to extend the end date. On October 20, 2016, WBA and Rite Aid issued a joint press release announcing the joint extension of the end date to January 27, 2017.

        Throughout the next several months, Weil and Jones Day, as well as counsel for potential buyers, attempted to address the questions from the FTC Staff relating to the potential divestiture buyers. Jones Day advised Rite Aid that the FTC Staff's questions were of the type and nature expected under the circumstances.

        During November 2016, drafts of an asset purchase agreement and other relevant documents were exchanged between WBA, on the one hand, and each of Party J, Party K and Fred's, on the other hand.

        On November 4, 2016, the Board of Directors held a telephonic board meeting to discuss the divestiture sale process, the FTC review process and the latest update on Rite Aid's financial and business performance. Members of management and representatives of Skadden and Jones Day joined the meeting. Representatives of Jones Day updated the Board of Directors on the status of the three potential divestiture buyers. Jones Day provided an update on Party J, which had met with the FTC Staff on November 2, 2016, and informed the Board of Directors that the next steps were to provide the FTC Staff with more information pertinent to its analysis of the bidders, including scheduling meetings the week of November 7, 2016 between the FTC and potential buyers. Representatives of Jones Day indicated that they would continue to work with Weil to get answers to the FTC Staff's questions to assist in their analysis of the divestiture. Management and the Board of Directors discussed that the challenges impacting Rite Aid's financial and business performance (discussed throughout the fiscal year) were continuing. Reduced pharmacy reimbursement rates continued to be the primary issue and prescription counts were expected to be trending lower for the quarter. Front end sales, which had been trending modestly higher during the earlier part of the fiscal year, were expected to be modestly lower for the third quarter. Management again discussed with the Board of Directors Rite Aid's Adjusted EBITDA and reported that Adjusted EBITDA was above the threshold in the definition of material adverse effect in the original merger agreement, and was currently forecasted to stay above the threshold through the January 27, 2017 end date. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold.

        WBA informed Rite Aid that in early November 2016, Party J, Party K and Fred's each met with, and made presentations to, the FTC Staff regarding such party's suitability as a potential purchaser of the divestiture assets and such party's plans to transition full operation of the divestiture assets from Rite Aid. Based on a variety of factors, including, among other things, the willingness and ability of Fred's to purchase all of the divestiture assets being offered and the perceived likelihood it would be

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deemed an acceptable purchaser of the divestiture assets by the FTC, WBA determined to focus its efforts in connection with the divestiture on negotiations with Fred's. Weil and Jones Day advised WBA and Rite Aid, respectively, that they continued to believe that the FTC would be more inclined to approve one buyer that would purchase all of the divestiture assets rather than multiple buyers that would purchase a portion of the divestiture assets. Throughout the remainder of November and early December 2016, additional meetings and negotiations occurred between WBA and Fred's and their respective advisors.

        On November 16, 2016, the Board of Directors held a scheduled meeting. At this meeting, members of management provided a business update and emphasized that reimbursement rate pressure continued to have a negative impact on Rite Aid's performance and reviewed with the Board of Directors the various factors impacting reimbursement rates. Management again discussed with the Board of Directors Rite Aid's Adjusted EBITDA and reported that Adjusted EBITDA was above the threshold in the definition of material adverse effect in the original merger agreement, and was currently forecasted to stay above the threshold through the January 27, 2017 end date. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold. Management discussed preliminary projections of pharmacy reimbursement rates for fiscal year 2018 and noted that pharmacy reimbursement rates were likely to continue to decline. Management also reviewed with the Board of Directors cost cutting initiatives that could be taken in the absence of the pending merger and stressed that, while such initiatives would be necessary, some of them risked having a negative impact on sales, and that it was uncertain that these cost reductions would be sufficient to offset further reimbursement rate decline.

        On November 21, 2016 and November 23, 2016, WBA and its advisors gave additional updates on the status of the divestiture process to Rite Aid and its advisors, including that WBA intended to proceed with Fred's as the potential divestiture buyer.

        On December 6, 2016, the Board of Directors held a telephonic board meeting and received an update from Rite Aid management and Jones Day regarding the latest updates on the divestiture sale process, including the status of the negotiations with Fred's and the FTC's review process of whether the divestiture transaction met the standard of restoring competition. Members of Rite Aid management and representatives of Skadden and Jones Day joined the meeting and the parties had a detailed discussion about the proposed divestiture. Mr. Standley and the representatives of Skadden then reviewed with the Board of Directors the significant terms of the draft asset purchase agreement with Fred's. After consideration of the draft asset purchase agreement and the related transactions, the Board of Directors then determined that the asset purchase agreement, and the transactions contemplated thereby were advisable, fair to, and in the best interests of Rite Aid and its stockholders and approved the asset purchase agreement and authorized management to finalize and enter into the asset purchase agreement. The terms of the draft asset purchase agreement were substantially finalized, subject to Fred's securing financing for the transaction. Additionally, Rite Aid management provided the Board of Directors with an update on the financial performance of Rite Aid, noting that financial trends were consistent with those discussed in the November 16 meeting. Management again discussed with the Board of Directors Rite Aid's Adjusted EBITDA and reported that Adjusted EBITDA was above the threshold in the definition of material adverse effect in the original merger agreement, and was currently forecasted to stay above the threshold through the January 27, 2017 end date. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold.

        On December 16, 2016, the Board of Directors held a telephonic board meeting to discuss the latest updates on the divestiture sale process and the FTC's approval process. Members of management and representatives of Skadden and Jones Day joined the meeting. Representatives of Jones Day informed the Board of Directors that WBA, which was leading the divestiture sale process in accordance with the terms of the original merger agreement, desired to present Fred's to the FTC in

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an effort to achieve approval of a divestiture plan by the end date, and Jones Day stated that based on the status of WBA's divestiture sale process, it agreed with this approach. The Board of Directors and members of management discussed WBA's plan for the divestiture sale process, including that WBA planned to meet with Fred's and the FTC during the week after the asset purchase agreement was executed. Management again discussed with the Board of Directors Rite Aid's Adjusted EBITDA and reported that Adjusted EBITDA was above the threshold in the definition of material adverse effect in the original merger agreement as of the third quarter, and was currently forecasted to stay above the threshold through the January 27, 2017 end date. In the period thereafter, Rite Aid management believed that there was risk that Adjusted EBITDA might fall below that threshold. The Board of Directors also discussed the future of Rite Aid as a stand-alone company in the event the merger was not completed. The Board of Directors discussed Rite Aid's strategic options, including the possibility of terminating the agreement after January 27, 2017 and receiving the termination fee from WBA and selling assets in the future. No decisions were made at this meeting regarding Rite Aid's strategic options in the event that the transaction was not completed by the January 27, 2017 end date, but the Board of Directors and management planned to continue to discuss and consider these issues at later board meetings once Rite Aid received additional clarity on the likelihood of completing the merger before the January 27, 2017 end date.

        On December 19, 2016, Rite Aid, WBA, Fred's and Divestiture Buyer entered into the asset purchase agreement. Pursuant to the terms and subject to the conditions set forth in the asset purchase agreement, Divestiture Buyer, AFAE, LLC, a subsidiary of Fred's, would purchase from Rite Aid 865 stores and certain specified related assets for a purchase price of $950 million plus the Divestiture Buyer's assumption of certain liabilities of Rite Aid and its affiliates. If the FTC requires divestiture of more than the 865 Rite Aid stores contemplated by the original asset purchase agreement and WBA agrees to sell such stores, the asset purchase agreement requires the Divestiture Buyer to purchase such additional stores. The asset purchase agreement was conditioned on FTC approval, the approval and completion of Rite Aid's pending merger with WBA and other customary closing conditions.

        On December 22, 2016, Rite Aid reported its financial position and results of operations as of and for the third quarter of its 2017 fiscal year. Rite Aid reported revenues of $8.1 billion (compared to revenues of $8.2 billion in the third quarter of Rite Aid's 2016 fiscal year), net income of $15.0 million (compared to net income of $59.5 million in the third quarter of Rite Aid's 2016 fiscal year) and Adjusted EBITDA of $274.1 million (compared to Adjusted EBITDA of $373.2 million in the third quarter of Rite Aid's 2016 fiscal year). Retail EBITDA was $221.7 million, which was a reduction of $117.6 million from the $339.3 million of Retail EBITDA generated in the third quarter of the prior year. Pharmacy reimbursement rate reductions were the primary driver of this decrease. Prescription counts were also trending lower than expected.

        During December 2016 and January 2017, the FTC Staff continued to analyze and review the proposed divestiture transaction and requested additional information from the parties relating to Fred's and the divestiture package.

        On January 6, 2017, the Board of Directors held a telephonic board meeting during which Jones Day provided updates on the FTC approval process, including the FTC's subpoena to interview members of Fred's management, the FTC's request for substantial documents related to the divestiture, and the increasing likelihood that the merger would not be consummated by the January 27, 2017 end date. Jones Day informed the Board of Directors that at that point, the FTC continued to review the transaction, and, in the judgment of Jones Day, the FTC would not recommend approval of the divestiture transaction by the end date. Members of Rite Aid management updated the Board of Directors on Rite Aid's financial condition, including Rite Aid's most recent Adjusted EBITDA relative to the threshold set forth in the original merger agreement. Management discussed with the Board of Directors that, if the Board of Directors were to approve an extension of the original merger agreement beyond January 27, 2017, then Rite Aid may require a revised Adjusted EBITDA threshold

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in order to maximize the likelihood of satisfying the related closing condition in the original merger agreement. Management discussed projections of pharmacy reimbursement rates for fiscal year 2018 and noted that pharmacy reimbursement rates and pharmacy margins were likely to continue to decline. Management also reiterated its intention to control costs to the extent advisable and allowed by the interim operating covenants of the original merger agreement to try to help mitigate these issues, and that many of those initiatives would likely be incorporated into its budget for the next fiscal year. Management and the Board of Directors discussed the fact that the original merger agreement contained certain restrictions on Rite Aid's ability to amend the terms of certain contracts or enter into certain new contracts with payors, vendors and other business partners. Members of management and representatives of Skadden, Jones Day and Citi attended the meeting.

        During January 2017, on several occasions members of the Rite Aid and WBA management teams discussed the FTC review process and ways in which the parties might propose to revise certain aspects of Fred's business plan and propose potential changes to the asset purchase agreement to address the questions raised by the FTC Staff in their review of Fred's and to increase the likelihood of obtaining FTC approval of the transaction. Rite Aid and WBA management also held preliminary discussions about the possibility of extending the end date beyond January 27, 2017. No specific terms were discussed, and Rite Aid and WBA agreed to meet on January 22, 2017 to discuss the potential extension further.

        On January 22, 2017 and January 23, 2017, representatives of Rite Aid's management met with representatives of WBA's management at Simpson Thacher's office and Skadden's office in New York. Representatives of Skadden, Jones Day, Simpson Thacher and Weil participated in such discussions as well. At the meetings, the parties discussed, among other things, the possibility of amending the original merger agreement to extend the end date, to alter the divestiture obligations in the original merger agreement, to propose potential changes to the divestiture transaction with Fred's and to provide certain additional exceptions to the interim operating covenant restrictions to account for the longer period for closing the transaction. In these initial discussions, the parties did not specifically discuss reducing the per share merger consideration, but WBA noted that it was unwilling to bear additional costs to revise the divestiture transaction with Fred's while operating under the terms of the original merger agreement, including that WBA was unwilling to bear the costs and business repercussions of transferring the Rite Aid Brand Rights to Fred's.

        On January 23, 2017, Simpson Thacher sent Skadden a draft Amendment No. 1 to the Agreement and Plan of Merger, which we refer to as the Original WBA Amendment Proposal. The Original WBA Amendment Proposal provided for, among other things, (i) extension of the end date to March 31, 2017, (ii) removing the increased $650 million termination fee in the event that WBA had entered into a "parent permitted transaction" (as defined in the original merger agreement) and providing that the $325 million termination fee would still be payable if Rite Aid failed to satisfy the Adjusted EBITDA condition at the time of such termination, (iii) an acknowledgement that WBA was not required to enter into any divestiture agreement on terms that would be adverse to WBA relative to the terms of the asset purchase agreement (which had the effect of not requiring WBA to comply with the terms of the antitrust efforts covenant of the original merger agreement to the extent not required by the asset purchase agreement) and (iv) an acknowledgement, as of the date of the amendment, that neither WBA nor Rite Aid had breached its obligations pursuant to the antitrust efforts covenant. The Original WBA Amendment Proposal did not obligate WBA to take any additional actions beyond the obligations in the original merger agreement and the asset purchase agreement to obtain FTC approval of the transaction, and Jones Day advised Rite Aid that Jones Day believed that WBA likely needed to proffer additional divestiture obligations in order to maximize the chance of obtaining FTC approval of the transaction. Also on January 23, 2017, Skadden sent Simpson Thacher a draft of amendments to Rite Aid's disclosure letter providing, among other things, additional exceptions to the interim operating covenant restrictions on Rite Aid in light of the additional period contemplated for closing

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the proposed transaction. WBA proposed the possibility of entering into a simple sixty (60) day extension to the end date of the original merger agreement without other substantive changes thereto.

        The parties continued their negotiations in Skadden's New York office on January 24, 2017. During the course of these negotiations, WBA informed Rite Aid that it was not willing to agree to a long-term (beyond March 31, 2017) extension of the original merger agreement or increased divestiture obligations without a decrease in the purchase price. WBA's stated reasons for a proposed reduction in the purchase price included (i) WBA's commitment to increase, if necessary, the number of divestitures above the 1,000 retail store threshold contemplated in the original merger agreement, (ii) the additional obligations that WBA would agree to proffer to the FTC (some of which, including the sale of the Rite Aid Brand Rights, were beyond the obligations in the original merger agreement) in order to do what the parties believed may be necessary to obtain FTC approval of the transaction, (iii) Rite Aid's reduced Adjusted EBITDA since entering into the original merger agreement, (iv) the additional costs to be incurred by WBA and (v) as a result of the factors specified in the foregoing clauses (i) through (iv), the reduction in WBA's internal rate of return compared to the rate of return contemplated at the time WBA entered into the original merger agreement. WBA did not propose a specific reduction to the purchase price in these negotiations. WBA then proposed entering into a short extension of the original merger agreement until March 31, 2017 on substantially the same terms as the original merger agreement, with the specific terms of the purchase price reduction and revised divestiture obligations to be negotiated during the course of that two (2) month extension, which we refer to collectively as the January 24 WBA Proposal. Rite Aid management conveyed that they did not believe Rite Aid's Board of Directors would agree to a short extension and that any potential price reduction should be discussed promptly. WBA did not make a specific proposal, but indicated that WBA's price proposal might be around $7.00 per share. Based on discussions among Rite Aid management and Rite Aid's advisors, representatives of Rite Aid proposed, subject to the approval of its Board of Directors, a price of $7.50 to $8.25 per share with a requirement that WBA divest up to a maximum of 1,300 stores and accept certain other terms to improve the likelihood that the divestiture would satisfy the FTC, which we refer to as the January 24 Rite Aid Proposal. Representatives from Simpson Thacher and Skadden met later in the day on January 24, 2017, and Simpson Thacher indicated that WBA would propose a termination right in the merger agreement amendment permitting WBA to terminate the merger agreement if WBA failed to obtain new financing commitment papers or other financing arrangements within fourteen (14) days of the execution of the merger agreement amendment.

        Following these discussions, on the evening of January 24, 2017, Rite Aid held a telephonic board meeting to update the Board of Directors on the status of negotiations and to discuss next steps. Mr. Standley described the Original WBA Amendment Proposal and the January 24 WBA Proposal, and informed the Board of Directors that WBA was demanding a price reduction in connection with entering into an amendment to the original merger agreement if WBA were to take on the additional divestiture obligations being discussed. He described WBA's proposal to enter into a short extension before the specific terms of the amendment were negotiated, with the negotiation of those terms to follow during the two (2) month extension period and explained WBA's stated reasons for the price reduction noted above. Mr. Standley then described the additional steps that Rite Aid and WBA discussed that they possibly could agree to, which steps the parties believed would address the questions raised by the FTC Staff and maximize the chances that the FTC would approve the transaction.

        Representatives of Rite Aid discussed the Original WBA Amendment Proposal, the January 24 WBA Proposal and the January 24 Rite Aid Proposal with the Board of Directors and representatives of Skadden, Jones Day and Citi. After a lengthy discussion, the Board of Directors determined that Rite Aid would likely be in a significantly worse negotiating position at the end of the two (2) month negotiating period that WBA proposed in the January 24, WBA Proposal because it was unlikely that

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the FTC would have sufficient time to approve the Fred's divestiture during such two (2) month period and, without improvements to the Fred's proposal, the FTC may not be willing to accept the divestiture proposal and approve the transaction, at which point another extension would be required and if pharmacy reimbursement rates continued to decrease, Rite Aid would be negotiating with WBA from a weaker position. Rite Aid also would be forced to continue to operate its business under the restrictions of the original merger agreement during that two (2) month period. Rite Aid management and the Board of Directors also considered that Adjusted EBITDA likely would be close to the threshold in the original merger agreement, and there was a risk that Rite Aid may have difficulty satisfying the Adjusted EBITDA threshold at the end of such two (2) month period, which would result in a loss of the right to receive a $325 million termination fee under the January 24 WBA Proposal that would otherwise be payable by WBA upon termination of the original merger agreement. As a result of its consideration of all of these factors, the Board of Directors determined that the January 24 WBA Proposal was not acceptable and would not be in the best interests of Rite Aid's stockholders.

        The Board of Directors discussed the reasons for a potential purchase price reduction and considered, among other things, the continuing negative impact of prescription reimbursement rates on Rite Aid's financial performance since entering into the original merger agreement, including that as a stand-alone company (assuming the original merger agreement was terminated), it expected to have difficulty in recapturing lost prescriptions, raising reimbursement rates and lowering costs to improve margins. The Board also considered WBA's commitment to increase, if necessary, the number of divested stores above the 1,000 retail store threshold contemplated in the original merger agreement. The Board of Directors took into account that increasing the number of retail store divestitures that WBA would be required to accept pursuant to the original merger agreement now could increase the likelihood of obtaining FTC approval of the transaction and decrease the likelihood that the parties would need to further amend the original merger agreement to require additional divestitures in the event that WBA was required to divest more than 1,000 retail stores. The Board of Directors also considered the sale of the Rite Aid Brand Rights, the additional infrastructure and other divestiture obligations that WBA would likely need to proffer to maximize the chances of FTC approval of the transaction. The Board of Directors considered changes since the date of the original merger agreement in market trends and challenges in the retail drugstore industry, including the continuing decline in reimbursement rates, as well as the difficulty in offsetting those reimbursement rate declines with sufficient drug cost reductions and incremental margin from new generic introductions, which historically have been Rite Aid's primary levers to offset reimbursement rate pressures. In addition, the Board of Directors considered Rite Aid's business, strategic and value creation prospects if it terminated the original merger agreement and operated on a stand-alone basis. Following these discussions, the Board determined that Rite Aid might be willing to accept a reduction in the purchase price, depending upon the terms of such a transaction, if following negotiations it determined such a transaction was the best alternative reasonably available to Rite Aid and its stockholders under the circumstances. While the Board of Directors and management determined that they needed more information to determine a price that might be acceptable, the Board of Directors, management and Citi discussed WBA's statement that its proposed price might be around $7.00 per share. The Board of Directors and management determined that additional analysis was necessary to determine an acceptable price, and the Board of Directors instructed management, together with Rite Aid's advisors, to continue negotiating and evaluating an acceptable price in order to maximize value for stockholders.

        The Board of Directors also considered that Rite Aid could determine not to proceed with a transaction with WBA and terminate the original merger agreement, receive the $325 million termination fee payable by WBA and operate as a stand-alone company following such termination. The Board of Directors, management and Citi discussed Rite Aid's potential prospects if it were to operate as a stand-alone company, including the potential that Rite Aid's stock price could decrease significantly if the original merger agreement were terminated given that the trading price of Rite Aid common stock after announcement of the original merger agreement likely reflected the potential

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consummation of the pending transaction with WBA on the terms of the original merger agreement rather than necessarily Rite Aid's underlying financial and business performance. Management discussed that it believed that the financial plan for the next year as a stand-alone company was challenging and, even if Rite Aid implemented certain cost reduction measures, it would likely continue to experience the negative impact of prescription reimbursement rates on Rite Aid's financial performance for the reasons described earlier in the meeting and that Rite Aid's stock price would likely be adversely affected.

        The Board of Directors determined that Rite Aid should propose two counterproposals to WBA. First, that the parties renegotiate the transaction and enter into an amendment to the original merger agreement by the end of the day on January 29, 2017 or, second, that the parties extend the end date of the merger agreement until March 31, 2017 and, in connection with such extension, that WBA agree to increase the termination fee to $650 million if the merger agreement were terminated for any reason after March 31, 2017 (with such termination fee reduced to $325 million if the parties entered into an amendment prior to such extended end date), which we refer to together as the Rite Aid January 24 Counterproposal.

        On January 25, 2017, Rite Aid and WBA continued negotiations in New York. A representative from Citi described the Rite Aid January 24 Counterproposal to WBA, and WBA requested to update its financial due diligence on Rite Aid before providing a purchase price proposal. Rite Aid and WBA and their respective advisors conducted such due diligence over the course of January 25 and January 26, 2017.

        Additionally, Rite Aid and WBA agreed that the merger agreement amendment would re-open the "fiduciary out" provisions that would allow Rite Aid to respond to unsolicited acquisition proposals and potentially enter into a superior proposal between the date of the merger agreement amendment and the date of the second stockholders meeting, because Rite Aid's stockholders would be required to vote again to adopt the merger agreement. Rite Aid, Skadden and Citi had previously discussed these "fiduciary out" provisions and Citi had indicated that it believed it was unlikely that another buyer would make a superior offer to acquire Rite Aid at that time taking into consideration, among other things, Rite Aid's outreach to potential buyers prior to signing the original merger agreement and the fact that no proposal for an alternative transaction had been made after signing the original merger agreement. Nonetheless, Rite Aid and its advisors believed that it was important as part of the amendment to allow third parties to make a superior proposal to acquire Rite Aid before the second stockholders meeting in order to maximize value for Rite Aid's stockholders. WBA agreed that the "fiduciary out" provisions would be re-opened between signing the amendment and the second stockholders meeting on substantially the same terms as in the original merger agreement.

        Rite Aid held a telephonic board meeting on the evening of January 25, 2017. Mr. Standley and representatives of Citi updated the Board of Directors on the status of negotiations since the board meeting on the previous day, and informed the Board of Directors that WBA was conducting financial due diligence. Rite Aid management and Rite Aid's advisors discussed likely next steps with the Board of Directors. The Board of Directors confirmed that Rite Aid management should continue to proceed with the diligence and negotiations.

        On January 26, 2017, WBA made a revised proposal, which we refer to as the January 26 WBA Proposal. The terms of the January 26 WBA Proposal included, among other things, a purchase price range of $5.95 to $7.00 per share (which was subsequently revised to $6.00 to $7.00 per share, and then the next morning to $6.05 to $7.00 per share), with a ratable deduction for each store divested over a threshold of 1,000 Rite Aid stores up to a maximum of 1,300 Rite Aid stores; extension of the end date to July 31, 2017; a mutual acknowledgment that neither WBA nor Rite Aid breached its obligations pursuant to the antitrust efforts covenant as of the date of the amendment; and WBA would not be required to agree to any amendment to the divestiture obligations that reduced the base purchase price

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under the asset purchase agreement below $950 million. WBA also proposed maintaining the $325 million termination fee under the merger agreement except that, if Rite Aid failed to satisfy the Adjusted EBITDA threshold, WBA would pay a termination fee of $162.5 million (as opposed to the original merger agreement provision whereby the termination fee was not payable at all if the Adjusted EBITDA threshold was not satisfied as of termination). WBA agreed in principle that it would sell the Rite Aid Brand Rights, but did not make a specific proposal as to the terms of that sale. WBA did not make a proposal with respect to revising the Adjusted EBITDA threshold but acknowledged that the material adverse effect condition under the original merger agreement would only be tested from the date of any amendment to the original merger agreement until the closing (or termination). WBA also did not make a proposal with respect to its financing obligations in the merger agreement, although during previous discussions WBA had indicated that it would propose a termination right permitting WBA to terminate the agreement if WBA failed to obtain new financing commitment papers or other financing arrangements within fourteen (14) days of the execution of the merger agreement amendment.

        On the morning of January 27, 2017, Rite Aid held a telephonic board meeting to discuss the January 26 WBA Proposal and Rite Aid's potential response. The Board of Directors noted that there was a risk that Rite Aid stockholders would ultimately be paid at the bottom end of any price range because WBA might agree to divest up to the maximum number of stores required under the merger agreement, and therefore Rite Aid would have to be comfortable that the bottom value in any price range was an acceptable price and in the best interests of Rite Aid's stockholders if the parties agreed to a price range. Citi discussed with the Board of Directors Rite Aid's financial performance during the previous fiscal year based on Rite Aid's public filings and information provided by Rite Aid management, which indicated that Rite Aid's projected fiscal year 2017 Adjusted EBITDA and revenue of $1.585 billion and $34.166 billion, respectively, at the time the original merger agreement was signed, had declined to a projected $1.124 billion and $32.732 billion, respectively. Citi noted Rite Aid management's reasons for the reduced revenue and Adjusted EBITDA, including decreased prescription reimbursement from PBMs and other payors and that the pending merger made it more difficult to obtain price reductions on the purchase of generic prescriptions, resulting in higher than expected prescription product costs. Citi also discussed Rite Aid's projected financial performance based on discussions with Rite Aid management and management's projections (which had been updated that week by management, shared with Citi and presented to the Board of Directors), which indicated that Rite Aid's long-term recovery would require stabilizing pharmacy margins and cost savings, and Rite Aid management's views regarding the expected challenges in doing so. Citi also discussed preliminary financial aspects of WBA's most recent proposal. The Board of Directors authorized Rite Aid management to continue negotiating the terms of a merger agreement amendment.

        On January 27, 2017, Rite Aid responded to the January 26 WBA Proposal with a revised proposal, which we refer to as the January 27 Rite Aid Proposal. The terms of the January 27 Rite Aid Proposal included, among other things, a purchase price range of $6.50 to $7.00 per share, with a ratable deduction for each store divested over a threshold of 1,000 Rite Aid stores up to a maximum of 1,300 Rite Aid stores. The parties agreed that the end date would be extended to July 31, 2017 and that WBA would be required to sell the Rite Aid Brand Rights (subject to a license of the Rite Aid Brand Rights back to WBA, the terms of which were being discussed), but would not be required to agree to any amendment to the divestiture obligations that reduced the base purchase price under the asset purchase agreement below $950 million. Rite Aid proposed a revised Adjusted EBITDA threshold of $900 million and that there would be no termination right for failure to obtain new financing within fourteen (14) days of execution of the amendment, and that instead the parties would rely on WBA's existing obligation to have the necessary financing at closing. Rite Aid also agreed to the mutual acknowledgment regarding antitrust efforts and the termination fee as set forth in the January 26 WBA

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Proposal and measurement of the material adverse effect condition starting on the date of the amendment.

        On January 28, 2017 and January 29, 2017, WBA responded to the January 27 Rite Aid Proposal and proposed a purchase price range of $6.20 to $7.00 per share or, alternatively, a fixed price per share of $6.40 and then $6.50, in each case with WBA being required to divest up to a maximum of 1,250 stores. WBA proposed an Adjusted EBITDA threshold of $1.0 billion. The parties also discussed the triggers for and amounts of termination fees; WBA was unwilling to lower the amount of the termination fee payable by Rite Aid in the event of a superior proposal, but agreed to delete the obligation in the original merger agreement that would have required Rite Aid to reimburse WBA's expenses if stockholders did not approve the revised terms of the merger. WBA agreed to offer to sell the Rite Aid Brand Rights to the Divestiture Buyer, but would require a multi-year exclusive royalty-free license post-closing.

        On January 28, 2017, Rite Aid held another telephonic board meeting to discuss the January 27 Rite Aid Proposal and WBA's responses thereto. Rite Aid management and Citi discussed with the Board of Directors the possibility of agreeing to a specified price as opposed to a range, noting that a price range could provide Rite Aid's stockholders with potential upside in the transaction if fewer stores were divested (based on the negotiations with WBA, Rite Aid's management and Citi believed that WBA would likely not agree to a fixed price at or near the top of the range under discussion). The Board of Directors again authorized Rite Aid management to continue negotiating the terms of the transaction.

        On January 29, 2017, Rite Aid sent a term sheet to WBA describing Rite Aid's counterproposal of $6.50 to $7.00 per share, with ratable deduction for each store divested over a threshold of 1,000 Rite Aid stores up to 1,200 Rite Aid stores and an Adjusted EBITDA threshold of $950 million. The term sheet also reflected Rite Aid's counterproposal with respect to the sale of the Rite Aid Brand Rights and agreed to an exclusive royalty-free license for a specified period. WBA agreed to the purchase price, divestiture limit and terms of the sale of the Rite Aid Brand Rights, but stated that it would not agree to an Adjusted EBITDA threshold of less than $1.0 billion, indicating that this was its last and final offer. Rite Aid, WBA, Skadden and Simpson Thacher discussed and exchanged drafts of the merger agreement amendment over the course of the day.

        On the afternoon of January 29, 2017, Rite Aid held a telephonic board meeting to discuss the latest status of the merger agreement amendment and negotiations. Mr. Standley informed the Board of Directors that the parties were finalizing some of the details of the merger agreement amendment but that WBA had made its final offer and management believed WBA was unwilling to make further amendments in Rite Aid's favor. Mr. Standley and Skadden then described the terms of the final proposed terms of the transaction. Rite Aid planned to reconvene the Board of Directors on the night of January 29, 2017 to allow the Board of Directors further time to consider the proposed terms of the merger agreement amendment.

        At the request of the Board of Directors, Citi indicated that, assuming no material changes in the information considered, it believed it would be in a position to render an opinion to the Board of Directors regarding the fairness, from a financial point of view, of the proposed merger consideration if asked to do so at the upcoming board meeting later that day based on terms and discussions at that time. Representatives of Skadden also reviewed and discussed with the Board of Directors the proposed merger agreement amendment term sheet.

        Mr. Standley then reviewed with the Board of Directors management's business, strategic, financial and stockholder value creation rationale for the merger agreement amendment, including, among other things, the continuing negative impact of prescription reimbursement rates on Rite Aid's financial performance since entering into the original merger agreement, WBA's commitment to increase, if

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necessary, the number of retail store divestitures and certain other actions that may be required to obtain FTC approval of the transaction. Mr. Standley reviewed that increasing the number of retail store divestitures that WBA would be required to accept pursuant to the merger agreement now could increase the likelihood of obtaining FTC approval of the transaction and decrease the likelihood that the parties would need to further amend the merger agreement in the future to require additional divestitures in the event that WBA was required to divest more than 1,000 retail stores. Mr. Standley also reviewed the current environment in the retail drugstore industry and Rite Aid's inability to absorb greater reimbursement rate pressures as a stand-alone company given its leveraged balance sheet.

        In the evening on January 29, 2017, the Board of Directors held a telephonic meeting that was also attended by members of Rite Aid management and representatives of Skadden, Jones Day and Citi. At the meeting, representatives of Skadden reviewed in detail with the Board of Directors its fiduciary duties in considering the transaction, including the amended terms of the merger agreement. Mr. Standley and the representatives of Skadden and Jones Day then reviewed with the Board of Directors the terms of the merger agreement amendment and discussed the proposed resolutions of the final issues in the merger agreement amendment, including, among others, the obligations of WBA to obtain regulatory approvals. The Board of Directors again discussed, with input from management and Citi, the potential that Rite Aid's stock price could decrease significantly if the original merger agreement were terminated, given that the trading price of Rite Aid common stock after announcement of the original merger agreement likely reflected the potential consummation of the pending transaction with WBA rather than necessarily Rite Aid's underlying financial and business performance.

        At the request of the Board of Directors, Citi then reviewed its financial analysis of the merger consideration with the Board of Directors and rendered an oral opinion, confirmed by delivery of a written opinion dated January 29, 2017, to the Board of Directors to the effect that, as of that date and based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken described in Citi's written opinion, the per share merger consideration to be received by holders of Rite Aid common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders.

        Mr. Standley again reviewed with the Board of Directors management's business, strategic, financial and stockholder value creation rationale for the transaction, including, among other things, the continuing negative impact of prescription reimbursement rates on Rite Aid's financial performance since entering into the original merger agreement, WBA's commitment to increase, if necessary, the number of retail store divestitures and other actions that may be required to obtain FTC approval of the transaction, the current environment in the retail drugstore industry, including the trend of consolidation in the healthcare industry and increased competition, the all-cash merger consideration that would provide certainty of value within a limited price range and liquidity to Rite Aid stockholders while eliminating long-term business and execution risk, Rite Aid's leveraged balance sheet limiting its ability to compete effectively with other retail drugstore companies with greater financial resources to invest in the expansion of their businesses, Rite Aid's efforts to seek other potential buyers for Rite Aid before execution of the original merger agreement, and the belief that, for the reasons previously discussed with the Board of Directors, another buyer was not reasonably likely to make a superior offer to acquire Rite Aid at that time and that the transaction with WBA would likely create greater value for Rite Aid stockholders than other strategic options or termination of the merger agreement and operation of Rite Aid as a stand-alone company.

        Rite Aid management and the representatives of Citi were then excused from the meeting, and the Board of Directors and Skadden held an executive session. The Board of Directors further discussed the terms of the merger agreement amendment and noted its belief that Rite Aid management had obtained the best price and other terms practicable under the circumstances.

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        The Board of Directors then unanimously determined that the merger agreement, as it was to be amended, and the transactions contemplated by the amended merger agreement were advisable, fair to, and in the best interests of Rite Aid and its stockholders, approved, adopted and declared advisable the amended merger agreement and the transactions contemplated thereby, and resolved, subject to the terms of the amended merger agreement, to recommend that Rite Aid stockholders approve the amended merger agreement and the transactions contemplated thereby.

        Following the meeting, Rite Aid and WBA finalized and executed the merger agreement amendment. The following morning, on January 30, 2017, Rite Aid and WBA issued a joint press release publicly announcing the execution of the merger agreement amendment.

        On January 30, 2017, a representative of Citi received an unsolicited phone call from a representative of Party D inquiring as to whether Rite Aid was in a position to entertain an offer. In accordance with Rite Aid's directives, the Citi representative referred the caller to Rite Aid's publicly filed merger agreement amendment. No terms or conditions of a proposal or offer were provided, and no documents were sent by Party D to Rite Aid or any of its representatives. Several days later, the representative of Citi received another unsolicited phone call from the same representative of Party D who indicated that Party D did not intend to submit a proposal and was not interested in pursuing a transaction with Rite Aid, without stating its reasoning.

Recommendation of Our Board of Directors and Reasons for the Merger

Recommendation of Our Board of Directors to Approve the Merger Agreement and the Transactions Contemplated Thereby

        The Board of Directors, after considering various factors described below, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of Rite Aid and its stockholders, and adopted, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement.

        The Board of Directors unanimously recommends that you vote "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger.

Reasons for the Merger

        In evaluating the merger agreement and the transactions contemplated thereby, the Board of Directors consulted with Rite Aid's management and legal and financial advisors and, in reaching its determinations, the Board of Directors considered a variety of factors with respect to the merger and the other transactions contemplated by the merger agreement, including the factors listed below (not necessarily in order of relative importance).

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Rite Aid's business and operations, strategy, its current and historical financial condition and results of operations, and business plan and projected performance.



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The current environment in the retail drugstore industry, including the trend of consolidation in the healthcare industry, increased competition and the downward trend in third-party reimbursement levels for prescription drugs, and the likely effect of these factors on Rite Aid's financial condition and Rite Aid's ability to compete in the market in the absence of the merger.



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The decline in Rite Aid's projected fiscal year 2017 revenue and Adjusted EBITDA since October 2015 from $34.166 billion and $1.585 billion, respectively, to a projected $32.732 billion

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and $1.124 billion, respectively, as well as the reduced forecasts for revenue and earnings over the next five (5) years.

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Rite Aid's financial results and prospects since announcement of the execution of the original merger agreement and Rite Aid management's and the Board of Directors' concerns that, if the merger agreement were terminated and Rite Aid continued as a stand-alone company, Rite Aid would expect to have difficulty improving reimbursement rates and lowering costs to improve operating margins.



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Rite Aid's leveraged balance sheet limiting its ability to compete effectively with other retail drugstore companies with greater financial resources to invest in the expansion of their businesses and absorb the impact of reimbursement rate increases.



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The risk that Rite Aid's ability to participate in Medicare Part D and other commercial networks, particularly networks with preferred or limited pharmacy options, would be limited.



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The perceived challenges and risks of continuing as a stand-alone public company and the assessment that no other internally developed alternatives were reasonably likely in the near term to create greater value for Rite Aid's stockholders than the merger, taking into account business, competitive, industry and market risks.

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•

The long-term and recent historical trading prices with respect to shares of Rite Aid common stock, including the Board of Directors' belief, with input from management and Citi, that the trading price of Rite Aid common stock after announcement of the original merger agreement likely reflected the potential consummation of the pending transaction with WBA on the terms of the original merger agreement rather than necessarily Rite Aid's underlying financial and business performance and that the potential trading price of Rite Aid common stock could decrease significantly if the merger agreement were terminated or absent announcement of the merger agreement amendment.



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The fact that the last twelve (12) months Adjusted EBITDA (as reported by Rite Aid in its public filings and defined under "The Merger—Financial Forecast—Forecast" beginning on page 87), multiple implied by WBA's purchase price (i) at $6.50 per share would be near the high-end of the range of relevant precedent retail drugstore transactions and (ii) at $7.00 per share would exceed the range of relevant precedent retail drugstore transactions.



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The fact that the $6.50 to $7.00 all-cash per share merger consideration will provide certainty of value within a limited price range and liquidity to Rite Aid stockholders, enabling them to realize value that had been created at Rite Aid in recent years, while eliminating long-term business and execution risk.



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The financial presentation and opinion of Citi, each dated January 29, 2017, to the Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, of the per share merger consideration to be received by holders of Rite Aid common stock pursuant to the merger agreement, which opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as more fully described under "The Merger—Opinion of Rite Aid's Financial Advisor" beginning on page 80.



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The Board of Directors' belief that it engaged in a thorough review of a potential sale and whether to enter into the merger agreement amendment, including that:



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the Board of Directors reviewed potential strategic alternatives available to Rite Aid, including instructing Rite Aid management to engage with potential strategic partners and acquirors over the course of several years preceding management's negotiation of the transaction with WBA and, prior to entering into the original merger agreement, to contact selected third parties to gauge such parties' potential interest in a business combination transaction involving Rite Aid, and to consider terminating the merger agreement to operate as a stand-alone company;



•

prior to execution of the original merger agreement, Rite Aid management, with the assistance of Citi, acting at the Board of Directors' direction, periodically had engaged in discussions and considered potential business combination transactions with multiple potential strategic partners in an effort by Rite Aid to maximize stockholder value and the fact that, prior to the execution of the merger agreement amendment, no party other than WBA was prepared to pursue an acquisition of Rite Aid at that time; and



•

based on its review and the process conducted, the Board of Directors' belief that the $6.50 to $7.00 all-cash per share merger consideration was the best price reasonably available for Rite Aid's stockholders under the circumstances, that no other alternative transactions would create greater value for Rite Aid's stockholders than the transaction with WBA and that terminating the merger agreement and operating Rite Aid as a stand-alone company would not create greater value for Rite Aid's stockholders than the transaction with WBA.



•

Rite Aid management's and the Board of Directors' belief that the merger and related transactions with WBA have a reasonable chance of being completed successfully (despite not

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closing on the terms of the original merger agreement) taking into account, among other things, their knowledge of WBA's financial condition and ability to fund the aggregate per share merger consideration, the repayment of all amounts owed under Rite Aid's existing credit agreements, all amounts payable in connection with any change of control offers required to be made and all other payments required in connection with the transaction, including associated fees and expenses, and the level of commitment by WBA to obtaining applicable consents and approvals under antitrust and similar laws and assuming the risks related to certain conditions and requirements that may be imposed by regulators in connection with securing such approvals up to a specified threshold, including the commitment to sell up to 1,200 stores of Rite Aid, sell the Rite Aid Brand Rights and take certain other limited actions, in each case, in order to avoid or vacate any order that would prevent or materially delay the merger.

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Rite Aid management's and the Board of Directors' belief that WBA's covenant in the merger agreement to have funds available at closing in an amount sufficient to consummate the merger and the other transactions contemplated by the merger agreement, WBA's investment grade rating, and Rite Aid's ability to specifically enforce the merger agreement would be sufficient to ensure that at the closing WBA would have the funds necessary to consummate the merger.



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The fact that the merger agreement was the product of arm's-length negotiations and contained terms and conditions that were, in the Board of Directors' view, favorable to Rite Aid and its stockholders.



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The fact that WBA was unwilling to pay $9.00 per share on the terms that Rite Aid management and its antitrust legal advisors believed were necessary to obtain the FTC's approval of the merger and the Board of Directors' belief that a range of $6.50 to $7.00 per share was the highest price reasonably available under the circumstances.



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The fact that Rite Aid management and Citi believed that it was unlikely that another buyer would pay in excess of the range of $6.50 to $7.00 per share at that time, and if there was such a buyer that presented a superior proposal prior to the stockholder vote to approve the merger, the Company would have certain rights in accordance with the terms of the merger agreement, as further described below.



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The fact that the merger agreement was unanimously approved by all members of the Board of Directors, which is comprised of a majority of independent directors who are not affiliated with WBA and are not employees of Rite Aid or any of its subsidiaries, and which retained and received advice from Rite Aid's senior management and outside legal and financial advisors in evaluating and negotiating the terms of the merger agreement.



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The fact that Rite Aid stockholders who do not vote to adopt the merger agreement and approve the merger and who follow certain prescribed procedures are entitled to appraisal rights under Delaware law.

        The Board of Directors also specifically considered the terms of the merger agreement, including the following:

•

The Board of Directors' view that the terms of the merger agreement, including Rite Aid's obligation to pay a termination fee of $325 million, which is approximately (x) 4.6% of the aggregate equity value of the transaction if the per share merger consideration is equal to $6.50 per share and (y) 4.3% of the aggregate equity value of the transaction if the per share merger consideration is equal to $7.00 per share, if the merger agreement is terminated under certain circumstances, as well as the right of WBA to match any competing acquisition proposal that the Board of Directors determines in good faith constitutes a superior proposal, are reasonable and would not deter interested third parties from making a superior proposal.

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•

Rite Aid's ability, under circumstances described in the merger agreement, to provide information to and engage in discussions or negotiations with a third party that makes an unsolicited bona fide acquisition proposal if the Board of Directors, prior to taking any such actions, determines in good faith that such acquisition proposal either constitutes a superior proposal or is reasonably likely to constitute a superior proposal.



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That if Rite Aid were to receive an acquisition proposal from a third party that provided superior value to Rite Aid and its stockholders, so long as it followed certain procedures, Rite Aid and its Board of Directors would be able to consider such superior value and the Board of Directors may change its recommendation that Rite Aid stockholders vote in favor of the merger proposal and/or terminate the merger agreement, provided that Rite Aid concurrently pays a $325 million termination fee to WBA.



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The ability of the Board of Directors, subject to certain conditions, to change its recommendation supporting the merger in response to an intervening event, if the Board of Directors determines that failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties.



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The $325 million termination fee payable by WBA to Rite Aid if the transaction is terminated because the "end date" is reached and all conditions to the closing of the merger other than antitrust approval are satisfied, or if there is a legal restraint from an antitrust authority prohibiting the transaction's consummation, and the fact that WBA would still be required to pay a $162.5 million termination fee even if Rite Aid did not satisfy the Adjusted EBITDA threshold at the time of such termination.



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The lack of a financing contingency to WBA's obligation to complete the merger.



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Rite Aid's ability to specifically enforce WBA's obligations under the merger agreement, including WBA's obligations to consummate the merger, and Rite Aid's ability to seek damages upon any breach by WBA of the merger agreement.



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The revised Adjusted EBITDA threshold of $1.0 billion rather than $1.075 billion in the original merger agreement, which provides Rite Aid with additional flexibility to satisfy the Adjusted EBITDA threshold in the material adverse effect definition.



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WBA's agreement to acknowledge that a material adverse effect had not occurred between the date of the original merger agreement and the date of the merger agreement amendment and WBA's agreement that the material adverse effect condition would only be measured from the date of the amendment to closing (or termination, as applicable).



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The fact that the original merger agreement was amended to, among other things, (i) increase the number of stores that WBA is required to divest, to the extent necessary to obtain the required regulatory approvals, from 1,000 stores to 1,200 stores; (ii) require that WBA sell, transfer, dispose of, divest, license or hold separate the Rite Aid Brand Rights; (iii) extend the end date from January 27, 2017 to July 31, 2017; (iv) remove Rite Aid's obligation to reimburse WBA's expenses in certain circumstances specified in the original merger agreement; and (v) require that WBA sell, transfer, dispose of, divest or hold separate certain Rite Aid distribution centers, inventory related thereto and certain administrative assets.

        The Board of Directors weighed the foregoing against a number of potentially negative factors, including:

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The reduced purchase price.



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The possibility that more than 1,000 stores may need to be divested such that Rite Aid stockholders would receive less than $7.00 per share, including the possibility that 1,200 stores

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may need to be divested such that Rite Aid stockholders would receive only $6.50 per share, at the bottom of the $6.50 to $7.00 range.

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The fact that the original $9.00 all-cash per share merger consideration represented a premium of approximately 48% to Rite Aid's closing price as of the last trading day prior to the announcement of the original merger consideration, while the $6.50 to $7.00 all-cash per share merger consideration, at:



•

the bottom of the range represented a premium of approximately 6.9% to Rite Aid's closing price as of October 26, 2015, the last trading day prior to the date on which the execution of the original merger agreement was publicly announced;



•

the top of the range represented a premium of approximately 15.1% to Rite Aid's closing price as of October 26, 2015, the last trading day prior to the date on which the execution of the original merger agreement was publicly announced.



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The fact that the bottom of the $6.50 to $7.00 range was lower than Rite Aid's closing price of $6.93 per share as of January 27, 2017, the last trading day prior to the date on which the execution of the merger agreement amendment was publicly announced.



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That Rite Aid stockholders would likely be asked to vote on adoption of the merger agreement before the exact per share merger consideration is known.



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The fact that the completion of the merger would require expiration or termination of the applicable waiting periods under the HSR Act and the amount of time that might be required to obtain such expiration or termination, including that it may not be obtained at all, and the risk that the FTC or other regulatory agencies may not approve the merger.



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The fact that the FTC had not approved the merger after approximately fifteen (15) months, and there was no guarantee that the FTC would approve the merger as modified by the merger agreement amendment and the planned changes to the asset purchase agreement with Fred's.



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The fact that, while Rite Aid expects the merger to be consummated if the proposal to adopt the merger agreement is approved by Rite Aid's stockholders, there can be no assurance that all conditions to the parties' obligations to consummate the merger will be satisfied.



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The risk that the merger could be delayed or not completed.



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The risk that Fred's may not agree to changes to the asset purchase agreement necessary or advisable to convince the FTC that the divestiture to Fred's should be approved.



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The significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to complete the merger, which may disrupt Rite Aid's business operations.



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The risk that the continued pendency of the merger could adversely affect Rite Aid's relationships with its customers, regulators, employees, suppliers and agents or Rite Aid's other commercial relationships.



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The restrictions on Rite Aid's conduct of business prior to completion of the merger under the standard covenants in the merger agreement, which could prevent Rite Aid from undertaking business opportunities that may arise or taking other actions with respect to its operations during the pendency of the merger and subject the business to continued constraints, subject to certain updated exceptions that Rite Aid and WBA agreed upon in the merger agreement amendment.

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•

The fact that, pursuant to its obligations under the merger agreement, Rite Aid's borrowings under its revolving credit facilities cannot exceed $3 billion in the aggregate immediately prior to the closing.



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The fact that, pursuant to the merger agreement and subject to certain conditions, Rite Aid is prohibited from soliciting other acquisition proposals.



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The fact that, upon termination of the merger agreement under certain circumstances, Rite Aid will be required to pay to WBA a termination fee of $325 million in cash.



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The fact that the receipt of the $6.50 to $7.00 per share all-cash merger consideration would be taxable to Rite Aid's stockholders that are treated as U.S. holders for U.S. federal income tax purposes.



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The fact that Rite Aid's stockholders would forego the opportunity to realize the potential long-term value of the successful execution of Rite Aid's current strategy as an independent company and, given the all-cash consideration, the merger will not allow Rite Aid stockholders to benefit from any potential future appreciation in the value of the Rite Aid business once combined with WBA after the merger.



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The challenge in absorbing the effect of any failure to complete the merger, including stockholder and market reactions, as well as the diversion of management's attention from ongoing business concerns during the pendency of the merger.



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The risk that an event or development results in, at closing, a last twelve (12) months Adjusted EBITDA (as such term is defined in the merger agreement) of Rite Aid of less than $1.0 billion, which would constitute a material adverse effect pursuant to the merger agreement and thereby result in a failure to satisfy a condition to WBA's obligation to consummate the merger.



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The fact that WBA is not required to accept divestiture and other remedies imposed by governmental authorities (i) that would result in the divestiture of more than 1,200 Rite Aid stores or (ii) that would be materially adverse to WBA, Rite Aid or their respective subsidiaries, relative to the terms and conditions of the asset purchase agreement with Fred's taken as a whole, other than (a) certain specified remedies or (b) remedies that would not result in an impact exceeding $50 million in the aggregate as a result of such remedies.



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The fact that Rite Aid acknowledged in the merger agreement amendment that WBA had not breached its obligations pursuant to the antitrust efforts covenant as of the date of the merger agreement amendment.



•

The fact that Rite Aid could have terminated the original merger agreement after January 27, 2017 and collected the $325 million termination fee payable by WBA to Rite Aid, and that there is no guarantee if the merger agreement is later terminated that the termination fee will still be payable or, if payable, will not be reduced to $162.5 million as a result of Rite Aid's failure to satisfy the Adjusted EBITDA threshold at the time of such termination.



•

The fact that WBA did not have committed financing at the time of the merger agreement amendment similar to the financing that WBA had in place at the time the parties entered into the original merger agreement.



•

The fact that directors and officers of Rite Aid may have interests different from and in addition to Rite Aid stockholders.

        The Board of Directors believed that, overall, the potential benefits of the merger to Rite Aid's stockholders outweighed the risks and uncertainties of the merger.

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        The foregoing discussion of factors considered by the Board of Directors is not intended to be exhaustive, but the Board of Directors believes that it includes the material factors considered by the Board of Directors. These factors are not listed in any particular order of priority. In light of the variety of factors considered in connection with its evaluation of the merger, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board of Directors present applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board of Directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board of Directors based its recommendation on the totality of the information presented.

Opinion of Rite Aid's Financial Advisor

        Rite Aid has engaged Citi as its financial advisor in connection with the merger. In connection with this engagement, Rite Aid requested that Citi evaluate the fairness, from a financial point of view, of the per share merger consideration to be received by holders of Rite Aid common stock pursuant to the merger agreement. On January 29, 2017, at a meeting of the Board of Directors held to evaluate the merger, Citi rendered an oral opinion, confirmed by delivery of a written opinion dated January 29, 2017, to the Board of Directors to the effect that, as of that date and based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken described in Citi's written opinion, the per share merger consideration to be received by holders of Rite Aid common stock was fair, from a financial point of view, to such holders.

        The full text of Citi's written opinion, dated January 29, 2017, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, is attached as Annex C to this proxy statement and is incorporated herein by reference. The description of Citi's opinion set forth below is qualified in its entirety by reference to the full text of Citi's opinion. Citi's opinion was provided for the information of the Board of Directors (in its capacity as such) in connection with its evaluation of the per share merger consideration from a financial point of view and did not address any other aspects or implications of the merger. Citi expressed no view as to, and its opinion did not address, the underlying business decision of Rite Aid to effect the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for Rite Aid or the effect of any other transaction Rite Aid might engage in or consider. Citi's opinion is not intended to be and does not constitute a recommendation as to how any stockholder should vote or act on any matters relating to the merger or otherwise.

        In arriving at its opinion, Citi:

•

reviewed the original merger agreement and a draft, dated January 29, 2017, of the merger agreement amendment;



•

held discussions with certain of Rite Aid's senior officers, directors and other representatives and advisors and certain senior officers and other representatives and advisors of WBA concerning the business, operations and prospects of Rite Aid;



•

reviewed certain publicly available and other business and financial information relating to Rite Aid, including certain internal financial forecasts and other information and data relating to Rite Aid provided to or discussed with Citi by Rite Aid management;



•

reviewed the financial terms of the merger as set forth in the merger agreement in relation to, among other things, current and historical market prices of Rite Aid common stock, historical and projected earnings and other operating data of Rite Aid, and the capitalization and financial condition of Rite Aid;

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•

analyzed certain financial, stock market and other publicly available information relating to the businesses of other companies whose operations Citi considered relevant in evaluating those of Rite Aid;



•

considered, to the extent publicly available, the financial terms of certain other transactions which Citi considered relevant in evaluating the merger; and



•

conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as Citi deemed appropriate in arriving at its opinion.

        In rendering its opinion, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of Rite Aid management that it was not aware of any relevant information that was omitted or that remained undisclosed to Citi. With respect to the financial forecasts and other information and data relating to Rite Aid (including, without limitation, information relating to NOLs expected by Rite Aid management to be utilized by Rite Aid on a stand-alone basis) that Citi was directed to utilize in its analyses, Citi was advised by Rite Aid management and assumed, with Rite Aid's consent, that such forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of Rite Aid management as to the future financial performance of Rite Aid and the other matters covered thereby. Citi also relied, at Rite Aid's direction, upon the assessments of Rite Aid management as to, among other things, (i) the potential impact on Rite Aid of certain market, competitive and other trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the retail drugstore and pharmacy services industries and (ii) Rite Aid's existing and future contractual and other commercial arrangements and relationships with third-party payors and partners. Citi assumed, with Rite Aid's consent, that there would be no developments with respect to any such matters that would have an adverse effect on Rite Aid or the merger or that otherwise would be meaningful in any respect to Citi's analyses or opinion.

        Citi did not make, and it was not provided with, an independent evaluation or appraisal of the assets or liabilities (contingent, off-balance sheet or otherwise) of Rite Aid or any other entity nor did Citi make any physical inspection of the properties or assets of Rite Aid or any other entity. Citi assumed, with Rite Aid's consent, that the merger would be consummated in accordance with the terms of the merger agreement and in compliance with all applicable laws, relevant documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements for the merger, no delay, limitation, restriction or condition, including any divestiture requirements, amendments or modifications, would be imposed or exist that would have an adverse effect on Rite Aid or the merger or that otherwise would be meaningful in any respect to Citi's analyses or opinion. Citi did not express any opinion as to the prices at which Rite Aid common stock (or any other securities of or relating to Rite Aid) may trade or otherwise be transferable at any time. Citi also did not express any opinion with respect to tax, accounting, regulatory, legal or similar matters and relied, with Rite Aid's consent, upon the assessments of representatives of Rite Aid as to such matters. In connection with its engagement, Citi was not requested to, and it did not, undertake a formal third-party solicitation process on behalf of Rite Aid; however, at Rite Aid's direction and prior to Rite Aid entering into the original merger agreement with WBA in October 2015, Citi held preliminary discussions with selected third parties regarding their potential interest in a possible acquisition or other strategic transaction involving Rite Aid. Rite Aid's description of these discussions is included above under "The Merger—Background of the Merger" beginning on page 40. Representatives of Rite Aid advised Citi, and Citi also assumed, that the final terms of the merger agreement amendment would not vary materially from those set forth in the draft reviewed by Citi.

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        Citi's opinion addressed only the fairness, from a financial point of view and as of the date of such opinion, of the per share merger consideration (to the extent expressly specified in the opinion) to the holders of Rite Aid common stock and did not address any other terms, aspects or implications of the merger, including, without limitation, the form or structure of the merger, any asset purchase agreement or related arrangements, any offer to purchase, redeem or exchange, or consent solicitation undertaken with respect to, outstanding debt securities of Rite Aid or any other agreement, arrangement or understanding to be entered into in connection with or contemplated by the merger or otherwise. Citi expressed no view as to, and its opinion did not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation or other payments to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the per share merger consideration or otherwise. Citi's opinion was necessarily based on information available to Citi, and financial, stock market and other conditions and circumstances existing and disclosed to Citi, as of the date of its opinion. Although subsequent developments may affect its opinion, Citi is not obligated to update, revise or reaffirm its opinion. The issuance of Citi's opinion was authorized by Citi's fairness opinion committee.

        In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The summary of the analyses below is not a complete description of Citi's opinion or the analyses underlying, and factors considered in connection with, Citi's opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. Citi arrived at its ultimate opinion based on the results of all analyses and factors assessed as a whole, and it did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Accordingly, Citi believes that the analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying such analyses and its opinion.

        In its analyses, Citi considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of Rite Aid. No company, business or transaction reviewed is identical or directly comparable to Rite Aid or the merger and an evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, business segments or transactions reviewed.

        The estimates contained in Citi's analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, Citi's analyses are inherently subject to substantial uncertainty.

        Citi was not requested to, and it did not, recommend or determine the specific consideration payable in the merger. The type and amount of consideration payable in the merger were determined through negotiations between Rite Aid and WBA and the decision to enter into the merger agreement was solely that of the Board of Directors. Citi's opinion was only one of many factors considered by the Board of Directors in its evaluation of the merger and should not be viewed as determinative of the views of the Board of Directors or Rite Aid management with respect to the merger or the consideration payable in the merger.

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Financial Analyses

        The following is a summary of the material financial analyses presented to the Board of Directors in connection with Citi's opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand Citi's financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of such analyses. For purposes of the analyses described below, (i) the high-end of the approximate implied per share equity value reference ranges for Rite Aid derived from such analyses include the estimated present value (as of February 28, 2017) of the NOLs that Rite Aid management expects to be utilized by Rite Aid on a stand-alone basis (assuming a 35% tax rate for Rite Aid as directed by Rite Aid management and utilizing a discount rate of 7.60%, which estimated present value was calculated to be approximately $0.68 per share of Rite Aid common stock) and (ii) with respect to Rite Aid, the term "Adjusted EBITDA" means, as defined by Rite Aid in its public filings, net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification assets), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements, and other items (including stock-based compensation expense, sale of assets and investments, and revenue deferrals related to Rite Aid's customer loyalty program).

        Selected Public Companies Analysis.    Citi reviewed publicly available financial and stock market information of the following three selected companies that Citi in its professional judgment considered generally relevant, consisting of publicly traded companies not involved in the merger with operations in the retail drugstore industry or discount retail industry, which we refer to collectively as the selected companies:

•

CVS Health Corporation



•

Dollar General Corporation



•

Dollar Tree, Inc.

        Citi reviewed, among other information, enterprise values, calculated as fully-diluted equity values based on closing stock prices on January 27, 2017, plus total debt and minority interests (as applicable) and less cash and cash equivalents and investments in unconsolidated affiliates (as applicable), as a multiple of calendar year 2016 and calendar year 2017 estimated EBITDA. The overall low to high calendar year 2016 and calendar year 2017 estimated EBITDA multiples observed for the selected companies were 8.3x to 10.6x (with a median of 9.3x) and 8.5x to 9.3x (with a median of 8.9x), respectively.

        Citi then applied the ranges of calendar year 2016 and calendar year 2017 estimated EBITDA multiples derived from the selected companies of 8.3x to 10.6x and 8.5x to 9.3x, respectively, to Rite Aid's calendar year 2016 and calendar year 2017 estimated Adjusted EBITDA, respectively, based on internal forecasts and other estimates of Rite Aid management. Financial data of the selected companies were based on publicly available Wall Street research analysts' estimates, public filings and other publicly available information. Financial data of Rite Aid was based on internal forecasts and estimates of Rite Aid management, calendarized for comparative purposes. This analysis indicated the

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following approximate implied per share equity value reference ranges for Rite Aid, as compared to the per share merger consideration:

        Selected Precedent Transactions Analysis.    Using publicly available information, Citi reviewed financial data relating to the following seven selected transactions that Citi in its professional judgment considered generally relevant involving target companies with operations in the retail drugstore industry, which we refer to collectively as the selected transactions:

        Citi reviewed, among other information, transaction values of the selected transactions, calculated as the purchase prices paid for the target companies, plus total debt and minority interests (as applicable) and less cash and cash equivalents and investments in unconsolidated affiliates (as applicable), as a multiple of such target companies' latest twelve (12) months EBITDA as of the announcement date of the relevant transaction. The overall low to high latest twelve (12) months EBITDA multiples observed for the selected transactions were 9.2x to 10.9x (or, at the high-end, 13.1x when taking into account stock price appreciation between the first and second steps of the August 2014 Walgreen Co./Alliance Boots GmbH transaction, which was a multi-step transaction). Citi then applied a selected range of latest twelve (12) months EBITDA multiples derived from the selected transactions of 9.2x to 10.9x to Rite Aid's latest twelve (12) months Adjusted EBITDA. Financial data of the selected transactions were based on publicly available information. Financial data of Rite Aid was based on public filings and internal forecasts and estimates of Rite Aid management. This analysis indicated the following approximate implied per share equity value reference range for Rite Aid, as compared to the per share merger consideration:

        Discounted Cash Flow Analysis.    Citi performed a discounted cash flow analysis of Rite Aid by calculating the estimated present value of the unlevered, after-tax free cash flows that Rite Aid was forecasted to generate during its fiscal years ending February 28, 2018 through February 28, 2022 based on internal forecasts and estimates of Rite Aid management, normalized to reflect capital expenditures equal to depreciation and amortization in the terminal year. Citi calculated terminal values for Rite Aid by applying to Rite Aid's fiscal year 2022 estimated Adjusted EBITDA a selected range of EBITDA multiples of 8.5x to 9.5x derived based on Citi's professional judgment and taking into account, among other things, historical EBITDA trading multiples for Rite Aid and the selected companies. The present values (as of February 28, 2017) of the cash flows and terminal values were then calculated using selected discount rates ranging from 7.4% to 7.8%. This analysis indicated the

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following approximate implied per share equity value reference range for Rite Aid, as compared to the per share merger consideration:

Certain Informational Factors

        Citi observed certain additional information that was not considered part of its financial analyses for its opinion but was noted for informational purposes, including the following:

•

historical trading prices of Rite Aid common stock during the 52-week period ended January 27, 2017 (noting that such period was during the pendency of the original merger agreement), which indicated low to high closing prices for Rite Aid common stock during such period of approximately $6.43 to $8.70 per share;



•

one (1) year forward stock price targets for Rite Aid common stock as reflected in selected publicly available Wall Street research analysts' reports, which indicated a target stock price range (discounted to present value utilizing a discount rate at Rite Aid's cost of equity of 10.7%) for Rite Aid of approximately $7.00 to $8.13 per share (with a median of $8.13 per share); and



•

based on publicly available Wall Street research analysts' estimates, the median implied latest twelve (12) months Adjusted EBITDA multiples of Rite Aid over, among other periods, the three (3) year period ended October 26, 2015, which indicated a median implied latest twelve (12) months Adjusted EBITDA multiple for Rite Aid over such three (3) year period of 9.0x (after taking into account the estimated present value (as of August 29, 2015) of Rite Aid's stand-alone NOLs as estimated by Rite Aid management in 2015).

Miscellaneous

        Rite Aid has agreed to pay Citi for its services in connection with the merger an aggregate fee estimated to be approximately $33 million (assuming a per share merger consideration of $6.50) to approximately $34 million (assuming a per share merger consideration of $7.00), of which a portion was payable upon delivery of Citi's opinions (including its opinion, dated October 27, 2015, delivered to the Board of Directors in connection with the original merger agreement) and approximately $29 million (assuming a per share merger consideration of $6.50) to approximately $30 million (assuming a per share merger consideration of $7.00) is payable contingent upon completion of the merger. In addition, Rite Aid has agreed to reimburse Citi for Citi's expenses, including fees and expenses of counsel, and to indemnify Citi and related parties against certain liabilities, including liabilities under federal securities laws, arising out of Citi's engagement.

        As Rite Aid was aware, Citi and its affiliates in the past have provided, currently are providing and in the future may provide investment banking, commercial banking and other similar financial services to Rite Aid and its affiliates unrelated to (or separate from) the merger, for which services Citi and its affiliates received and expect to receive compensation, including, during the two (2) year period prior to the date of its opinion, having acted or acting as (i) financial advisor to Rite Aid in connection with an acquisition transaction in 2015 and proposed divestiture of certain Rite Aid stores in 2016, (ii) lead joint bookrunner for a notes offering of Rite Aid in 2015 and (iii) administrative agent and/or co-lead arranger or joint bookrunner for, and as a lender under, certain credit facilities of Rite Aid, for which services Citi and its affiliates received during such two (2) year period aggregate fees of approximately $29 million from Rite Aid. As Rite Aid also was aware, Citi acted as lead bookrunner in 2015 and 2016 for secondary offerings on behalf of certain selling stockholders of equity securities of WBA, for which

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the underwriting discount for such offerings may be deemed compensation, and Citi and its affiliates may provide services to WBA and its affiliates in the future, for which services Citi and its affiliates would expect to receive compensation. In the ordinary course of business, Citi and its affiliates may actively trade or hold the securities of Rite Aid, WBA and their respective affiliates for their own account or for the account of their customers and, accordingly, may at any time hold a long or short position in such securities. In addition, Citi and its affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with Rite Aid, WBA and their respective affiliates.

        Rite Aid selected Citi as its financial advisor in connection with the merger based on Citi's reputation, experience and familiarity with Rite Aid and its business. Citi is an internationally recognized investment banking firm that regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes.

Financial Forecast

        As part of its annual strategic planning process and as required by its bank group, Rite Aid management prepares a long-range financial plan containing certain non-public unaudited prospective financial information, which it updates from time to time and which we refer to as the Forecast. Rite Aid provided the Board of Directors, and its advisors, including Citi, with the Forecast in connection with Rite Aid's evaluation of the original merger agreement, as well as the merger agreement amendment, and provided WBA with certain portions of the Forecast in connection with WBA's due diligence review of a possible transaction initially and in connection with the merger agreement amendment.

        The Forecast was not prepared with a view to public disclosure and is included in this proxy statement only because such information was made available as described above. The Forecast was not prepared with a view to compliance with GAAP, the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, Deloitte & Touche LLP, our independent auditor, has not examined, reviewed, compiled or otherwise applied procedures to the Forecast and, accordingly, assumes no responsibility for, and expresses no opinion on, the Forecast. The Forecast included in this proxy statement has been prepared by, and is the responsibility of, our management. The Forecast was prepared solely for internal use of Rite Aid and is subjective in many respects.

        Although a summary of the Forecast is presented with numerical specificity, it reflects numerous assumptions and estimates as to future events made by our management, including with respect to indebtedness and capital expenditure levels for the applicable periods, that our management believed were reasonable at the time the Forecast was prepared, taking into account the relevant information available to management at the time. However, this information is not fact and should not be relied upon as necessarily indicative of actual future results. Important factors that may affect actual results and cause the Forecast not to be achieved include general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, changes in tax laws and other factors described or referenced under "Forward-Looking Statements" beginning on page 31.

        In addition, the Forecast does not take into account any circumstances or events occurring after the date that it was prepared and does not give effect to the merger. As a result, there can be no assurance that the Forecast will or would be realized, and actual results may be materially better or worse than those contained in the Forecast.

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        The inclusion of this information should not be regarded as an indication that the Board of Directors, Rite Aid or any of its affiliates or their respective directors, officers, employees or advisors or any other recipient of this information considered, or now considers, the Forecast to be material information of Rite Aid or predictive of actual future results nor should it be construed as financial guidance, and it should not be relied upon as such. The summary of the Forecast is not included in this proxy statement in order to induce any stockholder to vote in favor of the proposal to adopt the merger agreement or any of the other proposals to be voted on at the special meeting or to influence any stockholder to make any investment decision with respect to the merger, including whether or not to seek appraisal rights with respect to shares of our common stock.

        The Forecast should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Rite Aid contained in our public filings with the SEC. Our management reviewed the Forecast with the Board of Directors, which considered the Forecast in connection with its evaluation and approval of the merger agreement and the merger. In preparing its financial analyses and opinion summarized under "The Merger—Opinion of Rite Aid's Financial Advisor" beginning on page 80, Citi relied on the accuracy and completeness of the information provided with respect to the Forecast and the assurances of our management that it was not aware of any facts or circumstances that would make such information inaccurate or misleading.

        The Forecast constitutes a forward-looking statement. For information on factors that may cause Rite Aid's future results to materially vary, see "Forward-Looking Statements" beginning on page 31.

        Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Forecast to reflect circumstances existing after the date when Rite Aid prepared the Forecast or to reflect the occurrence of future events or changes in general economic or industry conditions, even in the event that any of the assumptions underlying the Forecast are shown to be in error.

        In light of the foregoing factors and the uncertainties inherent in the Forecast, stockholders are cautioned not to rely on the Forecast.

        Certain of the measures included in the Forecast may be considered non-GAAP financial measures, as noted below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Rite Aid may not be comparable to similarly titled amounts used by other companies.

        The following table reflects selected metrics reflected in, or generated from, the Forecast:

Forecast

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        In this proxy statement, reference is made to Adjusted EBITDA and unlevered free cash flow, which are non-GAAP financial measures. Rite Aid uses these non-GAAP measure in assessing its performance in addition to net income and cash flow from operations, the most directly comparable GAAP financial measures to Adjusted EBITDA and unlevered free cash flow, respectively. Rite Aid believes Adjusted EBITDA and unlevered free cash flow serve as appropriate measures in evaluating the performance of its business and helps its investors better compare Rite Aid's operating performance with its competitors. Adjusted EBITDA and unlevered free cash flow should not be considered in isolation from, and are not intended to represent alternative measures of, operating results or of cash flow from operations, as determined in accordance with GAAP. Rite Aid's definitions of Adjusted EBITDA and unlevered free cash flow may not be comparable to similarly titled

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measurements reported by other companies and are not identical to similar terms in Rite Aid's debt facilities or the merger agreement.

Interests of the Directors and Executive Officers of Rite Aid in the Merger

        When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the merger agreement, you should be aware that some of our directors and executive officers may have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally, as more fully described below. The Board of Directors was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and overseeing the negotiation of the merger agreement, in approving the merger agreement and the merger and in recommending that the merger agreement be adopted by the stockholders of Rite Aid. For the purpose of each of the Rite Aid plans and agreements described below, the consummation of the merger will constitute a "change in control," "change of control" or term of similar meaning with respect to Rite Aid.

Arrangements with WBA or Fred's

        As of the date of this proxy statement, none of our executive officers or officers has entered into any agreement with WBA or Fred's or any of their affiliates regarding employment with, or the right to purchase or participate in the equity of, WBA, the Surviving Corporation or Fred's or one or more of their affiliates. However, following the request of WBA, at the recommendation of Jones Day in connection with the FTC's review of the merger and the divestiture to Fred's in order to enhance the management team of Fred's and provide continuity of management following the acquisition of the stores and assets to be purchased by Fred's from the Company, and at the direction of the Board of Directors, some of our executive officers and officers are discussing and/or in the future may discuss or enter into agreements with Fred's or any of Fred's affiliates regarding employment with, or service on the board of directors of, or the right to purchase or participate in the equity of, Fred's or one or more of Fred's affiliates. In addition, prior to or following the closing, some of our executive officers have discussed and/or in the future may discuss or enter into agreements with WBA or Merger Sub or any of their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, WBA or the Surviving Corporation or one or more of their respective affiliates.

Insurance and Indemnification of Directors and Executive Officers

        For six (6) years from and after the effective time of the merger, the Surviving Corporation will indemnify and hold harmless each present and former director, officer and employee of Rite Aid or any of its subsidiaries (in each case, when acting or having acted in such capacity), determined as of the effective time of the merger, against any costs and expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any proceeding arising out of matters existing or occurring at or prior to the effective time of the merger, to the fullest extent that Rite Aid would have been permitted under applicable law, the organizational documents of Rite Aid or its subsidiaries, as applicable, and any indemnification agreements with any directors, officers and employees of Rite Aid or any of its subsidiaries in effect on the date of the original merger agreement to indemnify such person (and the Surviving Corporation will also advance expenses (including reasonable attorneys' fees and expenses) as incurred to the fullest extent permitted under applicable law; provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification).

        Prior to the effective time of the merger, Rite Aid will be permitted and, if Rite Aid fails to do so, WBA will cause the Surviving Corporation as of the effective time of the merger to, obtain and fully pay for "tail" insurance policies for the extension of the directors' and officers' liability coverage of Rite Aid's existing directors' and officers' insurance policies for a claims reporting or discovery period

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of at least six (6) years from and after the effective time of the merger, that will be from an insurance carrier with the same or better credit rating as Rite Aid's insurance carrier as of the date of the original merger agreement with respect to directors' and officers' liability insurance with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as Rite Aid's existing policies with respect to matters existing or occurring prior to the effective time of the merger (including in connection with the merger agreement, the merger or the transactions contemplated thereby). In no event will Rite Aid expend, or will WBA or the Surviving Corporation be required to expend, for such policies an aggregate premium amount in excess of three hundred percent (300%) of the annual premiums currently paid by Rite Aid for such insurance. If Rite Aid and the Surviving Corporation for any reason fail to obtain such "tail" insurance policies as of the effective time of the merger, (i) the Surviving Corporation will, and WBA will cause the Surviving Corporation to, continue to maintain in effect for a period of at least six (6) years from and after the effective time of the merger the directors and officers insurance in place as of the date of the original merger agreement with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as provided in Rite Aid's existing policies as of the date of the original merger agreement, or (ii) the Surviving Corporation will, and WBA will cause the Surviving Corporation to, obtain directors and officers insurance for such six (6) year period with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as Rite Aid's existing policies as of the date of original the merger agreement. In no event will WBA or the Surviving Corporation be required to expend for such policies an annual premium amount in excess of three hundred percent (300%) of the annual premiums currently paid by Rite Aid for such insurance. If the annual premiums of such insurance coverage exceed such amount, the Surviving Corporation will obtain a policy with the best available coverage for a cost not exceeding such amount. The Surviving Corporation will maintain such policies in full force and effect, and continue to honor the obligations thereunder for a period of not less than six (6) years from and after the effective time of the merger.

Treatment of Equity and Equity-Based Awards

        Cash-Out Options.    Upon completion of the merger, each cash-out option will be cancelled and converted into the right to receive, without interest, an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such cash-out option and (y) the excess, if any, of the per share merger consideration (which will range from $6.50 to $7.00) over the per share exercise price of such cash-out option, less applicable withholding taxes.

        Rollover Options.    Upon completion of the merger, each rollover option will be converted into an option to acquire, on the same terms and conditions as were applicable immediately prior to the completion of the merger, a number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock subject to such rollover option and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares after aggregating each individual holder's option with the same exercise price. The exercise price of each converted rollover option will be equitably adjusted to be equal to the quotient (rounded up to the nearest whole cent) of (x) the exercise price per share of Rite Aid common stock subject to such rollover option and (y) the conversion ratio (rounded up to the nearest whole cent).

        Rollover Stock Awards.    Upon completion of the merger, each rollover stock award will be converted into a WBA restricted share award or a WBA performance stock unit, as applicable, relating to the number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock relating to such rollover stock award (which, in the case of performance stock units for which the applicable performance period has not completed, will be the target number of shares) and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares (with such rounding applied on an aggregate basis to each individual holder), and with each such converted rollover stock award generally subject to the same terms and conditions as

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were applicable immediately prior to the completion of the merger. With respect to each converted rollover stock award that is a performance stock unit, following the completion of the merger (i) the performance goals or conditions will not apply with respect to a pro rata portion of such award (with such portion based on the number of days elapsed in the performance period through the completion of the merger), and such portion of the rollover stock award will continue to be subject to service-based vesting on the same schedule as applied prior to the completion of the merger, and (ii) the remaining portion of the performance stock unit will continue to be subject to performance-based vesting (based on the achievement of adjusted performance goals) and service-based vesting on the same schedule as applied prior to the completion of the merger.

        Restricted Stock Units.    Upon completion of the merger, each Rite Aid restricted stock unit outstanding immediately prior to the completion of the merger, whether or not vested, will automatically be cancelled and converted into the right to receive an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such restricted stock unit and (y) the per share merger consideration (which will range from $6.50 to $7.00), less applicable withholding taxes.

Accelerated Vesting of Equity and Equity-Based Awards Upon Certain Terminations

        Pursuant to the terms of Rite Aid's stock plans, the vesting of each rollover option and rollover stock award outstanding as of the date of the original merger agreement, including the rollover options and rollover stock awards then held by any executive officer, will accelerate and vest (with any performance conditions deemed achieved at target levels) upon the occurrence of both (i) a change in control and (ii) a qualifying termination during the two (2) year period following a change in control, which we refer to as "double-trigger" vesting. The merger will be treated as a change in control for purposes of Rite Aid's stock plans with respect to any rollover options and rollover stock awards that are granted prior to the date of the original merger agreement, but will not be treated as a change in control for purposes with respect to any rollover options and rollover stock awards that are granted following the date of the original merger agreement and prior to completion of the merger (which will be subject to the vesting provisions of the executive officer's employment agreement, as described below).

        The table below sets forth the estimated amounts that each director, named executive officer and other executive officers of Rite Aid would be eligible to receive (without subtraction of applicable withholding taxes) with regard to rollover options, rollover stock awards, and restricted stock units as of promptly following the completion of the merger or, in the case of the rollover options and rollover stock awards, assuming (i) a per share merger consideration of $7.00 and (ii) continued employment or service through the completion of the merger and a qualifying termination of employment or service immediately following the completion of the merger. Depending on when the merger is completed, certain outstanding equity shown in the table below may become vested in accordance with their terms without regard to the merger or, in the case of rollover options, may be exercised by the director or executive officer. Further information regarding the named executive officers may be found under "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Golden Parachutes" beginning on page 96.

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Merger-Related Payments

Payments to Executives upon Termination Following Change-in-Control

Executive Officer Employment Agreements

        Each of Rite Aid's executive officers is party to an employment agreement with Rite Aid, which we refer to collectively as the employment agreements. During the term of the employment agreements, the employment agreements provide that each executive officer will be entitled to receive a severance benefit under his or her employment agreement if (i) the officer is terminated other than for cause or (ii) the officer resigns with good reason, which we refer to as a qualifying termination. For the purpose of the employment agreements, "good reason" generally includes (x) the assignment of duties or responsibilities materially inconsistent with the executive's status or position or any material adverse alteration in title or reporting relationship, (y) any decrease in base salary to which the executive has not agreed to in writing, or (z) a material breach by Rite Aid of the employment agreement. The receipt of the severance benefits described below is conditioned upon the executive's execution of a binding separation agreement and general release of claims in favor of Rite Aid. Additional

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information regarding the treatment of equity and equity-based awards may be found under "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Treatment of Equity and Equity-Based Awards" beginning on page 90.

John T. Standley

        Except as provided below, Mr. Standley's employment agreement provides for the following severance benefit upon a qualifying termination or upon the non-renewal of his employment agreement within six (6) months of a change in control: (i) a cash amount equal to two times the sum of his annual base salary and target annual bonus, payable in installments over the two (2) year period following the termination; (ii) if termination occurs following the start of Rite Aid's fiscal year and if the Surviving Corporation's board of directors determines that Rite Aid achieved or exceeded its annual performance targets for the fiscal year, an amount equal to the executive's target annual bonus, prorated to reflect the number of days in the fiscal year prior to termination; (iii) any accrued but unpaid salary and benefits, payable within ten (10) business days of the date of termination; and (iv) two (2) years' continued health and medical insurance coverage for Mr. Standley and his qualifying dependents.

        In the event Rite Aid does not renew Mr. Standley's employment agreement, and such non-renewal does not occur within six (6) months of a change in control, Mr. Standley would receive the following severance benefit: (i) a cash amount equal to one times the sum of his annual base salary and target annual bonus, such amount payable in installments over the one (1) year period following the termination; (ii) if termination occurs following the start of Rite Aid's fiscal year and if the Surviving Corporation's board of directors determines that Rite Aid achieved or exceeded its annual performance targets for the fiscal year, an amount equal to the executive's target annual bonus, prorated to reflect the number of days in the fiscal year prior to termination; (iii) any accrued but unpaid salary and benefits payable within ten (10) business days of the date of termination; and (iv) one (1) years' continued health and medical insurance coverage for Mr. Standley and his qualifying dependents.

        Mr. Standley's employment agreement provides that each then-outstanding stock option will vest upon the occurrence of a change in control. Mr. Standley's employment agreement further provides that he will receive an additional payment to reimburse him for any excise taxes imposed on "parachute payments" that may be incurred under Section 4999 of the Code and the taxes associated with such gross-up payment, as a result of Section 280G of the Code.

        As it would pertain to rollover stock awards granted following the date of the original merger agreement, Mr. Standley's employment agreement provides that upon a qualifying termination, all outstanding restrictions with respect to any restricted stock awards will lapse to the extent the restrictions would have lapsed had Mr. Standley remained employed by Rite Aid for a period of three (3) years (or one (1) year in the event of non-renewal where the non-renewal does not occur within six (6) months of a change in control) following the date of such termination. The occurrence of the merger will constitute a change in control for the purposes of Mr. Standley's employment agreement.

Kenneth A. Martindale and Darren W. Karst

        The employment agreements with Messrs. Martindale and Karst provide for the following severance benefit upon a qualifying termination: (i) a cash amount equal to two times the sum of the executive's annual base salary and target annual bonus, payable in installments over the two (2) year period following the termination; (ii) if termination occurs following the start of Rite Aid's fiscal year and if the Surviving Corporation's board of directors determines that Rite Aid achieved or exceeded its annual performance targets for the fiscal year, an amount equal to the executive's target annual bonus, prorated to reflect the number of days in the fiscal year prior to termination; (iii) any accrued but

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unpaid salary and benefits, payable within ten (10) business days of the date of termination; and (iv) two (2) years' continued health and medical insurance coverage for the executive and his qualifying dependents. The amendments to the employment agreements with Messrs. Martindale and Karst further provide that any portion of any payment that is subject to any excise taxes imposed on "parachute payments" that may be incurred under Section 4999 of Code as a result of Section 280G of the Code will be reduced to the extent necessary so that the executive will retain a greater amount on an after-tax basis than if the excise tax had been imposed on the unreduced amount of the payments.

        As it would pertain to rollover options and rollover stock awards granted following the date of the original merger agreement and prior to completion of the merger, the employment agreements with Messrs. Martindale and Karst provide that upon a qualifying termination, all outstanding option awards will immediately vest and become exercisable for a period of ninety (90) days, and the restrictions with respect to any restricted stock awards will lapse, in each case to the extent the options would have vested and the restrictions would have lapsed had the executives remained employed by Rite Aid for a period of two (2) years following the date of such termination.

David Abelman, Bryan Everett, Jocelyn Konrad, and Enio A. Montini, Jr.

        The employment agreements with Ms. Konrad and Messrs. Abelman, Everett, and Montini provide for the following severance benefit upon a qualifying termination: (i) a cash amount equal to two times the executive's annual base salary, such amount payable in installments over the two (2) year period following the termination; (ii) any accrued but unpaid salary and benefits payable within ten (10) business days of the date of termination; and (iii) two (2) years' continued health and medical insurance coverage for the executive and her or his qualifying dependents. The employment agreements with Ms. Konrad and Messrs. Abelman and Everett further provide that if termination occurs following the start of Rite Aid's fiscal year and if the Surviving Corporation's board of directors determines that Rite Aid achieved or exceeded its annual performance targets for the fiscal year, an amount equal to the executive's target annual bonus, prorated to reflect the number of days in the fiscal year prior to termination. The employment agreements with Ms. Konrad and Messrs. Abelman, Everett and Montini further provide that any portion of any payment that is subject to any excise taxes imposed on "parachute payments" that may be incurred under Section 4999 of the Code as a result of Section 280G of the Code will be reduced to the extent necessary so that the executive will retain a greater amount on an after-tax basis than if the excise tax had been imposed on the unreduced amount of the payments.

        The employment agreements with Ms. Konrad and Messrs. Abelman, Everett, and Montini provide that upon a qualifying termination, all outstanding option awards will immediately vest and become exercisable for a period of ninety (90) days, and the restrictions with respect to any restricted stock awards will lapse, in each case to the extent the options would have vested and the restrictions would have lapsed had the executives remained employed by Rite Aid for a period of two (2) years following the date of such termination.

Douglas E. Donley

        Mr. Donley's employment agreement provides for the following severance benefit upon a qualifying termination: (i) a cash amount equal to two times the sum of his annual base salary and target annual bonus, payable in installments over the two (2) year period following the termination; (ii) if termination occurs following the start of Rite Aid's fiscal year and if the Board of Directors determines that Rite Aid achieved or exceeded its annual performance targets for the fiscal year, an amount equal to the executive's target annual bonus, prorated to reflect the number of days in the fiscal year prior to termination; (iii) any accrued but unpaid salary and benefits, payable within ten (10) business days of the date of termination; and (iv) two (2) years' continued health and medical insurance coverage for Mr. Donley and his qualifying dependents.

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        As it would pertain to rollover options and rollover stock awards granted following the date of the original merger agreement and prior to completion of the merger, Mr. Donley's employment agreement provides that upon a qualifying termination, all outstanding option awards will immediately vest and become exercisable for a period of ninety (90) days, to the extent the options would have vested had Mr. Donley remained employed by Rite Aid for a period of two (2) years following the date of such termination.

Supplemental Executive Retirement Plan

        Each of Rite Aid's named executive officers and each of Rite Aid's other executive officers is a participant in the Supplemental Executive Retirement Plan, which we refer to as the SERP. Under the terms of the SERP, the unvested portions of the individual account balances of each of the executive officers will vest if the executive officer is involuntarily terminated without cause within twelve (12) months of the completion of the merger.

Retention Awards

        As disclosed on Rite Aid's Current Report on Form 8-K, filed with the SEC on January 7, 2016, Rite Aid entered into individual retention agreements with Messrs. Abelman, Donley, Everett, Karst and Montini and Ms. Castle and Ms. Konrad. The retention agreements generally provide for the lump-sum payment of, or the lapse of a repayment obligation regarding, the retention awards on the one hundred and twentieth (120th) day following the closing of the merger, subject to continued employment through such retention date or upon an earlier qualifying termination. The retention award granted to Ms. Castle, in the amount of $500,000, was paid to her in connection with her qualifying termination on January 20, 2017.

Potential Change-in-Control Payments to Executive Officers Other than Named Executive Officers

        The following table shows the estimated amounts that each executive officer other than the named executive officers would receive upon a termination of employment without cause or through resignation for good reason assuming that such events occurred on the termination date of the merger agreement, July 31, 2017. The following table does not replicate information already disclosed in the "Merger-Related Payments" table above.

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Golden Parachutes

        The following tables show the estimated amounts of payments and benefits that each named executive officer of Rite Aid would receive in connection with the merger, assuming consummation of the merger occurred on the termination date set forth in the merger agreement, July 31, 2017, the employment of the named executive officer was terminated without cause or the named executive officer resigned for good reason on such date, and assumes a per share merger consideration of $7.00.

        The first table below, entitled "Potential Change-in-Control Payments to Named Executive Officers," along with its footnotes, sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation payable to Rite Aid's chief executive officer, chief financial officer, any executive officer who served as Rite Aid's chief executive officer during the prior fiscal year, any executive officer who served as Rite Aid's chief executive officer during the prior fiscal year and the three other most highly compensated executive officers, as determined for purposes of its most recent annual proxy statement, each of whom we refer to as a named executive officer. This compensation is subject to an advisory vote of Rite Aid's stockholders, as described below under "Proposal 2: Advisory Vote on Merger-Related Executive Compensation Arrangements" beginning on page 136.

        The calculations in the tables below do not include amounts the named executive officers were already entitled to receive or that were or would be vested as of July 31, 2017, or amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all of the salaried employees of Rite Aid. In addition to the assumptions regarding the consummation date of the merger and termination of the employment of the named executive officers, these estimates are based on certain other assumptions that are described in the footnotes accompanying the tables below. Accordingly, the ultimate values to be received by a named executive officer in connection with the merger may differ from the amounts set forth below. Although Ms. Dedra Castle, Rite Aid's former Executive Vice President and Chief Human Resources Officer, was a named executive officer for the purposes of Rite Aid's most recent annual proxy statement, Ms. Castle ceased her employment with Rite Aid effective January 20, 2017, and has no interest in the merger (except insofar as she may be a holder of Rite Aid common stock) or any rights to compensation that are based on or otherwise related to the merger, and is therefore not included in the following disclosure.

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Potential Change-in-Control Payments to Named Executive Officers

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Financing of the Merger

        WBA's obligation to complete the merger is not subject to the receipt of financing. Concurrently with the signing of the original merger agreement, WBA entered into the Signing Date Commitment Letter providing for a $12.8 billion fully-committed senior unsecured bridge loan facility. On December 18, 2015, WBA entered into the Expired Credit Agreements. The Signing Date Commitment Letter and the commitments contemplated thereby terminated upon WBA entering into the Expired Credit Agreements. The Expired Credit Agreements expired on January 27, 2017, which date was the original end date under the original merger agreement prior to the execution of the merger agreement amendment.

Backstop Commitment Letter and Credit Agreement

        Following the execution of the merger agreement amendment, on January 30, 2017, WBA entered into the Backstop Commitment Letter with HSBC, providing for commitments in an aggregate principal amount of up to $5,000,000,000, which commitments were intended to replace a portion of the expired commitments in respect of the Expired Credit Agreements.

        Pursuant to the terms of the Backstop Commitment Letter, HSBC committed to enter into the Backstop Credit Agreement as promptly as practicable (and in any event, within one business day) following the effectiveness of the Backstop Commitment Letter. Accordingly, WBA entered into the Backstop Credit Agreement, which is a 364-day unsecured bridge term loan facility with aggregate commitments equal to $5,000,000,000.

        The ability of WBA to request the making of loans under the Backstop Credit Agreement is subject to the satisfaction (or waiver) of certain conditions set forth therein (including, among other things, the delivery of an officer's certificate certifying the accuracy of certain representations and warranties set forth in and the absence of certain defaults under the Backstop Credit Agreement). Loans will be available under the Backstop Credit Agreement in U.S. Dollars.

        The commitments of the lenders to make such term loans under the Backstop Credit Agreement expire upon the earliest of (i) the date of the consummation of the merger with or without the funding of the loans under the Backstop Credit Agreement, (ii) prior to the time of the consummation of the merger, the termination of the merger agreement by WBA or with the written consent of WBA in accordance with its terms (other than with respect to provisions therein that expressly survive termination), (iii) 11:59 p.m. (New York time) on July 31, 2017 and (iv) the date of termination in full of the commitments thereunder by mutual agreement of the parties thereto.

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        Borrowings under the Backstop Credit Agreement will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate, or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. WBA will also pay certain customary fees.

Revolving Credit Agreement

        On February 1, 2017, WBA entered into the Revolving Credit Agreement. The Revolving Credit Agreement is a revolving credit facility with aggregate commitments equal to $1,000,000,000 with a facility termination date of the earlier of (a) 364 days following the effective date of the Revolving Credit Agreement, subject to the extension thereof pursuant to the Revolving Credit Agreement, and (b) the date of termination in whole of the aggregate commitment pursuant to the Revolving Credit Agreement.

        The ability of WBA to request the making of loans under the Revolving Credit Agreement to be used for any purpose (including general corporate purposes) is subject to the satisfaction (or waiver) of certain customary conditions set forth therein (including a separate set of customary "limited conditions" applicable to any loans made thereunder for the sole purpose of financing the merger). Loans will be available under the Revolving Credit Agreement in U.S. Dollars.

        Borrowings under the Revolving Credit Agreement will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. In addition, WBA will also pay to the lenders under the Revolving Credit Agreement certain customary fees.

Term Loan Credit Agreements

        On February 22, 2017, WBA entered into the Term Loan Credit Agreements. In connection therewith, as of such date of entering into the Term Loan Credit Agreements the commitments available under the Backstop Credit Agreement were automatically reduced to zero.

        The Syndicated Credit Agreement is a two-tranche unsecured term loan facility, with the first tranche maturing October 27, 2019 and the second tranche maturing October 27, 2021. The aggregate commitments of all lenders under the Syndicated Credit Agreement are equal to $4.8 billion, provided that WBA may increase the commitments available under either of the tranches of the Syndicated Credit Agreement at any time prior to the funding date thereunder by up to $450 million, subject to obtaining commitments from existing lenders and/or new lenders selected by WBA and reasonably acceptable to Bank of America, N.A., as administrative agent.

        The Sumitomo Credit Agreement is a two-tranche unsecured term loan facility (each tranche in an amount of $500 million), with the first tranche maturing on the first anniversary of the funding date thereunder and the second tranche maturing on the earlier of the first anniversary of the funding date thereunder and March 30, 2018. The aggregate commitments under the Sumitomo Credit Agreement are equal to $1.0 billion.

        The ability of WBA to request the making of loans under each Term Loan Credit Agreement is subject to the satisfaction (or waiver) of certain conditions set forth therein (including, among other things, the delivery of an officer's certificate certifying the accuracy of certain representations and warranties set forth in and the absence of certain defaults under each Term Loan Credit Agreement).

        The commitments of the lenders to make such term loans under the Term Loan Credit Agreements expire upon the earliest of (i) the date of the consummation of the merger with or without the funding of the loans under each Term Loan Credit Agreement, (ii) prior to the time of the consummation of the merger, the termination of the merger agreement by WBA or with the written consent of WBA in accordance with its terms (other than with respect to provisions therein that

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expressly survive termination), (iii) 11:59 p.m. (New York time) on July 31, 2017; provided that WBA may extend such date to October 31, 2017 on prior written notice to the applicable Administrative Agent and lenders; provided further that such notice may not be delivered prior to the earlier of (1) July 24, 2017 and (2) the date of any amendment or extension of the end date in the merger agreement beyond July 31, 2017 and (iv) the date of termination in full of the commitments thereunder by mutual agreement of the parties thereto.

        Loans will be available under each Term Loan Credit Agreement in U.S. Dollars. Borrowings under the Term Loan Credit Agreements will bear interest at a fluctuating rate per annum equal to, at WBA's option, the alternate base rate or the reserve adjusted Eurocurrency rate, in each case, plus an applicable margin calculated based on WBA's credit ratings. In addition, WBA will also pay to the lenders under the Term Loan Credit Agreements certain customary fees.

        WBA currently expects (a) to finance the merger consideration and/or the refinancing of a portion of the indebtedness of Rite Aid and, if necessary, the WBA 2018 Notes, the WBA 2021 Notes and the WBA 2023 Notes and (b) to pay related fees and expenses with a combination of (i) existing cash on WBA's balance sheet, (ii) loans under the Credit Agreements and/or (iii) the issuance of new debt securities.

        Each Credit Agreement contains representations and warranties and affirmative, negative and financial covenants and events of default, in each case, that are customary for unsecured financings of this type and substantially consistent with those of the Expired Credit Agreements, which representations and warranties and affirmative and negative covenants in the case of the Term Loan Credit Agreements will not be in effect until the funding of the loans under the applicable Term Loan Credit Agreement and in the case of the Revolving Credit Agreement will be in effect from the date of effectiveness of the Revolving Credit Agreement.

        The foregoing description of the Backstop Credit Agreement, Revolving Credit Agreement and Term Loan Credit Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the applicable Credit Agreement.

$6.0 Billion Issuance of Notes

        On June 1, 2016, WBA completed the public offering and issuance of the WBA 2018 Notes, the WBA 2021 Notes, the WBA 2023 Notes, the WBA 2026 Notes and the WBA 2046 Notes.

        In the event that the merger is not consummated (or if the merger agreement is terminated) on or prior to June 1, 2017, then WBA will be required to redeem the WBA 2018 Notes, the WBA 2021 Notes and the WBA 2023 Notes (but not the WBA 2026 Notes or the WBA 2046 Notes) at a redemption price per note equal to 101% of the principal amount thereof, plus accrued and unpaid interest from and including the most recent date to which interest has been paid to, but excluding, the date of redemption.

Closing and Effective Time of the Merger

        Unless another date is agreed by the parties, the closing will take place no later than the third business day following the satisfaction or waiver in accordance with the merger agreement of all of the conditions to closing (as described under "Proposal 1: Adoption of the Merger Agreement—Conditions to the Closing of the Merger" beginning on page 130), other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions. Concurrently with the closing, the parties will file a certificate of merger with the Secretary of State for the State of Delaware as provided under the DGCL. The merger will become effective upon the filing of the certificate of merger, or at such later time as is agreed by the parties and specified in the certificate of merger.

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Appraisal Rights

        If the merger agreement is adopted by Rite Aid stockholders, stockholders who do not vote in favor of the proposal to adopt the merger agreement and who properly exercise and perfect their demand for appraisal of their shares will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL, which we refer to as Section 262.

        The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, as in effect as of the date of the original merger agreement, not including the August 1, 2016 DGCL amendments, which is attached to this proxy statement as Annex D. The following summary does not constitute any legal or other advice nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262. Only a holder of record of shares of Rite Aid common stock is entitled to demand appraisal rights for the shares registered in that holder's name. A person having a beneficial interest in shares of common stock of Rite Aid held of record in the name of another person, such as a bank, broker, fiduciary, depositary or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of Rite Aid common stock through a broker, bank or other nominee and you wish to exercise appraisal rights, you should consult with your broker, bank or other nominee.

        Under Section 262, holders of shares of common stock of Rite Aid who do not vote in favor of the proposal to adopt the merger agreement, who continuously are the record holders of such shares through the effective time of the merger, and who otherwise follow the procedures set forth in Section 262 will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive in lieu of the merger consideration payment in cash of the amount determined by the Court of Chancery to be the "fair value" of the shares of Rite Aid common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest to be paid upon the amount determined to be fair value, if any, as determined by the court.

        Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than twenty (20) days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes Rite Aid's notice to its stockholders that appraisal rights are available in connection with the merger, and the full text of Section 262, as in effect as of the date of the original merger agreement, not including the August 1, 2016 DGCL amendments, is attached to this proxy statement as Annex D. In connection with the merger, any holder of common stock of Rite Aid who wishes to exercise appraisal rights, or who wishes to preserve such holder's right to do so, should review Annex D carefully. Failure to strictly comply with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL. A stockholder who loses his, her or its appraisal rights will be entitled to receive the per share merger consideration described in the merger agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, Rite Aid believes that if a stockholder considers exercising such rights, such stockholder should seek the advice of legal counsel.

        Stockholders wishing to exercise the right to seek an appraisal of their shares of Rite Aid common stock must do ALL of the following:

•

The stockholder must not vote in favor of the proposal to adopt the merger agreement. Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the proposal to adopt the merger agreement, abstain or not vote its shares;

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•

The stockholder must deliver to Rite Aid a written demand for appraisal before the vote on the proposal to adopt the merger agreement at the special meeting;



•

The stockholder must continuously hold the shares from the date of making the demand through the effective time of the merger. A stockholder will lose appraisal rights if the stockholder transfers the shares before the effective time of the merger; and



•

The stockholder or the surviving company must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within one-hundred twenty (120) days after the effective time of the merger. The surviving company is under no obligation to file any petition and has no intention of doing so.

Filing Written Demand

        Any holder of shares of common stock of Rite Aid wishing to exercise appraisal rights must deliver to Rite Aid, before the vote on the adoption of the merger agreement at the special meeting at which the proposal to adopt the merger agreement will be submitted to the stockholders, a written demand for the appraisal of the stockholder's shares, and that stockholder must not submit a blank proxy or vote in favor of the proposal to adopt the merger agreement. A holder of shares of common stock of Rite Aid wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective time of the merger. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the proposal to adopt the merger agreement, and it will constitute a waiver of the stockholder's right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the proposal to adopt the merger agreement or abstain from voting on the proposal to adopt the merger agreement. Neither voting against the proposal to adopt the merger agreement nor abstaining from voting or failing to vote on the proposal to adopt the merger agreement will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the proposal to adopt the merger agreement. A proxy or vote against the proposal to adopt the merger agreement will not constitute a demand. A stockholder's failure to make the written demand prior to the taking of the vote on the proposal to adopt the merger agreement at the special meeting of Rite Aid's stockholders will constitute a waiver of appraisal rights.

        Only a holder of record of shares of Rite Aid common stock is entitled to demand appraisal rights for the shares registered in that holder's name. A demand for appraisal in respect of shares of common stock of Rite Aid should be executed by or on behalf of the holder of record, and must reasonably inform Rite Aid of the identity of the holder and state that the person intends thereby to demand appraisal of the holder's shares in connection with the merger. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.

        STOCKHOLDERS WHO HOLD THEIR SHARES IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS, AND WHO WISH TO EXERCISE APPRAISAL RIGHTS, SHOULD CONSULT WITH THEIR BROKERS, BANKS AND OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BROKER,

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BANK OR OTHER NOMINEE HOLDER TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BROKER, BANK OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

        All written demands for appraisal pursuant to Section 262 should be mailed or delivered to:

Rite Aid Corporation
30 Hunter Lane, Camp Hill, Pennsylvania 17011
Attention: Secretary

        Any holder of common stock of Rite Aid may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the merger agreement by delivering to Rite Aid a written withdrawal of the demand for appraisal within sixty (60) days after the effective date of the merger. However, any such attempt to withdraw the demand made more than sixty (60) days after the effective time of the merger will require written approval of the Surviving Corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just.

Notice by the Surviving Corporation

        If the merger is completed, within ten (10) days after the effective time of the merger, the Surviving Corporation will notify each holder of common stock of Rite Aid who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favor of the proposal to adopt the merger agreement, that the merger has become effective and the effective date thereof.

Filing a Petition for Appraisal

        Within one-hundred twenty (120) days after the effective time of the merger, but not thereafter, the Surviving Corporation or any holder of common stock of Rite Aid who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. The Surviving Corporation is under no obligation to and has no present intention to file a petition, and holders should not assume that the Surviving Corporation will file a petition or initiate any negotiations with respect to the fair value of shares of common stock of Rite Aid. Accordingly, any holders of common stock of Rite Aid who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of shares of common stock of Rite Aid within the time and in the manner prescribed in Section 262. The failure of a holder of common stock of Rite Aid to file such a petition within the period specified in Section 262 could nullify the stockholder's previous written demand for appraisal.

        Within one-hundred twenty (120) days after the effective time of the merger, any holder of common stock of Rite Aid who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of shares not voted in favor of the proposal to adopt the merger agreement and with respect to which Rite Aid has received demands for appraisal, and the aggregate number of holders of such shares. The Surviving Corporation must mail this statement to the requesting stockholder within ten (10) days after receipt of the written request for such a statement or within ten (10) days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person's own name, file a petition seeking appraisal or request from the Surviving

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Corporation the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.

        If a petition for an appraisal is duly filed by a holder of shares of common stock of Rite Aid and a copy thereof is served upon the Surviving Corporation, the Surviving Corporation will then be obligated within twenty (20) days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded payment for their shares to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss such stockholder from the proceedings.

Determination of Fair Value

        After determining the holders of common stock of Rite Aid entitled to appraisal, the Delaware Court of Chancery will appraise the "fair value" of the shares of common stock of Rite Aid, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. Unless the court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered, and that "[f]air price obviously requires consideration of all relevant factors involving the value of a company." The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be "exclusive of any element of value arising from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a "narrow exclusion [that] does not encompass known elements of value," but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that "elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered."

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL. Although Rite Aid believes that the per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the per

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share merger consideration. Neither Rite Aid nor WBA anticipates offering more than the per share merger consideration to any stockholder of Rite Aid exercising appraisal rights, and each of Rite Aid and WBA reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the "fair value" of a share of common stock of Rite Aid is less than the per share merger consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not include attorneys' fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys' fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.

        If any stockholder who demands appraisal of shares of common stock of Rite Aid under Section 262 fails to perfect, or loses or successfully withdraws, such holder's right to appraisal, the stockholder's shares of common stock of Rite Aid will be deemed to have been converted at the effective time of the merger into the right to receive the per share merger consideration applicable to the shares, less applicable withholding taxes. A stockholder will fail to perfect, or effectively lose or withdraw, the holder's right to appraisal if no petition for appraisal is filed within one-hundred twenty (120) days after the effective time of the merger or if the stockholder delivers to the Surviving Corporation a written withdrawal of the holder's demand for appraisal and an acceptance of the per share merger consideration in accordance with Section 262.

        From and after the effective time of the merger, no stockholder who has demanded appraisal rights will be entitled to vote the common stock of Rite Aid for any purpose, or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder's shares of common stock of Rite Aid, if any, payable to stockholders of Rite Aid of record as of a time prior to the effective time of the merger; provided, however, that if no petition for an appraisal is filed, or if the stockholder delivers to the Surviving Corporation a written withdrawal of the demand for an appraisal and an acceptance of the merger, either within sixty (60) days after the effective time of the merger or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder of Rite Aid without the approval of the court.

        Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of a stockholder's statutory appraisal rights. Consequently, any stockholder of Rite Aid wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

Accounting Treatment

        The merger will be accounted for as an "acquisition" for financial accounting purposes.

U.S. Federal Income Tax Consequences of the Merger

        The following discussion is a summary of the U.S. federal income tax consequences of the merger that are generally applicable to holders of shares of Rite Aid common stock whose shares are converted into the right to receive per share merger consideration pursuant to the merger. This discussion is based upon the Internal Revenue Code of 1986, which, as amended, we refer to as the Code, Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service, which we refer to as the IRS, and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of Rite Aid

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common stock as "capital assets" within the meaning of the Code (generally, property held for investment purposes). This summary does not describe any of the tax consequences arising under the laws of any state, local or foreign tax jurisdiction and does not consider any aspects of U.S. federal tax law other than income taxation (for example, estate, gift or alternative minimum tax or the Medicare net investment income surtax). In addition, this summary does not address the U.S. federal income tax consequences to holders of shares who exercise appraisal rights under Delaware law. For purposes of this discussion, a "holder" means either a U.S. Holder or a Non-U.S. Holder (each as defined below) or both, as the context may require.

        This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances, including:

•

Holders who may be subject to special treatment under U.S. federal income tax laws, such as: financial institutions, tax-exempt organizations, S corporations or any other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes, insurance companies, mutual funds, dealers in stocks and securities, traders in securities that elect to use the mark-to-market method of accounting for their securities, regulated investment companies, real estate investment trusts, or certain expatriates or former long-term residents of the United States;



•

Holders holding the shares as part of a hedging transaction, constructive sale or conversion, straddle or other risk reducing transaction;



•

Holders that received their shares of Rite Aid common stock in a compensatory transaction;



•

Non-U.S. Holders that own or have at any time within the prior five (5) years owned, actually or constructively, more than 5% of the outstanding Rite Aid common stock;



•

Holders who own an equity interest, actually or constructively, in WBA or the Surviving Corporation; or



•

U.S. Holders whose "functional currency" is not the U.S. dollar.

        If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of Rite Aid common stock, the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding the shares of Rite Aid common stock and partners therein should consult their tax advisors regarding the tax consequences of the merger to them.

        We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary. No assurance can be given that the IRS will agree with the views expressed in this summary, or that a court will not sustain any challenge by the IRS in the event of litigation.

        THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSEQUENCES IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. A HOLDER SHOULD CONSULT ITS TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.

U.S. Holders

        For purposes of this discussion, a "U.S. Holder" is a beneficial owner of shares of Rite Aid common stock who or that is for U.S. federal income tax purposes:

•

An individual who is a citizen or resident of the United States;

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•

A corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, or any state thereof or the District of Columbia;



•

An estate, the income of which is subject to U.S. federal income taxation regardless of its source; or



•

A trust (i) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in the Code or (ii) that has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

        The receipt of cash by a U.S. Holder in exchange for shares of Rite Aid common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder's gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder's adjusted tax basis in the shares surrendered pursuant to the merger. A U.S. Holder's adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder's holding period in such shares is more than one (1) year at the time of the completion of the merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder. There are limitations on the deductibility of capital losses.

Non-U.S. Holders

        For purposes of this discussion, the term "Non-U.S. Holder" means a beneficial owner of shares of Rite Aid common stock who is neither a U.S. Holder nor an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes.

        Any gain realized by a Non-U.S. Holder pursuant to the merger generally will not be subject to U.S. federal income tax unless:

•

The gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation (or any entity or arrangement treated as a corporation for U.S. federal income tax purposes), such gain may also be subject to the branch profits tax at a rate of 30% (or a lower rate under an applicable tax treaty); or



•

Such Non-U.S. Holder is an individual who is present in the United States for one-hundred and eighty-three (183) days or more in the taxable year of the merger, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30% (or a lower rate under an applicable tax treaty).

Regulatory Approvals

General

        Rite Aid and WBA have agreed to use their reasonable best efforts to take, and to assist and cooperate with each other in taking, all actions and to use their reasonable best efforts to do all things reasonably necessary, proper or advisable, to consummate the merger and the other transactions contemplated by the merger agreement, subject to certain specified limitations under the merger agreement. These approvals include approval under the HSR Act. Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained or obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, or require changes to the terms of

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the merger agreement. These conditions or changes could result in the conditions to the closing of the merger not being satisfied.

HSR Act and U.S. Antitrust Matters

        Under the merger agreement, the merger cannot be completed until the applicable waiting periods under the HSR Act (and any extension thereof) have expired or been terminated. Rite Aid and WBA filed their respective HSR Act notifications on November 10, 2015, resulting in an initial waiting period ending on December 10, 2015. On December 10, 2015, the FTC issued a second request to each of Rite Aid and WBA. The effect of the second request is to extend the waiting period imposed by the HSR Act until thirty (30) days after Rite Aid and WBA have substantially complied with the second request, unless such waiting period is extended voluntarily by the parties or terminated earlier by the FTC. For a more detailed description of the status of the FTC review and divestiture process, see "The Merger—Background of the Merger" beginning on page 40. In addition to the review of the merger by the FTC, certain state attorneys general are also reviewing the merger. Rite Aid and WBA are cooperating with the FTC and the state attorneys general.

Other Regulatory Approvals

        Approval (or non-objection, grant of exemption or, in certain circumstances, alternative resolution, as the case may be) has been or will be sought from (i) the state insurance regulator in the State of Ohio for the change of control of Envision Insurance Company, (ii) the Department of Managed Health Care of the State of California with respect to the change of control of Envision Insurance Company as a Knox-Keene licensed health care service plan, (iii) the Board of Pharmacy of the State of California with respect to (A) a change in ownership of Orchard Pharmaceutical Services, LLC, and (B) the transfer of certain other licenses, (iv) the Insurance Department of the State of Texas with respect to the change of control of Rite Aid's subsidiary licensed as a third-party administrator in Texas, and (v) the state insurance regulator in the State of Utah with respect to the change of ownership of Rite Aid's subsidiary licensed as a health discount program operator. In addition, a response letter from the Department of Insurance of the State of Missouri has been or will be sought confirming that the merger falls below the threshold requirements for filing a Form E (pre-acquisition notification form regarding the potential competitive impact of a proposed merger) in Missouri. To obtain these approvals, WBA, or the applicable Rite Aid subsidiary, as the case may be, has filed or will file, acquisition of control and material modification or similar statements, notices or applications (or requests for grants of exemption relating thereto), as required by the insurance and health care laws and regulations of each applicable state or jurisdiction. In addition, either prior to or following the completion of the merger, WBA or Rite Aid will be required to make change of control notification filings with various state regulators pursuant to applicable insurance and health care laws and regulations (none of which notification filings are conditions to the completion of the merger).

Legal Proceedings Regarding the Merger

        As of March 1, 2017, Rite Aid was aware of ten (10) putative class action lawsuits that were filed by purported Rite Aid stockholders, against Rite Aid, its directors (the Individual Defendants, together with Rite Aid, the Rite Aid Defendants), WBA and Merger Sub challenging the transactions contemplated by the merger agreement between Rite Aid and WBA. Eight (8) of these actions were filed in the Court of Chancery of the State of Delaware (Smukler v. Rite Aid Corp., et al., Hirschler v. Standley, et al., Catelli v. Rite Aid Corp., et al., Orr v. Rite Aid Corp., et al., DePietro v. Standley, et al., Abadi v. Rite Aid Corp., et al., Mortman v. Rite Aid Corp., et al., Sachs Investment Grp., et al. v. Standley, et al.). One (1) action was filed in Pennsylvania in the Court of Common Pleas of Cumberland County (Wilson v. Rite Aid Corp., et al.). The complaints in these nine (9) actions alleged primarily that Rite Aid's directors breached their fiduciary duties by, among other things, agreeing to an allegedly unfair

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and inadequate price, agreeing to deal protection devices that allegedly prevent the directors from obtaining higher offers from other interested buyers for Rite Aid and allegedly failing to protect against certain purported conflicts of interest in connection with the merger. The complaints further alleged that Rite Aid, WBA and/or Merger Sub aided and abetted these alleged breaches of fiduciary duty. The complaints sought, among other things, to enjoin the closing of the merger as well as money damages and attorneys' and experts' fees.

        On December 23, 2015, the eight Delaware actions were consolidated in an action captioned In re Rite Aid Corporation Stockholders Litigation, Consol. C.A. No. 11663-CB, which we refer to as the Consolidated Action. On April 15, 2016, Rite Aid reached a settlement in principle for the Consolidated Action for an immaterial amount. On May 11, 2016, the Court entered a stipulated order regarding notice of payment thereof and final dismissal of this matter.

        A tenth action was filed in the United States District Court for the Middle District of Pennsylvania (the Pennsylvania District Court) asserting a claim for violations of Section 14(a) of the Exchange Act and SEC Rule 14a-9 against all defendants and a claim for violations of Section 20(a) of the Exchange Act against the Individual Defendants and WBA (Herring v. Rite Aid Corp., et al.). The complaint in the Herring action alleges, among other things, that Rite Aid and the Individual Defendants disseminated an allegedly false and materially misleading proxy statement. The complaint sought to enjoin the stockholder vote on the proposed Merger, a declaration that the proxy statement was materially false and misleading in violation of federal securities laws, and an award of money damages and attorneys' and experts' fees. On January 14 and 16, 2016, respectively, the plaintiff in the Herring action filed a motion for preliminary injunction and a motion for expedited discovery. On January 21, 2016, the Rite Aid Defendants filed a motion to dismiss the Herring complaint. At a hearing held on January 25, 2016, the Pennsylvania District Court orally denied the plaintiff's motion for expedited discovery and subsequently denied the plaintiff's motion for preliminary injunction on January 28, 2016. On March 14, 2016, the Pennsylvania District Court appointed Jerry Herring, Don Michael Hussey and Joanna Pauli Hussey as lead plaintiffs for the putative class and approved their selection of Robbins Geller Rudman & Dowd LLP as lead counsel. On April 14, 2016, the Pennsylvania District Court granted the lead plaintiffs' unopposed motion to stay the Herring action for all purposes pending consummation of the Merger.

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

        The following summary describes certain material provisions of the merger agreement. This summary is not complete and is qualified in its entirety by reference to the original merger agreement and the merger agreement amendment, which are attached to this proxy statement as Annex A and Annex B, respectively, and which are incorporated into this proxy statement by reference. We encourage you to read the merger agreement carefully in its entirety because this summary may not contain all the information about the merger agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

        The representations, warranties, covenants and agreements described below and included in the merger agreement were made for purposes of the merger agreement and as of specific dates, were for the benefit of the parties to the merger agreement except as expressly stated therein and may be subject to important qualifications, limitations and supplemental information agreed to by Rite Aid, WBA and Merger Sub in connection with negotiating the terms of the merger agreement, including certain qualifications, limitations and supplemental information disclosed in the confidential disclosure schedules to the merger agreement. In addition, the representations and warranties were included in the merger agreement for the purpose of allocating contractual risk between Rite Aid, WBA and Merger Sub, and may be subject to standards of materiality applicable to such parties that differ from those generally applicable to investors. In reviewing the representations, warranties and covenants contained in the merger agreement or any description thereof in this summary, it is important to bear in mind that such representations, warranties, covenants and agreements or any descriptions were not intended by the parties to the merger agreement to be characterizations of the actual state of facts or condition of Rite Aid, WBA and Merger Sub or any of their respective affiliates or businesses except as expressly stated in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the original merger agreement. In addition, you should not rely on the covenants in the merger agreement as actual limitations on the respective businesses of Rite Aid, WBA and Merger Sub because the parties to the merger agreement may take certain actions that are either expressly permitted in the confidential disclosure schedules to the merger agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The merger agreement is described below, and the original merger agreement and merger agreement amendment are attached as Annex A and Annex B hereto, respectively, with the intention of providing you with information regarding the terms of the merger. Accordingly, the representations, warranties, covenants and other agreements in the merger agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding Rite Aid and our business. Please see "Where You Can Find More Information" beginning on page 143.

Structure of the Merger

        Upon the terms and subject to the conditions of the merger agreement and in accordance with the applicable provisions of the DGCL, at the effective time of the merger, Merger Sub will merge with and into Rite Aid, the separate corporate existence of Merger Sub will cease and Rite Aid will continue as the surviving corporation in the merger, which we sometimes refer to herein as the Surviving Corporation, and as a wholly owned direct subsidiary of WBA. From and after the effective time of the merger, all the properties, rights, privileges, immunities, powers and franchises of Rite Aid and Merger Sub will vest in Rite Aid as the Surviving Corporation and all claims, obligations, debts, liabilities and duties of Rite Aid and Merger Sub will become the claims, obligations, debts, liabilities and duties of Rite Aid as the Surviving Corporation.

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Closing and the Effective Time of the Merger

        Unless another date is agreed by the parties, the closing for the merger will take place on the third business day following the day on which all conditions to closing (described below under "Proposal 1: Adoption of the Merger Agreement—Conditions to the Closing of the Merger" beginning on page 130) (other than those conditions that by their nature are to be satisfied at the closing) are satisfied or, to the extent permitted by law, waived. Concurrently with the closing, the parties will file a certificate of merger with the Secretary of State of the State of Delaware as provided under the DGCL. The merger will become effective upon the filing of the certificate of merger, or at such later time as is agreed by Rite Aid and WBA and specified in the certificate of merger.

Directors and Officers; Certificate of Incorporation; Bylaws

        The directors of Merger Sub immediately prior to the effective time of the merger will, from and after the effective time of the merger, be the directors of the Surviving Corporation until their successors have been duly elected and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and the bylaws of the Surviving Corporation. The officers of Rite Aid immediately prior to the effective time of the merger will, from and after the effective time of the merger, be the officers of the Surviving Corporation until their successors will have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.

        At the effective time of the merger, the certificate of incorporation of Rite Aid will be amended and restated in its entirety to be in the form of Exhibit A to the merger agreement and, as so amended and restated, such certificate of incorporation will be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein or by applicable law. At the effective time of the merger, and without any further action on the part of Rite Aid and Merger Sub, the bylaws of Merger Sub in effect immediately prior to the effective time of the merger will be the bylaws of the Surviving Corporation until thereafter amended as provided therein or by applicable law, except that such bylaws will be amended by WBA as of the effective time of the merger to change the name of the Surviving Corporation as used therein to "Rite Aid Corporation" and to contain such provisions as are necessary to give full effect to the provisions described under "Proposal 1: Adoption of the Merger Agreement—Directors' and Officers' Indemnification and Insurance" beginning on page 128.

Merger Consideration

Common Stock

        At the effective time of the merger, each share of Rite Aid common stock issued and outstanding immediately prior to such time, other than (i) shares owned, directly or indirectly, by WBA, Rite Aid or Merger Sub (including shares owned by Rite Aid as treasury stock), (ii) shares owned by stockholders who are entitled to and who have exercised and perfected and not withdrawn a demand for appraisal rights pursuant to Section 262 of the DGCL and (iii) shares owned by any direct or indirect wholly owned subsidiary of Rite Aid or WBA, will be converted into the right to receive the per share merger consideration. All shares converted into the right to receive the per share merger consideration will automatically be cancelled at the effective time of the merger.

Treatment of Equity and Equity-Based Awards

        Cash-out Options.    Upon completion of the merger, each cash-out option will be converted into the right to receive, without interest, an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such cash-out option and (y) the excess, if any, of the per share merger consideration (which will range $6.50 to $7.00) over the per share exercise price of such cash-out option, less applicable withholding taxes.

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        Rollover Options.    Upon completion of the merger, each rollover option will be converted into an option to acquire, on the same terms and conditions as were applicable immediately prior to the completion of the merger, a number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock subject to such rollover option and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares after aggregating each individual holder's option with the same exercise price. The exercise price of each converted rollover option will be equitably adjusted to be equal to the quotient (rounded up to the nearest whole cent) of (x) the exercise price per share of Rite Aid common stock subject to such rollover option and (y) the conversion ratio (rounded up to the nearest whole cent).

        Rollover Stock Awards.    Upon completion of the merger, each rollover stock award will be converted into a WBA restricted share award or a WBA performance stock unit, as applicable, relating to the number of shares of WBA common stock equal to the product of (x) the number of shares of Rite Aid common stock relating to such rollover stock award (which, in the case of performance stock units for which the applicable performance period has not completed, will be the target number of shares) and (y) the conversion ratio, with any fractional shares rounded down to the next lower whole number of shares (with such rounding applied on an aggregate basis to each individual holder), and with each such converted rollover stock award generally subject to the same terms and conditions as were applicable immediately prior to the completion of the merger. With respect to each converted rollover stock award that is a performance stock unit, following the completion of the merger (i) the performance goals or conditions will not apply with respect to a pro rata portion of such award (with such portion based on the number of days elapsed in the performance period through the completion of the merger), and such portion of the rollover stock award will continue to be subject to service-based vesting on the same schedule as applied prior to the completion of the merger, and (ii) the remaining portion of the performance stock unit will continue to be subject to performance-based vesting (based on the achievement of adjusted performance goals) and service-based vesting on the same schedule as applied prior to the completion of the merger.

        Restricted Stock Units.    Upon completion of the merger, each restricted stock unit outstanding immediately prior to the completion of the merger will automatically be cancelled and converted into the right to receive an amount in cash equal to the product of (x) the total number of shares of Rite Aid common stock subject to such restricted stock unit and (y) the per share merger consideration (which will range from $6.50 to $7.00), less applicable withholding taxes.

Exchange Procedures

        Prior to the closing, WBA will enter into an agreement with the paying agent to make payments of the per share merger consideration to stockholders. At or prior to the effective time of the merger, WBA will deposit or cause to be deposited with the paying agent a cash amount sufficient to pay the aggregate per share merger consideration to stockholders.

        As soon as reasonably practicable after the effective time of the merger (and in no event more than four (4) business days following the effective time of the merger), WBA will cause the paying agent to mail, or otherwise provide in the case of book-entry shares, to each holder of record of Rite Aid shares (other than excluded shares):

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transmittal materials, including a letter of transmittal; and



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instructions for effecting the surrender of the book-entry shares or certificates to the paying agent in exchange for payment of the per share merger consideration.

        Upon surrender of a certificate (or an affidavit of loss in lieu thereof) to the paying agent in accordance with the terms of such transmittal materials and instructions, the holder of such certificate will be entitled to receive in exchange therefor a cash amount in immediately available funds (after

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giving effect to any required tax withholdings) equal to the product of (i) the number of Rite Aid shares previously represented by such certificate multiplied by (ii) the per share merger consideration. No interest will be paid or accrued on any amount payable upon due surrender of the certificates.

        Any holder of book-entry shares will not be required to deliver a certificate or an executed letter of transmittal to the paying agent to receive the aggregate per share merger consideration that such holder is entitled to receive as a result of the merger. Instead, each holder of record of one or more book-entry shares (other than excluded shares) will be entitled to receive, upon receipt by the paying agent of an "agent's message" in customary form, a cash amount in immediately available funds (after giving effect to any required tax withholdings) equal to the product of (i) the number of Rite Aid shares previously represented by such book-entry shares multiplied by (ii) the per share merger consideration. No interest will be paid or accrued on any amount payable upon due surrender of the book-entry shares.

        WBA or the Surviving Corporation will pay all charges and expenses, including those of the paying agent, in connection with the foregoing exchange procedures.

        Any cash deposited with the paying agent that is not claimed within nine (9) months after the effective time of the merger will be delivered to the Surviving Corporation or its designees, and any holders of Rite Aid common stock who have not complied with the exchange procedures in the merger agreement will thereafter look only to the Surviving Corporation (subject to applicable abandoned property, escheat or similar laws) for payment of the per share merger consideration.

Withholding Rights

        Each of WBA, the Surviving Corporation and the paying agent will be entitled to deduct and withhold from the consideration payable pursuant to the merger agreement to any holder of Rite Aid shares, cash-out options or restricted stock units such amounts as it is required to deduct and withhold with respect to the making of such payment (and, with respect to the restricted stock units, the vesting of such restricted stock units) under U.S. federal tax law or any other applicable state, local or foreign tax law.

Appraisal Rights

        Any Rite Aid shares that are issued and outstanding immediately prior to the effective time of the merger and as to which the holders thereof have properly demanded appraisal in accordance with Section 262 of the DGCL and have not effectively withdrawn such demand, which we refer to as dissenting shares, will not be converted into the right to receive the per share merger consideration, unless and until such holder will have effectively withdrawn or lost such holder's right to appraisal under the DGCL, at which time such Rite Aid shares will be treated as if they had been converted into and become exchangeable for the right to receive, as of the effective time of the merger, the per share merger consideration, without interest and after giving effect to any required tax withholdings, and such Rite Aid shares will not be deemed dissenting shares, and such holder thereof will cease to have any other rights with respect to such Rite Aid shares. Each holder of dissenting shares will only be entitled to such consideration as may be due with respect to such dissenting shares pursuant to Section 262 of the DGCL.

Representations and Warranties

        The merger agreement contains a number of representations and warranties made by the parties thereto that are subject in some cases to exceptions and qualifications, including "material adverse effect" qualifications. Please see the definition of "material adverse effect" beginning on page 116 of

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this proxy statement. The representations and warranties of Rite Aid in the merger agreement relate to, among other things:

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due organization, valid existence, good standing and qualification to do business;



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certificate of incorporation and bylaws;



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capitalization and ownership of subsidiaries;



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corporate authorization of the original merger agreement and the transactions contemplated by the original merger agreement and the valid and binding nature of the original merger agreement;



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the approval and recommendation by the Board of Directors of the original merger agreement and the transactions contemplated by the original merger agreement;



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the absence of any conflicts with or violations of organizational documents and other agreements or laws;



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required filings with, and consents from, governmental entities;



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compliance with applicable laws, possession of required permits necessary for the conduct of Rite Aid's business and absence of governmental investigations;



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SEC filings and financial statements;



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absence of undisclosed liabilities;



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internal controls and disclosure controls and procedures relating to financial reporting;



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material contracts;



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conduct of business in the ordinary course and the absence of a material adverse effect;



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absence of litigation;



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employee benefit plans;



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labor and employment matters;



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insurance policies;



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real properties;



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tax matters;



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intellectual property;



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environmental matters;



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opinion of financial advisor;



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the absence of any undisclosed brokers' fee;



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health care regulatory matters, including compliance with applicable health care laws;



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the absence of any related party transactions;



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inapplicability of anti-takeover statutes; and



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significant partners and key payors.

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        The representations and warranties of WBA and Merger Sub in the merger agreement relate to, among other things:

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due organization, valid existence, good standing and qualification to do business;



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corporate authorization of the original merger agreement and the transactions contemplated by the original merger agreement and the valid and binding nature of the original merger agreement;



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the absence of any conflicts with or violations of organizational documents and other agreements or laws;



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absence of litigation;



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operations and ownership of Merger Sub;



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the absence of any undisclosed brokers' fee;



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financing and the validity of the debt commitment letter;



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ownership of Rite Aid stock;



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agreements with Rite Aid stockholders, directors, officers and employees; and



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solvency.

        Additionally, the merger agreement amendment contains a limited number of representations and warranties made by the parties thereto that are subject in some cases to exceptions and qualifications. The representations and warranties of Rite Aid in the merger agreement amendment relate to, among other things:

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corporate authorization of the merger agreement amendment and the transactions contemplated by the merger agreement amendment and the valid and binding nature of the merger agreement amendment; and



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the approval and recommendation by the Board of Directors of the merger agreement and the transactions contemplated by the merger agreement.

        The representations and warranties of WBA and Merger Sub in the merger agreement amendment relate to, among other things:

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corporate authorization of the merger agreement amendment and the transactions contemplated by the merger agreement amendment and the valid and binding nature of the merger agreement amendment; and



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the approval by the board of directors of each of WBA and Merger Sub of the merger agreement amendment and the transactions contemplated by the merger agreement amendment.

        Certain of the representations and warranties made by the parties are qualified as to "knowledge," "materiality" or "material adverse effect." For purposes of the merger agreement, "material adverse effect," means any event, development, circumstance, change, effect, condition, or occurrence that, individually or in the aggregate, with all other events, developments, circumstances, changes, effects, conditions or occurrences, (i) has, or would reasonably be expected to have, a material adverse effect on or with respect to the business, assets, liabilities, results of operations or financial condition of Rite Aid and its subsidiaries, taken as a whole, (ii) without limiting clause (i), results in, at the earlier of the end date and closing, a last twelve (12) months Adjusted EBITDA (as such term is defined in the merger agreement) of less than $1 billion determined as of the end of the last fiscal month ended prior to closing or the end date, as applicable, for which internal financial statements of Rite Aid are available or (iii) prevents, materially delays or materially impairs the ability of Rite Aid to consummate

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the merger and the other transactions contemplated by the merger agreement. However, in the case of clause (i) or (ii), any event, development, circumstance, change, effect, condition or occurrence to the extent arising out of or resulting from any of the following after the date of the original merger agreement will not be deemed, either alone or in combination, to constitute or be taken into account in determining whether there has been, a material adverse effect:

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(A) any change or development generally affecting the economy or the financial, debt, capital, credit or securities markets in the United States or elsewhere in the world, including as a result of changes or developments in prevailing interest or exchange rates or the disruption of any securities markets;



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(B) national or international political or social conditions;



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(C) the execution and delivery of the merger agreement or the public announcement or pendency of the merger or other transactions contemplated by the merger agreement, including any WBA permitted transaction (as described below), including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, or employees of Rite Aid or its subsidiaries (provided that this exception will not be applied to clause (ii) above);



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(D) any change in any applicable laws or applicable accounting regulations or principles, including GAAP, or interpretations thereof;



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(E) any hurricane, tornado, earthquake, flood, tsunami or other natural disaster or outbreak or escalation of hostilities or war (whether or not declared), military actions or any act of sabotage, terrorism or other international or national emergency, or other force majeure event or natural disaster or act of God or other comparable events;



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(F) any change in the price or trading volume of Rite Aid common stock or the credit rating of Rite Aid, in and of itself;



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(G) any failure by Rite Aid to meet (1) any published analyst estimates, expectations, projections or forecasts of Rite Aid's revenue, earnings, cash flow, cash positions or other financial performance or results of operations for any period or (2) its internal or published projections, budgets, plans, forecasts, guidance, estimates, milestones of its revenues, earnings or other financial performance or results of operations, in and of itself;



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(H) any change or development in the industries in which Rite Aid and its subsidiaries operate;



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(I) the identity of WBA or its subsidiaries (provided that this exception will not be applied to clause (ii) above);



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(J) any communication by WBA or its subsidiaries regarding the plans or intentions of WBA with respect to the conduct of the business of the Surviving Corporation or its subsidiaries; or



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(K) any action taken by Rite Aid, or which Rite Aid causes to be taken by any of its subsidiaries, in each case which is expressly required or permitted by the merger agreement (other than pursuant to clause (a) of Section 5.1 of the merger agreement) or at WBA's express written request (provided that this exception will not be applied to clause (ii) above).

        The events, developments, circumstances, changes, effects, conditions or occurrences described in sub-sections (A), (B), (D), (E) and (H) above will be taken into account in determining whether a material adverse effect has occurred to the extent (but only to such extent) such events, developments, circumstances, changes, effects, conditions or occurrences are disproportionately adverse to the business, assets, liabilities, results of operations or financial condition of Rite Aid and its subsidiaries, taken as a whole, as compared to other participants in the industries in which Rite Aid and its subsidiaries operate. In addition, the changes and failures described in sub-sections (F) and (G) above will not prevent or otherwise affect a determination that any events, developments, circumstances,

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changes, effects, conditions or occurrences underlying such changes or failures constitute or contribute to a material adverse effect. Furthermore, the exception described in sub-section (C) above does not apply with respect to references to material adverse effect in those portions of the representations and warranties contained in the merger agreement relating to the absence of conflicts to the extent the purpose of such representations and warranties is to address the consequences resulting from the execution, delivery and performance of the merger agreement by Rite Aid or the consummation of the merger and the other transactions contemplated by the merger agreement.

        None of the representations and warranties contained in the merger agreement survive the consummation of the merger.

Conduct of Business Pending the Merger

        From the date of the original merger agreement until the earlier of the effective time of the merger and the termination of the merger agreement, except (i) as expressly contemplated or permitted by the merger agreement, (ii) as set forth in Rite Aid's confidential disclosure schedules or the merger agreement, (iii) as required by applicable laws or (iv) as consented to by WBA in writing (such consent not to be unreasonably withheld, conditioned or delayed), Rite Aid will, and will cause its subsidiaries to, (a) conduct its business in all material respects in the ordinary course, (b) use its commercially reasonable efforts to (x) preserve intact, in all material respects, its business organization, and its assets and properties, in each case, that are material to Rite Aid and its subsidiaries, taken as a whole, and (y) maintain in all material respects the benefits of its existing business relationships with its customers, suppliers, distributors, significant partners, and key payors, in each case whose business relationships are material to Rite Aid and its subsidiaries, taken as a whole; and (c) not, subject to certain exceptions:

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amend its certificate of incorporation, bylaws or equivalent governing instruments;



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acquire any business or person or make any investment in any person;



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acquire or license any intellectual property from any third party that would be material to Rite Aid and its subsidiaries, taken as a whole;



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issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities, of Rite Aid or any of its subsidiaries, or adopt a plan of complete or partial liquidation;



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reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of Rite Aid, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of Rite Aid's subsidiaries;



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create or incur liens;



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make loans or advances;



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sell or otherwise dispose of assets or any corporation, partnership or other business organization or division thereof, or sublicense, transfer, allow to lapse or expire, pledge, abandon, discontinue, fail to maintain or otherwise dispose of any right, title or interest of Rite Aid or any of its subsidiaries in any intellectual property;



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declare, authorize, set aside, make or pay dividends or other distributions, payable in cash, stock, property or otherwise, with respect to any of its capital stock;



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commit, make or authorize capital expenditures;

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modify in a manner adverse and material to Rite Aid and its subsidiaries, taken as a whole, or terminate, material contracts;



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enter into contracts that would have been material contracts had they been entered into prior to the date of the original merger agreement;



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terminate, modify or amend on terms materially adverse to Rite Aid, real property leases;



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renew, extend, or exercise any option to renew or extend real property leases;



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enter into new contracts with respect to real property leases;



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incur indebtedness for borrowed money, modify in a manner adverse and material to Rite Aid and its subsidiaries, taken as a whole, the terms of any such indebtedness for borrowed money, or assume or guarantee the indebtedness obligations of any person for borrowed money;



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terminate, enter into, amend or renew (or communicate any intention to take such action) any material Rite Aid benefit plan or arrangement;



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adopt compensation or benefit arrangements that would be material Rite Aid benefit plans or arrangements if they were in existence as of the date of the original merger agreement;



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increase the benefits or compensation provided to current or former employees, officers or directors;



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grant any bonus or cash incentive compensation or any retention, severance or termination benefits;



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grant any new equity awards, amend the terms of outstanding equity awards, or discretionarily accelerate the vesting or payment of any award;



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take any action to fund or secure the payment of any amounts under any Rite Aid benefit plan or arrangement;



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other than as required by GAAP, change any assumptions used to calculate funding or contribution obligations under any Rite Aid benefit plan or arrangement, or increase or accelerate the funding rate in respect of any Rite Aid benefit plan or arrangement;



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hire or engage the services of executive vice presidents or higher;



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file amended tax returns;



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make changes to any method of accounting;



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make or change tax elections;



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surrender claims for a refund of taxes;



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consent to extensions or waivers of the limitation period applicable to tax claims or assessments relating to Rite Aid or any of its subsidiaries;



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enter into agreements affecting taxes;



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voluntarily recognize any union or other labor organization as the representative of any of the employees of Rite Aid or enter into any new or amended collective bargaining agreement with any labor organization or other representative of any employees of Rite Aid;



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settle litigation proceedings that are adverse and material to Rite Aid and its subsidiaries, taken as a whole;



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fail to renew or maintain material existing insurance policies or comparable replacement policies in each case that are material to Rite Aid and its subsidiaries, taken as a whole; or



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agree, authorize or commit to do any of the foregoing actions.

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        Rite Aid's confidential disclosure schedules were amended by the merger agreement amendment to, among other things, take into account the extended time until closing.

Additional Agreements

No Solicitation

        As of the date of the original merger agreement, Rite Aid agreed to immediately cease all activities, discussions or negotiations with any parties that may have been ongoing prior to the date of the original merger agreement with respect to an acquisition proposal (as described below), to request that such parties promptly return or destroy all confidential information relating to Rite Aid or its subsidiaries previously furnished to such persons prior to the date of the original merger agreement in connection with the consideration of alternative proposals and to immediately terminate access to data rooms previously granted to such parties.

        Under the merger agreement, Rite Aid is generally not permitted to solicit or discuss acquisition proposals with third parties, subject to certain exceptions.

        Except as otherwise provided in the merger agreement, Rite Aid may not, and has agreed to cause its subsidiaries and its and its subsidiaries' directors, officers and employees not to, and has agreed to instruct its and its subsidiaries' representatives not to, directly or indirectly:

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initiate, solicit, knowingly encourage, knowingly induce or knowingly facilitate (including by providing non-public information relating to Rite Aid and its subsidiaries) the making of any acquisition proposal or any inquiry, offer or proposal that would reasonably be expected to lead to an acquisition proposal;



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engage or otherwise participate in any negotiations or discussions (other than, in response to a bona fide acquisition proposal or other inquiry, offer or proposal after the date of the merger agreement amendment that was not initiated, solicited, encouraged or facilitated in, and did not otherwise result from a, material violation of the merger agreement, contacting such person and its advisors for the purpose of clarifying the material terms of any such acquisition proposal or inquiry, offer or proposal and the likelihood and timing of consummation thereof) concerning, or provide access to its properties, books and records or any confidential or nonpublic information or data to, any person in connection with, relating to or for the purpose of encouraging or facilitating an acquisition proposal or any inquiry, offer or proposal that would reasonably be expected to lead to an acquisition proposal;



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approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any acquisition proposal; or



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execute or enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement or other similar written or oral agreement relating to any acquisition proposal or superior proposal.

        Notwithstanding the foregoing, after the date of the merger agreement amendment and prior to, but not after, obtaining the second stockholder approval (to which this proxy statement relates) of the proposal to adopt the merger agreement, Rite Aid is permitted to, in response to the receipt of a bona fide acquisition proposal made after the date of the merger agreement amendment in circumstances not otherwise involving a breach of the merger agreement by Rite Aid and that the Board of Directors

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determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal:

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furnish information with respect to Rite Aid to the party making such acquisition proposal pursuant to an acceptable confidentiality agreement; and



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engage in discussions or negotiations with such party regarding such acquisition proposal.

        In addition, following the receipt of an acquisition proposal made after the date of the merger agreement amendment in circumstances not otherwise involving a breach of the merger agreement, as amended, by Rite Aid, Rite Aid may contact the person who had made such acquisition proposal solely for the purpose of clarifying the material terms of any such proposal and the likelihood and timing of consummation thereof.

        For purposes of the merger agreement, acquisition proposal means any proposal or offer (including a tender offer or exchange offer) from any person or group of persons (other than WBA or Merger Sub) relating to:

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any merger, consolidation, dissolution, liquidation, recapitalization, reorganization, share exchange, business combination, purchase, or similar transaction with respect to Rite Aid or any of its subsidiaries whose business constitutes twenty percent (20%) or more of the consolidated revenues, net income or assets of Rite Aid and its subsidiaries, taken as a whole; or



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any direct or indirect acquisition or purchase, in one transaction or a series of related transactions, of assets (including equity securities of any subsidiary of Rite Aid) or businesses that constitute twenty percent (20%) or more of the consolidated revenues, net income or assets of Rite Aid and its subsidiaries, taken as a whole, or twenty percent (20%) or more of the total voting power of the equity securities of Rite Aid.

        For purposes of the merger agreement, superior proposal means any bona fide written acquisition proposal (with all references to "twenty percent (20%) or more" in the definition of acquisition proposal being deemed to reference "fifty percent (50%) or more") that the Board of Directors in good faith, after consultation with Rite Aid's financial advisors and outside legal counsel, determines would, if consummated, result in a transaction more favorable from a financial point of view to the stockholders of Rite Aid than the merger taking into account all financing (including availability thereof) and regulatory aspects of such acquisition proposal, the likelihood and timing of consummation thereof (as compared to the transactions contemplated hereby), such other matters as the Board of Directors deems relevant and any changes to the terms of the merger agreement proposed by WBA in response to such superior proposal pursuant to, and in accordance with, the merger agreement.

        The original merger agreement contained substantially identical restrictions on Rite Aid's ability to solicit and discuss acquisition proposals following the execution of the original merger agreement, with a substantially identical fiduciary out exception that was in effect between the date of the original merger agreement and the date of the first stockholder meeting on the proposal to adopt the original merger agreement, which occurred on February 4, 2016.

Change of Recommendation

        As described under "The Special Meeting—Board of Directors' Recommendation" beginning on page 35 of this proxy statement, and subject to the provisions described below, the Board of Directors has made the recommendation that the holders of Rite Aid shares vote "FOR" the proposal to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger. The merger agreement provides that the Board of Directors may not effect a change of recommendation except as described below.

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        The merger agreement provides that prior to, but not after, obtaining the second stockholder approval (to which this proxy statement relates) of the proposal to adopt the merger agreement, the Board of Directors may, in response to a bona fide, unsolicited acquisition proposal that was made after the date of the merger agreement amendment in circumstances not otherwise involving a breach of the merger agreement by Rite Aid, effect a change of recommendation if:

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The Board of Directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that such acquisition proposal constitutes a superior proposal and determines in good faith, after consultation with its outside legal counsel, that the failure to effect the change of recommendation would be reasonably likely to be inconsistent with the Board of Directors' fiduciary duties under applicable law;



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The Board of Directors provides WBA four (4) business days prior written notice of its intention to make a change of recommendation, which notice must include certain information with respect to the acquisition proposal, including a copy of the acquisition proposal;



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During the four (4) business days following such written notice, or such shorter period as described below, if required by WBA, Rite Aid and its representatives negotiate in good faith with WBA regarding any revisions to the terms of the merger agreement proposed by WBA in response to the superior proposal; and



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After the four (4) business day period described above (as extended, if applicable, as described below) the Board of Directors concludes in good faith, after consultation with its outside counsel and financial advisor (and taking into account any adjustment or modification of the terms of the merger agreement to which WBA has proposed), that the acquisition proposal continues to be a superior proposal and that the failure to effect the change of recommendation would be reasonably likely to be inconsistent with the Board of Directors' fiduciary duties under applicable law.

        Under the merger agreement, any amendment to the financial terms or any other material amendment to the terms and conditions of any superior proposal will be deemed to be a new superior proposal, except if the Board of Directors seeks to make a change of recommendation as provided above, the notice period and the period during which Rite Aid and its representatives are required, if requested by WBA, to negotiate with WBA regarding any revisions to the terms of the merger agreement proposed by WBA in response to such new acquisition proposal will expire on the later of (x) two (2) business days after Rite Aid provides notice of the new superior proposal to WBA and (y) the end of the original four (4) business day period described above.

        In addition to the foregoing, the Board of Directors is permitted to effect a change of recommendation based on events, developments, circumstances, changes, effects, conditions or occurrences that were not known by the Board of Directors (or if known, the consequences of which were not known or reasonably foreseeable) as of the date of the merger agreement amendment, in each case other than involving or relating to an acquisition proposal, if:

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The Board of Directors determines in good faith, after consultation with its outside legal counsel, that the failure to effect the change of recommendation would be reasonably likely to be inconsistent with the Board of Directors' fiduciary duties under applicable law;



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The Board of Directors provides WBA four (4) business days prior written notice of its intention to take such action, which notice must include the basis of the proposed action; and



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During the four (4) business days following such written notice, Rite Aid and its representatives negotiate in good faith with WBA regarding any revisions to the terms of the merger agreement proposed by WBA so that such event, development, circumstance, change, effect, condition or occurrence would cease to warrant a change of recommendation.

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        Notwithstanding the right of the Board of Directors to effect a change of recommendation under the merger agreement, Rite Aid is not entitled to terminate the merger agreement in connection therewith based on a change of recommendation alone. If the Board of Directors effects a change of recommendation under the merger agreement, WBA may either (i) terminate the merger agreement and receive the termination fee as more fully described under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination Fees" beginning on page 134 or (ii) continue to require the Rite Aid stockholders be afforded the opportunity to vote on the proposal to adopt the merger agreement.

        For the purpose of the merger agreement, the term change of recommendation is defined as the Board of Directors' (i) failure to include in the second proxy statement its recommendation that Rite Aid stockholders adopt the merger agreement, (ii) approval, endorsement or recommendation, or public proposal to approve, endorse or recommend, or otherwise declare advisable to the stockholder of Rite Aid, an acquisition proposal, (iii) following the commencement of a tender offer or exchange offer that constitutes an acquisition proposal, failure to publish, send or give to its stockholders, pursuant to the Exchange Act, within ten (10) business days after such tender offer or exchange offer is first published, sent or given, or subsequently amended in any material respect, a statement recommending that stockholders reject such tender offer or exchange offer and affirming its recommendation that Rite Aid stockholders adopt the merger agreement or (iv) formally resolve to effect or publicly announce an intention to effect any of the foregoing, in each case prior to obtaining the approval of the stockholders.

        The original merger agreement contained substantially identical restrictions on the Board of Directors' right to effect a change of recommendation from the date of the original merger agreement to the date of the first stockholder meeting on the proposal to adopt the original merger agreement, which occurred on February 4, 2016.

Further Action; Efforts

        WBA and Rite Aid have each agreed to use their reasonable best efforts to take, or cause to be taken, and to assist and cooperate with the other parties to the merger agreement in taking or causing to be taken, all actions and to use their reasonable best efforts to do, or cause to be done, all things reasonably necessary, proper or advisable under the merger agreement and applicable law to consummate and make effective the merger and the other transactions contemplated by the merger agreement in the most expeditious manner practicable.

        To the extent necessary in order to obtain the requisite consents of governmental entities and subject to the limitations described below, WBA has agreed to, and has agreed to cause its subsidiaries to:

•

(A) sell, lease, license, transfer, dispose of, divest or otherwise encumber, or hold separate pending any such action, or (B) proffer, propose, negotiate, offer to effect or consent, commit or agree to any sale, lease, licensing, transfer, disposal, divestiture, or other encumbrance of, or hold separate, in each case before or after the effective time of the merger, the assets, licenses, properties, businesses and interests of WBA, Rite Aid and any of their respective subsidiaries; and



•

take or agree to take any other action, and agree or consent to any limitations or restrictions on freedom of actions with respect to, or its ability to own, control, retain or make changes in, the assets, licenses, properties, businesses and interests of WBA, Rite Aid and any of their respective subsidiaries or WBA's ability to vote, transfer, receive dividends or otherwise exercise full ownership rights with respect to the stock of the Surviving Corporation.

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        Notwithstanding WBA's obligations summarized in the immediately foregoing paragraph, with respect to any sale, transfer, disposition, divestiture or hold separate of any retail stores of WBA, Rite Aid or any of their respective subsidiaries, neither WBA nor any of its subsidiaries will be required to (x) sell, transfer, dispose of, divest or hold separate, or (y) proffer, propose, negotiate, offer to effect or consent, commit or agree to any sale, transfer, disposal, divestiture or hold separate, in each case before or after the effective time of the merger, more than an aggregate of 1,200 retail stores of Rite Aid and its subsidiaries.

        Notwithstanding the foregoing paragraphs, WBA and Merger Sub will not be required to agree or consent to any material amendment, waiver, modification or termination of the asset purchase agreement, or enter into any other agreement with respect to any divestiture action, including any required antitrust action, in each case, that would in the aggregate be materially adverse to WBA, Rite Aid or their respective subsidiaries relative to the terms and conditions of the asset purchase agreement taken as a whole, provided that, to the extent necessary in order to obtain the requisite consents of governmental entities, WBA will, and will cause its subsidiaries to, take or agree to take any of the following actions:

•

sell, transfer, dispose of, divest or hold separate up to an aggregate of 1,200 retail stores of Rite Aid and its subsidiaries, on terms no less favorable in the aggregate to WBA than the terms in the asset purchase agreement (including the consideration payable to WBA);



•

sell, transfer, dispose of, divest, license or hold separate certain of Rite Aid's distribution centers and inventory related thereto listed on WBA's confidential disclosure schedules and certain administrative assets;



•

sell, transfer, dispose of, divest, license or hold separate the Rite Aid Brand Rights; and



•

take any other divestiture action (other than with respect to (a) any sale, transfer, disposition, divestiture or hold separate of any retail stores of WBA, Rite Aid or any of their respective subsidiaries; (b) fencing-in provisions (e.g., requirement to notify and /or obtain approval for transactions either below HSR Act thresholds or otherwise not reportable) or other similar provisions imposed for a short-term duration; or (c) temporary and transitional limitations on use of intellectual property), as would not, individually or in the aggregate, result in an impact exceeding $50 million in the aggregate as a result of:



•

the divestiture of non-earnings generating assets, properties or businesses, in each case with such impact calculated as the book value of such assets, properties or businesses so divested;



•

the divestiture of earnings generating assets, properties or businesses, or any other adverse impact on the assets, businesses, liabilities or financial condition of WBA, Rite Aid or their respective subsidiaries (including, with respect to WBA, the Surviving Corporation), in each case with such impact calculated by multiplying any reduction of Adjusted EBITDA (as such term is defined in the merger agreement except, if applicable, solely for purposes of this sentence, replacing any references to Rite Aid in such definition with references to WBA) on an annual basis resulting therefrom by twelve (12);



•

any requirement to dispose of, divest, hold separate or restrict, or provide services in connection with, the infrastructure directly relating to the stores to be divested or held separate, including, without limitation, restrictions on distribution or distribution chains, obligations to divest trucks, inventory, fixtures and other assets and rights directly supporting the stores to be divested, and obligations to divest existing, or enter into new, supply agreements or arrangements (including, but not limited to, agreements or arrangements for front end, pharmaceutical and/or biologic products), or other service agreements or arrangements, directly relating to the divested stores; or

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•

any requirement to dispose of, divest, hold separate or restrict assets or operations in, and real estate interests relating to certain properties listed on WBA's confidential disclosure schedules; provided that WBA will not be obligated to agree to any divestiture action described in this clause providing for the consummation of the divestiture thereof prior to the expiration (or earlier termination) of the applicable transition service period related thereto pursuant to the terms of the asset purchase agreement.

        Rite Aid and WBA agreed to (x) enter into any amendment to the asset purchase agreement consistent with the foregoing and (y) use their respective reasonable best efforts to enter into such an amendment as soon as reasonably practicable, with a target date to be done by March 1, 2017. WBA has agreed to consult with Rite Aid and its counsel reasonably in advance of any negotiations with the Divestiture Buyer and, if WBA determines that it is advisable to do so, provide Rite Aid with an opportunity to participate in such negotiations. To the extent reasonably requested by WBA, Rite Aid will make itself available for such negotiations and will consult with WBA in advance of such negotiations.

        As between WBA and Rite Aid, WBA may determine in its sole discretion the retail stores of WBA, Rite Aid or any of their respective subsidiaries to be so sold, transferred, disposed of, divested, held separate or subject to any restriction or limitation. WBA is not obligated to agree to any divestiture action not conditioned upon the closing or the satisfaction or (to the extent permitted by applicable law) waiver of all of the conditions to closing (other than those conditions that by their nature are to be satisfied at the closing) in a case where the closing will occur immediately following consummation of such divestiture action.

        Upon WBA's reasonable request, Rite Aid will, and will cause its subsidiaries to, (i) reasonably assist WBA in any sales process with the Divestiture Buyer and any potential purchasers of any of Rite Aid's or its subsidiaries' businesses or other assets proposed by WBA to be subject to any divestiture action and (ii) enter into one or more agreements or amendments to be entered into by any of them prior to the closing with respect to any divestiture action, including the asset purchase agreement. Rite Aid will not, and will not permit any of its representatives to, agree to any divestiture action without the prior written consent of WBA.

        In addition, the parties to the merger agreement are required to not, and to not permit any of their respective subsidiaries to, engage in, publicly propose or enter into any transaction that would reasonably be expected to (i) result in any material delay in the obtaining or materially increase the risk of not obtaining any required consent from any governmental entity with respect to the transactions contemplated by the merger agreement or (ii) materially increase the risk of any governmental entity entering a legal restraint prohibiting or materially delaying the consummation of the merger or the other transactions contemplated by the merger agreement, subject to the following exceptions. The parties agreed that nothing in the merger agreement would limit the ability of:

•

(i) the parties to acquire prescription and customer records in connection with "file buy" acquisitions in the ordinary course of business consistent with past practice; and



•

(ii) WBA or its subsidiaries to (A) take certain actions specified in WBA's confidential disclosure schedules, (B) engage in or enter into any transaction involving assets or equity interests of any person that does not engage in commerce or affect commerce in the United States or (C) following the seven (7) month anniversary of the date of the original merger agreement, engage in or enter into any transaction involving the assets or equity interests of any person, other than an acquisition of retail pharmacies, except that WBA is not permitted to enter into such a transaction if such transaction would materially and adversely impact the ability of WBA or Merger Sub to obtain the debt financing for the merger (or alternative financing in lieu thereof).

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        We refer to any such transaction as a WBA permitted transaction.

        The parties agreed that Rite Aid will not be deemed to have breached any of its representations or warranties, its conduct of business covenants or the related closing conditions to the extent such breach or failure is the result of, or attributable to, the entry by WBA into a WBA permitted transaction, or any public announcement by WBA of definitive plans to enter into a specific WBA permitted transaction, provided that no such breach or failure will be deemed to have resulted from such a transaction solely on the basis that, but for the occurrence of that transaction, the closing of the merger agreement would have occurred prior to the date of such breach.

        Subject to certain exceptions, in the event that any proceeding is commenced or threatened by a governmental entity or other person challenging the merger or the other transactions contemplated by the merger agreement under antitrust law, each of WBA and Rite Aid agreed to cooperate in all material respects with each other and will use their respective reasonable best efforts to contest, resist, oppose and resolve any such proceeding and avoid the entry of or have vacated, lifted, reversed or overturned any legal restraint that would reasonably be expected to prevent, make illegal, prohibit, restrain, enjoin, materially delay or materially impair consummation of the merger or the other transactions contemplated by the merger agreement.

        In addition, WBA and Rite Aid each agreed to:

•

no later than November 10, 2015, make appropriate filings pursuant to the HSR Act, which the parties filed on November 10, 2015;



•

as promptly as practicable (unless a later time is mutually agreed between the parties), make appropriate filings with appropriate insurance governmental entities;



•

as promptly as practicable and advisable, make appropriate filings under any healthcare law that are necessary or advisable in connection with the merger or any of the other transactions contemplated by the merger agreement; and



•

as promptly as practicable and advisable, prepare and submit all other filings, notifications, information updates and other presentations required by or in connection with seeking, and obtain, all consents from any governmental entity or other third party, in each case that are necessary or advisable in connection with the merger or any of the other transactions contemplated by the merger agreement, and assist and cooperate with the other party in connection with the foregoing, except that Rite Aid will have no obligation to amend or modify any contract or pay any fee to any third party for the purpose of obtaining any such consent, or pay any costs and expenses of any third party resulting from the process of obtaining such consent.

        In connection with the reasonable best efforts referenced above and subject to limitations described, the parties are obligated to, as applicable:

•

cooperate in all respects with each other and their respective representatives in connection with any filing or submission and in connection with any proceeding by or before a governmental entity;



•

promptly inform the other party and/or its counsel, and provide copies, of any substantive communication received by such party from, or given by such party to, the FTC, the DOJ or any other governmental entity or private party, in each case regarding any such filing, submission, proceeding or the transactions contemplated by the merger agreement;



•

comply, as early as practicable and advisable, with any request for additional information, documents or other materials received by such party or any of its subsidiaries from the FTC, the DOJ or any such other governmental entity;

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•

not directly or indirectly extend any waiting period under the HSR Act except with the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed);



•

permit the other party and/or its counsel to review and discuss reasonably in advance, and consider in good faith the views of the other party and/or its counsel in connection with, any proposed substantive communication to be given by it to the DOJ, the FTC or any such other governmental entity or, in connection with any proceeding by such private party, any other person; and



•

to the extent not prohibited by the DOJ, the FTC or such other governmental entity, give the other party and/or its counsel reasonable advance notice of any in-person meeting, and any conference call that is initiated by such party or scheduled in advance, with such governmental entity or such private party and not participate independently therein without first giving the other party and/or its counsel reasonable opportunity to attend and participate therein or, in the event such other party and/or its counsel does not attend or participate therein, consulting with such other party and/or its counsel reasonably in advance and considering in good faith the views of such other party and/or its counsel in connection therewith.

        WBA may make all strategic decisions and lead all discussions, negotiations and other proceedings, and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals, or waivers that may be sought by or from, any governmental entity, including determining the strategy for contesting, litigating or otherwise responding to objections to, or proceedings challenging, the consummation of the merger and the other transactions contemplated by the merger agreement, in each case subject to good faith consultations with Rite Aid reasonably in advance and consideration of Rite Aid's views and subject to the provisions of the merger agreement. Rite Aid will not, and will not permit any of its representatives to, make any offer, acceptance or counter-offer to or otherwise engage in negotiations or discussions with any governmental entity with respect to any proposed settlement, consent decree, commitment or remedy or, in the event of litigation, discovery, admissibility of evidence, timing or scheduling, except as specifically requested by or agreed with WBA.

        WBA and Rite Aid have agreed that, as of the date of the merger agreement amendment, each of WBA and Rite Aid have performed each of the obligations, and complied with each of the agreements and covenants, required to be performed by it, or complied with by it under Section 6.4 of the merger agreement on or prior to the date of the merger agreement amendment.

Employees and Employee Benefits

        For the twelve (12) month period following completion of the merger, WBA has agreed to provide, or cause the Surviving Corporation to provide, to the employees of Rite Aid and its subsidiaries who are not represented by a labor organization and who continue to be so employed following the completion of the merger, which we refer to as the continuing non-union employees:

•

the same annual base salary and wage rate as the base salary and wage rate provided to such employees prior to the completion of the merger;



•

employee incentive compensation opportunities which are no less favorable in the aggregate than the incentive compensation opportunities provided to such employees immediately prior to the completion of the merger; and



•

employee benefits which are substantially comparable in the aggregate to the employee benefits provided to such employees immediately prior to the completion of the merger.

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        Following the completion of the merger, WBA has agreed to observe, or cause the Surviving Corporation to observe, the terms of all existing collective bargaining agreements that govern the wages, hours and other terms and conditions of employment of employees of Rite Aid or its subsidiaries who are covered by such collective bargaining agreements and who continue to be employed by Rite Aid or the Surviving Corporation or any subsidiary or affiliate thereof, which we refer to as the continuing union employees.

        For the twelve (12) month period following the completion of the merger, WBA has agreed to provide severance benefits which are no less favorable than the severance benefits provided to continuing non-union employees under existing Rite Aid plans or any such severance plan that may be adopted by Rite Aid following the date of the original merger agreement and in consultation with WBA. Following the completion of the merger, WBA has agreed to cause the Surviving Corporation and its subsidiaries to honor certain of Rite Aid's employee benefit plans and arrangements in accordance with their terms, including the employment agreements with the named executive officers, the Supplemental Executive Retirement Plan, the Special Executive Retirement Plan, the retention plan that may be adopted by Rite Aid following the completion of the merger, the severance plan that may be adopted following the completion of the merger and Rite Aid's stock plans. WBA and Rite Aid agree that the occurrence of the merger will constitute a change in control for the purposes of all Rite Aid stock plans, employee benefit plans and arrangements and related trusts.

        Except to the extent necessary to avoid duplication of benefits, service with Rite Aid and its subsidiaries will be treated as service with WBA and its subsidiaries for the purposes of determining eligibility to participate, vesting, accrual of and entitlement to benefits (except for pension benefits, post-employment or retiree welfare benefits, special or early retirement programs or window separation programs) for continuing non-union employees and continuing union employees, which we refer to collectively as the continuing employees, under benefit plans maintained by WBA and its subsidiaries. If any covered employee becomes eligible to participate in any benefit plan, program, practice, policy, or arrangement of WBA or the Surviving Corporation, which we refer to as a WBA plan, following the effective time of the merger, WBA will or will cause the Surviving Corporation to (i) waive any pre-existing condition exclusions and waiting periods with respect to participation and coverage requirements applicable to any covered employee under any WBA plan to the same extent such limitation would have been waived or satisfied under the corresponding Rite Aid plan; and (ii) use commercially reasonable efforts to provide each covered employee with credit for any deductibles, copayments and out-of-pocket maximums paid prior to the covered employee's coverage under any WBA plan during the calendar year in which such amount was paid, to the same extent such credit was given under a corresponding Rite Aid plan, in satisfying any applicable deductible, copayment or out-of-pocket requirements under the WBA plan.

Directors' and Officers' Indemnification and Insurance

        For six (6) years from and after the effective time of the merger, the Surviving Corporation will indemnify and hold harmless each present and former director, officer and employee of Rite Aid or any of its subsidiaries (in each case, when acting or having acted in such capacity), determined as of the effective time of the merger, against any costs and expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any proceeding arising out of matters existing or occurring at or prior to the effective time of the merger, to the fullest extent that Rite Aid would have been permitted under applicable law, the organizational documents of Rite Aid or its subsidiaries, as applicable, and any indemnification agreements with any directors, officers and employees of Rite Aid or any of its subsidiaries in effect on the date of the original merger agreement to indemnify such person (and the Surviving Corporation will also advance expenses (including reasonable attorneys' fees and expenses) as incurred to the fullest extent permitted under applicable law; provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification).

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        Prior to the effective time of the merger, Rite Aid will be permitted and, if Rite Aid fails to do so, WBA will cause the Surviving Corporation as of the effective time of the merger to, obtain and fully pay for "tail" insurance policies for the extension of the directors' and officers' liability coverage of Rite Aid's existing directors' and officers' insurance policies for a claims reporting or discovery period of at least six (6) years from and after the effective time of the merger, that will be from an insurance carrier with the same or better credit rating as Rite Aid's insurance carrier as of the date of the original merger agreement with respect to directors' and officers' liability insurance with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as Rite Aid's existing policies with respect to matters existing or occurring prior to the effective time of the merger (including in connection with the merger agreement, the merger or the transactions contemplated thereby). In no event will Rite Aid expend, or will WBA or the Surviving Corporation be required to expend, for such policies an aggregate premium amount in excess of three hundred percent (300%) of the annual premiums currently paid by Rite Aid for such insurance. If Rite Aid and the Surviving Corporation for any reason fail to obtain such "tail" insurance policies as of the effective time of the merger, (i) the Surviving Corporation will, and WBA will cause the Surviving Corporation to, continue to maintain in effect for a period of at least six (6) years from and after the effective time of the merger the directors and officers insurance in place as of the date of the original merger agreement with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as provided in Rite Aid's existing policies as of the date of the original merger agreement, or (ii) the Surviving Corporation will, and WBA will cause the Surviving Corporation to, obtain directors and officers insurance for such six (6) year period with benefits and levels of coverage (including terms relating thereto) that are at least as favorable as Rite Aid's existing policies as of the date of the original merger agreement. In no event will WBA or the Surviving Corporation be required to expend for such policies an annual premium amount in excess of three hundred percent (300%) of the annual premiums currently paid by Rite Aid for such insurance. If the annual premiums of such insurance coverage exceed such amount, the Surviving Corporation will obtain a policy with the best available coverage for a cost not exceeding such amount. The Surviving Corporation will maintain such policies in full force and effect, and continue to honor the obligations thereunder for a period of not less than six (6) years from and after the effective time of the merger.

        Please see "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Insurance and Indemnification of Directors and Executive Officers" beginning on page 89 for additional information.

Transaction Litigation

        Subject to entry into a customary joint defense agreement, Rite Aid will give WBA the opportunity to consult with Rite Aid regarding, and participate in the defense of, any litigation related to the merger agreement, the merger or the other transactions contemplated by the merger agreement brought by a stockholder of Rite Aid against Rite Aid or any member of the Board of Directors after the date of the original merger agreement and prior to the effective time of the merger and Rite Aid will not settle or agree to settle any such transaction litigation without WBA's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), subject to certain exceptions not requiring consent.

SEC Reports and Financial Cooperation

        The merger agreement contains certain other covenants and agreements, including:

•

Rite Aid and WBA will use all reasonable efforts to take such steps as may be reasonably necessary or advisable to cause any dispositions of Rite Aid equity securities or acquisitions of WBA equity securities pursuant to, or resulting from, the transactions contemplated by the merger agreement by each individual who is subject to the reporting requirements of

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Section 16(a) of the Exchange Act with respect to Rite Aid (or will become subject to the reporting requirements with respect to WBA) to be exempt under Rule 16b-3 promulgated under the Exchange Act;

•

Rite Aid will, and will cause its subsidiaries and its and their respective representatives to, use its and their respective commercially reasonable efforts to provide such cooperation as may be reasonably requested by WBA or Merger Sub in connection with a financing transaction (debt and/or equity) made by WBA or any of its subsidiaries and any SEC filings related to such financing transaction to be made by WBA, subject to certain specified limitations under the merger agreement;



•

WBA will, promptly upon written request by Rite Aid, reimburse Rite Aid for all reasonable and documented out-of-pocket costs, fees and expenses (including attorneys' fees and expenses) to the extent such costs, fees and expenses are incurred by Rite Aid, its subsidiaries or their respective representatives in connection with any such party complying with the obligations under the financing cooperation covenant, and WBA will indemnify and hold harmless Rite Aid, its subsidiaries and their respective representatives from and against any and all losses, damages, claims, interest, awards, judgments, penalties, costs or expenses suffered or incurred by them to the extent such losses, damages, claims, interest, awards, judgments, penalties, costs or expenses arose out of the actions taken by Rite Aid, its subsidiaries or their respective representatives pursuant to the financing cooperation covenant (other than information provided by Rite Aid, its subsidiaries or representatives in writing for express use therein), except in the event such losses, damages, claims, interest, awards, judgments, penalties, costs or expenses are determined by a final non-appealable judgment of a court of competent jurisdiction to have arisen out of or resulted from the gross negligence or willful misconduct of Rite Aid, any of its subsidiaries or any of their respective representatives; and



•

on or prior to the second business day prior to the closing date, Rite Aid will use its reasonable best efforts to cause the agent under each Rite Aid credit agreement to deliver to WBA a copy of a draft payoff letter (subject to delivery of funds as arranged by WBA) with respect to each Rite Aid credit agreement, in customary form.

Conditions to the Closing of the Merger

        The respective obligations of WBA, Merger Sub and Rite Aid to effect the merger are subject to the satisfaction (or, to the extent permitted by applicable law, waiver by Rite Aid and WBA) at or prior to the closing of the following conditions:

•

receipt of second Rite Aid stockholder approval of the merger agreement and the transactions contemplated thereby;



•

no law or injunction (whether temporary, preliminary or permanent) has been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prevents, makes illegal, prohibits, restrains or enjoins the consummation of the merger, which we refer to as the Legal Restraints Condition; and



•

the waiting period (and any extension thereof) applicable to the consummation of the merger under the HSR Act has expired or been earlier terminated.

        The obligations of WBA and Merger Sub to effect the merger will be further subject to the satisfaction (or, to the extent permitted by applicable law, waiver by WBA) at or prior to the closing of the following conditions:

•

the representations and warranties of Rite Aid relating to certain organization and qualification matters, authority, absence of certain changes and events and brokers are true and correct as of

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the date of the original merger agreement and as of the closing date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date);

•

the representations and warranties of Rite Aid relating to certain capitalization matters are true and correct (except for de minimis inaccuracies) as of the date of the original merger agreement and as of the closing date as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct in all but de minimis respects as of such earlier date);



•

each of the representations and warranties of Rite Aid, other than those specifically identified in the two immediately preceding bullets, is true and correct as of the date of the original merger agreement and as of the closing date as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date), provided, however, that the condition described in this bullet will be deemed to have been satisfied unless the failure of such representations and warranties of Rite Aid to be so true and correct (without giving effect to any "Material Adverse Effect," "materiality" or similar qualifications contained therein) has had or would, individually or in the aggregate, reasonably be expected to have a material adverse effect;



•

Rite Aid has performed in all material respects (or, with respect to prong (A) of the conduct of business covenant relating to incurring indebtedness, in all respects) each of the obligations, and complied in all material respects with each of the agreements and covenants, required to be performed by, or complied with by, it under the merger agreement at or prior to the closing;



•

since the date of the merger agreement amendment, there has not occurred a material adverse effect (including that Rite Aid has not failed to meet the Adjusted EBITDA threshold specified in the material adverse effect definition in the merger agreement as of the end date or as of the date on which the closing is required to occur); provided that clause (C) of the definition of material adverse effect will be excluded from such definition for the purpose of determining the satisfaction of this closing condition; and



•

WBA has received a certificate of the Chief Executive Officer or the Chief Financial Officer of Rite Aid, certifying that the conditions set forth in the five preceding bullet points have been satisfied.

        The obligation of Rite Aid to effect the merger will be further subject to the satisfaction (or, to the extent permitted by applicable law, waiver by Rite Aid) at or prior to the closing date of the following conditions:

•

the representations and warranties of WBA and Merger Sub relating to certain organization matters, authority and operation and ownership of Merger Sub are true and correct as of the date of the original merger agreement and as of the closing date as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date);



•

the representations and warranties of WBA and Merger Sub set forth in the merger agreement (other than those identified in the preceding bullet) are true and correct, in each case as of the date of the original merger agreement and as of the closing date as though made on and as of such date (except to the extent that any such representation or warranty expressly speaks as of an earlier date, in which case such representation and warranty is true and correct as of such earlier date); provided, however, that the condition described in this bullet will be deemed to

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have been satisfied unless the failure of any such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to prevent, materially impair or have a material adverse effect on the ability of WBA or Merger Sub to consummate the merger and other transactions contemplated by the merger agreement;

•

each of WBA and Merger Sub has performed in all material respects each of the obligations, and complied in all material respects with each of the agreements and covenants, required to be performed by, or complied with by, it under the merger agreement at or prior to the closing; and



•

Rite Aid has received a certificate of the Chief Executive Officer or the Chief Financial Officer of WBA, certifying that the conditions set forth in the three preceding bullet points have been satisfied.

Termination of the Merger Agreement

Termination

        The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger:

•

by the mutual written consent of WBA and Rite Aid;



•

by either WBA or Rite Aid:



•

if any court of competent jurisdiction or other governmental entity has issued a legal restraint which prevents, makes illegal, prohibits, restrains or enjoins the consummation of the merger and such legal restraint is or will become final and nonappealable, except this termination right will not be available to a party whose breach of the merger agreement was the primary cause of, or primarily resulted in, the issuance of such legal restraint, which we refer to as the Legal Restraint Termination Right;



•

if the effective time of the merger has not occurred on or before July 31, 2017, except that this termination right will not be available to a party whose breach of the merger agreement was the primary cause of, or primarily resulted in, the failure of the effective time of the merger to occur on or before July 31, 2017, which we refer to as the End Date Termination Right; or



•

if Rite Aid's stockholders do not adopt the merger agreement and the transactions contemplated thereby at the second stockholders meeting (to which this proxy statement relates) or at any adjournment or postponement of the second stockholders meeting at which a vote on the adoption of the merger agreement was taken, which we refer to as the Stockholder Vote Termination Right.



•

by Rite Aid:



•

if there has been a breach of any representation, warranty, covenant or agreement by WBA or Merger Sub, or if any such representation or warranty has become inaccurate, such that the closing conditions relating to the accuracy of the representations and warranties of WBA and Merger Sub and performance of the obligations of WBA and Merger Sub would not be satisfied, and such breach or inaccuracy has not been cured within thirty (30) days after the receipt of notice thereof or such breach or inaccuracy is not reasonably capable of being cured within such period; or



•

prior to obtaining the second Rite Aid stockholder approval (to which this proxy statement relates), if (i) the Board of Directors has, after complying with its non-solicitation obligations, entered into a definitive agreement in connection with a superior proposal

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concurrently with such termination and (ii) Rite Aid pays to WBA the termination fee under the merger agreement of $325 million; which we refer to as the Rite Aid Alternative Acquisition Termination Right;

•

by WBA:



•

if there has been a breach of any representation, warranty, covenant or agreement by Rite Aid, or if any such representation or warranty has become inaccurate, such that the closing conditions relating to the accuracy of the representations and warranties of Rite Aid and performance of the obligations of Rite Aid would not be satisfied, and such breach or inaccuracy has not been cured within thirty (30) days after the receipt of notice thereof or such breach or inaccuracy is not reasonably capable of being cured within such period, which we refer to as the Obligations of Rite Aid Termination Right;



•

if prior to obtaining stockholder approval of the merger agreement and the transactions contemplated thereby, the Board of Directors effects a change of recommendation, which we refer to as the WBA Change of Recommendation Termination Right; or



•

if a material adverse effect has occurred as a result of Rite Aid's failure to satisfy the Adjusted EBITDA test set forth in clause (B) of the definition of material adverse effect as of the end date or as of the date on which the closing is required to occur.

Effect of Termination

        If the merger agreement is terminated as described above under "Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement—Termination" section beginning on page 132, the merger agreement will be void and have no effect, and there will not be any liability or obligation on the part of any party, except that:

•

no termination will affect the obligations of the parties contained in the confidentiality agreement and the clean room agreement;



•

no termination will relieve any party from liability for damages resulting from fraud or willful breach (as described below) prior to such termination, in which case the aggrieved party will be entitled to all rights and remedies available at law or in equity; and



•

certain other provisions of the merger agreement, including (i) covenants with respect to publicity concerning the transaction and (ii) provisions with respect to the allocation of fees and expenses, including, if applicable, the termination fees described below, will survive such termination.

        For the purpose of the merger agreement, the term willful breach means a material breach of, or a failure to perform any of the covenants or other agreements contained in, the merger agreement, that is a consequence of an act or failure to act by the breaching or non-performing party with actual knowledge, or knowledge that a person acting reasonably under the circumstances should have, that such party's act or failure to act would, or would be reasonably expected to, result in or constitute a breach of a failure of performance under the merger agreement. In addition, the failure, for any reason, of WBA or Merger Sub to consummate the merger and the other transactions contemplated by this merger agreement on that date that the closing is required to occur constitutes a willful breach of the merger agreement.

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Termination Fees

        Under the merger agreement, Rite Aid will be required to pay a termination fee of $325 million in connection with a termination of the merger agreement under the following circumstances:

•

in the event the merger agreement is terminated by Rite Aid pursuant to the Rite Aid Alternative Acquisition Termination Right;



•

in the event the merger agreement is terminated by WBA pursuant to the WBA Change of Recommendation Termination Right;



•

in the event the merger agreement is terminated by Rite Aid or WBA pursuant to the Stockholder Vote Termination Right or End Date Termination Right or by WBA pursuant to the Obligations of Rite Aid Termination Right, and in either such case:



•

prior to such termination, any person has publicly announced an intention to make an acquisition proposal, or an acquisition proposal has otherwise become publicly known, and within twelve (12) months after such termination, (i) Rite Aid or any of its subsidiaries enter into a definitive agreement with respect to such acquisition proposal or (ii) an acquisition proposal is consummated involving Rite Aid or any of its subsidiaries, provided that for the purposes of this bullet, references to twenty percent (20%) in the definition of acquisition proposal are deemed to be references to fifty percent (50%).

        Under the merger agreement, WBA will be required to pay a termination fee of $325 million in the event the merger agreement is terminated by WBA or Rite Aid pursuant to (i) the Legal Restraint Termination Right if the applicable legal restraint giving rise to such termination right is issued under or pursuant to any antitrust law or (ii) the End Date Termination Right, in each case of (i) and (ii), if on the termination date the only conditions to closing that have not been satisfied (other than those conditions that by their nature are to be satisfied at the closing which conditions would be capable of being satisfied at the closing if the closing date were on the termination date) are (x) the Legal Restraints Condition (and the applicable legal restraint causing the Legal Restraints Condition not to be satisfied is issued under or pursuant to any antitrust law) and the condition that the applicable waiting periods under the HSR Act (and any extension thereof) have expired or been earlier terminated and (y) the condition that a material adverse effect has not occurred solely with respect to the Adjusted EBITDA test set forth in clause (B) of the definition of material adverse effect; provided, however, that such termination fee payable by WBA to Rite Aid will be reduced to $162.5 million (1) if on the termination date Rite Aid has failed to satisfy the Adjusted EBITDA test set forth in clause (B) of the definition of material adverse effect or (2) if WBA exercises its right to terminate the merger agreement as a result of Rite Aid's failure to satisfy such Adjusted EBITDA test as of the end date or as of the date on which closing is required to occur.

        In no event will Rite Aid or WBA be required to pay the termination fees described above on more than one occasion.

Expenses

        Except as specifically provided in the merger agreement, each party will bear its own expenses in connection with the merger agreement and the transactions contemplated thereby.

Amendment and Waiver

Amendment

        The parties may modify, amend or supplement the merger agreement only by written agreement, executed and delivered by duly authorized officers of the respective parties; provided, however, unless otherwise agreed by the parties, that after the Rite Aid stockholder approval has been obtained there

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will be no amendment of the merger agreement that would require further approval of the stockholders of Rite Aid under applicable law without such approval having first been obtained.

Waiver

        At any time prior to the effective time of the merger, the parties to the merger agreement may:

•

extend the time for the performance of any of the obligations or other acts of the other parties to the merger agreement;



•

waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant to the merger agreement; and



•

subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained in the merger agreement.

Governing Law

        The merger agreement is governed by the laws of the state of Delaware (without giving effect to choice of law principles thereof).

Specific Performance

        The parties are entitled to injunctions, specific performance and other equitable relief to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms of the merger agreement in addition to any other remedy to which they are entitled at law or equity.

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PROPOSAL 2: ADVISORY VOTE ON MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS

The Non-Binding Advisory Proposal

        Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that we provide our stockholders with the opportunity to vote to approve, on an advisory non-binding basis, the payment of certain compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger, as disclosed in the section of this proxy statement entitled "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Payments to Executives upon Termination Following Change-in-Control" beginning on page 92.

        We are asking our stockholders to indicate their approval of the compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger. These payments are set forth in the section entitled "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Golden Parachutes" beginning on page 96 of this proxy statement and the accompanying footnotes. In general, the various plans and arrangements pursuant to which these compensation payments may be made formed part of Rite Aid's overall compensation program for its named executive officers, and have previously been disclosed to our stockholders as part of the Compensation Discussion and Analysis and related sections of our annual proxy statements. The Compensation Committee of the Board of Directors, which is composed solely of non-management directors, believes such compensatory arrangements to be reasonable.

        The Board of Directors encourages you to review carefully the named executive officer merger-related compensation information disclosed in this proxy statement. The Board of Directors unanimously recommends that you vote "FOR" the following resolution:

        "RESOLVED, that the stockholders of Rite Aid, Inc. approve, on a nonbinding, advisory basis, the compensation that will or may become payable to Rite Aid's named executive officers that is based on or otherwise relates to the merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section entitled "The Merger—Interests of the Directors and Executive Officers of Rite Aid in the Merger—Golden Parachutes" in Rite Aid's proxy statement for the special meeting."

        Stockholders should note that this proposal is not a condition to completion of the merger, and as an advisory vote, the result will not be binding on Rite Aid, the Board of Directors or WBA. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the merger is consummated our named executive officers will be entitled to receive the compensation that is based on or otherwise relates to the merger in accordance with the terms and conditions applicable to those payments.

Vote Required and Board of Directors Recommendation

        Approval of the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon.

        The Board of Directors unanimously recommends that you vote "FOR" the proposal to approve, by a non-binding, advisory vote, compensation that will or may become payable by Rite Aid to its named executive officers in connection with the merger.

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PROPOSAL 3: ADJOURNMENT OF THE SPECIAL MEETING

The Adjournment Proposal

        We are asking you to approve a proposal to approve one or more adjournments of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting. If our stockholders approve the adjournment proposal, we could adjourn the special meeting and any adjourned session of the special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders that have previously returned properly executed proxies voting against adoption of the merger agreement. Among other things, approval of the adjournment proposal could mean that, even if we had received proxies representing a sufficient number of votes against adoption of the merger agreement such that the proposal to adopt the merger agreement would be defeated, we could adjourn the special meeting without a vote on the adoption of the merger agreement and seek to convince the holders of those shares to change their votes to votes in favor of adoption of the merger agreement. Additionally, we may seek to adjourn the special meeting if a quorum is not present at the special meeting.

Vote Required and Board of Directors Recommendation

        Approval of the proposal to approve one or more adjournments of the special meeting requires the affirmative vote of a majority of the shares of Rite Aid common stock represented at the special meeting, either in person or by proxy, and entitled to vote thereon.

        The Board of Directors believes that it is in the best interests of Rite Aid and its stockholders to be able to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies in respect of the proposal to adopt the merger agreement if there are insufficient votes to adopt the merger agreement at the time of the special meeting.

        The Board of Directors unanimously recommends that you vote "FOR" the proposal to approve one or more adjournments or postponements of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement.

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MARKET PRICES AND DIVIDEND DATA

        Rite Aid's common stock is listed on the NYSE under the symbol "RAD." As of [    ·    ], 2017 there were [    ·    ] shares of our common stock outstanding, held by approximately [    ·    ] stockholders of record.

        The following table sets forth, for the indicated periods, the high and low sales prices of Rite Aid's common stock for the periods shown as reported by the NYSE: