Rite Aid 2011 Annual Report Download - page 108

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 26, 2011, February 27, 2010 and February 28, 2009
(In thousands, except per share amounts)
21. Subsequent Events (Continued)
during the first quarter of fiscal 2012 due to the write off of debt issue costs of $2.7 million and
unamortized original issue discount of $19.7 million.
On March 21, 2011, the Company launched a Stock Option Exchange Program (‘‘Program’’) for
eligible associates only. Under the Program, eligible associates had the opportunity to surrender certain
stock options for a lesser number of new stock options with a strike price that was determined based
on the closing market price on April 21, 2011, the day the Program concluded. The number of new
options was determined by applying exchange ratios that resulted in providing new stock options with
an aggregate fair value that approximates the aggregate fair value of the options they replaced. The
new options vest over two years and have a five year life with an exercise price of $1.03. A total of
14.0 million options with an exercise price in excess of $1.77 were cancelled and 5.3 million new
options were granted with an exercise price of $1.03. The Company expects to recognize a minimal
incremental compensation expense as a result of the Program.
108