Page 9 of 24 – SEC Filing
| Item 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. |
The 27,882,035 Shares (including options to
purchase 3,535,000 Shares) reported herein as beneficially owned by the Reporting Persons were acquired at an aggregate purchase
price of approximately $721.2 million.
The 26,314,367 Shares (including options to
purchase 3,535,000 Shares) reported herein by JANA were acquired at an aggregate purchase price of approximately $705.6 million.
Such Shares were acquired with investment funds in accounts managed by JANA and margin borrowings described in the following sentence.
Such Shares are held by the investment funds managed by JANA in commingled margin accounts, which may extend margin credit to JANA
from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances,
the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account.
The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities
are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Shares reported
herein.
Mr. Murphy used a total of approximately $44
million in the aggregate to acquire the 1,457,078 Shares reported herein as beneficially owned by him.
Ms. Dietz used a total of approximately $3.1
million in the aggregate to acquire the 101,000 Shares reported herein as beneficially owned by her.
Mr. Dickson used a total of approximately $155
thousand in the aggregate to acquire the 5,275 Shares reported herein as beneficially owned by him.
Ms. Adler used a total of approximately $100
thousand in the aggregate to acquire the 3,455 Shares reported herein as beneficially owned by her.
Mr. Bittman used a total of approximately $25
thousand in the aggregate to acquire the 860 Shares reported herein as beneficially owned by him.
Funds for the purchase of the Shares reported
herein as beneficially owned by each of the foregoing individuals were derived from the respective personal funds of each such
individual.
| Item 4. | PURPOSE OF TRANSACTION. |
The Reporting Persons acquired the Shares
because they believe the Shares are undervalued and represent an attractive investment opportunity. JANA has substantial
experience analyzing and investing in the grocery sector and more broadly across the food and retail sectors, and the other
Reporting Persons collectively possess significant operational, financial and nutritional expertise, including, for some of
the other Reporting Persons, experience creating significant shareholder value in the food and grocery sectors. JANA, with
the assistance of the other Reporting Persons, intends to have discussions with the Issuer’s board of directors and
management regarding topics including: (1) addressing the Issuer’s chronic underperformance for shareholders, (2) changing
the Issuer’s board and senior management composition and addressing governance, (3) optimizing the Issuer’s real estate and
capital allocation strategies, including discussing the Issuer’s “365” small store format and opportunities to
improve returns on invested capital, (4) pursuing opportunities to improve performance by advancing its brand development and
by addressing core operating deficiencies in areas including customer loyalty and analytics, category management and
analytics, technology and digital capabilities,
