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Loblaw/Shoppers-- summary under Shares for Shares and Nominal Cash, or Cash Summary Under Tax Topics- Public Transactions- Mergers & Acquisitions- Mergers (mostly Plans of Arrangement)- Shares for Shares and Nominal Cash, or Cash Loblaw acquisition of Shoppers Drug Mart for cash, or shares plus $0.01 per share cash Overview All the shares of TSX-listed Shoppers Drug Mart are to be acquired under a CBCA plan of arrangement by Loblaw, which is a CBCA company listed on the TSX, in consideration (subject to dissenter share adjustments) for 119.9M Loblaw shares and $6.67B cash (with the overall consideration of $12.4B representing a 29.4% premium). Shoppers Drug Mart shareholders are given a choice of $61.54 per share cash (the "Cash Consideration"), or 1.29417 of a Loblaw share plus $0.01 of cash (the "Share Consideration"), subject to the overall cash/share proportion being fixed. ... Plan of Arrangement Under the Plan of Arrangement: • the Shoppers Drug Mart shareholder rights plan will be cancelled • Shoppers Drug Mart shares of dissenters will be transferred to Loblaw, with an entitlement to be paid their fair value • vested RSUs will be surrendered for cash payments; and other RSUs or DSUs will be continued so as to apply to Loblaw shares, subject to adjustments for the exchange ratio • all outstanding options to acquire Shoppers Drug Mart shares will be exchanged for replacement options on Loblaw shares, with adjustments for the exchange ratio in accordance with s. 7(1.4)(c) • each outstanding Shoppers Drug Mart share will be transferred to Loblaw for the Cash Consideration or Share Consideration, subject to pro-ration Canadian tax consequences In the absence of an s. 85 election, the exchange will occur on a non-rollover basis (with ACB averaging not occurring re Loblaw shares acquired before 1972). ...

Pref redemption The paid-up capital of the preferred shares will be equal to the portion of the arrangement consideration to be paid on the redemption of the preferred shares. ... If the transaction were so characterized, a U.S. holder would recognize dividend income equal to the lesser of the portion of the arrangement consideration paid in redemption of the preferred shares and the portion of the arrangement consideration that would be treated as paid out of Catamaran's current or accumulated earnings and profits. The portion of the arrangement consideration that would be treated as paid out of Catamaran's current or accumulated earnings and profits is expected by Catamaran to be materially less than the portion paid in redemption of the preferred shares. ...