MEMPHIS, Tenn. — Fred’s Inc. has appointed two new board members as part of an agreement with hedge fund Alden Global Capital LLC, the discount and pharmacy chain’s largest shareholder.

Fred’s said Monday that Steven Rossi, chief executive officer of Digital First Media, and Timothy Barton, founder and former CEO of Freightquote.com, have been named to its board as independent directors, effective immediately.

Rossi and Barton are joining the Fred’s board of directors in connection with a cooperation agreement between Alden Global and Fred’s. “The cooperation agreement contains terms regarding the parties working together for the long-term success of Fred’s Pharmacy,” Fred’s stated.

“We are excited to welcome Steve and Tim to the Fred’s Pharmacy board of directors,” Fred’s chairman Thomas Tashjian said in a statement. “They add strong business, financial and operational expertise, and their perspectives will be instrumental as we continue the transformation of Fred’s Pharmacy. This includes moving expeditiously to complete the transaction with Walgreens and Rite Aid, pending approval by the Federal Trade Commission, which would make Fred’s Pharmacy the third-largest drug store chain in the nation. We look forward to continuing to work constructively with Alden and all of our shareholders as we focus on executing our strategic plan and delivering value for all Fred’s Pharmacy stakeholders.”

In late December, Fred’s announced the adoption of a shareholder rights plan — known as a “poison pill” — after Alden became its single largest shareholder. Alden had filed a Form 13D with the Securities and Exchange Commission after having purchased 9.275 million shares of Fred’s common stock since Nov. 28, giving it a 24.8% stake in the company.

In the filing, Alden indicated that it believed Fred’s shares “are undervalued and represent and attractive investment opportunity.” The investment firm also disclosed its intention to “engage in discussions with the issuer’s management and board of directors, other stockholders of the issuer, and other interested parties regarding, without limitation, the issuer’s recently announced agreement to acquire 865 stores and certain assets of Rite Aid Corp. as well as the issuer’s operating performance, capital allocation, governance, board composition and strategic plans.”

Fred’s recently appointed four new board members: Linda Longo-Kazanova, chief human resources officer at Keurig Green Mountain Inc., earlier this month and longtime CVS executive Christopher Bodine, former Safeway chief financial officer Peter Bocian and current Fred’s CEO Michael Bloom. Former Fred’s CEOs Jerry Shore and Michael Hayes and longtime director John Eisenman are retiring from the board and won’t stand for re-election at the company’s 2017 annual shareholders meeting.

“I am thrilled to work with Steve, Tim, Alden and the entire Fred’s Pharmacy board to capture the numerous value-creating opportunities that lie ahead for the company,” Bloom stated. “I am confident we have the right team in place to advance our new health care-focused strategy and drive returns for our shareholders while delivering on our mission to improve the lives of our patients and customers.”

As of the close of the annual shareholders meeting, Fred’s board will have nine directors, eight of whom are independent.

“I am pleased with today’s announcement and expect that Tim and Steve will immediately impact and contribute to the Fred’s board. I, and the rest of the Alden team, look forward to working with Fred’s as we all continue to support and strengthen Fred’s business,” Alden president Heath Freeman said in a statement. “Over the past few months, our team has spent considerable time with the Fred’s Pharmacy team. Having seen firsthand the progress that Mike Bloom and his team have made on the execution of the company’s health care strategy, I have great confidence in the future of the business. With the right focus, Fred’s can generate significant free cash flow per share at the existing business. The pending Rite Aid transaction will provide extraordinary growth to Fred’s business and free cash flow.”

Fred’s agreement to buy the Rite Aid stores is subject to FTC approval of the Walgreens-Rite Aid merger. Also under the agreement, Fred’s could be required to acquire additional stores if the FTC calls for WBA to divest more stores. In January, WBA and Rite Aid extended the end date for the acquisition deal and raised the number of stores that could be divested to as much as 1,200.

“Fred’s Pharmacy is executing on a transformation plan that is gaining momentum,”  Rossi commented. “I look forward to helping Fred’s Pharmacy with its compelling opportunities ahead.”

Barton stated, “I am honored to join the talented individuals on the Fred’s Pharmacy board. With its focused mission and first-class management team, I am confident the company has a bright future.”