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8-K - FORM 8-K - JO-ANN STORES INC | l41568e8vk.htm |
Exhibit 99.1
Going Private E-mail Mailbox Responses
FW50 1/13/2011
1. How does the buyout affect the Long Term Incentive (LTI) program for this year?
How and when will the stock value be determined?
The proposed acquisition will most likely not affect the current Stock Value Bonus plan
since the merger closing date probably will not occur until after the Plans conclusion date.
The closing price of this plan is determined by the 90-day average price on the third business day
following our year-end earnings release which normally occurs in mid-March. The 90-day average
price at the beginning of the period was $37.099. The maximum amount for this plan
is 150% of your grant amount. If our stock price stays around the $60 price range, then this plan
will max out ($37.099 x 150% = $55.649). For example, if you received a $6,000 grant in the Stock
Value Bonus plan in March 2010, the maximum amount you would receive would be $9,000 ($6,000 x
150%).
The Stock Value Bonus plan will be paid out in two different ways:
a. | In March 2011, you will receive the portion of your Stock Value Bonus plan that has already been earned and vested. For example, if you are a Manager, you will receive the second half of your Stock Value amount from the March 2009 grant and the first half of the March 2010 grant. If you are a Director with a three-year vesting schedule, you will receive the second 1/3 that has vested from the March 2009 grant and the first 1/3 that has vested from the March 2010 grant. |
b. | Assuming the acquisition by Leonard Green is completed, any remaining balances in the Stock Value Bonus plan will be paid out as soon after the closing of the acquisition as is administratively feasible. |
2. How does the buyout affect the Long Term Incentive for DTLs? We have completed one year of a
3-year program so far.
Assuming the Leonard Green acquisition is completed, the Stock Value Bonus plan will be accelerated
and all outstanding amounts will be paid out in a lump sum.
3. In March 2011, Ill receive 50% of whatever LTI bonus were due under the Stock Value Bonus Plan
grant from March 2010. The other half is slated to be paid out in March 2012. What will happen to
the second half payment? Will it be awarded just as the March 2011 payment will be (the set price
was @$37 and Im guessing/assuming the closing price will be @$60)? Or will the payment occur some
other way?
See the answers to questions #1 and #2 above.
4. Are we still eligible for bonuses? Will the bonus program continue after privatization?
Yes, you will still be eligible for your short-term and long-term incentives. The company has no
intention to discontinue these incentive plans for FY12. However, because we will be a private
company they may be based on other metrics and could be slightly different.
5. Will we be able to roll our 401(k) over to an IRA?
The plan rules governing the 401(k) plan will not change. The IRS prohibits any active
Team Member from rolling their money into an IRA unless they terminate from the company.
6. Is it a coincidence that the main lobby closed to visitors?
This was purely a coincidence. The decision was made several months ago to have one lobby entrance
for all vendors with security access so all vendors must now enter through the vendor lobby. With
that function being removed from the main lobby, it made more sense to have the Jo-Ann Lead
Receptionist be in an area with the rest of the customer service team.
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Cautionary Statement Regarding Forward-Looking Statements
This release may contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to Jo-Ann, the proposed merger and its business. These
forward-looking statements can be identified by the use of terminology such as subject to,
believe, expects, plan, project, estimate, intend, may, will, should, can, or
anticipates, or the negative thereof, or variations thereon, or comparable terminology, or by
discussions of strategy. Although all of these forward looking statements are believed to be
reasonable, they are inherently uncertain. Factors which may materially affect such forward-looking
statements include, but are not limited to general economic conditions, risks in implementing new
marketing initiatives, natural disasters and geo-political events, changes in customer demand,
changes in trends in the fabric and craft industry, changes in the competitive pricing for
products, the impact of competitors store openings and closings, our dependence on suppliers,
seasonality, disruptions to the transportation system or increases in transportation costs, energy
costs, our ability to recruit and retain highly qualified personnel, our ability to manage our
inventory, our ability to effectively manage our distribution network, disruptions to our
information systems, failure to maintain the security of our electronic and other confidential
information, failure to comply with various laws and regulations, failure to successfully implement
the store growth strategy, changes in accounting standards and effective tax rates, inadequacy of
our insurance coverage, cash and cash equivalents held at financial institutions in excess of
federally insured limits, volatility of our stock price, damage to our reputation, and other
factors, and uncertainties associated with the proposed sale of Jo-Ann to an affiliate of Leonard
Green & Partners, L.P., including uncertainties relating to the anticipated timing of filings and
approvals relating to the transaction, the expected timing of completion of the transaction and the
ability to complete the transaction. Other important factors that may cause actual results to
differ materially from those expressed in the forward looking statements are discussed in Jo-Anns
Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on forward-looking statements. Jo-Ann cannot
guarantee future results, trends, events, levels of activity, performance or achievements. Jo-Ann
does not undertake and specifically declines any obligation to update, republish or revise
forward-looking statements to reflect events or circumstances after the date hereof or to reflect
the occurrences of unanticipated events. Consequently, such forward-looking statements should be
regarded solely as Jo-Anns current plans, estimates and beliefs.
Additional Information and Where to Find It
In connection with the Merger, Jo-Ann will prepare a proxy statement to be filed with the SEC. When
completed, a definitive proxy statement and a form of proxy will be mailed to the shareholders of
the company. BEFORE MAKING ANY VOTING DECISION, JO-ANNS SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT REGARDING THE MERGER CAREFULLY AND IN ITS ENTIRETY BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER. Jo-Anns shareholders will be able to obtain, without
charge, a copy of the proxy statement (when available) and other relevant documents filed with the
SEC from the SECs website at http://www.sec.gov. Jo-Anns shareholders will also be able to
obtain, without charge, a copy of the proxy statement and other relevant documents (when available)
by directing a request by mail or telephone to Jo-Ann Stores Inc., Attn: Corporate Communications,
5555 Darrow Road, Hudson, Ohio 44236, telephone: (330) 463-6865, or from the investor relations
section of the companys website, http://www.joann.com.
Participants in Solicitation
Jo-Ann and its directors and officers may be deemed to be participants in the solicitation of
proxies from Jo-Anns shareholders with respect to the special meeting of shareholders that will be
held to consider the Merger. Information about Jo-Anns directors and executive officers and their
ownership of the companys common stock is set forth in the proxy statement for Jo-Anns 2010
Annual Meeting of Shareholders, which was filed with the SEC on April 26, 2010. Shareholders may
obtain additional information regarding the interests of Jo-Ann and its directors and executive
officers in the Merger, which may be different than those of Jo-Anns shareholders generally, by
reading the proxy statement and other relevant documents regarding the Merger, when filed with the
SEC.