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8-K - FORM 8-K - JO-ANN STORES INC | l41511e8vk.htm |
Exhibit 99.1
Going
Private E-mail Mailbox Responses
12/30/2010
1. What will happen to the money that is currently collected in my ASOP account?
The Associate Stock Ownership Plan (the ASOP) will continue to operate as it always has until the
earlier of the end of the current accumulation period (March 31, 2011) or the effective date of the
going private transaction, whichever occurs first. At that time the plan participants will receive
shares calculated in the normal manner, at either the lower price at the beginning of the period
($44.34) or the end of the period less 15%. At the effective date all shares in the plan will be
cashed out at the going private transaction price (which, at this time, is Leonard Greens offer of $61 per share). Note that there may be some tax
implications to plan participants since these shares will not be held for the required holding
period; Team Members are encouraged to consult with a tax professional. Jo-Ann will not be able to
offer the ASOP following the current accumulation period given that as a private company we will
not have publicly-traded stock.
2. What will happen to the current deductions going into the ASOP program which doesnt close until
April?
Please refer to the answer from question #1.
3. Will the acquisition prematurely end the employee stock purchase plan for the Oct 2010 Mar
2011 time period and/or not accept any contributions for the Apr 2011 Sept 2011 time period?
The ASOP will end no later than March 31, 2011.
4. What will happen to our 401k plan?
We expect to proceed with the change in the 401k plan provider from Vanguard to T. Rowe Price as
soon as the going private transaction is complete and all company stock has been sold. This should
occur within the first half of calendar year 2011. No other changes to the 401k plan have been
planned at this time.
5. Will Jo-Ann be reimbursing Team Members for the 401k Jo-Ann shares that we were told we had to
sell before the going private announcement was made on December 23, 2010?
No. Over a year ago, long before any consideration was being given to a going private transaction,
Jo-Ann announced that it would be eliminating the company stock fund as a 401k investment option in
accordance with best practices for 401k plans.
Plan participants were given the option of transferring to another investment option during the
year or making no change, in which case the company stock investments would automatically be sold
and reinvested in a default investment at the end of the year.
At the beginning of December the company had to delay the elimination of the stock fund as a 401k
investment option when a going private transaction became a possibility.
While we understand that some Team Members eliminated the company stock fund from one of their
investment choices over the past year, ERISA rules do not permit any adjustments to these
participant decisions.
6. What does this mean for the stock owned by team members?
Team Members owning stock will be treated like any other shareholder meaning that at the effective
date of the going private transaction, you will receive the acquisition price (which, at this time,
is Leonard Greens offer of $61 per share) for each share of stock you own. If TMs hold restricted shares or options, these will vest just before the
acquisition and you will receive the acquisition price for your restricted shares, and the
difference between the acquisition price and the option exercise price for your options.
7. Will Team members receive a discount at any of the other companies that Leonard Green owns?
At this time we do not anticipate that Jo-Ann Team Members will receive employee discounts at other
Leonard Green portfolio companies, as their philosophy is to allow each of their portfolio
companies to operate as an independent, stand-alone company.
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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.