RE: Notice regarding your Goody’s Stock Options You Must Take Action
Exhibit 99.(A)(5)(D)
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TO: [Optionee Name]
From: Goody’s Family Clothing, Inc.
Date: November 10, 2005
From: Goody’s Family Clothing, Inc.
Date: November 10, 2005
RE:
|
Notice regarding your Goody’s Stock Options You Must Take Action |
As you may know, on October 27, 2005, Xxxxx’s Family Clothing, Inc. (“Goody’s”) entered into an
Acquisition Agreement and Plan of Merger with affiliates of GMM Capital LLC and Prentice Capital
Management, L.P. (the “Buyer”) to purchase all of the issued and outstanding common stock of
Goody’s for $9.60 net per share in cash. A copy of the press release announcing this acquisition
is attached. The transaction will take place in two steps. First, a tender offer will be commenced
by the Buyer in which any shareholder may tender their shares for $9.60 per share in cash. Subject
to the satisfaction of the conditions to the tender offer, the tender offer is expected to be
completed in late December 2005 to early January 2006. Any shares not tendered, will subsequently
be purchased by Xxxxx in the second step, which is a merger (the “Merger”) at the same cash price
of $9.60 per share. The Merger is expected to take place between late January 2006 and mid-April
2006 after the tender offer is completed, subject to the satisfaction of the conditions to the
Merger.
You were granted options (“Options”) to purchase Goody’s common stock under one or more of Goody’s
stock option plans (“Stock Plan(s)”). Your vested Options may be exercised by you prior to the
completion of the tender offer and you can then tender them to the Buyer in the tender offer or
sell them in the market. All of your unvested options will be accelerated and become fully vested,
but not until the completion of the tender offer, which again is expected to be in late December
2005 to early-January 2006. Therefore, while you can exercise your vested options and sell them in
the tender offer if you choose to, you must wait until after the completion of the tender offer,
for your unvested options to vest.
In order to simplify the process for holders of Options, the Merger agreement provides that holders
of “In the money Options” who so elect, will receive a cash payment equal to the difference between
the $9.60 cash price and the applicable exercise price for each option share that they have a right
to purchase. An “In the Money Option” means an option with an exercise price of less than $9.60 per
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share. In other words, you can skip the step of exercising your option and simply receive a cash
payment equal to the positive spread, if any, between the cash price to be paid in the Merger and
your exercise price.
If you want to be paid on this basis without having to exercise your Options, you should sign the
Option Holder Acknowledgement Agreement in this package. Once you return your signed agreement, you
will be entitled to receive in settlement of your In the Money Options, as promptly as practicable
following the date of the Merger, but in no event later than 10 business days after the date of the
Merger, a cash payment, subject to any required withholding of payroll taxes, equal to the product
of (i) the total number of Common Shares otherwise issuable upon exercise of your In the Money
Options (ii) times the amount, if any, by which $9.60 per Common Share exceeds the applicable
exercise price per Common Share otherwise issuable upon exercise of your In the Money Options, The
total amount which would be paid to you for your In the Money Options is set forth opposite your
name on Annex A next to the caption Aggregate Option Consideration.
You should understand that the Merger will take place between late January 2006 and mid-April 2006
after the tender offer. If at least 90% of the outstanding shares are tendered and a short form
merger is available, the timeframe will be late January 2006 to early-February 2006. Otherwise it
could be consummated as late as mid-April 2006. You would receive your cash payment sooner if you
were to sell your vested Option shares in the tender offer but you will have to exercise the
Options first, in order to do so. As to any Option shares which you have that are not yet vested,
you could choose to exercise those Options after the tender offer is completed and thereafter sell
the shares in the open market. That would still get you your money faster than if you wait until
the Merger is complete. However, by signing the enclosed Acknowledgement Agreement you will avoid
having to exercise your Options, and will simply receive a cash payment, subject, of course, to the
consummation of the Merger.
If you elect to receive the cash payment described above, please sign both copies of the attached
Option Holder Acknowledgement Agreement forms. One of these forms should be retained for your
records and the other should be mailed or faxed no later than December 1, 2005 to Xxxxx’s
Family Clothing, Inc., P.O. Box 22000, Knoxville, TN 37933-2000, Attn: Treasury Management. A
stamped, self-addressed envelope is enclosed for your convenience. You can also fax a copy of the
Agreement to xxx-xxx-xxxx.
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If you do not either sign and return the Acknowledgement Agreement or otherwise exercise
your Options prior to the effective date of the Merger, the value of your options will be
forfeited. All Options, whether or not In the Money, will be cancelled upon the effective date
of the Merger. If for some reason the Merger does not take place, the
Acknowledgement Agreement will be terminated and your options will continue to be in full force and effect.
We urge you to read Xxxxx’s Offer to Purchase and Xxxxx’s recommendations statement on Schedule
14d-9 which is included for your convenience and we will have copies available upon request. In
addition, you should read Xxxxx’s other public filings, before making any decision. If you have any
questions on this matter, contact Xxxx Xxxxxx at xxx-xxx-xxxx, or Xxxxx Xxxxxxxx at xxx-xxx-xxxx.
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