SUBSEQUENT EVENT	9 Months Ended
Oct. 31, 2015
SUBSEQUENT EVENT.
SUBSEQUENT EVENT	NOTE 15—SUBSEQUENT EVENT Proposed Merger with Bridgestone Retail Operations, LLC The Company entered into an Agreement and Plan of Merger, dated as of October 26, 2015 (as it may be amended or supplemented from time to time, the “Merger Agreement”), by and among the Company, Bridgestone Retail Operations, LLC, a Delaware limited liability company (“Parent” or “Bridgestone”) and TAJ Acquisition Co., a Pennsylvania corporation (“Purchaser”). Pursuant to the Merger Agreement, and on the terms and subject to the conditions in the Merger Agreement, Purchaser commenced a tender offer (the “Offer”) on November 16, 2015, to acquire all of the outstanding shares of our common stock at a purchase price of $15.00 per share, net to the holders thereof, in cash (the “Offer Price”), without interest thereon, less any applicable tax withholding. The Merger Agreement contains certain conditions to Purchaser’s obligation to accept for payment shares of common stock of the Company validly tendered and not withdrawn in the Offer including, without limitation, (a) at least a majority of the shares of the common stock (calculated on a fully diluted basis in accordance with the Merger Agreement) having been validly tendered into and not withdrawn from the Offer, (b) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (c) the accuracy of the representations and warranties and compliance with the covenants contained in the Merger Agreement and (d) other customary conditions. On November 23, 2015, the Company was informed that it had been granted early termination of the waiting period under the HSR Act. The Merger Agreement contains certain termination rights in favor of each of the Company and Bridgestone, including under certain circumstances, the requirement for the Company to pay to Bridgestone a termination fee of $35.0 million. The Company also agreed (a) to cease any existing, and agreed not to solicit or initiate any additional, discussions with third parties regarding other proposals to acquire the Company and (b) to certain restrictions on the Company’s ability to respond to such proposals, subject to fulfillment of certain requirements. The Merger Agreement provides, among other things, that as soon as practicable (and in any event within three business days) following Purchaser’s acceptance for payment, upon the terms and subject to the conditions of the Offer set forth in the Merger Agreement, of all shares validly tendered and not validly withdrawn at the then-scheduled expiration of the Offer and satisfaction or waiver of the remaining applicable conditions set forth in the Merger Agreement, Purchaser will merge with and into the Company (the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation”). Consummation of the Merger is subject to certain conditions, including, without limitation, that after the completion of the Offer and to the extent that Parent and Purchaser do not complete the Merger through a “short-form merger” pursuant to applicable Pennsylvania law, the Company will hold a special meeting of shareholders to seek shareholder approval of the Merger. At the effective time of the Merger (the “Effective Time”), each share not purchased in the Offer, other than shares held directly or indirectly by the Company, Parent or Purchaser or any of their respective wholly owned subsidiaries (which will automatically be cancelled and retired and will cease to exist) or any shareholder of the Company who duly exercises dissenters’ rights under Pennsylvania law, will be converted into the right to receive an amount, in cash and without interest, equal to the Offer Price (the “Merger Consideration”). In connection with the Merger, each outstanding option award (each, a “Company Option”) granted under the Company 2014 Stock Incentive Plan (previously referred to as the Company 1999 Stock Incentive Plan and the Company 2009 Stock Incentive Plan) (the “Company Stock Plans”), whether or not exercisable or vested, will become fully vested and exercisable, and will, as of the Effective Time, be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the excess, if any, of the Merger Consideration over the applicable per share exercise price of each such Company Option and (b) the number of shares subject to such Company Option, less any applicable tax withholding. Any Company Option which has an exercise price that is equal to or more than the Merger Consideration will be cancelled without any cash payment. As of the Effective Time, each holder of Company Options will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph. In connection with the Merger, each outstanding restricted stock unit award granted pursuant to the Company Stock Plans representing the right to receive shares that vest over the passage of time (including any such award that previously became vested, but which was deferred under the terms of such restricted stock unit award) (each, a “Company RSU”) will vest (to the extent not vested) and will be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the Merger Consideration and (b) the number of units covered by such Company RSU that have not been settled or paid immediately prior to the Effective Time, less any applicable tax withholding. As of the Effective Time, each holder of Company RSUs will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph. The Company will provide for the cancellation and conversion of the Company RSUs that were deferred in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B). In connection with the Merger, each outstanding restricted stock unit award granted pursuant to the Company Stock Plans representing the right to receive shares that vest based on the level of achievement of performance goals (each, a “Company PSU”) will vest as if the applicable performance goals had been achieved at the target level of performance at the end of the applicable performance period (to the extent not vested) and will be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the Merger Consideration and (b) the number of vested units covered by such Company PSU that have not been settled or paid immediately prior to the Effective Time, less any applicable tax withholding. As of the Effective Time, each holder of Company PSUs will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph. The Merger Agreement provides that, as soon as administratively practicable after October 26, 2015, but no later than the day immediately prior to the date on which the first offering period that is regularly scheduled to commence under the Company Employee Stock Purchase Plan (the “Company ESPP”) after October 26, 2015, the Company will suspend the Company ESPP so that no further offering periods will commence after October 26, 2015. The Company has taken action to suspend the Company ESPP so that after the expiration of the current offering period of the Company ESPP, which began on October 1, 2015 and ends on December 31, 2015, no further offering periods will commence under the Company ESPP. With respect to the current offering period, each outstanding purchase right under the Company ESPP will be exercised in accordance with the terms of the Company ESPP on the regularly scheduled purchase date for the current offering period; provided that if the Effective Time occurs prior to December 31, 2015, then each outstanding right to purchase shares under the Company ESPP during the current offering period will be exercised immediately prior to the Effective Time. The Company is required to use reasonable best efforts to provide at least ten days’ prior written notice to each participant in the Company ESPP of such purchase. In connection with the Merger, all shares held in the brokerage account under the Company ESPP, as well as shares purchased under the last offering period of the Company ESPP, will, as of the Effective Time, be cancelled and converted into the right of the holder to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount of cash equal to the product of (a) the Merger Consideration and (b) the total number of shares purchased under the Company ESPP by such participant. The Company Stock Plans and the Company ESPP will be terminated as of the Effective Time. In connection with the Merger, each notional investment in shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014 (the “Company Deferred Compensation Plan”), whether or not vested, will, as of the Effective Time, become fully vested, and will, as of the Effective Time, be cancelled and converted into the right of the holder thereof to have allocated to the holder’s account under the Company Deferred Compensation Plan an amount of cash equal to the product of (a) the Merger Consideration and (b) the number of shares deemed invested under or otherwise referenced by such account immediately prior to the Effective Time. As of the Effective Time, each holder of notional investments in shares under the Company Deferred Compensation Plan will cease to have any rights with respect to such notional investments, except for the right to receive the allocation described in this paragraph. The Company will provide for the cancellation and conversion of the notional investments under the Company Deferred Compensation Plan described in this paragraph in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B). In the Merger Agreement, the Company granted Purchaser an option (the “Top-Up Option”) to purchase, at a price per share equal to the Offer Price, an aggregate number of newly issued shares (the “Top-Up Shares”) equal to the lowest number of shares that, when added to the number of shares owned by Parent and its subsidiaries at the time of exercise of the Top-Up Option, will constitute one share more than 80% of the shares (calculated on a fully diluted basis in accordance with the Merger Agreement) then outstanding (after giving effect to the issuance of the Top-Up Shares). If following the Offer and the exercise, if any, of the Top-Up Option, Parent, Purchaser and their respective subsidiaries hold, in the aggregate, at least one share more than 80% of the shares (calculated on a fully diluted basis in accordance with the Merger Agreement), the parties have agreed to take all necessary and appropriate action to complete the Merger as soon as practicable, subject to the satisfaction or waiver of the remaining conditions under the Merger Agreement, in accordance with the “short form” procedures available under the Pennsylvania law. At the closing of the purchase of Top-Up Shares, the aggregate purchase price owed by Purchaser to the Company for the Top-Up Shares will be paid to the Company at Parent’s election, either (x) entirely in cash, by wire transfer of same-day funds, or (y) by issuing to the Company an unsecured, non-negotiable, non-transferable promissory note having a principal amount equal to the aggregate purchase price pursuant to the Top-Up Option. Such promissory note (a) will bear interest at the applicable short-term federal rate per annum for U.S. income tax purposes, payable in arrears at maturity, (b) will mature on the first anniversary of the date of execution of the promissory note, (c) will be full recourse to Parent and Purchaser, (d) may be prepaid, at any time, in whole or in part, without premium or penalty, and (e) will have no other material terms. The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating us to continue to conduct our business in the ordinary course and to cooperate in seeking regulatory approvals. The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2015 and is incorporated herein by reference. After careful consideration, including a thorough review of the terms and conditions of the Offer, the Company’s Board of Directors unanimously (a) determined that the Offer, the Merger and the other Transactions are fair to and in the best interests of the Company and its shareholders, (b) approved the Offer, the Merger and the other Transactions and adopted the Merger Agreement and (c) recommended that the shareholders of the Company accept the Offer and tender their shares pursuant to the Offer, and if required to consummate the Merger, that the shareholders of the Company adopt the Merger Agreement. Additional information regarding the Merger, the Offer, and related matters, may be found in the Solicitation/Recommendation Statement on 14D-9, as amended (“the Schedule 14D-9”), and the Tender Offer Statement on Schedule TO, as amended, as filed by the Company and Parent and Purchaser, respectively, with the U.S. Securities & Exchange Commission. Proposal from Icahn Enterprises L.P. On December 4, 2015, Carl C. Icahn and affiliated entities (together, “Icahn”) filed a Schedule 13D disclosing its beneficial ownership of approximately 12% of the Company’s common stock. The Schedule 13D also disclosed that Icahn had engaged in prior discussions with the Company regarding Icahn’s interest in Pep Boys and, in particular, its retail business. The “Background to the Offer” section of the Schedule 14D-9 describes the Company’s prior discussions with Icahn (referred to as “Party H” therein). On December 4, 2015, Icahn also made an anti-trust filing under the HSR Act. The notice disclosed Icahn’s “good faith intention,” dependent upon various factors including market conditions, to acquire in excess of a majority of the Company’s outstanding voting securities. On December 7, 2015, the Company received a letter from Icahn Enterprises L.P. (“Icahn Enterprises”), in which Icahn Enterprises made a proposal (the “Icahn Proposal”) for a negotiated transaction whereby Icahn Enterprises would acquire all of the outstanding shares of common stock of the Company for $15.50 per share in cash. On December 8, 2015, the Company announced that its Board of Directors, after consultation with its independent legal and financial advisors, had determined that the Icahn Proposal would reasonably be expected to result in a “Superior Proposal” as defined in the Merger Agreement. This determination by the Company’s Board of Directors allows the Company to take certain actions, in accordance with the procedures set forth in the Merger Agreement, to further consider the Icahn Proposal. In and of itself, however, this determination does not allow the Company to terminate the Merger Agreement, nor enter into a definitive transaction with Icahn Enterprises, both of which can also only occur in accordance with the procedures set forth in the Merger Agreement. The Company’s Board of Directors has not changed its recommendation with respect to the Offer and the Merger, nor is it making any recommendation with respect to the Icahn Proposal. There can be no assurance that the Company’s Board of Directors will ultimately determine that the Icahn Proposal is a Superior Proposal, that the terms of a transaction with Icahn Enterprises will be the same as those reflected in the Icahn Proposal or that any transaction with Icahn Enterprises will be agreed to or consummated.

NOTE 15—SUBSEQUENT EVENT

Proposed Merger with Bridgestone Retail Operations, LLC

The Company entered into an Agreement and Plan of Merger, dated as of October 26, 2015 (as it may be amended or supplemented from time to time, the “Merger Agreement”), by and among the Company, Bridgestone Retail Operations, LLC, a Delaware limited liability company (“Parent” or “Bridgestone”) and TAJ Acquisition Co., a Pennsylvania corporation (“Purchaser”). Pursuant to the Merger Agreement, and on the terms and subject to the conditions in the Merger Agreement, Purchaser commenced a tender offer (the “Offer”) on November 16, 2015, to acquire all of the outstanding shares of our common stock at a purchase price of $15.00 per share, net to the holders thereof, in cash (the “Offer Price”), without interest thereon, less any applicable tax withholding.

The Merger Agreement contains certain conditions to Purchaser’s obligation to accept for payment shares of common stock of the Company validly tendered and not withdrawn in the Offer including, without limitation, (a) at least a majority of the shares of the common stock (calculated on a fully diluted basis in accordance with the Merger Agreement) having been validly tendered into and not withdrawn from the Offer, (b) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (c) the accuracy of the representations and warranties and compliance with the covenants contained in the Merger Agreement and (d) other customary conditions. On November 23, 2015, the Company was informed that it had been granted early termination of the waiting period under the HSR Act.

The Merger Agreement contains certain termination rights in favor of each of the Company and Bridgestone, including under certain circumstances, the requirement for the Company to pay to Bridgestone a termination fee of $35.0 million. The Company also agreed (a) to cease any existing, and agreed not to solicit or initiate any additional, discussions with third parties regarding other proposals to acquire the Company and (b) to certain restrictions on the Company’s ability to respond to such proposals, subject to fulfillment of certain requirements.

The Merger Agreement provides, among other things, that as soon as practicable (and in any event within three business days) following Purchaser’s acceptance for payment, upon the terms and subject to the conditions of the Offer set forth in the Merger Agreement, of all shares validly tendered and not validly withdrawn at the then-scheduled expiration of the Offer and satisfaction or waiver of the remaining applicable conditions set forth in the Merger Agreement, Purchaser will merge with and into the Company (the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation”). Consummation of the Merger is subject to certain conditions, including, without limitation, that after the completion of the Offer and to the extent that Parent and Purchaser do not complete the Merger through a “short-form merger” pursuant to applicable Pennsylvania law, the Company will hold a special meeting of shareholders to seek shareholder approval of the Merger.

At the effective time of the Merger (the “Effective Time”), each share not purchased in the Offer, other than shares held directly or indirectly by the Company, Parent or Purchaser or any of their respective wholly owned subsidiaries (which will automatically be cancelled and retired and will cease to exist) or any shareholder of the Company who duly exercises dissenters’ rights under Pennsylvania law, will be converted into the right to receive an amount, in cash and without interest, equal to the Offer Price (the “Merger Consideration”).

In connection with the Merger, each outstanding option award (each, a “Company Option”) granted under the Company 2014 Stock Incentive Plan (previously referred to as the Company 1999 Stock Incentive Plan and the Company 2009 Stock Incentive Plan) (the “Company Stock Plans”), whether or not exercisable or vested, will become fully vested and exercisable, and will, as of the Effective Time, be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the excess, if any, of the Merger Consideration over the applicable per share exercise price of each such Company Option and (b) the number of shares subject to such Company Option, less any applicable tax withholding. Any Company Option which has an exercise price that is equal to or more than the Merger Consideration will be cancelled without any cash payment. As of the Effective Time, each holder of Company Options will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph.

In connection with the Merger, each outstanding restricted stock unit award granted pursuant to the Company Stock Plans representing the right to receive shares that vest over the passage of time (including any such award that previously became vested, but which was deferred under the terms of such restricted stock unit award) (each, a “Company RSU”) will vest (to the extent not vested) and will be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the Merger Consideration and (b) the number of units covered by such Company RSU that have not been settled or paid immediately prior to the Effective Time, less any applicable tax withholding. As of the Effective Time, each holder of Company RSUs will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph. The Company will provide for the cancellation and conversion of the Company RSUs that were deferred in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B).

In connection with the Merger, each outstanding restricted stock unit award granted pursuant to the Company Stock Plans representing the right to receive shares that vest based on the level of achievement of performance goals (each, a “Company PSU”) will vest as if the applicable performance goals had been achieved at the target level of performance at the end of the applicable performance period (to the extent not vested) and will be cancelled and converted into the right of the holder thereof to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount in cash equal to the product of (a) the Merger Consideration and (b) the number of vested units covered by such Company PSU that have not been settled or paid immediately prior to the Effective Time, less any applicable tax withholding. As of the Effective Time, each holder of Company PSUs will cease to have any rights with respect thereto, except for the right to receive the payment (if any) described in this paragraph.

The Merger Agreement provides that, as soon as administratively practicable after October 26, 2015, but no later than the day immediately prior to the date on which the first offering period that is regularly scheduled to commence under the Company Employee Stock Purchase Plan (the “Company ESPP”) after October 26, 2015, the Company will suspend the Company ESPP so that no further offering periods will commence after October 26, 2015. The Company has taken action to suspend the Company ESPP so that after the expiration of the current offering period of the Company ESPP, which began on October 1, 2015 and ends on December 31, 2015, no further offering periods will commence under the Company ESPP. With respect to the current offering period, each outstanding purchase right under the Company ESPP will be exercised in accordance with the terms of the Company ESPP on the regularly scheduled purchase date for the current offering period; provided that if the Effective Time occurs prior to December 31, 2015, then each outstanding right to purchase shares under the Company ESPP during the current offering period will be exercised immediately prior to the Effective Time. The Company is required to use reasonable best efforts to provide at least ten days’ prior written notice to each participant in the Company ESPP of such purchase. In connection with the Merger, all shares held in the brokerage account under the Company ESPP, as well as shares purchased under the last offering period of the Company ESPP, will, as of the Effective Time, be cancelled and converted into the right of the holder to receive from the Surviving Corporation as soon as administratively practicable following the Effective Time (in conjunction with the Surviving Corporation’s regular payroll process) an amount of cash equal to the product of (a) the Merger Consideration and (b) the total number of shares purchased under the Company ESPP by such participant. The Company Stock Plans and the Company ESPP will be terminated as of the Effective Time.

In connection with the Merger, each notional investment in shares under the Company Deferred Compensation Plan, as amended and restated effective as of January 31, 2014 (the “Company Deferred Compensation Plan”), whether or not vested, will, as of the Effective Time, become fully vested, and will, as of the Effective Time, be cancelled and converted into the right of the holder thereof to have allocated to the holder’s account under the Company Deferred Compensation Plan an amount of cash equal to the product of (a) the Merger Consideration and (b) the number of shares deemed invested under or otherwise referenced by such account immediately prior to the Effective Time. As of the Effective Time, each holder of notional investments in shares under the Company Deferred Compensation Plan will cease to have any rights with respect to such notional investments, except for the right to receive the allocation described in this paragraph. The Company will provide for the cancellation and conversion of the notional investments under the Company Deferred Compensation Plan described in this paragraph in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(B).

In the Merger Agreement, the Company granted Purchaser an option (the “Top-Up Option”) to purchase, at a price per share equal to the Offer Price, an aggregate number of newly issued shares (the “Top-Up Shares”) equal to the lowest number of shares that, when added to the number of shares owned by Parent and its subsidiaries at the time of exercise of the Top-Up Option, will constitute one share more than 80% of the shares (calculated on a fully diluted basis in accordance with the Merger Agreement) then outstanding (after giving effect to the issuance of the Top-Up Shares). If following the Offer and the exercise, if any, of the Top-Up Option, Parent, Purchaser and their respective subsidiaries hold, in the aggregate, at least one share more than 80% of the shares (calculated on a fully diluted basis in accordance with the Merger Agreement), the parties have agreed to take all necessary and appropriate action to complete the Merger as soon as practicable, subject to the satisfaction or waiver of the remaining conditions under the Merger Agreement, in accordance with the “short form” procedures available under the Pennsylvania law.

At the closing of the purchase of Top-Up Shares, the aggregate purchase price owed by Purchaser to the Company for the Top-Up Shares will be paid to the Company at Parent’s election, either (x) entirely in cash, by wire transfer of same-day funds, or (y) by issuing to the Company an unsecured, non-negotiable, non-transferable promissory note having a principal amount equal to the aggregate purchase price pursuant to the Top-Up Option. Such promissory note (a) will bear interest at the applicable short-term federal rate per annum for U.S. income tax purposes, payable in arrears at maturity, (b) will mature on the first anniversary of the date of execution of the promissory note, (c) will be full recourse to Parent and Purchaser, (d) may be prepaid, at any time, in whole or in part, without premium or penalty, and (e) will have no other material terms. The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating us to continue to conduct our business in the ordinary course and to cooperate in seeking regulatory approvals.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2015 and is incorporated herein by reference.

After careful consideration, including a thorough review of the terms and conditions of the Offer, the Company’s Board of Directors unanimously (a) determined that the Offer, the Merger and the other Transactions are fair to and in the best interests of the Company and its shareholders, (b) approved the Offer, the Merger and the other Transactions and adopted the Merger Agreement and (c) recommended that the shareholders of the Company accept the Offer and tender their shares pursuant to the Offer, and if required to consummate the Merger, that the shareholders of the Company adopt the Merger Agreement.

Additional information regarding the Merger, the Offer, and related matters, may be found in the Solicitation/Recommendation Statement on 14D-9, as amended (“the Schedule 14D-9”), and the Tender Offer Statement on Schedule TO, as amended, as filed by the Company and Parent and Purchaser, respectively, with the U.S. Securities & Exchange Commission.

Proposal from Icahn Enterprises L.P.

On December 4, 2015, Carl C. Icahn and affiliated entities (together, “Icahn”) filed a Schedule 13D disclosing its beneficial ownership of approximately 12% of the Company’s common stock. The Schedule 13D also disclosed that Icahn had engaged in prior discussions with the Company regarding Icahn’s interest in Pep Boys and, in particular, its retail business. The “Background to the Offer” section of the Schedule 14D-9 describes the Company’s prior discussions with Icahn (referred to as “Party H” therein).

On December 4, 2015, Icahn also made an anti-trust filing under the HSR Act. The notice disclosed Icahn’s “good faith intention,” dependent upon various factors including market conditions, to acquire in excess of a majority of the Company’s outstanding voting securities.

On December 7, 2015, the Company received a letter from Icahn Enterprises L.P. (“Icahn Enterprises”), in which Icahn Enterprises made a proposal (the “Icahn Proposal”) for a negotiated transaction whereby Icahn Enterprises would acquire all of the outstanding shares of common stock of the Company for $15.50 per share in cash.

On December 8, 2015, the Company announced that its Board of Directors, after consultation with its independent legal and financial advisors, had determined that the Icahn Proposal would reasonably be expected to result in a “Superior Proposal” as defined in the Merger Agreement.

This determination by the Company’s Board of Directors allows the Company to take certain actions, in accordance with the procedures set forth in the Merger Agreement, to further consider the Icahn Proposal. In and of itself, however, this determination does not allow the Company to terminate the Merger Agreement, nor enter into a definitive transaction with Icahn Enterprises, both of which can also only occur in accordance with the procedures set forth in the Merger Agreement.

The Company’s Board of Directors has not changed its recommendation with respect to the Offer and the Merger, nor is it making any recommendation with respect to the Icahn Proposal.

There can be no assurance that the Company’s Board of Directors will ultimately determine that the Icahn Proposal is a Superior Proposal, that the terms of a transaction with Icahn Enterprises will be the same as those reflected in the Icahn Proposal or that any transaction with Icahn Enterprises will be agreed to or consummated.