RUE Rue21, Inc. (MM)

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on [ Ÿ ], 2013

Dear Stockholder:

You are cordially invited to attend a special meeting (the “Special Meeting”) of the stockholders of rue21, inc., which we refer to as the Company or rue21, to be held on [ Ÿ ], 2013, at [ Ÿ ] (local time) at [ Ÿ ], for the following purposes:

These items of business are more fully described in the proxy statement accompanying this notice.

The approval by the Company’s stockholders of the Merger Agreement Proposal is required to complete the Merger described in the accompanying proxy statement.

The record date for the Special Meeting is [ Ÿ ], 2013. Only stockholders of record at the close of business on that date are entitled to notice of and to vote at the Special Meeting or any adjournment or postponement thereof. Any stockholder entitled to attend and vote at the Special Meeting is entitled to appoint a proxy to attend and act on such stockholder’s behalf. Such proxy need not be a stockholder of the Company.

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Your vote is very important. To ensure your representation at the Special Meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet. Please vote promptly whether or not you expect to attend the Special Meeting. Submitting a proxy now will not prevent you from being able to vote in person at the Special Meeting. The Company’s board of directors has approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommends that you vote “FOR” the Merger Agreement Proposal, “FOR” the Adjournment Proposal and “FOR” the Golden Parachute Proposal.

Submitting your proxy over the Internet or by telephone is fast and convenient, and your proxy is immediately confirmed and tabulated. Using the Internet or telephone helps save the Company money by reducing postage and proxy tabulation costs.

On Behalf of the Board of Directors,

Stacy Siegal

Senior Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary

Warrendale, Pennsylvania

Dated: [ Ÿ ], 2013

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SUMMARY TERM SHEET

The following summary term sheet highlights selected information in this proxy statement and may not contain all of the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to in this proxy statement. Each item in this summary term sheet includes a page reference directing you to a more complete description of that topic. See “ Where You Can Find More Information .” In this proxy statement, we refer to the Agreement and Plan of Merger, dated as of May 23, 2013, by and among Rhodes Holdco, Inc., Rhodes Merger Sub, Inc. and rue21, inc., as it may be amended from time to time, as the Merger Agreement, and the merger of Rhodes Merger Sub, Inc. with and into rue21, inc. pursuant to the Merger Agreement as the Merger, and we refer to the Support Agreement, dated as of May 23, 2013, by and among SKM Equity Fund II, L.P., SKM Investment Fund II, rue21, inc. and Rhodes Holdco, Inc., as the Support Agreement. In addition, we refer to Rhodes Holdco, Inc. as Parent, Rhodes Merger Sub, Inc. as Merger Sub, SKM Equity Fund II, L.P. and SKM Investment Fund II, collectively as the SKM Funds, Apax Partners, L.P. as Apax, Apax VIII-A L.P., Apax VIII-B L.P., Apax VIII-1 L.P. and Apax VIII-2 L.P., collectively as the Apax Investors and rue21, inc. as the Company, rue21, us, our or we. We refer to the Company’s common stock, par value $0.001, each as a Share and collectively as the Shares, the special meeting of the stockholders of the Company to be held on [ Ÿ ], 2013, at [ Ÿ ] (local time) at [ Ÿ ] as the Special Meeting, and [ Ÿ ], the record date for the Special Meeting, as the Record Date.

If the Merger is completed, each Share outstanding immediately prior to the effective time of the Merger (other than (i) Shares owned by Parent, Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent, which we refer to as the Parent Group, and Shares owned by the Company or any direct or indirect wholly-owned subsidiary of the Company, and in each case not held on behalf of third parties, (ii) Shares as otherwise agreed to in writing before the effective time of the Merger between Parent or its affiliates and the holder of such Shares, (iii) Shares owned by stockholders who have not voted in favor of adoption of the Merger Agreement or consented thereto in writing and who have properly demanded and not withdrawn a demand for appraisal pursuant to Section 262 of the Delaware General Corporation Law, which we refer to as the DGCL, with respect to such Shares, which we refer to as the Dissenting Shares, and together with the Shares referred to in the immediately preceding clauses (i) and (ii), the Excluded Shares, and (iv) Shares that are subject to Company restricted stock unit awards, Company deferred stock unit awards, or Company performance share units), will automatically be converted into the right to receive $42.00 per Share in cash, without interest, which we refer to as the Merger Consideration, less any applicable withholding taxes.

Special Factors (page [•])

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are fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds), (ii) approve, adopt and declare advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolve to recommend that the holders of the Shares adopt the Merger Agreement, and direct that the Merger Agreement be submitted to the holders of Shares for their adoption. Upon such recommendations, the Company’s board of directors, pursuant to resolutions adopted at a meeting of the Company’s board of directors held on May 22, 2013, (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds), (ii) approved, adopted and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolved to recommend that the holders of Shares adopt the Merger Agreement, and directed that the Merger Agreement be submitted to the holders of Shares for their adoption. In reaching its conclusion to make such determination and recommendations to the Company’s board of directors, the Special Committee consulted with its financial and legal advisors and considered various material factors. For the factors considered by the Special Committee and the Company’s board of directors in reaching their decisions that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to and in the best interests of the Company and the holders of Shares (excluding the SKM Funds), please see “ Special Factors—Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger ” beginning on page [ Ÿ ] of this proxy statement.”

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Shares (other than the Parent Group and the SKM Funds) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Perella Weinberg’s written opinion provides that the opinion may be relied on by the other members of the Company’s board of directors, solely in their capacity as members of the Company’s board of directors, in connection with, and for the purposes of, the evaluation of the Merger. The full text of Perella Weinberg’s written opinion, dated May 22, 2013, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C to this proxy statement and is incorporated by reference herein. Holders of Shares are urged to read the opinion carefully and in its entirety. The opinion does not address the Company’s underlying business decision to enter into the Merger Agreement or the relative merits of the Merger as compared with any other strategic alternative which may have been available to the Company. The opinion does not constitute a recommendation to any holder of Shares as to how such holder should vote or otherwise act with respect to the Merger or any other matter and does not in any manner address the prices at which Shares will trade at any time. In addition, Perella Weinberg expressed no opinion as to the fairness of the Merger to, or any consideration received in connection with the Merger by, any member of the Parent Group, the SKM Funds or the holders of any class of securities other than the Shares, creditors or other constituencies of the Company. Perella Weinberg provided its opinion for the information and assistance of the Special Committee in connection with, and for the purposes of its evaluation of, the Merger and provided that the opinion may be relied on by the other members of the Company’s board of directors, solely in their capacity as members of the Company’s board of directors, for the same limited purposes. For a further discussion of Perella Weinberg’s opinion, see “ Special Factors—Opinion of Financial Advisor to the Special Committee ” beginning on page [ Ÿ ] of this proxy statement.

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independent public company, and the Shares will continue to be quoted on the NASDAQ. The Merger Agreement provides the Company and its advisors (acting under the direction of the Special Committee) are permitted to actively solicit and consider alternative proposals from third parties until 11:59 p.m., Eastern Time, on July 2, 2013 (the “Go-Shop Period”). The Company is permitted to, among other things, engage, enter into and participate in discussions and negotiations with certain parties who during the Go-Shop Period have made a proposal that the Special Committee determines constitutes, or could reasonably be expected to lead to, a superior proposal (“Excluded Parties”) until July 27, 2013. If the Merger Agreement is terminated to enter into a superior proposal with an Excluded Party prior to July 27, 2013, the Company will be required to pay to Parent a termination fee of $10.453 million. Upon termination of the Merger Agreement under specified circumstances (other than in the circumstances described above in connection with a superior proposal by an Excluded Party), rue21 would be required to pay Parent (or its designee) a termination fee in an amount equal to $31.359 million. The Company does not intend to publicly disclose any developments with respect to this process unless and until the Special Committee makes a decision regarding a potential superior proposal. See “ The Merger Agreement—Termination Fee ” beginning on page [•] of this proxy statement . In addition, failure of the stockholders to adopt the Merger Agreement could have a negative impact on our business and the market price of the Shares. See “ Special Factors—Certain Effects on the Company if the Merger is not Completed ” beginning on page [•] of this proxy statement for further discussion regarding the negative effects that could result if the Merger Agreement is not adopted.

These interests are discussed in more detail under “ Special Factors—Interests of Executive Officers and Directors of the Company in the Merger ” beginning on page [•] of this proxy statement.

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The Merger Agreement (page [•])

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Parties to the Merger (page [•])

The Special Meeting (page [•])

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SPECIAL FACTORS

This discussion of the Merger summarizes the material terms of the Merger Agreement, which is attached to this proxy statement as Annex A. You should read the entire Merger Agreement carefully because it is the legal document that governs the Merger.

We are asking our stockholders to vote on the adoption of the Merger Agreement. If the Merger is completed, the Company will become a wholly-owned subsidiary of Parent, and holders of Shares (other than Excluded Shares and Shares that are subject to Company restricted stock unit awards, Company deferred stock unit awards, or Company performance share units) will have the right to receive the Merger Consideration, without interest, less any applicable withholding taxes.

Background of the Merger

The Company was originally founded in 1976 as a value-focused specialty apparel retailer. In 1998, the Company was acquired by the SKM Funds.

In 2001, the Company’s current Chairman and Chief Executive Officer, Bob Fisch, joined the Company. Upon his hiring, Mr. Fisch began repositioning the Company by aligning the Company’s stores under one brand name, strengthening the management team, honing the Company’s fashion value merchandise approach and refocusing the Company’s store growth strategy. As part of the Company’s turnaround, the Company sought bankruptcy protection in February 2002 and emerged within fifteen months.

In April 2005, the SKM Funds became associated with Apax through the combination of the advisors to the SKM Funds, and various other related funds associated with Saunders Karp & Megrue Partners, LLC or their respective affiliates, with the advisors to various Apax funds. Certain partners and employees of the SKM Funds and/or their affiliates at such time, including John Megrue, Alex Pellegrini and William Gumina, became partners and/or employees of various Apax entities and Apax became the advisor of the SKM Funds.

On November 13, 2009, the Company completed its primary initial public offering, following which John Megrue and Alex Pellegrini returned as directors of the Company. On February 26, 2010, the Company completed a secondary follow-on offering. Following that secondary offering, the SKM Funds held 7,091,919 Shares constituting approximately 29% of outstanding Shares. Messrs. Megrue and Pellegrini were re-elected by the Company’s stockholders in 2012 and 2011, respectively. The SKM Funds do not have a shareholders agreement with the Company.

On September 25, 2012, the Company received a written proposal from Apax on behalf of funds advised by it for the acquisition of all of the outstanding stock of the Company with an indicative price range of $38.00 to $39.00 per Share, which represented a 21%-24% premium over the September 24, 2012 closing price of $31.36 per Share. The proposal letter was addressed to the independent members of the Company’s board of directors and indicated that Apax partners John Megrue and Alex Pellegrini, who were also directors of the Company, would recuse themselves from deliberations and meetings of the Company’s board of directors during the pendency of the proposal. The letter also stated that Apax’s expectation was for the existing management team to remain in place following the consummation of the transaction, and that at the appropriate time and with the approval of the Company’s board of directors, Apax would invite a discussion regarding a potential opportunity for existing management to make an equity investment in the ongoing Company on the same economic terms as Apax’s investment. The letter stated that Apax was amenable to having the acquisition agreement include a “go-shop” provision, on customary terms, that would permit the Company to solicit competing proposals for a reasonable

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period of time after signing, subject to the right of Apax to match each proposal and to the payment of an agreed break-up fee in the event that the Company determined to terminate the agreement with Apax to accept a superior proposal that Apax was unwilling to match. The letter stated that Apax had engaged J.P. Morgan as its financial advisor and Simpson Thacher & Bartlett LLP (“Simpson”) as its legal counsel. The letter indicated that the proposed acquisition would extend to all of the Shares and stockholders on the same basis, including the SKM Funds. Apax did not discuss the terms of its proposal with the SKM Funds or seek or obtain the support of the SKM Funds for its proposal.

On October 1, 2012, the Company’s board of directors, without Mr. Megrue or Mr. Pellegrini present, held a meeting to discuss Apax’s September 25 proposal. During the meeting, representatives of Kirkland & Ellis LLP (“Kirkland”) made a presentation to the Company’s board of directors regarding the directors’ fiduciary duties in considering any proposed transaction and reviewed certain legal aspects of Apax’s September 25 proposal. Following extensive discussion, the Company’s board of directors adopted resolutions for the formation of a special committee of the Company’s board of directors (the “Special Committee”) to review and evaluate possible strategic business combination transactions and other related or pertinent strategic alternatives for the Company (which could include, but were not limited to, a merger, other business combination, dividend, recapitalization, acquisition, spin-off, split-off, sale of a subsidiary, division or unit, or other similar transactions), including potential transactions with funds advised by Apax. The Company’s board of directors delegated exclusively to the Special Committee all of its power and authority to review and evaluate possible strategic business combination transactions and other related or pertinent strategic alternatives for the Company. The Special Committee’s power and authority specifically includes (i) engaging and compensating independent advisors, including financial and other advisors, (ii) the power to terminate any and all negotiations relating to a potential transaction at any time, (iii) making a recommendation to the Company’s board of directors with respect to any potential transaction and (iv) adopting and implementing a shareholder rights plan. The Company’s board of directors resolved not to authorize or approve any potential transaction, or any modification, variation, supplement or waiver thereof, without the prior affirmative recommendation of the Special Committee. The resolutions also provided the Special Committee with authority to oversee consummation of any potential transaction as evidenced by definitive agreements.

The Special Committee was initially composed of directors Bruce Hartman, Arnold Barron and Macon Brock. The Special Committee members were selected based on a number of factors, including their financial sophistication, previous transactional experience, willingness to serve on the Special Committee and status as non-management directors who were not representatives of Apax. Mr. Brock was subsequently replaced on the Special Committee by director Harlan Kent. Mr. Hartman is the chairperson of the Special Committee.

On October 8, 2012, the Special Committee held a telephonic meeting to discuss the engagement of advisors. During the meeting, a representative of Kirkland provided the Special Committee with an overview of Kirkland’s experience and qualifications to serve as legal advisor to the Special Committee. Representatives of Perella Weinberg and another financial advisory firm then provided separate presentations to the Special Committee regarding their experience and qualifications to serve as financial advisor to the Special Committee.

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Following the meeting, members of the Special Committee separately spoke with a second law firm regarding its proposal to represent the Special Committee as its legal advisor.

On October 10, 2012, the Special Committee authorized the engagement of Kirkland as its legal advisor and authorized the engagement of Perella Weinberg as its financial advisor.

On October 22, 2012, representatives of Perella Weinberg and Kirkland met with members of the Company’s management team at the Company’s headquarters to discuss management’s views on the Company’s history, business and prospects.

On October 25, 2012, the Special Committee held a telephonic meeting at which representatives of Perella Weinberg provided an update on their efforts to date regarding the preparation of Perella Weinberg’s preliminary financial analysis. At the same meeting, representatives of Potter, Anderson & Corroon LLP (“Potter”) provided the Special Committee with an overview of Potter’s qualifications, and the Special Committee authorized the engagement of Potter as legal counsel.

On November 2, 2012, the Special Committee held a telephonic meeting to discuss the strategic alternatives review process. At the commencement of the November 2, 2012 meeting, Mr. Hartman noted that Mr. Brock had resigned from the Special Committee during the previous week to avoid even the slightest appearance of a conflict of interest in light of his friendship with Mr. Megrue. Mr. Hartman informed the other members of the Special Committee that Mr. Kent was able to fill the seat left empty by Mr. Brock’s resignation. Mr. Kent informed the members of the Special Committee that he did not have a relationship with Apax aside from sitting on the Company’s board of directors with Mr. Megrue and Mr. Pellegrini. The Special Committee then adopted resolutions appointing Mr. Kent as a member of the Special Committee to replace Mr. Brock. Representatives of Perella Weinberg then discussed with the Special Committee potential strategic alternatives for the Company and their preliminary financial analyses of the Company. Members of the Special Committee, together with its advisors, then engaged in a discussion regarding Apax’s proposal to acquire the Company, possible responses to such proposal, and other potential strategic alternatives available to the Company, including continuing as a standalone company, merging with a strategic partner and pursuing a leveraged recapitalization. The Special Committee and its advisors discussed the merits of conducting a pre-signing market check, using a “go-shop” process or using a combination of approaches if it was the determination of the Special Committee to pursue a sale process at such time. Following discussion, the Special Committee decided not to make a determination about whether to pursue a transaction with Apax, or another potential bidder, or whether to pursue an alternative transaction or strategic alternative until it had an opportunity to further consider the matters that had been discussed at the meeting.

On November 8, 2012, the Special Committee held an in-person meeting at Kirkland’s offices in New York City to continue discussions from the prior meeting regarding the development of the Special Committee’s preliminary view on the valuation of the Company. The Special Committee then discussed in detail a long range plan for the Company which had been prepared by management in October (the “October Long Range Plan”). The October Long Range Plan was prepared for purposes of assisting the Special Committee in evaluating the Company’s strategic alternatives. It was prepared using the same methodology and assumptions that the

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Company’s management had historically used to prepare the Company’s annual long range plan and budget. The Special Committee had an extensive discussion regarding the underlying assumptions for the projections contained in the October Long Range Plan and the likelihood of achieving such projections. A representative of Perella Weinberg discussed, among other things, their preliminary financial analyses of the Company. Members of the Special Committee, together with its advisors, then engaged in a detailed discussion regarding the preliminary financial analyses. It was the consensus of the Special Committee that, although Apax’s initial offer range of $38.00 to $39.00 per Share was not in a range the Special Committee believed justified engaging in a transaction with Apax, it was at a high enough level that it merited a response and further discussion. Following extensive discussion, the Special Committee instructed its advisors to respond to Apax’s representatives with a counterproposal including an increased price from Apax of $43.50 per Share, a rejection of Apax’s request for exclusivity, a condition that the transaction be approved by a majority of the disinterested stockholders of the Company, the inclusion of a go-shop process which was sufficiently lengthy to account for the upcoming holiday season with no Apax match rights and a requirement that the SKM Funds agree to support a superior proposal. Further, the Special Committee directed its advisors to communicate to Apax the expectation of the Special Committee that Apax execute a confidentiality agreement containing a customary standstill provision.

On Monday, November 12, 2012 representatives of Perella Weinberg and Kirkland, on behalf of the Special Committee, and representatives of Simpson, on behalf of Apax, met at Apax’s office in New York City to discuss Apax’s proposal. Mr. Megrue and Mr. Pellegrini also attended the meeting. During the meeting, representatives of Perella Weinberg and Kirkland communicated the Special Committee’s positions and the representatives of Apax, J.P. Morgan and Simpson said they would respond following the meeting. Later on November 12, representatives of Kirkland sent representatives of Simpson a proposed form of confidentiality agreement.

On November 14, 2012, a representative of Apax contacted a representative of the SKM Funds to update them on the status of the proposed transaction, including the request of the Company that the SKM Funds agree to be subject to a confidentiality and standstill agreement. The representatives of the SKM Funds requested that Simpson contact Ropes & Gray LLP (“Ropes”), who would be acting as legal advisor to the SKM Funds. Representatives of Simpson and Ropes discussed the proposed transaction, including that the SKM Funds should enter into a separate confidentiality and standstill agreement with the Company and that certain procedures would need to be implemented to address any potential conflicts of interest between the SKM Funds and the funds advised by Apax.

On November 16, 2012, the Special Committee held a telephonic meeting to discuss certain technical and minor corrections to the October Long Range Plan that the management team had suggested. Representatives of Perella Weinberg discussed the minor impact of the changes to the long range plan on Perella Weinberg’s preliminary financial analyses that had been previously presented to the Special Committee by Perella Weinberg. Specifically, the changes resulted in a $0.279-$0.285 per Share reduction in the discounted cash flow valuation range and a $0.02-$0.05 per Share reduction in the leveraged buyout valuation range. Representatives of Perella Weinberg then noted that

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Perella Weinberg had performed a detailed review of management’s entire updated long range plan (the “November Long Range Plan”) and that it was Perella Weinberg’s view that the assumptions underlying management’s changed projections continued to appear reasonable. Members of the Company’s finance team were then invited to join the call to answer questions from members of the Special Committee regarding the changes to the October Long Range Plan. The Special Committee then discussed the likelihood of achievement of the November Long Range Plan and the overall effect of such revised projections on the preliminary financial analyses performed by Perella Weinberg. Members of the Special Committee also discussed the status of negotiations with Apax on the confidentiality agreement. The original draft confidentiality agreement had contained language prohibiting Apax from exclusively engaging, or “locking-up”, its debt financing sources. Apax requested the ability to lock-up debt financing sources and the Special Committee decided to reject this request.

On November 16, 2012, Apax and the Company finalized the Apax confidentiality agreement. Also on November 16, representatives from Ropes and Simpson discussed that Allan Karp and Chris Reilly would be exercising their authority over the SKM Funds without any involvement from John Megrue, Alex Pellegrini or anyone else from Apax. On November 18, representatives of Ropes sent the Company a separate confidentiality and standstill agreement to apply to the SKM Funds. A representative of Ropes informed Kirkland that Allan Karp and Chris Reilly would be exercising their authority over the SKM Funds without any involvement from John Megrue, Alex Pellegrini or anyone else from Apax.

On November 19, 2012, Apax and the SKM Funds executed separate confidentiality agreements with the Company which included customary standstills and which prohibited Apax and the SKM Funds from exclusively engaging, or “locking up” debt financing sources. The confidentiality agreement with the SKM Funds provided that the SKM Funds would not discuss any potential transaction, or share confidential information, with the funds advised by Apax without the prior consent of the Company. Shortly thereafter, the Company, via Perella Weinberg, delivered to Apax a copy of the November Long Range Plan.

On November 27, 2012, representatives of Apax, J.P. Morgan, the Company’s management team, Kirkland and Perella Weinberg participated in a due diligence conference call to discuss the Company’s business and the November Long Range Plan.

On the evening of November 29, 2012, Apax delivered a revised proposal letter to the Special Committee which provided for the acquisition of all of the outstanding stock of the Company for an increased price of $40.00 per Share, which represented a 37% premium over the November 28, 2012 closing price of $29.26 per Share. The letter noted that the SKM Funds, which had retained separate legal counsel, would be making a separate investment decision with respect to any proposal and that Apax had not discussed the proposal contained in the letter with the SKM Funds. The letter also advised that Apax anticipated that the Special Committee would approach the SKM Funds to determine if they would be supportive of the proposed transaction, and willing to enter into a voting support agreement, once the terms of the transaction had been agreed between Apax and the Special Committee. Attachments to the letter included a form of exclusivity agreement, which reflected a request for a limited period of exclusivity of 14 days, and letters from J.P. Morgan and Bank of America stating that each institution was “highly confident” of its ability to provide financing for the proposed transaction.

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On December 1, 2012, the Special Committee held a telephonic meeting to discuss Apax’s November 29 proposal. During the meeting, representatives of Perella Weinberg discussed with the Special Committee Perella Weinberg’s updated preliminary financial analyses relating to the Company. The presentation included a review of the trading prices of the Shares since Perella Weinberg’s review with the Special Committee on November 2, 2012, including certain updates relating to stock prices and analyst coverage, and also a comparison of the Company’s stock price and trading multiples to those of selected comparable companies. The discussion also included an update to Perella Weinberg’s broader financial analysis, including a discounted cash flow analysis, a review of comparable transactions and a leveraged buyout analysis. A representative of Perella Weinberg noted that although the changes in the market over the past month caused certain minor changes to the preliminary financial analyses, Perella Weinberg believed those changes should not impact the overall analysis. Following extensive discussion of potential responses to Apax, the Special Committee directed its representative to respond to Apax’s proposal with a counterproposal including an increased price from Apax of $43.00 per Share (with the Special Committee authorizing its advisors to further negotiate to $42.50 per Share), an agreement from the SKM Funds to support a transaction at a higher price from a third party bidder, and a condition that the transaction be approved by a majority of the disinterested stockholders of the Company.

That same afternoon on December 1, 2012, representatives of Kirkland and Perella Weinberg spoke by phone with representatives of Simpson and J.P. Morgan and communicated the Special Committee’s counterproposal.

Following receipt of the Special Committee’s request and with the approval of representatives of Kirkland, Simpson contacted Ropes on December 1 to ask whether the SKM Funds would be willing to agree with the Company to support a superior proposal from a third party bidder. On December 2, Ropes advised Simpson that the SKM Funds would be willing to accept in principle such a condition.

Over the following days, representatives of Kirkland and Perella Weinberg and representatives of J.P. Morgan and Simpson engaged in a series of discussions regarding deal terms. On December 2, 2012, a representative of J.P. Morgan communicated to representatives of Perella Weinberg that Apax would be willing to increase its offer price to $40.50 per Share, which represented a 41% premium over the November 30, 2012 closing price of $28.71 per Share.

On December 5, 2012, in a subsequent call between representatives of Perella Weinberg and J.P. Morgan, Perella Weinberg noted that the Special Committee would likely move forward with a transaction at $43.00 per Share, but otherwise may consider breaking off discussions until after the holiday season. J.P. Morgan indicated that Apax had limited flexibility on price and that Apax was unlikely to get to a price above $41.00 per Share. J.P. Morgan noted, in particular, Apax’s concerns regarding negative trends and future risks with respect to the Company’s same store sales growth.

On December 10, 2012, the Special Committee held a telephonic meeting to discuss the status of negotiations with Apax since the previous meeting of the Special Committee on December 1, 2012. In light of the lack of an agreement on price, the Special Committee decided to disengage from discussions with Apax during the holiday season, but to leave the door open to consider resuming negotiations in January, if the Special Committee determined it to be advisable at that time. The Special Committee decided that Mr. Hartman should speak directly with Mr. Megrue in the coming days to communicate that message.

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On December 12, 2012, Mr. Hartman spoke with Mr. Megrue and communicated to Mr. Megrue that the Special Committee continued to believe a higher price than Apax’s last proposal was appropriate and the Special Committee’s decision to end discussions with Apax during the holiday season. Mr. Hartman and Mr. Megrue agreed to have their respective advisors coordinate with each other over the coming weeks so they could consider resuming discussions after the holiday shopping season had ended and when the results for that season would be available.

On January 7, 2013, following the end of the holiday shopping season, Mr. Hartman and Mr. Megrue spoke by phone about Apax’s proposal. Mr. Megrue told Mr. Hartman that Apax’s investment committee was planning to meet later in the month to further consider the transaction.

On January 10, 2013, Bruce Hartman and representatives of the Company and Perella Weinberg met with representatives of Apax and J.P. Morgan and provided an update on the Company’s performance during the holiday shopping season.

On January 17, 2013, Mr. Hartman and Mr. Megrue again spoke by phone about Apax’s proposal. During the discussion, Mr. Megrue stated that Apax was unwilling to increase its proposed price. Mr. Megrue also stated that Apax was exploring an alternative transaction in which the SKM Funds would sell their Shares to Apax.

On January 22, 2013, the Special Committee held a telephonic meeting to receive an update from Mr. Hartman regarding his discussions with Mr. Megrue. The Special Committee also received an updated presentation of Perella Weinberg’s preliminary financial analyses relating to the Company. Following discussion, and in light of the fact that the parties had reached an impasse on price, the Special Committee determined that the best course of action at the current time was to formally end negotiations with Apax. The Special Committee instructed Perella Weinberg to relay that message to J.P. Morgan later that same morning.

Later in the morning on January 22, 2013, a representative of Perella Weinberg informed a representative of J.P. Morgan that the Special Committee had decided to end discussions with Apax regarding its proposal.

As Apax’s proposal was no longer pending, Apax partners John Megrue and Alex Pellegrini resumed their ordinary course participation on the Company’s board of directors.

On February 4, 2013, a representative of Apax delivered a letter to a representative of the SKM Funds proposing to acquire the shares of the Company held by the SKM Funds for a cash purchase price based on an volume weighted average share price over the 30 calendar days prior to entering into any such agreement. The SKM Funds advised that they might consider the sale of their Shares at a higher price but the SKM Funds and Apax elected not to pursue a transaction.

During this period, the SKM Funds and the Company also had a preliminary discussion regarding a repurchase by the Company of the Shares owned by the SKM Funds. The SKM Funds indicated that they might consider such a repurchase at an undetermined premium to market, but the SKM Funds and the Company elected not to pursue such a transaction.

During March 2013, the Company’s board of directors was considering the implementation of a share repurchase program and, in connection therewith, on March 15, 2013, consulted with an investment bank which provided a discounted cash flow valuation of the Company.

On April 18, 2013, a representative of Apax delivered to Mr. Fisch a copy of a written proposal from Apax for the acquisition of all of the outstanding stock of the Company for an increased price of $42.00 per Share, which represented a 42% premium over the April 17, 2013 closing price of $29.59 per Share. The proposal letter was addressed to the independent members of the

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Company’s board of directors and indicated that Apax partners John Megrue and Alex Pellegrini, directors of the Company, would recuse themselves from deliberations and meetings of the Company’s board of directors during the pendency of the proposal. The letter noted that the SKM Funds, which had retained separate legal counsel, would be making a separate investment decision with respect to any proposal and that Apax had not discussed the proposal contained in the letter with the SKM Funds. The letter stated that Apax was prepared to accept that the SKM Funds may commit with the Company to vote their Shares in favor of a superior proposal on the same pro rata basis as the votes by all other stockholders but that all matters pertaining to any voting support agreement would need to be negotiated and agreed with the SKM Funds. The letter also stated that Apax would be willing to accept that a transaction be subject to approval by a majority of the disinterested stockholders so long as any superior proposal be subject to the same requirement (i.e., exclude the Shares held by the SKM Funds from the vote on a superior proposal transaction).

On April 22, 2013, the Special Committee held a telephonic meeting to discuss Apax’s April 18 proposal. Representatives of Perella Weinberg and Kirkland summarized the key elements of the proposal for the Special Committee. The members of the Special Committee took note that, since its last meeting on January 22, 2013, the SKM Funds and Apax had decided not to pursue an alternative transaction involving the SKM Funds selling their Shares to Apax. A representative of Perella Weinberg then noted that Perella Weinberg would update its preliminary financial analyses to incorporate updated market information and actual data on the Company’s 2012 fiscal year and early 2013 performance. Members of the Special Committee then discussed their views of the November Long Range Plan. Members of the Special Committee discussed their view that there was more downside for the Company’s prospects than what was reflected in the plan. The Special Committee took note of the fact that the Company was planning to make an earnings announcement on May 23, 2013 and that, if a deal was to be accomplished with Apax, it may be advisable to announce the transaction prior to the earnings announcement, as the earnings announcement would likely have a negative effect on the Company’s stock price because the expected earnings for the first quarter of Fiscal Year 2013 were approximately 8% below consensus estimates and the expected decline in same store sales growth was greater than consensus estimates. Following extensive discussion on appropriate responses to Apax’s proposal, the Special Committee decided to allow Apax access to additional due diligence materials and to schedule management presentations, but that it would not respond to the key terms of the proposal (including price and exclusivity) until the Special Committee had obtained Perella Weinberg’s updated views on valuation.

Later in the day on April 22, 2013, representatives of Kirkland and Perella Weinberg communicated to their counterparts at Simpson and J.P. Morgan that the Special Committee would be willing to authorize the Company to provide due diligence materials at that time and would be willing to begin scheduling management presentations. They also stated that the Special Committee would be meeting later that week to further discuss Apax’s revised offer and to obtain financial advice and that it had not yet made any decision with respect to the terms offered by Apax (including price and the exclusivity request).

Also on April 22, 2013, members of the Company’s management and representatives of Perella Weinberg discussed management’s views on the Company’s business, recent results and the November Long Range Plan. Following this meeting, management worked to prepare an

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updated long range plan (the “April Long Range Plan”) to account for changes underlying management’s assumptions since November, including (i) updates to reflect that the Company’s actual 2012 fiscal year and early 2013 performance did not meet prior projections or expectations, (ii) an increase in estimated store openings per year, (iii) a postponement of the Company’s Canada initiative by two years, (iv) an expedited E-commerce initiative commencing during fiscal year 2013 rather than fiscal year 2014, and (v) a reduction in stock compensation expense.

On April 26, 2013, representatives of Apax sent a due diligence request list to the Company.

On April 27, 2013, the Special Committee held a telephonic meeting to further discuss Apax’s April 18 proposal. A representative of Kirkland provided the Special Committee an overview of the fiduciary duties applicable to board members. A representative of Perella Weinberg then reviewed Perella Weinberg’s updated preliminary financial analyses relating to the Company and discussed the key differences between the April Long Range Plan and the November Long Range Plan. Members of the Special Committee discussed their view that there was more downside for the Company’s prospects than what was reflected in the long range plan. A representative of Perella Weinberg then noted to the Special Committee that another financial advisor had presented certain analyses to the Company’s board of directors on March 15, 2013 in connection with its review of a share repurchase program which had included a discounted cash flow analysis setting forth a different and higher valuation range. The representative of Perella Weinberg stated that, upon review, Perella Weinberg identified three key differences between such other financial advisor’s analysis and Perella Weinberg’s, which resulted in the higher valuation range: (i) the other financial advisor’s discounted cash flow analysis failed to tax-effect operating earnings in its cash flow forecasts, resulting in inflated cash flows, (ii) the financial advisor used a lower discount rate for the discounted cash flow analysis than what Perella Weinberg believed was appropriate from a valuation perspective and (iii) the financial advisor used a higher terminal multiple for its discounted cash flow analysis than Perella Weinberg felt was consistent with the expectation that projected future growth rates in the terminal year would be less than expected growth rates today. Following lengthy discussion, the Special Committee decided that the price of $42.00 per Share offered by Apax in its April 18 proposal was, in their preliminary view, attractive to pursue. Members of the Special Committee then, together with representatives of Kirkland and Perella Weinberg, discussed whether or not to engage in a pre-signing market check and whether or not Apax’s proposed go-shop process might be acceptable in principle. The Special Committee then discussed with its advisors appropriate responses to Apax’s request for exclusivity and to its offer price of $42.00 per Share. The Special Committee decided to reject Apax’s request for exclusivity and ask for a higher price and to advise Apax that the Special Committee was willing to allow Apax to proceed with diligence based on its offer, but that the Special Committee believed Apax should increase its offer price following diligence. The Special Committee instructed its advisors to communicate to Apax’s legal and financial advisors the Special Committee’s key positions and for Kirkland to prepare a draft merger agreement to send to Simpson.

Later on April 27, 2013, a representative of Kirkland called a representative of Simpson to convey the Special Committee’s positions on deal terms, including the rejection of exclusivity, and informed the representative of Simpson that Kirkland would be sending a draft merger agreement reflecting the Special Committee’s positions. Later that day, Apax agreed to drop its request for exclusivity.

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On April 28, 2013, representatives of Perella Weinberg communicated to J.P. Morgan the Special Committee’s position on certain matters, including that diligence and management discussions could commence the next day, but that the Special Committee believed Apax should increase its price following diligence. Perella Weinberg indicted that Kirkland would be delivering a draft merger agreement to Simpson reflecting the Special Committee’s position on deal terms.

Also on April 28, 2013, representatives of the Company delivered the April Long Range Plan to representatives of Apax.

On April 29, 2013, Bloomberg published a news report that identified the Company and two other teen retailers as likely leveraged buyout targets for private equity firms.

Also on April 29, 2013, representatives of Kirkland sent a draft merger agreement to Simpson.

From April 29 through May 1, 2013 representatives of Apax and members of the Company’s management team met in person for management presentations at the Company’s headquarters. On May 2, 2013, the Company opened an electronic data room to facilitate documentary due diligence of the Company by Apax and its representatives, including its financing sources. Apax and its representatives, including its financing sources, continued to perform due diligence and had access to the data room through the signing of the transaction.

On May 2, 2013, representatives of J.P. Morgan advised representatives of Perella Weinberg that Apax was still assessing the April Long Range Plan as well as the Company’s first quarter 2013 performance, including the drop in same store sales growth for the first quarter of 2013, and that Apax sought additional due diligence on such changes. Representatives of Perella Weinberg asked whether Apax could reconfirm that its proposal of $42.00 per Share had not changed and were advised by J.P. Morgan that Apax was unable to do so based on the information then available to it.

On May 8, 2013, representatives of Simpson sent a revised draft of the Merger Agreement to Kirkland. Over the course of the next several weeks through signing of the transaction, numerous drafts of the merger agreement were exchanged between the parties.

On May 10, 2013, a representative of Kirkland called a representative of Ropes, legal counsel to the SKM Funds, to discuss the potential transaction. The representative from Ropes indicated that it was his preliminary understanding that the SKM Funds were likely to support Apax’s proposal to acquire the Company, subject to, among other things, the SKM Funds performing their due diligence, the SKM Funds’ review of the final deal terms and negotiation and agreement on the terms of the support agreement.

Later on May 10, 2013, the Special Committee held a telephonic meeting to discuss the issues raised in the May 8 draft of the merger agreement sent by Simpson. Following discussion, members of the Special Committee asked Kirkland to respond to the Simpson draft, including to reduce the go-shop period Company termination fee of 1.125% proposed in the Simpson draft to 1.0%, to replace the iterative match rights proposed in the Simpson draft with a single match right and to remove a provision contained in the Simpson draft for reimbursement of Apax’s expenses under certain circumstances.

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On May 15, Kirkland sent an initial draft of the support agreement to Ropes, which contained an obligation for the SKM Funds to support any superior proposal recommended by the Special Committee.

On May 15, 2013, representatives of Ropes informed representatives of Simpson that the SKM Funds would require an indemnity from the funds advised by Apax with respect to potential deal related litigation as well as an expense reimbursement as a condition to the SKM Funds agreeing to support the transaction.

On May 16, Ropes sent a revised draft of the support agreement which provided that the SKM Funds would be obligated to support a superior proposal recommended by the Special Committee if it was an all-cash offer at a higher price than the Merger. Over the course of the next several days through signing of the transaction, several drafts of the support agreement were exchanged between the parties.

Also on May 16, 2013, Simpson sent Kirkland initial drafts of the equity commitment letters. Over the course of the next several days through signing of the transaction, several drafts of the equity commitment letters were exchanged between the parties.

On May 17, 2013, representatives of J.P. Morgan and Perella Weinberg discussed the status of the transaction by phone. During the discussion, J.P. Morgan informed Perella Weinberg that Apax was unwilling to increase its price above $42.00 per Share and that $42.00 per Share would be its best and final price and noted in particular the Company’s lower April Long Range Plan, the decline in 2013 same store sales and the expected first quarter 2013 earnings shortfall as compared to consensus estimates. The representative of J.P. Morgan also discussed the importance to Apax of having iterative match rights.

On May 17, 2013, representatives of Ropes sent to representatives of Simpson a draft indemnification agreement to be entered into by the funds advised by Apax for the benefit of the SKM Funds. Over the next several days, through the signing of the transaction, drafts of the indemnification agreement were exchanged between the parties.

On May 18, 2013, Simpson sent Kirkland draft debt financing commitment papers.

Later on May 18, 2013, the Special Committee held a telephonic meeting to discuss ongoing negotiations with Apax. A representative of Kirkland then provided a summary of the terms contained in the draft debt commitment papers provided to Kirkland by Simpson earlier that day. A representative of Perella Weinberg next reviewed Perella Weinberg’s revised preliminary financial analyses relating to the Company. The presentation included an updated review of the trading of the Shares since Perella Weinberg’s last full presentation to the Special Committee on April 27th, including the anticipated effects on the stock price as a result of the Company’s first quarter financial earnings which were expected to be about 8% below consensus estimates and the decline in same store sales growth which was expected to be greater than consensus estimates. The representative of Perella Weinberg next presented Perella Weinberg’s updated analysis with respect to valuation using financial methodologies including a discounted cash flow analysis, a review of comparable transactions and a leveraged buyout analysis. Members of

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the Special Committee, together with its advisors, then engaged in a detailed discussion regarding the various assumptions and sensitivities underlying Perella Weinberg’s updated preliminary financial analyses. It was noted by members of the Special Committee that the vibrant and robust state of the financial markets was favorable for a transaction and might not remain as favorable in the future. Following extensive discussion, the Special Committee decided it would likely be willing to accept a $42.00 per Share price but directed Perella Weinberg to go back to Apax one more time to negotiate for a higher price.

Later in the evening on May 18, 2013, representatives of Perella Weinberg and J.P. Morgan engaged in a discussion about key open issues, including price, Apax’s request for iterative match rights, and Apax’s request for expense reimbursement from the Company under certain circumstances. During the discussion, J.P. Morgan stated that Apax was not flexible on either price or iterative match rights.

On May 19, 2013, Mr. Megrue called Mr. Hartman to discuss open deal terms and told Mr. Hartman that $42.00 per Share was Apax’s best and final offer and that Apax would insist on iterative match rights and expense reimbursement.

Later on May 19, 2013, Mr. Hartman updated the Special Committee about his discussion with Mr. Megrue.

On May 20, 2013, the Special Committee held a telephonic meeting to obtain updates on ongoing negotiations from its advisors. The Special Committee then decided to accept Apax’s position on iterative match rights and price and to reject the request for expense reimbursement.

On May 20, 2013, representatives of Kirkland provided to representatives of Simpson the draft Support Agreement which had been substantially agreed to between the Company and the SKM Funds.

Over the next two days, the advisors to the parties exchanged various drafts of the transaction documents and engaged in numerous telephonic discussions to resolve any remaining open issues. Among the open issues resolved during this period, the parties agreed to a 40 day go-shop period followed by a 25-day “excluded party” period and that Apax would not be entitled to receive any reimbursement of its expenses. Also during this time period, representatives of Simpson confirmed to representatives of Kirkland that Apax would not ask members of management to enter into agreements (including as to their post-closing employment with the Company or rolling over equity in the Company) prior to the execution of the Merger Agreement but that Apax wished to confirm with Mr. Fisch as a due diligence matter that he would be willing to explore with Apax at a later date his continuing as the Company’s chief executive officer and reinvesting part of his proceeds from the Merger alongside Apax. In a conversation with representatives of Apax and Perella Weinberg, Mr. Fisch advised that he would be open to having discussions on such matters following the go-shop process. Prior to that time, there had been no discussions between Apax and members of management regarding such matters.

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On May 22, 2013, the Special Committee held a meeting to discuss the outcome of negotiations with Apax. During the meeting, a representative of Perella Weinberg discussed the go-shop process contemplated by the draft Merger Agreement and discussed with the Special Committee a list of potentially interested parties that Perella Weinberg would expect to contact following execution of the Merger Agreement. Also at the meeting, Perella Weinberg reviewed with the Special Committee its financial analysis of the $42.00 per Share Merger Consideration and delivered an oral opinion, subsequently confirmed in writing, to the Special Committee, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the per Share Merger Consideration to be received by the holders of Shares (other than any of (i) the Parent Group and (ii) the SKM Funds) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. The full text of Perella Weinberg’s written opinion, dated May 22, 2013, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C to this proxy statement and is incorporated by reference herein. A discussion of Perella Weinberg’s analysis is described under “ Special Factors—Opinion of Financial Advisor to the Special Committee ” beginning on page [•] of this proxy statement. Members of the Special Committee next discussed the terms of the key transaction agreements, including the Merger Agreement, that were circulated prior to the meeting. Following extensive discussion, and after considering the foregoing and the factors described under “ Special Factors—Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger ” beginning on page [•] of this proxy statement, the Special Committee unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were advisable, fair to and in the best interest of the Company and its stockholders (excluding the SKM Funds). The Special Committee unanimously adopted resolutions to recommend that the Company’s board of directors (i) determine that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds), (ii) approve, adopt and declare advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolve to recommend that the holders of the Shares adopt the Merger Agreement, and direct that the Merger Agreement be submitted to the holders of Shares for their adoption.

Later on May 22, 2013, following the Special Committee meeting, the Company’s board of directors held a meeting to consider the potential transaction with Apax. Board members John Megrue and Alex Pellegrini did not join the meeting as they had both recused themselves from meetings of the Company’s board of directors during the pendency of Apax’s proposal. Mr. Brock was unable to attend the meeting due to a travel conflict. During the meeting, a representative of the Special Committee provided the other directors present with a description of the background of the proposed transaction and the process undertaken by the Special Committee. The representative of the Special Committee then provided the other directors with the Special Committee’s unanimous recommendation in favor of the proposed transaction. During the meeting, Perella Weinberg reviewed its financial analysis of the $42.00 per Share Merger Consideration and noted that its written opinion to the Special Committee would provide that such opinion may be relied on by the other members of the Company’s board of directors, solely in their capacity as members of the Company’s board of directors, in connection with, and for the purposes of, the evaluation of the Merger. Members of the Company’s board of directors next discussed the terms of the key transaction agreements, including the Merger Agreement, that were circulated prior to the meeting. Kirkland reviewed with the Company’s board of

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directors its fiduciary duties in the context of a potential acquisition. During the meeting, Mr. Fisch stated that he would work with the Company’s board of directors and the Special Committee during the “go-shop” period, was open to discussions with potential bidders during the go-shop process and agreed that he would make no commitment to Apax prior to the end of the go-shop process. Following extensive discussion, and after considering the foregoing and the factors described under “— Solicitation of Acquisition Proposals ” beginning on page [•] of this proxy statement, the Company’s board of directors (with Mr. Fisch abstaining) adopted resolutions which (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds)), (ii) approved, adopted and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolved to recommend that the holders of Shares adopt the Merger Agreement and directed that the Merger Agreement be submitted to the holders of Shares for their adoption.

In the early morning on May 23, 2013, the Company, Parent and Merger Sub executed the Merger Agreement, after which the Company and Apax issued a joint press release announcing the execution of the Merger Agreement. Contemporaneously with the execution of the Merger Agreement, the SKM Funds, the Company and Parent executed the Support Agreement and the Apax Investors, Apax, Parent Group, SKM Funds and the advisors to the SKM Funds entered into the indemnification agreement.

Subsequent Events

On May 23, 2013, representatives of Perella Weinberg began contacting third parties who might be potentially interested in acquiring the Company in accordance with the “go-shop” provisions of the Merger Agreement.

The Company will not update this proxy statement with information regarding the “go-shop” process until after the expiration of the “go-shop” period.

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Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger

Pursuant to resolutions of the Special Committee adopted at a meeting of the Special Committee held on May 22, 2013, the Special Committee unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were advisable, fair to and in the best interests of the Company and the holders of the Shares (other than the SKM Funds). The Special Committee also unanimously recommended that the Company’s board of directors (i) determine that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds), (ii) approve, adopt and declare advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolve to recommend that the holders of the Shares adopt the Merger Agreement, and direct that the Merger Agreement be submitted to the holders of Shares for their adoption. Following the recommendation of the Special Committee, the Company’s board of directors, pursuant to resolutions adopted at a meeting of the Company’s board of directors held on May 22, 2013, (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to and in the best interests of the Company and its stockholders (excluding the SKM Funds), (ii) approved, adopted and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (iii) resolved to recommend that the holders of Shares adopt the Merger Agreement, and directed that the Merger Agreement be submitted to the holders of Shares for their adoption. In reaching its conclusion to make such determination and recommendations to the Company’s board of directors, the Special Committee consulted with its financial and legal advisors and considered various material factors. Among the material information and factors considered by the Special Committee were the following:

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The Special Committee also considered a number of potentially countervailing factors and risks. These countervailing factors and risks included the following:

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The Special Committee believes that sufficient procedural safeguards were and are present to ensure the fairness of the Merger and to permit the Special Committee to represent effectively the interests of our unaffiliated stockholders, and in light of such procedural safeguards the Special Committee did not consider it necessary to retain an unaffiliated representative to act solely on behalf of our unaffiliated stockholders for purposes of negotiating the terms of the Merger Agreement or preparing a report concerning the fairness of the Merger Agreement and the Merger. These procedural safeguards include the following:

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This discussion of the risks and factors considered by the Special Committee in making its determination and recommendations is not intended to be exhaustive but includes all material factors considered by the Special Committee. In view of the wide variety of factors and risks considered by the Special Committee in making its determination and recommendations and the complexity of these factors and risks, the Special Committee did not find it useful, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors and risks. In considering the factors and risks described above, individual members of the Special Committee may have given different weight to different factors and risks. The Special Committee conducted an overall analysis of the factors and risks described above, including discussions with, and questioning of, its legal and financial advisors and the Company’s management, and considered the factors and risks overall to be favorable to, and to support, the Special Committee’s determination and recommendations.

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Position of the Parent Group and the Apax Investors as to the Fairness of the Merger

Under the SEC rules governing “going private” transactions, each of the Parent Group and the Apax Investors may be deemed to be an affiliate of the Company and, therefore, is required to express its beliefs as to the fairness of the Merger to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. Each of the Parent Group and the Apax Investors is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of each of the Parent Group and the Apax Investors should not be construed as a recommendation to any Company stockholder as to how that stockholder should vote on the proposal to adopt the Merger Agreement.

In this section only, we refer to the Company’s board of directors, other than Alex Pellegrini and John Megrue, who are both affiliated with the Apax Investors, as the “Board.” Each of Messrs. Pellegrini and Megrue recused himself from all discussions and deliberations of the Board related to the proposed Merger.

The Parent Group attempted to negotiate with the Special Committee the terms of a transaction that would be most favorable to the Parent Group and the Apax Investors, and not necessarily to the Company’s unaffiliated stockholders, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such unaffiliated stockholders. The Special Committee consists of three independent and disinterested directors of the Company who are not officers or employees of the Company or representatives of the Apax Investors or the Parent Group and have no economic interest in the Company or the surviving corporation following the completion of the Merger.

None of the Parent Group or the Apax Investors participated in the deliberations of the Special Committee or the Board regarding, or received advice from the Company’s or the Special Committee’s legal advisors or financial advisors as to, the substantive or procedural fairness of the Merger to the Company’s unaffiliated stockholders. None of the Parent Group or the Apax Investors has performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the Merger to the Company’s unaffiliated stockholders.

Based on the knowledge and analysis of each of the Parent Group and the Apax Investors of available information regarding the Company, as well as discussions with the Company’s senior management regarding the Company and its business and the factors considered by, and the analysis and resulting conclusions of, the Board and the Special Committee discussed under the sections captioned “ Special Factors—Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger” and “Special Factors—Purpose and Reasons of the Company for the Merger ” beginning on page [•] of this proxy statement (which analysis and resulting conclusions each of the Parent Group and the Apax Investors adopt), each of the Parent Group and the Apax Investors believes that the Merger is substantively and procedurally fair to the Company’s unaffiliated stockholders. In particular, each of the Parent Group and the Apax Investors believes that the proposed Merger is substantively and procedurally fair to the Company’s unaffiliated stockholders based on its consideration of the following factors, among others:

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In their consideration of the fairness of the proposed Merger, the Parent Group and the Apax Investors did not find it practicable to, and did not, appraise the assets of the Company to determine the liquidation value for the Company’s unaffiliated stockholders because of their belief that liquidation sales generally result in proceeds substantially less than sales of a going concern, because of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, because they considered the Company to be a viable, going concern and because the Company will continue to operate its business following the Merger. None of the Parent Group or the Apax Investors considered net book value, which is an accounting concept, for purposes of determining the fairness of the per Share Merger Consideration to the Company’s unaffiliated stockholders because, in their view, net book value is not indicative of the Company’s market value but rather an indicator of historical costs. Each of the Parent Group and the Apax Investors notes, however, that the per Share Merger Consideration of $42.00 per Share is higher than the net book value of the Company per Share of $7.16 as of February 2, 2013. None of the Parent Group or Apax Investors sought to establish a pre-Merger going

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concern value for the Shares to determine the fairness of the Merger Consideration to the Company’s unaffiliated stockholders because following the Merger the Company will have a significantly different capital structure. However, to the extent the pre-Merger going concern value was reflected in the Share price on May 22, 2013, the last trading day before the Merger Agreement was publicly announced, the per Share Merger Consideration of $42.00 represented a premium to the going concern value of the Company.

The foregoing discussion of the factors considered by each of the Parent Group and the Apax Investors in connection with the fairness of the Merger is not intended to be exhaustive but is believed to include all material factors considered by each of them. The Parent Group and the Apax Investors did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the Merger. Rather, each of the Parent Group and the Apax Investors made its fairness determination after considering all of the foregoing factors as a whole. Each of the Parent Group and the Apax Investors believes these factors provide a reasonable basis upon which to form its belief that the Merger is fair to the Company’s unaffiliated stockholders. This belief should not, however, be construed as a recommendation to any Company stockholder to vote in favor of the proposal to adopt the Merger Agreement. None of the Parent Group or the Apax Investors makes any recommendation as to how stockholders of the Company should vote their Shares on the proposal to adopt the Merger Agreement.

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Opinion of Financial Advisor to the Special Committee

The Special Committee retained Perella Weinberg to act as its financial advisor in connection with the proposed Merger. The Special Committee selected Perella Weinberg based on Perella Weinberg’s qualifications, expertise and reputation and its knowledge of the industries in which the Company conducts its business. Perella Weinberg, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, leveraged buyouts and other transactions as well as for corporate and other purposes.

On May 22, 2013, Perella Weinberg rendered its oral opinion, subsequently confirmed in writing, to the Special Committee that, as of such date and based upon and subject to the various assumptions made and limitations set forth therein, the per Share Merger Consideration to be received by the holders of Shares (other than any of the Parent Group and the SKM Funds) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Perella Weinberg’s written opinion provides that the opinion may be relied on by the other members of the Company’s board of directors solely in their capacity as members of the Company’s board of directors in connection with, and for the purposes of, the evaluation of the Merger.

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The full text of Perella Weinberg’s written opinion, dated May 22, 2013, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex C to this proxy statement and is incorporated by reference herein. Holders of Shares are urged to read the opinion carefully and in its entirety. The opinion does not address the Company’s underlying business decision to enter into the Merger Agreement or the relative merits of the Merger as compared with any other strategic alternative which may have been available to the Company. The opinion does not constitute a recommendation to any holder of Shares as to how such holder should vote or otherwise act with respect to the Merger or any other matter and does not in any manner address the prices at which Shares will trade at any time. In addition, Perella Weinberg expressed no opinion as to the fairness of the Merger to, or any consideration received in connection with the Merger by, any of the Parent Group, the SKM Funds or the holders of any class of securities other than the Shares, creditors or other constituencies of the Company. Perella Weinberg provided its opinion for the information and assistance of the Special Committee in connection with, and for the purposes of its evaluation of, the Merger and provided that the opinion may be relied on by the other members of the Board of Directors of the Company, solely in their capacity as members of the Board of Directors of the Company, for the same limited purposes. This summary is qualified in its entirety by reference to the full text of the opinion.

In arriving at its opinion, Perella Weinberg, among other things:

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In arriving at its opinion, Perella Weinberg assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information supplied or otherwise made available to it (including information that was available from generally recognized public sources) for purposes of its opinion and further relied upon the assurances of Company management that information furnished by them for purposes of Perella Weinberg’s analysis did not contain any material omissions or misstatements of material fact. With respect to the Company forecasts, Perella Weinberg was advised by Company management and assumed, with the consent of the Special Committee, that such Company forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of Company management as to the future financial performance of the Company and the other matters covered thereby and Perella Weinberg expressed no view as to the assumptions on which they were based. In arriving at its opinion, Perella Weinberg did not make any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of the Company, nor was Perella Weinberg furnished with any such valuations or appraisals, nor did Perella Weinberg assume any obligation to conduct, nor did Perella Weinberg conduct, any physical inspection of the properties or facilities of the Company. In addition, Perella Weinberg did not evaluate the solvency of any party to the Merger Agreement, including under any state or federal laws relating to bankruptcy, insolvency or similar matters. Perella Weinberg assumed that the final executed Merger Agreement would not differ in any material respect from the draft Merger Agreement reviewed by Perella Weinberg and that the Merger would be consummated in accordance with the terms set forth in the Merger Agreement, without material modification, waiver or delay. In addition, Perella Weinberg assumed that in connection with the receipt of all the necessary approvals of the proposed Merger, no delays, limitations, conditions or restrictions would be imposed that could have an adverse effect on the Company. Perella Weinberg relied as to all legal matters relevant to rendering its opinion upon the advice of counsel.

Perella Weinberg’s opinion addressed only the fairness from a financial point of view, as of the date thereof, of the per Share Merger Consideration to be received by holders of Shares (other than any of the Parent Group and the SKM Funds) pursuant to the Merger Agreement. Perella Weinberg was not asked to, nor did it, offer any opinion as to any other term of the Merger Agreement (or any related agreement) or the form or structure of the Merger or the likely timeframe in which the Merger would be

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consummated. In addition, Perella Weinberg expressed no opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the Merger, or any class of such persons, whether relative to the per Share Merger Consideration to be received by holders of Shares pursuant to the Merger Agreement or otherwise. Perella Weinberg did not express any opinion as to any tax or other consequences that may result from the transactions contemplated by the Merger Agreement or any other related document, nor did Perella Weinberg’s opinion address any legal, tax, regulatory or accounting matters, as to which Perella Weinberg understood the Company had received such advice as it deemed necessary from qualified professionals. Perella Weinberg’s opinion did not address the underlying business decision of the Company to enter into the Merger Agreement or the relative merits of the Merger as compared with any other strategic alternatives which may have been available to the Company.

Perella Weinberg’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Perella Weinberg as of, the date of its opinion. It should be understood that subsequent developments may affect Perella Weinberg’s opinion and the assumptions used in preparing it, and Perella Weinberg does not have any obligation to update, revise, or reaffirm its opinion. The issuance of Perella Weinberg’s opinion was approved by a fairness opinion committee of Perella Weinberg.

Summary of Material Financial Analyses

The following is a brief summary of the material financial analyses performed by Perella Weinberg and reviewed by the Special Committee in connection with Perella Weinberg’s opinion relating to the Merger and does not purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does not represent the relative importance or weight given to those analyses by Perella Weinberg.

Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses.

Historical Stock Trading. Perella Weinberg reviewed the historical trading price per share of Shares for the twelve-month period ended May 21, 2013, which we refer to as the reference date, the last trading date prior to the date that Perella Weinberg delivered its fairness opinion to the Special Committee. Perella Weinberg noted that the price of Shares had risen by 25.1% over the twelve-month period ended on the reference date while (i) a market cap weighted index of growth teen peers, as determined by Perella Weinberg in the exercise of its professional judgment and based on its knowledge of the industry, comprised of Zumiez and Tilly’s, which we refer to collectively as the growth teen peers, was down 1.4% for the same period, (ii) a market cap weighted index of other teen peers, as determined by Perella Weinberg in the exercise of its professional judgment and based on its knowledge of the industry, comprised of Abercombie & Fitch, Aeropostale and American Eagle, which we refer to collectively as the other teen peers, was up 14.6% for the same period, (iii) a market cap weighted index of mid-cap specialty peers, as determined by Perella Weinberg in the exercise of its professional judgment and based on its knowledge of the industry, comprised of BEBE, Casual Male, Pacific Sunwear, Christopher & Banks, Wet Seal, Jos A Bank, Citi Trends, CATO, Hot Topic and Destination Maternity, which we refer to collectively as the mid-cap specialty peers, was up 14.9% for the same period, (iv) a market cap weighted index of high growth peers, as determined by Perella Weinberg in the exercise of its professional judgment and based on its knowledge of the industry, comprised of Lululemon, Under Armour, TUMI, Francesca’s, Fossil and Vera Bradley, which we refer to collectively as the high growth

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peers, was up 29.4% for the same period, (v) a market cap weighted index of off price peers, as determined by Perella Weinberg in the exercise of its professional judgment and based on its knowledge of the industry, comprised of TJX, Ross Stores and Ascena Retail, which we refer to collectively as the off price peers, was up 21.2% for the same period and (vi) the S&P Index was up 26.8% for the same period. Perella Weinberg noted that, in the twelve-month period ended on the reference date, the range of trading market prices per share of Shares was $23.85 to $34.61 compared to the $42.00 per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger and the $34.50 closing market price per Share on the reference date.

This review of historical stock trading provided general reference points with respect to the trading prices of Shares, which enabled Perella Weinberg to compare the historical prices with the consideration to be paid to the holders of Shares pursuant to the Merger.

Equity Research Analyst Price Target Statistics. Perella Weinberg reviewed and analyzed the most recent publicly available research analyst value price targets for Shares prepared and published by seven equity research analysts, selected by Perella Weinberg in the exercise of its professional judgment. Perella Weinberg noted that the range of recent price targets of the selected equity analysts for Shares was $31.00 to $40.00 per share, with a median value price target of $34.00 per Share. Perella Weinberg noted that this range of equity analyst price targets for Shares, discounted for the cost of equity by a rate of 13.0% (based on the midpoint of the 12.0%-14.0% range of weighted average cost of capital, which was selected because it was consistent with the weighted average cost of capital for public companies in the retail industry deemed by Perella Weinberg to be relevant to its analysis) to the reference date, yielded a per share equity reference range for Shares of $27.50 to $35.50 (rounded to the nearest $0.25) compared to the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger.

The public market trading price targets published by these equity research analysts do not necessarily reflect current market trading prices for the Shares and these estimates are subject to uncertainties, including the future financial performance of the Company and future financial market conditions.

Analysis of Implied Transaction Premia and Multiples. Perella Weinberg calculated the implied premium represented by the per Share Merger Consideration to be received by the holders of the Shares in the Merger relative to the following:

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The results of this analysis are summarized in the following table:

Perella Weinberg also calculated the enterprise value of the Company based on the per Share Merger Consideration to be received by the holders of Shares in the Merger. Enterprise value for the Company was calculated as the aggregate value of the Company’s fully diluted equity plus net debt (estimated as of April 28, 2013, per management estimates). Based on the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger, the implied enterprise value for the Company was calculated to be approximately $984 million. Perella Weinberg also reviewed historical and estimated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the Company for the periods described below.

In this analysis, Perella Weinberg calculated enterprise value as a multiple of:

The results of these analyses are summarized in the following table:

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Perella Weinberg also calculated the per Share Merger Consideration as a multiple of the earnings per share, or EPS, also known as the price-to-earnings, or “P/E ratio”, for each of fiscal year 2013 and 2014 based on (i) Company forecasts; and (ii) I/B/E/S estimates. The results of these analyses are summarized in the following table:

Illustrative Premiums Paid Analysis.

Perella Weinberg analyzed the first quartile high, median and third quartile low premiums paid in (i) acquisitions of publicly traded U.S. companies through a “go-private” transaction since January 1, 2002, with transaction values greater than $100 million and (ii) acquisitions of publicly traded U.S. companies since January 1, 2002, with transaction values between $500 million and $1.5 billion. For each of the transactions, based on publicly available information obtained from Capital IQ and Dealogic, Perella Weinberg calculated the premiums of the offer price in the transaction to the target company’s closing stock price one day, one week and one month prior to the announcement of the transaction. The results of these analyses are summarized in the table below:

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Based on the premiums calculated above, Perella Weinberg’s analyses of the various publicly traded companies and on professional judgments made by Perella Weinberg, Perella Weinberg selected a representative range of premiums of 20.0%—30.0% to apply to the Company’s Share price as of the reference date. Perella Weinberg noted that this analysis implied a per share equity reference range for Shares (rounded to the nearest $0.25) of $41.50 to $44.75 and compared that to the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger.

Selected Publicly Traded Companies Analysis. Perella Weinberg reviewed and compared certain financial information for the Company to corresponding financial information, ratios and public market multiples for the following publicly traded companies in the apparel industry, which, in the exercise of its professional judgment and based on its knowledge of the industry, Perella Weinberg determined to be relevant to its analysis. Although none of the following companies is identical to the Company, Perella Weinberg selected these companies because they had publicly traded equity securities and were deemed to be similar to the Company in one or more respects including the nature of their business and financial performance, amongst other factors.

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For each of the selected companies, Perella Weinberg calculated and compared financial information and various financial market multiples and ratios based on publicly available data for historical information and third-party research estimates from Factset for forecasted information. For the Company, Perella Weinberg made calculations based on the Company forecasts and research estimates from Factset.

With respect to the Company and each of the selected companies, Perella Weinberg reviewed enterprise value as a multiple of estimated EBITDA and share price to estimated earnings per share, in each case based on the estimated EBITDA for each of fiscal year 2013 and 2014 and the estimated earnings per share for each of fiscal year 2013 and 2014, respectively. The results of these analyses are summarized in the following table:

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Based on the multiples calculated above, Perella Weinberg’s analyses of the various selected publicly traded companies and on professional judgments made by Perella Weinberg, Perella Weinberg selected a representative range of multiples to apply to the Company’s forecasted EBITDA for fiscal year 2013 and 2014. Perella Weinberg noted that this analysis implied several per share equity reference ranges for Shares (rounded to the nearest $0.25) and compared that to the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger. The results of these analyses are summarized in the following table:

Although the selected companies were used for comparison purposes, no business of any selected company was either identical or directly comparable to the Company’s business. Accordingly, Perella Weinberg’s comparison of selected companies to the Company and analysis of the results of such comparisons was not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected companies and the Company.

Discounted Cash Flow Analysis. Perella Weinberg conducted a discounted cash flow analysis for the Company by first calculating the present value as of May 21, 2013 of the estimated standalone unlevered free cash flows that the Company could generate for the second half of fiscal year 2013 and for fiscal years 2014 through 2017. Estimates of unlevered free cash flows used for this analysis were based upon the financial forecasts prepared by Company management, and were calculated as EBITDA less depreciation and amortization, taxes, capital expenditures, increase in working capital and other cash flows. Perella Weinberg also calculated a range of terminal values assuming terminal year multiples of last twelve months EBITDA ranging from 5.0x to 6.0x (which range was selected because it was consistent with the trading multiples of select companies in retail industry deemed by Perella Weinberg to be relevant to its analysis) and discount rates ranging from 12.0% to 14.0% based on estimates of the weighted average cost of capital for the Company. Perella Weinberg estimated the Company’s weighted average cost of capital by calculating the weighted average of cost of equity and after-tax cost of debt of the Company. The present values of unlevered free cash flows generated over the period described above were then added to the present values of terminal values resulting in a range of implied enterprise values for the Company. For each such range of implied enterprise values, Perella Weinberg derived ranges of implied equity values for the Company. These analyses resulted in the following reference range of implied equity values per Share:

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Perella Weinberg noted that within such analysis, utilizing a range of discount rates from 12.0% to 14.0% and a range of terminal year multiples from 5.0x to 6.0x yielded a range of implied equity values per Share (rounded to the nearest $0.25) of $38.25 to $46.75 and compared that to the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger.

In addition, Perella Weinberg performed, for informational purposes only, an analysis with respect to these discounted cash flows utilizing a range of discount rates from 12.0% to 14.0% and a range of terminal year multiples from 6.0x to 7.0x, which yielded a range of implied equity values per Share (rounded to the nearest $0.25) of $43.50 to $52.50. As noted, this analysis was for informational purposes only and the results of this analysis was not included in the reference range of implied equity values per Share derived from the discounted cash flow analysis.

Selected Transactions Analysis. Perella Weinberg analyzed certain information relating to selected transactions in the specialty branded apparel and accessories industry from November 2004 to May 2013 and selected transactions in the other retail industry from November 2004 to November 2012. Perella Weinberg selected the transactions because, in the exercise of its professional judgment, Perella Weinberg determined the targets in such transactions to be relevant companies having operations similar to the Company. The selected transactions analyzed were the following:

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For each of the selected transactions, Perella Weinberg calculated and compared the resulting enterprise value in the transaction as a multiple of LTM EBITDA. The multiples for the selected transactions were based on publicly available information at the time of the relevant transaction. The results of these analyses are summarized in the following table:

Based on the multiples calculated above, Perella Weinberg’s analyses of the various selected transactions and on professional judgments made by Perella Weinberg, Perella Weinberg selected a representative range of multiples of 8.0x—10.0x to apply to LTM EBITDA of the Company. Perella Weinberg applied such range of multiples to the Company’s LTM EBITDA to derive an implied per share equity reference range for Shares (rounded to the nearest $0.25) of $35.25 to $43.25 and compared that to the per Share Merger Consideration to be received by the holders of Shares pursuant to the Merger.

Although the selected transactions were used for comparison purposes, none of the selected transactions nor the companies involved in them was either identical or directly comparable to the Merger or the Company.

Leveraged Buyout Analysis . Perella Weinberg performed an illustrative leveraged buyout analysis to estimate the theoretical prices at which a financial sponsor might effect a leveraged buyout of the Company. For purposes of this analysis, and in the exercise of its professional judgment regarding financing options available for such a transaction, Perella Weinberg assumed that a financial sponsor would attempt to realize a return on its investment by exiting at the end of 2017, with a valuation of the Company realized by the financial sponsor in such subsequent exit transaction based on an enterprise value to last twelve months EBITDA (as of 2017) multiple ranging from 5.0x – 6.0x. Perella Weinberg utilized the Company forecasts on a core basis in performing its analysis. For purposes of this analysis, Perella Weinberg assumed an illustrative multiple of total debt to last twelve months EBITDA at the transaction date of 7.7x, reflecting an illustrative multiple of debt to last twelve months EBITDA of 5.2x for a term loan having an interest rate of LIBOR plus 3.5% and an illustrative multiple of debt to last twelve months EBITDA of 2.5x for subordinated debt having an interest rate of 7.0%. Perella Weinberg then derived a range of theoretical purchase prices based on an assumed required internal rate of return for a financial sponsor of between 17.5% and 22.5% assuming the aforementioned illustrative 5.0x – 6.0x exit multiple. This analysis resulted in a range of implied equity values per share of $42.75 to $49.75 (rounded to the nearest $0.25) which Perella Weinberg compared to the per Share Merger Consideration to be received by the holders of the Shares pursuant to the Merger.

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Other Materials

Prior to May 22, 2013, in connection with its engagement, Perella prepared certain preliminary discussion materials for the Special Committee based on information available as of earlier dates. Such preliminary discussion materials were provided to the Special Committee at meetings held on November 2, 2012, December 1, 2012, January 22, 2013, April 27, 2013 and May 18, 2013.

The November 2, 2012 discussion materials included:

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The December 1, 2012 discussion materials included the following updated analysis from the November 2, 2012 discussion materials:

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The January 22, 2013 discussion materials included the following updated analysis from the December 1, 2012 discussion materials:

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The April 27, 2013 discussion materials included the following updated analysis from the January 22, 2013 discussion materials:

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The May 18, 2013 discussion materials included the following updated analysis from the April 27, 2013 discussion materials:

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Miscellaneous

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth herein, without considering the analyses or the summary as a whole, could create an incomplete view of the processes underlying Perella Weinberg’s opinion. In arriving at its fairness determination, Perella Weinberg considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered. Rather, Perella Weinberg made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described herein as a comparison is directly comparable to the Company or the Merger.

Perella Weinberg prepared the analyses described herein for purposes of providing its opinion to the Special Committee that, as of May 22, 2013, the per Share Merger Consideration to be received by the holders of Shares (other than any of the Parent Group and the SKM Funds) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by Perella Weinberg’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the Merger Agreement or their respective advisors, none of the Company, Perella Weinberg or any other person assumes responsibility if future results are materially different from those forecast.

As described above, the opinion of Perella Weinberg to the Special Committee was one of many factors taken into consideration by the Special Committee in making its determination to approve the Merger Agreement. The per Share Merger Consideration was determined through negotiations between the Special Committee and Parent and was approved by the Special Committee and the Company’s board of directors. Perella Weinberg did not recommend any specific amount of consideration to the Company, the Special Committee or the Board of Directors or that any specific amount of consideration constituted the only appropriate consideration for the transaction.

In connection with Perella Weinberg’s services as financial advisor to the Special Committee and pursuant to the terms of the amended and restated engagement letter dated as of May 22, 2013, the Company agreed to pay to Perella Weinberg an aggregate fee based on a percentage formula of the aggregate consideration to be paid in the Merger. The aggregate fee will be determined upon consummation of the Merger. As of May 22, 2013, such fee is estimated to be approximately $8 million payable upon consummation of the Merger, less (i) $500,000 paid to Perella Weinberg in retainer fees, (ii) an aggregate of twelve additional monthly retainer fees in the amount of $100,000 each, payable commencing on May 1, 2013 and each month thereafter during the term of Perella Weinberg’s engagement and (iii) $2.0 million payable to Perella Weinberg in connection with the opinion rendered by it as described above. In the event that the Company receives an Acquisition Proposal (as defined in the Merger Agreement) and the Company thereafter enters into a definitive agreement for a transaction which the Special Committee or the Company’s board of directors determines to be superior to the Merger, a fee in an amount equal to 5% of the positive difference between (a) the transaction value of the superior transaction and (b) the transaction value of the Merger, will be payable to Perella Weinberg, provided that such fee will only be payable in event that the per Share value of the consideration to be paid in the superior transaction is equal to or greater than $43.00 per Share. This additional fee will also be payable to Perella Weinberg in the event that, in connection with the Company’s receipt of an Acquisition Proposal, the Company and Parent enter into an agreement where the consideration to be paid is equal to or greater than

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$43.00 per Share. In addition, the Company agreed to reimburse Perella Weinberg for its reasonable expenses, including attorneys’ fees and disbursements, and to indemnify Perella Weinberg and related persons against various liabilities, including certain liabilities under the federal securities laws.

In the ordinary course of its business activities, Perella Weinberg or its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers or clients, in debt or equity or other securities (or related derivative securities) or financial instruments (including bank loans or other obligations) of the Company or Parent or any of their respective affiliates. Except as set forth in the following sentence, Perella Weinberg and its affiliates have not had any material relationship with (i) the Company or (ii) Apax or any entity which, to Perella Weinberg’s knowledge, is an affiliate of Apax, which we collectively refer to as Apax, for which Perella Weinberg or its affiliates have received compensation during the last two years hereof. During the last two years, Perella Weinberg and its associates have been engaged by certain portfolio companies of Apax (other than the Company), for which Perella Weinberg or its affiliates have received compensation for their services not exceeding $2 million in the aggregate.

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Purpose and Reasons of the Company for the Merger

The Company’s purpose for engaging in the Merger is to enable its stockholders to receive the Merger Consideration, without interest and less any applicable withholding taxes, which Merger Consideration represents a premium of approximately 23% above the closing price of the Shares on May 22, 2013, the last trading day before the public announcement of the Merger and a premium of approximately 42% over the volume weighted average price of the Shares during the 90 calendar days that ended on May 22, 2013. The Company believes that the Merger is the strategic alternative that provides the best opportunity to maximize stockholder value. The Company has determined to undertake the Merger at this time based on the analyses, determinations and conclusions of the Special Committee and the Company’s board of directors described in detail above under “Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger” beginning on page [•] of this proxy statement.

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Purpose and Reasons of the Parent Group and the Apax Investors for the Merger

Under the SEC rules governing “going private” transactions, each of the Parent Group and the Apax Investors may be deemed to be an affiliate of the Company and, therefore, each is required to express its purposes and reasons for the Merger to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. Each of the Parent Group and the Apax Investors is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of each of the Parent Group and the Apax Investors should not be construed as a recommendation to any Company stockholder as to how that stockholder should vote on the proposal to adopt the Merger Agreement.

If the Merger is completed, the Company will become a wholly-owned subsidiary of Parent, and the Company will cease to have publicly traded equity securities. For the Parent Group, the purpose of the Merger is to effectuate the transactions contemplated by the Merger Agreement. For the Apax Investors, the purpose of the Merger is to allow the Apax Investors to indirectly own equity interests in the Company and to bear the rewards and risks of such ownership after the Merger is completed.

Each of the Parent Group and the Apax Investors believes that it is in the best interests of the Company to operate as a privately held entity. Each of the Parent Group and the Apax Investors also believes that the Merger will provide the Company with flexibility to pursue new investments and other business initiatives with a risk profile that may be unacceptable to many public shareholders, and that these new investments and other business initiatives can be more effectively executed as a private company. As a result of being privately held, the Company will also enjoy certain additional efficiencies, such as a reduction of the time devoted by its management and certain other employees to compliance with the reporting and other requirements applicable to a public company.

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Although each of the Parent Group and the Apax Investors believes that there will be significant opportunities associated with their investment in the Company, the Parent Group and the Apax Investors realize that there are also substantial risks (including the risks and uncertainties relating to the prospects of the Company) and that such opportunities may not ever be fully realized.

If the Merger is completed, the Company will become a wholly-owned subsidiary of Parent, and the Company’s Shares will cease to be publicly traded. The Parent Group and the Apax Investors believe that structuring the transaction in such manner is preferable to other transaction structures because (i) it will enable Parent to directly acquire all of the outstanding Shares of the Company at the same time, (ii) it will allow the Company to cease to be a publicly registered and reporting company, (iii) it represents an opportunity for the Company’s unaffiliated stockholders to immediately realize the value of their investment in the Company and (iv) it allows the Parent Group and the Apax Investors to invest in the Company.

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Plans for the Company After the Merger

At the effective time of the Merger, the Parent Group anticipates that the Company will continue its current operations, except that it will (i) cease to be an independent public company and will instead be a wholly-owned subsidiary of Parent and (ii) have substantially more debt than it currently has. If the Merger is consummated, the Shares will be delisted from the NASDAQ and will cease to be registered under the Exchange Act (via termination of registration pursuant to Section 12(g) of the Exchange Act). At the effective time of the Merger, the directors of Merger Sub immediately prior to the effective time will become the directors of the Company, and the officers of the Company immediately prior to the effective time will remain the officers of the Company, in each case until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be.

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Certain Effects of the Merger

If the Merger Agreement is adopted by the requisite votes of the Company’s stockholders and all other conditions to the closing of the Merger are either satisfied or waived, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent.

Treatment of Shares

At the effective time of the Merger, each Share outstanding immediately prior to the effective time of the Merger (other than (i) Excluded Shares and (ii) Shares that are subject to Company restricted stock unit awards, Company deferred stock unit awards or Company performance share unit awards) will be converted into the right to receive the Merger Consideration, without interest, less applicable withholding taxes, upon the terms and subject to the conditions set forth in the Merger Agreement, whereupon all such Shares will be automatically canceled, will cease to be outstanding, and will cease to exist, and the holders of such Shares will cease to have any rights with respect thereto, other than the right to receive the Merger Consideration.

Treatment of Company Equity-Based Awards

Stock Options. At the effective time of the Merger, except as otherwise agreed to between Parent or its affiliates and the holder of an option to purchase Shares, each outstanding option to purchase Shares, vested or unvested, will be cancelled, and in exchange therefor, the holder thereof will be entitled to receive, at the effective time of the Merger, an amount in cash equal to the product of (i) the total number of Shares subject to such option immediately prior to the effective time of the Merger multiplied by (ii) the excess, if any, of the per Share Merger Consideration over the exercise price per Share of such option, without interest and less applicable taxes required to be withheld. If the exercise price per Share of any such stock option is equal to or greater than the per Share Merger Consideration, such stock option will be canceled without any cash payment being made in respect thereof.

Restricted Stock Units; Deferred Stock Units. Except as otherwise agreed to between Parent or its affiliates and the holder of a restricted stock unit award of the Company or a deferred stock unit award of the Company, at the effective time of the Merger, outstanding restricted stock unit awards of the Company, whether vested or unvested, and outstanding deferred stock unit awards of the Company, all of which are vested, will be cancelled, and in exchange therefor, the holder thereof will be entitled to receive, at the effective time of the Merger, an amount in cash equal to the product of (i) the per Share Merger Consideration multiplied by (ii) the number of restricted stock units or deferred stock units underlying such cancelled awards, as applicable, without interest and less applicable taxes required to be withheld.

Performance Share Units. Except as otherwise agreed to between Parent or its affiliates and the holder of a performance share unit award of the Company, each performance share unit award of the Company that has become vested on or prior to the effective time of the Merger, based on the satisfaction of applicable operating income performance goals and/or the acceleration of applicable time-based vesting conditions, will be canceled and converted into the right to receive an amount in cash equal to the product of (x) the number of units subject to the performance share unit award times (y) the per Share Merger Consideration, without interest and less applicable taxes required to be withheld. Any performance share units of the Company that have not become vested as of the effective time of the Merger will be automatically cancelled and forfeited as of the effective time of the Merger for no consideration.

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Benefits of the Merger for the Company’s Stockholders (other than the SKM Funds)

The primary benefit of the Merger to our stockholders (other than the SKM Funds) will be their right to receive a cash payment of $42.00 per Share, without interest, less applicable withholding taxes, for each Share held by such stockholders as described above, representing a premium of approximately 23% to the closing price of the Shares on May 22, 2013, the last trading day before the public announcement of the Merger and a premium of approximately 42% over the volume weighted average price of the Shares during the 90 calendar days that ended on May 22, 2013. Additionally, such stockholders will avoid the risk after the Merger of any possible decrease in our future earnings, growth or value.

Detriments of the Merger to the Company’s Stockholders (other than the SKM Funds)

The primary detriments of the Merger to our stockholders (other than the SKM Funds) include the lack of an interest of such stockholders in the potential future earnings, growth, or value realized by the Company after the Merger. Additionally, the receipt of cash in exchange for Shares pursuant to the Merger Agreement will be a taxable transaction for United States federal income tax purposes. See “Special Factors—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page [•] of this proxy statement.

Certain Effects of the Merger for the Apax Investors

Following the Merger, it is contemplated that all of the equity interests in the Company will be owned, indirectly through Parent, by the Apax Investors, and potentially, certain members of management and other employees of the Company and certain other permitted assignees. If the Merger is completed, these equity investors will be the sole beneficiaries of our future earnings, growth and value, if any, and such equity investors will be the only ones entitled to vote on corporate matters affecting the Company. Additionally, following the Merger, rue21 will be a private company, wholly-owned by Parent and any additional investors permitted by the Apax Investors, and, as such, will be relieved of the burdens imposed on public companies, including the pressure to meet analyst forecasts and the requirements and restrictions on trading that our directors, officers and beneficial owners of more than 10% of the Shares face as a result of the provisions of Section 16 of the Exchange Act.

The primary detriments of the Merger to the Apax Investors include the fact that all of the risk of any possible decrease in the earnings, growth or value of rue21 following the Merger will be borne by the Apax Investors and any additional permitted investors. Additionally, the investment of the Apax Investors and any additional investors permitted by them in rue21 will be illiquid, with no public trading market for such securities.

The directors of Merger Sub immediately prior to the effective time of the Merger will be the directors of the surviving corporation and the officers of the Company immediately prior to the effective time of the Merger will be the officers of the surviving corporation. The certificate of incorporation of the surviving corporation will be amended and restated in its entirety to be in the form of the certificate of incorporation attached as Exhibit A to the Merger Agreement. The bylaws of the surviving corporation will be amended and restated in their entirety to be in the form of the bylaws attached as Exhibit B to the Merger Agreement.

The SKM Funds beneficially own approximately 30% of the outstanding Shares. Following consummation of the Merger, the Apax Investors and potentially other investors will indirectly own 100% of the Shares and will have a corresponding interest in our net book value and net earnings. Each

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stockholder of Parent will have an indirect interest in our net book value and net earnings in proportion to such stockholder’s ownership interest in Parent. Our net income for the fiscal year ended February 2, 2013 was approximately $43.901 million and our net book value as of February 2, 2013 was approximately $178.311 million. The table below sets forth the direct and indirect interests in the Company’s net book value and net earnings of the SKM Funds before the Merger and the Apax Investors immediately after the Merger, based on the net book value at February 2, 2013 and net earnings for the fiscal year ended February 2, 2013.

Considerations Relating to the Merger

Set forth below are various risks relating to the Merger. The following is not intended to be an exhaustive list of the risks relating to the Merger, and should be read in conjunction with the other information in this proxy statement. In addition, you should refer to the section entitled “Risk Factors” in our annual report on Form 10-K for the fiscal year ended February 2, 2013, and other risk factors detailed from time to time in the Company’s reports filed with the SEC and incorporated by reference in this proxy statement for risks relating to our business.

The fairness opinion delivered by Perella Weinberg will not reflect changes in circumstances between signing the Merger Agreement and the completion of the Merger.

The Special Committee has not obtained an updated fairness opinion as of the date of this proxy statement from Perella Weinberg. Changes in the operations and prospects of the Company, general market and economic conditions and other factors that may be beyond the control of the Company, and on which the fairness opinion was based, may alter the value of rue21 or the price of the Shares by the time the Merger is completed. The Perella Weinberg opinion does not speak as of the time the Merger will be completed or as of any date other than the date of the opinion. The Perella Weinberg opinion only addresses, as of the date of such opinion, the fairness, from a financial point of view, of the Merger Consideration to be paid to the holders of the Shares outstanding immediately prior to the effective time of the Merger (other than the Parent Group and the SKM Funds). The Perella Weinberg opinion is attached to this proxy statement as Annex C. For a further discussion of the Perella Weinberg opinion and a summary of the material financial analyses performed in connection with rendering the Perella Weinberg opinion, see “ Special Factors—Opinion of Financial Advisor to the Special Committee ” beginning on page [ Ÿ ] of this proxy statement.

Uncertainties associated with the Merger may cause us to lose key customers and key personnel.

As a result of the uncertainty surrounding the conduct of our business following the completion of the Merger, we may lose key customers and our employees may be uncertain about their future roles and relationships with us following the completion of the Merger, which may adversely affect our ability to retain them.

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Certain Effects on the Company if the Merger is not Completed

If the Merger Agreement is not adopted by the Company’s stockholders or if the Merger is not completed for any other reason, rue21’s stockholders will not receive any payment for their Shares in connection with the Merger. Instead, rue21 will remain an independent public company, and the Shares will continue to be quoted on the NASDAQ. In addition, if the Merger is not completed, the Company expects that management will operate rue21’s business in a manner similar to that in which it is being operated today and that rue21’s stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the competitive specialty retail industry in which rue21 operates and adverse economic conditions.

Furthermore, if the Merger is not completed, and depending on the circumstances that would have caused the Merger not to be completed, the price of the Shares may decline significantly. If that were to occur, it is uncertain when, if ever, the price of the Shares would return to the price at which the Shares trade as of the date of this proxy statement. Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your Shares. If the Merger is not completed, the Company’s board of directors will continue to evaluate and review the Company’s business operations, properties, dividend policy, share repurchase policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance stockholder value. If the Merger Agreement is not adopted by the Company’s stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to rue21 will be offered or that rue21’s business, prospects or results of operation will not be adversely impacted.

Failure to complete the Merger could negatively impact our business and the market price of the Shares.

If the Merger is not completed for any reason, we will be subject to a number of material risks, including the disruption to our business resulting from the announcement of the signing of the Merger Agreement, the diversion of management’s attention from our day-to-day business and the substantial restrictions imposed by the Merger Agreement on the operation of our business during the period before the completion of the Merger may make it difficult for us to achieve our business goals if the Merger does not occur.

Failure to complete the Merger could trigger the payment of a termination fee.

If the Merger Agreement is terminated, under specified circumstances, rue21 would be required to pay Parent (or its designee) a termination fee in an amount equal to $31.359 million. In addition, under the terms of the Merger Agreement, the Company and its advisors are permitted to actively solicit and consider alternative proposals from third parties during the Go-Shop Period and engage, enter into and participate in discussions and negotiations with Excluded Parties until July 27, 2013. If the Merger Agreement is terminated to enter into a superior proposal with an Excluded Party prior to July 27, 2013, the Company will be required to pay to Parent a termination fee of $10.453 million. The Company does not intend to publicly disclose any developments with respect to this process unless and until the Special Committee makes a decision regarding a potential superior proposal. See “ The Merger Agreement—Termination Fee ” beginning on page [•] of this proxy statement.

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