Good luck. It sounds like something needs to happen pretty quickly. If their financing does not come through, and it is curious that there was no press release yesterday, I would expect the stock to take another hit.
Borders Group Delays Filing of 10-K as Alternative Financing Proposals are Evaluated
Wednesday April 2, 5:01 pm ET
ANN ARBOR, Mich., April 2, 2008 /PRNewswire-FirstCall/ -- Borders Group, Inc. (NYSE: BGP - News) today announced that it is delaying the filing of its Annual Report on Form 10-K for fiscal year 2007, ended February 2, 2008. The company expects to make the filing on or before April 17 after it has completed its evaluation of financing alternatives and can include finalized transactions in its 10-K filing.
As stated in the company's most recent financial news release dated March 20, as well as in exhibit 10.1 to its current report on Form 8-K filed March 21 with the Securities and Exchange Commission, Borders Group has received a financing commitment from Pershing Square Capital Management, L.P. Under the terms of the commitment, which expires on April 4, 2008, Borders Group is allowed to explore alternatives to the Pershing Square financing that may be more advantageous to the company. Borders Group has entered into discussions with several parties regarding alternative financing proposals. The company's board of directors and senior management are currently evaluating the terms of these proposals against the Pershing Square commitment, and no decision has yet been made. As this process is not complete as of today's filing deadline, Borders Group is delaying the filing in accordance with Rule 12b-25 under the Securities Exchange Act of 1934.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 31, 2008, the Compensation Committee of the Board of Directors of Borders Group, Inc. (the "Company") approved arrangements intended to provide enhanced incentive compensation opportunities to certain key executives participating in the Company's Annual Incentive Bonus Plan (the "Bonus Plan"). The arrangements are also designed to encourage the retention of these key executives during the implementation of the Company's previously-announced strategic review process.
Under the Bonus Plan as presently in effect, executive officers are eligible to receive cash awards based on the attainment of annual performance goals. The performance goals under the Bonus Plan for the Company's 2008 fiscal year are based on the Company's attainment of specified levels of net income before non-recurring items. Generally, incentive bonus opportunities are expressed as a dollar amount based on a percentage of each executive's base salary. For positions at the executive vice president level and above, the threshold, target and maximum bonus opportunities under the Bonus Plan as currently in effect are established at 20%, 80% and 160% of salary, respectively. Bonus opportunity levels for other executives participating in the Bonus Plan are based on lower percentages of salary.
Under the arrangements approved by the Compensation Committee, certain key executives who are eligible for bonuses under the Bonus Plan based on the attainment of the specified performance goals for the Company's 2008 fiscal year will have their bonus participation levels doubled in the event of performance at the target level or above. Additionally, in order to encourage the retention of these key executives, each executive is guaranteed that in the event performance is below target, the executive will still receive a bonus that is no lower than the target bonus under the Bonus Plan as presently in effect (in addition to any bonus amount actually earned based on performance). Payment of the additional bonus amount is conditioned upon continued employment with the Company through the date upon which fiscal 2008 bonuses are paid. The additional bonus payments may be provided in part through the Bonus Plan and in part through separate arrangements.
The foregoing arrangements will apply to certain of the Company's officer and director-level employees. Each of George L. Jones, the President and Chief Executive Officer of the Company, Edward W. Wilhelm, the Executive Vice President and Chief Financial Officer of the Company, Robert P. Gruen, the Executive Vice President of Merchandising and Marketing of the Company, Kenneth H. Armstrong, the Company's Executive Vice President of U.S. Stores, and Daniel T. Smith, the Company's Executive Vice President of Human Resources, are eligible to participate in the foregoing arrangements.
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