To: Investment Bankers LLC From: John Doc, Board Member of Chino's Subject: Dcar Investment Bankers I.I.C: As a board member at Chino's, I'm assistance in helping us respond to an unwanted takcover advance. reaching out to you and several of your compctitors for As background, Chino's is a publicly traded men's casual retailer Our stock price has been languishing for some time (trading at S12 per share l last weck) even though our operating performance and balance sheet has been strong. Last Friday, ATL Capital, a private cquity fund with a potentially complementary portfolio company Good Guy Suits), bid $20 per share for our company, or around $200 mm (we have approximately 10 million shares outstanding). Note that we estimate our costs of being public costs are approximately S3 mm. We also understand that ATL believes there are other cost-saving synergics of up to $2 mm but we are skeptical there could be that much as our management tells the board that they run a pretty lcan ship. In 2013, we generated EBITDA of around S30 mm on revenucs of approximately $500 mm. We have approximately $20 mm of cash on our balance sheet and $50 mm of debt. (As is typical, ATL's bid contemplated assuming the outstanding net debt.) We started a small dividend program a year ago when a couple of our large institutional shareholders approached us and told us that they were unhappy with our stock price performancc and thaf they couldn't have strong price latest quarterly dividend was $0.03 per share, for an annual yield of approximately 1% e growth the least we could do was to return some capital to investors. Our One of your competitors for this investment banking assignment is our cxisting senior lender --United American Bank. We understand from UAB that we could borrow as much as $120 mm in a refinancing / recapitalization transaction but we are somewhat skeptical as we know that UAB is in "pitch modc" so they could be exaggcrating our leverage capacity: S120 mm is our entire current market cap! As you may remember, we have been approached by a handful of other potential strategic and private cquity funds in the past about a sale or going-private transaction. While our peers currently trade at over 8x EV /EBITDA, we understand that some of our competitors have been sold for around 7.5x EV EBITDA We know that our comparable companics and comparable companics are much larger, growing faster and have higher margins but we feel we're every bit as good as thcy arc. Our CEO Juantia Martinez has been adamant about remaining public: she took the the bell on the NYSIE and swore that her legacy would be intact only if she retired as the CEO of a publicly traded company with the Company "in good hands company public, rang On that note, Juantia will turn 64 this Junc. While she has publicly stated that she would adhere to the Company's retirement policy, privately, she told one of my fellow board members that she would like the board to consider amending the retirement policy for her to remain in placc. The board has mixed cmotions about this as we al believe that she was instrumental in building Chino's into the terrific To: Investment Bankers LLC From: John Doc, Board Member of Chino's Subject: Dcar Investment Bankers I.I.C: As a board member at Chino's, I'm assistance in helping us respond to an unwanted takcover advance. reaching out to you and several of your compctitors for As background, Chino's is a publicly traded men's casual retailer Our stock price has been languishing for some time (trading at S12 per share l last weck) even though our operating performance and balance sheet has been strong. Last Friday, ATL Capital, a private cquity fund with a potentially complementary portfolio company Good Guy Suits), bid $20 per share for our company, or around $200 mm (we have approximately 10 million shares outstanding). Note that we estimate our costs of being public costs are approximately S3 mm. We also understand that ATL believes there are other cost-saving synergics of up to $2 mm but we are skeptical there could be that much as our management tells the board that they run a pretty lcan ship. In 2013, we generated EBITDA of around S30 mm on revenucs of approximately $500 mm. We have approximately $20 mm of cash on our balance sheet and $50 mm of debt. (As is typical, ATL's bid contemplated assuming the outstanding net debt.) We started a small dividend program a year ago when a couple of our large institutional shareholders approached us and told us that they were unhappy with our stock price performancc and thaf they couldn't have strong price latest quarterly dividend was $0.03 per share, for an annual yield of approximately 1% e growth the least we could do was to return some capital to investors. Our One of your competitors for this investment banking assignment is our cxisting senior lender --United American Bank. We understand from UAB that we could borrow as much as $120 mm in a refinancing / recapitalization transaction but we are somewhat skeptical as we know that UAB is in "pitch modc" so they could be exaggcrating our leverage capacity: S120 mm is our entire current market cap! As you may remember, we have been approached by a handful of other potential strategic and private cquity funds in the past about a sale or going-private transaction. While our peers currently trade at over 8x EV /EBITDA, we understand that some of our competitors have been sold for around 7.5x EV EBITDA We know that our comparable companics and comparable companics are much larger, growing faster and have higher margins but we feel we're every bit as good as thcy arc. Our CEO Juantia Martinez has been adamant about remaining public: she took the the bell on the NYSIE and swore that her legacy would be intact only if she retired as the CEO of a publicly traded company with the Company "in good hands company public, rang On that note, Juantia will turn 64 this Junc. While she has publicly stated that she would adhere to the Company's retirement policy, privately, she told one of my fellow board members that she would like the board to consider amending the retirement policy for her to remain in placc. The board has mixed cmotions about this as we al believe that she was instrumental in building Chino's into the terrific