UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Exchange Act of 1934 (Amendment No. )
Filed by the Registranto
Filed by a Party other than the Registrantþ
Filed by a Party other than the Registrantþ
Check the appropriate box:
| o | Preliminary Proxy Statement | |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| o | Definitive Proxy Statement | |
| o | Definitive Additional Materials | |
| þ | Soliciting Material Pursuant to §240.14a-12 |
The Stride Rite Corporation
Payless ShoeSource, Inc.
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required. | |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| (1) | Title of each class of securities to which transaction applies: | ||
| (2) | Aggregate number of securities to which transaction applies: | ||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
| (4) | Proposed maximum aggregate value of transaction: | ||
| (5) | Total fee paid: | ||
| o | Fee paid previously with preliminary materials. | |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| (1) | Amount Previously Paid: | ||
| (2) | Form, Schedule or Registration Statement No.: | ||
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| (4) | Date Filed: | ||
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
The communication contains one or more forward-looking statements. Forward-looking statements are identified by words such as “will,” “expected,” and other similar words. A variety of known and unknown risks and uncertainties could cause actual results to differ materially from the anticipated results which include, but are not limited to: satisfaction of all conditions required for closing, the ability to obtain the approval of The Stride Rite Corporation’s shareholders; the risk that the businesses will not be integrated successfully, or will take longer than anticipated; the risk that the expected cost savings will not be achieved or unexpected costs will be incurred; the risk that customers will not be retained or that disruptions from the transaction will harm relationships with customers, employees and suppliers; costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings; changes in accounting treatment of any financings; changes in consumer spending patterns; changes in intellectual property, customs and/or tax laws; litigation, including intellectual property and employment litigation; and the ability to hire and retain associates. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements. Please refer to the Annual Reports on Form 10-K for Payless ShoeSource, Inc. (“Payless”) and The Stride Rite Corporation (“Stride Rite” collectively with Payless, the “Companies”) for the fiscal years ended February 3, 2007 and December 1, 2006, respectively, for more information on these and other risk factors that could cause actual results to differ. The Companies do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Stride Rite by Payless. In connection with the proposed acquisition, Payless and Stride Rite intend to file relevant materials with the SEC, including Stride Rite’s proxy statement on Schedule 14A. SHAREHOLDERS OF STRIDE RITE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING STRIDE RITE’S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Stride Rite shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Stride Rite. Such documents are not currently available.
This communication may also be deemed to be solicitation material in respect of the proposed amendment to the certificate of incorporation of Payless. In connection with the amendment to the certificate of incorporation, Payless intends to file relevant materials with the SEC, including Payless’ proxy statement on Schedule 14A. STOCKHOLDERS OF PAYLESS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING PAYLESS’ PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED AMENDMENT TO PAYLESS’ CERTIFICATE OF INCORPORATION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Payless stockholders will receive information at an appropriate time on how to obtain documents related to the amendment of the certificate of incorporation for free from Payless. Such documents are not currently available.
Payless and its directors and executive officers, and Stride Rite and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Stride Rite common stock in respect of the proposed transaction. Payless and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Payless common stock in respect of the proposed amendment of Payless’ Certificate of Incorporation. Information about the directors and executive officers of Payless is set forth in Payless’ Annual Report on Form 10-K for the most recently ended fiscal year, which was filed with the SEC on April 3, 2007. Information about the directors and executive officers of Stride Rite is set forth in the proxy statement for Stride Rite’s most recent 10-K, which was filed with the SEC on February 13, 2007. Investors may obtain additional information regarding the interest of Payless and its directors and executive officers, and Stride Rite and its directors and executive officers in the proposed transaction by reading the proxy statement regarding the acquisition when it becomes available. Investors may obtain additional information regarding the interest of Payless and its directors and executive officers in the proposed amendment to Payless’ Certificate of Incorporation by reading the proxy statement regarding the amendment of the certificate of incorporation when it becomes available.
| To: | All Stride Rite, Payless, and Collective Licensing Associates | |
| From: | David Chamberlain and Matt Rubel | |
| Subject: | Integrating our Companies to Form a Preeminent Footwear Company |
We want to provide you an overview of the process that will guide us as we work to integrate our companies to form Collective Brands Inc.
Over the past few weeks, leaders from Stride Rite and Payless have met several times. In great partnership, the leadership team has defined an integration process that will actively seek the best thinking, best ideas, and best practices of both organizations. When our companies come together, our objective is to form the preeminent footwear company in the world. And, the integration process laid out by the joint leadership team is strongly aligned with that objective. It will also be a highly collaborative process, with Associates from Stride Rite and Payless actively participating in all steps.
“Who will participate in the integration process?”
An Executive Steering Committee composed of senior leaders from both companies is overseeing the integration process. Day-to-day management of the process is being led by a cross-functional Integration Management Team (IMT). Small teams will identify specific integration opportunities in each functional area. Associates from both Stride Rite and Payless have been identified to serve on these functional teams. See the attachment for a complete list of integration team members. The integration planning teams have an important task to complete. However, we’ve intentionally kept these teams small, so most Associates can remain focused on operating our businesses and satisfying our Customers.
“How long will the integration process take?”
The integration process will have two main phases—“Planning” and “Implementation”.
The Integration Planning phase has just begun, following a kickoff meeting a few days ago. Integration teams will identifyinitial recommendations by August. Integration planning will continue after August, as there are important aspects of understanding each of our businesses that we cannot begin to consider or discuss until after our companies come together. Our goal is to ensure that careful and complete thought is given to how to best capitalize on the great opportunities that will result from combining our companies.
The Implementation phase will take a number of months. We anticipate implementing some “quick wins” soon after the closing date. For example, we intend to use our combined leverage to negotiate lower rates for transportation of merchandise through the supply chain. Efficiencies such as this will be acted upon as quickly as possible. Meanwhile, it will take longer to implement changes in other aspects of our business. The integration planning teams will lay out a “roadmap” for implementing their recommendations. Ultimately, we intend to completeall aspects of integration by the close of fiscal year 2008.
“What principles will guide the integration process?”
The joint integration team agreed upon four key principles to guide their work:
| • | Always operate in an open, fair and upfront manner; | ||
| • | Treat each other with mutual respect and engage in open dialogue; | ||
| • | Involve, communicate and make decisions with a sense of urgency: | ||
| • | Deliver results that will enable Collective Brands Inc. to provide exceptional shareholder value creation. |
“Where can I get more information and answers to other questions?”
You have our commitment that we will provide you with timely, honest communications throughout the integration process. We will provide regular updates on next steps. We will tell you what we can, as soon as we can. And, if we cannot share information, we will tell you why.
We’ve also established an email box where you can send your questions, suggestions, or ideas (AskCollective@collectivebrandsinc.com). The integration team will either respond to your email personally, or post answers to those questions that are relevant to all Associates.
In closing, we want to thank each of you for your understanding and support as we launch the integration
process. We are confident that the thoughtful and collaborative approach laid out by the integration team will yield the best ideas for integrating our companies. While the small integration planning teams are investigating those opportunities, we encourage you to remain focused on satisfying your Customers and achieving our business objectives.
Together, with the combined talents, resources and ideas of our companies, we will make Collective Brands Inc. the preeminent, consumer-centric footwear company in the world.
Best regards,
David Chamberlain and Matt Rubel
(attach list of inte gration team members - - 2 tabs)
This communication may be deemed to be solicitation material in respect of the proposed acquisition of Stride Rite by Payless. In connection with the proposed acquisition, Payless and Stride Rite intend to file relevant materials with the SEC, including Stride Rite’s proxy statement on Schedule 14A. SHAREHOLDERS OF STRIDE RITE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING STRIDE RITE’S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Stride Rite shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Stride Rite. Such documents are not currently available.
This communication may also be deemed to be solicitation material in respect of the proposed amendment to the certificate of incorporation of Payless. In connection with the amendment to the certificate of incorporation, Payless intends to file relevant materials with the SEC, including Payless’s proxy statement on Schedule 14A. STOCKHOLDERS OF PAYLESS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING PAYLESS’S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED AMENDMENT TO PAYLESS’S CERTIFICATE OF INCORPORATION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov, and Payless stockholders will receive information at an appropriate time on how to obtain documents related to the amendment of the certificate of incorporation for free from Payless. Such documents are not currently available.
Payless and its directors and executive officers, and Stride Rite and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Stride Rite common stock in respect of the proposed transaction. Payless and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Payless common stock in respect of the proposed amendment of Payless’s Certificate of Incorporation. Information about the directors and executive officers of Payless is set forth in Payless’ Annual Report on Form 10-K for the most recently ended fiscal year, which was filed with the SEC on April 3, 2007. Information about the directors and executive officers of Stride Rite is set forth in the proxy statement for Stride Rite’s most recent 10-K, which was filed with the SEC on February 13, 2007. Investors may obtain additional information regarding the interest of Payless and its directors and executive officers, and Stride Rite and its directors and executive officers in the proposed transaction by reading the proxy statement regarding the acquisition when it becomes available. Investors may obtain additional information regarding the interest of Payless and its directors and executive officers in the proposed amendment to Payless’s Certificate of Incorporation by reading the proxy statement regarding the amendment of the certificate of incorporation when it becomes available.
PMI Team Structure
| Tier I: Common Functions | Tier II: Parallel Ops | Tier III: Strategic Opportunities | |||||||||||||||||||||||||||||||||
| Inv Mgmt/ | Sales/ | ||||||||||||||||||||||||||||||||||
| Distribution/ | Merch Planning/ | Product Devel/ | Store | Wholesale/ | Strategy/ | Product | |||||||||||||||||||||||||||||
| Team | HR | Finance | Legal | IT | Logistics | Allocation | Sourcing | Development | eCommerce | Marketing | Retail Ops | Licensing | Brand Devel | Development | International | ||||||||||||||||||||
Executive Sponsors | Jay Lentz | Frank Caruso/Rick Porzig | Michael Massey | Yusef Akyuz | Darrel Pavelka | Darrel Pavelka | Darrel Pavelka | John Smith | Eran Cohen | Eran Cohen | Steve Gish | TBD | Paul Fenaroli | Darrel Pavelka | Ted Passig | ||||||||||||||||||||
Team leads | |||||||||||||||||||||||||||||||||||
- PSS | Ed Schloesslin | Doug Boessen | Robert Carroll | Tony Briggs/Myrl Cobb | Dave Milton | Phil Vostrejs | Mike Jeppesen | John Smith | Stephen Henderson/Peter deWeerdt | Bruce Pfannenstiel/Peter deWeerdt | Cris Beffort | TBD | Peter deWeerdt | Mike Jeppessen | TBD | ||||||||||||||||||||
- SRR | Janet DePiero | Jim Luks | Chuck Redepenning | Yusef Akyuz | Frank Caruso | Kathy Litel | Tom Montgomery/ | Pam Salkovitz | Chris Langway | Shawn Neville | Jay Nannicelli | ||||||||||||||||||||||||
| Pam Salkovitz | |||||||||||||||||||||||||||||||||||
| Shawn Neville | |||||||||||||||||||||||||||||||||||
| Craig Reingold | |||||||||||||||||||||||||||||||||||
| Richie Woodworth | |||||||||||||||||||||||||||||||||||
| Bornie DelPriore | |||||||||||||||||||||||||||||||||||
| Chuck Redepenning | |||||||||||||||||||||||||||||||||||
IT Resource | |||||||||||||||||||||||||||||||||||
- PSS | Mike Wind | Mike Wind | Mike Wind | — | Dennis Mahan | Jared Dolich | Jared Dolich | Mike Wind | Kevin Higgins | Rob Mullins | Dave VonFeldt | ||||||||||||||||||||||||
- SRR | Neil Ruocco | Neil Ruocco | — | Terry McDonald | Joe Phebus | Randi Gordman | Joe Phebus | John Wright | Yusef Akyuz | Joe Phebus | Anne Marie Legge | Randi Gordman | |||||||||||||||||||||||
HR Resource | — | Bron Lewis | Paula Nepote | Bron Lewis | Ashley Michael | Paula Nepote | Todd Averett | Steve Cardwell | Paula Nepote | Paula Nepote | Betty Click | ||||||||||||||||||||||||
Members | Sharon Brown | Jared Radke | Jay Andrews | Mike Wind | Michael Cress | Mike Smith | Ara Ishanyan | Sue Kristainsen | Eric Dreyer | Lisa Aschenbrenner | |||||||||||||||||||||||||
| Kelly Burke | Mark May | Ramona Palmer-Eason | Jared Dolich | Mary Boatright | Dan Park | Len Sadosky | Greg Hultgreen | Sheri Cafer | |||||||||||||||||||||||||||
| Bryan Lindstrom | Neil Hansen | Todd Bays | Brad Brunton | Melissa Lemon | Mark Looper | ||||||||||||||||||||||||||||||
| Susan Tucker | Jeff Scannell | Don Newell | Kirk Shiney | ||||||||||||||||||||||||||||||||
| Sam Porritt | Gary Madsen | Mike Heck | |||||||||||||||||||||||||||||||||
| Sally Burk | Laurie Tietjen | Tim Devine | |||||||||||||||||||||||||||||||||
| Danny Rose | |||||||||||||||||||||||||||||||||||
| Jim Thomas | |||||||||||||||||||||||||||||||||||
| Kathy Baker | Gordon Johnson | Chuck Kraus | Gerry Kane | Dave Sharp | Marcy Duggan | Patty Gibson | Jay Nannicelli | Kari Anderson | Sue Dooley | Kate Sweeney | |||||||||||||||||||||||||
| Bev Keaton | Scott Garner | Joe Russo | Bill Carter | Hong Zeng | Kate Sweeney | Greg Pullen | Karen Pitts | ||||||||||||||||||||||||||||
| Denise Lockaby | Steve Walsh | George Walker | Bob Thompson | Donna Tierny | |||||||||||||||||||||||||||||||
| Heather O’Connell | Paul Dubanowitz | David Thorpe | |||||||||||||||||||||||||||||||||
| Derek MacDermott | |||||||||||||||||||||||||||||||||||
| Kate Sweeney | |||||||||||||||||||||||||||||||||||
| Ron King | |||||||||||||||||||||||||||||||||||
Specific scope issues | |||||||||||||||||||||||||||||||||||
Wave 1 | HR IT | CapX approval/planning | Applications | Inbound flow | Factory base | ||||||||||||||||||||||||||||||
| Benefits programs | Forecasting | Infrastructure | - Consolidation | Capacity | |||||||||||||||||||||||||||||||
| Training programs | Fin Planning | Services | - Transportation | QC | |||||||||||||||||||||||||||||||
| Salary administration | Consolidation | Development | Outbound flow | First Cost | |||||||||||||||||||||||||||||||
| Compliance | Reporting (Int/Ext) | Communications | - Replenishment | Customs/Duties | |||||||||||||||||||||||||||||||
| Performance eval | Calendar | Support | - Frequency | Scheduling/Peaks | |||||||||||||||||||||||||||||||
| Development | Call Center Oppty | - Pool Pts | |||||||||||||||||||||||||||||||||
| Incentive Comp | Vendor Contracts | Systems/Procedures | |||||||||||||||||||||||||||||||||
| Recruiting | |||||||||||||||||||||||||||||||||||
| OD/Effectiveness | |||||||||||||||||||||||||||||||||||
Wave 2 | Policies & Procedures | IP | eCommerce | Retail v. wholesale | Processes | R/E tools | Best practices/tools | Best practices/tools | Best practices/tools | ||||||||||||||||||||||||||
| Governance | Litigation | MDO | Consolidation | - systems | Vendor leverage | Vendor leverage | Mall operations | ||||||||||||||||||||||||||||
| Treasury/Cash Mgmt | Corp Governance | Size Buy | PDM/PLM | - services | Fulfillment/returns | - consumer insights | Communication | ||||||||||||||||||||||||||||
| Tax | Employment Law | Replenishment | LL negotiation | Platforms | - media buys | eRecruiting | |||||||||||||||||||||||||||||
| Audit/Control Environment | Product Liab | Lot size mgmt | Facility Mgmt | - print production | Scheduling | ||||||||||||||||||||||||||||||
| BD/IR | Vendor Contracts | Allocation | Construction | - paper | DM Visit Guide | ||||||||||||||||||||||||||||||
| Closing | Price/Promo Mgmt | Lease admin | - licenses | Call Center Support | |||||||||||||||||||||||||||||||
| Financial Systems | Occupancy Costs | CRM — platforms | |||||||||||||||||||||||||||||||||
| Transaction Processing | Format options (Outlet) | CRM — sharing | |||||||||||||||||||||||||||||||||
| Ops Finance | Non-Merch Purch | ||||||||||||||||||||||||||||||||||
| Risk Management/Ins | Travel | ||||||||||||||||||||||||||||||||||
| LP | |||||||||||||||||||||||||||||||||||
| Retail Finance | |||||||||||||||||||||||||||||||||||
| Vendor Contracts | |||||||||||||||||||||||||||||||||||
Post Close | Samples | All | All | All | All | ||||||||||||||||||||||||||||||
| Returns | |||||||||||||||||||||||||||||||||||
| POS Materials | |||||||||||||||||||||||||||||||||||
| VA Customer Svc | |||||||||||||||||||||||||||||||||||
| Apparel/Accessories DC network | |||||||||||||||||||||||||||||||||||