formdef14a.htm

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The following notice of meeting identifies each business item for your action. These items are (i) the election of one director, and (ii) the ratification of SingerLewak LLP as the Company’s independent public accountants and auditors for the 2008 fiscal year. The Board of Directors recommends that you vote FOR each of these items. We have also included a proxy statement that contains more information about these items and the meeting.

The 2008 Annual Meeting of Stockholders of THE WALKING COMPANY HOLDINGS, INC. f/k/a Big Dog Holdings, Inc. (the “Company”) will be held at the office of The Walking Company, located at 2475 Townsgate Road, Suite 200, Westlake Village, California 91361 on Thursday, September 25, 2008 at 10:30 am, local time, for the following purposes:

This Proxy Statement is furnished to stockholders by the Board of Directors of THE WALKING COMPANY HOLDINGS, INC. f/k/a Big Dog Holdings, Inc. (the “Company”) in connection with the solicitation of proxies for use at the 2008 Annual Meeting of Stockholders of the Company to be held at the offices of The Walking Company, located at 2475 Townsgate Road, Suite 200, Westlake Village, California 91361 on Thursday, September 25, 2008 at 10:30 am, local time, and at any adjournments or postponements of the meeting. The Company’s principal executive offices are located at 121 Gray Avenue, Santa Barbara, California 93101, and its telephone number is (805) 963-8727. This Proxy Statement, Notice of Annual Meeting and the accompanying proxy card(s) are being first mailed to stockholders on or about August 18, 2008.

August 5, 2008 is the record date (the “Record Date”) for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements of the meeting. 9,539,349 shares of Common Stock of the Company (“Common Stock”) were outstanding on the Record Date, and are entitled to vote at the meeting. The Common Stock is the only outstanding voting stock of the Company, with each share entitled to one vote.

Each accompanying proxy card that is properly signed and returned to the Company, and not revoked, will be voted in accordance with the instructions contained therein. The proxy may be revoked at any time before it is exercised by attending the Annual Meeting and voting in person or by delivering to the Secretary of the Company, either in person or by mail, a later-dated proxy or a written notice of revocation. Attendance at the Annual Meeting will not in itself constitute revocation of the proxy.

Unless contrary instructions are given, the persons designated as proxy holders in the accompanying proxy card(s) (or their substitutes) will (i) vote FOR the election of David J. Walsh to the Board of Directors of the Company, (ii) vote FOR the approval of SingerLewak LLP as the Company’s independent public accountants and auditors for the 2008 fiscal year, and (iii) will use their discretion with regard to other matters (of which the Company is not now aware) that may be properly presented at the meeting or any adjournments or postponements of the meeting and all matters incident to the conduct of the meeting.

The presence at the meeting, in person or by proxy, of a majority of the shares of Common Stock outstanding on the Record Date will constitute a quorum. Assuming the presence of a quorum, (i) the director nominated will be elected by a plurality of the votes cast by the stockholders entitled to vote at the meeting; and (ii) the approval of the appointment of SingerLewak LLP as the Company’s independent accountants and auditors will require a majority of the votes cast by the stockholders represented and entitled to vote on the proposal. Stockholders will not have the right to vote cumulatively on the election of directors nor will stockholders have any dissenters’ rights of appraisal with respect to the proposals described in this proxy statement.

Abstentions will be treated as shares that are present in determining those entitled to vote on a matter and the presence of a quorum. If a broker or nominee indicates on its proxy that it does not have discretionary authority to vote on a particular matter as to certain shares, those shares will be counted for general quorum purposes, but will not be counted as represented at the meeting in determining the number of shares necessary for approval of that matter. Any unmarked proxies, including those submitted by brokers or nominees, will be voted in favor of the nominees of the Board of Directors and appointment of SingerLewak LLP.

The following table shows certain information, as of July 15, 2008, with respect to the shares of the Company’s Common Stock beneficially owned by (i) persons or entities known by the Company to own 5% or more of the Company’s Common Stock, (ii) the Company’s directors and Named Executive Officers (defined below) and (iii) all directors and Named Executive Officers as a group.

Name and Address	Number of Shares Owned1			Options2		Total		Percent of Class3
Fred Kayne		5,348,332	4		30,000		5,378,332		56.2	%
c/o Fortune Financial
1800 Avenue of the Stars, Suite 310
Los Angeles, CA 90067

Richard A. Kayne		844,534	5		0		844,534		8.9	%
1800 Ave of the Stars, Second Floor
Los Angeles, CA 90067

Andrew D. Feshbach		660,931	6		300,000		960,931		9.8	%
c/o The Walking Company Holdings, Inc.
121 Gray Avenue
Santa Barbara, CA 93101

Anthony J. Wall		65,216			154,278		219,494		2.3	%
Douglas N. Nilsen		58,221			100,612		158,833		1.6	%
Roberta J. Morris		41,904			89,500		131,404		1.4	%
Lee M. Cox		5,176			106,084		111,260		1.2	%
Michael Grenley		0			90,500		90,500		--
David C. Walsh		21,400			35,000		56,400		--
Steven C. Good		3,480			35,000		53,480		--
Skip R. Coomber, III		1,200			35,000		36,200		--

All directors and Named Executive Officers as a		6,205,860			985,974		7,191,834		68.3	%
Group (10 persons)

The Board of Directors of the Company is comprised of five members divided into three classes, with directors divided among the classes as nearly as equally as possible. Stockholders elect one class of directors each year and the members of each class serve for staggered three-year terms. The term of David Walsh, the sole Class II Director, expires in 2008. Mr. Walsh has been nominated to stand for re-election at the Annual Meeting and to hold office until the Company’s Annual Meeting in 2011 or until his successor is duly elected and qualified. The terms of other directors expire at the Annual Meeting in 2009 and 2010.

Unless authority to do so is withheld, the persons named in the enclosed proxy card(s) (or their substitutes) will vote the shares represented thereby FOR the election of Mr. Walsh. If such nominee becomes unavailable or is unable to serve as a director, the persons named as proxies (or their substitutes) will have full discretion and authority to vote or refrain from voting for any other nominee.

Mr. Kayne co-founded the Company in 1992 and has served as its Chairman since that time. Mr. Kayne co-founded Fortune Fashions Industries, LLC in 1991 and Paige Premium Denim in 2004, both of which are in the apparel business. Mr. Kayne has served as an officer and/or manager of each of those companies since their founding. Prior thereto, Mr. Kayne was a partner of Bear, Stearns & Company until it went public in 1985, after which he was Managing Director and a member of its Board of Directors until he retired in 1986. Mr. Kayne graduated from Massachusetts Institute of Technology with a B.S. degree in Engineering.

Mr. Feshbach co-founded the Company in 1992 and has served as Chief Executive Officer and as a director since that time. Previously, Mr. Feshbach was a partner in Maiden Lane, a merchant bank, and a Vice President in the Mergers and Acquisitions Group of Bear Stearns & Co. Mr. Feshbach holds an M.B.A. degree from Harvard Business School and a B.A. degree in Economics (Phi Beta Kappa) from the University of California, Berkeley.

Mr. Good is a founding partner of Good Swartz Brown & Berns LLP, an accounting, auditing and business advisory firm. He was previously partner at Laventhol & Horwath a national accounting firm. He is a founder and past Chairman of CU Bancorp and is a director of: OSI Systems, Inc., a provider of security and medical monitoring systems; California Pizza Kitchen, Inc., which owns, operates, licenses and franchises a chain of casual dining restaurants; Kayne Anderson MLP Investment Company, which invests in oil-related infrastructures; Kayne Anderson Energy Total Return Fund, Inc., a management investment company; and Youbet.com, a provider of technology and pari-mutual horse racing content for consumers.

Code of Ethics. The Board of Directors has adopted a Code of Ethics that applies to the Company’s executive officers. The Code of Ethics is designed to deter wrongdoing and to promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between person and professional relationships, (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company, (iii) compliance with applicable governmental laws, rules and regulations, (iv) the prompt internal reporting of violations of the code to an appropriate person, and (v) accountability for adherence to the code. Copies of the Code of Ethics are available by writing to THE WALKING COMPANY HOLDINGS, INC., Attention General Counsel, 121 Gray Ave., Santa Barbara, CA 93101. Should any changes to or waivers of this Code of Ethics be made, such changes to or waivers will be timely disclosed on the Company’s website, unless the same is disclosed in a current report on Form 8-K filed with the Securities and Exchange Commission.

Director Independence. The Board of Directors annually determines the independence of each of our directors and nominees in accordance with the independence standards set forth in the NASDAQ Marketplace Rules. These rules provide that “independent” directors are those who are independent of management and free from any relationship that, in the judgment of the Board of Directors, would interfere with their exercise of independent judgment. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). Members of the Audit Committee must be independent and must also satisfy a separate independence requirement pursuant to the Securities Exchange Act of 1934, as amended, which requires that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries other than their directors’ compensation.

Based on its review, the Board of Directors determined that Messrs. Walsh, Good and Coomber are independent directors. In making its determination regarding the independence of the non-employee directors, the Board considered, among other things, the stock holdings of the non-employee directors and to what extent such holdings may affect their ability to exercise independent judgment.

Controlled Company. The Board of Directors has determined that Company is a “controlled company” as defined in rule 4350(c)(5) of the Nasdaq Marketplace Rules based on Fred Kayne’s beneficial ownership of approximately 56% of the Company’s outstanding common stock. Accordingly, the Company is exempt from certain requirements of the Nasdaq listing standards, including the requirement to maintain a majority of independent directors on the Company’s Board of Directors and the requirements regarding the determination of compensation of executive officers and the nomination of directors by independent directors.

Director Nominations. Because the Company is a “controlled company,” the Board of Directors does not have a separate nominating committee make recommendations with respect to director nominees. Rather, the entire Board of Directors acts to nominate directors for election at each annual meeting of stockholders. In considering candidates for election at annual meetings of stockholders, the Board first identifies those incumbent directors whose terms expire at the upcoming meeting and who wish to continue their service on the Board. The Board of Directors believes that the continuing service of qualified incumbent directors promotes stability and continuity, contributing to the Board’s ability to work together as a collective body and giving the Company the benefit of experience and insight that its directors have accumulated during their tenure. Accordingly, the Board’s process for identifying and evaluating nominees reflects its general practice of re-nominating incumbent directors who continue to make important contributions to the Board and the Company.

To the extent that vacancies in the Board are anticipated or otherwise arise, the Board prepares a target candidate profile and develops an initial list of director candidates identified by the current members of the Board, business contacts, community leaders and members of management. The Board may also retain a professional search firm to assist it in developing a list of qualified candidates, although the Board has not utilized the services of such firms to date. The Board would also consider any stockholder recommendations for director nominees that are properly received in accordance with our bylaws, as discussed below, and applicable rules and regulations of the Securities and Exchange Commission.

Stockholder Nominations. As indicated above, any stockholder may nominate a person for election as a director of the Company by complying with the procedures set forth in our bylaws. For a stockholder to nominate a person for election as a director, such stockholder must give timely notice to our Corporate Secretary prior to the meeting at which directors are to be elected. Details regarding the timing and manner of the required notice are provided below under the caption “Proposals of Stockholders.”

Such stockholder’s notice must include certain information about the nominee, including his or her name, age, business address and residence address, principal occupation or employment, the number of shares of our capital stock which are beneficially owned by the person and such other information as would be required to be disclosed in a proxy statement soliciting proxies for the election of the proposed nominee. In addition, the notice must contain certain information about the stockholder proposing to nominate that person. The Company may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of such proposed nominee to serve as a director.

Related Party Transaction Review and Approval. The Board of Directors has adopted policies and procedures for the review and approval of transactions between the Company and certain “related parties,” which are generally considered to be our directors and executive officers, nominees for director, holders of five percent or more of our outstanding capital stock and members of their immediate families. The Board of Directors has delegated to the Audit Committee the authority to review and approve the material terms of any proposed related party transactions. To the extent that a proposed related party transaction may involve a non-employee director or nominee for election as a director and may be material to a consideration of that person’s independence, the matter may also be considered by the other disinterested directors.

In determining whether to approve or ratify a related party transaction, the Audit Committee may consider, among other factors it deems appropriate, the potential benefits to the Company, the impact on a director’s or nominee’s independence or an executive officer’s relationship with or service to the Company, whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. In deciding to approve a transaction, the Committee may, in its sole discretion, impose such conditions as it deems appropriate on the Company or the related party in connection with its approval of any transaction. Any transactions involving the compensation of executive officers, however, are to be reviewed and approved by the Compensation Committee. If a related-party transaction will be ongoing, the Audit Committee may establish guidelines to be followed in the Company’s ongoing dealings with the related party. Thereafter, the Audit Committee, on at least an annual basis, will review and assess ongoing relationships with the related party to see that they are in compliance with the Committee’s guidelines and that the related party transaction remains appropriate.

Communications sent to an individual director will be forwarded directly to the individual director, while communications sent to the Board of Directors will be forwarded to the Chairman of the Board of Directors. Any communications sent to the independent directors as a group will be forwarded to the Chairman of the Audit Committee on behalf of all independent directors.

The Board maintains an Audit Committee and Compensation Committee, the responsibilities of which are summarized below. The Board does not maintain a Nominating Committee and all nominees for the board are designated by full Board action. During 2007, there were three meetings of the Board of Directors. Each Board member attended 75% or more of the meetings of the Board and the committees on which he served that were held in 2007. In addition, all directors attended the 2007 Annual Meeting of Stockholders. It is the Company’s policy that all directors are encouraged to attend our annual meetings.

Audit Committee. A copy of the Audit Committee Charter is available from the Company free of charge to any stockholder who requests it. The Charter for the Audit Committee requires that the Committee be comprised of at least three members, all of whom are independent, as defined in the Nasdaq Marketplace Rules. Steven Good, David Walsh and Skip Coomber are the current members of the Audit Committee, all of whom have been determined by the Board to be independent. The Board has also determined that Mr. Good, the Chairman of the Committee, is an “audit committee financial expert,” as that term is defined by the SEC. The Audit Committee is responsible for monitoring and reviewing accounting methods adopted by the Company, internal accounting procedures and controls and audit plans. The Audit Committee recommends to the Board of Directors the engagement of the Company’s independent auditors and monitors the scope and results of the Company’s audits, the internal accounting controls of the Company, and the audit practices and professional services furnished by the Company’s independent auditors. The Audit Committee held five meetings during 2007.

Compensation Committee. Fred Kayne and David Walsh, neither of whom is an officer or employee of the Company, are the current members of the Compensation Committee. The Compensation Committee is responsible for reviewing and approving all compensation arrangements for the officers of the Company and has principal responsibility for administering the Amended and Restated 1997 Performance Award Plan (the “1997 Plan”). The responsibilities of the Compensation Committee are set forth in its charter and include determining the compensation of the Chief Executive Officer and reviewing and approving the compensation of the Company’s other executive officers, approving and making recommendations to the Board regarding non-employee director compensation and preparing an annual report on executive compensation for inclusion in the Company’s proxy statement or annual report on Form 10-K, in accordance with the rules and regulations of the Securities and Exchange Commission. In the exercise of its responsibilities, the Compensation Committee may delegate such of its authorities and responsibilities as the Committee deems proper to members of the Committee or to a subcommittee. The Compensation Committee’s processes and procedures for the consideration and determination of executive compensation are discussed in further detail under “Compensation Discussion and Analysis” below. The Compensation Committee held two meetings in 2007.

Description			Amount
Director Retainer Fees:
Non-employee director retainer fee (excluding Chairman)			$25,000 / year
Chairman retainer fee			$15,000 / month

Committee Retainer Fees:
Audit Committee Chairman			$15,000 / year
Other Audit Committee Members			$10,000 / year
Compensation Committee Members			$2,500 / year

Overview. The following Compensation Discussion and Analysis describes the material elements of compensation for our executives identified below in the Summary Compensation Table (“Named Executive Officers”). The compensation committee of the Board (the “Committee”) discharges the Board’s responsibilities regarding compensation of our executives, including the Named Executive Officers. The Company’s CEO makes recommendations to the Committee regarding the corporate goals and objectives relevant to executive compensation, executives’ performance in light of such goals and objectives, and recommends the executives’ compensation levels to the Committee based on such evaluations. The Committee evaluates such recommendations and determines compensation matters.

Compensation Philosophy and Objectives. We believe that an effective executive compensation program is one that is designed to reward the achievement of specific annual and long-term strategic business goals established by the Company, which align our executives’ interests with those of our stockholders, with the ultimate objective of increasing stockholder value. Our executive compensation program is designed to motivate and reward executives for achieving the business goals set by the Company, attract and retain highly qualified individuals with the skills and experience necessary for us to achieve these business goals, and to reward over time those individuals that consistently perform or exceed the performance levels expected of them. Our program is also designed to reinforce a sense of ownership and overall entrepreneurial spirit, to encourage individual excellence, effective collaboration, teamwork and the willingness to take prudent risk, and to link rewards to measurable corporate and individual performance goals.

In furtherance of the foregoing objectives, executive compensation is based on two primary components — base salary and cash-based incentive compensation. In addition, our executives receive benefits that are generally available to all of our employees plus enhanced health and life insurance benefits. In allocating overall compensation between these two principal elements, the compensation of those executives who have the greatest ability to influence the Company’s performance and who are more accountable for the strategic and tactical decisions of the Company may be more performance-based, while those having less influence on the direction, performance and strategic and tactical decisions of the Company may receive a greater portion of their compensation in base salary. As such, the mix of base salary and incentive compensation varies depending upon the individual’s level within the Company, with base salaries ranging from $274,000 to $454,000 and annual performance-based cash bonus awards ranging from $25,000 to $125,000. No specific formula or targeted ratio is used in fixing these amounts.

Additionally, the Compensation Committee may make use of equity awards from time to time in an effort to align the compensation returns for our executive officers with increases in value for our stockholders. However, recent changes in the accounting treatment for equity awards has made these grants less attractive as a compensation tool and the Compensation Committee has no current plans to grant equity awards.

Base Salary. Executive base salaries are based on job responsibilities, accountability, and the experience of the individual. Our compensation-setting process consists of annually reviewing base salaries for adjustment where performance or market conditions suggest that a change would be appropriate. During its review of base salaries for executives, the Committee primarily considers:

Additionally, the Committee may review executive officer compensation levels at other similar companies to ensure competitive compensation. No such market data were used in 2007. Salary levels are typically considered annually as part of our performance review process as well as upon promotion or other change in job responsibilities. Merit increases are awarded based on an executive’s performance of his or her job responsibilities and the achievement of objectives in the prior year.

In fiscal 2007, the Committee approved salary increases ranging from 1% to 7%, with an average increase of 5% among the Named Executive Officers. The salary increases also took into account that none of the Named Executive Officers received equity compensation awards in 2007. In approving these increases, the Committee considered the individual and Company performance in the prior year and specifically noted the factors described in the following paragraphs relating to the approval of performance-based cash awards for 2007.

Annual Performance-Based Cash Bonus Awards. Annual performance-based cash bonuses are based upon both corporate and individual performance. The target bonus amounts vary depending on each executive’s accountability and potential impact on the Company’s performance. Accordingly, the more control and accountability that an executive has the potential to exercise over the Company’s performance, the greater the percentage of that executive’s total compensation is dependent on annual performance-based cash bonus awards. Fiscal 2007 bonus levels range from approximately 8% to 28% of base salary for the Named Executive Officers.

Upon completion of the 2007 fiscal year, the Committee assessed the Company’s performance against the achievement of corporate performance goals. The Committee then assessed the CEO’s individual accomplishments, as well as the individual accomplishments for each executive as recommended by the CEO and determined the individual performance level for each executive. The specific factors considered by the Compensation Committee in determining to pay the above-referenced bonuses included year-over-year growth in consolidated net sales in 2007, the continued stabilization and integration of operations of 35 Steve’s Shoes stores acquired out of bankruptcy, and the continued growth in The Walking Company franchise, with 41 new stores opening that year.

Equity Incentive Compensation. Equity compensation may sometimes be used to promote performance and achievement of corporate goals by employees on a long-term basis, encourage the growth of stockholder value and allow employees to participate in the long-term success of the Company. Equity awards, if granted, are based on the estimated fair value of the awards on the grant date and vary depending on individual and company performance, as well as the awardee’s role within the organization and expected contributions over the vesting period.

However, following the implementation of FAS 123(R), which requires that we record an accounting charge for the fair value of equity awards, the Compensation Committee has declined to issue equity awards and no equity awards were granted in fiscal 2007. The Compensation Committee continues to evaluate the further grant of options and alternative incentive compensation programs and may grant equity awards in future periods.

Benefits. The Named Executive Officers are eligible to participate in all of the Company’s health, welfare, paid time-off, retirement savings and employee stock purchase benefit programs on the same terms as are available to other employees. These benefit programs are designed to enable the Company to attract and retain its workforce in a competitive marketplace. Health, welfare and paid time-off benefits ensure that the Company has a productive and focused workforce through reliable and competitive health and other benefits. In addition, the Named Executive Officers are also provided a supplemental health insurance program where the company pays the premiums, administrative fees and claims.

The Company’s retirement savings plan (“401(k) Plan”) is a tax-qualified retirement savings plan, pursuant to which all employees, including the Named Executive Officers, are able to contribute certain amounts of their annual compensation, subject to limits prescribed by the Internal Revenue Service. In fiscal 2007, the Company contributed $1,000 to the 401(k) accounts of four of the Named Executive Officers.

As discussed in Certain Relationships and Related-Party Transactions below, the Company occasionally charters airplane service for business trips. From time to time, executives may be permitted to have family members accompany them on such chartered business flights to the extent there are free seats available on the plane. There is no formal plan for allowing such activity and permission is granted on a case-by-case basis by the Chairman and CEO. Permission was granted on two occasions to one Named Executive Officer in 2007.

Employment Agreements and Change in Control Arrangements. The Company currently does not have any employment contracts with any of the Named Executive Officers. Unless the Compensation Committee provides otherwise, upon a change in control (as defined in our 1997 Performance Award Plan) each option and stock appreciation right issued under the 1997 Plan will be come immediately exercisable, any restricted stock issued under the 1997 Plan will immediately vest free of restrictions, and the number of shares, cash or other property covered by any “performance share award” issued under the 1997 Plan will be issued to the grantee of such award. The Company has, to date, issued only options under the 1997 Plan.

We believe that these “single trigger” acceleration benefits are common practice among comparable companies. Information regarding the potential value of these payments is provided below for the Named Executive Officers under the heading “Employment Contracts, Termination of Employment and Change in Control Arrangements.”

Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code limits the tax deductibility to the Company of compensation in excess of $1 million in any year for certain executive officers, except for qualified “performance-based compensation” under the Section 162(m) rules. No covered executive’s compensation for these purposes exceeded $1 million for 2007. The Compensation Committee considers the Section 162(m) rules as a factor with respect to compensation matters, but will not necessarily limit compensation to amounts deductible under Section 162(m).

Role of Executives in Compensation Decisions. The Committee reviews the performance and compensation of the CEO on annual basis and establishes the CEO’s compensation level. The CEO is not present for these discussions related to his compensation. For the remaining executives, the CEO makes recommendations to the Committee, which the Committee takes into account when determining executive compensation.

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A.

The following table sets forth certain information with respect to the compensation paid in the years indicated to the Company’s President and Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the four other most highly compensated executive officers other than the CEO and CFO (collectively the “Named Executive Officers”).

Name and Principal Position	Salary ($)		Bonus ($)(1)		All Other Compensation ($) (2)		Total ($)
Andrew D. Feshbach	$	451,650	$	125,000	$	23,026	$	599,676
President and Chief Executive Officer

Roberta J. Morris	$	269,342	$	35,000	$	17,382	$	321,724
Chief Financial Officer and Treasurer

Anthony J. Wall	$	364,727	$	40,000	$	8,350	$	413,077
Executive Vice President and General Counsel

Douglas N. Nilsen	$	315,210	$	25,000	$	6,879	$	347,089
Executive Vice President

Michael Grenley	$	288,039	$	50,000	$	23,821	$	361,860
Senior Vice President

Lee Cox	$	282,750	$	75,000	$	12,806	$	370,556
Senior Vice President- Retail

(2)

“All Other Compensation” includes (i) the Company’s contribution of $1,000 to each of the 401(k) accounts of Messrs Feshbach, Wall, Nilsen, Grenley and Cox and Ms. Morris (ii) supplemental health insurance benefits provided to Messrs. Feshbach ($13,197), Wall ($7,350), Nilsen ($5,879), Cox ($11,806) and Grenley ($22,821) and Ms. Morris ($16,382), and (iii) in regard to Mr. Feshbach, such amount also includes a $8,828 benefit of his being allowed to have family members accompany him on two business trips in 2007 taken on chartered flights.

Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date

Andrew D. Feshbach
		5,000	_		$	4.625	6/1/10
		250,000	_		$	4.25	3/2/11
		5,000	_		$	4.03	5/31/11
		5,000	_		$	3.60	5/30/12
		5,000	_		$	2.90	6/5/13
		15,000		10,000	$	3.50	1/2/14
		5,000	_		$	4.65	6/3/14
		5,000	_		$	6.90	6/21/15

Roberta J. Morris
		22,500	_		$	3.50	12/7/08
		35,000	_		$	4.25	3/2/11
		9,000		6,000	$	3.50	1/4/14

Anthony J. Wall
		27,500	_		$	3.50	12/7/08
		40,000	_		$	4.25	3/2/11
		9,000		6,000	$	3.50	1/4/14
		50,000	_		$	7.00	6/29/15

Douglas N. Nilsen
		27,500	_		$	3.50	12/7/08
		50,000	_		$	4.25	3/2/11
		9,000		6,000	$	3.50	1/4/14

Michael Grenley		36,000		24,000	$	5.50	7/27/14

Lee M. Cox
		21,000	_		$	6.50	1/1/11
		12,500	_		$	8.00	1/1/11
		12,500	_		$	10.00	1/1/11
		35,000	_		$	4.25	3/2/11
		6,000		4,000	$	3.50	1/4/14
		15,000		10,000	$	5.50	7/27/14

On May 9, 2007, the Company purchased from the officers of the Company all of the vested employee stock options held by them that would otherwise have expired on or before May 9, 2008. Options for a total of 245,000 shares were purchased from five officers (no options were purchased from the CEO). The purchase price was $16.00 per share, less the exercise price of the options, which ranged from $6.50 to $10.00 per share. The $16.00 price represents a discount of approximately 5% from the May 9, 2007 closing price of $16.80. The net purchase price was $1,965,000. The Company paid for the options by delivery of notes bearing interest at 7% per annum and payable in two equal installments on April 10, 2008 and April 10, 2009. The Notes held by Named Executive Officers are as follows: Ms. Morris ($317,500), Mr. Wall ($400,000), and Mr. Nilsen ($800,000).

			Option Awards
	Number of Options Repurchased By Company		Number of Shares Acquired on Exercise		Value Realized Upon Exercise Or Repurchase
Name	#		#		$

Andrew D. Feshbach		—		—		—
Roberta J. Morris		40,000		—		317,500
Anthony J. Wall		50,000		—		400,000
Douglas N. Nilsen		100,000		—		800,000
Michael Grenley		—		—		—
Lee M. Cox		—		14,000		168,048

The Company currently does not have any employment contracts with any of the Named Executive Officers. Unless the Compensation Committee provides otherwise, upon a change in control (as defined in the 1997 Plan) each option and stock appreciation right issued under the 1997 Plan will be come immediately exercisable, any restricted stock issued under the 1997 Plan will immediately vest free of restrictions, and the number of shares, cash or other property covered by any “performance share award” issued under the 1997 Plan will be issued to the grantee of such award. The Company has, to date, issued only options under the 1997 Plan.

Assuming that a change in control occurred as of the end of fiscal 2007, and based on the Company’s closing stock price on the last day of trading that year ($14.45), the Named Executive Officers would have received a change in control benefit in the form of accelerated vesting of stock options with the following values:

No member of the Compensation Committee was, during 2007, an officer or employee of the Company or any of its subsidiaries, nor was any member of the Compensation Committee formerly an officer of the Company or any of its subsidiaries. No executive officer of the Company served (i) as a member of the compensation committee (or board of directors serving the compensation function) of another entity, one of whose executive officers served on the Compensation Committee or (ii) as a member of the compensation committee of another entity, one of whose executive officers served on the Company’s Board.

The Board of Directors has adopted policies and procedures for the review and approval of transactions between the Company and certain “related parties,” which are generally considered to be our directors and executive officers, nominees for director, holders of five percent or more of our outstanding capital stock and members of their immediate families. The Board of Directors has delegated to the Audit Committee the authority to review and approve the material terms of any proposed related party transactions. To the extent that a proposed related party transaction may involve a non-employee director or nominee for election as a director and may be material to a consideration of that person’s independence, the matter may also considered by the other disinterested directors.

On April 3, 2007, the Company entered into a Convertible Note Purchase Agreement with certain purchasers, including some officers of the Company, pursuant to which the Company issued and sold $18.5 million of 8.375% Convertible Notes (“Note” or “Notes”) due March 31, 2012, interest payable quarterly. $3.0 million of the Notes were sold to management. The Notes are convertible into fully paid and nonassessable shares of the Company’s common stock to an aggregate of up to 1,027,777 shares at any time after the issuance date, at an initial conversion price of $18.00 per share. As of December 31, 2007, the Company’s stock price was $14.45, which was less than the conversion price of $18.00.

Certain of our Named Executive Officers participated in the Note offering. The following table sets forth the principal amount invested by Named Executive Officers and their affiliated entities, as well as the potential number of shares issuable upon conversion of the principal amount of indebtedness.

Fortune Fashions Industries, a company controlled by Fred Kayne, Chairman of the Board, owns an airplane that it makes available to the Company to rent for corporate travel use. The Company has no obligation to use such plane for any minimum amount, and to the extent it does use it, the Company has paid for such use on terms at least as favorable to the Company as could be obtained from an independent third party. Due to the geographically widespread nature of the Company’s retail store business, which has increased substantially with the continued expansion of The Walking Company, the Company has found the use of such plane to be beneficial to its business. The amounts paid by the Company for the use of such plane in 2007 totaled $268,000.

Notwithstanding anything to the contrary in any of the Company’s previous or future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, that might incorporate this Proxy Statement or future filings with the Securities Exchange Commission, in whole or in part, the following report shall not be deemed to be incorporated by reference into any such filing.

The current members of the Company’s Audit Committee are Steven Good, David Walsh and Skip Coomber, none of whom is an officer or employee of the Company. The members of the Audit Committee are considered independent as defined by the listing standards imposed by the Nasdaq Marketplace Rule 4200(a)(15). The Audit Committee has reviewed the 2007 audited financial statements with management, discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees) and received required written disclosures from the independent accountants. Based on the review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ending December 31, 2007 for filing with the Securities and Exchange Commission.

Upon the recommendation of the Audit Committee, the Board of Directors of the Company has appointed SingerLewak LLP (“Singer”) as the Company’s independent public accountants and auditors for the fiscal year ending December 31, 2008, subject to stockholder approval. Singer has served as the Company’s independent public accountants and auditors since fall 2005. A representative of Singer is expected to be present at the Annual Meeting to respond to appropriate questions, and to make such statements as he or she may desire.

The Company is seeking stockholder ratification of the independent public accountants as a matter of good corporate governance. However, the Audit Committee retains complete discretion over the appointment of the independent registered public accounting firm. Accordingly, even if the stockholders ratify the selection of Singer, the Audit Committee will retain the discretion to appoint another audit firm if it feels that it is in the best interests of the Company to do so. Similarly, the Audit Committee may retain Singer even if the stockholders do not approve their selection, although the Audit Committee would reconsider the matter in that event.

Services that will be provided to the Company and its subsidiaries by Singer with respect to the 2008 fiscal year include the examination of the Company’s consolidated financial statements, reviews of quarterly reports, services related to filings with the SEC and consultations on various tax matters. Over the two prior fiscal years, the Company has engaged Singer to perform audit services only. Below is a summary of the fees billed by Singer over the last two fiscal years.

“Audit Fees” consist of fees billed for professional services rendered for the audit of the Company’s annual financial statements and the review of the interim financial statements included in the Company’s Quarterly Reports and for services normally provided in connection with statutory and regulatory filings or engagements.

The Audit Committee must pre-approve all engagements of the Company’s independent accountants unless an exception to such requirement exists under the Securities Exchange Act of 1934 or the rules of the Securities and Exchange Commission. Each year, the independent auditors’ retention to audit the Company’s financial statements, including the associated fees, is approved by the committee. All audit fees for fiscal 2007 were pre-approved by the Audit Committee. The Audit Committee will also, if applicable, review other potential engagements of the independent auditors, including the scope of the proposed work and the proposed fees, and approve or reject such services taking into account whether the services are permissible under applicable law and the possible impact on the auditors’ independence from management.

Section 16(a) of the Securities Exchange Act of 1934 requires that executive officers, directors, and holders of more than 10% of a company’s registered class of securities file reports of their ownership of a company’s securities with the SEC. Based on a review of these reports, the Company believes that its reporting persons complied with all applicable filing requirements.

The expenses of preparing and mailing the Notice of Annual Meeting, the Proxy Statement and the proxy card(s) will be paid by the Company. In addition to the solicitation of proxies by mail, proxies may be solicited by directors, officers and employees of the Company (who will receive no additional compensation) by personal interviews, telephone, telegraph and facsimile. The Company has not retained, and does not intend to retain, any other entities to assist in the solicitation of proxies. It is anticipated that banks, custodians, nominees and fiduciaries will forward proxy soliciting material to beneficial owners of the Company’s Common Stock and that such persons will be reimbursed by the Company for their expenses incurred in so doing.

Enclosed with the Proxy Statement is the Annual Report of the Company for 2007, which includes a copy of the Company’s Annual Report on Form 10-K for 2007. The Annual Report is enclosed for the convenience of stockholders only and should not be viewed as part of the proxy solicitation material. If any person who was a beneficial owner of Common Stock of the Company on the record date for the 2008 Annual Meeting desires additional copies of the Company’s Annual Report, it will be furnished without charge upon receipt of a written request. The request should identify the person making the request as a stockholder of the Company and should be directed to:

The Company may satisfy SEC rules regarding delivery of proxy statements and annual reports by delivering a single proxy statement and annual report to an address shared by two or more Company stockholders. This delivery method can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company may deliver only one proxy statement and annual report to multiple stockholders who share an address, unless contrary instructions are received prior to the mailing date. Similarly, if you share an address with another stockholder and have received multiple copies of our proxy materials, you may write or call us at the address and phone number provided above to request delivery of a single copy of these materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy statement and/or annual report, as requested, to a stockholder at a shared address to which a single copy of these documents was delivered. If you hold stock as a record stockholder and prefer to receive separate copies of a proxy statement or annual report either now or in the future, please contact the Company’s Stockholder Relations department.

The 2009 Annual Meeting of stockholders is presently expected to be held in June 2009. To be considered for inclusion in the Company’s Proxy Statement for the 2009 Annual Meeting, proposals of stockholders intended to be presented at the meeting must be received by the Corporate Secretary, THE WALKING COMPANY HOLDINGS, INC., 121 Gray Avenue, Santa Barbara, California 93101, no later than January 1, 2009.

A stockholder may wish to have a proposal presented at the 2009 Annual Meeting, but not to have it included in the Company’s Proxy Statement for the meeting. If notice of the proposal is not received by the Company at the above address by January 1, 2009, then the proposal will be deemed untimely under Rule 14a-4(e) under the Securities and Exchange Act of 1934, and the Company will have the right to exercise discretionary voting authority with respect to the proposal.

Stockholders wishing to bring proposals before the 2009 Annual Meeting must also comply with Section 1.9 of the Company’s Bylaws, which requires certain information to be provided in connection with the submission of stockholder proposals and sets forth certain requirements in regard thereto. Any Stockholder who wishes to communicate with the Board of Directors or any individual director can write to THE WALKING COMPANY HOLDINGS, INC., Corporate Secretary/Board Administration, 121 Gray Avenue, Santa Barbara California 93101.

I hereby appoint Andrew D. Feshbach and Anthony J. Wall, and each of them or either of them, with full power to act without the other and with full power of substitution, my true and lawful attorneys and proxies, to vote all of the shares of common stock of THE WALKING COMPANY HOLDINGS, INC. (the “Company”) which undersigned may be entitled to vote and to act for me in my name, place and stead at the Annual Meeting of Stockholders of the Company to be held at Westlake Village, California on September 25, 2008 at 10:30 a.m. local time, and any adjournments or postponements thereof, for the purposes of considering and voting upon the following:

Name	Note Principal		Conversion Shares
Michael Grenley	$	900,000		50,000
Anthony J. Wall	$	500,000		27,778
Roberta J. Morris	$	360,000		20,000
Lee M. Cox	$	360,000		20,000
Douglas N. Nilsen	$	200,000		11,112

	2007		2006

Audit Fees	$	218,357	$	169,685

Audit-Related Fees		66,420		60,533

Tax Fees		-		-

All Other Fees		15,919		4,396

PROXY	THE WALKING COMPANY HOLDINGS, INC.	PROXY
	Annual Meeting of Shareholders, September 25, 2008 This Proxy is Solicited on Behalf of the Board of Directors of THE WALKING COMPANY HOLDINGS, INC.

•	Mark, sign and date your proxy card.
•	Detach your proxy card.
•	Return your proxy card in the postage paid envelope provided.

	Please sign exactly as name appears hereon. Joint owners should each sign. Where applicable, indicate position or representative capacity.

	Dated:					, 2008


	Signature


	Signature

	Sincerely,


	Andrew D. Feshbach
	Chief Executive Officer and Director

Name	Age	Year First Elected
Fred Kayne	70	1992
Andrew D. Feshbach	48	1992

Name	Fees Earned or Paid in Cash ($)		Total ($)

Fred Kayne	$	180,000	$	180,000
Andrew D. Feshbach (1)			
Skip R. Coomber, III	$	35,000	$	35,000
Steven C. Good	$	40,000	$	40,000
David J. Walsh	$	37,500	$	37,500

Name	Value of Accelerated Vesting (1)

Andrew D. Feshbach	
Roberta J. Morris	$	65,700
Anthony J. Wall	$	65,700
Douglas N. Nilsen	$	65,700
Michael Grenley	$	214,800
Lee M. Cox	$	133,300

	Anthony J. Wall
	Executive Vice President,
	General Counsel and Secretary