DEFA14A 1 c16202dadefa14a.htm SOLICITING MATERIAL defa14a
 

UNITED STATES
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.  )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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
 
Payless ShoeSource, Inc.
 
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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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 identify initial 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 complete all 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
(FLOW CHART)

 

 

     
                                                                       
    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
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