<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
The Stride Rite Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
The Stride Rite Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF STRIDE RITE]
191 Spring Street
P.O. Box 9191
Lexington, Massachusetts 02420-9191
March 1, 2000
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
The Stride Rite Corporation to be held at our corporate headquarters, 191
Spring Street, Lexington, Massachusetts, on Thursday, April 13, 2000, at
10:00 A.M.
I believe that the Annual Meeting provides an excellent opportunity for
stockholders to become better acquainted with Stride Rite's business strategy,
the product lines of our brands and our directors and officers. I hope that
you will be able to attend.
Whether or not you plan to attend, the prompt execution and return of your
proxy card will both assure that your shares are represented at the meeting
and minimize the cost of proxy solicitation. I thank you for your continued
interest and support.
Sincerely,
/s/ David M. Chamberlain
David M. Chamberlain
Chairman of the Board of Directors
and Chief Executive Officer
<PAGE>
THE STRIDE RITE CORPORATION
----------------
NOTICE OF ANNUAL MEETING
----------------
Lexington, Massachusetts
March 1, 2000
To the Stockholders of
The Stride Rite Corporation
The Annual Meeting of Stockholders of The Stride Rite Corporation, a
Massachusetts corporation, will be held at its corporate headquarters, 191
Spring Street, Lexington, Massachusetts, on Thursday, April 13, 2000, at 10:00
A.M. (Boston time), for the following purposes:
1. To elect two directors in the class whose term expires at the 2000
Annual Meeting and one additional nominee proposed by the Board of
Directors;
2. To consider and act upon the matter of ratifying the selection of
PricewaterhouseCoopers LLP as auditors of The Stride Rite Corporation for
the current fiscal year; and
3. To consider and act upon any other matters which may properly come
before the meeting or any adjournments or postponements thereof.
Only holders of record at the close of business on February 15, 2000 are
entitled to receive notice of and to vote at the 2000 Annual Meeting.
By Order of the Board of Directors
/s/ Charles W. Redepenning, Jr.
Charles W. Redepenning, Jr., Clerk
REGARDLESS OF THE NUMBER OF SHARES YOU MAY OWN, IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED AT THE ANNUAL MEETING. ACCORDINGLY, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
THE STRIDE RITE CORPORATION
191 Spring Street, Lexington, Massachusetts 02421
----------------
PROXY STATEMENT
For the 2000 Annual Meeting of Stockholders
----------------
General Information
This Proxy Statement is being furnished to holders of common stock, par
value $.25 per share (the "Common Stock"), of THE STRIDE RITE CORPORATION (the
"Company") in connection with the solicitation of proxies by the Board of
Directors to be used at the Annual Meeting of Stockholders on April 13, 2000
and at any adjournments or postponements of such meeting.
All proxies delivered in response to this solicitation are revocable at the
option of the person executing the proxy at any time before the voting of such
proxies at the meeting. A proxy may be revoked in writing delivered to the
Company's Clerk, at the principal executive offices of the Company prior to
the annual meeting, or by attending the annual meeting and voting in person.
Submission of a later dated proxy will revoke any earlier dated proxy. Unless
previously revoked, proxies so delivered will be voted at the meeting. Where a
choice or instruction is specified by the stockholder on a proxy, the proxy
will be voted in accordance with such specification. Where a choice or
instruction is not specified by such stockholder, the proxy will be voted as
recommended by the directors.
Only stockholders of record at the close of business on February 15, 2000
are entitled to receive notice of, and to vote at, the annual meeting. The
transfer books will not be closed. As of the close of business on February 15,
2000 there were outstanding and entitled to vote 43,484,381 shares of Common
Stock. Each share is entitled to one vote.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the meeting is
necessary to constitute a quorum for the transaction of business. Votes
withheld from any nominee for election as director, abstentions and broker
"non-votes" are counted as present or represented for purposes of determining
the presence or absence of a quorum for the meeting. A "non-vote" occurs when
a nominee holding shares for a beneficial owner votes on one proposal, but
does not vote on another proposal because, in respect of that other proposal,
the nominee does not have discretionary voting power and has not received
instructions from the beneficial owner.
The vote on each matter submitted to stockholders is tabulated separately. A
majority of votes cast by the shareholders present at the meeting or voting by
proxy is required to elect the directors. Abstentions are included in the
number of shares present or represented and voting on each matter. Neither
abstentions nor broker "non-votes" are counted as affirmative votes on any
matter.
This Proxy Statement, the related form of proxy and the Company's Annual
Report for the fiscal year ended December 3, 1999 are being mailed together on
or about March 1, 2000 to stockholders entitled to notice of and to vote at
the meeting.
The principal executive offices of the Company are located at 191 Spring
Street, Lexington, Massachusetts 02421.
<PAGE>
PROPOSAL NUMBER ONE: ELECTION OF DIRECTORS
Under Massachusetts law, the Board of Directors of the Company has three
classes of directors who serve staggered three-year terms. The classes are as
nearly equal in size as possible. Serving in Class I for terms expiring at the
2000 annual meeting are David M. Chamberlain, Joanna M. Jacobson, Robert L.
Seelert and Myles J. Slosberg. Serving in Class II for terms expiring at the
2001 annual meeting are Donald R. Gant, Warren Flick and W. Paul Tippett, Jr.
Serving in Class III for terms expiring at the 2002 annual meeting are Frank
R. Mori, Diane M. Sullivan and Bruce Van Saun. Mr. Seelert and Ms. Jacobson,
whose terms expire at the 2000 annual meeting, will not be standing for re-
election to the Board of Directors. The Company thanks Mr. Seelert and Ms.
Jacobson for their contributions and service to the Company.
The Board of Directors has nominated David M. Chamberlain, Peter L. Harris
and Myles J. Slosberg to serve as the Class I directors for a term of office
expiring at the 2003 annual meeting of stockholders. Mr. Slosberg has been a
director since 1961. Mr. Chamberlain was elected to the Board upon his
appointment as Chairman and Chief Executive Officer in November 1999. Mr.
Harris is not currently a director of the Company. The Board of Directors
recommends that the stockholders elect David M. Chamberlain, Peter L. Harris
and Myles J. Slosberg to serve as Class I directors.
It is the intention of the persons named as proxies to vote the proxies,
unless authority to vote is specifically withheld, to elect as directors the
three nominees listed above to the class of directors whose term expires at
the 2003 annual meeting of stockholders. The Company believes that the
nominees will be able and willing to serve. If any of them should be unable or
choose not to take office, the persons named as proxies may vote in favor of
such other person or persons as the Board of Directors at the time recommends.
Information as to Directors and Nominees for Director
Set forth below are the name and age of each director currently in office
and of each nominee for director, his or her principal occupation for the past
five years, the year each became a director of the Company and the names of
other companies in which he or she serves as a director.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation, Director Term
Business Experience and Directorships Since Expires
- ------------------------------------- -------- -------
<S> <C> <C>
Nominees for Class I Directors
David M. Chamberlain, age 56.................................. 1999 2000
Chairman of the Board of Directors and Chief Executive
Officer of the Company since November 1999. Prior to joining
the Company, Mr. Chamberlain was Chairman of the Board of
Genesco Inc., a footwear company, from 1994 to 1999 and
President and Chief Executive Officer of Genesco Inc. from
1994 to 1996. Mr. Chamberlain is a director of Wild Oats
Markets, Inc.
Peter L. Harris, age 55....................................... -- --
Chairman of the Board, President and Chief Executive Officer
of The Picture People, a national chain of retail stores
that create family and children's photographic portraits,
since 1995. Mr. Harris was Chief Executive Officer of F.A.O.
Schwarz, the preeminent retailer of fine toys and gifts,
from 1985 to 1992. Prior thereto, Mr. Harris served as Chief
Executive Officer of GEMCO Department Stores. Mr. Harris is
also a director of Egghead.com, Inc., Pacific Sunwear of
California, Inc., and Natural Wonders, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Name, Age, Principal Occupation, Director Term
Business Experience and Directorships Since Expires
- ------------------------------------- -------- -------
<S> <C> <C>
Myles J. Slosberg, age 63..................................... 1961 2000
Attorney in private practice since July 1994. Mr. Slosberg
served as interim Chairman and Chief Executive Officer of
the Company from July 1999 to November 1999. From March 1991
to July 1994, Mr. Slosberg was an Assistant Attorney General
for the Commonwealth of Massachusetts. Mr. Slosberg was
employed by the Company from 1959 to 1986, during which
period he served in a number of executive capacities.
Class II Directors
Warren Flick, age 56.......................................... 1998 2001
Co-Chairman of the Board of eSave Network, Inc., an internet
commerce company, since February 1999. Chairman of Warren
Flick Associates, a strategic investment, management and
consulting corporation, since January 1998. Prior to that
Mr. Flick was the President and Chief Operating Officer of
Kmart Corporation, a national chain of mass merchant
discount department stores, from 1995 to 1997, Chairman,
President and Chief Executive Officer of Sears de Mexico, a
subsidiary of Sears Roebuck and Co., a retailer, from 1994
to 1995 and Group Vice President of Sears Roebuck and Co.
from 1988 to 1994. Mr. Flick is a director of One Price
Clothing Stores, Inc. and eSave Network, Inc.
Donald R. Gant, age 71........................................ 1987 2001
Limited Partner of The Goldman Sachs Group, L.P., an
investment banking firm, since 1990. Mr. Gant is a director
of Diebold, Inc.
W. Paul Tippett, Jr., age 67.................................. 1993 2001
Principal of Ann Arbor Partners, a consulting firm, since
1990. Mr. Tippett was President and a director of Springs
Industries, Inc., a manufacturer of finished fabrics, home
furnishings and industrial fabrics, from 1985 to 1989, and
Chairman of the Board and Chief Executive Officer of
American Motors Corp., an automobile manufacturer, prior to
its acquisition by Chrysler Corporation in 1985.
Class III Directors
Frank R. Mori, age 59......................................... 1996 2002
President and co-Chief Executive Officer of Takihyo, Inc., an
investment holding company that manages a private equity
portfolio since 1986. From 1974 until 1999, Takihyo, Inc.
was the principal shareholder of Anne Klein & Co. and it
currently is a principal shareholder of Donna Karan
International, Inc. Mr. Mori served as President and Chief
Executive Officer of Anne Klein & Co., a women's apparel
company, from 1975 to 1999. Mr. Mori is a director of
Takihyo, Inc. and Donna Karan International, Inc.
Diane M. Sullivan, age 44..................................... 1999 2002
President and Chief Operating Officer of the Company since
July 1999. Ms. Sullivan was Group President of the Company
from October 1997 to July 1999 and President, Wholesale
Division, Stride Rite Children's Group, Inc., a subsidiary
of the Company, from the time she joined the Company in
April 1995 to July 1999.
Bruce Van Saun, age 42........................................ 1999 2002
Senior Executive Vice President and Chief Financial Officer,
The Bank of New York Company, Inc., a banking company, since
May 1997. Prior to that, Mr. Van Saun was Chief Financial
Officer of Deutsche Bank North America Group, a banking
company, from October 1994 to May 1997 and Chief Operating
Officer and Chief Financial Officer of Wasserstein Perella &
Co., Inc., an investment banking firm, from 1990 to
October 1994.
</TABLE>
3
<PAGE>
Ownership of Equity Securities
The following table shows the beneficial ownership of Common Stock of (i)
each person or entity known to the Company to be the beneficial owner of more
than 5% of the Common Stock and (ii) each director and nominee for director,
the chief executive officer, the other executive officers listed in the
summary compensation table and, as a group, the directors and all executive
officers. Except as otherwise stated, all information is dated as of February
15, 2000. The numbers disclosed include shares as to which a right to acquire
beneficial ownership within 60 days exists (for example, through the exercise
of stock options, conversions of securities or through various trust
arrangements) within the meaning of Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, (the "1934 Act").
<TABLE>
<CAPTION>
Shares of Common Stock Percent of
Name Beneficially Owned(1) Class
---- ---------------------- ----------
<S> <C> <C> <C>
David L. Babson and Co., Inc............... 3,102,690 (2) 7.1%
One Memorial Drive
Cambridge, MA 02142-1300
David M. Chamberlain....................... 100,000 (3) (4)
Warren Flick............................... 15,428 (5),(6) (4)
Donald R. Gant............................. 63,493 (5),(7),(8) (4)
Peter L. Harris............................ 0 (4)
Joanna M. Jacobson......................... 300,033 (9) (4)
Frank R. Mori.............................. 16,308 (5),(7) (4)
Robert L. Seelert.......................... 26,848 (5),(7),(10) (4)
Myles J. Slosberg.......................... 178,533 (5),(7),(11) (4)
Diane M. Sullivan.......................... 208,334 (12) (4)
W. Paul Tippett, Jr........................ 17,979 (5),(7),(13) (4)
Bruce Van Saun............................. 5,071 (14) (4)
James A. Eskridge.......................... 0 (4)
Robert C. Siegel........................... 400,334 (15) (4)
Thomas L. Nelson........................... 19,441 (16) (4)
Sandra A. Hayakawa......................... 6,668 (17) (4)
Gerrald B. Silverman....................... 156,812 (18) (4)
The Directors and Executive Officers listed
above and other executive officers as a
group (20 persons)........................ 1,738,510 (19) 4.0%
</TABLE>
- --------
(1) With respect to nominees, directors and executive officers, based on
information furnished by the nominee, director or executive officers
listed. Unless otherwise indicated, the persons listed above have sole
voting and dispositive power with respect to shares beneficially owned.
(2) According to a Schedule 13G filed with the SEC on February 7, 2000 by
David L. Babson and Co., Inc., such entity beneficially owned
3,102,689.97 shares of the Company's Common Stock as of December 31,
1999, of which such entity had sole power to vote or direct the vote with
respect to 3,101,209.97 shares and shared power to vote with respect to
1,480 shares.
(3) Includes currently exercisable options to purchase 100,000 shares granted
to Mr. Chamberlain under the Company's 1998 Stock Option Plan.
(4) Less than one percent of the outstanding shares of Common Stock of the
Company.
(5) Includes currently exercisable options to purchase 1,600 shares, granted
pursuant to the Company's 1998 Non-Employee Director Stock Ownership Plan
(the "1998 Directors' Plan").
(6) Includes 3,828 Phantom Stock Units credited to Mr. Flick's account
pursuant to the Deferred Compensation Plan for Directors.
(7) Includes currently exercisable options to purchase 5,000 shares, granted
pursuant to the Company's 1994 Non-Employee Director Stock Ownership Plan
(the "1994 Directors' Plan").
4
<PAGE>
(8) Includes 18,490 Phantom Stock Units credited to Mr. Gant's account
pursuant to the Deferred Compensation Plan for Directors.
(9) Includes 225,000 shares Ms. Jacobson is entitled to purchase under the
Company's 1995 Long-Term Growth Incentive Plan (the "1995 Plan") and
73,334 shares Ms. Jacobson is entitled to purchase under the Company's
1998 Stock Option Plan.
(10) Includes 17,248 Phantom Stock Units credited to Mr. Seelert's account
pursuant to the Deferred Compensation Plan for Directors.
(11) Includes 4,503 Phantom Stock Units credited to Mr. Slosberg's account
pursuant to the Deferred Compensation Plan for Directors. Also includes
(i) 89,400 shares of Common Stock held in an irrevocable trust created on
December 2, 1942 of which Mr. Slosberg's father was the settlor and Mr.
Slosberg is one of two trustees, for the benefit of Mr. Slosberg's mother
and for Mr. Slosberg and his siblings, and (ii) 8,300 shares of Common
Stock held in an irrevocable trust created on May 11, 1976 of which Mr.
Slosberg is the settlor and Mr. Slosberg's wife is one of two trustees,
for the benefit of Mr. Slosberg's children, and under certain
circumstances for the benefit of Mr. Slosberg's wife as a remainder
interest. Mr. Slosberg disclaims beneficial ownership of these 97,700
shares of Common Stock.
(12) Includes 130,000 shares Ms. Sullivan is entitled to purchase under the
Company's 1995 Plan and 73,334 shares Ms. Sullivan is entitled to
purchase under the Company's 1998 Stock Option Plan.
(13) Includes 1,879 Phantom Stock Units credited to Mr. Tippett's account
pursuant to the Deferred Compensation Plan for Directors.
(14) Includes 4,071 Phantom Stock Units credited to Mr. Van Saun's account
pursuant to the Deferred Compensation Plan for Directors.
(15) Includes 398,334 shares that Mr. Siegel is entitled to purchase under the
Company's 1975 Executive Incentive Stock Purchase Plan (the "1975 Plan")
and the Company's 1995 Plan.
(16) Includes 16,667 shares Mr. Nelson is entitled to purchase under the
Company's 1998 Stock Option Plan.
(17) Includes 6,668 shares Ms. Hayakawa is entitled to purchase under the
Company's 1998 Stock Option Plan.
(18) Includes 47,000 shares Mr. Silverman is entitled to purchase under the
Company's 1975 Plan, 83,667 shares Mr. Silverman is entitled to purchase
under the Company's 1995 Plan and 23,334 shares Mr. Silverman is entitled
to purchase under the 1998 Stock Option Plan.
(19) Includes 64,059 shares (4,332 shares of which are owned by a trust
established under the Uniform Gifts to Minors Act by one officer for the
benefit of his children and as to which that officer disclaims beneficial
ownership) and currently exercisable options to purchase 85,000 shares
under the 1995 Plan and 74,169 under the 1998 Stock Option Plan
beneficially owned by executive officers not separately listed above.
Meetings of the Board of Directors and Committees
During the Company's 1999 fiscal year, which ended December 3, 1999, the
Board of Directors held eight meetings. During fiscal 1999, the Board had
standing Audit, Compensation and Investment Committees, and a Committee on the
Board. Each director attended more than 75% of the aggregate of (i) the
meetings of the Board of Directors held while he or she served and (ii) the
total number of meetings held by all committees on which he or she served.
The Committee on the Board met one time during the 1999 fiscal year and is
currently composed of Messrs. Gant (Chairman), Flick, Seelert and Tippett. Its
purpose is to review the performance of directors, recommend to the Board of
Directors the selection of directors to be nominated, and consider and
recommend issues relating to director compensation.
The Audit Committee met three times during the 1999 fiscal year and is
currently composed of Messrs. Seelert (Chairman), Flick, Slosberg and Van
Saun. The Audit Committee recommends the selection of independent auditors to
the Board of Directors, reviews the overall scope, as well as the results, of
the annual audit, and reviews the overall internal controls of the Company.
The Compensation Committee met three times during the 1999 fiscal year and
is composed of Messrs. Mori (Chairman), Gant and Tippett. Members of the
Compensation Committee are non-employee directors of the Company. The
Compensation Committee reviews executives' salaries, administers various
incentive compensation plans and recommends action to the Board of Directors
on matters related to compensation for officers and other key employees of the
Company and its subsidiaries. The Compensation Committee Report for the 1999
fiscal year is included in this proxy statement, commencing on page 11.
5
<PAGE>
The Investment Committee met two times during the 1999 fiscal year. It is
composed of Messrs. Slosberg (Chairman), Mori, Tippett and Van Saun. The
Investment Committee recommends the selection of independent investment
managers for the investment of the Company's pension funds and reviews and
monitors the performance of the Company's pension funds. The Investment
Committee also reviews the Company's short-term investment of the Company's
available funds.
Compensation of Directors
Under the 1998 Directors' Plan, each director receives an annual retainer of
$40,000, payable either all in shares of Common Stock or one-half in cash and
one-half in shares of Common Stock at the discretion of the director, in
either case payable in increments of one-quarter of such amount at the
beginning of each fiscal quarter. The actual number of shares is calculated
based on the closing price of the Company's Common Stock on the last day of
the each preceding fiscal quarter. Each director receives each year an option
to purchase 5,000 shares of Common Stock on the first business day following
the Annual Meeting of Stockholders. Each option has a term of ten years from
the date of grant and becomes exercisable in three installments: 1,600 shares
on the first anniversary of the grant and 1,700 shares on each of the second
and third anniversaries of the grant. New directors receive option grants for
up to 5,000 shares upon initial election to the Board with the amount of such
grant based on the number of months remaining prior to the next annual meeting
of Stockholders. Each director may defer his or her annual retainer, with the
cash portion, if any, deferrable in a cash deferred account and the stock
option portion deferrable in Phantom Stock Units of Common Stock of the
Company.
As of February 1999, the Company adopted stock ownership guidelines for
directors pursuant to which each director is expected to accumulate shares of
Common Stock with a value equal to at least five times the annual retainer for
directors within five years of election to the Board, or February 2004 in the
case of current directors. Each director is expected to achieve at least one-
half of this goal within three years, or February 2002 in the case of current
directors.
6
<PAGE>
Executive Compensation
Summary Compensation Table
The following table shows the compensation for the past three fiscal years
of each person who served as Chief Executive Officer during fiscal 1999 and
each of the other four most highly compensated executive officers for fiscal
1999 (the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Awards
------------------- ------
Other
Annual All Other
Compen- Compen-
Name and Fiscal Salary Bonus sation Options sation
Principal Position(1) Year ($) ($) ($)(2) (#) ($)(3)
--------------------- ------ ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
David M. Chamberlain(4) 1999 43,846 -- -- 500,000 120
Chairman and Chief 1998 -- -- -- -- --
Executive Officer 1997 -- -- -- -- --
- --------------------------------------------------------------------------------------
Myles J. Slosberg(5) 1999 172,727 -- -- -- --
Interim Chairman and 1998 -- -- -- -- --
Chief Executive Officer 1997 -- -- -- -- --
- --------------------------------------------------------------------------------------
James A. Eskridge(6) 1999 352,308 -- 69,819(7) 500,000 --
Former Chairman and 1998 -- -- -- -- --
Chief Executive Officer 1997 -- -- -- -- --
- --------------------------------------------------------------------------------------
Diane M. Sullivan 1999 390,256 325,962 -- 200,000 5,864
President and Chief 1998 295,000 100,000(8) -- 60,000 3,783
Operating Officer 1997 259,266 200,000 -- 60,000 3,077
- --------------------------------------------------------------------------------------
Thomas L. Nelson(9) 1999 260,000 131,495 -- 30,000 864
President, Sperry 1998 137,500 53,750 -- 20,000 432
Top-Sider, Inc.(10) 1997 -- -- -- -- --
- --------------------------------------------------------------------------------------
Sandra A. Hayakawa(11) 1999 237,071 98,178 -- 30,000 864
President, Tommy 1998 116,667 40,000 -- 10,000 432
Hilfiger
Footwear, Inc.(10) 1997 -- -- -- -- --
- --------------------------------------------------------------------------------------
Gerrald B. Silverman 1999 253,885 39,392 -- 30,000 15,264
President, Stride Rite 1998 227,965 135,000 -- 20,000 14,141
Children's Group, 1997 211,470 74,000 -- 44,000 13,104
Inc.(10)
</TABLE>
- --------
(1) The summary compensation table does not include Mr. Siegel, who resigned
as Chief Executive Officer of the Company effective as of December 6,
1998.
(2) Amounts for executive perquisites and other personal benefits, securities
or property are not shown because the aggregate dollar amount per
executive is less than the lesser of either $50,000 or 10% of the annual
salary and bonus of such executive.
(3) Amounts awarded include (i) payments of dividend equivalents on shares of
Common Stock subject to unexercised options granted under the 1975 Plan
of $9,400, $9,400 and $10,000 for Mr. Silverman in respect of fiscal
1999, 1998 and 1997 respectively; (ii) Company contributions to the
executive's Employee Savings and Investment Plan account of $5,000,
$2,919 and $2,357 for Ms. Sullivan in respect of fiscal 1999, 1998 and
1997 respectively; and $5,000, $3,877 and $2,384 for Mr. Silverman in
respect of fiscal 1999, 1998 and 1997 respectively; and (iii) amounts of
insurance premiums paid by the Company for term life insurance for the
benefit of the executive of $120 for Mr. Chamberlain in respect of fiscal
1999; $864, $864 and $720 for Ms. Sullivan in respect of fiscal 1999,
1998 and 1997 respectively; $864 and $432 for Mr. Nelson in respect of
fiscal 1999 and 1998 respectively; $864 and $432 for Ms. Hayakawa in
respect of fiscal 1999 and 1998 respectively; and $864, $864 and $720 for
Mr. Silverman in respect of fiscal 1999, 1998 and 1997 respectively.
7
<PAGE>
(4) Mr. Chamberlain began his employment with the Company on November 15,
1999.
(5) Mr. Slosberg served as interim Chairman and Chief Executive Officer from
July 7, 1999 to November 15, 1999.
(6) Mr. Eskridge resigned as Chief Executive Officer of the Company,
effective as of July 7, 1999.
(7) Amounts reimbursed by the Company for the payment of taxes on non-
deductible relocation expenses.
(8) Includes $40,625, the fair market value of 5,000 shares of the Common
Stock of the Company as of the date of grant that were awarded to Ms.
Sullivan as a portion of the Company's annual bonus plan.
(9) Mr. Nelson became an employee of the Company on May 13, 1998.
(10) Each of Sperry Top-Sider, Inc., Tommy Hilfiger Footwear, Inc. and Stride
Rite Children's Group, Inc. are subsidiaries of the Company.
(11) Ms. Hayakawa became an employee of the Company on May 1, 1998.
Executive Stock Ownership Guidelines
As of February 1999, the Company adopted executive stock ownership
guidelines for the Chief Executive Officer and other key executives. Under
these guidelines, key executives are expected to accumulate shares of Common
Stock with a value equal to at least five times base compensation in the case
of the Chief Executive Officer, three times base compensation in the case of
top executive officers and one or two times base compensation for other key
executives within five years of being designated as a key executive subject to
the guidelines (by February 2004 for current designees). Each executive is
expected to achieve at least one-half of these goals within three years (by
February 2002 for current designees). There are currently nine executives
subject to these guidelines.
Stock Option Grants
The following table shows information concerning options to purchase Common
Stock of the Company granted during fiscal 1999 to the named executive
officers pursuant to the 1998 Stock Option Plan.
OPTION GRANTS FOR FISCAL YEAR 1999
<TABLE>
<CAPTION>
No. of
Shares % of Option
Underlying Total Date
Options Options Option Market Expiration Grant Date
Name(1) Granted Granted Price Value Date Valuation(2)
------- ---------- ------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
David M. Chamberlain.... 500,000 23.7 $ 6.875 $ 6.875 11/15/2009 $1,200,800
- ---------------------------------------------------------------------------------------
Diane M. Sullivan....... 100,000 4.8 $ 8.125 $ 8.125 12/17/2008 $ 267,090
100,000 4.8 $10.5625 $10.5625 7/7/2009 $ 364,320
- ---------------------------------------------------------------------------------------
Thomas L. Nelson........ 30,000 1.4 $ 8.125 $ 8.125 12/17/2008 $ 80,127
- ---------------------------------------------------------------------------------------
Sandra A. Hayakawa...... 10,000 0.5 $ 8.125 $ 8.125 12/17/2008 $ 26,709
20,000 0.9 $ 8.25 $ 8.25 7/12/2009 $ 56,912
- ---------------------------------------------------------------------------------------
Gerrald B. Silverman.... 30,000 1.4 $ 8.125 $ 8.125 12/17/2008 $ 80,127
</TABLE>
- --------
(1) The option grant table does not include Messrs. Slosberg and Eskridge. Mr.
Slosberg received no option grants in fiscal year 1999 other than the
standard grants he received for serving as a director of the Company, as
discussed in "Compensation of Directors" above. All options previously
granted to Mr. Eskridge terminated as a result of his resignation as
Chairman and Chief Executive Officer of the Company on July 7, 1999.
(2) Calculated using the Black-Scholes Single Option Pricing Model. The
assumptions used in determining the valuation of these options using this
methodology are as follows: average expected life of options of 4.5 years;
an average risk-free interest rate of 5.69%; a volatility factor of .40;
and a dividend yield of 2.2 percent. The actual value, if any, that an
executive officer may realize will depend on the continued employment of
the executive officer holding the option through its vesting period, and
the excess of the market price over the exercise price on the date the
option is exercised so that there is no assurance that the value realized
by an executive officer will be at or near the value estimated by the
Black-Scholes single option pricing model, which is based on assumptions
as to the variables of stock price volatility, future dividend yield,
interest rates, and other factors.
8
<PAGE>
Aggregated Option Exercises and Option Values
The following table shows information concerning the exercise of stock
options during fiscal year 1999 by each of the named executive officers and
the fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Shares Number of Unexercised Unexercised In-the-Money
Acquired on Value Options at Fy-End Options at Fy-End
Exercise Realized ------------------------- --------------------------
Name (1) (#) ($) Exercisable Unexercisable Exercisable Unexercisable
-------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David M. Chamberlain.... 0 0 100,000 400,000 0 0
- ----------------------------------------------------------------------------------------------------
Diane M. Sullivan....... 0 0 130,000 260,000 0 0
- ----------------------------------------------------------------------------------------------------
Thomas L. Nelson........ 0 0 6,667 43,333 0 0
- ----------------------------------------------------------------------------------------------------
Sandra A. Hayakawa...... 0 0 3,334 36,666 0 0
- ----------------------------------------------------------------------------------------------------
Gerrald B. Silverman.... 0 0 122,667 58,000 129,250(2) 0
</TABLE>
- --------
(1) The aggregated option exercise table does not include Messrs. Slosberg and
Eskridge. Mr. Slosberg received no option grants in fiscal year 1999 other
than the standard grants he received for serving as a director of the
Company, as discussed in "Compensation of Directors" above. All options
previously granted to Mr. Eskridge terminated as a result of his
resignation as Chairman and Chief Executive Officer of the Company on July
7, 1999.
(2) Represents the difference between the closing price of the Company's
Common Stock on December 3, 1999 ($6.125) and the exercise price of the
options, multiplied by the number of shares represented by such options.
Employment Agreements
On November 4, 1999, the Company entered into an employment agreement with
David M. Chamberlain for Mr. Chamberlain's service to the Company as Chairman
and Chief Executive Officer for the period from November 15, 1999 through
November 30, 2002 and renewable annually thereafter (the "Employment
Agreement"). Mr. Chamberlain's annual rate of base salary under his Employment
Agreement is $600,000 and he is eligible for an annual bonus with a target
bonus set at 50% of his base salary. Mr. Chamberlain was also granted
nonqualified stock options to purchase up to 500,000 shares of the Common
Stock of the Company at the closing price of the Company's Common Stock on the
trading day prior to the public announcement of his appointment ($6.875 per
share).
Under his Employment Agreement, Mr. Chamberlain is also entitled to receive
certain enumerated perquisites and to participate in the various employee
benefit plans which the Company maintains or adopts during his employment
period. The Agreement also provides for severance payments to Mr. Chamberlain
in the event that the Company terminates Mr. Chamberlain's employment during
the employment period without "cause" or Mr. Chamberlain terminates his
employment for "good reason". In such event, Mr. Chamberlain would receive
payments equal to twelve months' salary plus continued participation in
medical and dental plans through the end of the employment period.
Mr. Chamberlain has also entered into a change in control agreement with the
Company as described under "Change of Control Employment Agreements" below.
On November 11, 1998, the Company entered into an employment agreement with
James A. Eskridge for Mr. Eskridge's service to the Company as Chairman and
Chief Executive Officer for the period from December 7,
9
<PAGE>
1998 through December 7, 2001 and renewable annually thereafter (the
"Employment Agreement"). Mr. Eskridge's annual rate of base salary under his
Employment Agreement was $600,000 and he was eligible for an annual bonus with
a target bonus set at 50% of his base salary. Mr. Eskridge was also granted
nonqualified stock options to purchase up to 500,000 shares of the Common
Stock of the Company at the closing price of the Company's Common Stock on the
trading day prior to the public announcement of his appointment ($10.125 per
share). Mr. Eskridge resigned from the Company effective July 7, 1999.
Change of Control Employment Agreements
The Company has entered into change of control employment agreements with
each of the named executive officers in the summary compensation table, and
with certain other executive officers. The change of control employment
agreements are for two-year terms, which terms extend for one year upon each
anniversary unless a notice not to extend is given by the Company. These
agreements provide generally that the executive's terms and conditions of
employment (including position, location, compensation and benefits) will not
be adversely changed during the two-year period after a change of control of
the Company. If the Company terminates the executive's employment (other than
for cause, death, disability or retirement) or if the executive terminates for
good reason during such two-year period (or upon certain terminations within
18 months prior to a change of control in connection with or in anticipation
of a change of control), the Company must provide certain specified severance
benefits. For purposes of the agreements, a change of control shall mean,
subject to the conditions and exceptions specified in the change of control
employment agreements, (i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act (a
"Person"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of securities of the Company where such
acquisition causes such Person to own twenty percent (20%) or more of the
Common Stock or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; (ii) individuals who, as of February 12, 1998, constitute the Board
of Directors cease to constitute at least a majority of the Board of
Directors; (iii) consummation of certain reorganizations, mergers or
consolidations or sales or other dispositions of all or substantially all of
the assets of the Company or the acquisition of assets of another entity; or
(iv) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
Severance benefits under the agreements with each of the named executive
officers include three times the sum of the executive's base salary, target
bonus, and dividend equivalents under the 1975 Plan, and three years of
continued benefit insurance plan coverage. The value of additional retirement
benefits which would have been earned by the executive had he or she remained
in the Company's employ for an additional period of three years would also be
paid to the executive. In addition, the executives are entitled to receive an
additional payment in an amount sufficient to make them whole for any excise
tax on excess parachute payments imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended. The agreements also provide for the lapse
upon a change of control of all restrictions on options granted under the 1975
Plan, 1995 Plan and 1998 Stock Option Plan.
Retirement Income Plan
The Company's Retirement Income Plan, as amended effective as of January 1,
1989 (the "Retirement Plan"), is a non-contributory defined benefit pension
plan. For salaried, management, sales and non-production hourly employees, the
Retirement Plan covers basic compensation received from the Company and its
participating subsidiaries, excluding overtime payments, commissions, bonuses
and any other additional compensation; and for commissioned sales personnel
whose compensation is derived wholly from commissions, the Retirement Plan
covers 80% of the commissions received (the "Earnings"). The Retirement Plan
provides for an annual pension at normal retirement age, 65 (with a minimum of
five years of service), determined as
10
<PAGE>
follows: (i) for credited service (the "Credited Service") prior to January 1,
1984, 1% of average annual Earnings (based on 1981, 1982 and 1983 Earnings) up
to $9,000 and 1.75% of average annual Earnings in excess of $9,000 multiplied
by the number of years of Credited Service prior to January 1, 1984; plus (ii)
for Credited Service after January 1, 1984 but prior to January 1, 1989, 1.25%
of Earnings up to $15,000 for each year of service and 2% of Earnings in
excess of $15,000 for each year of service; plus (iii) for Credited Service
after January 1, 1989, 1.35% of Earnings up to $15,000 for each year of
service and 2% of Earnings in excess of $15,000 for each year of service. If
the total number of years of Credited Service exceeds 34 years, an amount
equal to 1.80% of annual Earnings for each additional year of service will be
added to the retirement benefit.
The following table shows, as to each of the named executive officers, his
or her (i) number of years of Credited Service as of February 15, 2000 and
(ii) estimated annual benefits payable upon retirement at age 65. The amounts
presented are on a straight-life annuity basis, but alternative methods of
payment are available at the option of the participant. In no event shall
benefits payable under the Retirement Plan exceed the maximum allowed under
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
benefit payment under the Retirement Plan is not subject to any deductions for
Social Security benefits or other offset amounts.
<TABLE>
<CAPTION>
Number of Years
of Credited Estimated Annual
Service as of Benefits Payable
February 15, Upon Retirement
Name 2000 At Age 65(1)
- ---- --------------- ----------------
<S> <C> <C>
David M. Chamberlain........................... 0 $27,322
Diane M. Sullivan.............................. 4 $81,762
Thomas L. Nelson............................... 1 $68,986
Sandra A. Hayakawa............................. 1 $92,278
Gerrald B. Silverman........................... 5 $94,381
</TABLE>
- --------
(1) Assumes continued service until age 65 at current salary levels.
Compensation Committee Report
The Compensation Committee (the "Committee") is comprised of three non-
employee directors: Mr. Frank R. Mori, Committee Chairman, and Messrs. Donald
R. Gant and W. Paul Tippett, Jr. The Committee reviews and oversees the
Company's various incentive plans, evaluates performance and reviews
compensation levels and other related matters for the Company's senior
executives. When evaluating the performance of its senior executives, the
Committee reviews with the full Board in detail all aspects of compensation
for the senior executives, including the five individuals named in the summary
compensation table. The Committee met three times in fiscal 1999.
Compensation Philosophy
The Committee's strategy is to align the Company's executive compensation
program with corporate performance and shareholder returns. The Committee
considers the following objectives when evaluating the Company's compensation
programs:
. Offering competitive base salaries to attract and retain well-qualified,
experienced executives;
. Linking cash-based incentive compensation to corporate performance goals
and individual performance; and
11
<PAGE>
. Linking senior executive long-term compensation to consistent
appreciation in price of the Common Stock of the Company through stock
option grants.
In achieving these objectives, the Committee analyzes Company, division and
individual performance, competitive executive compensation packages and stock
performance. The Committee periodically retains the services of a consulting
firm specializing in executive compensation to review the competitiveness of
the Company's executive compensation programs with respect to other public
corporations with whom the Company competes for executive talent. The
Company's competitors for executive talent are not necessarily the same
companies that would be included in a peer group established to compare
shareholder returns because the Company requires skills and perspectives from
a broader range of backgrounds.
The three major components of the Company's executive compensation for
fiscal year 1999 were: base salary, annual incentive compensation and stock
options, each of which is described in more detail below. The Committee also
evaluates the total compensation package of each executive officer, including
pension benefits, insurance, severance plans and other benefits.
Base Salary
The Committee establishes base salaries for executive officers by evaluating
the responsibilities of the position, the level of experience of the executive
officer, and competitive market data on comparable executive officer
positions.
The Committee reviews the base salaries of the Company's senior executives
annually. Salary increases are based on the overall performance of the Company
and of each executive officer individually, and on the financial results of
the executive's particular business unit. The Committee also evaluates market
data in determining base salary levels for each executive, and targets base
salary levels at approximately the median level among footwear competitors of
like size. The final determination is subjectively made based on these
criteria.
Annual Incentive Compensation
Pursuant to the annual incentive compensation plans in effect for fiscal
year 1999, the Committee established individual participation and target
bonuses based on the performance of particular business units and the nature
and scope of responsibilities of each participant. Bonuses were earned based
on comparing actual fiscal year 1999 performance against established business
and financial goals. The performance goals were approved by the full Board in
December 1998, and included a threshold consolidated pre-tax income goal, a
consolidated pre-tax income goal and divisional pre-tax income goals. For
fiscal year 1999, the Company met the minimum threshold for payments under the
incentive plans and met the minimum level of the consolidated pre-tax income
goals. The International, Sperry and Tommy Hilfiger Footwear divisions all met
or exceeded their divisional pre-tax income goals and bonus payments were made
to plan participants in those groups. An additional discretionary bonus was
given to Ms. Sullivan, President and Chief Operating Officer, who the
Committee felt merited incentive compensation based on subjective criteria,
including leadership, attitude and performance of additional responsibilities
during the period the Company was between permanent Chief Executive Officers.
Stock Options
Under the 1998 Stock Option Plan, the Committee is authorized to grant
options to purchase Common Stock with an exercise price equal to the market
price of the Common Stock on the date of the grant. The Committee has
established guidelines for the number of options to be granted at various
executive levels, based on
12
<PAGE>
competitive practices, the duties and scope of responsibilities of each
executive's position, and the amount and terms of options already held by each
executive.
The Committee and the Chief Executive Officer believe that executive
ownership of significant equity interest in the Company will more closely
align the interests of stockholders and management. In light of this belief,
the Company established stock ownership guidelines for senior executives,
effective February 4, 1999. The executives to whom these guidelines apply will
have up to five years to reach target minimum levels of stock ownership, based
on an ascending scale commensurate with their level in the Company. The
minimum levels of stock ownership set forth in the guidelines range from one
to five times' annual base salary. Compliance with these guidelines will be
monitored by the Committee and the Committee may take such compliance into
consideration when future stock option grants and bonus awards are made.
Compensation of the Chief Executive Officer
Mr. Eskridge was elected Chairman and Chief Executive Officer of the Company
on November 11, 1998, effective as of December 7, 1998. Mr. Eskridge's base
salary for fiscal year 1999 was $600,000, pursuant to his Employment Agreement
dated November 11, 1998. In evaluating his compensation package, the Committee
used market data on compensation levels, including all forms of incentive
compensation, from industry competitors of like size. Mr. Eskridge was
eligible to receive incentive compensation under the Senior Executive Annual
Incentive Plan, targeted at 50% of his base salary, and was awarded non-
qualified stock options to purchase 500,000 shares of Common Stock, at $
10.125 per share, the closing price of the Company's Common Stock on the New
York Stock Exchange--Composite Tape, on November 10, 1998. The shares were to
vest one-third on each of the first, second and third anniversaries of his
December 7, 1998 start date. Mr. Eskridge resigned as Chairman and Chief
Executive Officer of the Company, effective as of July 7, 1999, and therefore,
the non-qualified stock option grant terminated and no incentive compensation
was paid.
Mr. Chamberlain was elected Chairman and Chief Executive Officer of the
Company by the Board on November 4, 1999, effective as of November 15, 1999.
In evaluating his compensation package, the Committee used market data on
compensation levels, including all forms of incentive compensation, from
industry competitors of like size. Pursuant to his Employment Agreement, Mr.
Chamberlain's annual base salary for fiscal year 2000 was set at $600,000. Mr.
Chamberlain is eligible to receive incentive compensation under the Senior
Executive Annual Incentive Plan, targeted at 50% of his base salary. Payment
to Mr. Chamberlain of additional compensation under this Plan is based on the
attainment of certain financial goals established by the Board in December
1999.
The Committee also awarded Mr. Chamberlain non-qualified stock options to
purchase 500,000 shares of Common Stock, at $6.875 per share, the closing
price of the Company's Common Stock on the New York Stock Exchange--Composite
Tape, on November 3, 1999. Options to purchase 100,000 of these shares vested
on November 15, 1999, and the balance will vest as to one-third on each of the
first, second and third anniversaries of his November 15, 1999 start date.
Internal Revenue Code Section 162(m)
Pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended,
(the "Code"), publicly traded corporations are not permitted to deduct most
compensation exceeding $1,000,000 paid to certain top executives, unless the
compensation qualifies as "performance based compensation" or is otherwise
exempt under Section 162(m). All compensation paid to the named executives of
the Company in fiscal 1999 was deductible for federal tax purposes.
13
<PAGE>
Conclusion
As outlined in the compensation plans described above, a substantial portion
of the Company's executive compensation is directly linked to individual and
corporate performance and stock price appreciation, in accordance with our
stated Compensation Philosophy. As the Company moves forward to create
stockholder value, the Committee will continue to monitor and evaluate its
strategy for executive compensation.
COMPENSATION COMMITTEE
Frank R. Mori (Chairman)
Donald R. Gant
W. Paul Tippett, Jr.
Compensation Committee Interlocks and Insider Participation in Corporate
Decisions
No member of the Compensation Committee has served as an officer or employee
of the Company nor has any other business relationship or affiliation with the
Company, except his service as a director. None of such persons had any
relationships with the Company requiring disclosure under applicable rules and
regulations.
14
<PAGE>
Performance Graph
Set forth below is a graph comparing the cumulative total stockholder return
on the Company's Common Stock, based on the market price of the Common Stock
and assuming reinvestment of dividends, with the cumulative total return of
companies in the Standard & Poor's Small Cap 600 Index, and the Standard &
Poor's Footwear--Small Cap Index (the current performance indicator of peer
group companies), for a period of five fiscal years commencing November 30,
1994 and ending December 3, 1999. The Standard & Poor's Footwear--Small Cap
Index consists of Brown Shoe Company, Inc., Justin Industries, Inc., K-Swiss
Inc.--Class A, The Timberland Company--Class A, Wolverine World Wide, Inc. and
the Company.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Company................................. 100 72.84 85.15 103.26 78.26 57.53
S&P Footwear--Small Cap Index........... 100 96.77 132.33 180.96 130.99 154.69
S&P Small Cap--600 Index................ 100 130.96 159.63 198.81 188.15 207.91
</TABLE>
PROPOSAL NUMBER TWO: SELECTION OF AUDITORS
Although Massachusetts law no longer requires that the Company's auditors be
approved each year by the stockholders, the Board of Directors continues the
practice of submitting such selection to the stockholders for their approval
because the Board deems it appropriate to do so. The Board of Directors has
selected PricewaterhouseCoopers LLP, which has acted as auditors of the
Company since 1972, to act as auditors for its current fiscal year. In the
event that the stockholders do not approve of PricewaterhouseCoopers LLP, the
Board of Directors will reconsider the appointment of PricewaterhouseCoopers
LLP.
A representative of PricewaterhouseCoopers LLP will be present at the
meeting, will be provided the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions
from the stockholders.
15
<PAGE>
The Company's consolidated financial statements for the 1999 fiscal year
were examined and reported upon by PricewaterhouseCoopers LLP. In connection
with that examination, PricewaterhouseCoopers LLP also reviewed the Company's
Annual Report and the Company's filings with the SEC, and provided
consultations on financial statement implications of matters under
consideration. PricewaterhouseCoopers LLP also examined and reported upon the
financial statements of the Company's retirement and pension plans.
PROPOSAL NUMBER THREE: OTHER MATTERS
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act") requires the Company's executive officers and directors and persons
beneficially owning more than 10% of the outstanding Common Stock of the
Company to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC"). Executive officers, directors
and beneficial owners of more than 10% of the outstanding Common Stock are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on copies of such forms furnished as provided above, or written
representations that no Forms 4 or 5 were required, the Company believes that
all Section 16(a) filing requirements applicable to its executive officers,
directors and beneficial owners of greater than 10% of its outstanding Common
Stock were complied with in fiscal 1999 other than (i) Form 5 for Warren Flick
reporting acquisition of Phantom Stock Units pursuant to the Deferred
Compensation Plan for Directors, which was filed 4 days after the deadline
specified in Section 16(a) of the 1934 Act, and (ii) Form 5 for Joanna M.
Jacobson reporting the acquisition of Common Stock of the Company pursuant to
the 1998 Non-Employee Director Stock Ownership Plan, which was filed 22 days
after the deadline specified in Section 16(a) of the 1934 Act.
The Board of Directors of the Company is not aware of any other matters
which may come before the annual meeting of stockholders. If any other matters
shall properly come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote the proxy in accordance with their
judgment on any such matters.
PROXY SOLICITATION
The solicitation of proxies will be principally by mail, and may be followed
by telephone and personal contacts by officers, directors or regular employees
of the Company, or by employees of D.F. King & Company, Inc., proxy solicitors
for the Company. The cost of soliciting proxies will be borne by the Company.
The Company does not yet have a written agreement with D.F. King & Company,
Inc. regarding the proxy solicitation. It is anticipated that the agreement
with D.F. King & Company, Inc. will be on customary terms. The costs of proxy
solicitation are not anticipated to exceed $20,000, unless circumstances
require otherwise. Brokers and others holding shares of Common Stock in their
names or in the names of their nominees will be expected to forward copies of
the Company's proxy soliciting material to beneficial owners of such shares
and to seek authority for execution of proxies, and will be reimbursed by the
Company for their reasonable expenses.
16
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 annual meeting of
stockholders must be received by the Company on or before November 1, 2000 to
be considered for inclusion, pursuant to Rule 14a-8 under the 1934 Act, in the
proxy material for that meeting. Any such proposal must also comply with the
rules of the SEC governing the form and content of proposals in order to be
included in the Company's proxy materials and form or proxy, and should be
addressed as follows:
Office of the Clerk
The Stride Rite Corporation
191 Spring Street
P.O. Box 9191
Lexington, Massachusetts 02420-9191
A stockholder who wishes to present a proposal at the 2000 annual meeting of
stockholders, other than a proposal to be considered for inclusion in the
Company's proxy statement as described above, must deliver the proposal to the
address listed above. The Company must receive the proposal on or before March
11, 2000. The proposal must also comply with the other requirements contained
in the Company's Bylaws, including supporting documentation and other
information. Proxies solicited by the Board of Directors will confer
discretionary voting authority with respect to these proposals, subject to SEC
rules governing the exercise of this authority.
March 1, 2000
17
<PAGE>
0865-PS-2000
<PAGE>
PROXY
THE STRIDE RITE CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints David M. Chamberlain and Charles W.
Redepenning, Jr., and each of them acting solely, proxies, with full power of
substitution and with all powers the undersigned would possess if personally
present, to represent and vote, as designated below, all of the shares of Common
Stock, par value $.25 per share, of The Stride Rite Corporation (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Company to be held at its executive offices, 191 Spring Street,
Lexington. Massachussetts, on Thursday, April 13, 2000, at 10:00 A.M. (Boston
time), and at any adjournment(s) or postponement(s) thereof, upon the matters
set forth on the reverse side hereof and described in the Notice of Annual
Meeting of Stockholders and accompanying Proxy Statement and upon such other
matters as may properly be brought before such meeting and any adjournment(s) or
postponement(s) thereof.
The undersigned hereby revokes any proxy previously given and acknowledges
receipt of the Notice of and Proxy Statement for the aforesaid meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1 AND 2.
- ----------- -----------
SEE REVERSE (PLEASE SIGN AND DATE ON REVERSE SIDE SEE REVERSE
SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE) SIDE
- ----------- -----------
<PAGE>
DETACH HERE
[X] Please mark
votes as in
this example.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<CAPTION>
<S> <C>
FOR AGAINST ABSTAIN
1. Election of Directors. 2. Proposal to ratify selection of [_] [_] [_]
PricewaterhouseCoopers LLP
Nominees: (01) David M. Chamberlain, (02) Peter L. Harris, as Auditors of the Company.
(03) Myles J. Slosberg
FOR WITHHELD
[_] [_]
[_] ________________________________________
For all nominees except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Sign exactly as name appears on this Proxy. If the
shares are registered in the names of two or more
persons, each should sign. Executors, administrators,
trustees, partners, custodians, guardians, attorneys
and corporate officers should add their full titles
as such.
Signature: ____________________________ Date: _______________ Signature: ____________________________ Date: _______________
</TABLE>
