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
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Under Rule 14a-12
Footstar,
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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On June
11, 2008 Footstar, Inc. issued the following press release:
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Media
Contact:
Wendi Kopsick/Kimberly Kriger
Kekst and Company
212-521-4800
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Investor
Contact:
Michael Lynch
Chief Financial Officer
201-934-2577
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FOR IMMEDIATE
RELEASE
FOOTSTAR ISSUES OPEN LETTER
TO SHAREHOLDERS
MAHWAH,
NEW JERSEY, June 11, 2008 -- Footstar, Inc. today issued the following open
letter to its shareholders, thanking them for their support and recommending
they return their WHITE proxy cards TODAY to re-elect Footstar’s Director
nominees at the upcoming Annual Meeting scheduled for June 17,
2008.
To All
Footstar Shareholders:
Thank you
for the strong support you have shown for your Board and management team as we
head toward our Annual Meeting of Shareholders which is now only a few days off
- June 17, 2008. We firmly believe it is in your best interests to
re-elect our two Director nominees and recommend Footstar shareholders return
their WHITE proxy cards TODAY.
Footstar’s
Nominees are the Right Choice
As you
know, Footstar has nominated two highly qualified and experienced executives,
Adam Finerman and Gerald Kelly, for re-election as Directors on the Footstar
Board. Both have made valuable contributions to the Board and are
committed to assuring that the Company remains on a smooth path to maximize
profitability over the next six months and to promptly and efficiently execute a
wind-down of the business following the expiration of the Company’s contract
with Kmart at the end of 2008, in order to maximize shareholder
value.
Both ISS
RiskMetrics and Glass, Lewis & Co – the nation’s two leading independent
proxy voting advisory firms – have recommended that Footstar shareholders vote
FOR Messrs. Finerman and Kelly by returning their WHITE proxy
card. As ISS RiskMetrics stated in its report, “Disrupting the board
in the final few months of its wind down does not seem to provide any advantage
for shareholders in general.”
Messrs.
Finerman and Kelly are part of a Footstar Board that has shown a consistent
history of acting to maximize shareholder value and returning cash to
stockholders including:
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Declaring
$6.00 per share in distributions since
2007
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Generating
a 120% increase in stock price (including distributions paid) since
Footstar emerged from bankruptcy in
2006
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Selling
intellectual property for $13
million
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Systematically
reducing costs and prudently managing the
business
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Taking
steps to prepare for the wind-down of the Company including reaching
agreement with Kmart on the hiring of substantially all of Footstar’s
1000+ store and district managers at contract-end, resulting in
substantial anticipated severance
savings
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Resolving
outstanding claims and contingent
liabilities
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Their
re-election will help assure that the Company continues to move forward without
disruption to implement its liquidation plan and return value to
shareholders.
Outpoint’s
Nominees are the Wrong Choice
Nevertheless,
Outpoint, a hedge fund managed by Jordan Grayson, is continuing to ask Footstar
shareholders to elect him and his nominee, Zachary Prensky, to the Board in
place of Messrs. Finerman and Kelly. Mr. Grayson and Mr. Prensky’s
plan for the Company is no different from the plan that the Board is already
pursuing, i.e. to liquidate the Company and return money to
shareholders. More importantly, the Board believes the election of
Mr. Grayson and Mr. Prensky may impair the smooth process that is already in
place to wind-down the Company – hindering and potentially delaying the
liquidation process.
Don’t
jeopardize the Board’s focus and progress on returning value to
shareholders!
You can
help assure that Footstar remains on the right path by re-electing Messrs.
Finerman and Kelly.
Return
Your WHITE Proxy Card TODAY
Whether
or not you plan to attend the Annual Meeting, please complete, sign, date and
promptly mail your enclosed WHITE proxy card in the postage-paid envelope
provided. Should you prefer, you may vote in person or may deliver
your proxy by telephone or by the internet by following the instructions on your
WHITE proxy card.
Footstar’s
Board of Directors strongly urges you not to sign any proxy cards sent to you by
Outpoint. If you have previously signed an Outpoint proxy card, you
can revoke it by signing, dating and mailing the enclosed WHITE proxy card in
the envelope provided.
If you
have any questions or need assistance in voting your shares, please call or
contact our proxy solicitor, MacKenzie Partners, Inc., which is assisting
Footstar, toll-free at (800) 322-2885 or by email at
proxy@mackenziepartners.com.
On behalf
of the entire Board and management team, thank you for your
support.
Sincerely,
Jonathan
M. Couchman
Chairman
of the Board
About
Footstar, Inc.
Footstar,
Inc. (OTCBB: FTAR) is a discount footwear retailer. The Company operates
licensed footwear departments nationwide in Kmart and Rite Aid
Stores.
NOTE:
Footstar's certificate of incorporation contains restrictions that prohibit
parties from acquiring 4.75% or more of Footstar's common stock without its
prior consent and as further provided therein.
Forward-Looking
Statements
This
release contains forward-looking statements made in reliance upon the safe
harbor provisions of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements may be identified by the use of words such as "anticipate,"
"estimates," "should," "expect," "guidance," "project," "intend," "plan,"
"believe" and other words and terms of similar meaning, in connection with any
discussion of our financial statements, business, results of operations,
liquidity, future operating or financial performance and other future events and
circumstances. Factors that could affect our forward-looking
statements include, among other things, our ability to manage the anticipated
wind-down of our current businesses in connection with the termination of our
Kmart business, the impact of the payment of the $1.00 per share special
distribution on June 3, 2008 on our future cash requirements and liquidity
needs, both for our operating plans and any contingencies and obligations, and
the other risks and uncertainties discussed more fully in our 2007 Annual Report
on Form 10-K and the 2008 first quarter report on Form 10-Q.
Because
the information in this release is based solely on data currently available, it
is subject to change and should not be viewed as providing any assurance
regarding our future performance. Actual results, performance,
events, plans and expectations may differ from our current projections,
estimates and expectations and the differences may be material, individually or
in the aggregate, to our business, financial condition, results of operations,
liquidity or prospects. Additionally, we do not plan to update any of
our forward-looking statements based on changes in assumptions, changes in
results or other events subsequent to the date of this release, other than as
included in our future required SEC filings, or as may otherwise be legally
required.
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