UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM
8–K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): December 9,
2008
Footstar,
Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
(State
or Other Jurisdiction of
Incorporation)
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1-11681
(Commission
File Number)
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22-3439443
(IRS
Employer Identification No.)
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933
MacArthur Boulevard
Mahwah,
New Jersey
(Address
of Principal Executive Offices)
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07430
(Zip
Code)
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Registrant’s
telephone number, including area code: (201) 934-2000
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(c) As
previously disclosed, Footstar, Inc. (the “Company”) has entered into agreements
whereby substantially all of its operations, including the operation of licensed
footwear departments in stores operated by the Kmart subsidiary of Sears Holding
Corporation and Rite Aid Stores, Inc., shall cease on December 31,
2008. The Company anticipates that, promptly upon the cessation of
its operating business, it will take all necessary legal and business steps to
wind-down its business and distribute its remaining assets to its stakeholders
as promptly as practicable (the “Wind-down”). The Company anticipates
disclosing more detail about the Wind-down in the coming months.
As is the
case with all wind-downs, the Company’s Wind-down will encompass many formal and
informal activities. The Company’s Board of Directors (the “Board”)
has previously directed management to identify all Wind-down tasks and to begin
the process of implementing as many of these tasks prior to December 31, 2008 as
is practical. Beginning in September 2008, the Board asked its
Chairman, Jonathan M. Couchman, to expand his duties to include assessing the
Company’s preparedness for the Wind-down and to make recommendations to the
Board and management about ways to improve recoveries for the Company’s
stakeholders and the manners in which the Wind-down may be
expedited. The Board asked Mr. Couchman to perform these duties in
part due to his understanding of the Company and in order to allow management to
focus as much as possible on driving business performance during the last
quarters of its operations. In so deciding, the Board took note of
the unprecedented consumer and financial environment in which the Company’s
management is currently operating.
For his
services in this expanded capacity, the Board authorized the payment to Mr.
Couchman of $60,000 for each of the months of September and October, 2008 and
$41,667 per month (prorated for partial months) for the period from November 1,
2008 through December 8, 2008.
On
December 9, 2008, the Board formally appointed Mr. Couchman as its Chief
Wind-Down Officer pursuant to an employment agreement dated December 9, 2008
(the “Employment Agreement”). In this capacity, Mr. Couchman will
have the day-to-day responsibility of managing the Wind-down, including, without
limitation, the disposition of the Company’s assets and any other administrative
matters required in furtherance of the final dissolution of the
Company. The Employment Agreement gives the Company the discretion to
appoint Mr. Couchman as its Chief Executive Officer and President as of January
1, 2009, at which time Mr. Couchman will cease to serve as the Company’s Chief
Wind Down Officer and will perform such duties, responsibilities, and
authorities as are specified by the Company and as are customary for a Chief
Executive Officer and President of a publicly held corporation. This
provision provides the Company with a transition period of executive leadership
once the employment agreement with the Company’s current Chief Executive
Officer, Jeffrey A. Shepard, terminates, which is anticipated to occur on or
around December 31, 2008. The Board expresses its deepest
appreciation to Mr. Shepard for his 14 years of dedicated service and leadership
to the Company and its predecessors, and thanks him for his willingness to
assist in a smooth transition to the Wind-down.
Mr.
Couchman’s Employment Agreement has a nominal term of December 9, 2008 through
December 8, 2009, but is terminable on thirty (30) days notice by the
Company. Mr. Couchman will receive a base salary of $41,667 per month
(pro rated for partial months) during the term. Mr. Couchman will
also receive 169,492 restricted shares of the Company’s common stock pursuant to
this Employment Agreement.
Mr.
Couchman, age 39, was appointed the Chairman of the Board of the Company on
February 7, 2006 and has held that position since that time. He is the Managing
Member of Couchman Capital LLC, the general partner of Couchman Investments,
L.P., a Delaware limited partnership established in 2001 and the investment
manager of Couchman International Ltd., a British Virgin Islands corporation
established in 2001. Mr. Couchman is also a Director of Couchman International
Ltd. Couchman Capital LLC is also the general partner of Couchman Partners,
L.P., a British Virgin Islands limited partnership established in
2001.
The
Employment Agreement is filed herewith as Exhibit 10.1 and incorporated herein
by reference.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits.
The
exhibit to this Current Report on Form 8-K is listed on the Exhibit Index
hereof, which is incorporated by reference in this Item 9.01(d).
* * * * *
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Footstar, Inc. |
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Date: December
9, 2008
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By:
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/s/ Maureen
Richards |
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Name: |
Maureen
Richards |
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Title: |
Senior
Vice President and
General
Counsel
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EXHIBIT
INDEX
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Exhibit
Number
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Description |
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10.1
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Employment
Agreement, dated as of December 9, 2008, by and among Footstar, Inc. and
Jonathan M.
Couchman.
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