The Stride Rite Corporation Lexington, Massachusetts 02420
EXHIBIT
99.5
The
Stride Rite Corporation
000
Xxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
May
25,
2006
Barington
Capital Group, L.P.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxx X. Xxxxxx
Managing
Director and
General Counsel
Dear
Xx.
Xxxxxx:
This
letter agreement, dated May 25, 2006 (“Agreement”),
sets
forth the understanding by and among The Stride Rite Corporation, a
Massachusetts corporation (the “Company”),
and
the entities that are signatories hereto (collectively, the “Barington
Group,”
and
each, individually, a “member”
of
the
Barington Group) which are or may be deemed to be members of a “group” with
respect to the common stock of the Company, par value $0.25 per share, pursuant
to Rule 13d-5 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended.
1.
Appointment
of an Additional Director to the Board.
In
accordance with the agreement between the Company and the Barington Group dated
February 28, 2006 (the “February
Agreement”),
the
Board of Directors of the Company (the “Board”)
shall
appoint Xxxx
X.
Xxxxxxx to
the
Board as a Class II director as soon as reasonably practicable after the
execution of this Agreement. The Company agrees to include Xx. Xxxxxxx on the
Board’s slate of nominees for election as a director of the Company at the
Company’s 2007 annual meeting of shareholders (the “2007
Annual Meeting”)
and to
use its reasonable best efforts to cause the election of Xx. Xxxxxxx at the
2007
Annual Meeting (including, without limitation, recommending that the Company’s
shareholders vote in favor of the election of Xx. Xxxxxxx). If at anytime prior
to the 2007 Annual Meeting or during the term of Xx. Xxxxxxx that begins
immediately after the 2007 Annual Meeting there shall occur a vacancy in the
Board seat occupied by Xx. Xxxxxxx by reason of the resignation, removal, death
or incapacity of Xx. Xxxxxxx, then the Company shall take all necessary action
to fill such vacancy by a person who is mutually acceptable to the Board’s
Committee on the Board and the Barington Group and meets the qualifications
of a
“New Director” as that term is defined in Section 1(a) of the February
Agreement.
2. Board
Access.
On
a
quarterly basis during each of the four fiscal quarters of the Company beginning
with the fiscal quarter that starts June 3, 2006, no more than two (2)
representatives of the Barington Group (the “Representatives”)
shall
be afforded an opportunity to meet in person with the Board (the “Meetings”).
By
written notice to the Board, the Representatives may be changed from time to
time by the Barington Group. The Representatives shall deliver written notice
to
the Chairman of the Board of the request to have each Meeting, and each such
Meeting shall occur either immediately prior to or immediately after the next
scheduled Board meeting, except as otherwise agreed by the Representatives
and
the Company. Such Meetings may include participation by members of the Board
by
means of a conference telephone or video conference telephone hook-up that
would
satisfy the Company’s by-law requirement for a Board meeting,
provided,
however,
that a
majority of directors, the presiding independent director, and the Chairman
of
the Board shall be present in person at such Meetings.
The
parties hereto acknowledge that the matters that may be discussed at any Meeting
may include information regarding the Company that is material, non-public
information. Further, the parties hereto acknowledge that pursuant to the United
States securities laws any person that receives material, non-public information
regarding the Company shall be prohibited from purchasing or selling securities
of the Company or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell securities of the Company.
(c)
The
rights and obligations of the parties set forth in this Section 2 shall be
fully
binding on the parties hereto in accordance with the provisions hereof until
June 2, 2007.
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Barington Group that this
Agreement has been duly authorized, executed and delivered by the Company,
and
is a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
4.
Representations
and Warranties of the Barington Group.
Each
member of the Barington Group represents and warrants to the Company that this
Agreement has been duly authorized, executed and delivered by such member,
and
is a valid and binding obligation of such member, enforceable against such
member in accordance with its terms.
5.
Public
Announcement.
The
Company shall announce the execution of this Agreement and the appointment
to
the Board of Xx. Xxxxxxx by means of a mutually acceptable press release as
soon
as practicable on or after the date hereof. The parties hereto will provide
each
other the opportunity to review and comment upon any press release or other
public announcement or filing with respect to the transactions contemplated
by
this Agreement, and shall not issue any such press release or other public
announcement or filing prior to such consultation, except as, in the reasonable
judgment of the relevant party, may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national securities
exchange.
6.
Specific
Performance.
Each of
the members of the Barington Group, on the one hand, and the Company, on the
other hand, acknowledges and agrees that irreparable injury to
the
other
party hereto would occur in the event any of the provisions of this Agreement
were not performed
in accordance with their specific terms or were otherwise breached and that
such
injury would not be adequately compensable in damages. It is accordingly agreed
that the members of the Barington Group or any of them, on the one hand, and
the
Company, on the other hand (the “Moving
Party”),
in
addition to any other rights that may be available, shall each be entitled
to
specific enforcement of, and injunctive relief to prevent any violation of,
the
terms hereof, and the other party hereto will not take action, directly or
indirectly, in opposition to the Moving Party seeking such relief on the grounds
that any other remedy or relief is available at law or in equity.
7. Jurisdiction;
Applicable Law.
Each of
the parties hereto (a) consents to submit itself to the personal jurisdiction
of
the Court of Chancery or other federal or state courts of the State of Delaware
in the event any dispute arises out of this Agreement or the transactions
contemplated by this Agreement, (b) agrees that it shall not attempt to deny
or
defeat such personal jurisdiction by motion or other request for leave from
any
such court, (c) agrees that it shall not bring any action relating to this
Agreement or the transactions contemplated by this Agreement in any court other
than the Court of Chancery or other federal or state courts of the State of
Delaware, and each of the parties irrevocably waives the right to trial by
jury,
(d) agrees to waive any bonding requirement under any applicable law, in the
case any other party seeks to enforce the terms by way of equitable relief
and
(e) each of the parties irrevocably consents to service of process by first
class certified mail, return receipt requested, postage prepaid, to the address
of such parties’ principal place of business or as otherwise provided by
applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING
VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE
WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH
STATE.
8.
Representative.
Each
member of the Barington Group hereby irrevocably appoints Xxxxx X. Xxxxxxxxxxx,
or Xxxxxxxxx Capital Group, L.P. in the event that Xx. Xxxxxxxxxxx is no longer
serving in such role, as such member’s attorney-in-fact and representative (the
“Barington
Representative”),
in
such member’s place and stead, to do any and all things and to execute any and
all documents and give and receive any and all notices or instructions in
connection with this Agreement and the transactions contemplated hereby. The
Company shall be entitled to rely, as being binding on each member of the
Barington Group, upon any action taken by the Barington Representative or upon
any document, notice, instruction or other writing given or executed by the
Barington Representative.
9.
Counterparts.
This
Agreement may be executed in two or more counterparts which together shall
constitute a single agreement.
10.
Entire
Agreement; Amendment.
This
Agreement contains the entire understanding of the parties hereto with respect
to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth herein. This Agreement may be amended only by a written
instrument duly executed by the parties hereto, or in the case of the Barington
Group, the Barington Representative, or their respective successors or
assigns.
11. Notices.
Except
as set forth below, all notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when and if delivered personally, five (5) business days after being
sent
if mailed by registered or certified mail (return receipt requested), postage
prepaid, or upon receipt if sent by courier or overnight delivery service to
the
respective parties at the addresses set forth at the beginning of this Agreement
(or at such other address for any party as shall be specified by like notice,
provided
that
notices of a change of address shall be effective only upon receipt
thereof).
12. Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
13. No
Waiver.
Any
waiver by either the Barington Representative or the Company of a breach of
any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision
of
this Agreement. The failure of either the Barington Representative or the
Company to insist upon strict adherence to any term of this Agreement on one
or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement.
14. Successors
and Assigns.
Neither
the Barington Representative nor the Company may assign, delegate, or otherwise
transfer any or all of its rights or obligations under this Agreement without
an
express written and signed approval of the other party. Any attempted assignment
or delegation in contravention of this Section 14 will be null and void. This
Agreement will bind and inure to the benefit of the parties, their successors,
and permitted assigns or delegates.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly
authorized signatories of the parties as of the date hereof.
THE
STRIDE RITE CORPORATION
By:
/s/
Xxxxxxx X. Xxxxxxxxxxx, Xx.
Name:
Xxxxxxx X. Xxxxxxxxxxx, Xx.
Title:
General Counsel and Secretary
BARINGTON
COMPANIES EQUITY PARTNERS, L.P.
By: Barington
Companies Investors, LLC, its general partner
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
Managing Member
BARINGTON
INVESTMENTS, L.P.
By: Barington
Companies Advisors, LLC, its general partner
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
Managing Member
BARINGTON
COMPANIES ADVISORS, LLC
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
Managing Member
BARINGTON
COMPANIES INVESTORS, LLC
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
Managing Member
BARINGTON
COMPANIES OFFSHORE FUND, LTD.
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
President
BARINGTON
OFFSHORE ADVISORS, LLC
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
Authorized Signatory
BARINGTON
CAPITAL GROUP, L.P.
By:
LNA
Capital Corp., its general
partner
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
President and CEO
LNA
CAPITAL CORP.
By:
/s/
Xxxxx X. Xxxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxxx
Title:
President and CEO
STARBOARD
VALUE AND OPPORTUNITY MASTER FUND LTD.
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Authorized Signatory
PARCHE,
LLC
By: Admiral
Advisors, LLC, its managing member
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Authorized Signatory
ADMIRAL
ADVISORS, LLC
By:
Ramius Capital Group, L.L.C., its
sole
member
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Authorized Signatory
RAMIUS
CAPITAL GROUP, L.L.C.
By:
C4S
& Co., L.L.C., its Managing Member
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Authorized Signatory
C4S
&
CO., L.L.C.
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Authorized Signatory
