The Board of Directors is committed to sound and effective corporate governance practices. In this regard, the Board of Directors has
formally adopted a Code of Business Conduct and Ethics applicable to all officers, directors and employees as required by NASDAQ listing
standards. This Code of Business Conduct and Ethics is publicly available on the Company's website at www.shoepavilion.com.
The Company's Board of Directors currently includes four independent directors. To be considered independent under NASDAQ rules, a
director may not be employed by the Company or engage in certain types of business dealings with the Company. In addition, as required by
NASDAQ rules, the Board has made a determination as to each independent director that no relationship exists that, in the opinion of the Board,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the
Board reviewed and discussed information provided by the directors and by the Company with regard to each director's business and personal
activities as they relate to the Company and its management. Based on this review, the Board has determined that Mr. Hanelt,
Mrs. Iverson, Mr. Katz and Mr. Miller are independent directors. Mr. Beinus is an employee of the Company and are
therefore not considered independent.
The Board of Directors currently has three standing committees: the Audit Committee; the Compensation Committee; and the Governance
and Nominating Committee. The Board of Directors adopted charters for the Audit, Compensation and Governance and Nominating
Committees. Copies of these charters are publicly available on the Company's website at www.shoepavilion.com. All members of the three
committees are independent within the meaning of applicable NASDAQ listing standards.
The Audit Committee has three members: Peter G. Hanelt (Chair), Ann Iverson and Randy Katz. The Committee met eight times in fiscal
2007.
The Audit Committee's role includes the oversight of the Company's financial, accounting and reporting processes; its system of internal
accounting and financial controls and compliance with related legal and regulatory requirements; the appointment, engagement, termination and
oversight of the Company's independent auditors, including conducting a review of their independence, reviewing and approving the planned
scope of the annual audit, overseeing the independent auditors' audit work; review and pre-approval of any audit and non-audit services that
may be performed by them; review with management and the independent auditors the adequacy of the Company's internal financial controls;
and review of the Company's critical accounting policies and the application of accounting principles. See "Report of the Audit
Committee" contained in this proxy statement.
Each member of the Audit Committee meets the independence criteria prescribed by applicable law and the rules of the Securities and
Exchange Commission (the "SEC") for audit committee membership and is an "independent director" within the meaning
of applicable NASDAQ listing standards. Each Audit Committee member meets the NASDAQ's financial knowledge requirements, and the
Board of Directors has further determined that Peter G. Hanelt (i) is an "audit committee financial expert" as such term is
defined in Item 401(h) of Regulation S-K promulgated by the SEC; and (ii) also meets the NASDAQ's professional experience
requirements. The Audit Committee operates pursuant to a written charter, which complies with the applicable provisions of the Sarbanes-Oxley
Act of 2002 and related rules of the SEC and NASDAQ.
The Compensation Committee has three members: Ann Iverson (Chair), Peter G. Hanelt and Mark J. Miller, all of whom are independent.
The Committee met three times in fiscal 2007.
The Compensation Committee is responsible for establishing and administering the policies and practices governing the annual
compensation of executive officers, including cash compensation and equity incentive programs, and reviews and establishes annually the
compensation of the Chief Executive Officer. It also is responsible for evaluating the performance of executive officers and senior management.
As part of this process, the Compensation Committee meets with the Chief Executive Officer on an annual basis and reviews his
recommendations on compensating executive officers as well as compensation policies and practices. The Compensation Committee also
reviews and approves equity-based compensation grants to the Company's non-officer employees.
The Governance and Nominating Committee has three members: Mark J. Miller (Chair), Peter G. Hanelt Randy Katz. The Committee met
one time in fiscal 2007.
The Governance and Nominating Committee's principal functions include (i) ensuring written charters are prepared for each standing
committee; (ii) periodically reviewing the Company's Code of Business Conduct and Ethics; (iii) periodically reviewing the Company's Insider
Trading Policy and recommending any changes for approval by the Board; (iv) reviewing any director candidates, including those nominated or
recommended by stockholders; (v) assisting the Chairman of the Board in the annual evaluation of individual members of the Board and its
standing committees; and (vi) identifying candidates to become members of the Board or its standing committees consistent with criteria
established by the Board or its standing committees.
The Company does not have a policy with regard to consideration of director candidates nominated by the stockholders. Historically,
the only candidates who have been nominated at the Company's annual meetings have been the nominees proposed by the Board of Directors,
and, therefore, there has not been a need to have in place a set of procedures for stockholder nominations. Nevertheless, were a stockholder
nomination to be delivered to the Company on or before the deadline for stockholder proposals, including all information required by Regulation
14A under the Securities Exchange Act of 1934, as amended, the Committee would consider any such proposed nominee in connection with its
own deliberations. Any nominee should be prepared to participate fully in Board activities, including attendance at, and active participation in,
meetings of the Board, and not have other personal or professional commitments that would, in the Committee's judgment, interfere with or limit
such candidate's ability to do so. Any nominee should also be prepared to represent the best interests of all of Shoe Pavilion's stockholders and
not just one particular constituency.
Any stockholder who desires to contact the Board or specific members of the Board may do so electronically by sending an email to the
following address: steng@shoepavilion.com. Alternatively, a stockholder may contact the Board or specific members of the Board by writing to:
Stockholder Communications, Shoe Pavilion, Inc., 13245 Riverside Drive, Suite 450, Sherman Oaks, California 91423.
The Board of Directors conducted 18 meetings in fiscal 2007. During 2007, there were no members of the Board of Directors who attended
fewer than 75% of the meetings of the Board of Directors and all committees of the Board on which they served.
We seek to provide a level of compensation for our executive officers that is competitive with publicly-traded companies similar in both size
and industry. We hope to attract, retain, and reward executive officers who contribute to our success, to align executive officer compensation
with our performance and to motivate executive officers to achieve our business objectives. We compensate our senior management through a
mix of base salary, bonus and equity compensation pursuant to our equity incentive plan.
Our Compensation Committee determines and recommends to our Board of Directors the compensation of our executive officers. The
Compensation Committee also will administer our equity incentive plan. The Compensation Committee reviews base salary levels for executive
officers of our Company and recommends raises and bonuses based upon Company achievements, individual performance and competitive
and market conditions. The Compensation Committee may delegate certain of its responsibilities, as it deems appropriate, to other
compensation committees or to the Company's officers, but it has not elected to do so.
The following Summary Compensation Table sets forth certain information regarding the compensation of (i) our principal executive officer;
(ii) the only other executive officer serving on December 29, 2007 who earned $100,000 or more in total compensation during fiscal 2007; and
(iii) one former executive officer who would have been included in the Summary Compensation Table had he been employed by Shoe Pavilion
on December 29, 2007 (together, the "Named Executive Officers"). The information in the table covers services rendered in all
capacities to us during the fiscal year ended December 29, 2007.
The following table provides information with respect to outstanding stock options held by the Named Executive Officers as of
December 29, 2007. The Named Executive Officers have no other outstanding equity awards.
The Company has no employment agreement or other arrangement regarding employment with the Named
Executive Officers or any other executive officer of the Company.
7
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has selected Grant Thornton LLP as the independent registered public accounting firm to perform the audit of the
Company's consolidated financial statements for the fiscal year ending January 3, 2009. Although action by the stockholders is not required by
law, the Board of Directors has determined as a matter of good corporate governance that it is desirable to request ratification of this selection
by the stockholders of the Company. If the stockholders fail to approve the selection of such auditors, the Board of Directors will reconsider the
selection.
A majority of the shares present in person or by proxy and entitled to vote at the annual meeting is required for approval of this proposal.
Resignation of Former Independent Registered Public Accounting Firm and Appointment of Grant Thornton LLP
On November 28, 2007, Deloitte & Touche informed the Audit Committee that it declines to stand for reappointment
as the Company's independent registered public accountants.
The reports of Deloitte & Touche on the Company's consolidated financial statements for fiscal years 2005 and 2006 did not
contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles,
except as discussed in the following sentence. Deloitte & Touche's report on the December 30, 2006 consolidated financial statements
included explanatory paragraphs related to the restatement of the Company's consolidated statements of cash flows for the years ended
December 31, 2005 and January 1, 2005 and related to the adoption of Statement of Financial Standards No. 123(R), "
Share-Based
Payment
."
During the fiscal years ended December 31, 2005 and December 30, 2006 and through November 28, 2007, there
were no disagreements between Deloitte & Touche and the Company on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Deloitte & Touche's satisfaction, would
have caused it to make reference to the subject matter of the disagreement in connection with its reports.
Except as described below, there were no reportable events under Item 304(a)(1)(v) of Regulation S-K that occurred
during the fiscal years ended December 31, 2005 and December 30, 2006 and through November 28, 2007. The Audit
Committee of the Board of Directors discussed each of the material weaknesses described below with Deloitte & Touche, and the
Company authorized Deloitte & Touche to respond fully to the inquiries of a successor auditor concerning the subject matter below.
In connection with Deloitte & Touche's review of the interim financial statements for the quarter ended September 29,
2007, they advised the Company that they believed the following matters constituted material weaknesses. These material weaknesses were
reported in Item 4T of the Company's Form 10-Q for that fiscal quarter.
-
Material weakness related to the control environment -
The Company did not maintain a control environment that fully emphasized
the establishment of, adherence to, or adequate communication regarding appropriate internal control for all aspects of its operations.
Specifically, the Company did not have adequate controls for the purposes of establishing, maintaining and communicating its control
environment due to the insufficient number of personnel and lack of appropriate depth of knowledge, experience and training in the application
of accounting principles generally accepted in the United States of America ("US GAAP") in its accounting and finance function.
-
Material weakness related to preparation of account analysis, account summaries and account reconciliations -
In certain cases,
inaccurate or incomplete account analyses, account summaries and account reconciliations were prepared during the quarter-end financial
closing and reporting process in the areas of inventory, fixed assets and income taxes. As a result, material adjustments were necessary in
8
order to present the Company's condensed consolidated financial statements for the thirty-nine weeks ended September 29, 2007 in
accordance with US GAAP.
In connection with Deloitte & Touche's review of the interim financial statements for the quarter ended April 1, 2006, they
advised the Company that they believed the following matter constituted a material weakness. This material weakness was reported in
Item 4 of the Company's Form 10-Q for that fiscal quarter.
Material weakness related to the control environment -
In the course of evaluating the design and operating effectiveness of the
Company's disclosure controls and procedures for the thirteen weeks ended April 1, 2006, management identified the following deficiencies that
increased the likelihood of potential material errors in the Company's financial reporting: (i) an insufficient number of accounting and finance
personnel with the appropriate depth of experience, and (ii) a need for a more formalized process to identify, analyze and record significant
financial information and transactions in conformity with current accounting literature.
On December 7, 2007, the Audit Committee appointed Grant Thornton LLP as the Company's independent registered public
accounting firm to review the Company's consolidated financial statements for the fiscal year ended December 29, 2007. During the fiscal years
ended December 31, 2005 and December 30, 2006 and through December 7, 2007, the Company did not consult with Grant Thornton LLP on
either (i) the application of accounting principles to a specific completed or contemplated transaction or the type of audit opinion that might be
rendered on the Company's financial statements; or (ii) any matter that was the subject of a disagreement as defined in Item 304(a)(1)(iv) of
Regulation S-K or a reportable event described in Item 304(a)(1)(v) of Regulation S-K.
AUDIT COMMITTEE MATTERS
Principal Accounting Fees and Services
Grant Thornton LLP did not bill any fees to the Company in fiscal year 2007 because its engagement did not begin until December 7, 2007.
The aggregate fees billed by Deloitte & Touche LLP to Shoe Pavilion for fiscal years 2007 and 2006 for professional services totaled
$419,827 and $783,825, respectively. The fees described below are as follows:
-
Audit Fees
for the audit of the annual consolidated financial statements for fiscal 2006 and reviews of the quarterly consolidated
financial statements included in the Form 10-Q's for fiscal 2007 and 2006 were $301,777 and $496,300, respectively.
-
Audit-Related Fees
for services related to the secondary stock offering for fiscal 2006 was $217,555. There were no audit-related
fees for fiscal 2007.
-
Tax Fees
for services relating to transaction review, tax regulatory matters and tax return review for fiscal
2007 and 2006 were $118,050 and $68,470, respectively.
-
All Other Fees
for professional services rendered to the Company in fiscal 2006 was $1,500. There were no other fees for fiscal
2007.
A representative of Grant Thornton LLP will be present at the Annual Meeting with the opportunity to make a statement if he desires to do
so and will be available to respond to appropriate questions.
9
Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors
The Company is required to obtain prior approval from the Audit Committee for all audit and permissible non-audit related fees incurred with
the Company's independent auditors. Pursuant to the Pre-Approval Policy, all new projects (and fees) either must be authorized in advance
under the guidelines set forth in the Pre-Approval Policy or approved in advance by the full Committee. The Committee does not currently have
a separate written Pre-Approval Policy, although the Audit Committee Charter addresses the Pre-Approval Policy. All new projects and fees are
pre-approved by Peter G. Hanelt, the Chairman of the Audit Committee, acting as the designated subcommittee for pre-approval purposes. Mr.
Hanelt reports any such pre-approvals to the Committee at its next meeting.
The Audit Committee has considered whether the provision of non-audit services is compatible with
maintaining the independence of its independent registered public accounting firm and has concluded that it is.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE SELECTION OF GRANT
THORNTON LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
10
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is responsible for monitoring the integrity of the Company's consolidated financial
statements, its system of internal controls and the independence and performance of its independent auditors. It also recommends to the Board
of Directors, subject to stockholder ratification, the selection of the Company's independent auditors. The Committee is composed of three
non-employee directors and operates under a written charter adopted and approved by the Board of Directors. Each Committee member is
independent as defined by The NASDAQ Stock Market listing standards.
Management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of
consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company's
independent auditors are responsible for auditing those financial statements. The Audit Committee's responsibility is to monitor and review
these processes. The Audit Committee, however, is not professionally engaged in the practice of accounting or auditing and is not expert in the
fields of accounting or auditing, including with respect to auditor independence. The Audit Committee relies, without independent verification, on
the information provided to it and on the representations made by management and the independent auditors.
The Audit Committee held eight meetings during fiscal 2007. The meetings were designed, among other things, to facilitate and encourage
communication among the Committee, management and the Company's independent auditors, Deloitte & Touche LLP and, as of
December 7, 2007, Grant Thornton LLP. The Audit Committee discussed with the Company's independent auditors the overall scope and plans
for their audit. It met with the independent auditors, with and without management present, to discuss the results of their examination and their
evaluation of the Company's internal controls.
The Audit Committee reviewed and discussed the audited consolidated financial statements for the
fiscal year ended December
29, 2007 with management and Grant Thornton LLP. It also discussed with the independent auditors matters required to be discussed with audit
committees under auditing standards generally accepted in the United States of America, including, among other things, matters related to the
conduct of the audit of the Company's consolidated financial statements and the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees).
The Company's independent auditors also provided the Audit Committee with the written disclosures and the letter required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and discussed with the independent
auditors their independence from the Company. When considering Grant Thornton LLP's independence, it considered whether their provision of
services to the Company beyond those rendered in connection with their audit and review of the Company's consolidated financial statements
was compatible with maintaining their independence. The Audit Committee also reviewed, among other things, the amount of fees paid to
Deloitte & Touche LLP for audit and non-audit services for the fiscal year ended December 29, 2007.
Based on its review and these meetings, discussions and reports, and subject to the limitations on its role and responsibilities referred
to above and in the Audit Committee Charter, the Audit Committee recommended to the Board of Directors that the Company's audited
consolidated financial statements for the fiscal year ended December 29, 2007 be included in the Company's Annual Report on Form 10-K for
filing with the SEC. It has also recommended the selection of the Company's independent auditors, and, based on its recommendation, the
Board has selected Grant Thornton LLP as the Company's independent auditors for the fiscal year ending
January 3, 2009, subject to
stockholder ratification.
Audit Committee
Peter G. Hanelt, Chair
Ann Iverson
Randy Katz
11
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides certain information with respect to all of the Company's equity compensation plans in effect as of December 29,
2007.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
Number of Common
|
|
Number of
|
|
Shares Remaining
|
|
Common Shares
|
|
Available for Issuance
|
|
to be issued
|
Weighted-average
|
Under Equity
|
|
Upon Exercise
|
Exercise Price
|
Compensation Plans
|
|
of Outstanding
|
of Outstanding
|
(Excluding Securities
|
|
Options, Warrants
|
Options, Warrants
|
Reflected in the
|
Plan Category
|
and Rights (#)
|
and Rights ($)
|
First Column) (#)
|
|
|
|
|
Equity compensation plans approved
|
|
|
|
by stockholders
|
|
|
|
|
|
|
|
Amended and Restated 1998 Equity
|
|
|
|
Incentive Plan
|
426,500
|
4.67
|
419,561
|
|
|
|
|
Second Amended and Restated
|
|
|
|
Non-Employee Director Stock Plan
|
45,000
|
5.28
|
12,500
|
|
|
|
|
Equity compensation plans not
|
|
|
|
approved by stockholders
|
-
|
-
|
-
|
12
SECURITY OWNERSHIP OF MANAGEMENT, DIRECTORS AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to each director, director nominee, Named Executive Officer and each holder known to the Company to be
the beneficial owner of more than five percent of any class of the Company's voting stock, the number of shares and percentage of the
Company's stock beneficially owned as of March 29, 2008. For the purpose of the disclosure of ownership of shares by named executive
officers, below, shares are considered to be "beneficially" owned if a person, directly or indirectly, has or shares the power to vote or
direct the voting of the shares, the power to dispose of or direct the disposition of shares, or the right to acquire beneficial ownership of shares
within 60 days of March 29, 2008.
|
|
Shares of
|
|
|
|
|
Common Stock
|
|
Percentage
|
|
|
Beneficially
|
|
of Common
|
Name and Address
|
|
Held
|
|
Stock
|
5% or Greater Stockholders
|
|
|
|
|
|
|
|
|
|
Dmitry Beinus (1)
|
|
2,819,442
|
|
29.5%
|
13245 Riverside Drive, Suite 450
|
|
|
|
|
Sherman Oaks, CA 91423
|
|
|
|
|
|
|
|
|
|
Jack Roth (2)(3)
|
|
1,011,351
|
|
10.6%
|
1801 Century Park East
|
|
|
|
|
Los Angeles, CA 90067
|
|
|
|
|
|
|
|
|
|
JPMorgan Chase & Co. (2)
|
|
872,285
|
|
9.1%
|
270 Park Avenue
|
|
|
|
|
New York, NY 10017
|
|
|
|
|
|
|
|
|
|
Officers, Directors and Nominees Not Listed Above
|
|
|
|
|
|
|
|
|
|
Robert R. Hall (4)
|
|
130,284
|
|
1.4%
|
|
|
|
|
|
Peter G. Hanelt (5)
|
|
21,500
|
|
*
|
|
|
|
|
|
Ann Iverson (6)
|
|
7,500
|
|
*
|
|
|
|
|
|
Randy Katz (6)
|
|
7,500
|
|
*
|
|
|
|
|
|
Mark J. Miller (6)
|
|
7,500
|
|
*
|
|
|
|
|
|
Gail N. Egan
|
|
-
|
|
-
|
|
|
|
|
|
Paul R. Lambert, Jr.
|
|
-
|
|
-
|
|
|
|
|
|
Charlotte K. Reith
|
|
-
|
|
-
|
|
|
|
|
|
All current executive officers and directors
|
|
2,993,726
|
|
31.4%
|
as a group (6 persons) (7)
|
|
|
|
|
* Less than 1.0%
(1) Includes 69,442 shares issuable upon exercise of outstanding options exercisable within 60 days of March 29, 2008.
(2) Based solely upon Schedules 13D or 13G filed with the SEC.
(3) Includes 142,320 shares of common stock owned by members of Mr. Roth's family, or foundations or 401(k) plans established by or
for the benefit of family members. As to these shares, Mr. Roth shares power to dispose or direct the disposition of such shares, but he does
not have the power to vote or to direct the voting of such shares. Mr. Roth disclaims beneficial ownership of all such shares. Without
considering such shares, Mr. Roth owns 9.1% of the Company's outstanding shares.
13
(4) Includes 130,284 shares issuable upon exercise of outstanding options exercisable within 60 days of March 29, 2008.
(5) Includes 12,500 shares issuable upon exercise of outstanding options exercisable within 60 days of March 29, 2008.
(6) Includes 7,500 shares issuable upon exercise of outstanding options exercisable within 60 days of March 29, 2008.
(7) Includes 234,726 shares issuable upon exercise of outstanding options exercisable within 60 days of March 29, 2008.
RELATED PARTY TRANSACTIONS
The
following is a description of each transaction since January 1, 2006 and each
currently proposed transaction in which:
-
the Company has been or are to be a participant;
-
the amount involved exceeds $120,000; and
-
any of the Company's directors, executive officers or holders of more than 5% of the capital stock, or any immediate family member of or
persons sharing the household with any of these individuals, had or will have a direct or indirect material interest.
The Company has used Ad Marketing, Inc. for its advertising and marketing needs since fiscal year 1997. Ad Marketing provides Shoe
Pavilion with both print and advertising services, including the creation of advertising content and the buying of media time. The contract with Ad
Marketing may be cancelled by either party upon giving 60 days' notice. The Company paid Ad Marketing $5.9 million for its services in each of
fiscal 2007 and fiscal 2006. As of December 29, 2007, the Company had $1.1 million in accrued liabilities to Ad Marketing. Jack Roth is the
President, Chief Executive Officer, Chairman and the principal stockholder of Ad Marketing. Mr. Roth and various members of his family directly,
or indirectly through foundations and 401(k) plans, own 1,011,351 shares, or 10.6% of the Company's outstanding shares of common
stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the SEC. Officers,
directors and greater than ten-percent stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons that no Forms
5 were required for those persons, the Company believes that, during the period from December 31, 2006 through December 29, 2007 all
applicable filing requirements were complied with for its officers, directors, and greater than ten-percent beneficial owners.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which management intends to present or has reason to believe others will
present at the Annual Meeting. If other matters properly come before the Annual Meeting, those who act as proxies will vote in accordance with
their judgment.
STOCKHOLDER PROPOSALS
Under certain circumstances, stockholders are entitled to present proposals at stockholder meetings. In order for such a proposal to be
included in the proxy statement for the Company's 2009 annual meeting of
14
stockholders, it must be submitted to the Company by a stockholder
prior to January 4, 2009, in a form that complies with applicable regulations. If a stockholder gives notice of the proposal after that deadline, the
Company's proxy holders will be allowed to use their discretionary voting authority to vote against the stockholder proposal when and if the
proposal is raised at the meeting.
The Company was not notified by any stockholder of his or her intent to present a stockholder proposal from the floor at this year's annual
meeting. The enclosed proxy card grants the proxy holders discretionary authority to vote on any matter properly brought before the annual
meeting.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including the charges of brokerage houses and other custodians, nominees or
fiduciaries for forwarding documents to stockholders, will be paid by the Company.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 29, 2007 accompanies or has preceded this Proxy Statement. The
Annual Report contains consolidated financial statements of the Company and its subsidiary and the report thereon of Grant Thornton LLP, the
Company's independent registered public accounting firm.
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE SEC PURSUANT TO THE EXCHANGE ACT FOR THE FISCAL
YEAR ENDED DECEMBER 29, 2007, BY WRITING TO THE COMPANY AT: 13245 RIVERSIDE DRIVE, SUITE 450, SHERMAN OAKS,
CALIFORNIA 91423, ATTENTION: STEPHEN TENG.
Dated: May 5, 2008
By Order of the Board of Directors
Michael P. McHugh,
Secretary
15
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SHOE PAVILION, INC.
The undersigned hereby appoints Dmitry Beinus and Michael P. McHugh, and each of them, with power to act without
the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the
other side, all the shares of Shoe Pavilion, Inc. Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon
such other business as may properly come before the Annual Meeting of Stockholders of the Company to be held at Shoe Pavilion's corporate
headquarters, located at 13245 Riverside Drive, Suite 450, Sherman Oaks, California 91423 on Friday, May 30, 2008, at 9:00 a.m., California
time or any adjournment thereof, with all powers which the undersigned would possess if present at the Meeting.
(Continued, and to be marked, dated and signed, on the other side)
Address Change/Comments
(Mark the corresponding box on the reverse side)
↑ FOLD AND DETACH HERE ↑
This proxy will be voted as directed, or if no direction is indicated, will be voted "FOR"
the proposals. This proxy is solicited on behalf of the Board of Directors.
The Board of Directors recommends a vote FOR items 1 and 2.
|
|
¨
|
|
Mark Here for
Address Change
or Comments
PLEASE SEE
REVERSE SIDE
|
|
1. ELECTION OF DIRECTORS
|
|
|
|
NOMINEES:
|
FOR
|
WITHHELD FOR ALL
|
|
¨
|
¨
|
01 Dmitry Beinus
02 Gail N. Egan
03 Paul R. Lambert, Jr.
04 Charlotte K. Reith
|
|
|
Withheld for the nominees you list below: (Write that nominee's name in the space provided below.)
2. RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT AUDITORS
|
For
¨
|
Against
¨
|
Abstain
¨
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If you plan to attend the Annual Meeting, please
mark the box
¨
Signature ________________________________
|
Signature ________________________________
|
Date ________________________________
|
Note: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
↑ FOLD AND DETACH HERE ↑
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