Exhibit 10.4
AMENDMENT NO. 1 TO
CHANGE OF CONTROL AGREEMENT
AMENDMENT NO. 1 TO CHANGE OF CONTROL AGREEMENT (“Amendment”), executed and
effective as of December 19, 2008 by and between COLLECTIVE BRANDS, INC.,
formerly known as Payless ShoeSource, Inc., a Delaware corporation (“CBI”), and
                     (“Executive”).
WHEREAS, CBI and Executive are parties to the amended and restated change of
control agreement entered into                      (“Change of Control
Agreement”).
WHEREAS, in order to avoid certain adverse federal income tax consequences to
Executive under the Change of Control Agreement as a result of Sections 162(m)
and 409A of the Internal Revenue Code of 1986, as amended, relating to deferred
compensation, CBI desires to implement certain amendments to the Change of
Control Agreement; and
WHEREAS, CBI and Executive desire to amend the Change of Control Agreement.
NOW, THEREFORE:
Section 1. Amendment to Section 4(c). Section 4(c) will be replaced in its
entirety with the following:
          “(c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. ‘Good Reason’ means in the absence of a written
consent by the Executive:

  1.   the assignment to the Executive of any duties inconsistent in any
material respect with the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a) of this Agreement, or any other action by the
Company that results in a material diminution in such position, authority,
duties or responsibilities;     2.   any other action or inaction that
constitutes a material breach of the terms of the Agreement;     3.   the
Company’s requiring the Executive to be based at any office or location
different than the office the Executive was employed immediately preceding the
Effective Date if such relocation increases Executive’s one-way commute from the
Executive’s principal residence by more than 35 miles;

 

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  4.   any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or     5.   any failure
by the Company to comply with and satisfy Section 10(c).

Anything in this Agreement to the contrary notwithstanding a termination by the
Executive for any reason during the 30-day period immediately following the
first anniversary of a Change of Control shall be deemed to be a termination for
Good Reason for all purposes of this Agreement.”
Section 2. Addition of Section 4(f). Section 4(f) shall be inserted as follows:
        “(f) Notice of Good Reason. Prior to complying with Sections 4(d) and
11(b), (1) the Executive must provide written notification of the Executive’s
intention to resign within 90 days after the Executive knows or has reason to
know of the occurrence of any such event in Sections 4(c)(1)-(5) constituting
Good Reason, (2) the Company shall have 30 days from the receipt of such notice
to effect a cure of the condition constituting Good Reason under Section 4(c)
and (3) if the Company is unable to cure the condition constituting Good Reason
within the 30-day period then the Executive must terminate his employment within
two years from the date such event constituting Good Reason occurred, otherwise
the event will no longer constitute Good Reason. For the avoidance of doubt,
Good Reason will not include any isolated, insubstantial and inadvertent action
not taken in bad faith by the Company and that is cured promptly upon receiving
notice from the Executive.”
Section 3. Amendment to Section 5(a). The introductory language to
Section 5(a)(A) shall be replaced in its entirety with the following:
“(A) the Company shall pay to the Executive, in a lump sum in cash within
30 days after the Date of Termination, (provided, however, that no amount shall
be paid pursuant to this Subsection 5(a)(A) after March 15 of the year following
the first anniversary of a Change of Control), the aggregate of the following
amount:”
Section 4. Amendment to Section 5(e). The following shall be added at the end of
Section 5(e):
“, except that no amount shall be paid pursuant to clause (ii) of the first
paragraph of Section 5(a)(A) of this Agreement (relating to a fractional payment
of the highest Annual Bonus) and the amount specified in Appendix A shall be
paid at the same time as the other amounts specified in Section 5(a)(A) are
paid.”

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Section 5. Amendment to Section 8(a). The following language shall be included
at the end of Section 8(a):
“The reduction of amounts payable hereunder, if applicable, shall be determined
in manner which has the least economic cost to the Executive and, to the extent
the economic cost is equivalent, then all the Payments, in the aggregate will be
reduced in the inverse order of when all the Payments, in the aggregate, would
have been made to the Executive until the reduction specified is achieved.”
Section 6. Amendment to Section 11(f). Section 11(f) will be replaced in its
entirety with the following:
“(f) From and after the Effective Date or the date that a Potential Change in
Control occurs, and except as expressly set forth herein, this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof, including the employment agreement, dated as of
                                         (the ‘Employment Agreement’); provided,
however, in no event shall this Agreement supersede or replace the
Indemnification Agreement between the Executive and the Company, dated as of
                                        , as from time to time amended prior to
the Effective Date; and provided further that, to the extent not inconsistent
with any provision hereof, the following provisions of the Employment Agreement
shall remain in effect during the Change of Control Period: Section 4 (relating
to non-competition), Section 10 (relating to certain remedies that the Company
and the Executive shall have), and Section 19 (relating to Section 409A, with
any references in that provision to other sections of the Employment Agreement
also being deemed references to similar provisions of this Agreement, as
appropriate, so as to give maximum effect to such provision).”
Section 7. Effectiveness of Amendment. This Amendment shall become effective on
the date hereof.
Section 8. Definitions. Capitalized terms that are not defined in this Amendment
shall have the meanings ascribed thereto in the Change of Control Agreement.
Section 9. Other Provisions Unaffected. Except as modified by this Amendment,
the existing provisions of the Change of Control Agreement shall remain in full
force and effect.

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                  COLLECTIVE BRANDS, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Its:        
 
                EXECUTIVE    
 
           
 
  By:        
 
     
 
   

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APPENDIX A
CHART OF SEVERANCE PAYMENT UNDER SECTION 5(E)
FOR EACH EXECUTIVE OFFICER
DOUGLAS J. TREFF

          Fiscal Quarter in which     Date of Termination   Payment under
Section Occurs   5(E) $
First Fiscal Quarter
  $ 260,000  
Second Fiscal Quarter
  $ 380,000  
Third Fiscal Quarter
  $ 510,000  
Fourth Fiscal Quarter
  $ 630,000  

DARREL J. PAVELKA

          Fiscal Quarter in which     Date of Termination   Payment under
Section Occurs   5(E) $
First Fiscal Quarter
  $ 260,000  
Second Fiscal Quarter
  $ 380,000  
Third Fiscal Quarter
  $ 510,000  
Fourth Fiscal Quarter
  $ 620,000  

MICHAEL J. MASSEY

          Fiscal Quarter in which     Date of Termination   Payment under
Section Occurs   5(E) $
First Fiscal Quarter
  $ 180,000  
Second Fiscal Quarter
  $ 250,000  
Third Fiscal Quarter
  $ 330,000  
Fourth Fiscal Quarter
  $ 410,000  

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BETTY J. CLICK

          Fiscal Quarter in which     Date of Termination   Payment under
Section Occurs   5(E) $
First Fiscal Quarter
  $ 150,000  
Second Fiscal Quarter
  $ 220,000  
Third Fiscal Quarter
  $ 290,000  
Fourth Fiscal Quarter
  $ 350,000  

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