exv10w1



 





Exhibit 10.1




EMPLOYMENT AGREEMENT




     THIS AGREEMENT is made this       day of      , 2007 (the “Effective Date”), by and
between PAYLESS SHOESOURCE, INC., a Delaware corporation, (“PSS”) and                     
(“Executive”).



WITNESSETH:




     WHEREAS, Payless and its related entities are one of the leading retail companies in the
United States with self service shoe stores throughout the United States, Puerto Rico and the U.S.
Virgin Islands, Guam, Saipan and Canada.



     WHEREAS, PSS conducts its business in part through various direct and indirect subsidiaries
(PSS and its subsidiaries and affiliates being collectively referred to as “Payless”).



     WHEREAS, Executive is employed by Payless as a Senior Vice President pursuant to that certain
Amended and Restated Employment Agreement dated effective as of                      (the “Prior Employment
Agreement”).



     WHEREAS, Executive recognizes and acknowledges that Executive’s position with Payless provides
Executive with access to Payless’ proprietary, trade secret and other confidential information
relating to its business.



     WHEREAS, Payless has expended a great deal of time, money and effort to develop and maintain
its proprietary, trade secret and confidential information; this information, if misused or
disclosed, could be very harmful to Payless’ business and its competitive position in the
marketplace.



     WHEREAS, Executive recognizes and acknowledges that if Executive’s employment with Payless
ceases, Payless needs certain protections to ensure that Executive does not misuse or disclose any
proprietary, trade secret or confidential information entrusted to Executive during the course of
employment or take any other action which could result in a loss of Payless’ good will that was
generated on Payless’ behalf and at its expense, and, more generally, to prevent Executive from
having an unfair competitive advantage over Payless.



     WHEREAS, Executive desires to be employed by Payless, to be eligible for potential
compensation increases and to be given access to proprietary, trade secret and confidential
information of Payless necessary for Executive to perform Executive’s job, but which Payless would
not make available but for Executive’s signing and agreeing to abide by the terms of this
Agreement.



     WHEREAS, the parties desire to terminate the Prior Employment Agreement in its entirety and to
be subject to and bound by the terms and conditions of this Agreement.



     In consideration of the mutual promises and agreements herein contained, and other good and
valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:



 









 




1. Term. This Agreement shall commence on the Effective Date and shall expire on May 31,
2009 (the “Contract Term”), unless sooner terminated in accordance with Paragraph 8 hereof.
Beginning on May 31, 2007, the Contract Term will be automatically extended each day by one day,
until either party delivers to the other written notice of non-renewal.



2. Duties.




     (a) Executive shall perform all duties incident to the position of Senior Vice President, as
well as any other duties as may be assigned from time to time by Payless, and agrees to abide by
all the by-laws, policies, practices, procedures and rules of Payless. Executive agrees to use
Executive’s best efforts, energies and skill to perform the duties and responsibilities of the
position, and to this end will devote Executive’s full time and attention exclusively to the
business of Payless. Executive may be assigned or transferred to another management position, as
designated by Payless, which may or may not provide the same level of responsibility as the initial
assignment. [Inasmuch as Executive is a licensed attorney, this Agreement is intended to take into
account not only Payless’ needs and interests, but also Executive’s ethical and other duties and
responsibilities as an attorney.—only in attorney agreements] This Agreement shall remain in
effect and shall apply to Executive, without any need for re-execution, regardless of the Payless
subsidiary or business division for which Executive works or provides services, or the duties to
which Executive may in the future be assigned.



     (b) At all times during the Contract Term, Executive will maintain Executive’s residence
within reasonable access to the Corporate Headquarters of Payless or any division to which
Executive may be assigned.


3. Compensation; Benefits.




     (a) Base Salary. Payless agrees to pay Executive a base salary during the Contract
Term at the annual rate of $                    , less applicable taxes and withholding, payable in equal
bi-weekly installments, which annual rate will be subject to an annual review, which may result in
an increase or decrease in salary, during Payless’ regularly scheduled review time.



     (b) Incentive Plans. Executive shall be eligible to participate in such annual and
long-term plans, programs or arrangements established from time to time for senior executives of
Payless (the “Incentive Plans”), in accordance with and subject to all of the terms and provisions
of such Incentive Plans.



     (c) Expenses. Payless shall reimburse Executive for all items of normal business
expense incurred by Executive as an employee of Payless in accordance with Payless’ reimbursement
policies in effect from time to time.



     (d) Benefits. Payless has adopted certain welfare benefit plans (including, but not
limited to, medical, prescription drug, dental, disability, and life insurance) and has established
certain perquisites which may, from time to time, confer rights and benefits on Executive in
accordance with their terms. Payless may also, in the future, adopt additional welfare benefit
plans, establish additional perquisites, or amend, modify or terminate any of the aforesaid welfare
benefit plans and arrangements, all in accordance with their terms and in accordance with
applicable law. Unless effectively waived, Executive shall be entitled to whatever rights



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and benefits which may be conferred on Executive, from time to time in accordance with the terms of
such plans and arrangements.



     (e) Stock. Executive will be eligible for future grants of restricted stock,
stock-settled stock appreciation rights, stock options, or performance units, if any, as may be
granted under the terms of the Payless ShoeSource, Inc. 2006 Stock Incentive Plan, in accordance
with the criteria established from time to time by the Compensation Committee of the Payless
ShoeSource, Inc. Board of Directors.



     (f) Automobile Allowance. Executive shall be eligible for an automobile allowance as
determined by Payless from time to time, paid monthly upon written request. The portion of the
allowance that is substantiated as business-related will not be considered taxable.


4. Noncompete.




     (a) At all times during the Contract Term, and for a period of two (2) years immediately
following Executive’s last day of employment with Payless, Executive will not directly or
indirectly:




     (i) own, manage, operate, finance, join, control, or participate in the ownership,
management, operation, financing, or control of, or be a partner in, be employed by, or act
as an advisor, consultant, agent, officer, director, or independent contractor for, or
otherwise have an interest in, a Competing Business; or




     (ii) solicit, induce, hire, or attempt to aid or assist any person or entity other than
Payless in soliciting for employment, offering employment to, or hiring, any employee of
Payless or any person who, at any time during the 12 months prior to the solicitation, was
employed by Payless.




Nothing in this Paragraph 4(a) shall prevent Executive, however, from performing Executive’s
duties and responsibilities for Payless. In addition, ownership of an investment of less
than the greater of $25,000 or 1% of any class of equity or debt security of a Competing
Business shall not constitute ownership or participation in ownership in violation of
Paragraph 4(a)(i). [ Provided Paragraph 4(a) shall not apply to Executive if Executive is
employed by or acting as an advisor to a Competing Business solely in Executive’s capacity
as a lawyer.—only in attorney agreements]



     (b) The term “Competing Business” shall include, but not be limited to:




     (i) any retail business with gross sales or revenue in the prior fiscal year of more
than $25 million (or which is a subsidiary, affiliate or joint venture partner of a business
with gross sales or revenue in the prior fiscal year of more than $25 million) which sells
footwear or accessories in whole or in part competitive to that sold by Payless
(“Competitive Footwear”) (including, without limitation, Wal-Mart Stores, Inc.; Sears
Holdings Corporation; Target Corporation; Foot Star, Inc.; DSW, Inc.; Aldo Shoes, Inc.; Ross
Stores, Inc.; T.J. Maxx; Off-Broadway Shoes; Burlington Coat Factory Warehouse Corporation;
Gennesco Inc.; Brown Shoe Company, Inc.; Shoe Carnival, Inc.; Kohl’s



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Corporation; Liz Claiborne, Inc.; Big 5 Sporting Goods Corporation; J.C. Penney
Company; Shoe Zone, Limited; Bata, Limited; Shoes.com; Zappos.com) within 10 miles of any
Payless store or the store of any wholesale customer of Payless in the United States, or
anywhere in any foreign country in which Payless has retail stores or wholesale customers;




     (ii) any franchising or wholesaling business with gross sales or revenues in the prior
fiscal year of more than $25 million (or which is a subsidiary, affiliate or joint venture
partner of a business with gross sales or revenues in the prior fiscal year of more than
$25 million) which sells Competitive Footwear at wholesale to franchisees, retailers or
other footwear distributors located within 10 miles of any Payless store or the store of any
wholesale customer of Payless in the United States, or anywhere in any foreign country in
which Payless has retail stores or wholesale customers;




     (iii) any footwear manufacturing business with gross sales or revenue in the prior
fiscal year of more than $25 million (or which is a subsidiary, affiliate or joint venture
partner of a business with gross sales or revenue in the prior fiscal year of more than $25
million) which sells Competitive Footwear to retailers, wholesale customers, or other
footwear distributors located within 10 miles of any Payless store or the store of any
wholesale customer of Payless in the United States, or anywhere in any foreign country in
which Payless has retail stores or wholesale customers (including, without limitation, Nine
West Shoes; Dexter Shoe Company; Liz Claiborne, Inc.; Wolverine Worldwide, Inc.; Timberland
Company; Nike, Inc.; Reebok International, Ltd.; K-Swiss, Inc.; and adidas-Salomon AG); or




     (iv) any business which provides buying office services to any store or group of stores
or businesses referred to in Paragraph 4(b).



     (c) Background of non-compete restrictions:




     (i) In connection with its business, Payless has expended a great deal of time, money
and effort to develop and maintain its proprietary, trade secret and confidential
information; this information, if misused or disclosed, could be very harmful to Payless’
business and its competitive position in the marketplace;




     (ii) Executive recognizes and acknowledges that Executive’s position with Payless
provides Executive with access to Payless’ proprietary, trade secret, and confidential
information;




     (iii) Payless compensates its employees to, among other things, develop and preserve
goodwill and relationships on Payless’ behalf and to develop and preserve business
information for Payless’ exclusive ownership and use;




     (iv) long-term customer and supplier relationships often can be difficult to develop
and require a significant investment of time, effort and expense; and



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     (v) Executive recognizes and acknowledges that if Executive’s employment with Payless
were to cease, Payless would need certain protections in order to ensure that Executive does
not appropriate or use any confidential and proprietary trade secret information entrusted
to Executive during the course of employment or take any other action which could result in
a loss of Payless’ goodwill that was generated on Payless’ behalf and at its expense, and,
more generally, to prevent Executive from having an unfair competitive advantage over
Payless.



     (d) Reasonableness of non-compete restrictions. Executive acknowledges and agrees that the
restrictions in Paragraph 4 are reasonable and that such restrictions are enforceable in view of
the background for the non-compete restrictions set forth in the Paragraph 4(c), and in view of,
among other things, the following:




     (i) the markets in which Payless operates its businesses;




     (ii) the proprietary, trade secret, and other confidential business information to
which Executive has or will have access;




     (iii) Executive’s training and background, which are such that neither Payless nor
Executive believes that the restraint will pose an undue hardship on the Executive or
prevent Executive from finding suitable non-competitive employment during the specified
period of non-competition;




     (iv) a Competing Business could benefit greatly if it were to obtain Payless’
proprietary, trade secret, and other confidential business information;




     (v) Payless would not have adequate protection if Executive is permitted to work for
any Competing Business in violation of this Agreement since Payless would be unable to
verify whether its proprietary, trade secret, and other confidential business information
was being disclosed or misused;




     (vi) the limited duration and limited scope of, and the limited activities prohibited
by, the restrictions in Paragraph 4; and




     (vii) Payless’ legitimate interests in protecting its proprietary, trade secret, and
other confidential business information, goodwill and relationships.



     (e) If Executive violates Executive’s obligations under Paragraph 4, then Payless shall be
entitled to all legal and equitable rights and remedies under this Agreement, including all of its
rights and remedies referred to in Paragraph 10 of this Agreement. Further, any time in which
Executive is in violation of Executive’s obligations shall not count toward satisfying the time
during which any injunctive restriction shall apply. For example, if Executive were to join a
competitor in violation of the restrictions in Paragraph 4(a) and work for such competitor for one
month before a court enjoined such violation, then the two year time period of the restriction
would begin when such injunction were issued; the one month in which Executive violated the
restriction would not count toward the time that the restriction applies.



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     (f) Executive agrees to provide a copy of this Agreement (with Paragraph 3(a) redacted, if
desired) to any prospective employer Executive contacts during or after termination or resignation
of employment. Executive authorizes Payless to contact Executive’s future employers and other
entities with which Executive has any business relationship to determine Executive’s compliance
with this Agreement or to communicate the contents of this Agreement to such employer and entities.
Executive releases Payless, its employees and agents, from all liability for damages arising from
such contact or communications.


5. Confidential Information.




     (a) Executive will not, at any time during the Contract Term or after termination of
employment, directly or indirectly use, make known, disclose, furnish, or make available
Confidential Information (as defined herein), other than in the proper performance of the duties
contemplated herein.



     (b) “Confidential Information” means any non-public information pertaining to Payless’
business disclosed by Payless to Executive, or developed or learned by Executive during the course
of Executive’s Payless employment, including, without limitation, any confidential information and
documents concerning Payless’ customers; customer, supplier, and vendor lists; terms, conditions
and other business arrangements with vendors, suppliers, or factories; contract factory lists;
manufacturing plans; advertising, marketing plans and strategies; pricing information; profit
margins; seasonal plans, goals, objectives and projections; compilations, analyses and projections
regarding Payless’ businesses, product segments, product lines, suppliers, sales and expense
information; patent applications (prior to their being public); salary, staffing and employment
information (including information about performance of other executives); operations manuals;
computer software applications and other programs; techniques, methods, styles, designs and design
concepts, business plans, knowledge and data related to processes, products, compounds,
compositions, formulae, lasts and molds, and “know-how,” techniques or any technical information
not of a published nature relating, for example, to how Payless conducts its business;



     (c) Executive acknowledges that Payless’ business is intensely competitive and that, by virtue
of Executive’s employment with Payless, Executive will have access to and knowledge of Confidential
Information. Executive also agrees that the misuse or direct or indirect disclosure of
Confidential Information to existing or potential competitors of Payless would place it at a
competitive disadvantage and would harm and damage Payless’ business.



     (d) During Executive’s employment with Payless and thereafter, Executive will: (i) notify and
provide Payless immediately with the details of any unauthorized possession, use or knowledge of
any Confidential Information, (ii) assist in preventing any reoccurrence of such possession, use or
knowledge, and (iii) cooperate with Payless in any litigation or other action to protect or
retrieve Confidential Information.


6. Payless Intellectual Property. (a) Executive hereby assigns to Payless all of
Executive’s rights, title, and interest (including but not limited to all patent, trademark,
copyright and trade


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secret rights) in and to all Work Product (as defined herein). Executive further acknowledges and
agrees that all copyrightable Work Product prepared by Executive within the scope of Executive’s
employment with Payless are “works made for hire” and, consequently, that Payless owns all
copyrights thereto. For purposes of this Agreement, “Work Product” shall include but is not
limited to, all literary works, software, documentation, memoranda, photographs, artwork, sound
recordings, audiovisual works, ideas, designs, inventions, discoveries, creations, conceptions,
improvements, processes, algorithms, and so forth which (i) are prepared or developed by Executive,
individually or jointly with others, during Executive’s employment with Payless, or within six (6)
months thereafter, whether or not during working hours, and (ii) relate to or arise in any way out
of (1) current and/or anticipated business and/or activities of Payless, (2) Payless’ current
and/or anticipated research or development, (3) any work performed by Executive for Payless, and/or
(4) any information or assistance provided by Payless, including but not limited to Confidential
Information.




     (b) Executive shall promptly disclose to Payless all Work Product. All such Work Product is
and shall forthwith become the property of Payless, or its designee, whether or not patentable or
copyrightable. Executive will execute promptly upon request any documents or instruments at any
time deemed necessary or proper by Payless in order to formally convey and transfer to Payless or
its designee title to such Work Product, or to confirm Payless or its designee’s title therein, and
it order to enable Payless or its designee to obtain and enforce United States and foreign Letters
Patent, Trademarks and Copyrights thereon. Executive will perform Executive’s obligations under
this Paragraph 6 without further compensation, except for reimbursement of reasonable out-of-pocket
expenses incurred at the request of Payless.


7. Disability. If Executive becomes Disabled and remains continuously so Disabled for a
period of 180 days, then Payless’ obligations under this Agreement may be terminated by notice in
writing to that effect during the continuance of such Disability, such termination to take effect
the later of (a) the last day of the month during which such notice is given or (b) the last day of
such 180 day period. If Executive has made a previous election to participate in the Payless
ShoeSource, Inc. Long-Term Disability Plan (subject to the terms and provisions of that plan), then
the terms of that plan shall apply. “Disability” or “Disabled” shall mean disability as defined
under the Payless ShoeSource, Inc. Long-Term Disability Plan applicable to Executive.



8. Termination.




     (a) For Cause; Voluntary Resignation; Death; Disability. Payless may terminate
Executive’s employment for Cause at any time upon written notice to Executive, with immediate
effect. Executive may voluntarily resign from Payless at any time upon 30 days written notice to
Payless; provided, Payless may require Executive to cease working earlier and which date shall be
the termination date. If Executive’s employment terminates during the Contract Term by reason of
Executive’s death or Disability, by Executive’s voluntary termination of employment, or by Payless
for Cause:




     (i) Executive’s basic compensation and employee benefits shall cease on the date of
such termination or resignation, except as otherwise provided in any applicable employee
benefit plan or program;



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     (ii) Executive shall be entitled to receive Executive’s base salary through that date
of termination or resignation (including payment for any accrued but unused vacation),
payable within the first pay period following termination or resignation;




     (iii) Executive will be reimbursed, in accordance with Payless policy, for any business
expenses properly incurred by Executive prior to the date of termination or resignation;




     (iv) Executive shall be entitled to any equity-linked awards, consistent with the terms
of the applicable award agreements;




     (v) Executive shall be entitled to such portion of any long-term cash incentive
compensation as shall be payable under the terms of the Incentive Plans; and




     (vi) Executive will have the opportunity to continue coverage in Payless’ medical,
dental, and vision plans in which Executive is participating on the date of termination or
resignation, through COBRA.



     (b) Without Cause by Payless. Payless may terminate Executive’s employment Without
Cause at any time upon written notice to Executive. If Executive’s employment is terminated
Without Cause:




     (i) Executive’s basic compensation and employee benefits shall cease on the date of
such termination, except as otherwise provided herein or in any applicable employee benefit
plan or program;




     (ii) Executive shall be entitled to receive Executive’s base salary through that
date of termination (including payment for any accrued but unused vacation);




     (iii) Executive will be reimbursed, in accordance with Payless policy, for any business
expenses properly incurred by Executive prior to the date of termination;




     (iv) Provided that Executive is not in violation of, and does not violate, any of
Executive’s obligations under Paragraphs 2, 4, 5, and 6 of this Agreement, Executive shall
be entitled to a severance payment in an amount equal to two (2) times Executive’s then
current base salary at the time of termination of employment, payable in a lump sum, less
applicable withholdings and deductions;




     (v) Executive shall be entitled to the amount of any annual award payable to
Executive under the Incentive Plans for the fiscal year in which Executive’s employment is
terminated, prorated by the number of days Executive is actively employed in that fiscal
year divided by the number of days in the fiscal year, and payable at the time and pursuant
to the terms of such Incentive Plans, less applicable withholdings and deductions; provided,
however, such Annual Award must be paid no later than 2 1/2 months from the end of Payless’
fiscal year in which Executive’s employment terminates;



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     (vi) Executive shall be entitled to any equity-linked awards, consistent with the
terms of the applicable award agreements;




     (vii) Executive shall be entitled to such portion of any long-term cash incentive
compensation as shall be payable under the terms of the Incentive Plans;




     (viii) Executive will receive a special payment which is the equivalent, before
taxes, to the portion paid by Payless towards 18 months of COBRA coverage under Payless’
medical, dental and vision plans, to the extent Executive is participating in such plan(s)
on the date of termination; and.




     (ix) Executive shall receive executive-level outplacement services to be coordinated by
the Human Resources Department. Executive must commence utilizing the outplacement services
no later than 30 days following the date of termination or the right to such services will
cease. Provided, however, the services in no event will extend beyond 15 months following
the date of termination.




     (x) If at the time that Executive terminates employment Executive is a “key employee”
within the meaning of IRC Section 409A and regulation issued thereunder, then, if necessary
to comply with 409A, payment to Executive shall not be made until six (6) months after
termination of employment and such payment shall be made in a lump sum, less applicable
withholdings and deductions.



     (c) “Cause” means:




     (i) an act of fraud, embezzlement, or theft against Payless, or any other violation of
the law that is harmful to the Company’s operations (excluding minor traffic violations), or
conviction of a felony;




     (ii) grossly negligent disclosure of Confidential Information contrary to the policy of
Payless;




     (iii) material breach of any of the terms of this Agreement, abuse of Executive’s
position for personal gain, or breach of Executive’s duties to Payless and its shareholders;




     (iv) engagement in any competitive activity which would constitute a breach of
Executive’s duty of loyalty or of Executive’s obligations under this Agreement;




     (v) grossly negligent breach of any policy of Payless including those contained in
Payless’ Code of Ethics;




     (vi) the conviction of Executive, or a plea of guilty or nolo contendre, to any crime
involving moral turpitude;




     (vii) the willful and continued failure by Executive to substantially perform



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Executive’s duties with Payless (other than any such failure resulting from Executive’s
incapacity due to physical or mental illness); or




     (viii) the willful engaging by Executive in conduct which is demonstrably or materially
injurious to Payless, monetarily or otherwise.




For purposes of this Paragraph 8(c), an act, or a failure to act, shall not be deemed
“willful” or “intentional” unless it is done, or omitted to be done, by Executive in bad
faith or without reasonable belief that Executive’s action or omission was in the best
interest of Payless, as determined by Payless’ Senior Vice President-Human Resources.
Failure to meet performance standards or objectives, by itself, will not constitute “Cause”.




Payless shall be entitled to suspend Executive with pay while investigating any conduct that
could constitute Cause.



     (d) Executive agrees that, in addition to any other remedies, and to the extent permitted by
law and or plan, Payless shall be permitted, as part of the computation of any final amount due to
Executive as compensation, wages, bonus, or otherwise, and before any such amount shall be due and
owing, to reduce any amount which Payless may otherwise owe to Executive by any unpaid amount which
Executive owes to Payless.



     (e) Executive’s obligations under Paragraph 2 shall cease on the effective date of such
resignation or termination for whatever cause(s), Executive’s obligations under the Agreement,
including Paragraphs 4, 5, and 6, shall remain in full force and effect, and Payless shall be
entitled to all legal and equitable rights and remedies under this Agreement, including all of its
rights and remedies referenced in Paragraph 10 of this Agreement.



     (f) Upon resignation or termination of employment due to whatever cause(s), Executive shall
return all property of Payless which is then or thereafter comes into Executive’s possession,
including but not limited to documents, contracts, agreements, plans, photographs, books, notes,
records, computer diskettes and tapes, and any other electronically stored data and all copies of
the foregoing, as well as an other material or equipment supplied by Payless, keys, credit cards,
and equipment, and delete from Executive’s own computer or other electronic storage medium any
Confidential Information. Executive shall also sign all documents necessary for Executive’s
immediate resignation as an officer of Payless.



     (g) The payments and other benefits provided in Paragraph 8 are not made pursuant to any
welfare benefit or pension plan as defined by the Employee Retirement Income Security Act of 1974.


9. Release and Waiver of Claims. The parties agree that payment of severance and other
benefits provided in Paragraph 8 shall constitute payment in full for all compensation due to
Executive, are in lieu of any benefits which Executive may otherwise be entitled under the Payless
ShoeSource, Inc. Severance Plan, and constitute full and complete discharge of any and all claims
which Executive might otherwise have or purport to have with respect to any period subsequent to
the effective date of such resignation or termination, for the payment of


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compensation, or any additional benefits provided by Payless to Executive. Provided, however, the
payments of the amounts specified in Paragraph 8(b)(iv),(v),(viii) and (ix) are contingent upon
Executive signing a Separation Agreement and General Release, prior to payment.



10. Remedies. Executive acknowledges and agrees that the restrictions in this Agreement
are reasonable in order to protect Payless’ expectations and rights under this Agreement and to
provide Payless with the protections it needs to, among other things, safeguard its Confidential
Information. Executive agrees that any breach or threatened breach of Paragraphs 4, 5, or 6 of
this Agreement by Executive will cause immediate irreparable injury to Payless, for which an award
of damages alone may be inadequate. Therefore, Payless shall be entitled, in addition to any other
legal or equitable right or remedy it may have, to temporary, preliminary, and permanent injunctive
relief restraining such breach or threatened breach of Paragraphs 4, 5, or 6 of this Agreement.
Moreover, any award of injunctive relief shall not preclude Payless from seeking or recovering any
lawful compensatory damages which may have resulted from a breach of this Agreement, including
forfeiture of any payments not yet made and return of any payments already received by Executive.
In the event Payless is successful in any suit or proceeding relating to the enforcement of this
Agreement, Executive agrees to pay Payless’ fees, costs and expenses, including attorneys’ fees.



11. Representations of Executive. Executive hereby represents and warrants that the
execution and delivery of this Agreement and Executive’s employment with Payless do not violate any
previous employment agreement or other contractual obligation of Executive with any other party.
Executive has not disclosed, and will not disclose, to Payless any information, whether
confidential, proprietary or otherwise, which Executive is not legally free to disclose. Executive
shall abide by the terms of any nondisclosure or confidentiality agreement between Payless and any
other parties.



12. Severability. The invalidity or unenforceability of any provision, or portion thereof,
of this Agreement shall not affect the remainder of that provision or any other provision of the
Agreement. If any clause is deemed overly broad, illegal, invalid, or unenforceable with respect
to the duration of time or the geographic scope, then such clause shall automatically be amended to
the extent (but only to the extent) necessary to make it sufficiently narrow in scope, time and
geographic area so that it shall be enforceable, and that it is not illegal, void or unenforceable.
All other remaining terms and provisions shall remain in full force and effect.



13. Entire Agreement. With the sole exception of the Change of Control Agreement dated
                    , and the Indemnification Agreement dated                     , each between
Payless and Executive, and each amended from time to time (collectively, the “Related Agreements”),
the entire understanding and agreement between the parties has been incorporated into this
Agreement, and this Agreement supersedes all other employment agreements or other arrangements
(except the Related Agreements), whether oral or written, with respect to the subject matter
contained herein, including the Prior Employment Agreement which is hereby terminated. This
Agreement may be executed in counterparts, in which case each of the two counterparts shall be
deemed to be an original and the final counterpart shall be deemed to have been executed in Topeka,
Kansas.




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14. Amendment, Breach and Waiver. This Agreement may not be changed, amended, or modified
in any manner except by a written instrument in writing signed by both the parties hereto, except
that if IRC Section 409A is determined to have applicability to any portion of this Agreement, with
the effect that Executive shall have no right to any payment hereunder prior to six months from
employment termination, this Agreement may be amended by Payless to comply with IRC Section 409A.
The failure of either party to enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any of such provision, or of the right to such party thereto
to enforce each and every such provision in the event of a subsequent breach.



15. Successors and Assigns. This Agreement and/or the rights hereunder shall be freely
assignable by Payless. This Agreement shall inure to the benefit of, and be binding upon, any
entity which shall succeed to Payless’ business. Being a contract for personal services, neither
this Agreement nor any rights hereunder, shall be assigned by Executive, and any such attempts or
purported assignment shall be null and void.



16. Third Party Beneficiary. Each PSS direct and indirect subsidiary is a third party
beneficiary of this Agreement with respect to, among other things, the protection of each such
subsidiary’s interest in such subsidiary’s Confidential Information, customer goodwill,
relationships and contacts, and each such subsidiary has the full rights and power to enforce the
rights, interests and obligations under this Agreement of or relating to such subsidiary.



[17. Ethical Obligations. In recognition of Executive’s ethical duties and
responsibilities as a licensed attorney, the parties agree that nothing in this Agreement shall
prevent Executive from providing legal advice or otherwise being engaged in the practice of law;
provided, however, that Executive agrees not to breach any ethical obligations Executive has by
virtue of being, or having been, Payless’ general counsel. — only in attorney employment
agreements]



18. Governing Law; Choice of Forum. This Agreement, and any questions relating or
regarding the validity, interpretation, or performance, shall be governed by and construed in
accordance with the laws of the State of Kansas, without reference to the conflicts or choice of
law principles thereof. Payless and Executive agree that any action to enforce any provision of
this Agreement shall be filed and litigated exclusively in any state court or federal court located
in the City of Topeka, Kansas, or in Shawnee County, Kansas. Payless and Executive hereby waive
any defense of lack of personal jurisdiction or venue in such courts and agree that process may be
served, if made upon Payless, upon Payless’ registered agent (with a copy to Payless’ General
Counsel), or if made upon Executive, at Executive’s last known address on the records of Payless.



BY SIGNING THIS AGREEMENT, EXECUTIVE HEREBY CERTIFIES THAT EXECUTIVE (A) HAS RECEIVED A COPY OF
THIS AGREEMENT FOR REVIEW AND STUDY BEFORE SIGNING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE
SIGNING IT; (C) HAS HAD SUFFICIENT OPPORTUNITY TO REVIEW THE AGREEMENT WITH ANY ADVISOR WHICH
EXECUTIVE MAY DESIRE TO CONSULT, INCLUDING LEGAL COUNSEL; (D) HAS HAD SUFFICIENT OPPORTUNITY BEFORE
SIGNING IT TO ASK ANY QUESTIONS EXECUTIVE HAS ABOUT THIS AGREEMENT AND HAS RECEIVED SATISFACTORY
ANSWERS TO




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ALL SUCH QUESTIONS; AND (E) UNDERSTANDS EXECUTIVE’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.




     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 	 	 	 	 
	 	EXECUTIVE
 	 
	 	
 	 
	 	 


PAYLESS SHOESOURCE, INC.

 	 
	 	By:  	
 	 
	 	 	Its: 	 	 
	 	 	 	 
	 




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