exv10w1






Exhibit 10.1








Betty J. Click

Senior Vice President

     Human Resources




December 19, 2008




Matthew E. Rubel

2100 W. 59th Street

Mission Hills, KS 66208-1110




          Re: Employment Agreement Amended and Restated



Dear Matt:



This is your Employment Agreement with Collective Brands, Inc., a Delaware corporation
(the “Company”). It sets forth the terms of your employment with the Company and its affiliates
from time to time (together, the “Group”).




1. Your Position, Performance and Other Activities




     (a) Position. You will be employed in the position of Chief Executive Officer of the Company.
You will be appointed to the Company’s Board of Directors (the “Board”) as of your Start Date (as
defined in Section 2) and the Company will use reasonable efforts to cause you to be nominated for
re-election each time your term expires during your employment. You agree to serve as a member of
the Board, as well as a member of any Board committee to which you may be elected or appointed.



     (b) Authority, Responsibilities and Reporting. You shall be the most senior officer of the
Company and you shall be responsible for the oversight and management of all operations and
activities of the Group. Each employee of the Group shall report, directly or indirectly, to you
provided that such reporting relationship is in compliance with the charter and bylaws of the
Company and all applicable laws and regulations, including the rules of the stock exchange on which
the Company is listed. You shall report directly and exclusively to the Board in its entirety (and
not to any individual member thereof).



     (c) Performance. During your employment, you will devote substantially all of your business
time and attention to the Group and will use good faith efforts to discharge your responsibilities
under this Agreement to the best of your ability. During your employment, your place of
performance will be Topeka, Kansas or such other place as the Board determines to locate the
Company’s headquarters, subject to your right to resign for “Good Reason” (as defined in Section
5(c)) upon certain relocations of the Company’s headquarters as described in Section 5(c)(1)(H).



 









 





     (d) Other Activities. During your employment, you will not render any business, commercial or
professional services to any non-member of the Group. However, you may (1)
serve on corporate, civic or charitable boards, (2) manage personal investments, and (3)
deliver lectures, fulfill speaking engagements or teach at educational institutions, so long as (A)
these activities do not interfere in more than a de minimis manner with your performance of your
responsibilities under this Agreement and (B) any service on a corporate board, and any service on
more than two civic and/or charitable boards, is approved by the Board. The boards on which you
expect to serve are: American Apparel & Footwear Association and Portland Museum of Arts.



2. Term of Your Employment



Your employment under this Agreement will (a) begin on August 1, 2005 or such earlier date that is
mutually agreed by you and the Company (the “Start Date” of this Agreement) provided that the
condition set forth in Section 10(c) is satisfied on or prior to June 30, 2005 and (b) end at the
close of business on the earlier of (1) the end of the Compensation Period or (2) the effective
date of early termination of your employment. Your “Compensation Period” begins on your Start Date
and is initially scheduled to end on May 31, 2008 (the “Initial End Date”). Beginning on May 31,
2008 and on each following anniversary, your Compensation Period will automatically extend for one
year unless either you or the Company gives at least ninety (90) days’ prior notice of
non-extension. References in this Agreement to “your employment” are to your employment under this
Agreement. This Agreement will only become effective on the Start Date and will automatically
terminate if you do not accept and agree to this Agreement by June 30, 2005.




3. Your Compensation




     (a) Salary. During your employment, you will receive an annual base salary (as increased from
time to time, your “Salary”). The starting amount of your Salary is $1,000,000. The Company will
review your Salary at least annually and may increase it at any time for any reason and your Salary
may not be decreased at any time (including after any increase) without your consent; references in
this Agreement to Salary shall mean your annual base salary as so increased or decreased. Any
increase in your Salary will not reduce or limit any other obligation to you under this Agreement.
Your Salary will be paid in accordance with the Company’s practices for senior executives of the
Company.



     (b) Bonus. You will be eligible to receive an annual cash bonus (your “Bonus”) for each
fiscal year of the Company ending during your employment. The amount of your Bonus will be
determined by the Board (or the Board’s Compensation Committee) based on the achievement of
performance goals established by the Board (or the Board’s Compensation Committee) in consultation
with you. Your minimum annual cash bonus target will be equal to 75% of your Salary (or such
greater amount as determined annually by the Board or the Board’s Compensation Committee) (the
"Target Annual Bonus”) and, in the discretion of the Board (or the Board’s Compensation Committee),
you will have the opportunity to earn a Bonus in excess of the Target Annual Bonus for achievement
of performance in excess of the established performance goals. Your Bonus will be paid in
accordance with the Company’s practices for senior executives of the Company. For the Company’s
fiscal year ending January 28, 2006, you are guaranteed to receive a Bonus of at least $750,000
multiplied by the number of elapsed days from your Start Date through January 28, 2006 divided by
365, provided you are in the employ of the Company on the date the Bonus is paid.



-2-









 





     (c) Initial Equity Incentive Awards.




          (1) In addition to your Salary and Bonus, on your Start Date you will be awarded




          (A) stock options to purchase 720,000 shares of the Company’s common stock (your
“Sign-On Stock Options”) and




          (B) 214,250 restricted shares of the Company’s common stock (your “Sign-On
Stock”).




          (2) Your Sign-On Options will have the terms and conditions set forth in an award
agreement between the Company and you that is substantially in the form attached as Exhibit
1. Your Sign-On Stock Options will have an exercise price equal to the closing price of
the Company’s common stock on your Start Date. Subject to the terms of the award
agreement, one-half of your Sign-On Options (i.e., options on 360,000 shares) will vest and
first become exercisable in equal one-third installments on the first, second and third
anniversaries, respectively, of your Start Date and the balance of your Sign-On Options
(i.e., the remaining options on 360,000 shares) will vest and first become exercisable in
equal one-third installments on the second, third and fourth anniversaries, respectively,
of your Start Date.




          (3) Your Sign-On Stock will have the terms and conditions set forth in an award
agreement between the Company and you that is substantially in the form attached as Exhibit
2. Subject to the terms of the award agreement, your Sign-On Stock will vest on the third
anniversary of your Start Date.




          (4) You will be eligible to receive equity-based compensation awards following your
Start Date in the sole discretion of the Compensation Committee of the Board.



     (d) Long-Term Cash Awards. During your employment, you will be eligible to participate in the
Company’s Incentive Compensation Plan (and any successor plan) for each performance period starting
with and after the Company’s fiscal year beginning January 29, 2006 (your“Long-Term Cash Award").
However, on your Start Date you will be deemed to participate in each of the 2004-2006 and
2005-2007 performance cycles that are already in progress under such plan (1) subject to the
achievement of the performance goals that are already established for each cycle and (2) based on a
target cash award of $450,000 for the 2004-2006 cycle and a target cash award $450,000 for the
2005-2007 cycle, in each case multiplied by the number of elapsed days between your Start Date and
the last day of the applicable cycle (or if earlier the effective date of early termination of your
employment) divided by 1095. In addition, your minimum target cash award for the 2006-2008
performance cycle established by the Board (or the Board’s Compensation Committee) will be
$450,000.



     (e) Special Cash Award. You will receive a one-time cash award equal to the amount of profit
sharing and annual bonus you forfeit from your prior employer by virtue of resigning to accept your
position with the Company, to be paid promptly following the later of (i) your Start Date and (ii)
the date on which you advise the Company of the fact of such forfeiture. However, this one-time
cash award is subject to a maximum of $640,000.



     (f) Other Executive Compensation Plans and Additional Compensation. During your employment,
you will be eligible to participate in all of the Group’s executive compensation plans, including
any management incentive plans, deferred compensation plans (but you will not



-3-









 




be entitled to any benefits under the Payless ShoeSource, Inc. Supplementary Retirement Plan,
nor any successor plan (“SRP”), unless you are expressly made eligible by resolution of the Board
or a committee thereof), and equity plans, in which senior executives of the Company participate.




4. Other Employee Benefits




     (a) Employee Benefit Plans. During your employment, you will be eligible to participate in
the Group’s employee benefit and welfare plans, including plans providing retirement benefits
(other than the SRP), medical, dental, hospitalization, life or disability insurance, on a basis
that is at least as favorable as that provided to senior executives of the Company.



     (b) Vacation. You will be entitled to paid annual vacation during your employment on a basis
that is at least as favorable as that provided under the Company’s vacation policy (but in no event
less than four weeks annually).



     (c) Business Expenses. You will be reimbursed for business and entertainment expenses
incurred by you in performing your responsibilities under this Agreement. However, your
reimbursement will be subject to the Company’s normal practices for senior executives of the
Company.



     (d) Relocation Benefit. You will be reimbursed for the reasonable costs incurred in
connection with your relocation to the Topeka or Kansas City, Kansas metropolitan area in a manner
no less generous in any aspect than as in accordance with the Company’s Executive Relocation Policy
(in the form provided to you prior to the date hereof) and consistent with applicable law. In
addition, you will be reimbursed for otherwise unreimbursed expenses incurred in connection with
the purchase, preparation and decoration of your new home in Kansas, subject to a maximum of
$75,000.



     (e) Perquisites. During your Compensation Period, you will be entitled to (1) personal use of
the corporate aircraft in accordance with the Company’s proposed standard practice instructions for
such use (in the form provided to you prior to the date hereof), (2) reimbursement of up to $16,000
per year for payment of annual club dues and an automobile, (3) reimbursement of up to $2,900 per
year for income tax preparation and $5,000 per year for the purchase of excess medical insurance,
(4) access to a Company-paid driver up to four days a week who can drive you to and from your
principal residence in the Topeka or Kansas City, Kansas metropolitan area to the Company’s
headquarters in Topeka, Kansas, and (5) reimbursement of up to $7,500 per year for payment of the
Young Presidents Organization local and international chapter fees.



5. Early Termination of Your Employment




     (a) No Reason Required. You or the Company may terminate your employment early at any time
for any reason, or for no reason, subject to compliance with Section 5(e).



     (b) Termination by the Company for Cause.




          (1) “Cause” means any of the following:



-4-









 






          (A) Your failure, either due to willful action or as a result of gross neglect, to
substantially perform your duties and responsibilities to the Group under this
Agreement (other than any such failure resulting from your incapacity due to physical
or mental illness) that has not been cured within thirty (30) days after written notice
is delivered to you by the Board, which notice specifies in reasonable detail the
manner in which the Company believes you have not substantially performed your duties
and responsibilities.




          (B) Your engagement in conduct which is demonstrably and materially injurious to
the Group, or that materially harms the reputation or financial position of the Group,
unless the conduct in question was undertaken in good faith and with a rational
business purpose and based upon the honest belief that such conduct was in the best
interest of the Group.




          (C) Your indictment or conviction of, or plea of guilty or nolo contendere to, a
felony or any other crime involving dishonesty, fraud or moral turpitude. However, if
after your indictment the Company terminates your employment “for Cause” but the
charges are dropped or you are acquitted of the charges, you will be entitled to the
benefits set forth in Section 6(b).




          (D) Your being found liable in any SEC or other civil or criminal securities law
action or entering any cease and desist order with respect to such action (regardless
of whether or not you admit or deny liability).




          (E) Your breach of your fiduciary duties to the Group which has a material adverse
effect on the Group. However, to the extent the breach is curable, the Company must
give you notice and a reasonable opportunity to cure.




          (F) Your (i) obstructing or impeding, (ii) endeavoring to obstruct or impede or
(iii) failing to materially cooperate with, any investigation authorized by the Board
or any governmental or self-regulatory entity.




          (G) Your unauthorized use or disclosure of confidential or proprietary
information, or related materials, or the violation of any of the terms of the
Company’s standard confidentiality policies and procedures, in the case of any item
identified in this clause (G) which may reasonably be expected to have a material
adverse effect on the Group and that, if capable of being cured, has not been cured
within thirty (30) days after written notice is delivered to you by the Company, which
notice specifies in reasonable detail the alleged unauthorized use or disclosure or
violation.




          (H) Your material breach of a material provision of the Group’s Policy on Business
Conduct (and any successor code of conduct and ethics).




For this definition, no act or omission by you will be “willful” unless it is made by
you in bad faith or without a reasonable belief that your act or omission was in the
best interests of the Group. Any act, or failure to act, based on authority given
pursuant to a resolution duly adopted by the Board or based upon the advice of
counsel to the Company shall be presumed to be done, or omitted to be done, by you in
good faith and in the best interests of the Group.



-5-









 






     (2) To terminate your employment “for Cause”, the Board must determine in good faith
that Cause has occurred, the Company must comply with Section 5(e) and the Company must
deliver to you a copy of a resolution duly adopted by a majority of the entire Board
(excluding you) at a meeting of the Board called and held for such purpose (after
reasonable notice to you and a reasonable opportunity for you, with your legal counsel, to
be heard) that finds that in the good faith opinion of the Board, Cause has occurred and
states the basis for that belief (“Notice of Cause”).




     (3) If the Board does not give Notice of Cause within ninety (90) days after any
member of the Board (other than you and any other member of the Board involved in the
event) has actual knowledge that an event constituting Cause has occurred, the Board cannot
assert that event as a basis to terminate your employment “for Cause”. For the avoidance
of doubt, the waiver or non-assertion by the Board of a particular Cause event does not
preclude the Board from providing in accordance with this Section a Notice of Cause with
respect to a subsequent Cause event.



     (c) Termination by You for Good Reason.




          (1) “Good Reason” means any of the following:




          (A) Any material and adverse change in your position with the Group for any reason
other than your termination of employment by the Company for Cause or by reason of your
Disability. However, a reduction in your responsibilities as a result of the
appointment of a President of the Company and, to the extent you are named President,
the removal of such title shall not be a material and adverse change so long as you
retain all of the authority, responsibilities and reporting relationships as provided
in Section 1(b).




          (B) Your not being appointed to the Board on your Start Date or the Company’s
failure to cause you to be nominated to the Board for any reason other than your
termination of employment by the Company for Cause or by reason of your Disability.




          (C) Failure by the Company to provide you with authority, responsibilities and
reporting relationships as provided in Section 1(b) or any material and adverse
reduction in your authority, responsibility or reporting relationships or the
assignment of any duties inconsistent in any material and adverse respect with your
position, authority, duties or responsibilities, for any reason other than your
termination of employment by the Company for Cause or by reason of your Disability.




          (D) Any material failure by the Company to comply with Section 3 (dealing with
compensation obligations).



-6-









 






          (E) Any other action or inaction that constitutes a material breach of the terms
of this Agreement.




          (F) The Company notifies you that it will not extend your Compensation Period for
a period that ends upon your Retirement for any reason other than Cause or your
Disability. References in this Agreement to “your Retirement” means the date of the
Company’s annual meeting of shareholders occurring in the year of your 65th
birthday.




          (G) Any failure by the Company to comply with Section 11(c).




          (H) The relocation of the Company’s headquarters or your principal office more
than 35 miles from its location on the Start Date if such relocation increases your
one-way commute from your principal residence by more than 35 miles, unless such
relocation is to the New York City metropolitan area.




          (2) The Company’s placing you on paid leave for up to ninety (90) consecutive days
while it is determining whether there is a basis to terminate your employment for Cause
will not constitute Good Reason.




          (3) To terminate your employment “for Good Reason,” Good Reason must have occurred and
you must comply with Section 5(e). However, prior to complying with Section 5(e), (A) you
must provide written notification of your intention to resign within ninety (90) days after
you know of the occurrence of any such event (“Notice of Good Reason”) and the Company
shall have thirty (30) days from the date of receipt of such notice to effect a cure of the
condition constituting Good Reason under Section 5(c) and (B) if the Company is unable to
cure the condition constituting Good Reason within the thirty (30) day period then you must
terminate your 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 failure by the Company that is not in bad faith and is cured promptly on your
giving the Company notice and an event will not constitute Good Reason if you have
consented to it in accordance with Section 13(e).



     (d) Termination on Disability or Death.




          (1) The term “Disability” means your absence from your responsibilities with the
Company on a full-time basis for 130 business days in any consecutive twelve (12) months as
a result of incapacity due to mental or physical illness or injury. If the Company
determines in good faith that your Disability has occurred, it may give you a Termination
Notice. If within thirty (30) days following the Termination Notice you do not return to
full-time performance of your responsibilities, your employment will terminate. If you do
return to full-time performance in that thirty (30) day period, the Termination Notice will
be cancelled for all purposes of this Agreement. Except as provided in this Section 5(d),
your incapacity due to mental or physical illness or injury will not affect the Company’s
obligations under this Agreement.



-7-









 






          (2) Your employment will terminate automatically on your death.



     (e) Advance Notice Generally Required.




          (1) To terminate your employment before the end of your Compensation Period, either
you or the Company must provide a Termination Notice to the other. A “Termination Notice”
is a written notice that states the specific provision of this Agreement on which
termination is based, including, if applicable, the specific clause of the definition of
Cause or Good Reason and a reasonably detailed description of the facts that permit
termination under that clause. (The failure to include any fact in a Termination Notice
that contributes to a showing of Cause or Good Reason does not preclude either party from
asserting that fact in enforcing its rights under this Agreement.)




          (2) You and the Company agree to provide ninety (90) days’ advance Termination Notice
of any early termination (although the Company may accelerate the end of your employment by
providing you with notice), unless your employment is terminated by the Company for Cause
or because of your Disability or death. Accordingly, the effective date of early
termination of your employment will be ninety (90) days after Termination Notice is given
(unless the Company elects to accelerate the end of your employment) except that




          (A) the effective date will be the date of the Company’s Termination Notice if
your employment is terminated by the Company for Cause, although the Company may
provide a later effective date in the Termination Notice,




          (B) the effective date will be thirty (30) days after Termination Notice is given
if your employment is terminated because of your Disability, and




          (C) the effective date will be the time of your death if your employment is
terminated because of your death.



          The Company may elect to place you on paid leave for all or part of the advance notice
period.




          (3) The effective date of termination of your employment is referred to herein as the
“Termination Date”.



6. The Company’s Obligations in Connection With Your Early Termination




     (a) General Effect. On termination in accordance with Sections 2 and 5, your employment will
end and the Group will have no further obligations to you except as provided in this Section 6.



     (b) For Good Reason or Without Cause. If, during your Compensation Period, the Company
terminates your employment without Cause or you terminate your employment for Good Reason in
accordance with Section 5:




          (1) The Company will pay you the following as of the end of your employment: (A) your
unpaid Salary, (B) your Salary for any accrued but unused vacation, (C) any unpaid Bonus
for the fiscal year ending before the Termination Date, (D) any unpaid



-8-









 






Long-Term Cash Award for the performance cycle(s) ending in the fiscal year before the
Termination Date, and (E) any accrued expense reimbursements (together, your “Accrued
Compensation”). For the avoidance of doubt, no other amount will be paid to you in respect
of any other Bonus or Long-Term Cash Award or any other incentive compensation plan of the
Company that has not already been paid (or previously deferred). The Company will timely
pay you any other amounts and provide to you any benefits that are required, or to which
you are entitled on or after your Termination Date, under any plan, contract or arrangement
of the Group (together, the “Other Benefits”).




          (2) The Company will pay you an amount equal to the sum of (A) two (2) times the sum
of your (x) Salary and (y) Target Annual Bonus for the fiscal year in which the Termination
Notice is given and (B) the amount provided in Appendix A.




          (3) The unvested stock options issued by the Group to you (including the Sign-On
Options), that, absent the end of your employment, would have vested and become exercisable
in the twenty-four (24) month period following the Termination Date, will immediately vest
and become exercisable and remain exercisable until the earlier of (x) three years
following the Termination Date and (y) the final expiration date of such options. The
Sign-On Stock (if not previously vested) will immediately vest and any other restricted
stock or equity-based compensation awarded by the Group to you, that, absent the end of
your employment, would have vested in the twenty-four (24) month period following the
Termination Date, will vest and become immediately payable in accordance with the terms of
the applicable award agreement(s).




          (4) You, your spouse and your dependents will continue to be entitled to participate
in each of the Group’s employee welfare plans providing for medical, dental or other health
insurance on a basis (including costs) that is at least as favorable as that provided to
senior officers of the Company (the “Medical Benefits”). However, if the Group’s plans do
not permit you, your spouse or your dependents to participate on this basis, the Company
will provide Medical Benefits (with the same after-tax effect for you) outside of the
plans. Each Medical Benefit will be provided until the earlier of (A) your becoming
employed by another employer and being eligible for coverage from your new employer in
respect of such Medical Benefit and (B) the expiration of the twenty-four (24) month period
following the Termination Date.




          (5) You will be entitled to an allowance of up to $15,000 for your reasonable
outplacement expenses.



     (c) For Cause or Without Good Reason. If, during your Compensation Period, the Company
terminates your employment for Cause or you terminate your employment without Good Reason, the
Company will pay your Accrued Compensation and provide you your Other Benefits.



     (d) Retirement, Disability or Death. If, during your Compensation Period, your employment
terminates as a result of your Retirement, death or Disability, the Company will pay your Accrued
Compensation and the amount provided in Appendix A and will provide your Other Benefits.



-9-









 





     (e) Change of Control. On your Start Date, you and the Company will enter into a Change of
Control Agreement in the form attached as Exhibit 3. If there is a “Change of Control” as defined
in your Change of Control Agreement, your Change of Control Agreement will supersede this Agreement
(except as set forth therein). However, to the extent there is a change of control of the Company
that does not qualify as a “Change of Control” under the Change of Control Agreement but
nevertheless causes any payments under this Agreement to become subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code, you shall be entitled to the additional payments and
benefits of Section 8 of your Change of Control Agreement with respect to such payments.



     (f) Indemnification. On your Start Date, you and the Company will enter into an
Indemnification Agreement in the form attached as Exhibit 4.



     (g) Condition. The payments and the benefits stated in this Section 6 are conditioned on your
execution, delivery and non-revocation of a valid and effective release, in substantially the form
attached hereto as Appendix B (the “Release”), within fifty-five (55) days following the date of
your termination of employment; provided, however, that the Company shall be obligated to execute,
deliver and not revoke the Release within two (2) business days following your execution, and
delivery of the Release.



     (h) Timing. The benefits provided in this Section 6 will begin and, unless otherwise
specified, any cash payments owed you under this Section 6 will be paid in a lump sum within ten
(10) business days following the date the condition specified in Section 6(g) of this Agreement has
been satisfied.



     (i) Resignation from Directorships and Officerships. Unless the Group waives this
requirement, the termination of your employment for any reason will constitute your resignation
from (1) any director, officer or employee position you then have with any member of the Group and
(2) all fiduciary positions (including as trustee) you hold with respect to any pension plans or
trusts established by any member of the Group. You agree that this Agreement will serve as your
written notice of resignation in this circumstance.



7. Proprietary Information and Work Product




     (a) Definition. “Proprietary Information” means confidential or proprietary information,
knowledge or data concerning (1) the Group’s businesses, strategies, operations, financial affairs,
organizational matters, personnel matters, budgets, profit margins, seasonal plans, goals,
objectives and projections, compilations, analyses and projections regarding the Group’s divisions,
businesses, product segments, product lines, suppliers, sales and expenses, supplier and customer
list, advertising and business plans, marketing plans, studies, policies, procedures, products,
ideas, processes, software systems, trade secrets and technical know-how, (2) any other matter
relating to the Group and (3) any matter relating to suppliers of the Group (including the Group’s
terms, conditions and other business arrangements with suppliers) or other third parties having
relationships with the Group. Proprietary Information includes (A) information regarding any
aspect of your tenure as an employee of the Group or the termination of your employment, (B) the
names, addresses, and phone numbers and other information concerning clients and prospective
clients of the Group, and (C) information and materials concerning personnel information of the
Group. In addition, Proprietary Information may include information furnished to you orally or in
writing (whatever the form or storage medium) or



-10-









 




gathered by inspection, in each case before or after the date of this Agreement. However,
Proprietary Information does not include information (i) that was or becomes generally available to
the public, other than as a result of a disclosure by you, directly or indirectly, or as a result
of the violation by a third party of the Group’s confidentiality rights, (ii) that you can
establish was independently developed by you without reference to any Proprietary Information or
(iii) your personal contact information.




     (b) Use and Disclosure. You will obtain or create Proprietary Information in the course of
your involvement in the Group’s activities and may already have Proprietary Information. You agree
that the Proprietary Information is the exclusive property of the Group, and that, during your
employment, you will use and disclose Proprietary Information only for the Group’s benefit and in
accordance with any restrictions placed on its use or disclosure by the Group. After your
employment, you will not use or disclose any Proprietary Information. In addition, nothing in this
Agreement will operate to weaken or waive any rights that the Group may have under statutory or
common law, or any other agreement, to the protection of trade secrets, confidential business
information and other confidential information.



     (c) Return of Proprietary Information. At the Company’s request and/or upon termination of
your employment, you will return to the Company all documents, records, notebooks, computer
diskettes and tapes and anything else containing Proprietary Information, including all copies
thereof, as well as any other property of the Group, in your possession, custody or control. You
will also delete from your own computer or other electronic storage medium any Proprietary
Information. Not later than 20 days after termination of your employment, you will certify in
writing to the Group that you have complied with these obligations.



     (d) Work Product. You agree to disclose fully to the Group, and hereby assign and transfer to
the Group, and agree to execute any additional documentation the Group may reasonably request to
evidence the assignment and transfer, immediately upon the conception, development, making or
acquisition thereof, the right, title, and interest in and to any and all inventions, discoveries,
improvements, innovations, and/or designs (the “Work Product”) conceived, discovered, developed,
acquired or secured by you, solely or jointly with others or otherwise, together with all
associated U.S. and foreign intellectual property rights (i.e., patents, copyrights, trademarks or
trade secrets) either:




          (1) during the period of your employment, if such Work Product is related directly or
indirectly, to the business of, or to the research or development work of the Group;




          (2) with the use of the time, materials, or facilities of the Group; or




          (3) within one year after termination of your employment if conceived as a result of
and is attributable to work done during such employment and relates to Work Product within
the scope of the business of the Group, together with rights to all intellectual property
rights which may be granted thereon.


Upon discovery, development or acquisitions or any such Work Product, you shall notify the Group
and shall execute and deliver to the Group, without further compensation, such documents prepared
by the Group as may be reasonable or necessary to prepare or prosecute applications for


-11-









 






such Work Product and to assign and transfer to the Group your right, title and interest in and to
such Work Product and intellectual property rights thereof. You acknowledge that you have
carefully read and considered the provisions of this paragraph and, having done so, agree that the
restrictions set forth herein are fair and reasonable and are reasonably required for the
protection of the interests of the Group, its officers, directors, and other executives.




     (e) Limitations. Nothing in this Agreement prohibits (i) you or any member of the Group from
providing truthful testimony or information to governmental, regulatory or self-regulatory
authorities, (ii) you or any member of the Group from having discussions with legal counsel for the
purpose of asserting or defending the party’s legal rights or (iii) you from having discussions
with your financial and tax advisors for purposes of personal financial and tax planning, provided
that in the case of your disclosure to any financial or tax advisor (other than your legal
counsel), such advisor(s) agree in writing to be bound by Sections 7(b) and 7(c) to the same extent
that you are bound.



8. Ongoing Restrictions on Your Activities




     (a) General Effect. This Section 8 applies during your employment and for the twenty-four
(24) month period after your employment ends. This Section uses the following defined terms:




          ”Competitive Enterprise” shall include, but not be limited to:




          (1) 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 at retail to consumers at price points competitive, or likely to be
competitive with the Group (e.g., including, without limitation, Wal-Mart, K-Mart, Target,
Ames, Mervyn’s Pic-N-Pay, Foot Star, Inc., Edison, Aldo, Genesco, Venator, Famous Footwear,
Shoe Carnival, Jones Apparel Group, Kohl’s, Liz Claiborne, Big Five, J.C. Penney and Sears)
within 20 miles of any store of the Group or the store of any wholesale customer of the
Group in the United States, or anywhere in any foreign country in which the Group has
retail stores, franchisees or wholesale customers;




          (2) any franchising or wholesaling 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 at wholesale to franchisees, retailers or other footwear
distributors located within 20 miles of any store of the Group or the store of any
wholesale customer of the Group in the United States, or anywhere in any foreign country in
which the Group has retail stores, franchisees or wholesale customers;




          (3) 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 footwear to retailers or other footwear distributors located within 20
miles of any store of the Group or the store of any wholesale customer of the Group in the
United States, or anywhere in any foreign country in which the Group has retail stores,
franchisees, or wholesale customers; (e.g., including, without limitation, Jones
Apparel Group, Dexter, Stride Rite, Liz Claiborne, Wolverine Worldwide, Timberland,
Nike, Reebok, K-Swiss, Keds and Adidas); or



-12-









 






          (4) any business which provides buying office services to any store or group of stores
or businesses referred to in paragraphs (1), (2) or (3) above.




          ”Client” means any client or prospective client of the Group to whom you provided
services, or for whom you transacted business, or whose identity became known to you in
connection with your relationship with or employment by the Group.




          ”Solicit” means any direct or indirect communication of any kind, regardless of who
initiates it, that in any way invites, advises, encourages or requests any person to take
or refrain from taking any action.



     (b) Your Importance to the Group and the Effect of this Section 8. You acknowledge that:




          (1) In the course of your involvement in the Group’s activities, you will have access
to Proprietary Information and the Group’s client base and will profit from the goodwill
associated with the Group. On the other hand, in view of your access to Proprietary
Information and your importance to the Group, if you compete with the Group for some time
after your employment, the Group will likely suffer significant harm. In return for the
benefits you will receive from the Group and to induce the Group to enter into this
Agreement, and in light of the potential harm you could cause the Group, you agree to the
provisions of this Section 8. The Company would not have entered into this Agreement if
you did not agree to this Section 8.




          (2) In light of Section 8(b)(1), if you breach any provision of this Section 8, the
loss to the Company would be material but the amount of loss would be uncertain and not
readily ascertainable.




          (3) This Section 8 limits your ability to earn a livelihood in a Competitive
Enterprise and your relationships with Clients. You acknowledge, however, that complying
with this Section 8 will not result in severe economic hardship for you or your family.



     (c) Your Payment Obligations.




          (1) If you fail to comply with this Section 8 during the Compensation Period and for a
twenty-four (24) month period thereafter, other than any isolated, insubstantial and
inadvertent failure that is not in bad faith, you will forfeit all remaining payments owed
to you under Section 6.




          (2) With respect to any equity-based compensation awarded to you by the Company from
time to time (including Exhibits 1 and 2 hereto), notwithstanding Section 6.1 of the
Company’s 1996 Stock Incentive Plan, the Company shall not be entitled to cancel or rescind
or demand repayment in respect of or as a remedy for any purported violation of this
Section 8 or any similar covenants in any other plan, policy, arrangement or agreement
applicable to you.



-13-









 





     (d) Non-Competition. During your Compensation Period and for a twenty-four (24) month period
after termination of your employment, you will not directly or indirectly:




          (1) hold more than or equal to the greater of $25,000 or 1% of any equity, debt,
voting or profit participation interest in a Competitive Enterprise; or




          (2) associate (including as a director, officer, employee, partner, consultant, agent
or advisor) with a Competitive Enterprise and in connection with your association engage,
or directly or indirectly manage or supervise personnel engaged, in any activity:




          (A) that is substantially related to any activity that you were engaged in,




          (B) that is substantially related to any activity for which you had direct or
indirect managerial or supervisory responsibility, or




          (C) that calls for the application of specialized knowledge or skills
substantially related to those used by you in your activities;




          in each case, for the Group at any time during the year before the end of your
employment (or, if earlier, the year before the date of determination).



     (e) Non-Solicitation of Clients. During your Compensation Period and for a twenty-four (24)
month period after termination of your employment, you will not attempt to:




          (1) Solicit any Client to transact business with a Competitive Enterprise or to reduce
or refrain from doing any business with the Group,




          (2) transact business with any Client that would cause you to be a Competitive
Enterprise or that would cause any Client to reduce or refrain from doing any business with
the Group, or




          (3) interfere with or damage any relationship between the Group and a Client.



     (f) Non-Solicitation of Group Employees. During your Compensation Period and for a
twenty-four (24) month period after termination of your employment, you will not attempt to Solicit
anyone who is then an employee of the Group (or who was an employee of the group within the prior
six (6) months) to resign from the Group or to apply for or accept employment with any Competitive
Enterprise.



     (g) Notice to New Employers. Before you accept employment with any other person or entity
while any of Section 8(d), (e) or (f) is in effect, you will provide the prospective employer with
written notice of the provisions of this Section 8 and you will deliver a copy of the notice to the
Group no later than your first day of employment with such employer.



9. No Public Statements or Unfavorable Publicity



After your employment, you agree not to take any action that is intended to harm the Group or its
reputation or which leads to unwanted or unfavorable publicity to the Group and you agree that you
will not make any public statement that would libel, slander or disparage any member of the


-14-









 






Group or any of their respective past or present executive officers or directors. After your
employment, the Company agrees, on behalf of the members of the Board and the executives who are
your direct reports on the Termination Date, that neither such Board member nor such direct reports
(in each case, during their tenure as director or employee, respectively) will make any public
statement that is intended to libel, slander or disparage you. This Section 9 is subject to
Section 7(e). This Section 9 shall not prevent you from making good faith comparative claims
regarding the goods and services of the Company and those of an entity by which you are
subsequently employed or in which you obtain a financial interest, so long as such activity does
not violate Section 8. Nothing in the preceding sentence shall have any impact on the
interpretation of Section 8.




10. Entire Agreement; No Conflict; Written Waiver




     (a) Entire Agreement. This Agreement (including the Exhibits hereto), the Change of Control
Agreement and the Indemnification Agreement (the “Signing Agreements”) are the entire agreement
between you and the Company with respect to the relationship contemplated by the Signing Agreements
and supersede any earlier agreement, written or oral, with respect to the subject matter of the
Signing Agreements. In entering into the Signing Agreements, no party has relied on or made any
representation, warranty, inducement, promise or understanding that is not in the Signing
Agreements.



     (b) No Conflicts. Your execution of this Agreement and performance of the obligations under
this Agreement by you do not and will not conflict with, violate the terms of, or constitute a
default under, and will be in compliance with any agreement or instrument to which you are a party
or by which you are bound, or to which you are subject. You are not party to any employment
contract, confidentiality agreement or other agreement that contains any restriction that will
affect the performance of your duties hereunder. You represent that (A) your negotiations with the
Group have not interfered with your duties as an employee, partner or member of another entity, (B)
you have not and will not solicit or encourage any employee of another entity to leave such
entity’s employment in violation of any agreement between such entity and you and (C) you have not,
and will not, use, retain or disclose to the Group any confidential information of another entity.



     (c) Written Waiver. In order for this Agreement to become valid and binding, you must deliver
to the Company prior to June 30, 2005 a valid written waiver from your prior employer confirming
the agreement of such employer not to enforce its post-employment non-competition restrictions
against you during your employment with the Group.



11. Successors




     (a) Payments on Your Death. If you die and any amounts become payable under this Agreement,
we will pay those amounts to your estate.



     (b) Assignment by You. You may not assign this Agreement without the Company’s consent.
Also, except as required by law, your right to receive payments or benefits under this Agreement
may not be subject to execution, attachment, levy or similar process. Any attempt to effect any of
the preceding in violation of this Section 11(b), whether voluntary or involuntary, will be void.



-15-









 





     (c) Assumption by any Surviving Company. Before the effectiveness of any merger,
consolidation, statutory share exchange or similar transaction (including an exchange offer
combined with a merger or consolidation) involving the Company (a “Reorganization”) or any sale,
lease or other disposition (including by way of a series of transactions or by way of merger,
consolidation, stock sale or similar transaction involving one or more subsidiaries) of all or
substantially all of the Company’s consolidated assets (a “Sale”), the Company will cause (1) the
Surviving Company to unconditionally assume this Agreement in writing and (2) a copy of the
assumption to be provided to you. After the Reorganization or Sale, the Surviving Company will be
treated for all purposes as the Company under this Agreement. The “Surviving Company” means (A) in
a Reorganization, the entity resulting from the Reorganization or (B) in a Sale, the entity that
has acquired all or substantially all of the assets of the Company.



12. Disputes




     (a) Employment Matter. This Section 12 applies to any controversy or claim between you and
the Group arising out of or relating to or concerning this Agreement or any aspect of your
employment with the Group or the Seller or the termination of that employment (together, an
"Employment Matter”).



     (b) Mandatory Arbitration. Subject to the provisions of this Section 12, any Employment
Matter will be finally settled by arbitration in Shawnee County, Kansas administered by the
American Arbitration Association under its Commercial Arbitration Rules then in effect. However,
the rules will be modified in the following ways: (1) the decision must not be a compromise but
must be the adoption of the submission by one of the parties, (2) each arbitrator will agree to
treat as confidential evidence and other information presented to the same extent as the
information is required to be kept confidential under Section 7, (3) there will be no authority to
amend or modify the terms of this Agreement except as provided in Section 13(c) (and you and the
Group agree not to request any such amendment or modification), (4) a decision must be rendered
within 10 business days of the parties’ closing statements or submission of post-hearing briefs and
(5) the arbitration will be conducted before a panel of three arbitrators, one selected by you
within 10 days of the commencement of the notice of arbitration, one selected by the Company in the
same period and the third selected jointly by these arbitrators (or, if they are unable to agree on
an arbitrator within thirty (30) days of the commencement of arbitration, the third arbitrator will
be appointed by the American Arbitration Association; provided that the arbitrator shall be a
partner or former partner at a nationally recognized law firm who is experienced in employment
matters).



     (c) Limitation on Damages. You and the Group agree that there will be no punitive damages
payable as a result of any Employment Matter and agree not to request punitive damages.



     (d) Injunctions and Enforcement of Arbitration Awards. You or the Group may bring an action
or special proceeding in a state or federal court of competent jurisdiction sitting in the City of
Topeka or Shawnee County, Kansas to enforce any arbitration award under Section 12(b). Also,
notwithstanding anything to the contrary in this Agreement, the Group may bring an action or
proceeding, in addition to its rights under Section 12(b) and whether or not an arbitration
proceeding has been or is ever initiated, to temporarily, preliminarily or permanently enforce any
part of Sections 7 and 8 in state or federal court . You agree that (1) your violating any part of
Sections 7 and 8 would cause damage to the Group that cannot be
measured or repaired and (2) the Group therefore is entitled to an injunction, restraining
order or other equitable relief restraining any actual or threatened violation of any of those
Sections.



-16-









 





     (e) Jurisdiction and Choice of Forum. You and the Group irrevocably submit to the exclusive
jurisdiction of any state or federal court located in the City of Topeka or Shawnee County, Kansas
over any Employment Matter that is not otherwise arbitrated or resolved according to Section 12(b).
This includes any action or proceeding to compel arbitration or to enforce an arbitration award.
Both you and the Group (1) acknowledge that the forum stated in this Section 12(e) has a reasonable
relation to this Agreement and to the relationship between you and the Group and that the
submission to the forum will apply even if the forum chooses to apply non-forum law, (2) waive, to
the extent permitted by law, any objection to personal jurisdiction or to the laying of venue of
any action or proceeding covered by this Section 12(e) in the forum stated in this Section, (3)
agree not to commence any such action or proceeding in any forum other than the forum stated in
this Section 12(e) and (4) agree that, to the extent permitted by law, a final and non-appealable
judgment in any such action or proceeding in any such court will be conclusive and binding on you
and the Group. However, nothing in this Agreement precludes you or the Group from bringing any
action or proceeding in any court for the purpose of enforcing the provisions of Sections 12(b) and
this 12(e).



     (f) Waiver of Jury Trial. To the extent permitted by law, you and the Group waive any and all
rights to a jury trial with respect to any Employment Matter.



     (g) Governing Law. This Agreement will be governed by and construed in accordance with the
law of the State of Kansas applicable to contracts made and to be performed entirely within that
State.



     (h) Costs. To the extent permitted by law, the Company will pay as incurred on a quarterly
basis any reasonable expenses, including reasonable attorney’s fees (and such fees incurred at your
attorney’s normal hourly rates will be presumed reasonable), you incur as a result of any
Employment Matter, provided that you make satisfactory arrangements to repay such expenses if you
ultimately do not prevail on one material issue in such dispute. Additionally, the Company will
reimburse your reasonable attorney’s fees, not to exceed $35,000, incurred by you in entering into
this Employment Agreement.



13. General Provisions




     (a) Construction. (1) References (A) to Sections are to sections of this Agreement unless
otherwise stated; (B) to any contract (including this Agreement) are to the contract as amended,
modified, supplemented or replaced from time to time; (C) to any statute, rule or regulation are to
the statute, rule or regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the section; (D) to any
governmental authority include any successor to the governmental authority; (E) to any plan include
any programs, practices and policies; (F) to any entity include any corporation, limited liability
company, partnership, association, business trust and similar organization and include any
governmental authority; and (G) to any affiliate of any entity are to any person or other entity
directly or indirectly controlling, controlled by or under common control with the first entity.



-17-









 






          (2) The various headings in this Agreement are for convenience of reference only and
in no way define, limit or describe the scope or intent of any provisions or Sections of
this Agreement.




          (3) Unless the context requires otherwise, (A) words describing the singular number
include the plural and vice versa, (B) words denoting any gender include all genders and
(C) the words “include”, “includes” and “including” will be deemed to be followed by the
words “without limitation.”




          (4) It is your and the Group’s intention that this Agreement not be construed more
strictly with regard to you or the Group.



     (b) Taxes.




          (1) Withholding. You and the Group will treat all payments to you under this
Agreement as compensation for services. Accordingly, the Group may withhold from any
payment any taxes that are required to be withheld under any law, rule or regulation.




          (2) Section 409A.




          (A) This Agreement is intended to satisfy the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) with respect to amounts, if
any, subject thereto and shall be interpreted and construed and shall be performed by
the parties consistent with such intent. If either party notifies the other in writing
that, based on the advice of legal counsel, one or more or the provisions of this
Agreement contravenes any Treasury Regulations or guidance promulgated under Section
409A or causes any amounts to be subject to interest, additional tax or penalties under
Section 409A, the parties shall promptly and reasonably consult with each other (and
with their legal counsel), and shall use their reasonable best efforts to reform the
provisions hereof to (a) maintain to the maximum extent practicable the original intent
of the applicable provisions without violating the provisions of Section 409A or
increasing the costs to the Company of providing the applicable benefit or payment;
provided, however, de minimis costs associated with the implementation of such 409A
reforms shall be considered reasonable and not an increase under this subsection (a),
and (b) to the extent possible, to avoid the imposition of any interest, additional tax
or other penalties under Section 409A upon you or the Company.




          (B) To extent you would otherwise be entitled to any payment under this Agreement,
or any plan or arrangement of the Company or its affiliates, that constitutes a
“deferral of compensation” subject to Section 409A and that if paid during the six (6)
months beginning on the date of termination of your employment would be subject to the
Section 409A, additional tax because you are a “specified employee” (within the meaning
of Section 409A and as determined by the Company), the payment, together with simple
interest on any unpaid amounts equal to 6-month LIBOR on the Termination Date plus 450
basis points, will be paid to you on the earlier of the first day following the six (6)
month anniversary of your date of termination or your death.



-18-









 






          (C) Similarly, to the extent you would otherwise be entitled to any benefit (other
than a payment) during the six (6) months beginning on termination of your employment
that would be subject to the Section 409A additional tax, the benefit will be delayed
and will begin being provided (together, if applicable, with an adjustment to
compensate you for the delay) on the earlier of the first day following the six (6)
month anniversary of your date of termination or your death.




          (D) Any payment or benefit due upon a termination of your employment that
represents a “deferral of compensation” within the meaning of Section 409A shall be
paid or provided to you only upon a “separation from service” as defined in Treas. Reg.
§ 1.409A-1(h). Each payment made under Section 6 of this Agreement shall be deemed to
be a separate payment for purposes of Section 409A. Amounts payable under Section 6 of
this Agreement shall be deemed not to be a “deferral of compensation” subject to
Section 409A to the extent provided in the exceptions in Treasury Regulation §§
1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including
the exception under subparagraph (iii)) and other applicable provisions of Treasury
Regulation § 1.409A-1 through A-6.




          (E) Notwithstanding anything to the contrary in this Agreement or elsewhere, any
payment or benefit under this Agreement or otherwise that is exempt from Section 409A
pursuant to Treasury Regulation § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain
reimbursements and in-kind benefits) shall be paid or provided to you only to the
extent that the expenses are not incurred, or the benefits are not provided, beyond the
last day of the second calendar year following the calendar year in which your
“separation from service” occurs; and provided further that such expenses are
reimbursed no later than the last day of the third calendar year following the calendar
year in which your “separation from service” occurs. To the extent any expense
reimbursement or the provision of any in-kind benefit is determined to be subject to
Section 409A (and not exempt pursuant to the prior sentence or otherwise), the amount
of any such expenses eligible for reimbursement, or the provision of any in-kind
benefit, in one calendar year shall not affect the expenses eligible for reimbursement
in any other calendar year (except for any life-time or other aggregate limitation
applicable to medical expenses), in no event shall any expenses be reimbursed after the
last day of the calendar year following the calendar year in which the you incurred
such expenses, and in no event shall any right to reimbursement or the provision of any
in-kind benefit be subject to liquidation or exchange for another benefit.



     (c) Severability. If any provision of this Agreement is found by any court of competent
jurisdiction (or legally empowered agency) to be illegal, invalid or unenforceable for any reason,
then (1) the provision will be amended automatically to the minimum extent necessary to cure the
illegality or invalidity and permit enforcement and (2) the remainder of this Agreement will not be
affected. In particular, if any provision of Section 8 is so found to violate law or be
unenforceable because it applies for longer than a maximum permitted period or to greater than a
maximum permitted area, it will be automatically amended to apply for the maximum permitted period
and maximum permitted area.



-19-









 





     (d) No Set-off or Mitigation. Except as provided in Section 6(b)(5) or if your employment is
terminated by the Company for Cause, your and the Company’s respective
obligations under this Agreement will not be affected by any set-off, counterclaim, recoupment
or other right you or any member of the Group may have against each other or anyone else. You do
not need to seek other employment or take any other action to mitigate any amounts owed to you
under this Agreement.



     (e) Notices. All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed given (1) on the business day sent, when delivered by hand or
facsimile transmission (with confirmation) during normal business hours, (2) on the business day
after the business day sent, if delivered by a nationally recognized overnight courier or (3) on
the third business day after the business day sent if delivered by registered or certified mail,
return receipt requested, in each case to the following address or number (or to such other
addresses or numbers as may be specified by notice that conforms to this Section 13(e)):


If to you, to your address then on file with the Company’s payroll department.



If to the Company or any other member of the Group, to:



Collective Brands, Inc.

3231 SE Sixth Avenue

Topeka, KS 66607

Attention: General Counsel

Facsimile: 785-368-7524




     (f) Consideration. This Agreement is in consideration of the mutual covenants contained in
it. You and the Group acknowledge the receipt and sufficiency of the consideration to this
Agreement and intend this Agreement to be legally binding.



     (g) Amendments and Waivers. Any provision of this Agreement may be amended or waived but only
if the amendment or waiver is in writing and signed, in the case of an amendment, by you and the
Company or, in the case of a waiver, by the party that would have benefited from the provision
waived. Except as this Agreement otherwise provides, no failure or delay by you or the Group to
exercise any right or remedy under this Agreement will operate as a waiver, and no partial exercise
of any right or remedy will preclude any further exercise.



     (h) Third Party Beneficiaries. Subject to Section 11, this Agreement will be binding on,
inure to the benefit of and be enforceable by the parties and their respective heirs, personal
representatives, successors and assigns. This Agreement does not confer any rights, remedies,
obligations or liabilities to any entity or person other than you and the Company and your and the
Company’s permitted successors and assigns, although (1) this Agreement will inure to the benefit
of the Group and (2) Section 11(a) will inure to the benefit of the most recent persons named in a
notice under that Section.



     (i) Counterparts. This Agreement may be executed in counterparts, each of which will
constitute an original and all of which, when taken together, will constitute one agreement.
However, this Agreement will not be effective until the date both parties have executed this
Agreement.



-20-









 




BY SIGNING THIS AGREEMENT, I HEREBY CERTIFY THAT I (A) HAVE RECEIVED A COPY OF THIS AGREEMENT FOR
REVIEW AND STUDY BEFORE SIGNING IT, (B) HAVE READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT, (C)
HAVE HAD SUFFICIENT OPPORTUNITY TO REVIEW THE AGREEMENT WITH ANY ADVISOR I DESIRED TO CONSULT,
INCLUDING LEGAL COUNSEL, (D) HAVE HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING IT TO ASK ANY QUESTIONS
ABOUT THIS AGREEMENT AND HAVE RECEIVED SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS, AND (E)
UNDERSTAND MY RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.




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



	 	 	 	 	 
	EXECUTIVE	 	 
	 
	 	 	 	 
	/s/ Matthew E. Rubel	 	 
	 	 	 
	          Matthew E. Rubel	 	 
	 
	 	 	 	 
	COLLECTIVE BRANDS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Betty J. Click	 	 
	 

	 	 	 	 
	 

	 	Betty J. Click	 	 
	Its:

	 	Senior Vice President Human Resources	 	 





December 19, 2008




-21-









 








APPENDIX A

CHART OF ADDITIONALSEVERANCE PAYMENT UNDER SECTION 6




	 	 	 	 	 
	Fiscal Quarter in which 

Date of Termination 	 	Payment under Section
	Occurs 	 	6(b)(2)(B) $*
	First Fiscal Quarter
	 	$	1,000,000	 
	Second Fiscal Quarter
	 	$	1,425,000	 
	Third Fiscal Quarter
	 	$	1,850,000	 
	Fourth Fiscal Quarter
	 	$	2,275,000	 








 




			
	*	 	The amounts set forth in this column shall be automatically increased by the percentage increase,
if any, in the Executive’s Salary from January 1, 2009.




-22-









 










APPENDIX B

FORM OF SEPARATION AGREEMENT AND GENERAL RELEASE




-23-









 








WAIVER AND RELEASE




     THIS WAIVER AND RELEASE (this “Waiver and Release”) is entered into by and between Collective
Brands, Inc., a Delaware corporation (the “Company”) and Matthew E. Rubel(the “Executive”) pursuant
to that certain Employment Agreement executed by and between the Company and the Executive on the
______ day of ______, as amended from time to time (the “Employment Agreement”). The Company and the Executive
hereby agree knowingly and voluntarily as follows:



     In
consideration of the payments and benefits pursuant to Paragraph[s] ______ of the Employment
Agreement (the “Benefits”) the Executive agrees that the Benefits constitute consideration for this
agreement to which the Executive would not otherwise be entitled and are in lieu of any rights or
claims that the Executive may have with respect to separation or severance benefits, or any other
form of remuneration from the Company or any of its affiliates, and in consideration thereof, after
the opportunity to consult legal counsel, the Executive hereby for himself, and his heirs, agents,
executors, successors, assigns and administrators (collectively, “Related Parties”), forever
releases, remises, and discharges, in all their capacities, the Company and all of its affiliates
or subsidiaries, and any of their present or former directors, employees, fiduciaries,
representatives, officers and agents, successors and assigns (collectively, the “Releasees”)
individually and in their official capacities, of and from all covenants, obligations, liabilities
and agreements, and forever waives all claims, rights and causes of action whatsoever, in law or in
equity, whether known or unknown, asserted or unasserted, suspected or unsuspected, that the
Executive or any Related Parties ever had, may have in the future or have now in connection with or
arising from the Executive’s employment relationship with the Company or termination of the
Executive’s employment relationship with the Company; including, without limitation, any claims,
rights and causes of action under United States federal, state or local law, regulation or
decision, and the national or local law (statutory or decisional) of any foreign country,
including, without limitation, those under the Age Discrimination in Employment Act, as amended 29
U.S.C. §§621 et. seq., the Older Workers Benefit Protection Act, 29 U.S.C. §626



-24-









 




(f)(1), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act, 42 U.S.C. §§12101-12213, the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), the Family and Medical Leave Act of 1993, the Fair Labor Standards Act,
and any other similar or related law, regulation or decision relating to or dealing with
discrimination including, without limitation, any claims, rights or causes of action for punitive
damages, attorney’s fees, expenses and costs of litigation. Notwithstanding the foregoing, the
Executive and Related Parties do not release or waive any right or claim (i) the Executive and
Related Parties may have to obtain post-employment payments and benefits, if any, and exercise any
rights pursuant to the Employment Agreement or award thereunder (including, but not limited to,
paragraph[s] ______ thereof; (ii) to obtain post-employment payments and benefits and exercise any rights
under any plan or agreement referred to in the Employment Agreement or award thereunder (iii) under
ERISA to obtain post-employment payments and benefits under any employee benefit plan (as defined
in ERISA); (iv) for indemnification and advancement of fees and expenses under any agreement with
or policy of the Company or its affiliates relating to indemnification and advancement of fees and
expenses of directors or officers or under any provision of the Company’s articles or by-laws
relating to indemnification of directors or officers; (v) under any policy of directors’ or
officers’ liability insurance; (vi) that arises against the Company after the date of this Waiver
and Release; and (vii) to obtain contribution as permitted by law in the event of entry of judgment
against the Executive and the Company as a result of any act or failure to act for which the
Executive and the Company are jointly liable.




     The Executive represents that he has not filed, and will not hereafter file, any claim against
the Company relating to his employment and/or cessation of employment with the Company, or
otherwise involving facts that occurred on or prior to the date that Executive has signed this
Waiver and Release except as permitted under paragraph 1 hereof.



     The Executive understands and agrees that if Executive commences, continues, joins in, or in
any other manner attempts to assert any claim released herein against the Company, or otherwise
materially violates the terms of this Waiver and
Release, the Executive will cease to have any further rights to the Benefits from the Company
referred to in the first paragraph of this Waiver and Release.



-25-









 





     In consideration for the Executive’s release and waiver of claims herein and other good and
valuable consideration, the Company, on behalf of itself and the Releasees, forever releases,
remises and discharges, in all their capacities, the Executive and the Related Parties,
individually and in their official capacities, of and from all covenants, obligations, liabilities
and agreements, and forever waives all claims, rights and causes of action whatsoever, in law or in
equity, whether known or unknown, asserted or unasserted, suspected or unsuspected, that the
Company or any of the Releasees ever had, may have in the future or have now in connection with or
arising from the Executive’s employment relationship with the Company or termination of the
Executive’s employment relationship with the Company; including, without limitation, any claims,
rights and causes of action under United States federal, state or local law, regulation or
decision, and the national or local law (statutory or decisional) of any foreign country.
Notwithstanding the foregoing, the Company and the Releasees do not release or waive (i) any right
or claim that arises against the Executive after the date of this Waiver and Release, (ii) any
claim against the Executive based on intentional misconduct, fraud, misappropriation or gross
neglect or (iii) any right the Company and the Releasees may have to obtain contribution as
permitted by law in the event of entry of judgment against the Executive and the Company as a
result of any act or failure to act for which the Executive and the Company are jointly liable.



     The Executive understands and agrees that the payments by the Company to the Executive of any
Benefits and the signing of this Waiver and Release by the Executive do not in any way indicate
that the Executive has any viable claims against the Company or that the Company admits any
liability to the Executive whatsoever.



     The Executive affirms that, prior to the execution of this Waiver and Release, the Executive
was advised by an attorney of the Executive’s choice concerning the terms and conditions set forth
herein, and that the Executive was given up to twenty-one (21) days to consider (notwithstanding
the time lapsed, if any, during such twenty-one day period to review and revise) this Waiver and
Release and its consequences. The
Executive has seven (7) days following the Executive’s signing of this Waiver and Release to
revoke and cancel the terms and conditions contained herein, and the terms and conditions of this
Waiver and Release shall not become effective or enforceable until such revocation period has
expired.




-26-









 








     IN
WITNESS WHEREOF, the parties hereto have executed this Waiver and Release this ______ day of ______, ______.



	 	 	 	 	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 	 	 	 	 
	 	 	MATTHEW E. RUBEL
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 	 	 	 	 
	 	 	COLLECTIVE BRANDS, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Betty J. Click	 	 
	 

	 	 	 	Title:
	 	Senior Vice President Human Resources