Document:

EMPLOYMENT
      AGREEMENT

    

    THIS
      AGREEMENT is made this 4th day of September, 2007 (the “Effective Date”), by and
      between COLLECTIVE BRANDS, INC., a Delaware corporation, (“CBI”) and DOUGLAS J.
      TREFF (“Executive”).

     

    WITNESSETH:

     

    WHEREAS,
      CBI and its related entities are one of the leading global footwear, accessories
      and lifestyle brands companies in the United States, reaching customers through
      multiple price points and selling channels, including retail, wholesale,
      licensing and e-commerce, throughout the United States, Europe, Puerto Rico,
      and
      the U.S. Virgin Islands, Guam, Saipan, Canada, and Central and South
      America.

     

    WHEREAS,
      CBI conducts its business in part through various direct and indirect
      subsidiaries, including Payless ShoeSource, Inc., The Stride Rite Corporation,
      and Collective Licensing International, LLC (CBI and its subsidiaries and
      affiliates being collectively referred to as “Collective”).

     

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

     

    WHEREAS,
      Collective 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 Collective's
      business and its competitive position in the marketplace. 

     

    WHEREAS,
      Executive recognizes and acknowledges that if Executive's employment with
      Collective ceases, Collective 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 Collective's good will that was
      generated on Collective's behalf and at its expense, and, more generally, to
      prevent Executive from having an unfair competitive advantage over
      Collective.

     

    WHEREAS,
      Executive desires to be employed by Collective, to be eligible for potential
      compensation increases and to be given access to proprietary, trade secret
      and
      confidential information of Collective necessary for Executive to perform
      Executive’s job, but which Collective would not make available but for
      Executive’s signing and agreeing to abide by the terms 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 September
      4,
      2009 (the “Contract Term”), unless sooner terminated in accordance with
      Paragraph 8 hereof. Beginning on September 5, 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 Executive Vice President,
      Chief Administrative Officer, as well as any other duties as may be assigned
      from time to time by Collective, and agrees to abide by all the by-laws,
      policies, practices, procedures and rules of Collective. 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 Collective. Executive may
      be
      assigned or transferred to another management position, as designated by
      Collective, which may or may not provide the same level of responsibility as
      the
      initial assignment. This Agreement shall remain in effect and shall apply to
      Executive, without any need for re-execution, regardless of the Collective
      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 Collective or any
      division to which Executive may be assigned.

     

    3. Compensation;
      Benefits.

     

    (a) Base
      Salary.
      Collective agrees to pay Executive a base salary during the Contract Term at
      the
      annual rate of $525,000.00, 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
      Collective’s 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
      Collective (the "Incentive Plans"), in accordance with and subject to all of
      the
      terms and provisions of such Incentive Plans. 

     

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

     

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

     

    
      
        
        

      

      
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    (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 Collective Brands, Inc. 2006 Stock Incentive
      Plan, in accordance with the criteria established from time to time by the
      Compensation Committee of the Collective Brands, Inc. Board of Directors.

     

    (f)
       Automobile
      Allowance.
      Executive shall be eligible for an automobile allowance as determined by
      Collective 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 Collective, 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
      Collective in soliciting for employment, offering employment to, or hiring,
      any
      employee of Collective or any person who, at any time during the 12 months
      prior
      to the solicitation, was employed by Collective.

    

    Nothing
      in this Paragraph 4(a) shall prevent Executive, however, from performing
      Executive’s duties and responsibilities for Collective. 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). 

    

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

    

    (i) any
      retail business or licensee 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 Collective (“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
      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 Collective store or the store of any wholesale customer or licensee
      of Collective in the United States, or anywhere in any foreign country in which
      Collective has retail stores, wholesale customers, or licensees;

     

    
      
        
        

      

      
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    (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 Collective store or the store of any wholesale customer
      or licensee of Collective in the United States, or anywhere in any foreign
      country in which Collective 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, licensees, or other footwear distributors located within
      10
      miles of any Collective store or the store of any wholesale customer or licensee
      of Collective in the United States, or anywhere in any foreign country in which
      Collective has retail stores, wholesale customers, or licensees (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.; adidas-Salomon AG; Asics; FILA; New Balance; Puma)
      or

    

    (iv) any
      business, located in the United States or any other country in which Collective
      operates, with gross sales or revenue in the prior fiscal year of more than
      $25
      million engaged in the sale, licensing or sublicensing of footwear, apparel,
      sporting goods and accessories to other companies for manufacture and sale
      to
      the skateboarding, snowboarding, mountain biking, BMX biking, casual streetwear
      and youth lifestyle markets (including, without limitation, Adio; Anarchy;
      Circa; DC Shoes; Dragon; DVS; Element; Etnies; Globe; Lakai; Oakley; Osiris;
      Vans; Volcom; or World Industries); or

    

    (v) 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, Collective 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 Collective's business and its competitive position in the
      marketplace; 

    

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

     

    
      
        
        

      

      
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    (iii)
      Collective compensates its employees to, among other things, develop and
      preserve goodwill and relationships on Collective's behalf and to develop and
      preserve business information for Collective’s 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

    

    (v) Executive
      recognizes and acknowledges that if Executive’s employment with Collective were
      to cease, Collective 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 Collective’s goodwill that
      was generated on Collective’s behalf and at its expense, and, more generally, to
      prevent Executive from having an unfair competitive advantage over
      Collective.

    

    (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 Collective 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 Collective 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 Collective's
      proprietary, trade secret, and other confidential business
      information;

    

    (v) Collective
      would not have adequate protection if Executive is permitted to work for any
      Competing Business in violation of this Agreement since Collective 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) Collective's
      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 Collective
      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 Collective 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 Collective, 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 Collective’s
      business disclosed by Collective to Executive, or developed or learned by
      Executive during the course of Executive’s Collective employment, including,
      without limitation, any confidential information and documents concerning
      Collective’s 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 Collective's
      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
      Collective conducts its businesses; 

     

    (c) Executive
      acknowledges that Collective’s businesses are intensely competitive and that, by
      virtue of Executive’s employment with Collective, 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 Collective would place it at a competitive disadvantage
      and would harm and damage Collective’s businesses. 

     

    
      
        
        

      

      
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    (d) During
      Executive's employment with Collective and thereafter, Executive will: (i)
      notify and provide Collective 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 Collective in any litigation or other action to protect or
      retrieve Confidential Information.   

     

    6. Collective
      Intellectual Property.
      (a)
      Executive hereby assigns to Collective all of Executive’s rights, title, and
      interest (including but not limited to all patent, trademark, copyright and
      trade 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 Collective are “works
      made for hire” and, consequently, that Collective 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 Collective, 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 Collective, (2) Collective’s current and/or anticipated research
      or development, (3) any work performed by Executive for Collective, and/or
      (4)
      any information or assistance provided by Collective, including but not limited
      to Confidential Information.

     

    (b)
       Executive
      shall promptly disclose to Collective all Work Product. All such Work Product
      is
      and shall forthwith become the property of Collective, 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
      Collective in order to formally convey and transfer to Collective or its
      designee title to such Work Product, or to confirm Collective or its designee’s
      title therein, and in order to enable Collective 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 Collective. 

     

    7. Disability.
      If
      Executive becomes Disabled and remains continuously so Disabled for a period
      of
      180 days, then Collective's 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.
      Collective may terminate Executive’s employment for Cause at any time upon
      written notice to Executive, with immediate effect. Executive may voluntarily
      resign from Collective at any time upon 30 days written notice to Collective;
      provided, Collective 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 Collective for Cause:

    

    
      
        
        

      

      
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    (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; 

    

    (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 Collective 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 Collective’s medical, dental,
      and vision plans in which Executive is participating on the date of termination
      or resignation, through COBRA. 

    

    (b) Without
      Cause by Collective.
      Collective 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 Collective 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; 

    

    
      
        
        

      

      
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    (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 Collective’s fiscal year
      in which Executive’s employment terminates; 

    

    (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 Collective towards 18 months of COBRA coverage under
      Collective’s 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 Collective, or any other violation of
      the
      law that is harmful to its operations (excluding minor traffic violations),
      or
      conviction of a felony; 

     

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

    

    (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 Collective 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; 

    

    
      
        
        

      

      
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    (v) grossly
      negligent breach of any policy of Collective including those contained in
      Collective’s 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 Executive's
      duties with Collective (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 Collective, 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 Collective, as determined by Collective’s
      Senior Vice President-Human Resources. Failure to meet performance standards
      or
      objectives, by itself, will not constitute "Cause".

     

    Collective
      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, Collective 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
      Collective may otherwise owe to Executive by any unpaid amount which Executive
      owes to Collective.

     

    (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 Collective 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 Collective 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 Collective, 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 Collective. 

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

       

    

    (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 any
      Collective severance plans, 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 compensation, or any additional benefits
      provided by Collective 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 Collective’s expectations and rights under this
      Agreement and to provide Collective 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 Collective, for which
      an
      award of damages alone may be inadequate. Therefore, Collective 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 Collective 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
      Collective is successful in any suit or proceeding relating to the enforcement
      of this Agreement, Executive agrees to pay Collective’s 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 Collective 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 Collective 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 Collective 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 September 4, 2007,
      and the Indemnification Agreement dated September 4, 2007, each between
      Collective 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. 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.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

       

    

    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 Collective
      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 Collective.
      This Agreement shall inure to the benefit of, and be binding upon, any entity
      which shall succeed to Collective’s 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
      CBI 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. 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. Collective 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. Collective 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 Collective, upon Collective’s registered agent (with a
      copy to Collective’s General Counsel), or if made upon Executive, at Executive’s
      last known address on the records of Collective.

     

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

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

       

    

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

     

     

    EXECUTIVE

    

    /s/
      Douglas J. Treff______

    Douglas
      J. Treff

    

    COLLECTIVE
      BRANDS, INC.

    

    By: /s/
      Jay A. Lentz

     

    

    Its: Senior
      Vice President - Human Resources

     

     

    
      
        
        

      

      
        -13-CHANGE
      OF CONTROL AGREEMENT

     

    This
      CHANGE OF CONTROL AGREEMENT (this “Agreement”),
      is
      entered into as of the 4th day of September, 2007 (the “Agreement
      Date”),
      by
      and between Collective Brands, Inc., a Delaware corporation (the “Company”),
      and
      Douglas J. Treff (the “Executive”).

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”),
      has
      determined that it is in the best interests of the Company and its stockholders
      to assure that the Company will have the continued dedication of the Executive,
      notwithstanding the possibility, threat or occurrence of a Change of Control
      (as
      defined herein). The Board believes it is imperative to diminish the inevitable
      distraction of the Executive by virtue of the personal uncertainties and risks
      created by a pending or threatened Change of Control and to encourage the
      Executive’s full attention and dedication to the current Company and in the
      event of any threatened or pending Change of Control, and to provide the
      Executive with compensation and benefits arrangements upon a Change of Control
      that ensure that the compensation and benefits expectations of the Executive
      will be satisfied and that are competitive with those of other corporations.
      Therefore, in order to accomplish these objectives, the Board has caused the
      Company to enter into this Agreement.

     

    NOW,
      THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     

    Section
      1. Certain
      Definitions. 

     

    (a) “Effective
      Date”
means
      the first date on which a Change of Control occurs. Notwithstanding anything
      in
      this Agreement to the contrary, if a Change of Control occurs and if the
      Executive’s employment with the Company is terminated without Cause or for Good
      Reason within one year prior to the date on which the Change of Control occurs
      then “Effective Date” means the date immediately prior to the date of such
      termination of employment unless
      such
      termination did not occur at the request of a third party that has taken steps
      reasonably calculated to effect a Change of Control. Further, notwithstanding
      anything in this Agreement to the contrary, if a Potential Change of Control
      occurs and if the Executive’s employment with the Company is terminated as
      provided in Section 5(e), then “Effective Date” means the date immediately prior
      to the date of such termination of employment.

     

    (b) “Change
      of Control Period”
means
      the period commencing on the Effective Date and ending on the third anniversary
      thereof.

     

    (c) “affiliated
      company”
means
      any company controlled by, controlling or under common control with the
      Company.

     

    (d) “Change
      of Control”
      means:

     

    (1) The
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
      “Exchange
      Act”))
      (a
“Person”)
      of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) of 20% or more of either (A) the then-outstanding shares of common
      stock of the Company (the “Outstanding
      Company Common Stock”)
      or (B)
      the combined voting power of the then-outstanding voting securities of the
      Company entitled to vote generally in the election of directors (the
“Outstanding
      Company Voting Securities”);
      provided,
      however,
      that,
      for purposes of this Section 1(d), none of the following shall constitute a
      Change of Control: (i) any acquisition directly from the Company of 30% or
      less
      of Outstanding Company Common Stock or Outstanding Company Voting Securities
      provided that at least a majority of the members of the board of directors
      of
      the Company following such acquisition were members of the Incumbent Board
      at
      the time of the Board’s approval of such acquisition, (ii) any acquisition by
      the Company, (iii) any acquisition by any employee benefit plan (or related
      trust) sponsored or maintained by the Company or any affiliated company, or
      (iv)
      any acquisition by the Company which, by reducing the number of shares of
      Outstanding Company Common Stock or Outstanding Company Voting Securities,
      increases the proportionate number of shares of Outstanding Company Common
      Stock
      or Outstanding Company Voting Securities beneficially owned by any Person to
      20%
      or more of the Outstanding Company Common Stock or Outstanding Company Voting
      Securities; provided,
      however,
      that, if
      such Person shall thereafter become the beneficial owner of any additional
      shares of Outstanding Company Common Stock or Outstanding Company Voting
      Securities and beneficially owns 20% or more of either the Outstanding Company
      Common Stock or the Outstanding Company Voting Securities, then such additional
      acquisition shall constitute a Change of Control; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (2) Individuals
      who, as of the date hereof, constitute the Board (the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Board; provided,
      however,
      that
      any individual becoming a director subsequent to the date hereof whose election,
      or nomination for election by the Company’s stockholders, was approved by a vote
      of at least a majority of the directors then comprising the Incumbent Board
      shall be considered as though such individual were a member of the Incumbent
      Board, but excluding, for this purpose, any such individual whose initial
      assumption of office occurs as a result of an actual or threatened election
      contest with respect to the election or removal of directors or other actual
      or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Board; or

     

    (3) Consummation
      of a reorganization, merger, consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company (a “Business
      Combination”),
      in
      each case, unless, immediately following such Business Combination, (A) more
      than 50%, respectively, of the then-outstanding shares of common stock and
      the
      combined voting power of the then-outstanding voting securities entitled to
      vote
      generally in the election of directors, as the case may be, of (x) the
      corporation resulting from such Business Combination, or (y) a corporation
      that,
      as a result of such transaction, owns the Company or all or substantially all
      of
      the Company’s assets either directly or through one or more subsidiaries, is
      represented by the Outstanding Company Common Stock and the Outstanding Company
      Voting Securities (or, if applicable, is represented by shares into which
      Outstanding Company Common Stock or Outstanding Company Voting Securities were
      converted pursuant to such Business Combination) in substantially the same
      proportions as their ownership immediately prior to such Business Combination
      of
      the Outstanding Company Common Stock and the Outstanding Company Voting
      Securities, as the case may be, (B) no Person (excluding any corporation
      resulting from such Business Combination or any employee benefit plan (or
      related trust) of the Company or such corporation resulting from such Business
      Combination) beneficially owns, directly or indirectly, 20% or more of,
      respectively, the then-outstanding shares of common stock of the corporation
      resulting from such Business Combination or the combined voting power of the
      then-outstanding voting securities of such corporation, except to the extent
      that such ownership existed prior to the Business Combination, and (C) at least
      a majority of the members of the board of directors of the corporation resulting
      from such Business Combination were members of the Incumbent Board at the time
      of the execution of the initial agreement or of the action of the Board
      providing for such Business Combination; or 

     

    (4) Approval
      by the stockholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (e) “Potential
      Change of Control”
means:
      

     

    (1) At
      least
      two directors of a particular class of directors, as of the date hereof, are
      replaced for any reason by directors who are not members of the Incumbent Board
      at the time of such replacement; provided,
      however,
      that
      any individual becoming a director subsequent to the date hereof whose election,
      or nomination for election by the Company’s stockholders, was approved by a vote
      of at least a majority of the directors then comprising the Incumbent Board
      shall be considered as though such individual were a member of the Incumbent
      Board, but excluding, for this purpose, any such individual whose initial
      assumption of office occurs as a result of an actual or threatened election
      contest with respect to the election or removal of directors or other actual
      or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Board; or

     

    (2) The
      Board
      adopts a resolution to the effect that, for purposes of this Agreement, a
      Potential Change of Control has occurred. 

     

    Section
      2. Term
      of Agreement and Covered Employment.
      (a) Term
      of Agreement.
      This
      Agreement shall be in effect from the Agreement Date and shall terminate on
      the
      third anniversary thereof; provided,
      however,
      that,
      commencing on the date one year after the Agreement Date, and on each annual
      anniversary of such date (such date and each annual anniversary thereof, the
      “Renewal
      Date”),
      unless previously terminated, this Agreement shall be automatically extended
      so
      as to terminate three years from such Renewal Date, unless, at least 60 days
      prior to the Renewal Date, the Company shall give notice to the Executive that
      the Change of Control Period shall not be so extended (a “Nonrenewal
      Notice”).
      Notwithstanding the delivery of any such Nonrenewal Notice, this Agreement
      shall
      continue in effect for the Change of Control Period if a Change of Control
      occurs during the term of this Agreement. Notwithstanding anything in this
      Section to the contrary, this Agreement shall terminate if (i) the Executive
      or
      the Company terminates the Executive’s employment prior to a Change of Control
      (except as provided in Section 1(a)), or (ii) the Executive’s employment
      terminates in accordance with Sections 1(a), 4 or 5 and the Company has
      fulfilled all of its obligations to the Executive under this
      Agreement.

     

    (b) Covered
      Employment.
       The
      Company hereby agrees to continue the Executive in its employ, and the Executive
      hereby agrees to remain in the employ of the Company, subject to the terms
      and
      conditions of this Agreement, for the Change of Control Period.

     

    Section
      3. Terms
      of Employment. (a) Position
      and Duties. (1)
      During
      the Change of Control Period, (A) the Executive’s position (including status,
      offices, titles and reporting requirements), authority, duties and
      responsibilities shall be at least commensurate in all material respects with
      the most significant of those held, exercised and assigned at any time during
      the 120-day period immediately preceding the Effective Date and (B) the
      Executive’s services shall be performed at the office where the Executive was
      employed immediately preceding the Effective Date or at any other location
      less
      than 35 miles from such office.

     

    (2) During
      the Change of Control Period, and excluding any periods of vacation and sick
      leave to which the Executive is entitled, the Executive agrees to devote
      reasonable attention and time during normal business hours to the business
      and
      affairs of the Company and, to the extent necessary to discharge the
      responsibilities assigned to the Executive hereunder, to use the Executive’s
      reasonable best efforts to perform faithfully and efficiently such
      responsibilities. During the Change of Control Period, it shall not be a
      violation of this Agreement for the Executive to (A) serve on corporate, civic
      or charitable boards or committees, (B) deliver lectures, fulfill speaking
      engagements or teach at educational institutions and (C) manage personal
      investments, so long as such activities do not significantly interfere with
      the
      performance of the Executive’s responsibilities as an employee of the Company in
      accordance with this Agreement. It is expressly understood and agreed that,
      to
      the extent that any such activities have been conducted by the Executive prior
      to the Effective Date, the continued conduct of such activities (or the conduct
      of activities similar in nature and scope thereto) subsequent to the Effective
      Date shall not thereafter be deemed to interfere with the performance of the
      Executive’s responsibilities to the Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (b) Compensation. (1) Base
      Salary.
      During
      the Change of Control Period, the Executive shall receive an annual base salary
      (the “Annual
      Base Salary”),
      which
      Annual Base Salary shall be paid at a monthly rate at least equal to 12 times
      the highest monthly base salary paid or payable, including any base salary
      that
      has been earned but deferred, to the Executive by the Company and the affiliated
      companies in respect of the 12-month period immediately preceding the month
      in
      which the Effective Date occurs. During the Change of Control Period, the Annual
      Base Salary shall be reviewed at least annually, beginning no more than 12
      months after the last salary increase awarded to the Executive prior to the
      Effective Date. Any increase in the Annual Base Salary shall not serve to limit
      or reduce any other obligation to the Executive under this Agreement. The Annual
      Base Salary shall not be reduced after any such increase and the term “Annual
      Base Salary” shall refer to the Annual Base Salary as so increased.

     

    (2) Annual
      Bonus.
      In
      addition to the Annual Base Salary, the Executive shall be awarded, for each
      fiscal year ending during the Change of Control Period, an annual bonus (the
      “Annual
      Bonus”)
      in
      cash at least equal to the Executive’s highest bonus under the Company’s annual
      and long-term incentive plans, or any comparable bonus under any predecessor
      or
      successor plan, for the last three full fiscal years prior to the Effective
      Date
      (annualized, in the event that the Executive was not employed by the Company
      for
      the whole of such fiscal year) (the “Recent
      Annual Bonus”).
      Each
      such Annual Bonus shall be paid no later than the end of the third month of
      the
      fiscal year next following the fiscal year for which the Annual Bonus is
      awarded, unless the Executive shall elect to defer the receipt of such Annual
      Bonus.

     

    (3) Incentive,
      Savings and Retirement Plans.
      During
      the Change of Control Period, the Executive shall be entitled to participate
      in
      all incentive, savings and retirement plans, practices, policies, and programs
      applicable generally to other peer executives of the Company and the affiliated
      companies, but in no event shall such plans, practices, policies and programs
      provide the Executive with incentive opportunities (measured with respect to
      both regular and special incentive opportunities, to the extent, if any, that
      such distinction is applicable), savings opportunities and retirement benefit
      opportunities, in each case, less favorable, in the aggregate, than the most
      favorable of those provided by the Company and the affiliated companies for
      the
      Executive under such plans, practices, policies and programs as in effect at
      any
      time during the 120-day period immediately preceding the Effective Date or,
      if
      more favorable to the Executive, those provided generally at any time after
      the
      Effective Date to other peer executives of the Company and the affiliated
      companies.

     

    (4) Welfare
      Benefit Plans.
      During
      the Change of Control Period, the Executive and/or the Executive’s family, as
      the case may be, shall be eligible for participation in and shall receive all
      benefits under welfare benefit plans, practices, policies and programs provided
      by the Company and the affiliated companies (including, without limitation,
      medical, prescription, dental, disability, employee life, group life, accidental
      death and travel accident insurance plans and programs) to the extent applicable
      generally to other peer executives of the Company and the affiliated companies,
      but in no event shall such plans, practices, policies and programs provide
      the
      Executive with benefits that are less favorable, in the aggregate, than the
      most
      favorable of such plans, practices, policies and programs in effect for the
      Executive at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive, those provided generally
      at any time after the Effective Date to other peer executives of the Company
      and
      the affiliated companies.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (5) Expenses.
      During
      the Change of Control Period, the Executive shall be entitled to receive prompt
      reimbursement for all reasonable expenses incurred by the Executive in
      accordance with the most favorable policies, practices and procedures of the
      Company and the affiliated companies in effect for the Executive at any time
      during the 120-day period immediately preceding the Effective Date or, if more
      favorable to the Executive, as in effect generally at any time thereafter with
      respect to other peer executives of the Company and the affiliated
      companies.

     

    (6) Fringe
      Benefits.
      During
      the Change of Control Period, the Executive shall be entitled to fringe
      benefits, including, without limitation, tax and financial planning services,
      payment of club dues, and, if applicable, use of an automobile, and payment
      of
      related expenses, in accordance with the most favorable plans, practices,
      programs and policies of the Company and the affiliated companies in effect
      for
      the Executive at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive, as in effect generally
      at
      any time thereafter with respect to other peer executives of the Company and
      the
      affiliated companies.

     

    (7) Office
      and Support Staff.
      During
      the Change of Control Period, the Executive shall be entitled to an office
      or
      offices of a size and with furnishings and other appointments, and to exclusive
      personal secretarial and other assistance, at least equal to the most favorable
      of the foregoing provided to the Executive by the Company and the affiliated
      companies at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive, as provided generally
      at
      any time thereafter with respect to other peer executives of the Company and
      the
      affiliated companies.

     

    (8) Vacation.
      During
      the Change of Control Period, the Executive shall be entitled to paid vacation
      in accordance with the most favorable plans, policies, programs and practices
      of
      the Company and the affiliated companies as in effect for the Executive at
      any
      time during the 120-day period immediately preceding the Effective Date or,
      if
      more favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and the affiliated
      companies.

     

    Section
      4. Termination
      of Employment. (a) Death
      or Disability.
      The
      Executive’s employment shall terminate automatically if the Executive dies
      during the Change of Control Period. If the Company determines in good faith
      that the Disability (as defined herein) of the Executive has occurred during
      the
      Change of Control Period (pursuant to the definition of “Disability”), it may
      give to the Executive written notice in accordance with Section 11(b) of its
      intention to terminate the Executive’s employment. In such event, the
      Executive’s employment with the Company shall terminate effective on the 30th
      day after receipt of such notice by the Executive (the “Disability
      Effective Date”),
      provided
      that,
      within the 30 days after such receipt, the Executive shall not have returned
      to
      full-time performance of the Executive’s duties. “Disability”
means
      the absence of the Executive from the Executive’s duties with the Company on a
      full-time basis for 180 consecutive business days as a result of incapacity
      due
      to mental or physical illness that is determined to be total and permanent
      by a
      physician selected by the Company or its insurers and acceptable to the
      Executive or the Executive’s legal representative.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (b) Cause.
      The
      Company may terminate the Executive’s employment during the Change of Control
      Period for Cause. “Cause”
      means:

     

    (A) the
      willful and continued failure of the Executive to perform substantially the
      Executive’s duties with the Company or any affiliated company (other than any
      such failure resulting from incapacity due to physical or mental illness),
      after
      a written demand for substantial performance is delivered to the Executive
      by
      the Board or the Chief Executive Officer of the Company that specifically
      identifies the manner in which the Board or the Chief Executive Officer of
      the
      Company believes that the Executive has not substantially performed the
      Executive’s duties, or

     

    (B) the
      willful engaging by the Executive in illegal conduct or gross misconduct that
      is
      materially and demonstrably injurious to the Company.

     

    For
      purposes of this Section 4(b), no act, or failure to act, on the part of the
      Executive shall be considered “willful” unless it is done, or omitted to be
      done, by the Executive in bad faith or without reasonable belief that the
      Executive’s action or omission was in the best interests of the Company. Any
      act, or failure to act, based upon authority given pursuant to a resolution
      duly
      adopted by the Board or upon the instructions of the Chief Executive Officer
      of
      the Company or a senior officer of the Company or based upon the advice of
      counsel for the Company shall be conclusively presumed to be done, or omitted
      to
      be done, by the Executive in good faith and in the best interests of the
      Company. The cessation of employment of the Executive shall not be deemed to
      be
      for Cause unless and until there shall have been delivered to the Executive
      a
      copy of a resolution duly adopted by the affirmative vote of not less than
      three-quarters of the entire membership of the Board at a meeting of the Board
      called and held for such purpose (after reasonable notice is provided to the
      Executive and the Executive is given an opportunity, together with counsel
      for
      the Executive, to be heard before the Board), finding that, in the good faith
      opinion of the Board, the Executive is guilty of the conduct described in
      Section 4(b)(1) or 4(b)(2), and specifying the particulars thereof in
      detail.

     

    (c) Good
      Reason.
      The
      Executive’s employment may be terminated by the Executive for Good Reason.
“Good
      Reason”
means
      in the absence of a written consent by the Executive:

     

    (A) the
      assignment to the Executive of any duties inconsistent in any respect with
      the
      Executive’s position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      3(a), or any other action by the Company that results in a diminution in such
      position, authority, duties or responsibilities, excluding for this purpose
      an
      isolated, insubstantial and inadvertent action not taken in bad faith and that
      is remedied by the Company promptly after receipt of notice thereof given by
      the
      Executive;

     

    (B) any
      failure by the Company to comply with any of the provisions of Section 3(b),
      other than an isolated, insubstantial and inadvertent failure not occurring
      in
      bad faith and that is remedied by the Company promptly after receipt of notice
      thereof given by the Executive;

     

    
      
        
        

      

      
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    (C) the
      Company’s requiring the Executive to be based at any office or location other
      than as provided in Section 3(a)(1)(B) or the Company’s requiring the Executive
      to travel on Company business to a substantially greater extent than required
      immediately prior to the Effective Date;

     

    (D) any
      purported termination by the Company of the Executive’s employment otherwise
      than as expressly permitted by this Agreement; 

     

    (E) any
      failure by the Company to comply with and satisfy Section 10(c).

     

    For
      purposes of this Section 4(c), any good faith determination of Good Reason
      made
      by the Executive shall be conclusive. Anything in this Agreement to the contrary
      notwithstanding, a termination by the Executive for any reason during the 30-day
      period immediately following the first anniversary of a Change of Control shall
      be deemed to be a termination for Good Reason for all purposes of this
      Agreement.

     

    (d) Notice
      of Termination.
      Any
      termination by the Company for Cause, or by the Executive for Good Reason,
      shall
      be communicated by Notice of Termination to the other party hereto given in
      accordance with Section 11(b). “Notice
      of Termination”
means
      a
      written notice that (1) indicates the specific termination provision in this
      Agreement relied upon, (2) to the extent applicable, sets forth in reasonable
      detail the facts and circumstances claimed to provide a basis for termination
      of
      the Executive’s employment under the provision so indicated, and (3) if the Date
      of Termination (as defined herein) is other than the date of receipt of such
      notice, specifies the Date of Termination (which Date of Termination shall
      be
      not more than 30 days after the giving of such notice). The failure by the
      Executive or the Company to set forth in the Notice of Termination any fact
      or
      circumstance that contributes to a showing of Good Reason or Cause shall not
      waive any right of the Executive or the Company, respectively, hereunder or
      preclude the Executive or the Company, respectively, from asserting such fact
      or
      circumstance in enforcing the Executive’s or the Company’s respective rights
      hereunder.

     

    (e) Date
      of Termination.
      “Date
      of Termination”
means
      (1) if the Executive’s employment is terminated by the Company for Cause, or by
      the Executive for Good Reason, the date of receipt of the Notice of Termination
      or any later date specified in the Notice of Termination, as the case may be,
      (2) if the Executive’s employment is terminated by the Company other than for
      Cause or Disability, the Date of Termination shall be the date on which the
      Company notifies the Executive of such termination, and (3) if the Executive’s
      employment is terminated by reason of death or Disability, the Date of
      Termination shall be the date of death of the Executive or the Disability
      Effective Date, as the case may be.

     

    Section
      5. Obligations
      of the Company upon Termination.
      (a) Good
      Reason; Other Than for Cause, Death or Disability.
      If,
      during the Change of Control Period, the Company terminates the Executive’s
      employment other than for Cause or Disability or the Executive terminates
      employment for Good Reason:

     

    (A) the
      Company shall pay to the Executive, in a lump sum in cash within 30 days after
      the Date of Termination, the aggregate of the following amounts:

     

    the
      sum
      of (i) the Executive’s Annual Base Salary through the Date of Termination to the
      extent not theretofore paid, (ii) the product of (x) the higher of (I) the
      Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any
      bonus or portion thereof that has been earned but deferred (and annualized
      for
      any fiscal year consisting of less than 12 full months or during which the
      Executive was employed for less than 12 full months), for the most recently
      completed fiscal year during the Change of Control Period, if any (such
      higher amount, the “Highest
      Annual Bonus”)
      and
      (y) a fraction, the numerator of which is the number of days in the current
      fiscal year through the Date of Termination and the denominator of which is
      365,
      and (iii) any compensation previously deferred by the Executive (together with
      any accrued interest or earnings thereon) and any accrued vacation pay, in
      each
      case, to the extent not theretofore paid (the sum of the amounts described
      in
      subclauses (i), (ii) and (iii), the “Accrued
      Obligations”);
      and

     

    
      
        
        

      

      
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    the
      amount equal to the product of (i) three and (ii) the sum of (x) the Executive’s
      Annual Base Salary and (y) the Highest Annual Bonus; and

     

    in
      lieu
      of the receipt of shares of common stock of the Company ("Common
      Stock")
      issuable upon the exercise of outstanding options (other than stock options
      qualifying as incentive stock options ("ISOs")
      under
      Section 422A of the Internal Revenue Code of 1986, as amended (the "Code")
      which
      ISOs were granted on or prior to April 29, 1996) ("Options"),
      stock
      appreciation rights ("SARs")
      and
      performance units (“Units”),
      if
      any (the Options, SARs and Units shall be referred to herein collectively as
      the
“Awards”),
      granted to the Executive under the Company's 1996 Stock Incentive Plan or any
      successor or substitute plans thereto, or otherwise not under any such plan,
      an
      amount equal to the product of (i) the excess of (x) in the case of an ISO
      granted after April 29, 1996, the closing price of Common Stock as reported
      on
      the New York Stock Exchange on the Date of Termination or the last full trading
      day immediately prior to the Date of Termination (or, if not listed on such
      exchange, on a nationally recognized exchange or quotation system on which
      trading value in the Common Stock is highest) (the “Closing
      Price”)
      and,
      in the case of all other Awards, the higher of the Closing Price and the highest
      per share price for Common Stock actually paid in connection with any Change
      of
      Control, over (y) the per share exercise price (if any) of each Award, and
      (2)
      the number of shares of Common Stock covered by each such Award, whether or
      not
      such Award is exercisable on the Date of Termination; and

     

    (B) for
      three
      years after the Executive’s Date of Termination, or such longer period as may be
      provided by the terms of the appropriate plan, program, practice or policy,
      the
      Company shall continue benefits to the Executive and/or the Executive’s family
      at least equal to those that would have been provided to them in accordance
      with
      the plans, programs, practices and policies described in Section 3(b)(4) if
      the
      Executive’s employment had not been terminated or, if more favorable to the
      Executive, as in effect generally at any time thereafter with respect to other
      peer executives of the Company and the affiliated companies and their families,
      provided,
      however,
      that,
      if the Executive becomes reemployed with another employer and is eligible to
      receive medical or other welfare benefits under another employer provided plan,
      the medical and other welfare benefits described herein shall be secondary
      to
      those provided under such other plan during such applicable period of
      eligibility. If the Executive has attained age 50 on the Date of Termination
      and
      if, with five additional years of age and service beyond the Executive’s age and
      years of service as of the Date of Termination,
      the Executive would have been entitled to receive any other benefits under
      the
      Company's post-retirement programs as in effect immediately prior to the
      Effective Date, then the Executive shall be entitled to such benefits as if
      the
      Executive had attained those five additional years of age and been employed
      by
      the Company for those five additional years of service, as of the Date of
      Termination, and such benefits shall commence immediately and be determined
      and
      provided under the terms of such plans as in effect immediately prior to the
      Effective Date, without regard to any amendments subsequent to the Effective
      Date that adversely affect the rights of participants thereunder;
      and

     

    
      
        
        

      

      
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    (C) if
      the
      Executive has attained age 50 but has not attained age 55 on the Date of
      Termination, then for purposes of determining benefits under Section 3.2(c)
      of
      the Company's Supplementary Retirement Plan or any successor plan, as in effect
      immediately prior to the Effective Date (the “Supplemental
      Plan”),
      the
      Executive shall be deemed to be entitled to the benefits under Section 3.2(c)
      of
      the Supplemental Plan if, during the five-year period following the Effective
      Date, the Company terminates the Executive’s employment other than for Cause or
      the Executive terminates his employment for Good Reason (it being expressly
      agreed that, notwithstanding anything to the contrary contained herein, the
      rights under this Section 5(a)(3) shall survive for the five-year period
      following the Effective Date); and

     

    (D) Notwithstanding
      any provision in any equity or equity-based grant agreement or any other
      agreement or plan covering the Executive, all of the non-competition
      restrictions imposed on the Executive under such equity or equity-based grant
      agreement shall cease to apply for all purposes of such equity or equity-based
      grant agreement, including but not limited to all options, stock appreciation
      rights, and performance units granted to the Executive at any time;

     

    (E) the
      Company shall, at its sole expense as incurred, and subject to a maximum limit
      equal to three (3) times the Executive’s monthly compensation, provide the
      Executive with outplacement services the scope and provider of which shall
      be
      selected by the Executive in the Executive’s sole discretion; and

     

    (F) to
      the
      extent not theretofore paid or provided, the Company shall timely pay or provide
      to the Executive any other amounts or benefits required to be paid or provided
      or that the Executive is eligible to receive under any plan, program, policy
      or
      practice or contract or agreement of the Company and the affiliated companies
      (such other amounts and benefits, the “Other
      Benefits”).

     

    (b) Death.
      If the
      Executive’s employment is terminated by reason of the Executive’s death during
      the Change of Control Period, this Agreement shall terminate without further
      obligations to the Executive’s legal representatives under this Agreement, other
      than for payment of Accrued Obligations and the timely payment or provision
      of
      the Other Benefits. The Accrued Obligations shall be paid to the Executive’s
      estate or beneficiary, as applicable, in a lump sum in cash within 30 days
      of
      the Date of Termination. With respect to the provision of the Other Benefits,
      the term “Other Benefits” as utilized in this Section 5(b) shall include,
      without limitation, and the Executive’s estate and/or beneficiaries shall be
      entitled to receive, benefits at least equal to the most favorable benefits
      provided by the Company and the affiliated companies to the estates and
      beneficiaries of peer executives of the Company and the affiliated companies
      under such plans, programs, practices and policies relating to death benefits,
      if any, as in effect with respect to other peer executives and their
      beneficiaries at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive’s estate and/or the
      Executive’s beneficiaries, as in effect on the date of the Executive’s death
      with respect to other peer executives of the Company and the affiliated
      companies and their beneficiaries.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c) Disability.
      If
      the
      Executive’s employment is terminated by reason of the Executive’s Disability
      during the Change of Control Period, this Agreement shall terminate without
      further obligations to the Executive, other than for payment of Accrued
      Obligations and the timely payment or provision of the Other Benefits. The
      Accrued Obligations shall be paid to the Executive in a lump sum in cash within
      30 days of the Date of Termination. With respect to the provision of the Other
      Benefits, the term “Other Benefits” as utilized in this Section 5(c) shall
      include, and the Executive shall be entitled after the Disability Effective
      Date
      to receive, disability and other benefits at least equal to the most favorable
      of those generally provided by the Company and the affiliated companies to
      disabled executives and/or their families in accordance with such plans,
      programs, practices and policies relating to disability, if any, as in effect
      generally with respect to other peer executives and their families at any time
      during the 120-day period immediately preceding the Effective Date or, if more
      favorable to the Executive and/or the Executive’s family, as in effect at any
      time thereafter generally with respect to other peer executives of the Company
      and the affiliated companies and their families.

     

    (d) Cause;
      Other Than for Good Reason.
      If
      the
      Executive’s employment is terminated for Cause during the Change of Control
      Period, this Agreement shall terminate without further obligations to the
      Executive other than the obligation to pay to the Executive (1) the Executive’s
      Annual Base Salary through the Date of Termination, (2) the amount of any
      compensation previously deferred by the Executive, and (3) the Other Benefits,
      in each case, to the extent theretofore unpaid. If the Executive voluntarily
      terminates employment during the Change of Control Period, excluding a
      termination for Good Reason, this Agreement shall terminate without further
      obligations to the Executive, other than for the Accrued Obligations and the
      timely payment or provision of the Other Benefits. In such case, all the Accrued
      Obligations shall be paid to the Executive in a lump sum in cash within 30
      days
      of the Date of Termination.

     

    (e) Obligations
      of the Company and the Executive upon a Potential Change of
      Control.
      If,
      prior
      to the Change of Control Period, a Potential Change of Control occurs, the
      Executive hereby agrees to remain in the employ of the Company, on the same
      basis and terms and conditions as the Executive is employed by the Company
      immediately prior to the Potential Change of Control, for the 12-month period
      following such Potential Change of Control. If the Executive’s employment is
      terminated by the Company other than for Cause, death or Disability,
      or
      the
      Executive terminates his employment for Good Reason, during the 12-month period
      following the occurrence of a Potential Change of Control, without regard to
      whether a Change of Control has actually occurred or is likely to occur, the
      Executive’s employment shall be deemed to have been terminated by the Company in
      anticipation of a Change of Control, and the Executive shall be entitled to
      receive the payments and benefits provided in Section 5(a) hereof.

     

    Section
      6. Non-exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit the Executive’s continuing or future
      participation in any plan, program, policy or practice provided by the Company
      or the affiliated companies and for which the Executive may qualify, nor,
      subject to Section 11(f), shall anything herein limit or otherwise affect such
      rights as the Executive may have under any contract or agreement with the
      Company or the affiliated companies. Amounts that are vested benefits or that
      the Executive is otherwise entitled to receive under any plan, policy, practice
      or program of or any contract or agreement with the Company or the affiliated
      companies at or subsequent to the Date of Termination shall be payable in
      accordance with such plan, policy, practice or program or contract or agreement,
      except as explicitly modified by this Agreement.

     

    
      
        
        

      

      
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    Section
      7. Full
      Settlement.
      The
      Company’s obligation to make the payments provided for in this Agreement and
      otherwise to perform its obligations hereunder shall not be affected by any
      set-off, counterclaim, recoupment, defense, or other claim, right or action
      that
      the Company may have against the Executive or others. In no event shall the
      Executive be obligated to seek other employment or take any other action by
      way
      of mitigation of the amounts payable to the Executive under any of the
      provisions of this Agreement, and such amounts shall not be reduced whether
      or
      not the Executive obtains other employment. The Company agrees to pay as
      incurred, to the full extent permitted by law, all legal fees and expenses
      that
      the Executive may reasonably incur as a result of any contest (regardless of
      the
      outcome thereof) by the Company, the Executive or others of the validity or
      enforceability of, or liability under, any provision of this Agreement or any
      guarantee of performance thereof (including as a result of any contest by the
      Executive about the amount of any payment pursuant to this Agreement), plus,
      in
      each case, interest on any delayed payment at the applicable federal rate
      provided for in Section 7872(f)(2)(A) of the Code.

     

    Section
      8. Certain
      Additional Payments by the Company.

     

    (a) Anything
      in this Agreement to the contrary notwithstanding and except as set forth below,
      in the event it shall be determined that any payment or distribution by the
      Company or the affiliated companies to or for the benefit of the Executive
      (whether paid or payable or distributed or distributable pursuant to the terms
      of this Agreement or otherwise but determined without regard to any additional
      payments required under this Section 8) (the “Payment”)
      would
      be subject to the excise tax imposed by Section 4999 of the Code, or any
      interest or penalties are incurred by the Executive with respect to such excise
      tax (such excise tax, together with any such interest and penalties,
      collectively, the “Excise
      Tax”),
      then
      the Executive shall be entitled to receive an additional payment (the
“Gross-Up
      Payment”)
      in an
      amount such that after payment by the Executive of all taxes (including any
      interest or penalties imposed with respect to such taxes), including, without
      limitation, any income taxes (and any interest and penalties imposed with
      respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
      retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
      the Payments. Notwithstanding the foregoing provisions of this Section 8(a),
      if
      it shall be determined that the Executive is entitled to the Gross-Up Payment,
      but that the Payments do not exceed 110% of the greatest amount that could
      be
      paid to the Executive such that the receipt of the Payments would not give
      rise
      to any Excise Tax (the “Reduced
      Amount”),
      then
      no Gross-Up Payment shall be made to the Executive and the Payments, in the
      aggregate, shall be reduced to the Reduced Amount.

     

    (b) Subject
      to the provisions of Section 8(c), all determinations required to be made
      under this Section 8, including whether and when a Gross-Up Payment is required
      and the amount of such Gross-Up Payment and the assumptions to be utilized
      in
      arriving at such determination, shall be made by Deloitte & Touche LLP or
      such other certified public accounting firm as may be designated by the
      Executive (the “Accounting
      Firm”)
      that
      shall provide detailed supporting calculations both to the Company and the
      Executive within 15 business days of the receipt of notice from the Executive
      that there has been a Payment or such earlier time as is requested by the
      Company. In the event that the Accounting Firm is serving as accountant or
      auditor for the individual, entity or group effecting the Change of Control,
      is
      not able to make the determinations required hereunder for any reason, or the
      Company determines that the Accounting Firm is precluded from performing such
      services under applicable independence standards or otherwise, the Executive
      shall appoint another nationally recognized accounting firm to make the
      determinations required hereunder (which accounting firm shall then be referred
      to as the Accounting Firm hereunder). All fees and expenses of the Accounting
      Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
      pursuant to this Section 8, shall be paid by the Company to the Executive within
      five days of the receipt of the Accounting Firm’s determination. Any
      determination by the Accounting Firm shall be binding upon the Company and
      the
      Executive. As a result of the uncertainty in the application of Section 4999
      of
      the Code at the time of the initial determination by the Accounting Firm
      hereunder or as a result of a permitted or required redetermination of the
      Excise Tax, it is possible that Gross-Up Payments that will not have been made
      by the Company should have been made (the “Underpayment”)
      or
      that Gross-Up Payments that were initially made by the Company exceeded the
      amount necessary to reimburse the Executive as contemplated in the first
      sentence of Section 8(a) or were not due pursuant to the application of the
      last
      sentence of Section 8(a) (“Overpayment”).
      In
      the event the Company exhausts its remedies pursuant to Section 8(c) and the
      Executive thereafter is required to make a payment of any Excise Tax, the
      Accounting Firm shall determine the amount of the Underpayment that has occurred
      and any such Underpayment shall be promptly paid by the Company to or for the
      benefit of the Executive. The Accounting Firm shall determine the amount of
      any
      Overpayment that has been made and whether any permitted redetermination of
      the
      Excise Tax would result in an Overpayment and such Overpayment shall be promptly
      paid to the Company by the Executive to the extent he is entitled to a refund
      on
      account of such Overpayment (together with interest at the rate provided in
      Section 1274(b)(2) of the Code from the date of such entitlement). It is the
      intent of this provision that the Gross-Up Payment reflect the Excise Tax
      liability, if any, actually incurred by the Executive in the opinion of the
      Accounting Firm.

     

    
      
        
        

      

      
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    (c) The
      Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service that, if successful, would require the payment by the Company
      of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than 10 business days after the Executive is informed in writing
      of
      such claim and shall apprise the Company of the nature of such claim and the
      date on which such claim is requested to be paid. The Executive shall not pay
      such claim prior to the expiration of the 30-day period following the date
      on
      which the Executive gives such notice to the Company (or such shorter period
      ending on the date that any payment of taxes with respect to such claim is
      due).
      If the Company notifies the Executive in writing prior to the expiration of
      such
      period that the Company desires to contest such claim, the Executive
      shall:

     

    (A) give
      the
      Company any information reasonably requested by the Company relating to such
      claim,

     

    (B) take
      such
      action in connection with contesting such claim as the Company shall reasonably
      request in writing from time to time, including, without limitation, accepting
      legal representation with respect to such claim by an attorney reasonably
      selected by the Company,

     

    (C) cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

     

    (D) permit
      the Company to participate in any proceedings relating to such
      claim;

     

    
      
        
        

      

      
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    provided,
      however,
      that
      the Company shall bear and pay directly all costs and expenses (including
      additional interest and penalties) incurred in connection with such contest,
      and
      shall indemnify and hold the Executive harmless, on an after-tax basis, for
      any
      Excise Tax or income tax (including interest and penalties with respect thereto)
      imposed as a result of such representation and payment of costs and expenses.
      Without limitation on the foregoing provisions of this Section 8(c), the Company
      shall control all proceedings taken in connection with such contest, and, at
      its
      sole option, may pursue or forgo any and all administrative appeals,
      proceedings, hearings and conferences with the applicable taxing authority
      in
      respect of such claim and may, at its sole option, either direct the Executive
      to pay the tax claimed and sue for a refund or contest the claim in any
      permissible manner, and the Executive agrees to prosecute such contest to a
      determination before any administrative tribunal, in a court of initial
      jurisdiction and in one or more appellate courts, as the Company shall
      determine; provided,
      however,
      that,
      if the Company directs the Executive to pay such claim and sue for a refund,
      the
      Company shall advance the amount of such payment to the Executive, on an
      interest-free basis, and shall indemnify and hold the Executive harmless, on
      an
      after-tax basis, from any Excise Tax or income tax (including interest or
      penalties with respect thereto) imposed with respect to such advance or with
      respect to any imputed income with respect to such advance; and provided,
      further,
      that
      any extension of the statute of limitations relating to payment of taxes for
      the
      taxable year of the Executive with respect to which such contested amount is
      claimed to be due is limited solely to such contested amount. Furthermore,
      the
      Company’s control of the contest shall be limited to issues with respect to
      which the Gross-Up Payment would be payable hereunder, and the Executive shall
      be entitled to settle or contest, as the case may be, any other issue raised
      by
      the Internal Revenue Service or any other taxing authority.

     

    (d) If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 8(c), the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall (subject to the Company’s complying
      with the requirements of Section 8(c)) promptly pay to the Company the
      amount of such refund (together with any interest paid or credited thereon
      after
      taxes applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 8(c), a determination is made that
      the Executive shall not be entitled to any refund with respect to such claim
      and
      the Company does not notify the Executive in writing of its intent to contest
      such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

     

    Section
      9. Confidential
      Information.
      The
      Executive shall hold in a fiduciary capacity for the benefit of the Company
      all
      secret or confidential information, knowledge or data relating to the Company
      or
      the affiliated companies, and their respective businesses, which information,
      knowledge or data shall have been obtained by the Executive during the
      Executive’s employment by the Company or the affiliated companies and which
      information, knowledge or data shall not be or become public knowledge (other
      than by acts by the Executive or representatives of the Executive in violation
      of this Agreement). After termination of the Executive’s employment with the
      Company, the Executive shall not, without the prior written consent of the
      Company or as may otherwise be required by law or legal process, communicate
      or
      divulge any such information, knowledge or data to anyone other than the Company
      and those persons designated by the Company. In no event shall an asserted
      violation of the provisions of this Section 9 constitute a basis for deferring
      or withholding any amounts otherwise payable to the Executive under this
      Agreement.

     

    
      
        
        

      

      
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    Section
      10. Successors. (a)
      This
      Agreement is personal to the Executive, and, without the prior written consent
      of the Company, shall not be assignable by the Executive other than by will
      or
      the laws of descent and distribution. This Agreement shall inure to the benefit
      of and be enforceable by the Executive’s legal representatives.

     

    (b) This
      Agreement shall inure to the benefit of and be binding upon the Company and
      its
      successors and assigns.

     

    (c) The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to assume expressly and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. “Company”
means
      the Company as hereinbefore defined and any successor to its business and/or
      assets as aforesaid that assumes and agrees to perform this Agreement by
      operation of law or otherwise.

     

    Section
      11. Miscellaneous. (a)
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware, without reference to principles of conflict of laws. The
      captions of this Agreement are not part of the provisions hereof and shall
      have
      no force or effect. This Agreement may not be amended or modified other than
      by
      a written agreement executed by the parties hereto or their respective
      successors and legal representatives.

     

    (b) All
      notices and other communications hereunder shall be in writing and shall be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed as follows:

     

    if
      to the
      Executive:

    to
      the
      address then on file with the Company’s payroll department

     

    if
      to the
      Company:

    Collective
      Brands, Inc.

    3231
      SE
      Sixth Avenue

    Topeka,
      Kansas 66607

    Attention:
      General Counsel

     

    or
      to
      such other address as either party shall have furnished to the other in writing
      in accordance herewith. Notice and communications shall be effective when
      actually received by the addressee.

     

    (c) The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

     

    (d) The
      Company may withhold from any amounts payable under this Agreement such United
      States federal, state or local or foreign taxes as shall be required to be
      withheld pursuant to any applicable law or regulation.

     

    (e) The
      Executive’s or the Company’s failure to insist upon strict compliance with any
      provision of this Agreement or the failure to assert any right the Executive
      or
      the Company may have hereunder, including, without limitation, the right of
      the
      Executive to terminate employment for Good Reason pursuant to Sections 4(c)(1)
      through 4(c)(5), shall not be deemed to be a waiver of such provision or right
      or any other provision or right of this Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    (f) If
      the
      Company determines that the Executive is a “key employee” within the meaning of
      Section 409A of the Internal Revenue Code and that, as a result of
      such status, any portion of the payments under this Agreement (without
      regard to any other plan of deferred compensation) would be subject to
      additional or accelerated taxation, the Company will delay paying such portion
      of the payment until the earliest permissible date on which payments may
      commence without triggering such additional taxation (with such delay not to
      exceed six months), with the first such payment to include the amounts that
      would have been paid earlier but for the above delay plus simple interest on
      any
      unpaid amounts equal to 6-month LIBOR on the date of termination of employment
      plus 450 basis points.

     

    (g) From
      and
      after the Effective Date or the date that a Potential Change of Control occurs,
      and except as expressly set forth herein, this Agreement shall supersede any
      other agreement between the parties with respect to the subject matter hereof,
      including the Employment Agreement, dated as of September 4, 2007 (the
“Employment
      Agreement”);
      provided,
      however,
      in no
      event shall this Agreement supersede or replace the Indemnification Agreement
      between the Executive and the Company, dated as of September 4, 2007, as from
      time to time amended prior to the Effective Date; and provided
      further
      that, to
      the extent not inconsistent with any provision hereof, the following provisions
      of the Employment Agreement shall remain in effect during the Change of Control
      Period: Paragraphs 3 (relating to non-competition), and 8(a) (relating to
      certain remedies that the Company and the Executive shall have).

     

    IN
      WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
      pursuant to the authorization from the Board, the Company has caused these
      presents to be executed in its name on its behalf, all as of the day and year
      first above written.

     

     

    
      	 	 	 
	 	
            
	 
 	 
 	 
 
	
            	
            	/s/ Douglas
              J. Treff
	 	
              

            
	 	Douglas
              J. Treff

    

     

    
      	 	 	 
	 	
              Collective
                Brands, Inc.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Jay
              A.
              Lentz
	 	
              

            
	 	
              Name: Jay
                A. Lentz

              Title: Senior
                Vice President - Human Resources

            

    

     

     

    
      
        
        

      

      
        15

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