Document:

exv10w1

 

Exhibit 10.1

PERFORMANCE UNIT AGREEMENT

THIS AWARD AGREEMENT (the “Agreement”) is made and entered into as of June 4, 2007 (the “Date of
Grant”), by and between Payless ShoeSource, Inc. (“Company”), and                                                             
(“Executive”). Where the term “Company” is used herein, in describing Executive’s obligations,
such obligations extend to any parent or subsidiary of the Company.

AGREEMENT

	1.	 	Grant of Award. The Company grants to Executive                                         
performance share units, to be settled in Stock (“Performance Share Unit Award”),
subject to the terms, conditions, and adjustments set forth in this Agreement and the Payless
ShoeSource, Inc. 2006 Stock Incentive Plan (the “2006 Plan”). Except as otherwise provided
herein, or unless the context clearly indicates otherwise, capitalized terms herein which are
defined in the 2006 Plan have the same definitions as provided in the 2006 Plan. If anything
stated herein conflicts with the terms of the 2006 Plan document, the 2006 Plan document
governs.

	2.	 	Performance Period & Vesting Date. The performance period for this Performance Share
Unit Award is June 4, 2007 through May 31, 2010 (“Performance Period”). Subject to the terms
of this Agreement, if the following stock appreciation performance metrics are attained, the
Performance Share Unit Award will cliff vest on May 31, 2010 (the “Vesting Date”).
Notwithstanding the above, the Committee reserves the right to cancel all or part of this
Performance Share Unit Award, at the Committee’s absolute discretion, based on relevant facts
and circumstances. At the end of the Performance Period, the Performance Share Unit Award
will vest based upon the greatest Stock Price Appreciation achieved during the Performance
Period.

	 	 	 
	Stock Appreciation	 	 
	Performance Metrics	 	 
	 
	•    If Stock
Price Appreciation
is less than 25%
for an
“Appreciation
Period”

	 	Performance Share Unit Award will not vest
	 
	 	 
	•    If Stock
Price Appreciation
is equal to or
greater than 25%
and less than 50%
for an Appreciation
Period

	 	Performance Share Unit Award will be settled in .5 shares
of Stock for each performance unit
granted
	 
	 	 
	•    If Stock
Price Appreciation
is equal to or
greater than 50%
and less than 75%
for an Appreciation
Period

	 	Performance Share Unit Award will be settled in
1 share of Stock for each performance unit
granted

 

 

	 	 	 
	Stock Appreciation	 	 
	Performance Metrics	 	 
	 
	•    If Stock
Price Appreciation
is equal to or
greater than 75%
and less than 100%
for an Appreciation
Period

	 	Performance Share Unit Award will be settled in
1.25 shares of Stock for each performance unit
granted
	 
	 	 
	•    If Stock
Price Appreciation
is greater than
100% for an
Appreciation Period

	 	Performance Share Unit Award will be settled in
1.5 shares of Stock for each performance unit
granted

Stock Price Appreciation means relative to the closing Stock price on the Date of Grant, the price
for one share of Stock must appreciate by the required percentage(s) listed above and must be
maintained for any 20 consecutive trading days during the Performance Period in order for the
Performance Share Unit Award to vest. This 20 consecutive trading day period during the
Performance Period is referenced herein as the “Appreciation Period”. For example, if the Stock
price on the Date of Grant is $30, a Stock Price Appreciation of greater than $37.50 which is
maintained for 20 consecutive days during the Performance Period will result in a Performance Share
Unit Award of .5 shares of Stock for each performance share unit granted which vests at the end of
the Performance Period. .

	3.	 	Payment.

If the Stock Price Appreciation requirements are satisfied and the Performance Share Unit
Award vests, as soon as practicable after the end of the Performance Period, the Company
shall pay to Executive the due payment, settled in Stock, as determined by the Stock
Appreciation Performance Metrics above.

	4.	 	Termination of Agreement.

(a) Except as provided in subsections (b) and (c), this Agreement will terminate and be of no
further force or effect and all unvested Performance Units shall immediately be forfeited on
the date that Executive is no longer employed by the Company or any of its subsidiaries.

(b) Notwithstanding subsection (a), if during the Performance Period but prior to vesting,
(i) Executive ceases to be an employee of the Company by reason of Disability or death, (ii)
Executive has been in continuous employment of the Company from the Date of Grant through the
date of such event, and (iii) such Disability or death occurs more than one year after the
Date of Grant, then a prorated portion of the Performance Share Unit Award will be paid at
the end of the Performance Period to the beneficiary of the Executive in the case of death,
or to the Executive in the case of Disability. As used herein, “Disability” means a
permanent and total disability which enables the Executive to be eligible for and receive a
disability benefit under the Federal Social Security Act. Further, if Executive Retires
during the Performance Period but prior to vesting, Executive will be eligible for a prorated
portion of the Performance Share Unit Award at the end of

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the Performance Period. In the case of an Executive who dies, becomes Disabled or Retires,
the number of shares settled under the Performance Share Unit Award will be based upon the
number of months (rounded up or down to the nearest whole month) divided by 36 multiplied by
the number of shares that would be paid out if Executive were actively employed through and
on the last day of the Performance Period.

(c) For purposes of this Section 4(b), the Executive’s employment shall not be deemed to have
ceased solely by reason of a leave of absence (i) during the first 90 consecutive days of
paid military, sick, family or other bona fide paid leave of absence, or (ii) thereafter, if
Executive has a right of reemployment expressly guaranteed by either statute or contract.

(d) Notwithstanding any other provision of this Agreement to the contrary:

	 	(i)	 	The Committee has the absolute right to cancel all unvested
Performance Units hereunder at any time if the Executive’s Retirement was
without the Company’s consent or if, during the Executive’s period of
Retirement or Disability, the Executive engages in employment or activities
that, in the sole opinion of the Committee, are contrary to the best interests
of the Company.
	 
	 	(ii)	 	The Committee has the absolute right to cancel all unvested
Performance Units, and rescind any vested Performance Unit, if within the later
of (x) the non-compete period specified in such Executive’s employment agreement
or (y) six months from the Vesting Date of the Performance Share Unit Award,

(1) the Executive divulges “Confidential Information” as described in
Section 5(m) of the 2006 Plan or

(2) upon the Company’s request and/or upon Executive’s termination of
employment (for any reason), Executive fails to return to the Company all
documents, records, notebooks, computer diskettes and tapes and anything
else containing the Company’s Confidential Information, including copies
thereof, as well as any other Company property, in Executive’s possession,
custody or control, including deleting from employee’s personal computer(s)
and other electronic storage medium any of the Company’s proprietary or
Confidential Information, or

(3) the Executive fails to (i) notify and provide the Company with the
details of any unauthorized possession, use or knowledge of any o f the
Company’s Confidential information as soon as Executive becomes aware of
such circumstance (ii) assist the Company in preventing any reoccurrence of
such possession, use or knowledge, or (iii) cooperate with the Company in
any litigation or other action to protect or retrieve the Company’s
Confidential Information, or

(4) (i) Executive fails to assign and transfer to the Company, the right,
title and interest in and to any and all inventions, discoveries,
improvements, innovations, and/or designs (the “Work Product”) conceived,
discovered, developed, acquired or secured by Executive, solely or jointly
with others

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or otherwise, together with all associated U.S. and foreign intellectual
property rights (i.e. patents, copyrights, trademarks or trade secrets) if
such Work product is related directly or indirectly to the Company’s
business or to the research or development work of the Company, or (ii) upon
discovery, development or acquisition of any Work Product, Executive fails
to notify the Company an/or fails to execute and deliver to the Company,
without further compensation, such documents prepared by the Company as may
be reasonable or necessary to prepare or prosecute applications of the Work
Product and to assign and transfer to the Company all of Executive’s right,
title and interest in and to such Work product and intellectual property
rights thereof.

Within 10 days after receiving notice that he Committee has rescinded an
Award, Executive must either (i) pay to the Company an amount equal to the
Fair Market Value of the Stock, as of the vesting date, for the Stock
received as compensation for the Award and/or (ii) return to the Company the
number of shares of Stock received upon vesting of the Award. This
paragraph 4 shall not apply to the Executive if the Executive is employed
by, or acting as an advisor to, a Competing Business, as defined by the
Executive’s employment agreement, solely in Executive’s capacity as an
attorney.

	5.	 	Administration. The Performance Share Unit Award shall be administered by the
Committee subject to all applicable provisions of this Agreement. The Committee is authorized
to construe and interpret this Agreement and to make all determinations and take all actions
necessary or advisable for the administration of the Performance Share Unit Award.

	6.	 	Change of Control.

In the event the Company experiences a Change of Control during the Performance Period but
before the Performance Share Unit Award vested, the Award will be calculated and paid in
cash based upon the Fair Market Value of the Stock at the time of the Change of Control and
prorated based upon the number of months, rounded up or down to the nearest whole month, the
Executive is actively employed during the start of the Performance Period to the date of the
Change of Control. A Change of Control has such meaning as defined in the 2006 Plan.

	7.	 	Tax Withholding. Payments received by the Executive pursuant to Sections 3 & 6 of
this Agreement will be subject to any and all federal, state, and local tax withholding that
in the opinion of the Company is required by law.

	8.	 	Offset. The Company may deduct from the amounts payable to the Executive under this
Agreement any amounts owed to the Company by the Executive. Whether or not the Company elects
to make any set-off in whole or in part, if the Company does not recover by means of set-off
the full amount owed by the Executive, then the Executive agrees to pay immediately the unpaid
balance to the Company.

	9.	 	Non-Transferability. Neither this Performance Share Unit Award nor any rights under
this Agreement may be assigned, transferred, or in any manner encumbered except by

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	 	 	will or the laws of descent and distribution, and any attempted assignment, transfer,
mortgage, pledge or encumbrance except as herein authorized, will be void and of no effect.

	10.	 	Governing Law. The law of the State of Delaware shall apply to all awards and
interpretations under this Agreement without regard to the application of such state’s
conflict of laws principles.

	11.	 	No Employment Contract. Nothing in this Agreement shall be deemed by implication or
otherwise to impose any limitation on any right of the Company to terminate the Executive’s
employment at any time, in the absence of a specific agreement to the contrary.

	12.	 	Plan Summary. Executive acknowledges that Executive has received a copy of the 2006
Plan and/or Plan Summary, as such Plan is in effect on the date of this Agreement, has read
and understands the terms of the 2006 Plan and of this Agreement, and agrees to all the terms
and conditions provided for in the 2006 Plan and this Agreement.

	13.	 	Amendment. This Agreement may not be amended, altered or modified, except by a
written instrument signed by both parties, or their respective successors, and then only with
Committee approval.

Payless ShoeSource, Inc. has caused this Agreement to be executed in its corporate name and
Executive has executed the same in evidence of the Executive’s acceptance hereof upon the terms and
conditions herein set forth effective as of the Date of Grant.

	 	 	 	 	 
	 	PAYLESS SHOESOURCE, INC.

 	 
	 	By:  	 	 
	 	 	Its:	

 	 
	 	

EXECUTIVE

 	 
	 	
 	 
	 

-5-exv10w2

 

Exhibit 10.2

PAYLESS SHOE SOURCE, INC.

2007 RESTRICTED STOCK AGREEMENT

     Pursuant to the terms and conditions of the Payless ShoeSource, Inc.
2006 Stock Incentive Plan (the “2006 Plan”), you have been granted the shares of
stock outlined below:

	 	 	 	 	 	 	 
	 

	 	Granted to:
	 	Matthew Rubel

	 
	 	 	 	 	 	 
	 

	 	Grant Date:
	 	June 4, 2007

	 
	 	 	 	 	 	 
	 

	 	Shares Granted:
	 	30,294 	 	 
	 
	 	 	 	 	 	 
	 

	 	Expiration Date:
	 	June 4, 2014

	 
	 	 	 	 	 	 
	 

	 	Vesting Schedule:
	 	Cliff vesting on May 31, 2010 (“Vesting Date”)

     Payless ShoeSource, Inc. has caused this Agreement, which includes the
Terms and Conditions contained on the following pages, to be executed in its
corporate name and Executive has executed the same in evidence of the
Executive’s acceptance hereof upon the terms and conditions herein set forth as
of the grant date shown above. By accepting this award, Executive agrees to
conform to all terms and conditions of this Agreement and the 2006 Plan.

Page 1 of 3 (RSTUS-CEO) 

 

TERMS AND CONDITIONS

The Committee under the 2006 Stock Incentive Plan (“2006 Plan”) of Payless
ShoeSource, Inc., a Delaware corporation, has approved granting Executive
restricted stock on the terms and subject to the conditions set forth in this
Agreement. Except as otherwise provided herein, or unless the context clearly
indicates otherwise, capitalized terms herein which are defined in the 2006 Plan
have the same definitions as provided in the 2006 Plan.

     Therefore, the Company and Executive hereby agree as follows:

1. The Company hereby grants to Executive, in the aggregate, the number of shares of the presently authorized common stock of the Company shown on the
first page of this agreement (“Restricted Stock”), which shall be subject to the
restrictions and conditions set forth in the 2006 Plan and in this Agreement.

2. The Company shall hold the certificates for the Restricted Stock in custody
until the restrictions thereon shall lapse, at which time the Company shall
deliver the certificates for such shares to Executive, less any required
withholding.

3. The restrictions on the Restricted Stock are that the shares (i) may not be
sold, assigned, conveyed, transferred, pledged, hypothecated or otherwise
disposed of, and (ii) shall be returned to the Company forthwith, and all of the
Executive’s rights to such shares shall immediately terminate without any
payment or consideration by the Company regardless of any notice period or
period of pay in lieu of such notice required under local statute or at common
law, on the earlier of (a) the date established by the Company on which your
employment with the Company terminates, or (b) the date your employment with the
Company terminates, if Executive’s continuous employment with the Company or any
Subsidiary shall terminate for any reason except for Executive’s death or
Disability, as provided in Section 7 .

4. Executive agrees that, subject to Section 5 of this Agreement, (a) no later
than the date(s) as of which the restrictions on the Restricted Stock shall
lapse with respect to all or any of the shares of Restricted Stock covered by
this Agreement, Executive shall pay to the Company (in cash or shares of Company
common stock whose Fair Market Value on the date the Restricted Stock vests is
equal to the amount of Executive’s tax withholding liability) or make other
arrangements satisfactory to the Committee regarding payment of any Federal,
state or local taxes of any kind required by law to be withheld with respect to
the shares of Restricted Stock for which the restrictions shall lapse; and (b)
the Company shall, to the extent permitted by law, have the right to deduct from
any payment of any kind otherwise due to Executive any Federal, state or local
taxes of any kind required by law to be withheld with respect to the shares of
Restricted Stock.

5. If Executive properly elects, within thirty (30) days of the Grant Date shown
above, to include in gross income for Federal income tax purposes an amount
equal to the fair market value of the shares of Restricted Stock granted on the
Grant Date, Executive shall pay to the Company, or make other arrangements
satisfactory to the Committee to pay to the Company in the year of such grant,
any Federal, state or local taxes required to be withheld with respect to such shares. If Executive fails to make such payments, the Company shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to Executive any Federal, state or local taxes of any kind
required by law to be withheld with respect to such shares.

6. The restrictions on the Restricted Stock shall lapse on the date(s) and with
respect to the corresponding number of shares shown on the previous page,
subject to all the other terms and conditions of this agreement.

7. Notwithstanding the foregoing, if (i) Executive ceases to be an employee of
the Company by reason of death or Disability prior to the Vesting Date and (ii)
Executive has been in the continuous employment of the Company from the Grant
Date shown above through the date of death or Disability and (iii)
such Disability or death occurs more than one year after the Grant Date,
then a prorated portion of the Restricted Stock will be paid on the Vesting Date
to the beneficiary of the Executive in the case of death, or to the Executive in
the case of Disability. As used herein, “Disability” means a permanent and
total disability which enables the Executive to be eligible for and receive a
disability benefit under the Federal Social Security Act. In the case
of an Executive who dies or becomes Disabled, the number of shares settled under
the Restricted Stock award will be based upon the number of months (rounded up
or down to the nearest whole month) divided by 36 multiplied by the number of shares that would be paid out if Executive were actively employed through and on
the Vesting Date.

Page 2 of 3 (RSTUS-CEO) 

 

8. Except as provided in Section 7, this Agreement will terminate and be of
no further force or effect and all unvested Restricted Stock shall immediately
be forfeited on the date that Executive is no longer employed by the Company or
any of its subsidiaries.

9. In the event the Company experiences a Change of Control prior to the Vesting
Date of the Restricted Stock, the Restricted Stock will be calculated and paid
in cash based upon the Fair Market Value of the Stock at the time of the Change
of Control and prorated based upon the number of months, rounded up or down to
the nearest whole month, the Executive is actively employed from the Grant Date
to the date of the Change of Control. A Change of Control has such meaning as
defined in the 2006 Plan.

10. Nothing in this Agreement shall be deemed by implication or otherwise to
impose any limitation on any right of the Company to terminate the Executive’s
employment at any time, in the absence of a specific agreement to the contrary.

11. If the Company determines that the listing, registration or qualification of
any shares of stock is necessary or desirable as a condition of or in connection
with the grant of Restricted Stock made under this Agreement, then delivery of
certificates for such shares of Restricted Stock shall not be made until such
listing, registration or qualification shall have been completed.

12. This Agreement shall be governed by the laws of the State of Delaware. It
may not be modified except in writing signed by both parties.

14. Executive acknowledges that Executive has received a copy of the 2006
Incentive Stock Plan and/or Plan Summary, as such Plan is in effect on the date
of this Agreement, has read and understands the terms of the 2006 Plan and of
this Agreement, and agrees to all the terms and conditions provided for in the
2006 Plan and in this Agreement.

	 	 	 	 	 
	 	PAYLESS SHOESOURCE, INC. 

 	 
	 	By:  	/s/ Jay A. Lentz
 	 
	 	 	Its: Senior Vice President-Human Resources 	 
	 	 	 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Matthew E. Rubel
 	 
	 	 	 
	 	 	 
	 

Page 3 of 3 (RSTUS-CEO)

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