EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made this 22nd day of July, 2008 (the “Effective Date”), by and
between PAYLESS SHOESOURCE, INC., a Missouri corporation (“PSS”), and XXXXX XXX
(“Executive”).
WITNESSETH:
WHEREAS,
PSS conducts its business in part through various direct and indirect
subsidiaries and affiliates (PSS and its parent, subsidiaries and affiliates
being collectively referred to as “Payless”).
WHEREAS,
Payless is one of the leading retail companies in the United States with self
service shoe stores throughout the United States, Puerto Rico and the U.S.
Virgin Islands, Guam, Saipan and Canada.
WHEREAS,
Executive recognizes and acknowledges that Executive's position with PSS
provides Executive with access to Payless’ proprietary, trade secret and other
confidential information relating to its business.
WHEREAS,
Payless has expended a great deal of time, money and effort to develop and
maintain its proprietary, trade secret and confidential information; this
information, if misused or disclosed, could be very harmful to Payless' business
and its competitive position in the marketplace.
WHEREAS,
Executive recognizes and acknowledges that if Executive's employment with PSS
and all other Payless-related entities ceases, Payless needs certain protections
to ensure that Executive does not misuse or disclose any proprietary, trade
secret or confidential information entrusted to Executive during the course
of
employment or take any other action which could result in a loss of Payless'
good will that was generated on Payless' behalf and at its expense, and, more
generally, to prevent Executive from having an unfair competitive advantage
over
Payless.
WHEREAS,
Executive desires to be employed by PSS, to be eligible for potential
compensation increases, and to be given access to proprietary, trade secret
and
confidential information of Payless necessary for Executive to perform
Executive’s job, but which Payless would not make available but for Executive’s
signing and agreeing to abide by the terms of this Agreement.
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 July 22,
2010
(the “Contract Term”), unless sooner terminated in accordance with Paragraph 8
hereof. Beginning on July 23, 2008, 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 President and Chief
Executive Officer of PSS, as well as any other duties as may be assigned from
time to time by PSS, and agrees to abide by all the by-laws, policies,
practices, procedures and rules of Payless. Executive agrees to use Executive’s
best efforts, energies and skill to perform the duties and responsibilities
of
the position, and to this end will devote Executive’s full time and attention
exclusively to the business of PSS and/or such other Payless entities to which
Executive may be assigned or transferred. Executive may be assigned or
transferred to another management position with PSS or Payless, as designated
by
Payless, so long as such assignment or transfer does not result in a material
diminution in responsibilities or duties. This Agreement shall remain in effect
and shall apply to Executive, without any need for re-execution, regardless
of
the Payless parent, subsidiary, affiliate 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 PSS or any division,
parent, subsidiary or affiliate to which Executive may be assigned.
3. Compensation;
Benefits.
(a) Base
Salary.
PSS
agrees to pay Executive a base salary during the Contract Term at the annual
rate of $675,000, 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 (where such decrease
is i)
not material; or ii) is occurring as part of an overall reduction in
compensation also applied to other senior executives of Payless as a result
of a
decrease in business performance by PSS or one of its business units), during
PSS’ 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
PSS (the "Incentive Plans"), in accordance with and subject to all of the terms
and provisions of such Incentive Plans and such other incentive plans of Payless
as may be appropriate in light of any reassignment or transfer of Executive
under Paragraph 2(a) above.
(c) Expenses.
PSS
shall reimburse Executive for all items of normal business expense incurred
by
Executive as an employee of PSS in accordance with its reimbursement policies
in
effect from time to time.
-2-
(d) Benefits.
PSS 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. PSS 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 and such other benefits of Payless as
may
be appropriate in light of any reassignment or transfer of Executive under
Paragraph 2(a) above.
(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, or any successor 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 PSS
(or
such other Payless entity as may be appropriate) 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 any Payless entity, Executive
will not directly or indirectly:
(i) own,
manage, operate, finance, join, control, or participate in the ownership,
management, operation, financing, or control of, or be a partner in, be employed
by, or act as an advisor, consultant, agent, officer, director, or independent
contractor for, or otherwise have an interest in, a Competing Business;
or
(ii) solicit,
induce, hire, or attempt to aid or assist any person or entity other than
Payless in soliciting for employment, offering employment to, or hiring, any
employee of any Payless entity or any person who, at any time during the 12
months prior to the solicitation, was employed by any Payless
entity.
Nothing
in this Paragraph 4(a) shall prevent Executive, however, from performing
Executive’s duties and responsibilities for PSS or any other Payless entity. 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). Further, Paragraph 4 shall not apply in the event of a Change of
Control (as defined in Section 1.8 of the Collective Brands, Inc. Supplementary
Retirement Account Plan, as amended and restated January 1, 2008).
(b) The
term
"Competing Business" shall include, but not be limited to:
-3-
(i) any
retail business with gross sales or revenue in the prior fiscal year of more
than $25 million (or which is a parent, subsidiary, affiliate or joint venture
partner of a business with gross sales or revenue in the prior fiscal year
of
more than $25 million) which sells footwear or accessories in whole or in part
competitive to that sold by Payless (“Competitive Footwear”), including, without
limitation, Wal-Mart Stores, Inc.; Sears Holdings Corporation; Target
Corporation; Foot Star, Inc.; DSW, Inc.; Aldo Shoes, Inc.; Xxxx Stores, Inc.;
T.J. Maxx; Off-Broadway Shoes; Burlington Coat Factory Warehouse Corporation;
Gennesco Inc.; Xxxxx Shoe Company, Inc.; Shoe Carnival, Inc.; Xxxx’x
Corporation; Liz Claiborne, Inc.; Big 5 Sporting Goods Corporation; X.X. Xxxxxx
Company; Shoe Zone, Limited; Bata, Limited; Xxxxx.xxx; and Xxxxxx.xxx, within
10
miles of any Payless store or the store of any wholesale customer of Payless
in
the United States, or anywhere in any foreign country in which Payless has
retail stores or wholesale customers;
(ii) any
franchising or wholesaling business with gross sales or revenues in the prior
fiscal year of more than $25 million (or which is a subsidiary, affiliate or
joint venture partner of a business with gross sales or revenues in the prior
fiscal year of more than $25 million) which sells Competitive Footwear at
wholesale to franchisees, retailers or other footwear distributors located
within 10 miles of any Payless store or the store of any wholesale customer
of
Payless in the United States, or anywhere in any foreign country in which
Payless has retail stores or wholesale customers;
(iii) any
footwear manufacturing business with gross sales or revenue in the prior fiscal
year of more than $25 million (or which is a subsidiary, affiliate or joint
venture partner of a business with gross sales or revenue in the prior fiscal
year of more than $25 million) which sells Competitive Footwear to retailers,
wholesale customers, or other footwear distributors located within 10 miles
of
any Payless store or the store of any wholesale customer of Payless in the
United States, or anywhere in any foreign country in which Payless has retail
stores or wholesale customers (including, without limitation, Nine West Shoes;
Dexter Shoe Company; Liz Claiborne, Inc.; Wolverine Worldwide, Inc.; Timberland
Company; Nike, Inc.; Reebok International, Ltd.; K-Swiss, Inc.; and
adidas-Salomon AG); or
(iv) any
business which provides buying office services to any store or group of stores
or businesses referred to in Paragraph 4(b).
(c) Background
of non-compete restrictions:
(i)
In
connection with its business, Payless (including PSS) has expended a great
deal
of time, money and effort to develop and maintain its proprietary, trade secret
and confidential information; this information, if misused or disclosed, could
be very harmful to Payless' business and its competitive position in the
marketplace;
(ii)
Executive recognizes and acknowledges that Executive’s position with PSS
provides Executive with access to Payless’ proprietary, trade secret, and
confidential information;
(iii)
Payless compensates its employees to, among other things, develop and preserve
goodwill and relationships on Payless' behalf and to develop and preserve
business information for Payless’ exclusive ownership and use;
-4-
(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 hereunder were to
cease, Payless would need certain protections in order to ensure that Executive
does not appropriate or use any confidential and proprietary trade secret
information entrusted to Executive during the course of employment or take
any
other action which could result in a loss of Payless’ goodwill that was
generated on Payless’ behalf and at its expense, and, more generally, to prevent
Executive from having an unfair competitive advantage over Payless.
(d) Reasonableness
of non-compete restrictions. Executive acknowledges and agrees that the
restrictions in Paragraph 4 are reasonable and that such restrictions are
enforceable in view of the background for the non-compete restrictions set
forth
in the Paragraph 4(c), and in view of, among other things, the
following:
(i) the
markets in which Payless operates its businesses;
(ii) the
proprietary, trade secret, and other confidential business information to which
Executive has or will have access;
(iii) Executive's
training and background, which are such that neither Payless nor Executive
believes that the restraint will pose an undue hardship on the Executive or
prevent Executive from finding suitable non-competitive employment during the
specified period of non-competition;
(iv) a
Competing Business could benefit greatly if it were to obtain Payless'
proprietary, trade secret, and other confidential business
information;
(v) Payless
would not have adequate protection if Executive is permitted to work for any
Competing Business in violation of this Agreement since Payless would be unable
to verify whether its proprietary, trade secret, and other confidential business
information was being disclosed or misused;
(vi) the
limited duration and limited scope of, and the limited activities prohibited
by,
the restrictions in Paragraph 4; and
(vii) Payless'
legitimate interests in protecting its proprietary, trade secret, and other
confidential business information, goodwill and relationships.
-5-
(e) If
Executive violates Executive’s obligations under Paragraph 4, then Payless
(including PSS) 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.
(f) Executive
agrees to provide a copy of this Agreement (with Paragraph 3(a) redacted, if
Executive so desires) to any prospective employer Executive contacts during
or
after termination or resignation of employment. Executive authorizes Payless
to
contact Executive’s future employers and other entities with which Executive has
any business relationship to determine Executive’s compliance with this
Agreement or to communicate the contents of this Agreement to such employer
and
entities. Executive releases Payless, its employees and agents, from all
liability for damages arising from such contact or communications.
5. Confidential
Information.
(a) Executive
will not, at any time during the Contract Term or after termination of
employment, directly or indirectly use, make known, disclose, furnish, or make
available Confidential Information (as defined herein), other than in the proper
performance of Executive’s duties contemplated herein.
(b) “Confidential
Information” means any non-public information pertaining to Payless’ business
disclosed by Payless to Executive, or developed or learned by Executive during
the course of Executive’s employment with any Payless entity, including, without
limitation, any confidential information and documents concerning Payless’
customers; customer, supplier, and vendor lists; terms, conditions and other
business arrangements with vendors, suppliers, or factories; contract factory
lists; manufacturing plans; advertising, marketing plans and strategies; pricing
information; profit margins; seasonal plans, goals, objectives and projections;
compilations, analyses and projections regarding Payless' businesses, product
segments, product lines, suppliers, sales and expense information; patent
applications (prior to their being public); salary, staffing and employment
information (including information about performance of other executives);
operations manuals; computer software applications and other programs;
techniques, methods, styles, designs and design concepts, business plans,
knowledge and data related to processes, products, compounds, compositions,
formulae, lasts and molds, and "know-how," techniques or any technical
information not of a published nature relating, for example, to how Payless
conducts its business;
(c) Executive
acknowledges that Payless’ business is intensely competitive and that, by virtue
of Executive’s employment, Executive will have access to and knowledge of
Confidential Information. Executive also agrees that the misuse or direct or
indirect disclosure of Confidential Information to existing or potential
competitors of Payless would place Payless at a competitive disadvantage and
would harm and damage Payless’ business.
-6-
(d) During
Executive's Payless-related employment and thereafter, Executive will: (i)
notify and provide Payless immediately with the details of any unauthorized
possession, use or knowledge of any Confidential Information, (ii) assist in
preventing any reoccurrence of such possession, use or knowledge, and (iii)
cooperate with Payless in any litigation or other action to protect or retrieve
Confidential Information.
6. Payless
Intellectual Property.
(a)
Executive hereby assigns to Payless all of Executive’s rights, title, and
interest (including but not limited to all patent, trademark, copyright and
trade 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 Payless-related employment are “works
made for hire” and, consequently, that Payless owns all copyrights thereto. For
purposes of this Agreement, “Work Product” shall include but is not limited to,
all literary works, software, documentation, memoranda, photographs, artwork,
sound recordings, audiovisual works, ideas, designs, inventions, discoveries,
creations, conceptions, improvements, processes, algorithms, and so forth which
(i) are prepared or developed by Executive, individually or jointly with others,
during Executive’s Payless-related employment, or within six (6) months
thereafter, whether or not during working hours, and (ii) relate to or arise
in
any way out of (1) current and/or anticipated business and/or activities of
Payless, (2) Payless’ current and/or anticipated research or development, (3)
any work performed by Executive for Payless, and/or (4) any information or
assistance provided by Payless, including but not limited to Confidential
Information.
(b)
Executive
shall promptly disclose to Payless all Work Product. All such Work Product
is
and shall forthwith become the property of Payless, or its designee, whether
or
not patentable or copyrightable. Executive will execute promptly upon request
any documents or instruments at any time deemed necessary or proper by Payless
in order to formally convey and transfer to Payless or its designee title to
such Work Product, or to confirm Payless or its designee’s title therein, and it
order to enable Payless or its designee to obtain and enforce United States
and
foreign Letters Patent, Trademarks and Copyrights thereon. Executive will
perform Executive’s obligations under this Paragraph 6 without further
compensation, except for reimbursement of reasonable out-of-pocket expenses
incurred at the request of Payless.
7. Disability.
If
Executive becomes Disabled and remains continuously so Disabled for a period
of
180 days, then Payless' obligations under this Agreement may be terminated
by
notice in writing to that effect during the continuance of such Disability,
such
termination to take effect the later of (a) the last day of the month during
which such notice is given or (b) the last day of such 180 day period. If
Executive has made a previous election to participate in the Payless ShoeSource,
Inc. Long-Term Disability Plan, or successor 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.
-7-
8.
Termination.
(a) For
Cause; Voluntary Resignation; Death; Disability.
PSS (or
such other Payless entity as may be appropriate in light of any reassignment
or
transfer) may terminate Executive’s employment for Cause at any time upon
written notice to Executive, with immediate effect. Executive may voluntarily
resign from PSS (or such other Payless entity) at any time upon 30 days written
notice to PSS (or such other Payless entity); provided, PSS (or such other
Payless entity) may require Executive to cease working earlier than the noticed
termination date and agrees to continue to pay Executive her basic compensation
and maintain her employee benefits through the noticed 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 PSS (or such other Payless entity) for Cause:
(i) Executive’s
basic compensation and employee benefits shall cease on the date of such
termination or resignation, except as otherwise provided in any applicable
employee benefit plan or program;
(ii) Executive
shall be entitled to receive Executive’s base salary through that date of
termination or resignation (including payment for any accrued but unused
vacation), payable within the first pay period following termination or
resignation;
(iii) Executive
will be reimbursed, in accordance with Payless policy, for any business expenses
properly incurred by Executive prior to the date of termination or resignation;
(iv) Executive
shall be entitled to any equity-linked awards, consistent with the terms of
the
applicable award agreements;
(v)
Executive shall be entitled to such portion of any long-term cash incentive
compensation as shall be payable under the terms of the Incentive Plans;
and
(vi) Executive
will have the opportunity to continue coverage in Payless’ medical, dental, and
vision plans in which Executive is participating on the date of termination
or
resignation, through and subject to the terms of COBRA.
(b) Without
Cause by Payless; With Good Reason by Executive.
PSS (or
such other Payless entity as may be appropriate in light of any reassignment
or
transfer) may terminate Executive’s employment Without Cause at any time upon
written notice to Executive, and Executive may terminate Executive’s employment
for Good Reason at any time upon written notice to PSS (or such other Payless
entity as may be appropriate in light of any reassignment or transfer). If
Executive’s employment is terminated Without Cause or for Good Reason:
(i) Executive’s
basic compensation and employee benefits shall cease on the date of such
termination, except as otherwise provided herein or in any applicable employee
benefit plan or program;
(ii) Executive
shall be entitled to receive Executive’s base salary through that date of
termination (including payment for any accrued but unused vacation);
(iii) Executive
will be reimbursed, in accordance with Payless policy, for any business expenses
properly incurred by Executive prior to the date of termination;
-8-
(iv) Provided
that Executive is not in violation of, and does not violate, any of Executive’s
obligations under Paragraphs 2, 4, 5, and 6 of this Agreement, Executive shall
be entitled to a severance payment in an amount equal to two (2)
times Executive’s
then current base salary at the time of termination of employment, payable
in a
lump sum, less applicable withholdings and deductions;
(v)
Executive shall be entitled to the amount of any annual award payable to
Executive under the Incentive Plans for the fiscal year in which Executive’s
employment is terminated, prorated by the number of days Executive is actively
employed in that fiscal year divided by the number of days in the fiscal year,
and payable at the time and pursuant to the terms of such Incentive Plans,
less
applicable withholdings and deductions; provided, however, such Annual Award
must be paid no later than 2 ½ months from the end of Payless’ 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 Payless towards 18 months of COBRA coverage under
Payless’ medical, dental and vision plans, to the extent Executive is
participating in such plan(s) on the date of termination; and.
(ix) Executive
shall receive executive-level outplacement services to be coordinated by the
Human Resources Department. Executive must commence utilizing the outplacement
services no later than 30 days following the date of termination or the right
to
such services will cease. Provided, however, the services in no event will
extend beyond 15 months following the date of termination.
(x) If
at the
time that Executive terminates employment Executive is a “key employee” within
the meaning of IRC Section 409A and regulations 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.
(xi) A
resignation for Good Reason shall be treated for all purposes under any PSS
plans or benefits the same as a termination Without Cause.
(c) "Cause"
means:
(i) an
act of
fraud, embezzlement, or theft against Payless, or any other violation of the
law
that is harmful to Payless’ operations (excluding minor traffic violations), or
conviction of a felony;
(ii) grossly
negligent disclosure of Confidential Information contrary to the policy of
Payless;
-9-
(iii) material
breach of any of the terms of this Agreement, abuse of Executive’s position for
personal gain, or breach of Executive’s duties to Payless and its shareholders;
(iv) engagement
in any competitive activity which would constitute a breach of Executive's
duty
of loyalty or of Executive's obligations under this Agreement;
(v) grossly
negligent breach of any policy of Payless including those contained in Payless’
Code of Ethics;
(vi) the
conviction of Executive, or a plea of guilty or nolo
contendre,
to any
crime involving moral turpitude;
(vii) the
willful and continued failure by Executive to substantially perform Executive's
duties with Payless (other than any such failure resulting from Executive's
incapacity due to physical or mental illness); or
(viii) the
willful engaging by Executive in conduct which is demonstrably or materially
injurious to Payless, monetarily or otherwise.
For
purposes of this Paragraph 8(c), an act, or a failure to act, shall not be
deemed "willful" or "intentional" unless it is done, or omitted to be done,
by
Executive in bad faith or without reasonable belief that Executive's action
or
omission was in the best interest of Payless, as determined by the Chief
Executive Officer of Collective Brands, Inc. Failure to meet performance
standards or objectives, by itself, will not constitute cause.
Payless
shall be entitled to suspend Executive with pay while investigating any conduct
that could constitute Cause. A termination for Cause under this Paragraph
8(c)(ii), (iii), (iv), (v), (vii) or (viii) can not occur until and unless
the
Executive is afforded an opportunity to be heard on the issue at an in-person
meeting with the Chief Executive Officer, where Executive has been notified
reasonably in advance of the agenda and timing of the meeting.
(d) “Good
Reason” means:
(i) the
relocation of Payless’ headquarters more than 75 miles from its location on the
Effective Date if such relocation increases Executive’s one-way commute from
Executive’s principal residence by more than 75 miles;
(ii) a
material diminution in Executive’s primary duties and responsibilities except to
the extent such diminution in duties and responsibilities occurs as the result
of an investigation of Executive’s for “Cause” termination; or
-10-
(iii) any
material decrease in the aggregate of compensation and benefits unless part
of
an overall reduction in other compensation and benefits also applied to other
senior executives of Payless as a result of a decrease in business performance
by PSS or one of its business units.
(e) Executive
agrees that, in addition to any other remedies, and to the extent permitted
by
law and or plan, Payless shall be permitted, as part of the computation of
any
final amount due to Executive as compensation, wages, bonus, or otherwise,
and
before any such amount shall be due and owing, to reduce any amount which
Payless may otherwise owe to Executive by any unpaid amount which Executive
owes
to Payless.
(f) Executive’s
obligations under Paragraph 2 shall cease on the effective date of such
resignation or termination for whatever cause(s), Executive’s obligations under
the Agreement, including Paragraphs 4, 5, and 6, shall remain in full force
and
effect, and Payless shall be entitled to all legal and equitable rights and
remedies under this Agreement, including all of its rights and remedies
referenced in Paragraph 10 of this Agreement.
(g) Upon
resignation or termination of employment due to whatever cause(s), Executive
shall return all property of Payless which is then or thereafter comes into
Executive’s possession, including but not limited to documents, contracts,
agreements, plans, photographs, books, notes, records, computer diskettes and
tapes, and any other electronically stored data and all copies of the foregoing,
as well as an other material or equipment supplied by Payless, keys, credit
cards, and equipment, and delete from Executive’s own computer or other
electronic storage medium any Confidential Information. Executive shall also
sign all documents necessary for Executive's immediate resignation as an officer
of Payless.
(h) The
payments and other benefits provided in Paragraph 8 are not made pursuant to
any
welfare benefit or pension plan as defined by the Employee Retirement Income
Security Act of 1974.
9. Release
and Waiver of Claims.
The
parties agree that payment of severance and other benefits provided in Paragraph
8 shall constitute payment in full for all compensation due to Executive, are
in
lieu of any benefits which Executive may otherwise be entitled under the Payless
ShoeSource, Inc. Severance Plan, and constitute full and complete discharge
of
any and all claims which Executive might otherwise have or purport to have
with
respect to any period subsequent to the effective date of such resignation
or
termination, for the payment of compensation, or any additional benefits
provided by Payless to Executive. Provided, however, the payments of the amounts
specified in Paragraph 8(b)(iv),(v),(viii) and (ix) are contingent upon
Executive signing a Separation Agreement and General Release, prior to
payment.
-11-
10. Remedies.
Executive acknowledges and agrees that the restrictions in this Agreement are
reasonable in order to protect Payless’ expectations and rights under this
Agreement and to provide Payless with the protections it needs to, among other
things, safeguard its Confidential Information. Executive agrees that any breach
or threatened breach of Paragraphs 4, 5, or 6 of this Agreement by Executive
will cause immediate irreparable injury to Payless, for which an award of
damages alone may be inadequate. Therefore, Payless shall be entitled, in
addition to any other legal or equitable right or remedy it may have, to
temporary, preliminary, and permanent injunctive relief restraining such breach
or threatened breach of Paragraphs 4, 5, or 6 of this Agreement. Moreover,
any
award of injunctive relief shall not preclude Payless from seeking or recovering
any lawful compensatory damages which may have resulted from a breach of this
Agreement, including forfeiture of any payments not yet made and return of
any
payments already received by Executive, to the extent ordered by a court of
competent jurisdiction.
11. Representations
of Executive.
Executive hereby represents and warrants that the execution and delivery of
this
Agreement and Executive’s Payless-related employment do not violate any previous
employment agreement or other contractual obligation of Executive with any
other
party. Executive has not disclosed, and will not disclose, to Payless any
information, whether confidential, proprietary or otherwise, which Executive
is
not legally free to disclose. Executive shall abide by the terms of any
nondisclosure or confidentiality agreement between Payless and any other
parties.
12. Written
Waiver.
In
order for this Agreement to become valid and binding, you must deliver to
Payless prior to August 1, 2008, a valid written waiver from your prior employer
confirming the agreement of such employer not to enforce its post-employment
non-competition restrictions against you during your employment with any Payless
entity.
13. 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.
14. Entire
Agreement.
This
Agreement, and the Offer Letter dated June 17, 2008 (attached hereto as Exhibit
“A”), constitute the entire understanding and agreement between the parties and
supersede all other employment agreements or other arrangements, 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.
15. Amendment,
Breach and Waiver.
This
Agreement may not be changed, amended, or modified in any manner except by
a
written instrument in writing signed by both the parties hereto, except that
if
IRC Section 409A
is
determined to have applicability to any portion of this Agreement, with the
effect that Executive shall have no right to any payment hereunder prior to
six
months from employment termination, this Agreement may be amended by Payless
to
comply with IRC Section 409A. The failure of either party to enforce at any
time
any of the provisions of this Agreement shall in no way be construed to be
a
waiver of any of such provision, or of the right to such party thereto to
enforce each and every such provision in the event of a subsequent
breach.
-12-
16. Successors
and Assigns.
This
Agreement and/or the rights hereunder shall be freely assignable by PSS or
Payless. This Agreement shall inure to the benefit of, and be binding upon,
any
entity which shall succeed to Payless’ business. Being a contract for personal
services, neither this Agreement nor any rights hereunder, shall be assigned
by
Executive, and any such attempts or purported assignment shall be null and
void.
Any payment owed to Executive but not paid to Executive as a result of death
shall be paid to Executive’s estate.
17. Third
Party Beneficiary.
Each
PSS direct and indirect parent, subsidiary and affiliate is a third party
beneficiary of this Agreement with respect to, among other things, the
protection of each’s interest in its Confidential Information, customer
goodwill, relationships and contacts, and each has the full rights and power
to
enforce the rights, interests and obligations under this Agreement of or
relating to each’s interest.
18. Governing
Law; Choice of Forum.
This
Agreement, and any questions relating or regarding the validity, interpretation,
or performance, shall be governed by and construed in accordance with the laws
of the State of Kansas, without reference to the conflicts or choice of law
principles thereof. Payless and Executive agree that any action to enforce
any
provision of this Agreement shall be filed and litigated exclusively in any
state court or federal court located in the City of Topeka, Kansas, or in
Shawnee County, Kansas. Payless and Executive hereby waive any defense of lack
of personal jurisdiction or venue in such courts and agree that process may
be
served, if made upon PSS or Payless, upon Payless’ registered agent (with a copy
to Payless’ General Counsel), or if made upon Executive, at Executive’s last
known address on the records of Payless.
BY
SIGNING THIS AGREEMENT, EXECUTIVE HEREBY CERTIFIES THAT EXECUTIVE (A) HAS
RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE SIGNING IT; (B)
HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS HAD SUFFICIENT
OPPORTUNITY TO REVIEW THE AGREEMENT WITH ANY ADVISOR WHICH EXECUTIVE MAY DESIRE
TO CONSULT, INCLUDING LEGAL COUNSEL; (D) HAS HAD SUFFICIENT OPPORTUNITY BEFORE
SIGNING IT TO ASK ANY QUESTIONS EXECUTIVE HAS ABOUT THIS AGREEMENT AND HAS
RECEIVED SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (E) UNDERSTANDS
EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
|
EXECUTIVE |
By: | /s/ XxXxx Xxx | |
|
||
PAYLESS SHOESOURCE, INC. | ||
|
|
|
By: | /s/ Xxx Xxxxx | |
|
||
Its:
|
/s/ Senior Vice President-Human Resources |
-13-