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Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into on the 22nd day of March, 2000, by
and between PAYLESS SHOESOURCE, INC., a Delaware corporation, ("Payless") and
__________________ ("Executive").
In consideration of mutual promises and agreements set forth in this Employment
Agreement, Payless and Executive agree as follows:
1. (a) Payless agrees to employ Executive, and Executive agrees to render
personal services to Payless, for the period commencing on the date of this
Employment Agreement through [May 31, 2002 or 2003] (the "Contract Term") as
________________________________ of Payless ShoeSource, Inc.
(b) Payless agrees to pay Executive basic compensation for such services
during the Contract Term at the annual rate of $____________, payable in equal
bi-weekly installments, and in accordance with Paragraph 5, which annual rate
will be subject to an annual review during Payless' regularly scheduled review
time.
(c) If Executive is eligible to participate in one of Payless' bonus
plans (the "Incentive Plan"), then Executive shall be entitled to such Awards,
if any, which may be payable under the Incentive Plan, determined in accordance
with and subject to all of the terms and provisions of the Incentive Plan.
(d) Payless shall reimburse Executive for all items of normal expense
incurred by Executive as an employee of Payless in accordance with Payless'
reimbursement policies in effect from time to time.
(e) The Executive Compensation Change Memorandum from time to time in
effect, as initialed on behalf of Payless and by Executive, is hereby
incorporated by reference herein and made a part hereof. In addition, Payless
has adopted certain employee benefit plans and has established certain
arrangements concerning executive perquisites which may, from time to time,
confer rights and benefits on the Executive in accordance with their terms, and
Payless may, in the future, adopt additional employee benefit plans and
establish additional arrangements concerning executive perquisites, and may in
the future amend, modify or terminate any of the aforesaid employee benefit
plans and arrangements, all in accordance with their terms and in accordance
with applicable law. Executive shall be entitled to whatever rights and
benefits may be conferred on Executive, from time to time in accordance with
the terms of such plans and arrangements, as they may be amended from time to
time, independent of this Agreement. All references to payment dates or
vesting dates in this Paragraph 1 or in such plans and arrangements, shall
require that Executive be employed by Payless on such date to receive such
payment or be vested in such benefit.
(f) Executive will be eligible for future grants of restricted stock and
stock options as may be made under the terms of the Stock Incentive Plan in
accordance with the levels established by the Compensation Committee of the
Board of Directors.
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2. (a) At all times during the Contract Term, Executive will:
(i) faithfully and diligently perform Executive's duties in
conformity with the directions of Payless and serve Payless to the best
of Executive's ability; and
(ii) devote Executive's undivided time and attention to the business
of Payless, subject to reasonable vacations in accordance with Payless'
vacation policy as it applies from time to time, to such extent as may be
reasonably necessary for the proper performance of the personal services
to be rendered by Executive under this Agreement; and
(iii) maintain Executive's residence in the Topeka, Kansas
metropolitan area or the environs thereof within reasonable access to the
business activities of Payless therein for the Contract Term.
(b) At all times during the Contract Term, Executive will not:
(i) engage in any activity which conflicts or interferes with or
adversely affects Executive's performance of Executive's duties
hereunder, or
(ii) accept any other employment, whether as an Executive or as a
consultant or in any other capacity, and whether or not compensated
therefor, or
(iii) violate the terms of any of the policies described in Payless'
Policy of Business Conduct distributed from time to time to Executive.
3. (a) At all times during the Contract Term and for a period of [one or two]
years from actual termination of employment or, if there are more than one year
remaining in the Contract Term at the time of termination of employment, for
the remainder of the Contract Term, Executive will not:
(i) directly or indirectly, own, manage, operate, finance, join,
control, or participate in the ownership, management, operation,
financing or control of, or be employed by or connected in any manner
with any Competing Business, or
(ii) solicit for employment, hire or offer employment to, or
disclose information to or otherwise aid or assist any other person or
entity other than Payless or any subsidiary of Payless in soliciting for
employment, hiring or offering employment to, any employee of Payless or
any subsidiary of Payless, or
(iii) take any action which is intended to harm Payless or its
reputation, which Payless reasonably concludes could harm Payless or its
reputation or which Payless reasonably concludes could lead to unwanted
or unfavorable publicity to Payless.
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 3(a).
(b) The term "Competing Business" shall include, but not be limited to,
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(i) any retail business with gross sales or revenue in the prior
fiscal year of more than $25 million (or which is a subsidiary, affiliate
or joint venture partner of a business with gross sales or revenue in the
prior fiscal year of more than $25 million) which sells footwear at
retail to consumers at price points competitive, or likely to be
competitive with Payless (e.g., including, without limitation, Wal-Mart,
K-Mart, Target, Xxxx, Mervyn's Pic-N-Pay, Foot Star, Inc., Xxxxxx, Xxxx,
Genesco, Venator, Famous Footwear, Shoe Carnival, Xxxxx Apparel Group,
Xxxx'x, Xxx Claiborne, Big Five, X.X. Xxxxxx and Sears) within 20 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, franchisees or wholesale customers;
(ii) any franchising or wholesaling business with gross sales or
revenue in the prior fiscal year of more than $25 million (or which is a
subsidiary, affiliate or joint venture partner of a business with gross
sales or revenue in the prior fiscal year of more than $25 million) which
sells footwear at wholesale to franchisees, retailers or other footwear
distributors located within 20 miles of any 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, franchisees 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 footwear to retailers or other footwear distributors located within
20 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, franchisees, or wholesale customers; (e.g.,
including, without limitation, Xxxxx Apparel Group, Dexter, Stride Rite,
Liz Claiborne, Wolverine Worldwide, Timberland, Nike, Reebok, K-Swiss,
Keds and Adidas); or
(iv) any business which provides buying office services to any store
or group of stores or businesses referred to in Paragraph 3.(b) (i), 3.
(b) (ii) and 3.(b)(iii).
(c) Background of non-compete restriction:
(i) Payless is one of the leading retail companies in North America,
with self-service shoe stores throughout the United States and its
territories and Canada; and
(ii) In connection with its business, Payless has expended a great
deal of time, money and effort to develop and maintain its confidential,
proprietary and trade secret information; this information, if misused or
disclosed, could be very harmful to Payless' business and its competitive
position in the marketplace; and
(iii) Executive desires to be employed by Payless, to be eligible
for opportunities for advancement within Payless, to be eligible for
potential compensation increases and to be given access to confidential
and proprietary information of Payless necessary for Executive to perform
Executive's job, but which Payless would not make available to Executive
but for
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Executive's signing and agreeing to abide by the terms of this Agreement
as a condition of Executive's employment by Payless; and
(iv) Executive recognizes and acknowledges that Executive's position
with Payless provides Executive with access to Payless' confidential and
proprietary trade secret information and other confidential business
information; and
(v) Payless compensates its associates 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; and
(vi) long-term customer and supplier relationships often can be
difficult to develop and require a significant investment of time, effort
and expense; and
(vii) Executive recognizes and acknowledges that if Executive's
employment with Payless were to cease, Payless needs certain protections
in order to ensure that Executive does not appropriate and use any
confidential information entrusted to Executive during the course of
Executive's employment by Payless 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 restriction. Executive acknowledges
and agrees that the restrictions in Paragraph 3(a) are reasonable and
enforceable in view of the background for the non-compete restriction set forth
in Paragraph 3(c) and in view of, among other things,
(i) the markets in which Payless and its subsidiaries operate their
business; and
(ii) the confidential information to which Executive has access; and
(iii) Executive's training and background, which are such that
neither Payless nor Executive believe that the restraint will pose
an undue hardship on Executive; and
(iv) the fact that a Competing Business could benefit greatly if it
were to obtain Payless' confidential information; and
(v) the fact that Payless would not have adequate protection if
Executive were permitted to work for any Competing Business since Payless
would be unable to verify whether its confidential information was being
disclosed or misused; and
(vi) the limited duration of, the limited scope of, and the limited
activities prohibited by, the restrictions in Paragraph 3(a); and
(vii) Payless' legitimate interests in protecting its confidential
information, goodwill and relationships.
(e) If Executive violates Executive's obligations under Paragraph 3(a),
then Payless shall be entitled to an injunction and other relief provided for
in this Agreement to prevent such violation,
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and the time during which Executive violated the obligations shall not count
toward satisfying the time during which the restriction shall apply. For
example, if Executive were to join a competitor at the end of the Contract Term
in violation of the restrictions in Paragraph 3(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 during which Executive violated such restriction would not count toward
the time that the restriction applies.
4. If Executive becomes Totally Disabled and remains continuously so Totally
Disabled for a period of 180 days, then Payless' obligations under this
Employment Agreement, at Payless' option, may be terminated by notice in
writing to that effect given during the continuance of such Total 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 Payless' Long Term
Disability Plan (subject to the terms and provisions of that plan), then the
terms of that plan shall apply. "Total Disability" or "Totally Disabled" shall
mean the inability of Executive to perform the normal duties of Executive's job
under this Agreement.
5. (a) If Executive's employment terminates during the Contract Term by
reason of Executive's death or Total Disability, by Executive's voluntary
termination of employment or by Payless for Cause,
(i) Executive's basic compensation and employee benefits shall cease
on the date of such termination, except as otherwise provided herein or
in any applicable employee benefit plan or program; and
(ii) Executive (or Executive's legal representative(s)) shall be
entitled to such portion of any incentive compensation as shall be
payable under the terms of the Incentive Plan.
(b) In addition, if Executive's employment is terminated by reason of
death, then Executive's obligations under Paragraphs 1 and 2 shall cease on the
effective date of such termination.
(c) In addition, if Executive's employment is terminated by reason of
Total Disability, by Executive voluntarily or by Payless for Cause, then
Executive's obligations under Paragraphs 1 and 2 shall cease on the effective
date of such termination and Executive's obligations under Paragraphs 3 and 6
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 referred to in Paragraph 8 of this Agreement, and Payless shall be
entitled to enjoin Executive from violating the provisions of Paragraphs 3 and
6 of this Agreement.
(d) If Executive's employment is terminated by Payless without Cause,
then
(i) Executive's employment (and status as an employee) shall cease
immediately; and
(ii) Executive shall be entitled, subject to the provisions of
Paragraph 5(d)(vi), to continue to receive for the remainder of the
Contract Term the higher of (x) Executive's
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basic compensation specifically stated in Paragraph 1(b) as of the date
of this Agreement, and (y) Executive's basic compensation at the time
Executive employment terminates; and
(iii) Executive shall be entitled to such portion of any incentive
compensation as shall be payable under the terms of the Incentive Plan;
and
(iv) Executive shall be entitled to post-termination benefits that
are payable under Payless' employee benefit plans in accordance with
their terms based on Executive's service through, and termination of
employment on, the termination date, including any rights Executive may
have to continued participation in Payless' medical plans under COBRA;
and
(v) except as expressly provided in this Paragraph 5(d), Executive's
post-termination obligations under this Agreement, including, without
limitation, the provisions of Paragraphs 3 and 6, shall continue to apply
following such termination; and
(vi) Executive shall use Executive's best efforts to find other
employment which does not violate the provisions of Paragraph 3 hereof.
If Executive accepts such other employment, Executive shall promptly
notify Payless of such employment and of the compensation received, to be
received or receivable from Executive's subsequent employer attributable
to the remainder of the Contract Term, and all basic compensation
otherwise payable under Paragraph 5(d) for the remainder of the Contract
Term shall be reduced to the extent of Executive's similar compensation
received, to be received or receivable from such other employer or other
business.
(e) "Cause" means
(i) an intentional act of fraud, embezzlement, theft or any other
material violation of law in connection with Executive's duties or in the
course of Executive's employment with Payless; or
(ii) intentional damage to assets of Payless; or
(iii) intentional disclosure of confidential information of Payless
contrary to the policy of Payless; or
(iv) breach of Executive's obligations under this Agreement; or
(iv) intentional engagement in any competitive activity which would
constitute a breach of Executive's duty of loyalty or of Executive's
obligations under this Agreement; or
(v) intentional breach of any policy of Payless; or
(vi) 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
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(vii) the willful engaging by Executive in conduct which is
demonstrably and materially injurious to Payless, monetarily or
otherwise.
For purposes of this Paragraph 5(e), 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. Failure to meet performance
standards or objectives, by itself, will not constitute "Cause".
(f) Executive agrees that, in addition to any other remedies, Payless
shall be permitted, as part of the computation of any final amount or amounts
due to Executive as wages, compensation, bonus, deferred compensation 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.
6. (a) Executive will not, at any time, directly or indirectly, use or
disclose any of Payless' Confidential Information except as authorized and
within the scope of Executive's employment with Payless.
(b) At Payless' request and/or termination of Executive's employment with
Payless, Executive will return to Payless all documents, records, notebooks,
computer diskettes and tapes and anything else containing Payless' Confidential
Information, including all copies thereof, as well as any other Payless
property, in Executive's possession, custody or control. Executive will also
delete from Executive's own computer or other electronic storage medium any of
Payless' proprietary or Confidential Information. Not later than 20 days after
Executive's employment is terminated, Executive will certify in writing to
Payless that Executive has complied with these obligations.
(c) During Executive's employment with Payless and thereafter, Executive
will
(i) notify and provide Payless immediately with the details of any
unauthorized possession, use or knowledge of any of Payless' Confidential
Information,
(ii) assist in preventing any reoccurrence of this possession, use or
knowledge, and
(iii) cooperate with Payless in any litigation or other action to
protect or retrieve Payless' Confidential information.
(d) "Confidential Information" means any non-public information
pertaining to Payless' business. Confidential Information includes information
disclosed by Payless to Executive, and information developed or learned by
Executive during the course of or as a result of Executive's employment with
Payless, which Executive also agrees is Payless' property. Executive further
agrees that any item of intellectual or artistic property generated or prepared
by Executive, for Executive or with others, in connection with Executive's
employment by Payless is Payless' sole property and shall remain so unless
Payless otherwise specifically agrees in writing. Confidential Information
includes, without limitation, information and documents concerning Payless'
processes; suppliers (including Payless' terms, conditions and other business
arrangements with suppliers); supplier and customer lists; advertising,
marketing plans and strategies; profit margins; seasonal plans, goals,
objectives and projections, compilations, analyses and projections regarding
Payless'
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divisions, businesses, product segments, product lines, suppliers, sales and
expenses; files; trade secrets and patent applications (prior to their being
public); salary, staffing and employment information (including information
about performance of other executives); and "know-how," techniques or any
technical information not of a published nature relating, for example, to how
Payless conducts its business.
(e) Executive agrees that Executive will not disclose to Payless or use,
or induce Payless to use, any proprietary information, trade secret or
confidential business information of any other person or entity, including any
previous employer of Executive. Executive also represents that Executive has
returned property, proprietary information, trade secret and confidential
business information belonging to any prior employer.
7. (a) If any court of competent jurisdiction determines that, but for the
provisions of this Paragraph 7, any provision of this Agreement is illegal, void
as against public policy or otherwise unenforceable because it is deemed to be
overbroad, then such provision shall automatically be amended to the extent (but
only to the extent) necessary to make it sufficiently narrow in scope, time and
geographic area that it is not illegal, void as against public policy or
overbroad. All other remaining terms and provisions shall remain in full force
and effect.
(b) If Executive raises any question regarding the enforceability of any
aspect of this Agreement, including, without limitation, Paragraphs 3 or 6,
Executive specifically agrees that Executive will abide fully by such
provisions unless and until a court of competent jurisdiction has rendered a
final judgment that such provisions are not fully enforceable. Following any
such final judgment, Executive and Payless will abide fully by such judgment.
8. (a) Payless and Executive shall each be entitled to pursue all legal and
equitable rights and remedies to secure performance of the obligations and
duties of the other under this Agreement, and enforcement of one or more of
such rights and remedies shall in no way preclude Payless or Executive from
pursuing any and all other rights and remedies available to each of them.
(b) Executive acknowledges and agrees that the individualized services
and capabilities that Executive will render and provide to Payless during the
Contract Term are of a personal, special, unique, unusual, extraordinary and
intellectual character.
(c) Executive acknowledges and agrees that the restrictions in this
Agreement on Executive are reasonable in order to protect Payless' expectations
and rights under this Agreement and to provide Payless with the protections
that Payless needs to, among other things, safeguard its confidential
information. Payless shall be entitled to injunctive relief in addition to any
other remedy it may have, and Executive expressly consents to injunctive and
such other equitable relief as Payless in good faith believes it may need.
Without limiting the generality of the foregoing, if Executive breaches or
threatens to breach Executive's obligations under Paragraphs 3 or 6 hereof,
Executive consents to entry of an order enjoining Executive from rendering
personal services to or in connection with a Competing Business and from using
or disclosing any confidential information.
(d) If Executive's employment is terminated by Executive voluntarily or
by Payless for Cause, Executive shall be liable for all attorneys' fees and
costs incurred by Payless in seeking to enforce its rights under this
Agreement.
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9. Payless Work-Product, The Executive agrees to disclose fully to
Payless, and hereby assigns and transfers to Payless, and agrees to execute any
additional documentation Payless may reasonably request to evidence the
assignment and transfer, immediately upon the conception, development, making or
acquisition thereof, the right, title, and interest in and to any and all
inventions, discoveries, improvements, innovations, and/or designs (the "Work
Product") conceived, discovered, developed, acquired or secured by the
Executive, solely or jointly with others or otherwise, together with all
associated U.S. and foreign intellectual property rights (i.e. patents,
copyrights, trademarks or trade secrets) either:
(a) during the period of Executive's employment, if such Work Product
is related directly or indirectly, to the business of, or to the research or
development work of Payless;
(b) with the use of the time, materials, or facilities of Payless; or
(c) within one year after termination of such employment if conceived
as a result of and is attributable to work done during such employment and
relates to Work Product within the scope of the business of Payless, together
with rights to all intellectual property rights which may be granted thereon.
Upon discovery, development or acquisitions or any such Work Product, Executive
shall notify Payless and shall execute and deliver to Payless, without further
compensation, such documents prepared by Payless as may be reasonable or
necessary to prepare or prosecute applications for such Work Product and to
assign and transfer to Payless Executive's right, title and interest in and to
such Work Product and intellectual property rights thereof. Executive
acknowledges that Executive has carefully read and considered the provisions of
this paragraph and, having done so, agrees that the restrictions set forth
herein are fair and reasonable and are reasonably required for the protection of
the interests of Payless, its officers, directors, and other executives.
10. The entire understanding and agreement between the parties has been
incorporated into this Agreement, and this Agreement supersedes all other
agreements and understandings between the Executive and Payless and its parents
and subsidiaries, with respect to the employment of Executive by Payless and its
parents and subsidiaries. This Agreement shall inure to the benefit of, and
shall be binding upon, Payless, its successors and assigns and upon Executive
and Executive's heirs, successors and assigns; provided, however, that, since
this is an agreement for the rendering of personal services, Executive cannot
assign any of Executive's obligations under this Agreement to anyone else. 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. Executive agrees that this Agreement may be assigned by Payless to a
subsidiary of Payless; such assignment, however, shall not relieve Payless of
any of its obligations hereunder except to the extent that such obligations are
actually discharged by such subsidiary.
12. This Agreement has been executed by Payless at Payless' corporate
headquarters and principal executive offices in Topeka, Kansas. Any questions or
other matter arising under this Agreement, whether of validity, interpretation,
performance or otherwise, shall be governed by and
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construed in accordance with the laws of the State of Kansas applicable to
agreements made and to be performed in such state without regard to such state's
conflicts of law provision. All actions and proceedings arising out of or
relating directly or indirectly to 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. The parties hereto expressly consent to the
jurisdiction of any such court and to venue therein and consent to service of
process if made upon Payless' registered agent or if made 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, this Agreement has been executed by Executive, and then by
Payless in Topeka, Kansas, effective as of the date first above written.
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PAYLESS SHOESOURCE, INC.
By:
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Name:
Title:
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