8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

September 4, 2007

Date of Report (Date of earliest event reported)

COLLECTIVE BRANDS, INC.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE

(State or Other Jurisdiction of Incorporation)

1-14770	43-1813160
(Commission File Number)	(IRS Employer Identification No.)

3231 Southeast Sixth Avenue

Topeka, Kansas 66607-2207

(Address of Principal Executive Office) (Zip Code)

(785) 233-5171

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

G Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

G Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

G Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

G Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On September 4, 2007, Collective Brands, Inc. (the “Company”) announced the election of Douglas J. Treff, as Executive Vice President, Chief Administrative Officer, effective September 4, 2007.

From 2006 to 2007, Mr. Treff served as Executive Vice President/Chief Administrative Officer for Sears Canada, Inc.  From 2000 to 2006, he was Senior Vice President/Chief Financial Officer for Deluxe Corporation.

There are no arrangements or understanding between Mr. Treff or any other person(s) pursuant to which he was selected as an officer, and the Company has not entered into, nor has any currently proposed plans to enter into, any transactions in which Mr. Treff has or will have a direct or indirect material interest. In addition, there are no family relationships between Mr. Treff and any other director or executive officer of the Company.

The Company and Mr. Treff entered into an employment agreement effective September 4, 2007 (the “Employment Agreement”) providing that Mr. Treff will be employed in the position of Executive Vice President, Chief Administrative Officer of the Company. 

Under the Employment Agreement, Mr. Treff will receive an initial annual base salary of $525,000.  Mr. Treff will be eligible to participate in the annual and long-term cash incentive bonus programs and arrangements established for the executives of the Company and the Company’s benefit plans and arrangements.  Mr. Treff will also be eligible for future grants of restricted stock, stock-settled appreciation rights, and stock options and other equity based awards as may be made under the terms of the Collective Brands, Inc. Stock Incentive Plan.

The term of the Employment Agreement is initially scheduled to end on September 4, 2009. However, 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.

If during the Employment Agreement term Mr. Treff’s employment is terminated by the Company without “cause” (as defined in the Employment Agreement), he will be entitled to (i) a severance payment equal to two times his then-current base salary payable in a lump sum (provided that Mr. Treff is not in violation with the non-compete, non-solicitation, confidentiality and work product provisions of the Employment Agreement), (ii) the amount of any annual award payable to him under Company’s Incentive Plan for senior executives of the company (the “Incentive Plans”) for the fiscal year in which his employment is terminated, prorated by the number of days he is actively employed in that fiscal year divided by the number of days in the fiscal year, and payable no later than 2 ½ months from the end of the Company’s fiscal year, (iii) the long-term portion of his cash incentive bonus that would be payable under the terms if the Incentive Plans, (iv)any equity-linked awards consistent with the terms of the applicable award agreements, (iv) a special payment which is the equivalent, before taxes, to the portion paid by the Company towards 18 months of COBRA, and (v) executive level outplacement services.

Mr. Treff is subject to non-competition and non-solicitation covenants during the term of the Employment Agreement and for a period of two years following termination of employment.  Mr. Treff has also agreed to not use or disclose any Company confidential information and to assign all rights to any work products created by him.

In conjunction with his Employment Agreement, Mr. Treff has entered into a change of control agreement with the Company effective September 4, 2007 (the “Change of Control Agreement”). 

The Change of Control Agreement provides that Mr. Treff is entitled to benefits if he is terminated for other than cause, death, or disability or if he terminates for “Good Reason” (as defined in the agreement) (i) within three years of a “Change of Control” (as defined in the agreement) occurring; or (ii) within twelve months of a “Potential Change of Control” (as defined in the agreement). A termination by Mr. Treff within 30 days after the first anniversary of a Change of Control will be deemed a termination for Good Reason. Under the agreement, a Change of Control would include any of the following events: (i) any “person,” as defined in the Exchange Act, acquires 20% or more of the Company’s common stock or voting securities; (ii) a majority of the Company’s Directors are replaced and not approved by the “Incumbent Board” (as defined in the agreement); (iii) consummation of certain mergers or a sale of all or substantially all of the Company’s assets; or (iv) stockholders approve a liquidation of the Company. Upon a covered termination of employment, the agreement provides a lump sum payment equal to the aggregate of (i) three times the sum of (x) base salary at termination or, if greater, base salary immediately prior to the change of control plus (y) highest bonus in previous three years or the bonus paid in the most recently completed fiscal year following a Change of Control and (ii) a cash payment for cancellation of stock options or stock appreciation rights.

The Change of Control Agreement provides that Mr. Treff shall receive (i) three years of continued participation (or such longer period as is provided in such plan) in the Company’s welfare benefit plans plus any benefit he would receive with an additional five years of age and service under the Company’s post retirement programs; (ii) unreduced benefits under the Company’s Supplementary Retirement Plan if he is between 50 and 55 and is terminated within five years of a Change of Control other than for Cause (as defined in the agreement) or he terminates his employment for Good Reason; and (iii) outplacement benefits. The agreements also provide a “tax gross-up” payment if such payment would result in Mr. Treff receiving at least 110 percent of the safe harbor amount and, in the event that any payment does not meet the 110 percent threshold, the payments are reduced so that no excise tax is imposed.

In addition, in the event of a Change of Control, (i) amounts deferred under the Company’s deferred compensation plan will be distributed in a lump sum cash payment subject to certain distribution time limits under Section 409A of the Internal Revenue Code; (ii) all options and stock appreciation rights outstanding on that date will become immediately and fully exercisable; (iii) all restrictions on any restricted or phantom stock units will lapse and such shares and units will become fully vested; and (iv) any performance units will be earned and become fully payable.

In conjunction with the Employment Agreement, Mr. Treff has entered into an indemnification agreement with the Company effective September 4, 2007 (the “Indemnification Agreement”) providing that the Company will indemnify and advance expenses to Mr. Treff in the case of certain claims made against him by virtue of his position with the Company. 

A copy of the Company’s press release announcing the appointment of Mr. Treff to the position of Executive Vice President, Chief Administrative Officer is attached hereto as Exhibit 99.1. The above discussion regarding the various agreements is qualified by reference to the agreements filed as exhibits 10.1, 10.2 and 10.3.

The Board of Directors also promoted Darrel J. Pavelka from Senior Vice President, Merchandise Distribution, Planning and Global Supply Chain to Executive Vice President, Global Supply Chain of the Company. Effective September 9, 2007, Mr. Pavelka’s base compensation will increase to $500,000 and the annual component of his incentive compensation will increase from 55 percent of his base salary to 65% of his base salary. A copy of the Company’s press release announcing the promotion of Mr. Pavelka is attached hereto as Exhibit 99.2.

In recognition of the new Company and to align management and other employees interest with that of stockholders as a result of the acquisition of The Stride Rite Corporation, the Compensation, Nominating and Governance committee accelerated the 2008 grant of Stock Settled Stock Appreciation Rights (“SSARs”) and restricted stock awards to the September 2007 granting date. The following executive officers received the following equity awards on September 4, 2007:

Executive	SSARs	Restricted Stock
Matthew E. Rubel	151,746(1)	0
Douglas J. Treff	37,500(2) 37,500(3) 28,500 (1)	10,000(2) 8,000(4) 6,000(5)
Darrel J. Pavelka	27,100(3) 28,500(1)	5,825(4) 6,000(5)
Ullrich E. Porzig	12,800(1)	2,680(5)
Jay A. Lentz	12,800(1)	2,680(5)
Michael J. Massey	12,800(1)	2,680(5)

⁽¹⁾ The SSARs vest ratably on September 4, 2008, 2009 and 2010 and has a 7 year term and a 200 percent cap on stock appreciation

⁽²⁾The grant vests on September 4, 2010.

⁽³⁾ The grant vests ratably on May 31, 2008, 2009 and 2010 and has a 7 year term and a 200 percent cap on stock appreciation.

⁽⁴⁾ The grant of restricted stock is subject to a performance vesting condition, store-for-store sales of the Payless ShoeSource retail stores (“Sales”) for fiscal 2007. If Sales for fiscal 2007 are (i) negative, the grant will be forfeited; (ii) greater than 0 then 50% of the award will vest ratably; (iii) equal to 1.5% then 75% percent of the award will vest ratably; and (iv) greater than or equal to 3% then 100 percent of the award will vest ratably. Vesting will be interpolated between each threshold level. If the performance condition is achieved, the restricted shares will vest ratably May 31, 2008, 2009 and 2010.

⁽⁵⁾ The grant of restricted stock is subject to a performance vesting condition, Sales for the 2008 Spring season, the period from fiscal February through fiscal July. If Sales for the 2008 Spring season are (i) negative, the grant will be forfeited; (ii) greater than 0 then 50% of the award will vest ratably; (iii) equal to 1.5% then 75% percent of the award will vest ratably; and (iv) greater than or equal to 3% then 100 percent of the award will vest ratably. Vesting will be interpolated between each threshold level. Vesting will be interpolated between each threshold level. If the performance condition is achieved, the restricted shares will vest ratably on the first, second and third anniversaries of the grant date.

Item 9.01 Financial Statements and Exhibits.

Exhibits.

EXHIBIT #	DESCRIPTION
10.1	Employment Agreement with Douglas J. Treff made as of September 4, 2007
10.2	Change of Control Agreement with Douglas J. Treff entered into as of September 4, 2007
10.3	Indemnification Agreement dated September 4, 2007 with Douglas J. Treff
99.1	Press Release dated September 4, 2007
99.2	Press Release dated September 6, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	COLLECTIVE BRANDS, INC.
Date: September 6, 2007	By:	/s/ Ullrich E. Porzig
		Ullrich E. Porzig Senior Vice President Chief Financial Officer and Treasurer

EXHIBIT INDEX

EXHIBIT #	DESCRIPTION
10.1	Employment Agreement with Douglas J. Treff made as of September 4, 2007
10.2	Change of Control Agreement with Douglas J. Treff entered into as of September 4, 2007
10.3	Indemnification Agreement dated September 4, 2007 with Douglas J. Treff
99.1	Press Release dated September 4, 2007
99.2	Press Release dated September 6, 2007

EX-10.1

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) timesExecutive’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 ½ 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.

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(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.

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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 Section409A 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.

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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

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EX-10.2

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.

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(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.

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(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.

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(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.

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(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 DateofTermination, 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.

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(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.

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(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

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EX-10.3

INDEMNIFICATION AGREEMENT

AGREEMENT, dated as of the 4th day of September, 2007, between Collective Brands, Inc., a Delaware corporation (the "Company") and Douglas J. Treff (the "Indemnitee").

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available; and

WHEREAS, Indemnitee is a director or officer of the Company; and

WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies in today's environment; and

WHEREAS, basic protection against undue risk of personal liability of directors and officers heretofore has been provided through insurance coverage providing reasonable protection at reasonable cost, and Indemnitee has relied on the availability of such coverage; but as a result of substantial changes in the marketplace for such insurance it generally has become more difficult to obtain such insurance on terms providing reasonable protection at reasonable cost; and

WHEREAS, the Delaware legislature, in recognition of the need to secure the continued service of competent and experienced people in senior corporate positions and to assure that they will be able to exercise judgment without fear of personal liability so long as they fulfill the basic duties of honesty, care and good faith, has so enacted Section 145 of The Delaware General Corporation Law (the "DGCL"), which empowers the Company to indemnify its officers, directors, employees and agents and expressly provides that the indemnification provided by the statute is not exclusive; and

WHEREAS, the Certificate of Incorporation of the Company requires the Company to indemnify and advance expenses to its directors and officers to the fullest extent now or hereafter authorized or permitted by law and authorizes the Company to enter into agreements providing for such indemnification and advancement of expenses; and

WHEREAS, in recognition of the fact that the Indemnitee continues to serve as a director or officer of the Company, in part in reliance on the aforesaid By-laws, and of the fact of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued service to the Company in an effective manner, and in part to provide Indemnitee with specific contractual assurance that the protection promised by such Certificate of Incorporation will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of such Certificate of Incorporation or any change in the composition of the Company's Board of Directors or any acquisition transaction relating to the Company), and due to the possibility that the Company's directors' and officers' liability insurance coverage could at some future time become inadequate, the Company wishes to provide in this Agreement for the indemnification of, and the advancing of expenses to, Indemnitee to the fullest extent (whether partial or complete) now or hereafter authorized or permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company's directors' and officers' liability insurance policies,

NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties hereto agree as follows:

1. CERTAIN DEFINITIONS:

(1) “Approved Law Firm” shall mean any law firm (i) located in New York or Delaware, (ii) having 50 or more attorneys and (iii) rated "av" by Martindale-Hubbell Law Directory; provided, however, that such law firm shall not, for a five- year period prior to the Indemnifiable Event, have been engaged by the Company, an Acquiring Person or the Indemnitee.

(2) “Applicable Standard of Conduct” shall mean the standard established by Section 145(a)-(b) of the DGCL.

(3) “Board of Directors” shall mean the Board of Directors of the Company.

(4) A “Change of Control” shall be deemed to have occurred upon:

(A)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, (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, (iv) any acquisition by any corporation pursuant to a transaction that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and 1(d)(3)(C) or (v) 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 Sock or the Outstanding Company Voting Securities, then such additional acquisition shall constitute a Change of Control; or

(B)The cessation, for any reason, of individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) 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

(C)The 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, following such Business Combination, (i) all or substantially all of the individuals and entities that were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, 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 the corporation resulting from such Business Combination (including, without limitation, 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) 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, (ii) 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 (iii) 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

(D)The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(5) AClaim@ shall mean any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other.

(6) AExpenses@ shall include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim relating to any Indemnifiable Event, together with interest, computed at the Company's average cost of funds for short-term borrowings, accrued from the date of payment of such expense to the date Indemnitee receives reimbursement therefor.

(7) AIndemnifiable Event@ shall mean any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation of any type or kind, domestic or foreign, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity. Without limitation of any indemnification provided hereunder, an Indemnitee serving (i) another corporation, partnership, joint venture or trust of which 20 percent or more of the voting power or residual economic interest is held, directly or indirectly, by the Company, or (ii) any employee benefit plan of the Company or any entity referred to in clause (i), in any capacity shall be deemed to be doing so at the request of the Company.

(8) AReviewing Party@ shall be (i) the Board of Directors acting by majority vote of directors who are not parties to the particular Claim with respect to which Indemnitee is seeking indemnification, even through less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, (A) by independent legal counsel in a written opinion that indemnification is proper in the circumstances because the indemnification is not precluded by circumstances described in the last sentence of Section 2 of this Agreement and the Applicable Standard of Conduct set forth in Section 145 of the DGCL has been met by the Indemnitee or (B) the shareholders upon a finding that the Indemnitee has met the Applicable Standard of Conduct referred to in clause (iii)(A) of this definition.

(9) AVoting Securities@ shall mean any securities of the Company which vote generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT. If Indemnitee was, is or becomes at any time a party to, or witness or other participant in, or is threatened to be made a party to, or witness or other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent now or hereafter authorized or permitted by law as soon as practicable but in any event no later than 30 days after written demand is presented to the Company, against any and all Expenses, judgments, fines (including excise taxes assessed against an Indemnitee with respect to an employee benefit plan), penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with, or in respect of, such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim. If so requested by Indemnitee, the Company shall advance (within two business days of such request) any and all Expenses to Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to the contrary, (i) Indemnitee shall not be entitled to indemnification pursuant to this Agreement in any action in which the Indemnitee=s conduct has been finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct; (ii) in any derivative action in which Indemnitee has been finally adjudged to be liable to the Company, unless and only to the extent that the Court of Chancery or the court in which the proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper, and (iii) prior to a Change in Control Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim initiated by Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Claim.

3. PAYMENT. Notwithstanding the provisions of Section 2, the obligations of the Company under Section 2 (which shall in no event be deemed to preclude any right to indemnification to which Indemnitee may be entitled under Section 145(c) of the DGCL) shall be subject to the condition that the Reviewing Party shall have authorized such indemnification in the specific case by having determined that the indemnification is not precluded by circumstances described in the last sentence of Section 2 of this Agreement and Indemnitee is permitted to be indemnified under the Applicable Standard of Conduct set forth in Section 145(a)-(b) of the DGCL. The Company shall promptly call a meeting of the Board of Directors with respect to a Claim and agrees to use its best efforts to facilitate a prompt determination by the Reviewing Party with respect to the Claim. Indemnitee shall be afforded the opportunity to make submissions to the Reviewing Party with respect to the Claim. The obligation of the Company to make an Expense Advance pursuant to Section 2 shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under Section 2 and applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees and undertakes to the full extent required by Section 145(e) of the DGCL to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in the State of Delaware having subject matter jurisdiction thereof and in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, and the Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and Indemnitee.

4. CHANGE IN CONTROL. If there is a Change in Control (other than a Change in Control which has been approved by a majority of the Board of Directors who were directors immediately prior to such Change in Control) then (i) all determinations by the Company pursuant to the first sentence of Section 3 hereof and Section 145(d) of the DGCL shall be made by independent legal counsel in a written opinion pursuant to Section 145(d) of the DGCL and (ii) with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or By-law of the Company now or hereafter in effect relating to Claims for Indemnifiable Events (including, but not limited to, any such legal opinion provided under Section 145 (d) of the DGCL) the Company (including the Board of Directors) shall seek legal advice from (and only from) special, independent counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company (or any subsidiary of the Company) or an Acquiring Person (or any affiliate or associate of such Acquiring Person) or Indemnitee within the last five years (other than in connection with such matters). Unless Indemnitee has theretofore selected counsel pursuant to this Section 4 and such counsel has been approved by the Company, any Approved Law Firm selected by Indemnitee shall be deemed to be approved by the Company. Such counsel, among other things, shall render its written opinion to the Company, the Board of Directors and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the special, independent counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. As used in this Agreement, the terms "affiliate" and "associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Act and in effect on the date of this Agreement.

5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify Indemnitee against any and all expenses (including attorneys' fees) and, if requested by Indemnitee, shall (within two business days of such request) advance such expenses to Indemnitee, which are reasonably incurred by Indemnitee in connection with any claim asserted or action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or By-law of the Company now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors' and officers' liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be.

6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified, to the extent permitted by law, against all Expenses incurred in connection with such Indemnifiable Event.

7. BURDEN OF PROOF. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

8. NO PRESUMPTION. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, whether civil or criminal, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

9. NONEXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Certificate of Incorporation of the Company, the DGCL, or otherwise. To the extent that a change in the DGCL (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Certificate of Incorporation of the Company and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.

10. LIABILITY INSURANCE. To the extent the Company maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer of the Company.

11. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or any affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

12. AMENDMENTS, ETC. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be effective unless in writing and no written waiver shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

13. SUBROGATION. In the event of payment under the Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

14. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.

15. SPECIFIC PERFORMANCE. The parties recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, the Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

16. BINDING EFFECT, ETC. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company's request.

17. SEVERABILITY. The provisions of this Agreement shall be severable if any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.

18. GOVERNING LAW. This Agreement shall be governed by, and be construed and enforced in accordance with, the laws of the State of Delaware applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.

19. EFFECTIVE TIME. This Agreement shall become effective as of the date first above written. The contractual rights of Indemnitee with respect to Indemnifiable Events occurring before the Effective Time are governed by the Indemnification Agreement between Indemnitee and Payless ShoeSource, Inc., a Missouri corporation or Collective Brands, Inc., a Delaware corporation, if any, (the APrior Agreements@) and Indemnitee shall have no rights under this Agreement with respect to such Indemnifiable Events. The contractual rights of Indemnitee with respect to Indemnifiable Events occurring after the Effective Time are governed by this Agreement, and Indemnitee shall have no rights against Payless ShoeSource, Inc., a Missouri corporation or Collective Brands, Inc., a Delaware corporation, under any Prior Agreements with respect to such Indemnifiable Events.

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

By:	/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

EX-99.1

Collective Brands, Inc. Hires Douglas Treff as Executive Vice President and Chief

 Administrative Officer for Holding Company and Payless ShoeSource Unit

Treff, Most Recently as CAO of Sears Canada, Begins in New Role Early September

TOPEKA, Kan., Sept. 4 /PRNewswire-FirstCall/ -- Collective Brands, Inc. (NYSE: PSS) announced today that it has hired Douglas Treff as executive vice president and chief administrative officer for Collective Brands, Inc. and its Payless ShoeSource unit. Treff will report to Matt Rubel, chief executive officer and president of Collective Brands, Inc., and chief executive officer and president, Payless.

As EVP and CAO, Treff will lead the finance, store development and Information Technology (IT) functions for Payless. The global sourcing and supply chain, merchandising, marketing, retail operations, law and human resources teams for Payless and Collective Brands will continue to report to Rubel. Treff will start in his new role early this month.

"Doug has strong expertise in managing key administrative groups in retail-oriented and large enterprises such as Sears, Deluxe Corporation and Wilsons Leather," said Rubel. "We have built a great team, and we look forward to Doug joining our team and to his leadership in Finance, IT, and store development to fully integrate these critical functions into our broader strategy with high-performing platforms of expertise."

Most recently Treff served as executive vice president and chief administrative officer for Sears Canada, Inc. From 2000 to 2006, he served as senior vice president and chief financial officer for Deluxe Corporation, Shoreview, Minn. and prior, from 1990 to 2000, as chief financial officer and in other leadership roles in finance at Wilsons The Leather Experts, Inc., Brooklyn Park, Minn. Treff received a Bachelor of Arts degree in Psychology from the University of Minnesota, Minneapolis, and a Masters of Business Administration in Finance and Strategic Planning from The Wharton School of the University of Pennsylvania, Philadelphia.

Collective Brands, Inc. is a consumer-centric global footwear, accessories and lifestyle brand company, reaching customers through multiple price points and selling channels. Collective Brands, Inc. is the holding company of Payless ShoeSource, Stride Rite and Collective Licensing International. At this time, Collective Brands, Inc. continues to trade under the symbol (PSS). Payless ShoeSource is the largest specialty family footwear retailer in the Western Hemisphere. It is dedicated to democratizing fashion and design in footwear and accessories and inspiring fun fashion possibilities for the family at a great value. Stride Rite markets the leading brand of high-quality children's shoes in the United States. Stride Rite also markets products for children and adults under well-known brand names, including Keds, Sperry Top-Sider, Saucony, Tommy Hilfiger Footwear and Robeez. Collective Licensing International is a leading youth lifestyle marketing and global licensing business. Information about, and links for shopping on, each of the Collective Brand's units can be found at http://www.collectivebrands.com

EX-99.2

Collective Brands, Inc. Promotes Darrel Pavelka to Executive Vice President,

Global Supply Chain Supporting New Company

TOPEKA, Kan., Sept. 6 /PRNewswire-FirstCall/ — Collective Brands, Inc. (NYSE: PSS) announced today that it has promoted Darrel Pavelka to executive vice president, global supply chain, reporting to Matt Rubel, chief executive officer and president, Collective Brands, Inc.

In this role, Pavelka will oversee all aspects of getting products to market, including product development, sourcing, logistics, merchandise planning, allocation, and inventory management, for approximately 220 million pairs of shoes annually for the entire Collective Brands, Inc. organization, including all branded products for the Payless and Stride Rite business units. Most recently, Pavelka served as senior vice president, global supply chain, Payless ShoeSource. Pavelka starts in his new role effective today.

“Darrel is one of our most seasoned and experienced leaders and his newly expanded role is in direct recognition of his valued contribution in leading our global supply chain for Payless, his 27 years of expertise at Payless and rich understanding of our customers, and the strategic importance of the global supply chain operation to the future success of Collective Brands,” said Matt Rubel. “We look forward to Darrel's leadership as we leverage our supply chain expertise and efficiency — one of our core competencies — throughout the entire Collective Brands enterprise.”

Pavelka joined Payless in 1980 as a Store Manager. Throughout the past 27 years, he has held numerous positions of increasing responsibility and led teams of expertise in key areas for Payless including retail operations, merchandising and supply chain.

Collective Brands, Inc. is a consumer-centric global footwear, accessories and lifestyle brand company, reaching customers through multiple price points and selling channels. Collective Brands, Inc. is the holding company of Payless ShoeSource, Stride Rite and Collective Licensing International. Collective Brands, Inc. trades under the symbol (PSS). Payless ShoeSource is the largest specialty family footwear retailer in the Western Hemisphere. It is dedicated to democratizing fashion and design in footwear and accessories and inspiring fun fashion possibilities for the family at a great value. Stride Rite markets the leading brand of high-quality children's shoes in the United States. Stride Rite also markets products for children and adults under well-known brand names, including Keds, Sperry Top-Sider, Saucony, Tommy Hilfiger Footwear and Robeez. Collective Licensing International is a leading youth lifestyle marketing and global licensing business. Information about, and links for shopping on, each of the Collective Brand's units can be found at http://www.collectivebrands.com