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Exhibit 99.8
THE STOCK APPRECIATION AND PHANTOM STOCK UNIT PLAN
OF
PAYLESS SHOESOURCE, INC. AND ITS SUBSIDIARIES
FOR
PAYLESS SHOESOURCE INTERNATIONAL EMPLOYEES
(as amended April 20, 1998)
PART I. GENERAL
1. PURPOSE. The purpose of the Plan is to aid Payless
ShoeSource, Inc. and its subsidiaries in attracting, retaining, motivating and
rewarding certain management employees.
2. DEFINITIONS. Whenever used herein, the following
terms shall have the meanings set forth below:
(a) "Agreement" means the agreement between the
Company or any International Subsidiary and a Participant evidencing
the award of Stock Appreciation Units or Phantom Stock Units and
containing the terms and conditions, not inconsistent with the Plan,
that are applicable to such Units.
(b) "Award" means an award of Units under the Plan.
(c) "Exercise Price" means, with respect to a Stock
Appreciation Unit, the Fair Market Value of a share of Stock on the
date the Stock Appreciation Unit is granted.
(d) "Board" means the Board of Directors of Payless
ShoeSource, Inc., a Missouri corporation, provided, that immediately
after the effective time of the Merger such term shall mean the Board
of Directors of Payless ShoeSource, Inc. (formerly Payless ShoeSource
Holdings, Inc.), a Delaware corporation.
(e) "Committee" means a committee designated by the
Board which shall consist of not less than 2 members of the Board who
shall be appointed by and serve at the pleasure of the Board and who
shall be "outside" directors within the meaning of Section 162(m) of
the Code.
(f) "Company" means Payless ShoeSource, Inc., a
Missouri corporation, provided, that immediately after the effective
time of the Merger
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such term shall mean Payless ShoeSource, Inc. (formerly Payless
ShoeSource Holdings, Inc.), a Delaware corporation.
(g) "Disability" means a total and permanent
disability which enables the Participant to be eligible for and to
receive disability benefits under (i) the Social Security Act of the
United States of America or (ii) under any comparable governmental
arrangements in the country in which the Participant resides.
(h) "Fair Market Value" of a share of Stock means the
average of the high and low price of the Stock on the New York Stock
Exchange on the date in question, or if no sales occurred on such day,
on the last preceding day on which Stock was traded.
(i) "International Subsidiary" means any Subsidiary
primarily engaged in business outside of the United States of America.
(j) "Participant" means an individual to whom an
Award for Stock Appreciation Units or a Phantom Stock Units is made
under the Plan.
(k) "Phantom Stock Unit" means a non-transferrable,
non-assignable right described in Part II of the Plan awarded by the
Company or any Subsidiary and approved by the Committee under or
pursuant to the Plan which provides for the payment of an amount in
cash in accordance with such terms and conditions, not inconsistent
with the Plan, that are applicable to such Unit.
(l) "Plan" means The Stock Appreciation and Phantom
Stock Unit Plan of Payless ShoeSource, Inc. and Its Subsidiaries For
Payless ShoeSource International Employees.
(m) "Retirement" means "retirement" as that word is
defined in any retirement plan sponsored by an International Subsidiary
which is applicable to the Participant or, if there is no such plan, as
defined in the Company's Profit Sharing Plan.
(n) "Subsidiary" means any company owned, directly or
indirectly by the Company or any subsidiary thereof.
(o) "Stock" means common stock of the Company.
(p) "Stock Appreciation Unit" means a
non-transferrable, non-assignable right described in Part II of the
Plan awarded by the Company or any Subsidiary and approved by the
Committee under or pursuant to the Plan
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which provides for the payment of an amount in cash in accordance with
such terms and conditions, not inconsistent with the Plan, that are
applicable to such Unit and whose Exercise Price is the Fair Market
Value of a share of Stock on the date of the Award.
(q) "Unit" means a Stock Appreciation Unit or a
Phantom Stock Unit. Each Phantom Stock Unit shall represent the right
to receive 100% of the value of a share of Stock on the day the Unit
vests. Each Stock Appreciation Unit shall represent the right to
receive the difference, if positive, between the Fair Market Value of a
share of stock on the date the Unit is exercised and the Exercise Price
of the Unit. Units are not shares of stock and do not entitle
Participants to receive Stock or exercise any rights incident to
ownership of Stock, except that the Committee may provide in an
agreement that holders of Phantom Stock Units will receive dividend
equivalents if any cash dividends are paid on its Stock by the Company.
(r) "Merger" means the merger of Payless Merger
Corp., a Missouri corporation and wholly-owned subsidiary of Payless
ShoeSource, Inc. (formerly Payless ShoeSource Holdings, Inc.), a
Delaware corporation, with the Company, pursuant to an Agreement and
Plan of Merger among the Company, Payless Merger Corp. and Payless
ShoeSource, Inc. (formerly Payless ShoeSource Holdings, Inc.).
3. ADMINISTRATION. The Plan shall be administered by the
Committee. Subject to all the applicable provisions of the Plan, including,
without limitation, Section 4 of Part I of the Plan, the Committee is authorized
to approve Awards of Units in accordance with the Plan, to construe and
interpret the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, and to make all determinations and take all actions
necessary or advisable for the Plan's administration. The Committee shall act by
vote or written consent of a majority of its members. Whenever the Plan
authorizes or requires the Committee to take any action, make any determination
or decision, or form any opinion, then any such action, determination, decision
or opinion by or of the Committee shall be in the absolute discretion of the
Committee.
4. PARTICIPANTS. The individuals who are eligible to
receive Awards for Units hereunder shall be limited to management employees of
any Subsidiary who, on the date of the award of Units under the Plan, are not
citizens of the United States of America and who are employed and reside out of
the boundaries of the United States of America.
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From time to time the Committee shall in its sole discretion,
but subject to all of the provisions of the Plan, determine which eligible
employees will receive Awards of Units under the Plan and the size, terms and
conditions of the Unit or Units to be awarded to each Participant. In any year,
the Committee may approve the award to any eligible employee of Units subject to
differing terms and conditions. Neither the Committee's decision to approve the
award of a Unit to that employee in any other year or to any other employee in
any other year, nor the Committee's decision with respect to the size, terms and
conditions of the Award(s) to be made to an employee in any year, require the
Committee to approve the award of the Unit(s) of the same size or with the same
terms and conditions to such employee in any other year or to any other employee
in any year. The Committee shall not be precluded from approving the award of a
Unit to any eligible employee solely because such employee may previously have
received an Award under the Plan.
5. EMPLOYMENT. In the absence of any specific agreement
to the contrary, no Award of Units to a Participant under the Plan shall affect
any right of the Participant's employer to terminate the Participant's
employment at any time.
PART II. UNITS
1. UNITS. The Committee may from time to time in its
discretion approve the award of Units to employees who are eligible to receive
an Award in accordance with Section 4 of Part I of the Plan. An Award shall be
evidenced by an Agreement which shall contain such terms and conditions (which
may include vesting provisions and other restrictions not inconsistent with the
Plan as the Committee shall determine); provided, however, that an Award shall
satisfy the requirements set forth in Part II of the Plan.
2. GRANT. An Award may be granted by the Committee and
shall be effective upon the date approved by the Committee.
3. EXERCISE AND VESTING. Stock Appreciation Unit Awards
may be exercised by the Participant only at such time or times, and only upon
such terms and conditions, as shall be set forth in the Agreement relating to
such Stock Appreciation Unit Award. A Phantom Stock Unit Award will vest on the
date or dates as are set forth in the Agreement respecting such Phantom Stock
Unit Award.
4. AMOUNT OF PAYMENT. Upon the exercise of a Stock
Appreciation Unit Award, a Participant shall be entitled to receive the excess
of the Fair Market Value of a share of Stock over the Exercise Price of a Unit
with respect to each Unit exercised. Upon vesting of a Phantom Stock Unit, a
participant shall be entitled to receive an amount for such Unit equal to the
Fair Market Value of a share of Stock on the date the Unit vests.
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5. FORM OF PAYMENT. Any amount which becomes payable
upon exercise or vesting of an Award under the Plan shall be paid entirely in
cash. The Committee may determine that amounts shall be payable in United States
dollars or in local currency, converted on such basis and at such conversion
rate as the Committee shall deem reasonable.
6. TERMINATION.
(a) GENERAL. A Stock Appreciation Unit Award shall
terminate as of the earlier of (i) the date of exercise of Award, to
the extent that it is exercised, or (ii) the expiration date specified
in the Agreement with respect to such Award. If an unexercised Stock
Appreciation Unit Award is otherwise exercisable on the date that it
expires, and if the Fair Market Value of Stock with respect to which it
was granted, determined as of the date of such expiration, exceeds the
Exercise Price of the Units (under such Award as set forth in the Stock
Appreciation Unit Agreement), then the Award shall automatically be
deemed to have been exercised as of the date of such expiration.
(b) TERMINATION OF EMPLOYMENT. If a Participant
ceases to be an employee of the Company or of a Subsidiary, for any
reason other than such Participant's Disability, Retirement or Death,
then any Award not theretofore exercised or vested, as applicable,
shall immediately be terminated and may not thereafter be exercised,
and no payment shall be made hereunder pursuant to such Award. Each
Agreement shall provide that the Committee may terminate any Award
prior to the date on which the Unit is exercised or vested, as
applicable, if the Participant engages during the life of the Award in
employment or activities contrary, in the opinion of the Committee, to
the best interests of the Company or of any Subsidiary.
(c) DISABILITY. If a Participant ceases to be an
employee of the Company or of a Subsidiary by reason of such
Participant's Disability, then the Participant's rights under the Award
after the date of such Disability shall be determined by the provisions
of the Agreement applicable to such Award.
(d) DEATH. If a Participant ceases to be an employee
of the Company or of a Subsidiary by reason of the Participant's death,
the participant's rights under the Award shall be determined by the
provisions of the Agreement applicable to such Award.
(e) RETIREMENT. If a Participant ceases to be an
employee of the Company or of a Subsidiary by reason of the
Participant's Retirement,
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any unvested Phantom Stock Units shall expire. The right to exercise
all or any portion of any Award of Stock Appreciation Units shall be
determined by the provisions of the Agreement applicable to such Award.
7. NON-ASSIGNABILITY. An Award shall not be transferable
(other than by will or the laws of descent and distribution) and, during the
Participant's lifetime, shall be exercisable by, and payable to, only the
Participant.
8. RESTRICTIONS. Awards shall be subject to the
condition that if at any time the Company shall determine in its discretion that
the registration of the Plan with any regulatory authority, the satisfaction of
withholding tax or other withholding liabilities under the law of any applicable
jurisdiction or the consent or approval of any regulatory body is necessary or
desirable as a condition of, or in connection with, the exercise or vesting of
such Award, then, in any such event, such exercise or vesting shall not be
effective unless such registrations withholding, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.
9. REPRICING PROHIBITED. There shall be no grant of a
Stock Appreciation Unit in exchange for a Participant's agreement to
cancellation of a Stock Appreciation Unit with a higher Exercise Price that was
previously granted to such Participant.
PART III. CANCELLATION AND RESCISSION
1. COMPETITION; CONFIDENTIAL INFORMATION.
(a) Unless a Stock Appreciation Right Agreement (any
such agreement being referred to herein as an "Agreement") specifies
otherwise, the Committee may
(1) cancel at any time any unexercised Stock
Appreciation Unit; or
(2) rescind any exercise of a Stock Appreciation
Unit
if the Participant is not in compliance with all other
applicable provisions of the Agreement or the Plan or if,
prior to any such exercise or within six months after such
exercise, the Participant
(i) engages in a Competing Business, as such term is
defined in the Agreement; or
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(ii) solicits for employment, hires or offers
employment to, or discloses information to or
otherwise aids or assists any other person or entity
other than the Company in soliciting for employment,
hiring or offering employment to, any employee of the
Company; or
(iii) takes any action which is intended to harm the
Company or its reputation, which the Company
reasonably concludes could harm the Company or its
reputation or which the Company reasonably concludes
could lead to unwanted or unfavorable publicity to
the Company; or
(iv) discloses to anyone outside the Company, or uses
in other than the Company's business, any
"confidential information," as such term is defined
in the Agreement.
(b) Upon exercise of Stock Appreciation Unit, the
Participant shall certify on a form acceptable to the Committee that
the Participant is in compliance with the terms and conditions of the
Agreement and the Plan.
(c) The Company shall immediately notify the
Participant in writing of any cancellation of any unexercised Stock
Appreciation Unit. Following receipt of such notice, the Participant
shall have no further rights with respect to such Stock Appreciation
Unit.
(d) The Company shall notify the Participant in
writing of any rescission of an exercise of a Stock Appreciation Unit
within one year after the activity referred to in Part III, Section
1(a). Within ten days after receiving such a notice from the Company,
the Participant shall pay to the Company the excess of the Fair Market
Value of the Stock on the date of exercise of a Stock Appreciation Unit
over the Exercise Price for the Unit.
2. AGREEMENT BY PARTICIPANT REGARDING DEDUCTION. The
Participant shall agree and consent to a deduction from any amounts the Company
or a Subsidiary owes to the Participant from time to time (including amounts
owed as wages or other compensation, fringe benefits, or vacation pay, as well
as any other amounts owed to the Participant by the Company or a subsidiary), to
the extent of the amounts the Participant owes the Company under this Article
III. Whether or not the Company elects to make any set-off in whole or in part,
if the Company does not recover by means of set-off the full amount owed by the
Participant, calculated as set forth in this Article III, then the Participant
agrees to pay immediately the unpaid balance to the Company.
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PART IV. MISCELLANEOUS
1. EFFECTIVE DATE. The Plan shall become effective on
May 14, 1997.
2. DURATION OF PLAN. The Plan shall remain in effect
until it is terminated by the Company.
3. WITHHOLDING. The Company or any Subsidiary shall have
the right to deduct from the amount of any payment arising from the exercise or
vesting of an Award any taxes required by applicable law to be withheld from
such amount.
4. UNFUNDED PLAN. The Plan shall be unfunded. Neither
the Company nor any Subsidiary nor the Committee shall be required to segregate
any assets that may at any time be represented by Awards under the Plan. Neither
the Company nor the Committee shall be deemed to be a trustee of any amounts to
be paid under the Plan. Any liability of the Company to any Participant with
respect to an Award shall be based solely upon any contractual obligations
created by the Plan or an Agreement, and no such obligation shall be deemed to
be secured by any pledge or any encumbrance on any property of the Company or of
any Subsidiary.
5. CHANGES IN CAPITAL STRUCTURE. In the event that there
is any change in the capital structure of the Company, through merger,
consolidation, reorganization, recapitalization, spinoff or otherwise, or if
there shall be any dividend on the Stock, payable in such Stock, or if there
shall be a stock split or combination of shares, the number and/or the Exercise
Price of the Units shall be proportionately adjusted by the Board as it deems
equitable, in its absolute discretion, to prevent dilution or enlargement of the
Participant's Award. The issuance of Stock for consideration and the issuance of
Stock rights shall not be considered a change in the Company's capital
structure. No adjustment provided for in this section will result in fractional
Units.
6. AMENDMENT OR TERMINATION. The Board may, by
resolution, amend or terminate the Plan at any time; provided, however, that the
Board may not, without the consent of the holder of the Unit, alter or impair
any Award previously granted under the Plan except as authorized herein.
Notwithstanding the foregoing, the Board may, by resolution, amend the Plan in
any way that it deems necessary or appropriate in order to make income with
respect to the Plan deductible for United States Federal income tax purposes
under Section 162(m) of the Code without regard to the foregoing proviso and any
such amendment shall be effective as of such date as is necessary to make such
income under the Plan so deductible.
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7. CHANGE OF CONTROL. If while unexercised Awards remain
outstanding under the Plan:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or
any company owned, directly or indirectly, by the shareowners of the
Company in substantially the same proportions as their ownership of
stock of the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this Section) whose election by
the Board or nomination for election by the Company's shareowners was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
(c) the shareowners of the Company approve a merger
or consolidation of the Company with any other Company, other than (1)
a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or
(d) the shareowners of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale of
disposition by the Company of all or substantially all of the Company's
assets,
then from and after the date of the first of the foregoing events to occur, all
outstanding Stock Appreciation Unit Awards held by active employees on such date
shall be exercisable in full, whether or not otherwise exercisable, and all
outstanding Phantom
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Stock Unit Awards held by active employees on such date shall vest in full, and
shall be deemed fully payable.
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