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Exhibit 99.12
Payless ShoeSource, Inc. Supplementary Retirement Plan
This document constitutes and sets forth the terms of the Payless ShoeSource,
Inc. Supplementary Retirement Plan (hereinafter referred to as the "Plan"),
effective as of the date Payless ShoeSource, Inc. was "spun-off" from and ceased
to be a subsidiary of The May Department Stores Company, May 4, 1996 (the
"Effective Date"). The Plan is hereby amended and restated to reflect the merger
(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.). This amendment makes the
former Payless ShoeSource Holdings, Inc. (the Delaware corporation) in effect
the sponsor of the Plan. Capitalized terms, not otherwise defined herein, which
are defined in the Payless Profit Sharing Plan shall have the meanings set forth
in such plan.
SECTION 1. DEFINITIONS.
1.1 Act means the Social Security Act as in effect from time to time.
1.2 Actuarial Equivalent means a benefit of equivalent value when computed on
the basis of the actuarial principles and tables adopted or otherwise approved
by the Committee.
1.3 Annual Compensation means an Associate's Compensation during a fiscal year
of the Company, on an accrual basis, and shall include all of the Associate's
Compensation accrued for services during such fiscal year, regardless of when
such Compensation is paid or credited.
1.4 Annual Estimated Social Security Benefits means:
(a) the estimated initial annual amount of the Primary Insurance Amount
or the Disability Insurance Benefit (as such terms are defined in the Act),
whichever is applicable, determined by the Committee from available records and
such other information as the Committee may request the Member to furnish, to
which the Member would be entitled under the Act as in effect at the beginning
of the calendar year in which cessation of employment occurs assuming the Member
is not thereafter in employment covered under the Act. The estimated Primary
Insurance Amount shall be applicable under this Plan in all cases except as
hereinafter provided in certain cases of Total Disability and shall be adjusted
in the manner provided in the Act as of the date of retirement if such
retirement occurs on or after the Member's 62nd birthday or as if the Member's
age at retirement were 62 if such retirement occurs before the
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Member's 62nd birthday. The estimated Disability Insurance Benefit shall be
applicable to a Member who sustains Total Disability and qualifies for LTD Plan
benefits which are reduced on account of Disability Insurance Benefits under the
Act; and
(b) the estimated initial annual amount of benefit to which the Member would
be entitled under any public pension or welfare system of any country other than
the United States of America which is similar to the Primary Insurance Amount or
the Disability Insurance benefit under the Act, as determined by the Committee
in its sole and absolute discretion.
1.5 Annual Minimum Benefit Amount means:
(a) for all years in which the Member participated in the Payless Profit
Sharing Plan or the May Profit Sharing Plan, the amount of the Company
contribution and forfeitures which would have been allocated to the Member's
Company Accounts in the May and Payless Profit Sharing Plans but for the
limitation on annual additions imposed by Section 415(c)(1) and Section
415(c)(2) of the Internal Revenue Code (the "Code"), and the limitation under
Code Section 401(a)(17) on the amount of such Member's Compensation which may be
taken into account in determining 1) the Member's basic contributions under the
May Profit Sharing Plan and 2) the Member's Allocation Pay Amount under the
Payless Profit Sharing Plan. The Minimum Benefit Amount with respect to the
Payless Profit Sharing Plan shall be determined as if the Company Contribution
for the applicable year or years was invested in the investment fund(s) in which
the Company Contribution actually allocated for the Member was invested. (The
amount determined under this paragraph shall be converted to an annual benefit
which would be produced if the amount determined were paid in the form of an
Actuarially Equivalent immediate life annuity with appropriate adjustments to
the amount on account of investment experience actually experienced by the
Profit Sharing Plan); and
(b) the difference between the annual amount of Retirement Pension, if any,
to which the Member is entitled under the May Retirement Plan paid in the form
of an immediate life annuity and the annual amount of such Retirement Pension
which would be payable to the Member but for (i) the limitation on benefits
under Section 415(b) of the Code, (ii) the limitation under Code Section 401(a)
(17) on the amount of such Member's Compensation which may be taken into account
in determining such Member's annual amount of Retirement Pension, and (iii) the
limitation under Code Section 415(e) on the benefit payable to a Member who
participates in both a defined benefit plan and a defined contribution plan, to
the extent applicable.
1.6 Annual Retirement Income means the amount determined by multiplying two
percent (2%) of the Member's Average Annual Compensation by the number of years
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and fractions thereof (to the closest one-twelfth) of Plan Service, up to a
maximum of twenty-five (25) years of Plan Service, completed by the Member on
his actual Retirement Date.
1.7 Annual Retirement Benefits Offset means the total of the following annual
amounts:
(a) the annual amount of Retirement Pension that would be produced if the
benefits payable under the May Retirement Plan were paid to the Member in the
form of an immediate life annuity,
(b) the annual amount of Retirement Pension that would be produced under any
other retirement plan to which the Company or a related entity contributes and
which credits employment included in Plan Service if the benefits thereunder
were payable in the form of an Actuarially Equivalent immediate life annuity,
(c) the annual amount of benefits that would be produced if the amount
payable from the Member's Company Accounts under the Payless Profit Sharing Plan
(including Company Accounts which were Employer or Company Accounts under the
May Profit Sharing Plan or Plans merged into the May Profit Sharing Plan) were
paid in the form of an Actuarially Equivalent immediate life annuity, assuming
that:
(i) for each calendar year that the Member was eligible to participate
as a Member of the May Profit Sharing Plan and for such period of
time that the Member is eligible to share in Company matching
contributions under the Payless Profit Sharing Plan, the Company
Contribution and forfeitures allocated to the Member's Company
Accounts were and are deemed to be in an amount equal to the
product of the May or Company matching rate (as applicable)
actually applicable to such year or period of time multiplied by
the maximum basic contributions under the May or Payless Profit
Sharing Plan(s) which could have been contributed by the Member for
such calendar year or other period of time;
(ii) appropriate adjustments on account of investment experience were
made to such amount based on the actual investment experience of
the May Profit Sharing Plan, as the Committee shall determine,
(d) the May Retirement Plan and May Profit Sharing Plan offsets set forth in
this Section 1.7 shall apply only if the period of membership in those Plans is
included in Plan Service under this Plan.
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1.8 Average Annual Compensation means the average of the three highest amounts
of Annual Compensation of the Member accrued with respect to three (not
necessarily consecutive) of the most recent five fiscal years of the Company
ending before the Member's actual Retirement Date.
1.9 Associate means any associate of an Employer under the Payless Profit
Sharing Plan.
1.10 Committee means the committee established by Section 4 of this Plan.
1.11 Company means Payless ShoeSource, Inc., a Missouri corporation, provided
that immediately after the effective time of the Merger such term shall mean
Payless ShoeSource, Inc. (formerly Payless ShoeSource Holdings, Inc.), a
Delaware corporation, and any other organization which may be a successor to it.
1.12 Compensation means the total compensation from an Employer (or, for the
period prior to the date Payless ceases to be a subsidiary of May, from an
Employer or from any member of the controlled group of corporations determined
in accordance with Section 414(b) of the Code or is a trade or business under
common control in accordance with Section 414(c) of the Code, which includes an
Employer) with respect to an Associate for services rendered prior to the
Associate's actual Retirement Date, including all regular pay commissions,
overtime pay, cash incentives, prize awards, amounts which an Associate elected
to have the Employer contribute directly to the May or Payless Profit Sharing
Plans on the Associate's behalf in accordance with Section 4.01(b) of each such
Plan, amounts not otherwise includable in the Associate's taxable income
pursuant to Section 125 of the Code, and amounts subject to the Deferred
Compensation Plan of May or Payless. Compensation shall not include a pension,
retirement allowance, severance pay, retainer or fee under contract, any special
payments, cash or otherwise, relating to the spinoff of Payless or distributions
from the Profit Sharing Plan.
1.13 Competing Business means any single (i) retail department store; (ii)
discount department store; (iii) catalog showroom store; (iv) specialty store;
(v) furniture store; (vi) shoe store; (vii) clothing store; or a group of any of
the type of stores referred to in (i) through (vii) hereof, which such store or
group of stores had, in its fiscal year ending within the twelve month period
immediately preceding the date of such Member's Retirement Date, a gross sales
volume, including sales in leased or licensed departments, in excess of
$25,000,000.
1.14 Effective Date means May 4, 1996. The effective date of this amendment and
restatement is the effective date of the Merger.
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1.15 Employer means an employer designated as an Employer under the Payless
Profit Sharing Plan.
1.16 Gender. Wherever applicable, the masculine pronoun as used herein shall
include the feminine pronoun.
1.17 May means The May Department Stores Company.
1.18 May Profit Sharing Plan means The May Department Stores Company Profit
Sharing Plan.
1.19 May Retirement Plan means The May Department Stores Company Retirement
Plan.
1.20 (a) Member means any person included in the membership of the Plan as
provided in Section 2.
(b) Retired Member means a Member who retires after the Effective Date and
becomes entitled to a supplementary retirement benefit under this Plan in
accordance with its provisions.
1.21 Payless means Payless ShoeSource, Inc., a Missouri corporation, provided
that immediately after the effective time of the Merger such term shall mean
Payless ShoeSource, Inc. (formerly Payless ShoeSource Holdings, Inc.), a
Delaware corporation.
1.22 Payless Profit Sharing Plan means the Payless ShoeSource, Inc. Profit
Sharing Plan, as amended from time to time, and any other successor retirement
plan which may be designated by the Committee, including the Payless ShoeSource,
Inc. Profit Sharing Plan for Puerto Rico Associates.
1.23 Plan Service means Years of Service determined using the elapsed time
method. Plan Members shall receive a Year of Plan Service on each anniversary
date of their commencement of employment with an Employer, subject to any
limitations or restrictions as may be imposed in connection with such Employer's
adoption of the Plan.
1.24 Retirement Date means the last day of the month in which a Member retires
under the Payless Profit Sharing Plan.
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SECTION 2. MEMBERSHIP.
2.1 Eligibility for Membership. Each Associate who is a member of The May
Department Stores Company Supplementary Retirement Plan on the day Payless
ceased to be a subsidiary of May shall become a Member of the Plan as of that
date. Each other Associate of an Employer who has Compensation from an Employer
in any later calendar year completed prior to his Retirement Date equal to at
least twice the amount of "wages" which are subject to the payment of F.I.C.A.
tax by the Associate in such year shall become a Member as of the January 1
thereafter. The Committee, in its discretion, may permit any other Associate to
become a Member if the Committee determines that the Associate's Compensation
from an Employer in any calendar year does not adequately reflect the
Associate's full Compensation for such year.
2.2 Eligibility for Benefits. A Member shall become entitled to benefits under
the Plan only if, and to the extent that, the Plan so provides. The fact that an
Associate becomes a Member shall not, by itself, entitle the Associate to any
benefit under the Plan.
SECTION 3. BENEFITS.
3.1 Normal Retirement.
(a) Subject to the remaining provisions of this Section 3, the annual
supplementary retirement benefit payable to a Member who retires on or after
attaining age 65 shall be equal to the excess, if any, of:
(i) such Members Annual Retirement Income, over
(ii) the sum of:
- his Annual Estimated Social Security Benefits, and
- his Annual Retirement Benefits Offset.
(b) If the benefit payable under subsection (a) above is less than the
Annual Minimum Benefit Amount computed pursuant to Section 1.5, the Member shall
receive the Annual Minimum Benefit Amount.
3.2 Early Retirement.
(a) A Member may retire early under this Plan at any time after attaining
age 55 and completing 5 years of Plan Service. Subject to the remaining
provisions of this Section 3, the annual supplementary retirement benefit
determined under Sections
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3.1(a) and 3.1(b) above, payable to a Member who retires prior to attaining age
65 shall be first computed on the basis provided by Section 3.1(a), taking into
account only years of Plan Service and Average Annual Compensation to the
Member's Retirement Date or, if applicable, on the basis provided by Section
3.1(b), which amount shall be reduced as follows:
Age at Retirement Reduction in Payment
- - ----------------- --------------------
65 or older No reduction
64 2.0% of Average Annual Compensation
63 4.0% of Average Annual Compensation
62 6.0% of Average Annual Compensation
61 6.5% of Average Annual Compensation
60 7.0% of Average Annual Compensation
59 7.5% of Average Annual Compensation
58 8.0% of Average Annual Compensation
57 8.5% of Average Annual Compensation
56 9.0% of Average Annual Compensation
55 9.5% of Average Annual Compensation
(b) Notwithstanding the other provisions of this Section 3.2, if a Member's
retirement occurs prior to his 62nd birthday, then during the period between his
Retirement Date and the Member's 62nd birthday only, in the calculation of the
Member's supplementary retirement benefit, such Member's supplementary
retirement benefit shall not be reduced by his Annual Estimated Social Security
Benefits.
(c) Notwithstanding anything to the contrary provided in this Section 3.2
or otherwise in the Plan, if, during the five-year period following the
occurrence of a Change in Control of the Company, the Company or an Employer
terminates a Member's employment other than for cause and such Member had
attained age 50 on the date on which the Change in Control occurred, then such
Member's annual supplementary retirement benefit shall be computed and paid to
such Member as if such Member had retired at age 55 with at least five years of
service on the date of termination with benefits to be determined as if such
Member had been employed through age 55 at a level of Compensation equal to the
Member's Average Annual Compensation. For this purpose, the Average Annual
Compensation of such Member shall be deemed to be the greater of his Average
Annual Compensation determined (i) as of the date of the Change in Control or
(ii) as of the date of termination of employment.
(d) A "Change in Control of the Company" shall be deemed to have occurred
if:
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(i) 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;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors 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 by clause (i), (iii) or (iv) of this paragraph) 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;
(iii) the shareowners of the Company approve a merger or consolidation
of the Company with any other company, other than (A) 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 (B) 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
(iv) the shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
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(e) "Termination by the Company or by an Employer of employment for cause"
means termination upon:
(i) the willful and continued failure by the Member to substantially
perform his duties with the Company or an Employer (other than any
such failure resulting from disability or any such actual or
anticipated failure after the Member notifies the Company or an
Employer of termination for good reason) after a written demand for
substantial performance is delivered to the Member by the Company
or Employer, which demand specifically identifies the manner in
which the Company or Employer believes the Member has not
substantially performed his duties, or
(ii) the willful engaging by the Member in conduct that is demonstrably
and materially injurious to the Company or Employer, monetarily or
otherwise.
For the purposes of this subparagraph, "good reason" means, without the Member's
express written consent, the occurrence of any of the following circumstances
during the one-year period following a Change in Control of the Company, unless
such circumstances are fully corrected (effective retroactive to and including
the date the circumstances first occurred) within 30 days of the Company or
Employer receiving notice of the Member's termination:
(i) a reduction by the Company or Employer or a subsidiary, as
appropriate, in the Member's annual base salary, bonus opportunity
or benefits as the same may be increased from time to time except
for across-the-board salary, bonus opportunity or benefit
reductions similarly affecting all management personnel of the
Company, Employer and/or subsidiaries (and all management personnel
of any person in control of the Company or Employer and of all
persons, firms, corporations and partnerships and other entities
controlled by such person); or
(ii) the relocation of the Company's or Employer's (or subsidiary's)
offices at which the Member is principally employed to a location
more than 35 miles from such location. or the Company's or
Employer's (or subsidiary's) requiring the Member to be based
anywhere other than the Company's or Employer's (or subsidiary's)
offices at such location.
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3.3 Cessation of Benefits. Subject to the provisions of Sections 3.4, 3.5
and 3.6, all payments of supplementary retirement benefits hereunder shall cease
upon the death of the Member.
3.4 Form of Benefit. Subject to subsection (b) below, the standard form of
the supplementary retirement benefit payable hereunder shall be an immediate
life annuity; provided, however, that one of the following optional forms of
payment may also be elected:
(a) 100% Joint Annuity. This option is an actuarially reduced benefit
payable to a Member during his life and, after his death, payable
for life to such person he shall have designated as his contingent
annuitant.
(b) 50% Joint and Survivor Annuity. This option is an actuarially
reduced benefit payable to a Member during his life and. after his
death, a benefit at one-half the rate of such actuarially reduced
benefit payable for life to such person as he shall have designated
as his contingent annuitant. Unless the Member's spouse consents to
another optional form of payment, this will be the standard form of
payment for a Member who is married at Retirement Date. The
Member's spouse will be the contingent annuitant.
(c) Period Certain Annuity (10 years). This option is an actuarially
reduced benefit payable to a Member during his life with periodic
payments certain terminating at the end of ten years, with
provision that if the Member dies before receiving all the periodic
payments for such ten year period, (i) periodic payments for the
remainder of such period shall be paid to a designated beneficiary,
and (ii) if there is no such designated beneficiary, to his estate.
(d) Period Certain Annuity. (15 years). This option is an actuarially
reduced benefit payable to a Member during his life with periodic
payments certain terminating at the end of fifteen years, with
provision that if the Member dies before receiving all the periodic
payments for such fifteen year period, (i) periodic payments for
the remainder of such period shall be paid to a designated
beneficiary, and (ii) if there is no such designated beneficiary,
to his estate.
The supplementary retirement benefit payable under an optional form shall be the
Actuarial Equivalent of the supplementary retirement benefit otherwise payable
in the form of an immediate life annuity.
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3.5 Standard Payment Period. Supplementary retirement benefit payments
shall be made in monthly installments, except that the Committee may, in its
discretion at any time and from time to time prior or subsequent to retirement,
direct that such payments be made other than at monthly intervals, or direct
that either a lump sum settlement or a different form of payment be made equal
to the Actuarial Equivalent of the benefit or remainder thereof otherwise
payable.
3.6 Limitation on Payments.
(a) It is recognized that a Member's duties during the period of
employment with the Company or an Employer entail the receipt of confidential
information concerning not only the current operations and procedures of the
Company or an Employer but also its short-range and long-range plans. If (A) the
Member during any portion of the period of two (2) years following his
retirement (1) has an aggregate investment (as determined from time to time) in
a Competing Business equal to at least the greater of (i) $100,000, (ii) 1% in
value of such Competing Business or (iii) such greater amount as the Committee
may establish on a case by case basis or (2) personally renders services to a
Competing Business in any manner, including without limitation, as owner,
partner, director, trustee, officer, employee, consultant or advisor thereof,
and (B) the Committee determines, in its discretion, that such investment or
rendering of personal services is contrary to the best interests of the Company,
then all rights to receive any benefits under the Plan shall immediately cease
if the Member does not reduce such aggregate investment to an amount permitted
hereunder or cease rendering such personal services, within 60 days of receipt
of written notice of such determination from the Committee. The term "value" as
used herein shall mean the net worth of such Competing Business, as disclosed by
the balance sheet of such Competing Business, as of the close of the last
preceding fiscal year; provided, however. that with respect to an investment in
stock or other securities of a Competing Business, if such stock or other
securities are part of a class of stock or other securities listed on any stock
exchange, the term "value" shall mean the market value of such class of stock or
other securities of such Competing Business, as of the date of any such
determination by the Committee.
(b) Any and all rights to benefits payable to or for the account of a
Member shall at all times be subject to termination (i) if the Committee shall
find such Member guilty of dishonesty or any other unlawful act causing injury
or harm to the Company or an Employer or their employees or customers, or (ii)
if such Member voluntarily terminates his employment without the written consent
of the Company or his Employer or in violation of a written contract of
employment.
(c) Notwithstanding any other provisions of the Plan, in the event that
the aggregate amount of benefits paid under this Plan in any benefit year (the
period commencing on July 1 of any year and ending on the following June 30),
after taking into account the tax effect on the Company or an Employer, shall
exceed five percent (5%) of
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the average consolidated net earnings of the Company as shown in the Company's
annual report to shareowners for the three (3) most recent consecutive fiscal
years, ending prior to the conclusion of the benefit year, then all benefits
otherwise payable hereunder during the next following benefit year shall be
reduced or if necessary terminated. Such reduction shall be made by reducing the
benefits otherwise payable during such next following benefit year in the same
proportion that the benefits for the immediately preceding benefit year (before
the imposition of the limitations provided for by this paragraph) would have had
to have been reduced so that no excess would have occurred during such
immediately preceding benefit year.
(d) Notwithstanding anything provided in this Section 3.6 or otherwise
in the Plan, to the contrary, the terms of subsections (a), (b) and (c) of this
Section 3.6 shall cease to apply and shall be null and void immediately upon the
occurrence of a Change in Control of the Company, as defined in Section 3.2(d)
of the Plan.
3.7 Indirect Payment of Benefits. If any retired Member or his beneficiary
is, in the judgment of the Committee, legally, physically or mentally incapable
or incompetent, payment may be made to the guardian or other legal
representative of such retired Member or beneficiary or, if there be none, to
such other person or institution who or which, in the opinion of the Committee,
based on information furnished to the Committee, is then maintaining or has
custody of such retired Member or beneficiary. Such payment shall constitute a
full discharge with respect thereto.
3.8 Termination and Rehire. In the event a Member's employment is
terminated prior to eligibility for early retirement, as described in Section
3.2, (for any reason other than Total Disability), or in the event that a Member
dies prior to the date as of which supplementary retirement benefits hereunder
would otherwise commence, then no benefits shall be payable under this Plan. If
a terminated Member is rehired under circumstances which result in reinstatement
of membership under the Payless Profit Sharing Plan, reinstatement of membership
under this Plan will occur at the same time. Such reinstatement will result in
cessation of payment of benefits under this Plan. Upon the subsequent retirement
of a Member whose benefits had ceased by reason of this Section 3.8,
supplementary retirement benefits shall again be payable based upon such
adjustments in amounts as the Committee may deem equitable.
3.9 Withholding. The Employer shall withhold from amounts otherwise payable
under this Plan any amounts required to be withheld under federal, state or
local law or regulations, such amounts to be remitted on a timely basis to the
appropriate governmental authorities.
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SECTION 4. ADMINISTRATION OF THE PLAN.
4.1 The Committee. Except as otherwise provided herein, the Plan shall be
administered by the Committee constituted under the Payless Profit Sharing Plan.
4.2 Delegation of Duties. In the administration of the Plan, the Committee
may, from time to time, appoint agents and delegate to such agents and to the
Administrative Subcommittee such duties as it considers appropriate and to the
extent that such duties have been so delegated, the Administrative Subcommittee
or agent, as the case may be, shall be exclusively responsible for the proper
discharge of such duties. The Committee, the Administrative Subcommittee or any
agent may from time to time consult with counsel who may be counsel to the
Company.
4.3 Authority. Any decision or action of the Committee (or, with respect to
any duty delegated to it, any decision or action of the Administrative
Subcommittee or of a duly appointed agent) in respect of any question arising
out of or in connection with the administration, interpretation and application
of the Plan and the rules and regulations thereunder shall be in its absolute
discretion and shall be final, conclusive and binding upon all persons having
any interest in the Plan.
SECTION 5. CERTAIN RIGHTS AND OBLIGATIONS.
5.1 Rights of Members, Members' Spouses and Beneficiaries. The rights of
the Members, their spouses, their beneficiaries and other persons are hereby
expressly limited as set forth herein and shall be determined solely in
accordance with the provisions of the Plan.
5.2 Employer-Associate Relationship. The establishment of the Plan shall
not be construed as conferring any legal or other rights upon any Associate or
any other person for a continuation of employment or as interfering with or
affecting in any manner the right of the Company or any Employer to discharge
any Associate or otherwise act with relation to such Associate. The Company or
an Employer may take action (including discharge) with respect to any Associate
or other person and may treat him without regard to the effect which such action
or treatment might have upon him under the Plan.
5.3 Unfunded Nature of Plan. The Plan shall be unfunded. Neither an
Employer nor the Committee shall be required to segregate any assets in
connection with benefits provided by the Plan. Neither the Company, an Employer
nor the Committee shall be deemed to be a trustee of any amounts to be paid
under the Plan. Any liability of the Company or an Employer to any person with
respect to benefits payable under the Plan shall be based solely upon such
contractual obligations, if any, as shall be created by the Plan and shall be
only a claim against the general assets of the Company or the Employer,
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and no such liability shall be deemed to be secured by any pledge or any other
encumbrance on any specific property of the Company or any Employer.
SECTION 6. NON-ALIENATION OF BENEFITS.
6.1 Provisions with Respect to Assignment and Levy. No benefit payable
under the Plan shall be subject in any manner to anticipation, alienation. sale,
transfer, assignment, pledge, encumbrance, levy or charge, and any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber, levy upon or
charge the same shall be void; nor shall any such benefit be in any manner
liable for or, subject to the debts, contracts, liabilities, engagements or
torts of the person entitled to such benefit, except as specifically provided
herein.
6.2 Alternate Application. If any Member, Member's spouse or beneficiary
under the Plan becomes bankrupt or attempts to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit under the Plan, except
as specifically provided herein, or any benefit shall be levied upon, garnished
or attached, then such benefit shall, in the discretion of the Committee, cease,
and in that event the Committee may hold or apply the same or any part thereof
to or for the benefit of such Member, Member's spouse or beneficiary, children
or other dependents, or any of them, or in such other manner and in such
proportion as the Committee may deem proper.
SECTION 7. AMENDMENT AND TERMINATION.
7.1 Company's Rights. The Company reserves the right at any time and from
time to time in its sole discretion to modify or amend in whole or in part any
or all of the provisions of the Plan, provided that no amendment shall reduce
any supplementary retirement benefit with respect to a Member who had already
retired and no amendment shall reduce the amount of any supplementary retirement
benefit with respect to a Member who, at the time of amendment, was eligible for
retirement under the terms of the Plan, to a level below that determined as if
retirement were effective at the time of amendment.
Notwithstanding anything provided to the contrary in this Section 7.1 or the
next Section 7.2, following a Change in Control of the Company the Plan may not
be amended or terminated in a manner that would adversely affect the rights of
any Member to his vested annual supplementary retirement benefits. Without
limiting the generality of the foregoing, Section 3.2(c) through (e) may not be
amended or deleted following a Change of Control of the Company.
7.2 Rights to Terminate. Except as provided in the previous Section 7.1,
the Company reserves the right at any time and from time to time in its sole
discretion to terminate the Plan, in whole or in part. In the event the Plan is
terminated, the Employer shall be under no further obligation to provide
benefits under the Plan, except to the extent of any
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supplementary retirement benefit with respect to a Member who had already
retired and to the extent of any supplementary retirement benefit with respect
to a Member who, at the time of termination, was eligible for retirement under
the terms of the Plan, determined as if retirement were effective at the time of
Plan termination. If the Plan is partially terminated, the preceding sentence
shall apply to Members in the class with respect to which the Plan is
terminated.
SECTION 8. CONSTRUCTION.
The provisions of the Plan shall be construed, regulated, administered and
enforced according to the laws of the State of Kansas.
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PAYLESS SHOESOURCE, INC.
SUPPLEMENTARY RETIREMENT PLAN
AS AMENDED EFFECTIVE JUNE 1, 1998
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TABLE OF CONTENTS
Section 1. Definitions......................................................................................1
1.1 Act............................................................................................1
1.2 Actuarial Equivalent...........................................................................1
1.3 Annual Compensation............................................................................1
1.4 Annual Estimated Social Security Benefits......................................................1
1.5 Annual Minimum Benefit Amount..................................................................2
1.6 Annual Retirement Income.......................................................................2
1.7 Annual Retirement Benefits Offset..............................................................3
1.8 Average Annual Compensation....................................................................4
1.9 Associate......................................................................................4
1.10 Committee......................................................................................4
1.11 Company........................................................................................4
1.12 Compensability.................................................................................4
1.13 Competing Business.............................................................................4
1.14 Effective Date.................................................................................4
1.15 Employer.......................................................................................5
1.16 Gender.........................................................................................5
1.17 May............................................................................................5
1.18 May Profit Sharing Plan........................................................................5
1.19 May Retirement Plan............................................................................5
1.20 Member.........................................................................................5
1.21 Payless........................................................................................5
1.22 Payless Profit Sharing Plan....................................................................5
1.23 Retirement Date................................................................................5
1.24 Plan Service...................................................................................5
Section 2. Membership.......................................................................................6
2.1 Eligibility for Membership.....................................................................6
2.2 Eligibility for Benefits.......................................................................6
Section 3. Benefits.........................................................................................6
3.1 Normal Retirement..............................................................................6
3.2 Early Retirement...............................................................................6
3.3 Cessation of Benefits.........................................................................10
3.4 Form of Benefit...............................................................................10
3.5 Standard Payment Period.......................................................................11
3.6 Limitation on Payments........................................................................11
3.7 Indirect Payment of Benefits..................................................................12
3.8 Termination and Rehire........................................................................12
3.9 Withholding...................................................................................12
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Section 4. Administration of the Plan......................................................................13
4.1 The Committee.................................................................................13
4.2 Delegation of Duties..........................................................................13
4.3 Authority.....................................................................................13
Section 5. Certain Rights and Obligations..................................................................13
5.1 Rights of Members, Members' Spouses and Beneficiaries.........................................13
5.2 Employer-Associate Relationship...............................................................13
5.3 Unfunded Nature of Plan.......................................................................13
Section 6. Non-Alienation of Benefits......................................................................14
6.1 Provisions with Respect to Assignment and Levy................................................14
6.2 Alternate Application.........................................................................14
Section 7. Amendment and Termination.......................................................................14
7.1 Company's Rights..............................................................................14
7.2 Rights to Terminate...........................................................................14
Section 8. Construction....................................................................................15