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EXHIBIT 10.1

PAYLESS SHOESOURCE, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN

This document constitutes and sets forth the terms of the Payless
ShoeSource, Inc. Executive Incentive Compensation Plan for Payless Executives.

Section 1. PURPOSES OF THE PLAN. The purposes of the Plan are (i) to
provide a means to attract, retain and motivate talented personnel and (ii) to
provide to participating management employees added incentive for high levels of
performance and for additional effort to improve the Company's financial
performance. Payments of awards under this Plan are intended to qualify for tax
deductibility under the provisions of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Notwithstanding any other provisions of
this Plan, if any decision must be made before a specified date in order for
payments to qualify for such tax deductibility under the tax rules in effect
from time to time, then such decision is to be made before such date.

Section 2. DEFINITIONS. Whenever used herein, the following terms shall
have the following meanings:

a. "Annual Award" means, for a Participant for a Fiscal Year,
the product of the Participant's Minimum Annual Compensation for such Fiscal
Year multiplied by the aggregate of:

i. the Participant's Annual EPS Factor for such Fiscal
Year, plus

ii. the Participant's Annual RONA Factor for such
Fiscal Year.

b. "Annual EPS Factor" means, for a Participant for a Fiscal
Year (i) five percent, if actual EPS Growth for such Fiscal Year equals or
exceeds the Participant's Threshold Annual EPS Growth Objective for such Fiscal
Year, plus (ii) ten percent multiplied by a fraction (not less than zero and not
greater than one), the numerator of which is the actual EPS Growth for such
Fiscal Year less the Participant's Threshold Annual EPS Growth Objective for
such Fiscal Year and the denominator of which is the Participant's Maximum
Annual EPS Growth Objective for such Fiscal Year less the Participant's
Threshold Annual EPS Growth Objective for such Fiscal Year; provided, however,

i. that the Annual EPS Factor shall be subject to
adjustment as provided in Section 6(b);

ii. that the percentages referred to in this
definition may be adjusted by the Committee as provided in Section
4(b); and

iii. that the percentages referred to in this
definition may be adjusted by the Committee as provided in Section
4(c).

c. "Annual RONA Factor" means, for a Participant for a Fiscal
Year (i) five percent if actual RONA for such Fiscal Year equals or exceeds the
Participant's Threshold Annual RONA Objective for such Fiscal Year, plus (ii)
ten percent multiplied by a fraction (not less than zero and not greater than
one), the numerator of which is the actual RONA for such Fiscal Year less the
Participant's Threshold Annual RONA Objective for such Fiscal Year and the
denominator of which is the Participant's Maximum Annual RONA Objective for such
Fiscal Year less the Participant's Threshold Annual RONA Objective for such
Fiscal Year; provided, however,

i. that the Annual RONA Factor shall be subject to
adjustment as provided in Section 6(b);

ii. that the percentages referred to in this definition
may be adjusted by the Committee as provided in Section 4(b); and

iii. that the percentages referred to in this
definition may be adjusted by the Committee as provided in Section
4(c).

d. "Average Annual Compensation" means, for a Long-Term
Performance Period, the Participant's average annual salary rate during such
period, determined on a monthly basis, or such lesser amount as the Participant
and the Company shall agree to, in writing.

e. "Board" means the Board of Directors of the Company.

f. "Committee" means a committee designated by the Board,
which shall consist of not less than two 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.

g. "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.

h. "Disability" means the inability of a Participant to
perform the normal duties of the Participant's regular occupation.

i. "EPS Growth" means (i) for a Fiscal Year, the annual growth
rate in EPS measured from the immediately preceding Fiscal Year; and (ii) for a
Long-Term Performance Period, the compound annual growth rate in EPS measured
from the Fiscal Year immediately preceding the Long-Term Performance Period to
the last Fiscal Year in the Long-Term Performance Period. For purposes of this
definition, "EPS" for a Fiscal Year means the Company's EPS for such Fiscal Year
as reported in the Company's annual report to its shareholders for the year of
determination (or, in the event that such item is not included in such annual
report, such comparable figure as may be determined by the Committee) adjusted
by the Company's independent certified public accountants to exclude such
non-recurring or extraordinary items as the Committee shall determine are not
representative of the on-going operations of the Company.

j. "Fiscal Year" means the fiscal year of the Company.

k. "Long-Term Award" means, for a Participant for a Long-Term
Performance Period, the product of the Participant's Average Annual Compensation
for such period multiplied by the aggregate of:

i. the Participant's Long-Term EPS Factor for such
period, plus

ii. the Participant's Long-Term RONA Factor for such
period

as such product is adjusted in accordance with Section 5(b) of the Plan.

l. "Long -Term EPS Factor" means, for a Participant for a
Long-Term Performance Period, (i) five percent if actual EPS Growth for such
period equals or exceeds the Participant's Threshold Long-Term EPS Growth
Objective for such period, plus (ii) ten percent multiplied by a fraction (not
less than zero and not greater than one) the numerator of which is the actual
EPS Growth for such period less the Participant's Threshold Long-Term EPS Growth
Objective for such period and the denominator of which is the Participant's
Maximum Long-Term EPS Growth Objective for such period less the Participant's
Threshold Long-Term EPS Growth Objective for such period; provided, however,

i. that the Long-Term EPS Factor shall be subject to
adjustment as provided in Section 6(b); and

ii. that the percentages referred to in this
definition may be adjusted by the Committee as provided in Section
5(c).

m. "Long-Term Performance Period" means three consecutive
Fiscal Years; provided, however, that the first Long-Term Performance Period
under the Plan shall be Fiscal Year 1996 and the second Long-Term Performance
Period under the Plan shall be Fiscal Years 1996 and 1997.

n. "Long-Term RONA Factor" means, for a Participant for a
Long-Term Performance Period (i) five percent if actual RONA for such period
equals or exceeds the Participant's Threshold Long-Term RONA Objective for such
period plus (ii) ten percent multiplied by a fraction (not less than zero and
not greater than one), the numerator of which is the actual RONA for such period
less the Participant's Threshold Long-Term RONA Objective for such period and
the denominator of which is the Participant's Maximum Long-Term RONA Objective
for such period less the Participant's Threshold Long-Term RONA Objective for
such period; provided, however,

i. that the Long-Term RONA Factor shall be subject to
adjustment as provided in Section 6(b); and

ii. that the percentages referred to in this
definition may be adjusted by the Committee as provided in Section
5(c).

o. "Market Value" means the average closing price of the
Stock on the New York Stock Exchange, Inc. during the month of February of the
year specified; provided, however, that "Market Value" for Fiscal Year 1996
means the arithmetic average of the high and low trading prices of the Stock on
the New York Stock Exchange for each of the first 30 trading days on which
trading in the Stock on that exchange occurs

p. "Minimum Annual Compensation" means, for a Fiscal Year,
the Participant's rate of minimum annual salary on the first day of the fiscal
month of November in the Fiscal Year.

q. "Participant" means an individual who has been designated
to participate in the Plan in accordance with Section 3 of the Plan.

r. "Plan" mean the Payless ShoeSource, Inc. Executive
Incentive Compensation Plan for Payless Executives.

s. "Relative Performance Rank" means, for a Fiscal Year or
for a Long-Term Performance Period, the relative rank of the Company (as among
the Company and a group of competitors designated by the Committee) based on the
EPS Growth and RONA, respectively, of all such corporations for such
corporations'

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comparable fiscal periods, as determined by the Committee. Relative Performance
Rank shall be determined based on data provided by the Company's independent
certified public accountants from publicly available information about all such
corporations, and adjusted by such independent certified public accountants for
comparability (adjustments for LIFO, major non-recurring transactions, etc.)
subject to the direction and approval of the Committee. The Committee may change
the number of competitors or corporations included in the group when, as a
result of extraordinary or unforeseen events, it is no longer appropriate for a
particular corporation to be included in the competitor group (such as when one
of the group ceases operations, merges with another corporation, files for
bankruptcy protection or significantly changes the nature of its business).

t. "Retirement" means, as to a Participant, retirement as
that word is defined in the Company's Profit Sharing Plan.

u. "RONA" means (i) for a Fiscal Year, the Company's return
on beginning net assets for such Fiscal Year as reported in the Company's annual
report to its shareowners for the year of determination (or, in the event that
such item is not included in such annual report, such comparable figure as may
be determined by the Committee) adjusted by the Company's independent certified
public accountants to exclude such non-recurring or extraordinary items as the
Committee shall determine are not representative of the ongoing operations of
the Company; and (ii) for a Long-Term Performance Period, the sum of the RONA
for each Fiscal Year in the Long-Term Performance Period divided by three.

v. "Stock" means the common stock of the Company.

w. "Subsidiary" means a subsidiary corporation of the Company
within the meaning of Section 425(f) of Code.

x. The terms "Maximum Annual EPS Growth Objective," "Maximum
Long-Term EPS Growth Objective," "Target Annual EPS Growth Objective," "Target
Long-Term EPS Growth Objective," "Threshold Annual EPS Growth Objective,"
"Threshold Long-Term EPS Growth Objective," "Maximum Annual RONA Objective,"
"Maximum Long-Term RONA Objective," "Target Annual RONA Objective," "Target
Long-Term RONA Objective," "Threshold Annual RONA Objective" and "Threshold
Long-Term RONA Objective" shall mean the respective objectives determined by the
Committee for each Participant pursuant to Section 7 of the Plan.

y. "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.

Section 3. ELIGIBILITY. Management employees of the Company and its
Subsidiaries shall be eligible to participate in the Plan. The Committee may, in
its sole discretion, designate any such individual as a Participant for a
particular Fiscal Year and/or for a particular Long-Term Performance Period
before the end of such Fiscal Year and Long-Term Performance Period,
respectively. Designation of an individual as a Participant for any period shall
not require designation of such individual as a Participant in any other period,
and designation of one individual as a Participant shall not require designation
of any other individual as a Participant in such period or in any other period.

Section 4. ANNUAL AWARD.

a. Subject to the other provisions of the Plan, a Participant
for a Fiscal Year who is designated as such for an entire Fiscal Year shall be
entitled to an Annual Award for such Fiscal Year. Subject to the other
provisions of the Plan, a Participant for a Fiscal Year who is designated as
such for less than an entire Fiscal Year shall be entitled to a reduced Annual
Award for such Fiscal Year equal to the Annual Award for such Fiscal Year
multiplied by a fraction, the numerator of which shall be the number of complete
fiscal months between (i) the first day of the fiscal month in which occurs the
date as of which the Participant was so designated and (ii) the end of such
Fiscal Year and the denominator of which shall be twelve.

b. The Committee may change the percentages referred to in the
definitions of "Annual EPS Factor" and "Annual RONA Factor" for any Fiscal Year,
provided that the maximum Annual Award which may be paid under such different
percentage may not be greater than 45% of the Participant's Minimum Annual
Compensation for such Fiscal Year.

c. The percentages referred to in the definitions of "Annual
EPS Factor" and "Annual RONA Factor" may be adjusted by the Committee, in its
sole discretion, to provide that such percentages

i. with respect to the chairman of the Board and
chief executive officer of the Company may be up to two times the
percentages stated in such definitions (subject to a maximum of 37.5%
for each factor), and

ii. with respect to the president of the Company may
be up to one and two-thirds times the percentages stated in such
definitions (subject to a maximum of 31.25% for each factor).

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d. Notwithstanding any other provision of the Plan, the
maximum dollar amount of any Annual Award for any Participant for any Fiscal
Year shall not exceed $1,500,000.

SECTION 5. LONG-TERM AWARD.

a. Subject to the other provisions of the Plan, a Participant
for a Long-Term Performance Period who is designated as such for an entire
Long-Term Performance Period shall be entitled to a Long-Term Award for such
period. Subject to the other provisions of the Plan, a Participant for a
Long-Term Performance Period who is designated as such for less than an entire
Long-Term Performance Period shall be entitled to a reduced Long-Term Award for
such period equal to the Long-Term Award for such period multiplied by a
fraction, the numerator of which shall be the number of complete fiscal months
between (i) the first day of the fiscal month in which occurs the date as of
which the Participant was so designated and (ii) the end of such Long-Term
Performance Period and the denominator of which shall be thirty-six.

b. The Long-Term Award otherwise payable pursuant to Section
5(a) of the Plan for a Long-Term Performance Period shall be adjusted by
multiplying such Long-Term Award by a percentage equal to a fraction, the
numerator of which shall be the Market Value of the Stock in February of the
calendar year in which such Long-Term Performance Period ends and the
denominator of which shall be the Market Value of the Stock in February of the
calendar year in which such Long-Term Performance Period begins; provided,
however, that such percentage shall in no event be greater than one hundred
fifty percent nor less than seventy-five percent.

c. The percentages referred to in the definitions of
"Long-Term EPS Factor" and "Long-Term RONA Factor" may be adjusted by the
Committee, in its sole discretion, to provide that such percentages

ii. with respect to the president of the Company may
be up to one and two-thirds times the percentages stated in such
definitions (subject to a maximum of 31.25% for each factor).

d. Notwithstanding any other provision of the Plan, the
maximum dollar amount of any Long-Term Award for any Participant for any
Long-Term Performance Period shall not exceed $1,500,000.

Section 6. ADJUSTMENTS.

a. Discretionary Adjustment of Awards. In the event that the
Committee determines, in its absolute discretion, that an Annual Award or a
Long-Term Award payable to a Participant in accordance with the other terms of
the Plan should be adjusted, upwards or downwards, based on all the facts and
circumstances known to the Committee at the time, then, the Committee may, in
its sole and absolute discretion, increase or decrease any such Annual Award or
Long-Term Award to such amount as it determines; provided, however, that the
Committee may not adjust upwards any Annual Award or Long-Term Award of any
Participant who is a "covered employee" (as defined in Section 162 (m) of the
Code and the regulations thereunder) with respect to the particular performance
period for which the Annual Award or Long-Term Award is being granted.

(b) Adjustment for Relative Rank. A Participant's Annual EPS
Factor, Annual RONA Factor, Long-Term EPS Factor and Long-Term RONA Factor shall
be adjusted in the following manner based upon the number of competitors in the
group of competitors used to determine the Company's Relative Performance Rank
and the Company's Relative Performance Rank therein:

Number of Competitor Companies (not including the Company)

16 15 14 13 12 11 10 9 8 7 6 5 4

Factor will be no less than 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st- 1st
"Target" if the Company's rank is: 4th 4th 4th 4th 3rd 3rd 3rd 3rd 2nd 2nd 2nd 2nd

Factor will be no less than 5th- 5th- 5th- 5th- 4th- 4th- 4th- 4th - 3rd- 3rd- 3rd 3rd 2nd
"Threshold" if the Company's rank 8th 8th 7th 7th 6th 6th 5th 5th 4th 4th
is:
Factor will be no higher than 14th- 13th- 12th- 11th- 11th- 10th- 9th- 8th- 8th- 7th- 6th- 5th- 5th
"Threshold" if the Company's rank 17th 16th 15th 14th 13th 12th 11th 10th 9th 8th 7th 6th
is:

Section 7. ANNUAL AND LONG-TERM TARGETS. Threshold, target and maximum
annual and long-term objectives with respect to EPS Growth and with respect to
RONA shall be determined by the Committee as soon as practicable prior to the
commencement of each Fiscal Year and each Long-Term Performance Period for each
Participant or within the period permitted by applicable law. The Committee
shall cause the respective objectives for each Participant to be provided to
such Participant as soon thereafter as practicable. Such objectives shall remain
in effect for the entire Fiscal Year or Long-Term Performance Period, as
appropriate.

Section 8. PAYMENT OF AWARDS.

a. Annual Awards for a Fiscal Year shall be payable in cash
within three months after the close of such Fiscal Year or as soon thereafter as
practicable.

b. Long-Term Awards for a Long-Term Performance Period shall
be payable in cash within three months after the close of such Long-Term
Performance Period or as soon thereafter as practicable.

c. A Participant may elect to defer all or a portion of an
award by making such election under the Deferred Compensation Plan with respect
to such award. Such election must be made not later than December 31 of the
calendar year preceding the commencement of the Fiscal Year or Long-Term
Performance Period, as appropriate.

d. The Company shall have the right to deduct any sums that
federal, state or local tax laws require to be withheld with respect to any
payment of awards.

e. Before any award is paid to a Participant who is a "covered
employee" (as defined in Section 162(m) of the Code and the regulations
thereunder), the Committee shall certify in writing that the material terms of
the Plan have been satisfied.

Section 9. TERMINATION OF EMPLOYMENT.

a. Death or Disability. In the event of either the death or
Disability of the Participant while employed (a "Section 9(a) Event"), the
Participant shall be entitled to the following:

i. An Annual Award with respect to the Fiscal Year in
which the Section 9(a) Event occurs equal to the Annual Award otherwise
payable (if any) for that Fiscal Year, prorated to the end of the
fiscal month in which such Section 9(a) Event occurs; and

ii. A Long-Term Award with respect to each Long-Term
Performance Period which includes the Fiscal Year of the Section 9(a)
Event; provided, however, that for purposes of this Section 9(a)(ii)
the Long-Term Award for any Long-Term Performance Period (1) shall be
determined at the end of the Fiscal Year in which the Section 9(a)
Event occurs, (2) shall be determined (and averages used in that
determination shall be calculated) based only on the Fiscal Year and
any preceding Fiscal Years otherwise included in the Long-Term
Performance Period and (3) shall be prorated to the end of the fiscal
month in which the Section 9(a) Event occurs.

b. Retirement.

i. In the event of the Retirement of the Participant
with the written consent of the Company, such event shall be deemed to
be a Section 9(a) Event, and the Participant shall be entitled to an
Annual Award and to a Long-Term Award as provided in Section 9(a).

ii. In the event of the Retirement of the Participant
without the consent of the Company (a "Section 9(b)(ii) Event"), the
Participant shall be entitled to the following:

(1) An Annual Award with respect to the
Fiscal Year in which the Section 9(b)(ii) Event occurs equal
to the Annual Award otherwise payable (if any) for the Fiscal
Year, prorated to the end of the fiscal month in which the
Section 9(b)(ii) Event occurs; and

(2) No Long-Term Award following the Section
9(b)(ii) Event. The Participant shall forfeit any right or
entitlement to any award with respect to any Long-Term
Performance Period which has not been completed on the date of
the Section 9(b)(ii) Event. Any Long-Term Award for a period
which ended prior to the Section 9(b)(ii) Event shall remain
unaffected.

c. Termination of Employment.

i. In the event of the termination of employment of
the Participant not covered by Sections 9(a) or 9(b) above which occurs
at the end of the term of the Participant's then-current written
employment agreement (if any) with the Company or Subsidiary, or in the
event of such a termination of a Participant who has no current written
employment agreement with the Company or Subsidiary, such event shall
be deemed to be a Section 9(b)(ii) Event, and the Participant shall be
entitled to an Annual Award (but not to a Long-Term Award) as provided
in Section 9(b)(ii).

ii. In the event of the termination of employment of
the Participant not covered by Sections 9(a) or 9(b) above before the
end of the term of the Participant's then-current written employment
agreement (if any) with the Company or Subsidiary, with the written
consent of the Company (a "Section 9(c)(ii) Event"), the Participant
shall be entitled to the following:

(1) An Annual Award with respect to the
Fiscal Year in which the Section 9(c)(ii) Event occurs equal
to the actual award otherwise payable for the Fiscal Year (if
any); provided, however, that in

the event that the term of the Participant's then-current
employment agreement is due to expire during that Fiscal Year,
then the Annual Award shall be prorated to the end of the
fiscal month in which such term is due to expire; and

(2) A Long-Term Award with respect to each
Long-Term Performance Period which includes the Fiscal Year of
the 9(c)(ii) Event equal to the Long-Term Award otherwise
payable with respect to each Long-Term Performance Period;
provided, however, that in the event that the term of the
Participant's then-current employment agreement (if any) with
the Company is otherwise due to expire during any such period,
then the Long-Term Award with respect to such period shall be
prorated to the end of the calendar month in which such term
is due to expire.

iii. In the event of the termination of employment of
the Participant not otherwise covered by this Section 9 before the end
of the term of the then-current written employment agreement (if any)
with the Company or Subsidiary, without the written consent of the
Company, the Participant shall not be entitled to any Annual Award or
to any Long-Term Award with respect to any Fiscal Year or Long-Term
Performance Period which has not been completed as of the date of such
termination of employment. The Participant shall forfeit any right or
interest in any award for any such Fiscal Year or Long-Term Performance
Period. Annual Awards and Long-Term Awards with respect to Fiscal Years
and Long-Term Performance Periods which ended prior to the date of such
termination of employment shall remain unaffected.

d. For purposes of this Section 9, the term "written consent
of the Company" shall refer to an express written consent of the Company, duly
executed by the Company, which, by its own terms, expressly refers to this
Section 9 of the Plan.

Section 10. CHANGES IN RESPONSIBILITIES. In the event that (i) the
duties of a Participant change and the Participant becomes eligible to
participate in another bonus plan of the Company, or (ii) the duties of an
employee who is a participant in another bonus plan of the Company change and
the employee is newly designated by the Committee as a Participant in this Plan,
then the maximum amount that such Participant would be entitled to receive under
the Plan shall be

a. the Annual Award determined in accordance with the
provisions of the Plan with respect to the entire Fiscal Year in which such
event occurred; and

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b. a Long-Term Award with respect to each Long-Term Performance
Period which has commenced at the time of the event, determined in accordance
with the provisions of the Plan, subject, in all events, to the Committee's
right to adjust such awards in accordance with and subject to the restrictions
set forth in Section 6(a), in its absolute discretion, which may be exercised in
such a way that the Committee deems fair and equitable based on the performance
of Participant while participating in the other bonus plan of the Company.

Section 11. RIGHTS OF PARTICIPANTS AND BENEFICIARIES.

a. Nothing contained in the Plan shall confer upon any
Participant any right to continue in the employ of the Company or constitute any
contract or agreement of employment or interfere in any way with the right of
the Company to terminate or change the conditions of employment.

b. The Company shall pay all amounts payable hereunder only to
the Participant or his or her personal representatives. In the event of the
death of a Participant, payments of all amounts otherwise due to the Participant
under the Plan shall be made to the Participant's beneficiary at the time of
death under the Company Paid Life Plan of Payless ShoeSource, Inc. or to such
other beneficiary as the Participant shall have designated, in writing, for
purposes of this Plan on a form provided by the Company.

c. Subject to the provisions of Section 11(d), rights to
payments under the Plan shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, levy or charge, and
any attempt to do so shall be void; nor shall any such amounts be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the Participant or his or her beneficiaries.

d. Nothing in this Section 11 shall prohibit the personal
representatives of a Participant from designating that any amount that would
otherwise be distributed to the Participant's estate should be distributed in
accordance with the terms of the Participant's last will and testament or
pursuant to the laws of descent and distribution.

Section 12. UNFUNDED CHARACTER OF THE PLAN. The right of a Participant
to receive any Annual Award or Long-Term Award hereunder shall be an unsecured
claim against the general assets of the Company. Nothing in the Plan shall
require the Company to invest any amounts in Stock or in any other medium.

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Section 13. CHANGES IN CAPITAL STRUCTURE. In the event that there is
any change in the Stock through merger, consolidation, reorganization,
recapitalization, spin-off 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, then the fraction provided for in Section 5(b) of the
Plan shall be adjusted by the Committee as it deems desirable, in its absolute
discretion, to prevent dilution or enlargement of the rights of Participants.
The issuance of Stock for consideration and the issuance of Stock rights shall
not be considered a change in the Company's capital structure.

Section 14. AMENDMENT OR TERMINATION. The Committee may, by resolution,
amend or terminate the Plan at any time. Any amendment necessary to bring the
Plan into compliance with Section 162(m) of the Code and any regulations
thereunder shall not require shareowner approval and the effectiveness of such
amendment shall be as of the effective date of the provision in Section 162(m)
of the Code or regulations thereunder giving rise to the amendment. However, (i)
shareowner approval shall be sought for any changes to the Plan which would
require shareowner approval under Section 162(m) of the Code and (ii) except as
provided in the preceding sentence, the Committee may not, without the consent
of the Participant, amend or terminate the Plan in such a manner as to affect
adversely any Annual Award or Long-Term Award which would have been payable,
based on the terms of the Plan immediately prior to any such amendment or
termination, for any Fiscal Year or Long-Term Performance Period which has
already commenced as of the effective date of the amendment or termination.