<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON JUNE 30, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PAYLESS SHOESOURCE, INC.
(Exact Name of Registrant as Specified in its Charter)
Missouri 48-0674097
(State of Incorporation) (I.R.S. Employer Identification No.)
3231 E. 6th Street, Topeka, Kansas 66607-2207
(Address of Principal Executive Offices) (Zip Code)
PAYLESS SHOESOURCE, INC. STOCK OWNERSHIP PLAN
(Full Title of Plan)
William J. Rainey
Senior Vice President and General Counsel
PAYLESS SHOESOURCE, INC.
3231 E. 6th Street
Topeka, Kansas 66607-2207
(913) 233-5171
(Name, Address and Telephone Number of Agent for Service)
Copies to:
John H. Calvert
Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2600
Kansas City, Missouri 64108
(816) 460-5807
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of Securities Amount Being Proposed Maximum Proposed Maximum Amount of
Being Registered Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
Common Stock 2,000,000 shares $53.46875(2) $106,937,500(2) $32,405
($.01 par value)
<FN>
(1) Pursuant to Rule 416 under the Securities Act of 1933 (the "Act") this
Registration Statement covers, in addition to shares of Common Stock
stated above, an indeterminate number of shares of Common Stock which ,by
reason of certain events such as stock splits or stock dividends, may
become subject to the Plan.
(2) Estimated by the registrant solely for the purpose of calculating the
registration fee pursuant to Rules 457(h) and 457(c). The price per share
is the average of the high and low prices of the Registrant's common stock
as reported on the NYSE composite tape on June 24, 1997.
</FN>
</TABLE>
<PAGE>
Part I
This Registration Statement covers the offering of Common Stock of Payless
ShoeSource, Inc. under the Payless ShoeSource, Inc. Stock Ownership Plan (the
"Plan")
The Section 10(a) prospectus relating to the Plan is omitted from this
Registration Statement pursuant to the Note to the Instructions to Part I of
Form S-8.
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
(a) The Registrant's Annual Report on Form 10-K for the Fiscal Year
ended February 1, 1997, filed pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since February 1, 1997.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 10 dated February 23, 1996, as
amended through April 15, 1996; and Registrant's Form of Restated Articles of
Incorporation (incorporated herein by reference to Exhibit 3 of the Registrant's
Quarterly Report on Form 10-Q for the period ended May 4, 1996) including any
amendment or report filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, are incorporated by reference in this Registration Statement and are a
part hereof from the date of filing of such documents. Any statement contained
herein or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified and amended, to constitute part of this Registration Statement.
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Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Registrant's Restated Articles of Incorporation provides that any
director or officer of the Registrant who is made a party to any action, suit or
proceeding in connection with services to the Registrant or its subsidiaries
will be indemnified against expenses, judgments, fines and amounts paid in
settlement to the maximum extent permitted by Missouri Law.
Section 351.355(l) of the General and Business Corporation Law of
Missouri ("MGBCL") provides that a corporation may indemnify a director,
officer, employee or agent of the corporation in any action, suit or proceeding
other than an action by or in the right of the corporation, against expenses
(including attorney's fees), judgments, fines and settlement amounts actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action, had no reasonable cause to believe his conduct was
unlawful. Section 351.355(2) of the MGBCL provides that the corporation may
indemnify any such person in any action or suit by or in the right of the
corporation against expenses (including attorneys' fees) and settlement amounts
actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, except that he may not be indemnified in respect of any matter in
which he has been adjudged liable for negligence or misconduct in the
performance of his duty to the corporation, unless authorized by the court.
Section 351.355(3) of the MGBCL provides that a corporation shall indemnify any
such person against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the action, suit or proceeding if he has been
successful in the defense of such action, suit or proceeding and if such action,
suit or proceeding is one for which the corporation may indemnify him under
Section 351.355(l) or (2). Section 351.355(7) of the MGBCL provides that a
corporation shall have the power to give any further indemnity to any such
person, in addition to the indemnity otherwise authorized under Section 351.355,
provided such further indemnity is either (i) authorized, directed or provided
for in the articles of incorporation of the corporation or any duly adopted
amendment thereof or (ii) is authorized, directed or provided for in any bylaw
or agreement of the corporation which has been adopted by a vote of the
shareowners of the corporation, provided that no such indemnity shall indemnify
any person from or on account of such person's conduct which was finally
adjudged to have been
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knowingly fraudulent, deliberately dishonest or willful. Section 351.355(8) of
the MGBCL provides that a corporation may purchase and maintain insurance on
behalf of any such person.
The Registrant has entered into indemnification agreements with each
director and certain executive officers of the Registrant. Generally, each
indemnification agreement provides, among other things, (i) for indemnification
to the fullest extent permitted by law against all expenses, judgments, fines,
penalties incurred in connection with, and amounts paid in settlement of, any
claim against the indemnified party, provided it is determined pursuant to the
agreement that the indemnitee is entitled to be indemnified under the applicable
standard of conduct under the MGBCL; (ii) for advancement of expenses to the
indemnitee in connection with the indemnitee's defense of any threatened or
pending claim, provided that if it is determined pursuant to the agreement that
the indemnitee would not be permitted to be indemnified under applicable law,
the Registrant shall be entitled to be reimbursed by the indemnitee for all such
amounts previously paid; (iii) for the creation of a trust for the benefit of
the indemnitee in the event of a potential change in control of the Registrant
which shall be funded from time to time at the request of the indemnitee in an
amount sufficient to satisfy the Registrant's indemnification obligations under
the agreement; and (iv) that no legal action be brought and no cause of action
be asserted by or on behalf of the Registrant against the indemnitee after the
expiration of the earlier of the applicable statute of limitations or two years
after the date of accrual of such cause of action. Similar indemnification
agreements may be entered into from time to time with additional officers of the
Registrant. In addition, the Registrant has purchased a directors and officers
liability insurance policy.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Restated Articles of Incorporation of Registrant (incorporated
herein by reference to Exhibit 3 of the Registration's Quarterly
Report on Form 10-Q for the period ended May 4, 1996).
4.2 Amended and Restated By-Laws of Registrant (incorporated herein
by reference to Exhibit 3.2 of the Registrant's Annual Report on
Form 10-K for Fiscal Year ended February 1, 1997).
4.3 Rights Agreement, dated as of April 2, 1996, between Registrant
and The Bank of New York, as Rights Agent, which includes as
Exhibit A thereto, the Form of Rights Certificate (incorporated
herein by reference to Exhibit 4.1 of the Registrant's
Registration Statement on Form 10 dated February 23, 1996, as
amended through April 15, 1996)
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*23.1 Consent of Arthur Andersen LLP
*24. Powers of Attorney
99.1 Payless ShoeSource, Inc. Stock Ownership Plan, as amended
(incorporated herein by reference from Appendix C (pages C-1 to
C-8) of the Registrant's April 14, 1997 Proxy Statement relating
to its May 23, 1997 annual meeting of shareowners.
*99.2 Payless ShoeSource, Inc. Stock Ownership Plan Committee Rules
and Procedures, effective August 1, 1997.
* Filed Herewith
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Provided, however, that paragraphs 1.(a)(i) and 1.(a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement
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relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
6
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Topeka, State of Kansas, on the 27th day of June,
1997.
PAYLESS SHOESOURCE, INC.
By: /s/ William J. Rainey
Name: William J. Rainey
Title: Senior Vice President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
Signature Title Date
Steven J. Douglass* Director, Chairman of the Board and June 27, 1997
Steven J. Douglass Chief Executive Officer (Principal
Executive officer)
Richard A. Jolosky* Director and President June 27, 1997
Richard A. Jolosky
Ullrich E. Porzig* Senior Vice President and Chief June 27, 1997
Ullrich E. Porzig Financial Officer (Principal Financial
and Accounting Officer)
Howard R. Fricke* Director June 27, 1997
Howard R. Fricke
Thomas A. Hays* Director June 27, 1997
Thomas A. Hays
7
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Michael E. Murphy* Director June 27, 1997
Michael E. Murphy
Richard L. Stark* Director June 27, 1997
Richard L. Stark
*By:/s/William J. Rainey
Attorney-in-Fact
8
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EXHIBIT INDEX
4.1 Restated Articles of Incorporation of Registrant (incorporated
herein by reference to Exhibit 3 of the Registration's
Quarterly Report on Form 10-Q for the period ended May 4,
1996).
4.2 Amended and Restated By-Laws of Registrant (incorporated
herein by reference to Exhibit 3.2 of the Registrant's Annual
Report on Form 10-K for Fiscal Year ended February 1, 1997).
4.3 Rights Agreement, dated as of April 2, 1996, between
Registrant and The Bank of New York, as Rights Agent, which
includes as Exhibit A thereto, the Form of Rights Certificate
(incorporated herein by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form 10 dated February
23, 1996, as
amended through April 15, 1996).
* 23.1 Consent of Arthur Andersen LLP
* 24 Powers of Attorney
99.1 Payless ShoeSource, Inc. Stock Ownership Plan, as amended
(incorporated herein by reference from Appendix C (pages C-1
to C-8) of the Registrant's April 14, 1997 Proxy Statement
relating to its May 23, 1997 annual meeting of shareowners.
Confer to list of Exhibit D.
* 99.2 Payless ShoeSource, Inc. Stock Ownership Plan Committee Rules
and Procedures, effective August 1, 1997.
* Filed Herein
9
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-8 of our
report dated February 21, 1997, incorporated by reference in the Payless
ShoeSource, Inc. Form 10-K for the year ended February 1, 1997, and to all
references to our firm included in this registration statement.
/s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
June 30, 1997
10
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J, Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Steven J. Douglass
Steven J. Douglass
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J. Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Richard A. Jolosky
Richard A. Jolosky
11
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J, Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Ullrich E. Porzig
Ullrich E. Porzig
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J, Douglass, Ullrich E, Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Howard R. Fricke
Howard R. Fricke
12
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J. Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Thomas A. Hays
Thomas A. Hays
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J. Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Michael E. Murphy
Michael E. Murphy
13
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Steven J, Douglass, Ullrich E. Porzig, and William J. Rainey, and each
or any one of them acting alone, as his true and lawful attorney-in-fact and
agent, with full power of substitution for him and in his name, place and stead,
in any and all capacities, to sign any and all registration statements,
amendments thereto and post-effective amendments thereto with respect to the
Payless ShoeSource, Inc. Stock Ownership Plan, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to perfect and
complete such filing(s), as fully to all the intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute may lawfully do or cause to be
done by virtue thereof.
Dated this 23rd day of May, 1997
/s/Richard L. Stark
Richard L. Stark
14
Exhibit 99.2
Payless ShoeSource, Inc.
Stock Ownership Plan Committee
Rules and Procedures Effective August 1, 1997
Pursuant to the Provisions of the Payless ShoeSource, Inc. Stock
Ownership Plan, the following Rules and Procedures shall become effective on
August 1, 1997:
1. The Plan Trustee shall be ChaseMellon Shareholder Services, L.L.C
who shall administer the Plan pursuant to an agreement to be entered into
between Payless ShoeSource, Inc. and ChaseMellon, on such terms as the officers
executing such agreement deem appropriate.
2. The Plan shall utilize a Voice Response System ("VRS") to process
participant enrollment information and participant directions with respect to
stock purchases, sales and withdrawals on Business Days.
3. The following rules shall apply to eligibility until further action
of the Committee:
a. All full-time and part-time associates will be eligible after
one year of continuous service. A break in service of more
than 30 days (other than an approved leave of absence) will
interrupt the period of continuous service.
b. Rehired associates who were formerly eligible will be
immediately eligible to participate.
c. Rehired associates whose employment with Payless terminated
with less than one year of continuous service and who remain
unemployed by Payless for more than 30 days following such
termination, will be required to have one year of continuous
service following the date of rehire.
4. Until otherwise specified by the Vice President-Compensation &
Benefits, the following procedures will apply:
a. Enrollments:
(1) Enrollments will be permitted by VRS from the
first until the 20th day of each Month.
(2) Enrollments will become effective with the first
paycheck received on or after the first day of the
Month following the Month in which an enrollment is
properly effected.
<PAGE>
b. Changes in Enrollment and Payroll Deductions and Suspensions of
Participation.
(1) Contribution Changes. Contribution changes may be
made at any time before the 20th day of each Month
and will become effective beginning with the first
paycheck received on or after the first day of the
next Month.
(2) Suspensions. Participants may suspend their
participation in the Plan by directing VRS on any
Business Day to suspend their contributions. Any
change received before 10:00 p.m. Eastern Time on
each Thursday (prior Business Day if Thursday is a
holiday) will become effective with the next
paycheck received after the week in which notice is
given. A participant may resume contributions by
following the enrollment procedures.
c. Purchases
(1) Each Purchase Period, which ends on the last day of
each Month will include all pay periods for which
pay is received in the month.
(2) ChaseMellon will purchase shares on the open market
within the first five Business Days of each Month
with participant and Payless contributions for the
preceding month.
(3) The procedures in this section may not be revised
more than once in any three month period.
d. Sales of Shares:
(1) Participants may direct ChaseMellon to sell shares
in their Investment Accounts through VRS on a
Business Day prior to 10:00 p.m. Eastern Time.
(2) Only whole shares may be sold except in connection
with a termination of employment or termination of
the Plan.
(3) If less than all of the shares in an account are to
be sold, ChaseMellon will sell the shares on a
"FIFO" or first in - first out basis, in the order
of their date of acquisition, with the oldest sold
first.
(4) ChaseMellon will aggregate all requests received and
effect the sales
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at the market. Sales proceeds for each selling
participant will consist of the average price
received for all such sales on the same date, less
brokerage fees and commissions.
(5) Generally, sales by ChaseMellon will be effected on
the first Business Day following the placement of
an order on the VRS. Also, the VRS and ChaseMellon
will not accept limit orders or any other special
order.
(6) A check for the proceeds of the sale, less
brokerage fees and commissions and atransaction
statement will be mailed three business days after
the date of the trade.
e. Distributions In Connection With Terminations:
(1) Upon a termination of employment a participant may
direct ChaseMellon to sell all the shares in the
participant's account and receive a final
distribution entirely in cash (an "In Cash"
distribution), or the participant may direct
ChaseMellon to distribute the shares in the
participant's Investment Account in kind together
with cash for any fractional share and any cash
remaining in the participant's Payroll Deduction
Account (an "In Kind" distribution"). If the
participant does not make an election within 90
days of the termination of his employment he will
receive an In Kind distribution.
(2) If a participant's employment terminates due to
death, ChaseMellon will make an In Kind
distribution.
(3) In the event of any termination of the Plan or in
other circumstances that would effect the
termination of any Payless division or other
substantial segment of Payless, the accounts of
participants that are affected will be distributed
In Kind unless the Committee should otherwise
provide.
f. Withdrawal or Certification of Shares:
No Shares may be withdrawn (Certificated) prior to
any termination of employment or termination of the
plan.
g. Beneficiary Designations.
(1) Forms for Beneficiary designations will be
furnished with initial
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enrollment materials and on request.
(2) Completed forms shall be returned to and maintained
by Associate Services at the Corporate Office.
(3) Participants may change the designation at any time
by completing and filing a new form.
h. Statements of Account. Statements of accounts will be issued
as of the end of each calendar quarter and delivered within a
reasonable period after the close of the quarter.
4
