EMPLOYMENT AGREEMENT

THIS AGREEMENT is made this 22nd day of July, 2008 (the “Effective Date”), by
and between PAYLESS SHOESOURCE, INC., a Missouri corporation (“PSS”), and LUANN
VIA (“Executive”).
 
WITNESSETH:
 
WHEREAS, PSS conducts its business in part through various direct and indirect
subsidiaries and affiliates (PSS and its parent, subsidiaries and affiliates
being collectively referred to as “Payless”).
 
WHEREAS, Payless is one of the leading retail companies in the United States
with self service shoe stores throughout the United States, Puerto Rico and the
U.S. Virgin Islands, Guam, Saipan and Canada.
 
WHEREAS, Executive recognizes and acknowledges that Executive's position with
PSS provides Executive with access to Payless’ proprietary, trade secret and
other confidential information relating to its business.
 
WHEREAS, Payless has expended a great deal of time, money and effort to develop
and maintain its proprietary, trade secret and confidential information; this
information, if misused or disclosed, could be very harmful to Payless' business
and its competitive position in the marketplace.
 
WHEREAS, Executive recognizes and acknowledges that if Executive's employment
with PSS and all other Payless-related entities ceases, Payless needs certain
protections to ensure that Executive does not misuse or disclose any
proprietary, trade secret or confidential information entrusted to Executive
during the course of employment or take any other action which could result in a
loss of Payless' good will that was generated on Payless' behalf and at its
expense, and, more generally, to prevent Executive from having an unfair
competitive advantage over Payless.
 
WHEREAS, Executive desires to be employed by PSS, to be eligible for potential
compensation increases, and to be given access to proprietary, trade secret and
confidential information of Payless necessary for Executive to perform
Executive’s job, but which Payless would not make available but for Executive’s
signing and agreeing to abide by the terms of this Agreement.
 
In consideration of the mutual promises and agreements herein contained, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
 

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1. Term. This Agreement shall commence on the Effective Date and shall expire on
July 22, 2010 (the “Contract Term”), unless sooner terminated in accordance with
Paragraph 8 hereof. Beginning on July 23, 2008, the Contract Term will be
automatically extended each day by one day, until either party delivers to the
other written notice of non-renewal.
 
2. Duties.
 
(a) Executive shall perform all duties incident to the position of President and
Chief Executive Officer of PSS, as well as any other duties as may be assigned
from time to time by PSS, and agrees to abide by all the by-laws, policies,
practices, procedures and rules of Payless. Executive agrees to use Executive’s
best efforts, energies and skill to perform the duties and responsibilities of
the position, and to this end will devote Executive’s full time and attention
exclusively to the business of PSS and/or such other Payless entities to which
Executive may be assigned or transferred. Executive may be assigned or
transferred to another management position with PSS or Payless, as designated by
Payless, so long as such assignment or transfer does not result in a material
diminution in responsibilities or duties. This Agreement shall remain in effect
and shall apply to Executive, without any need for re-execution, regardless of
the Payless parent, subsidiary, affiliate or business division for which
Executive works or provides services, or the duties to which Executive may in
the future be assigned.
 
(b) At all times during the Contract Term, Executive will maintain Executive’s
residence within reasonable access to the Corporate Headquarters of PSS or any
division, parent, subsidiary or affiliate to which Executive may be assigned.
 
3. Compensation; Benefits.
 
(a) Base Salary. PSS agrees to pay Executive a base salary during the Contract
Term at the annual rate of $675,000, less applicable taxes and withholding,
payable in equal bi-weekly installments, which annual rate will be subject to an
annual review, which may result in an increase or decrease in salary (where such
decrease is i) not material; or ii) is occurring as part of an overall reduction
in compensation also applied to other senior executives of Payless as a result
of a decrease in business performance by PSS or one of its business units),
during PSS’ regularly scheduled review time.
 
(b) Incentive Plans. Executive shall be eligible to participate in such annual
and long-term plans, programs or arrangements established from time to time for
senior executives of PSS (the "Incentive Plans"), in accordance with and subject
to all of the terms and provisions of such Incentive Plans and such other
incentive plans of Payless as may be appropriate in light of any reassignment or
transfer of Executive under Paragraph 2(a) above.
 
(c) Expenses. PSS shall reimburse Executive for all items of normal business
expense incurred by Executive as an employee of PSS in accordance with its
reimbursement policies in effect from time to time.
 

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(d) Benefits. PSS has adopted certain welfare benefit plans (including, but not
limited to, medical, prescription drug, dental, disability, and life insurance)
and has established certain perquisites which may, from time to time, confer
rights and benefits on Executive in accordance with their terms. PSS may also,
in the future, adopt additional welfare benefit plans, establish additional
perquisites, or amend, modify or terminate any of the aforesaid welfare benefit
plans and arrangements, all in accordance with their terms and in accordance
with applicable law. Unless effectively waived, Executive shall be entitled to
whatever rights and benefits which may be conferred on Executive, from time to
time in accordance with the terms of such plans and arrangements and such other
benefits of Payless as may be appropriate in light of any reassignment or
transfer of Executive under Paragraph 2(a) above.
 
(e) Stock. Executive will be eligible for future grants of restricted stock,
stock-settled stock appreciation rights, stock options, or performance units, if
any, as may be granted under the terms of the Collective Brands, Inc. 2006 Stock
Incentive Plan, or any successor plan, in accordance with the criteria
established from time to time by the Compensation Committee of the Collective
Brands, Inc. Board of Directors.
 
(f)  Automobile Allowance. Executive shall be eligible for an automobile
allowance as determined by PSS (or such other Payless entity as may be
appropriate) from time to time, paid monthly upon written request. The portion
of the allowance that is substantiated as business-related will not be
considered taxable. 
 
4. Noncompete.
 
(a) At all times during the Contract Term, and for a period of two (2) years
immediately following Executive’s last day of employment with any Payless
entity, Executive will not directly or indirectly:

(i) own, manage, operate, finance, join, control, or participate in the
ownership, management, operation, financing, or control of, or be a partner in,
be employed by, or act as an advisor, consultant, agent, officer, director, or
independent contractor for, or otherwise have an interest in, a Competing
Business; or

(ii) solicit, induce, hire, or attempt to aid or assist any person or entity
other than Payless in soliciting for employment, offering employment to, or
hiring, any employee of any Payless entity or any person who, at any time during
the 12 months prior to the solicitation, was employed by any Payless entity.

Nothing in this Paragraph 4(a) shall prevent Executive, however, from performing
Executive’s duties and responsibilities for PSS or any other Payless entity. In
addition, ownership of an investment of less than the greater of $25,000 or 1%
of any class of equity or debt security of a Competing Business shall not
constitute ownership or participation in ownership in violation of Paragraph
4(a)(i). Further, Paragraph 4 shall not apply in the event of a Change of
Control (as defined in Section 1.8 of the Collective Brands, Inc. Supplementary
Retirement Account Plan, as amended and restated January 1, 2008).

(b) The term "Competing Business" shall include, but not be limited to:

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(i) any retail business with gross sales or revenue in the prior fiscal year of
more than $25 million (or which is a parent, subsidiary, affiliate or joint
venture partner of a business with gross sales or revenue in the prior fiscal
year of more than $25 million) which sells footwear or accessories in whole or
in part competitive to that sold by Payless (“Competitive Footwear”), including,
without limitation, Wal-Mart Stores, Inc.; Sears Holdings Corporation; Target
Corporation; Foot Star, Inc.; DSW, Inc.; Aldo Shoes, Inc.; Ross Stores, Inc.;
T.J. Maxx; Off-Broadway Shoes; Burlington Coat Factory Warehouse Corporation;
Gennesco Inc.; Brown Shoe Company, Inc.; Shoe Carnival, Inc.; Kohl’s
Corporation; Liz Claiborne, Inc.; Big 5 Sporting Goods Corporation; J.C. Penney
Company; Shoe Zone, Limited; Bata, Limited; Shoes.com; and Zappos.com, within 10
miles of any Payless store or the store of any wholesale customer of Payless in
the United States, or anywhere in any foreign country in which Payless has
retail stores or wholesale customers;

(ii) any franchising or wholesaling business with gross sales or revenues in the
prior fiscal year of more than $25 million (or which is a subsidiary, affiliate
or joint venture partner of a business with gross sales or revenues in the prior
fiscal year of more than $25 million) which sells Competitive Footwear at
wholesale to franchisees, retailers or other footwear distributors located
within 10 miles of any Payless store or the store of any wholesale customer of
Payless in the United States, or anywhere in any foreign country in which
Payless has retail stores or wholesale customers;

(iii) any footwear manufacturing business with gross sales or revenue in the
prior fiscal year of more than $25 million (or which is a subsidiary, affiliate
or joint venture partner of a business with gross sales or revenue in the prior
fiscal year of more than $25 million) which sells Competitive Footwear to
retailers, wholesale customers, or other footwear distributors located within 10
miles of any Payless store or the store of any wholesale customer of Payless in
the United States, or anywhere in any foreign country in which Payless has
retail stores or wholesale customers (including, without limitation, Nine West
Shoes; Dexter Shoe Company; Liz Claiborne, Inc.; Wolverine Worldwide, Inc.;
Timberland Company; Nike, Inc.; Reebok International, Ltd.; K-Swiss, Inc.; and
adidas-Salomon AG); or

(iv) any business which provides buying office services to any store or group of
stores or businesses referred to in Paragraph 4(b).

(c) Background of non-compete restrictions:

(i) In connection with its business, Payless (including PSS) has expended a
great deal of time, money and effort to develop and maintain its proprietary,
trade secret and confidential information; this information, if misused or
disclosed, could be very harmful to Payless' business and its competitive
position in the marketplace;

(ii) Executive recognizes and acknowledges that Executive’s position with PSS
provides Executive with access to Payless’ proprietary, trade secret, and
confidential information;

(iii) Payless compensates its employees to, among other things, develop and
preserve goodwill and relationships on Payless' behalf and to develop and
preserve business information for Payless’ exclusive ownership and use;

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(iv) long-term customer and supplier relationships often can be difficult to
develop and require a significant investment of time, effort and expense; and

(v) Executive recognizes and acknowledges that if Executive’s employment
hereunder were to cease, Payless would need certain protections in order to
ensure that Executive does not appropriate or use any confidential and
proprietary trade secret information entrusted to Executive during the course of
employment or take any other action which could result in a loss of Payless’
goodwill that was generated on Payless’ behalf and at its expense, and, more
generally, to prevent Executive from having an unfair competitive advantage over
Payless.

(d) Reasonableness of non-compete restrictions. Executive acknowledges and
agrees that the restrictions in Paragraph 4 are reasonable and that such
restrictions are enforceable in view of the background for the non-compete
restrictions set forth in the Paragraph 4(c), and in view of, among other
things, the following:

(i) the markets in which Payless operates its businesses;

(ii) the proprietary, trade secret, and other confidential business information
to which Executive has or will have access;

(iii) Executive's training and background, which are such that neither Payless
nor Executive believes that the restraint will pose an undue hardship on the
Executive or prevent Executive from finding suitable non-competitive employment
during the specified period of non-competition;

(iv) a Competing Business could benefit greatly if it were to obtain Payless'
proprietary, trade secret, and other confidential business information;

(v) Payless would not have adequate protection if Executive is permitted to work
for any Competing Business in violation of this Agreement since Payless would be
unable to verify whether its proprietary, trade secret, and other confidential
business information was being disclosed or misused;

(vi) the limited duration and limited scope of, and the limited activities
prohibited by, the restrictions in Paragraph 4; and

(vii) Payless' legitimate interests in protecting its proprietary, trade secret,
and other confidential business information, goodwill and relationships.

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(e) If Executive violates Executive’s obligations under Paragraph 4, then
Payless (including PSS) shall be entitled to all legal and equitable rights and
remedies under this Agreement, including all of its rights and remedies referred
to in Paragraph 10 of this Agreement. Further, any time in which Executive is in
violation of Executive’s obligations shall not count toward satisfying the time
during which any injunctive restriction shall apply. For example, if Executive
were to join a competitor in violation of the restrictions in Paragraph 4(a) and
work for such competitor for one month before a court enjoined such violation,
then the two year time period of the restriction would begin when such
injunction were issued; the one month in which Executive violated the
restriction would not count toward the time that the restriction applies.

(f) Executive agrees to provide a copy of this Agreement (with Paragraph 3(a)
redacted, if Executive so desires) to any prospective employer Executive
contacts during or after termination or resignation of employment. Executive
authorizes Payless to contact Executive’s future employers and other entities
with which Executive has any business relationship to determine Executive’s
compliance with this Agreement or to communicate the contents of this Agreement
to such employer and entities. Executive releases Payless, its employees and
agents, from all liability for damages arising from such contact or
communications.

5. Confidential Information.
 
(a) Executive will not, at any time during the Contract Term or after
termination of employment, directly or indirectly use, make known, disclose,
furnish, or make available Confidential Information (as defined herein), other
than in the proper performance of Executive’s duties contemplated herein.
 
(b) “Confidential Information” means any non-public information pertaining to
Payless’ business disclosed by Payless to Executive, or developed or learned by
Executive during the course of Executive’s employment with any Payless entity,
including, without limitation, any confidential information and documents
concerning Payless’ customers; customer, supplier, and vendor lists; terms,
conditions and other business arrangements with vendors, suppliers, or
factories; contract factory lists; manufacturing plans; advertising, marketing
plans and strategies; pricing information; profit margins; seasonal plans,
goals, objectives and projections; compilations, analyses and projections
regarding Payless' businesses, product segments, product lines, suppliers, sales
and expense information; patent applications (prior to their being public);
salary, staffing and employment information (including information about
performance of other executives); operations manuals; computer software
applications and other programs; techniques, methods, styles, designs and design
concepts, business plans, knowledge and data related to processes, products,
compounds, compositions, formulae, lasts and molds, and "know-how," techniques
or any technical information not of a published nature relating, for example, to
how Payless conducts its business;
 
(c) Executive acknowledges that Payless’ business is intensely competitive and
that, by virtue of Executive’s employment, Executive will have access to and
knowledge of Confidential Information. Executive also agrees that the misuse or
direct or indirect disclosure of Confidential Information to existing or
potential competitors of Payless would place Payless at a competitive
disadvantage and would harm and damage Payless’ business.
 

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(d) During Executive's Payless-related employment and thereafter, Executive
will: (i) notify and provide Payless immediately with the details of any
unauthorized possession, use or knowledge of any Confidential Information, (ii)
assist in preventing any reoccurrence of such possession, use or knowledge, and
(iii) cooperate with Payless in any litigation or other action to protect or
retrieve Confidential Information.   
 
6. Payless Intellectual Property. (a) Executive hereby assigns to Payless all of
Executive’s rights, title, and interest (including but not limited to all
patent, trademark, copyright and trade secret rights) in and to all Work Product
(as defined herein). Executive further acknowledges and agrees that all
copyrightable Work Product prepared by Executive within the scope of Executive’s
Payless-related employment are “works made for hire” and, consequently, that
Payless owns all copyrights thereto. For purposes of this Agreement, “Work
Product” shall include but is not limited to, all literary works, software,
documentation, memoranda, photographs, artwork, sound recordings, audiovisual
works, ideas, designs, inventions, discoveries, creations, conceptions,
improvements, processes, algorithms, and so forth which (i) are prepared or
developed by Executive, individually or jointly with others, during Executive’s
Payless-related employment, or within six (6) months thereafter, whether or not
during working hours, and (ii) relate to or arise in any way out of (1) current
and/or anticipated business and/or activities of Payless, (2) Payless’ current
and/or anticipated research or development, (3) any work performed by Executive
for Payless, and/or (4) any information or assistance provided by Payless,
including but not limited to Confidential Information.
 
(b)  Executive shall promptly disclose to Payless all Work Product. All such
Work Product is and shall forthwith become the property of Payless, or its
designee, whether or not patentable or copyrightable. Executive will execute
promptly upon request any documents or instruments at any time deemed necessary
or proper by Payless in order to formally convey and transfer to Payless or its
designee title to such Work Product, or to confirm Payless or its designee’s
title therein, and it order to enable Payless or its designee to obtain and
enforce United States and foreign Letters Patent, Trademarks and Copyrights
thereon. Executive will perform Executive’s obligations under this Paragraph 6
without further compensation, except for reimbursement of reasonable
out-of-pocket expenses incurred at the request of Payless.
 
7. Disability. If Executive becomes Disabled and remains continuously so
Disabled for a period of 180 days, then Payless' obligations under this
Agreement may be terminated by notice in writing to that effect during the
continuance of such Disability, such termination to take effect the later of (a)
the last day of the month during which such notice is given or (b) the last day
of such 180 day period. If Executive has made a previous election to participate
in the Payless ShoeSource, Inc. Long-Term Disability Plan, or successor plan,
(subject to the terms and provisions of that plan), then the terms of that plan
shall apply. "Disability" or "Disabled" shall mean disability as defined under
the Payless ShoeSource, Inc. Long-Term Disability Plan applicable to Executive.
 

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8. Termination.
 
(a) For Cause; Voluntary Resignation; Death; Disability. PSS (or such other
Payless entity as may be appropriate in light of any reassignment or transfer)
may terminate Executive’s employment for Cause at any time upon written notice
to Executive, with immediate effect. Executive may voluntarily resign from PSS
(or such other Payless entity) at any time upon 30 days written notice to PSS
(or such other Payless entity); provided, PSS (or such other Payless entity) may
require Executive to cease working earlier than the noticed termination date and
agrees to continue to pay Executive her basic compensation and maintain her
employee benefits through the noticed termination date. If Executive’s
employment terminates during the Contract Term by reason of Executive’s death or
Disability, by Executive’s voluntary termination of employment, or by PSS (or
such other Payless entity) for Cause:

(i) Executive’s basic compensation and employee benefits shall cease on the date
of such termination or resignation, except as otherwise provided in any
applicable employee benefit plan or program;

(ii) Executive shall be entitled to receive Executive’s base salary through that
date of termination or resignation (including payment for any accrued but unused
vacation), payable within the first pay period following termination or
resignation;

(iii) Executive will be reimbursed, in accordance with Payless policy, for any
business expenses properly incurred by Executive prior to the date of
termination or resignation;

(iv) Executive shall be entitled to any equity-linked awards, consistent with
the terms of the applicable award agreements;

(v) Executive shall be entitled to such portion of any long-term cash incentive
compensation as shall be payable under the terms of the Incentive Plans; and

(vi) Executive will have the opportunity to continue coverage in Payless’
medical, dental, and vision plans in which Executive is participating on the
date of termination or resignation, through and subject to the terms of COBRA.

(b) Without Cause by Payless; With Good Reason by Executive. PSS (or such other
Payless entity as may be appropriate in light of any reassignment or transfer)
may terminate Executive’s employment Without Cause at any time upon written
notice to Executive, and Executive may terminate Executive’s employment for Good
Reason at any time upon written notice to PSS (or such other Payless entity as
may be appropriate in light of any reassignment or transfer). If Executive’s
employment is terminated Without Cause or for Good Reason:

(i) Executive’s basic compensation and employee benefits shall cease on the date
of such termination, except as otherwise provided herein or in any applicable
employee benefit plan or program;

(ii) Executive shall be entitled to receive Executive’s base salary through that
date of termination (including payment for any accrued but unused vacation);

(iii) Executive will be reimbursed, in accordance with Payless policy, for any
business expenses properly incurred by Executive prior to the date of
termination;

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(iv) Provided that Executive is not in violation of, and does not violate, any
of Executive’s obligations under Paragraphs 2, 4, 5, and 6 of this Agreement,
Executive shall be entitled to a severance payment in an amount equal to two (2)
times Executive’s then current base salary at the time of termination of
employment, payable in a lump sum, less applicable withholdings and deductions;

(v) Executive shall be entitled to the amount of any annual award payable to
Executive under the Incentive Plans for the fiscal year in which Executive’s
employment is terminated, prorated by the number of days Executive is actively
employed in that fiscal year divided by the number of days in the fiscal year,
and payable at the time and pursuant to the terms of such Incentive Plans, less
applicable withholdings and deductions; provided, however, such Annual Award
must be paid no later than 2 ½ months from the end of Payless’ fiscal year in
which Executive’s employment terminates;

(vi) Executive shall be entitled to any equity-linked awards, consistent with
the terms of the applicable award agreements;

(vii) Executive shall be entitled to such portion of any long-term cash
incentive compensation as shall be payable under the terms of the Incentive
Plans;

(viii) Executive will receive a special payment which is the equivalent, before
taxes, to the portion paid by Payless towards 18 months of COBRA coverage under
Payless’ medical, dental and vision plans, to the extent Executive is
participating in such plan(s) on the date of termination; and.

   (ix) Executive shall receive executive-level outplacement services to be
coordinated by the Human Resources Department. Executive must commence utilizing
the outplacement services no later than 30 days following the date of
termination or the right to such services will cease. Provided, however, the
services in no event will extend beyond 15 months following the date of
termination.

(x) If at the time that Executive terminates employment Executive is a “key
employee” within the meaning of IRC Section 409A and regulations issued
thereunder, then, if necessary to comply with 409A, payment to Executive shall
not be made until six (6) months after termination of employment and such
payment shall be made in a lump sum, less applicable withholdings and
deductions.

(xi) A resignation for Good Reason shall be treated for all purposes under any
PSS plans or benefits the same as a termination Without Cause.

(c) "Cause" means:
 
(i) an act of fraud, embezzlement, or theft against Payless, or any other
violation of the law that is harmful to Payless’ operations (excluding minor
traffic violations), or conviction of a felony;
 
(ii) grossly negligent disclosure of Confidential Information contrary to the
policy of Payless;

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(iii) material breach of any of the terms of this Agreement, abuse of
Executive’s position for personal gain, or breach of Executive’s duties to
Payless and its shareholders;

(iv) engagement in any competitive activity which would constitute a breach of
Executive's duty of loyalty or of Executive's obligations under this Agreement;

(v) grossly negligent breach of any policy of Payless including those contained
in Payless’ Code of Ethics;

(vi) the conviction of Executive, or a plea of guilty or nolo contendre, to any
crime involving moral turpitude;

(vii) the willful and continued failure by Executive to substantially perform
Executive's duties with Payless (other than any such failure resulting from
Executive's incapacity due to physical or mental illness); or

(viii) the willful engaging by Executive in conduct which is demonstrably or
materially injurious to Payless, monetarily or otherwise.

For purposes of this Paragraph 8(c), an act, or a failure to act, shall not be
deemed "willful" or "intentional" unless it is done, or omitted to be done, by
Executive in bad faith or without reasonable belief that Executive's action or
omission was in the best interest of Payless, as determined by the Chief
Executive Officer of Collective Brands, Inc. Failure to meet performance
standards or objectives, by itself, will not constitute cause.
 
Payless shall be entitled to suspend Executive with pay while investigating any
conduct that could constitute Cause. A termination for Cause under this
Paragraph 8(c)(ii), (iii), (iv), (v), (vii) or (viii) can not occur until and
unless the Executive is afforded an opportunity to be heard on the issue at an
in-person meeting with the Chief Executive Officer, where Executive has been
notified reasonably in advance of the agenda and timing of the meeting.
 
(d) “Good Reason” means:
 
(i) the relocation of Payless’ headquarters more than 75 miles from its location
on the Effective Date if such relocation increases Executive’s one-way commute
from Executive’s principal residence by more than 75 miles;
 
(ii) a material diminution in Executive’s primary duties and responsibilities
except to the extent such diminution in duties and responsibilities occurs as
the result of an investigation of Executive’s for “Cause” termination; or
 

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(iii) any material decrease in the aggregate of compensation and benefits unless
part of an overall reduction in other compensation and benefits also applied to
other senior executives of Payless as a result of a decrease in business
performance by PSS or one of its business units.
 
(e) Executive agrees that, in addition to any other remedies, and to the extent
permitted by law and or plan, Payless shall be permitted, as part of the
computation of any final amount due to Executive as compensation, wages, bonus,
or otherwise, and before any such amount shall be due and owing, to reduce any
amount which Payless may otherwise owe to Executive by any unpaid amount which
Executive owes to Payless.
 
(f) Executive’s obligations under Paragraph 2 shall cease on the effective date
of such resignation or termination for whatever cause(s), Executive’s
obligations under the Agreement, including Paragraphs 4, 5, and 6, shall remain
in full force and effect, and Payless shall be entitled to all legal and
equitable rights and remedies under this Agreement, including all of its rights
and remedies referenced in Paragraph 10 of this Agreement.

(g) Upon resignation or termination of employment due to whatever cause(s),
Executive shall return all property of Payless which is then or thereafter comes
into Executive’s possession, including but not limited to documents, contracts,
agreements, plans, photographs, books, notes, records, computer diskettes and
tapes, and any other electronically stored data and all copies of the foregoing,
as well as an other material or equipment supplied by Payless, keys, credit
cards, and equipment, and delete from Executive’s own computer or other
electronic storage medium any Confidential Information. Executive shall also
sign all documents necessary for Executive's immediate resignation as an officer
of Payless.

(h) The payments and other benefits provided in Paragraph 8 are not made
pursuant to any welfare benefit or pension plan as defined by the Employee
Retirement Income Security Act of 1974.

9. Release and Waiver of Claims. The parties agree that payment of severance and
other benefits provided in Paragraph 8 shall constitute payment in full for all
compensation due to Executive, are in lieu of any benefits which Executive may
otherwise be entitled under the Payless ShoeSource, Inc. Severance Plan, and
constitute full and complete discharge of any and all claims which Executive
might otherwise have or purport to have with respect to any period subsequent to
the effective date of such resignation or termination, for the payment of
compensation, or any additional benefits provided by Payless to Executive.
Provided, however, the payments of the amounts specified in Paragraph
8(b)(iv),(v),(viii) and (ix) are contingent upon Executive signing a Separation
Agreement and General Release, prior to payment.

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10. Remedies. Executive acknowledges and agrees that the restrictions in this
Agreement are reasonable in order to protect Payless’ expectations and rights
under this Agreement and to provide Payless with the protections it needs to,
among other things, safeguard its Confidential Information. Executive agrees
that any breach or threatened breach of Paragraphs 4, 5, or 6 of this Agreement
by Executive will cause immediate irreparable injury to Payless, for which an
award of damages alone may be inadequate. Therefore, Payless shall be entitled,
in addition to any other legal or equitable right or remedy it may have, to
temporary, preliminary, and permanent injunctive relief restraining such breach
or threatened breach of Paragraphs 4, 5, or 6 of this Agreement. Moreover, any
award of injunctive relief shall not preclude Payless from seeking or recovering
any lawful compensatory damages which may have resulted from a breach of this
Agreement, including forfeiture of any payments not yet made and return of any
payments already received by Executive, to the extent ordered by a court of
competent jurisdiction.

11. Representations of Executive. Executive hereby represents and warrants that
the execution and delivery of this Agreement and Executive’s Payless-related
employment do not violate any previous employment agreement or other contractual
obligation of Executive with any other party. Executive has not disclosed, and
will not disclose, to Payless any information, whether confidential, proprietary
or otherwise, which Executive is not legally free to disclose. Executive shall
abide by the terms of any nondisclosure or confidentiality agreement between
Payless and any other parties.

12. Written Waiver. In order for this Agreement to become valid and binding, you
must deliver to Payless prior to August 1, 2008, a valid written waiver from
your prior employer confirming the agreement of such employer not to enforce its
post-employment non-competition restrictions against you during your employment
with any Payless entity.

13. Severability. The invalidity or unenforceability of any provision, or
portion thereof, of this Agreement shall not affect the remainder of that
provision or any other provision of the Agreement. If any clause is deemed
overly broad, illegal, invalid, or unenforceable with respect to the duration of
time or the geographic scope, then such clause shall automatically be amended to
the extent (but only to the extent) necessary to make it sufficiently narrow in
scope, time and geographic area so that it shall be enforceable, and that it is
not illegal, void or unenforceable. All other remaining terms and provisions
shall remain in full force and effect.
 
14. Entire Agreement. This Agreement, and the Offer Letter dated June 17, 2008
(attached hereto as Exhibit “A”), constitute the entire understanding and
agreement between the parties and supersede all other employment agreements or
other arrangements, whether oral or written, with respect to the subject matter
contained herein. This Agreement may be executed in counterparts, in which case
each of the two counterparts shall be deemed to be an original and the final
counterpart shall be deemed to have been executed in Topeka, Kansas.
 
15. Amendment, Breach and Waiver. This Agreement may not be changed, amended, or
modified in any manner except by a written instrument in writing signed by both
the parties hereto, except that if IRC Section 409A is determined to have
applicability to any portion of this Agreement, with the effect that Executive
shall have no right to any payment hereunder prior to six months from employment
termination, this Agreement may be amended by Payless to comply with IRC Section
409A. The failure of either party to enforce at any time any of the provisions
of this Agreement shall in no way be construed to be a waiver of any of such
provision, or of the right to such party thereto to enforce each and every such
provision in the event of a subsequent breach.
 

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16. Successors and Assigns. This Agreement and/or the rights hereunder shall be
freely assignable by PSS or Payless. This Agreement shall inure to the benefit
of, and be binding upon, any entity which shall succeed to Payless’ business.
Being a contract for personal services, neither this Agreement nor any rights
hereunder, shall be assigned by Executive, and any such attempts or purported
assignment shall be null and void. Any payment owed to Executive but not paid to
Executive as a result of death shall be paid to Executive’s estate.
 
17. Third Party Beneficiary. Each PSS direct and indirect parent, subsidiary and
affiliate is a third party beneficiary of this Agreement with respect to, among
other things, the protection of each’s interest in its Confidential Information,
customer goodwill, relationships and contacts, and each has the full rights and
power to enforce the rights, interests and obligations under this Agreement of
or relating to each’s interest.
 
18. Governing Law; Choice of Forum. This Agreement, and any questions relating
or regarding the validity, interpretation, or performance, shall be governed by
and construed in accordance with the laws of the State of Kansas, without
reference to the conflicts or choice of law principles thereof. Payless and
Executive agree that any action to enforce any provision of this Agreement shall
be filed and litigated exclusively in any state court or federal court located
in the City of Topeka, Kansas, or in Shawnee County, Kansas. Payless and
Executive hereby waive any defense of lack of personal jurisdiction or venue in
such courts and agree that process may be served, if made upon PSS or Payless,
upon Payless’ registered agent (with a copy to Payless’ General Counsel), or if
made upon Executive, at Executive’s last known address on the records of
Payless.
 
BY SIGNING THIS AGREEMENT, EXECUTIVE HEREBY CERTIFIES THAT EXECUTIVE (A) HAS
RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE SIGNING IT; (B)
HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS HAD SUFFICIENT
OPPORTUNITY TO REVIEW THE AGREEMENT WITH ANY ADVISOR WHICH EXECUTIVE MAY DESIRE
TO CONSULT, INCLUDING LEGAL COUNSEL; (D) HAS HAD SUFFICIENT OPPORTUNITY BEFORE
SIGNING IT TO ASK ANY QUESTIONS EXECUTIVE HAS ABOUT THIS AGREEMENT AND HAS
RECEIVED SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (E) UNDERSTANDS
EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT.
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 

           
   
  EXECUTIVE
    By:   /s/ LuAnn Via  

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        PAYLESS SHOESOURCE, INC.  
   
   
    By:   /s/ Jay Lentz  

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Its:  
/s/ Senior Vice President-Human Resources

 

 
 

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