Document:

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                                                                  Exhibit 10.14

                           CHANGE OF CONTROL AGREEMENT

     AGREEMENT, dated as of the 10th day of March, 2000 (this "Agreement"), by
and between Payless ShoeSource, Inc., a Delaware corporation (the "Company"),
and _________________________ (the "Executive").

     WHEREAS, the Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined herein). The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
the Executive's full attention and dedication to the current Company and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied and that are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     SECTION 1. CERTAIN DEFINITIONS.  (a) "Effective Date" means the first date
during the Change of Control Period (as defined herein) on which a Change of
Control occurs. Notwithstanding anything in this Agreement to the contrary, if
a Change of Control occurs and if the Executive's employment with the Company
is terminated prior to the date on which the Change of Control occurs, and if
it is reasonably demonstrated by the Executive that such termination of
employment (1) was at the request of a third party that has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then "Effective Date"
means the date immediately prior to the date of such termination of employment.
Further, notwithstanding anything in this Agreement to the contrary, if a
Potential Change of Control occurs and if the Executive's employment with the
Company is terminated as provided in Section 5(e), then "Effective Date" means
the date immediately prior to the date of such termination of employment.

     (b) "Change of Control Period" means the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that, commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof, the "Renewal Date"), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate three years
from such Renewal Date, unless, at least 60 days prior to the Renewal Date, the
Company shall give notice to the Executive that the Change of Control Period
shall not be so extended.

     (c) "affiliated company" means any company controlled by, controlling or
under common control with the Company.

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     (d) "Change of Control" means:

     (1) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change of Control:  (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliated company or (iv) any acquisition by
any corporation pursuant to a transaction that complies with Sections
1(d)(3)(A), 1(d)(3)(B) and 1(d)(3)(C); or

     (2) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

     (3) Consummation of a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%,
respectively, of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the

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combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business
Combination; or

     (4) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.

     (e) "Potential Change of Control" means:

     (1) At least two directors of a particular class of directors, as of the
date hereof, are replaced for any reason by directors who are not members of
the Incumbent Board at the time of such replacement; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

     (2) The Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change of Control has occurred.

     SECTION 2. EMPLOYMENT PERIOD.  The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of the Effective Date (the "Employment Period").

     SECTION 3. TERMS OF EMPLOYMENT.  (a)  POSITION AND DUTIES.  (1)  During
the Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the office where the Executive was employed
immediately preceding the Effective Date or at any other location less than 35
miles from such office.

     (2) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this

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Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.  It is expressly understood and agreed that, to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

     (b) COMPENSATION.  (1)  BASE SALARY.  During the Employment Period, the
Executive shall receive an annual base salary (the "Annual Base Salary"), which
Annual Base Salary shall be paid at a monthly rate at least equal to 12 times
the highest monthly base salary paid or payable, including any base salary that
has been earned but deferred, to the Executive by the Company and the
affiliated companies in respect of the 12-month period immediately preceding
the month in which the Effective Date occurs.  During the Employment Period,
the Annual Base Salary shall be reviewed at least annually, beginning no more
than 12 months after the last salary increase awarded to the Executive prior to
the Effective Date.  Any increase in the Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
The Annual Base Salary shall not be reduced after any such increase and the
term "Annual Base Salary" shall refer to the Annual Base Salary as so
increased.

     (2) ANNUAL BONUS.  In addition to the Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least equal to the Executive's
highest bonus under the Company's annual and long-term incentive plans, or any
comparable bonus under any predecessor or successor plan, for the last three
full fiscal years prior to the Effective Date (annualized, in the event that
the Executive was not employed by the Company for the whole of such fiscal
year) (the "Recent Annual Bonus").  Each such Annual Bonus shall be paid no
later than the end of the third month of the fiscal year next following the
fiscal year for which the Annual Bonus is awarded, unless the Executive shall
elect to defer the receipt of such Annual Bonus.

     (3) INCENTIVE, SAVINGS AND RETIREMENT PLANS.  During the Employment
Period, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies, and programs applicable
generally to other peer executives of the Company and the affiliated companies,
but in no event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and the affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or,
if

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more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the affiliated
companies.

     (4) WELFARE BENEFIT PLANS.  During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and the affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and the affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
benefits that are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the affiliated
companies.

     (5) EXPENSES.  During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and
procedures of the Company and the affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Company and
the affiliated companies.

     (6) FRINGE BENEFITS.  During the Employment Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and the
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.

     (7) OFFICE AND SUPPORT STAFF.  During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other assistance,
at least equal to the most favorable of the foregoing provided to the Executive
by the Company and the affiliated companies at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.

     (8) VACATION.  During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and the affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to

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the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and the affiliated companies.

     SECTION 4. TERMINATION OF EMPLOYMENT.  (a)  DEATH OR DISABILITY.  The
Executive's employment shall terminate automatically if the Executive dies
during the Employment Period.  If the Company determines in good faith that the
Disability (as defined herein) of the Executive has occurred during the
Employment Period (pursuant to the definition of "Disability"), it may give to
the Executive written notice in accordance with Section 11(b) of its intention
to terminate the Executive's employment.  In such event, the Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties.  "Disability"
means the absence of the Executive from the Executive's duties with the Company
on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness that is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative.

     (b) CAUSE.  The Company may terminate the Executive's employment during
the Employment Period for Cause.  "Cause" means:

          (1) the willful and continued failure of the Executive to perform
     substantially the Executive's duties with the Company or any affiliated
     company (other than any such failure resulting from incapacity due to
     physical or mental illness), after a written demand for substantial
     performance is delivered to the Executive by the Board or the Chief
     Executive Officer of the Company that specifically identifies the manner
     in which the Board or the Chief Executive Officer of the Company believes
     that the Executive has not substantially performed the Executive's
     duties, or

          (2) the willful engaging by the Executive in illegal conduct or
     gross misconduct that is materially and demonstrably injurious to the
     Company.

For purposes of this Section 4(b), no act, or failure to act, on the part of
the Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company.  Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer of the Company or a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.  The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Board), finding that, in the

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good faith opinion of the Board, the Executive is guilty of the conduct
described in Section 4(b)(1) or 4(b)(2), and specifying the particulars thereof
in detail.

     (c) GOOD REASON. The Executive's employment may be terminated by the
Executive for Good Reason. "Good Reason" means:

          (1) the assignment to the Executive of any duties inconsistent in
     any respect with the Executive's position (including status, offices,
     titles and reporting requirements), authority, duties or responsibilities
     as contemplated by Section 3(a), or any other action by the Company that
     results in a diminution in such position, authority, duties or
     responsibilities, excluding for this purpose an isolated, insubstantial
     and inadvertent action not taken in bad faith and that is remedied by the
     Company promptly after receipt of notice thereof given by the Executive;

          (2) any failure by the Company to comply with any of the provisions
     of Section 3(b), other than an isolated, insubstantial and inadvertent
     failure not occurring in bad faith and that is remedied by the Company
     promptly after receipt of notice thereof given by the Executive;

          (3) the Company's requiring the Executive to be based at any office
     or location other than as provided in Section 3(a)(1)(B) or the Company's
     requiring the Executive to travel on Company business to a substantially
     greater extent than required immediately prior to the Effective Date;

          (4) any purported termination by the Company of the Executive's
     employment otherwise than as expressly permitted by this Agreement; or

          (5) any failure by the Company to comply with and satisfy Section
     10(c).

     For purposes of this Section 4(c), any good faith determination of Good
Reason made by the Executive shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of a
Change of Control shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.

     (d) NOTICE OF TERMINATION. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b).
"Notice of Termination" means a written notice that (1) indicates the specific
termination provision in this Agreement relied upon, (2) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated, and (3) if the Date of Termination (as defined herein)
is other than the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30 days after the
giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance that contributes to

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a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's respective rights hereunder.

     (e) DATE OF TERMINATION. "Date of Termination" means (1) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified in the Notice of Termination, as the case may be, (2)
if the Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination, and (3) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

     SECTION 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (A) GOOD REASON;
OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period,
the Company terminates the Executive's employment other than for Cause or
Disability or the Executive terminates employment for Good Reason:

          (1) the Company shall pay to the Executive, in a lump sum in cash
     within 30 days after the Date of Termination, the aggregate of the
     following amounts:

               (A) the sum of (i) the Executive's Annual Base Salary through
          the Date of Termination to the extent not theretofore paid, (ii)
          the product of (x) the higher of (I) the Recent Annual Bonus and
          (II) the Annual Bonus paid or payable, including any bonus or
          portion thereof that has been earned but deferred (and annualized
          for any fiscal year consisting of less than 12 full months or
          during which the Executive was employed for less than 12 full
          months), for the most recently completed fiscal year during the
          Employment Period, if any (such higher amount, the "Highest Annual
          Bonus") and (y) a fraction, the numerator of which is the number of
          days in the current fiscal year through the Date of Termination and
          the denominator of which is 365, and (iii) any compensation
          previously deferred by the Executive (together with any accrued
          interest or earnings thereon) and any accrued vacation pay, in each
          case, to the extent not theretofore paid (the sum of the amounts
          described in subclauses (i), (ii) and (iii), the "Accrued
          Obligations"); and

               (B) the amount equal to the product of (i) three and (ii) the
          sum of (x) the Executive's Annual Base Salary and (y) the Highest
          Annual Bonus; and

               (C) an amount equal to the excess of (i) the actuarial
          equivalent of the benefit under the Company's qualified defined
          benefit retirement plan (the "Retirement Plan") (utilizing
          actuarial assumptions no less favorable to the Executive than those
          in effect under the Retirement Plan immediately prior to the
          Effective Date) and the any excess or supplemental retirement plan
          in which

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          the Executive participates (collectively, the "SERP") that the
          Executive would receive if the Executive's employment continued for
          three years after the Date of Termination, assuming for this
          purpose that all accrued benefits are fully vested and assuming
          that the Executive's compensation in each of the three years is
          that required by Sections 3(b)(1) and 3(b)(2), over (ii) the
          actuarial equivalent of the Executive's actual benefit (paid or
          payable), if any, under the Retirement Plan and the SERP as of the
          Date of Termination; and

               (D) in lieu of the receipt of shares of common stock of the
          Company ("Common Stock") issuable upon the exercise of outstanding
          options (other than stock options qualifying as incentive stock
          options ("ISOs") under Section 422A of the Internal Revenue Code of
          1986, as amended (the "Code") which ISOs were granted on or prior
          to [SET FORTH DATE OF PRIOR AGREEMENT]) ("Options"), stock
          appreciation rights ("SARs") and performance units ("Units"), if
          any (the Options, SARs and Units shall be referred to herein
          collectively as the "Awards"), granted to the Executive under the
          Company's 1996 Stock Incentive Plan or any successor or substitute
          plans thereto, an amount equal to the product of (i) the excess of
          (x) in the case of an ISO granted after [SET FORTH DATE OF PRIOR
          AGREEMENT], the closing price of Common Stock as reported on the
          New York Stock Exchange on the Date of Termination or the last full
          trading day immediately prior to the Date of Termination (or, if
          not listed on such exchange, on a nationally recognized exchange or
          quotation system on which trading value in the Common Stock is
          highest) (the "Closing Price") and, in the case of all other
          Awards, the higher of the Closing Price and the highest per share
          price for Common Stock actually paid in connection with any Change
          of Control, over (y) the per share exercise price (if any) of each
          Award, and (2) the number of shares of Common Stock covered by each
          such Award, whether or not such Award is exercisable on the Date of
          Termination; and

          (2) for three years after the Executive's Date of Termination, or
     such longer period as may be provided by the terms of the appropriate
     plan, program, practice or policy, the Company shall continue benefits to
     the Executive and/or the Executive's family at least equal to those that
     would have been provided to them in accordance with the plans, programs,
     practices and policies described in Section 3(b)(4) if the Executive's
     employment had not been terminated or, if more favorable to the
     Executive, as in effect generally at any time thereafter with respect to
     other peer executives of the Company and the affiliated companies and
     their families, provided, however, that, if the Executive becomes
     reemployed with another employer and is eligible to receive medical or
     other welfare benefits under another employer provided plan, the medical
     and other welfare benefits described herein shall be secondary to those
     provided under such other plan during such applicable period of
     eligibility. If the Executive has attained age 50 on the Date of
     Termination and if, with five additional years of age and service beyond
     the Executive's age and years of service as of the Date of Termination,
     the Executive would have been entitled to receive post-retirement medical
     and life benefits under the Company's post-retirement programs as in
     effect immediately prior to the Effective Date, then the Executive shall
     be entitled to such benefits as if the

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     Executive had attained those five additional years of age and been
     employed by the Company for those five additional years of service, as of
     the Date of Termination, and such post-retirement medical and life
     benefits shall [COMMENCE IMMEDIATELY AND] be determined and provided
     under the terms of such plans as in effect immediately prior to the
     Effective Date, without regard to any amendments subsequent to the
     Effective Date that adversely affect the rights of participants
     thereunder; and

          (3) if the Executive has attained age 50 but has not attained age 55
     on the Date of Termination, then for purposes of determining benefits
     under Section 3.2(c) of the Company's Supplementary Retirement Plan or
     any successor plan, as in effect immediately prior to the Effective Date
     (the "Supplemental Plan"), the Executive shall be deemed to be entitled
     to the benefits under Section 3.2(c) of the Supplemental Plan if, during
     the five-year period following the Effective Date, the Company terminates
     the Executive's employment other than for Cause or the Executive
     terminates his employment for Good Reason (it being expressly agreed
     that, notwithstanding anything to the contrary contained herein, the
     rights under this Section 5(a)(3) shall survive for the five-year period
     following the Effective Date); the benefits under this Section 5(a)(3)
     shall not be in duplication of the benefits set forth in Section
     5(a)(1)(C); and

          (4) the Company shall, at its sole expense as incurred, provide the
     Executive with outplacement services the scope and provider of which
     shall be selected by the Executive in the Executive's sole discretion;
     and

          (5) to the extent not theretofore paid or provided, the Company
     shall timely pay or provide to the Executive any other amounts or
     benefits required to be paid or provided or that the Executive is
     eligible to receive under any plan, program, policy or practice or
     contract or agreement of the Company and the affiliated companies (such
     other amounts and benefits, the "Other Benefits").

(b) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of the Other Benefits. The Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of the Other
Benefits, the term "Other Benefits" as utilized in this Section 5(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and the affiliated companies to the estates and
beneficiaries of peer executives of the Company and the affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and the affiliated
companies and their beneficiaries.

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     (c) DISABILITY.  If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of the Other
Benefits.  The Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.  With respect to the
provision of the Other Benefits, the term "Other Benefits" as utilized in this
Section 5(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and the
affiliated companies to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other
peer executives of the Company and the affiliated companies and their families.

     (d) CAUSE; OTHER THAN FOR GOOD REASON.  If the Executive's employment is
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive (1) the Executive's Annual Base Salary
through the Date of Termination, (2) the amount of any compensation previously
deferred by the Executive, and (3) the Other Benefits, in each case, to the
extent theretofore unpaid.  If the Executive voluntarily terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for the Accrued Obligations and the timely payment or provision of the
Other Benefits.  In such case, all the Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.

     (e) OBLIGATIONS OF THE COMPANY AND THE EXECUTIVE UPON A POTENTIAL CHANGE
OF CONTROL.  If, during the Change of Control Period, a Potential Change of
Control occurs, the Executive hereby agrees to remain in the employ of the
Company, on the same basis and terms and conditions as the Executive is
employed by the Company immediately prior to the Potential Change of Control,
for the 12-month period following such Potential Change of Control.  If the
Executive's employment is terminated by the Company other than for Cause, death
or Disability, or the Executive terminates his employment for Good Reason,
during the 12-month period following the occurrence of a Potential Change of
Control, without regard to whether a Change of Control has actually occurred or
is likely to occur, the Executive's employment shall be deemed to have been
terminated by the Company in anticipation of a Change of Control, and the
Executive shall be entitled to receive the payments and benefits provided in
Section 5(a) hereof.

     SECTION 6. NON-EXCLUSIVITY OF RIGHTS.  Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or the affiliated
companies and for which the Executive may qualify, nor, subject to Section
11(f), shall anything herein limit or otherwise affect such

                                       11

<PAGE>   12

rights as the Executive may have under any contract or agreement with the
Company or the affiliated companies.  Amounts that are vested benefits or that
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of or any contract or agreement with the Company or the affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or
agreement, except as explicitly modified by this Agreement.

     SECTION 7. FULL SETTLEMENT.  The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right or action that the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not the Executive obtains other
employment.  The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement), plus, in each
case, interest on any delayed payment at the applicable federal rate provided
for in Section 7872(f)(2)(A) of the Code.

     SECTION 8. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, in the event it shall be determined that any payment or
distribution by the Company or the affiliated companies to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise but determined without
regard to any additional payments required under this Section 8) (the
"Payment") would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, collectively, the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (the "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  Notwithstanding the foregoing provisions of this
Section 8(a), if it shall be determined that the Executive is entitled to the
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount that could be paid to the Executive such that the receipt of the
Payments would not give rise to any Excise Tax (the "Reduced Amount"), then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

                                       12

<PAGE>   13

     (b) Subject to the provisions of Section 8(c), all determinations required
to be made under this Section 8, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Arthur Anderson,
LLP or such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") that shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall
be paid by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (the "Underpayment"), consistent with the calculations required to be made
hereunder. In the event the Company exhausts its remedies pursuant to Section
8(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of the Executive.

     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that the Company desires to contest such claim,
the Executive shall:

          (1) give the Company any information reasonably requested by the
     Company relating to such claim,

          (2) take such action in connection with contesting such claim as the
     Company shall reasonably request in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by the Company,

          (3) cooperate with the Company in good faith in order effectively to
     contest such claim, and

                                       13

<PAGE>   14

          (4) permit the Company to participate in any proceedings relating to
     such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest, and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 8(c), the Company shall control all proceedings taken in
connection with such contest, and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that, if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that any extension of the
statute of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which the Gross-Up
Payment would be payable hereunder, and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

     (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 8(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

     SECTION 9. CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or the affiliated
companies, and their respective businesses, which information, knowledge or
data shall have been obtained by the Executive during the Executive's
employment by the Company or the affiliated companies and which

                                       14

<PAGE>   15

information, knowledge or data shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those persons designated by the Company. In no event shall an
asserted violation of the provisions of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

     SECTION 10. SUCCESSORS. (a) This Agreement is personal to the Executive,
and, without the prior written consent of the Company, shall not be assignable
by the Executive other than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.

     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
"Company" means the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.

     SECTION 11. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

          if to the Executive:

          _________________________

          _________________________

          _________________________

                                       15

<PAGE>   16

          if to the Company:

          Payless ShoeSource, Inc.,

          3231 SE Sixth Avenue

          Topeka, Kansas 66607

          Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement
such United States federal, state or local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

     (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Sections 4(c)(1) through 4(c)(5), shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

     (f) From and after the Effective Date, this Agreement shall supersede any
other agreement between the parties with respect to the subject matter hereof;
provided, however, in no event shall this Agreement supersede or replace the
Indemnification Agreement between the Executive and the Company, dated as of
March 10, 2000.

                                       16

<PAGE>   17

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

                                   _________________________

                                   PAYLESS SHOESOURCE, INC.

                                   By_______________________

                                   Name:

                                   Title:

                                       17<PAGE>   1

                                                                   Exhibit 10.15

                            INDEMNIFICATION AGREEMENT

          AGREEMENT, dated as of the 22nd day of March, 2000, between Payless
ShoeSource, Inc., a Delaware corporation (the "Company") and ____________(the
"Indemnitee").

          WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available; and

          WHEREAS, Indemnitee is a director or officer of the Company; and

          WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

          WHEREAS, basic protection against undue risk of personal liability of
directors and officers heretofore has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Indemnitee has relied on
the availability of such coverage; but as a result of substantial changes in the
marketplace for such insurance it generally has become more difficult to obtain
such insurance on terms providing reasonable protection at reasonable cost; and

          WHEREAS, the Delaware legislature, in recognition of the need to
secure the continued service of competent and experienced people in senior
corporate positions and to assure that they will be able to exercise judgment
without fear of personal liability so long as they fulfill the basic duties of
honesty, care and good faith, has so enacted Section 145 of The Delaware General
Corporation Law (the "DGCL"), which empowers the Company to indemnify its
officers, directors, employees and agents and expressly provides that the
indemnification provided by the statute is not exclusive; and

          WHEREAS, the Certificate of Incorporation of the Company requires the
Company to indemnify and advance expenses to its directors and officers to the
fullest extent now or hereafter authorized or permitted by law and authorizes
the Company to enter into agreements providing for such indemnification and
advancement of expenses; and

          WHEREAS, in recognition of the fact that the Indemnitee continues to
serve as a director or officer of the Company, in part in reliance on the
aforesaid By-laws, and of the fact of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Company in an effective manner, and in part to provide Indemnitee
with specific contractual assurance that the protection promised by such
Certificate of Incorporation will be available to Indemnitee (regardless of,
among other things, any amendment to or revocation of such Certificate of
Incorporation or any change in the composition of the Company's Board of
Directors or any acquisition transaction relating to the Company), and due to
the possibility that the Company's directors' and officers' liability insurance
coverage could at some future time become inadequate, the Company wishes to
provide in this Agreement for the

<PAGE>   2

indemnification of, and the advancing of expenses to, Indemnitee to the fullest
extent (whether partial or complete) now or hereafter authorized or permitted by
law and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies,

          NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

          1. CERTAIN DEFINITIONS:

          (1) "Approved Law Firm" shall mean any law firm (i) located in New
York or Delaware, (ii) having 50 or more attorneys and (iii) rated "av" by
Martindale-Hubbell Law Directory; provided, however, that such law firm shall
not, for a five- year period prior to the Indemnifiable Event, have been engaged
by the Company, an Acquiring Person or the Indemnitee.

          (2) "Applicable Standard of Conduct" shall mean the standard
established by Section 145(a)-(b) of the DGCL.

          (3) "Board of Directors" shall mean the Board of Directors of the
Company.

          (4) A "Change of Control" shall be deemed to have occurred upon:

                 (A) The acquisition by any individual, entity or group (within
              the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
              Exchange Act of 1934, as amended (the "Exchange Act")) (a
              "Person") of beneficial ownership (within the meaning of Rule
              13d-3 promulgated under the Exchange Act) of 20% or more of either
              (A) the then-outstanding shares of common stock of the Company
              (the "Outstanding Company Common Stock") or (B) the combined
              voting power of the then-outstanding voting securities of the
              Company entitled to vote generally in the election of directors
              (the "Outstanding Company Voting Securities"); provided, however,
              that, for purposes of this Section 1(d), none of the following
              shall constitute a Change of Control: (i) any acquisition directly
              from the Company, (ii) any acquisition by the Company, (iii) any
              acquisition by any employee benefit plan (or related trust)
              sponsored or maintained by the Company or any affiliated company,
              (iv) any acquisition by any corporation pursuant to a transaction
              that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and 1(d)(3)(C)
              or (v) any acquisition by the Company which, by reducing the
              number of shares of Outstanding Company Common Stock or
              Outstanding Company Voting Securities, increases the proportionate
              number of shares of Outstanding Company Common Stock or
              Outstanding Company Voting Securities beneficially owned by any
              Person to 20% or more of the Outstanding Company Common Stock or
              Outstanding Company Voting Securities; provided, however, that, if
              such Person shall thereafter become the beneficial owner of any
              additional shares of Outstanding Company Common

                                       2

<PAGE>   3

              Stock or Outstanding Company Voting Securities and beneficially
              owns 20% or more of either the Outstanding Company Common Sock or
              the Outstanding Company Voting Securities, then such additional
              acquisition shall constitute a Change of Control; or

                 (B) The cessation, for any reason, of individuals who, as of
              the date hereof, constitute the Board (the "Incumbent Board") to
              constitute at least a majority of the Board; provided, however,
              that any individual becoming a director subsequent to the date
              hereof whose election, or nomination for election by the Company's
              stockholders, was approved by a vote of at least a majority of the
              directors then comprising the Incumbent Board shall be considered
              as though such individual were a member of the Incumbent Board,
              but excluding, for this purpose, any such individual whose initial
              assumption of office occurs as a result of an actual or threatened
              election contest with respect to the election or removal of
              directors or other actual or threatened solicitation of proxies or
              consents by or on behalf of a Person other than the Board; or

                 (C) The consummation of a reorganization, merger, consolidation
              or sale or other disposition of all or substantially all of the
              assets of the Company (a "Business Combination"), in each case,
              unless, following such Business Combination, (i) all or
              substantially all of the individuals and entities that were the
              beneficial owners, respectively, of the Outstanding Company Common
              Stock and the Outstanding Company Voting Securities immediately
              prior to such Business Combination beneficially own, directly or
              indirectly, more than 50%, respectively, of the then-outstanding
              shares of common stock and the combined voting power of the
              then-outstanding voting securities entitled to vote generally in
              the election of directors, as the case may be, of the corporation
              resulting from such Business Combination (including, without
              limitation, a corporation that, as a result of such transaction,
              owns the Company or all or substantially all of the Company's
              assets either directly or through one or more subsidiaries) in
              substantially the same proportions as their ownership immediately
              prior to such Business Combination of the Outstanding Company
              Common Stock and the Outstanding Company Voting Securities, as the
              case may be, (ii) no Person (excluding any corporation resulting
              from such Business Combination or any employee benefit plan (or
              related trust) of the Company or such corporation resulting from
              such Business Combination) beneficially owns, directly or
              indirectly, 20% or more of, respectively, the then-outstanding
              shares of common stock of the corporation resulting from such
              Business Combination or the combined voting power of the
              then-outstanding voting securities of such corporation, except to
              the extent that such ownership existed prior to the Business
              Combination, and (iii) at least a majority of the members of the
              board of directors of the corporation resulting from such Business
              Combination were members of the Incumbent Board at the time of the
              execution of

                                       3

<PAGE>   4
          the initial agreement or of the action of the Board providing for
          such Business Combination; or

               (D) The approval by the stockholders of the Company of a complete
          liquidation or dissolution of the Company.

          (5) "Claim" shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted by the
Company or any other party, that Indemnitee in good faith believes might lead to
the institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.

          (6) "Expenses" shall include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating to
any Indemnifiable Event, together with interest, computed at the Company's
average cost of funds for short-term borrowings, accrued from the date of
payment of such expense to the date Indemnitee receives reimbursement therefor.

          (7) "Indemnifiable Event" shall mean any event or occurrence related
to the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, trustee, agent or fiduciary of another
corporation of any type or kind, domestic or foreign, partnership, joint
venture, trust, employee benefit plan or other enterprise, or by reason of
anything done or not done by Indemnitee in any such capacity. Without limitation
of any indemnification provided hereunder, an Indemnitee serving (i) another
corporation, partnership, joint venture or trust of which 20 percent or more of
the voting power or residual economic interest is held, directly or indirectly,
by the Company, or (ii) any employee benefit plan of the Company or any entity
referred to in clause (i), in any capacity shall be deemed to be doing so at the
request of the Company.

          (8) "Reviewing Party" shall be (i) the Board of Directors acting by
majority vote of directors who are not parties to the particular Claim with
respect to which Indemnitee is seeking indemnification, even through less than a
quorum, or (ii) by a committee of such directors designated by a majority vote
of such directors, even though less than a quorum, or (iii) if there are no such
directors, or if such directors so direct, (A) by independent legal counsel in a
written opinion that indemnification is proper in the circumstances because the
indemnification is not precluded by circumstances described in the last sentence
of Section 2 of this Agreement and the Applicable Standard of Conduct set forth
in Section 145 of the DGCL has been met by the Indemnitee or (B) the
shareholders upon a finding that the Indemnitee has met the Applicable Standard
of Conduct referred to in clause (iii)(A) of this definition.

          (9) "Voting Securities" shall mean any securities of the Company which
vote generally in the election of directors.

                                       4
<PAGE>   5

     2. BASIC INDEMNIFICATION ARRANGEMENT. If Indemnitee was, is or becomes at
any time a party to, or witness or other participant in, or is threatened to be
made a party to, or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent now or hereafter authorized or permitted by law
as soon as practicable but in any event no later than 30 days after written
demand is presented to the Company, against any and all Expenses, judgments,
fines (including excise taxes assessed against an Indemnitee with respect to an
employee benefit plan), penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with, or
in respect of, such Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim. If so requested by Indemnitee, the Company shall
advance (within two business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"). Notwithstanding anything in this Agreement to
the contrary, (i) Indemnitee shall not be entitled to indemnification pursuant
to this Agreement in any action in which the Indemnitee's conduct has been
finally adjudged to have been knowingly fraudulent, deliberately dishonest or
willful misconduct; (ii) in any derivative action in which Indemnitee has been
finally adjudged to be liable to the Company, unless and only to the extent that
the Court of Chancery or the court in which the proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper, and (iii) prior to a Change in Control Indemnitee shall not be entitled
to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim.

     3. PAYMENT. Notwithstanding the provisions of Section 2, the obligations of
the Company under Section 2 (which shall in no event be deemed to preclude any
right to indemnification to which Indemnitee may be entitled under Section
145(c) of the DGCL) shall be subject to the condition that the Reviewing Party
shall have authorized such indemnification in the specific case by having
determined that the indemnification is not precluded by circumstances described
in the last sentence of Section 2 of this Agreement and Indemnitee is permitted
to be indemnified under the Applicable Standard of Conduct set forth in Section
145(a)-(b) of the DGCL. The Company shall promptly call a meeting of the Board
of Directors with respect to a Claim and agrees to use its best efforts to
facilitate a prompt determination by the Reviewing Party with respect to the
Claim. Indemnitee shall be afforded the opportunity to make submissions to the
Reviewing Party with respect to the Claim. The obligation of the Company to make
an Expense Advance pursuant to Section 2 shall be subject to the condition that,
if, when and to the extent that the Reviewing Party determines that Indemnitee
would not be permitted to be so indemnified under Section 2 and applicable law,
the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees
and undertakes to the full extent required by Section 145(e) of the DGCL to
reimburse the Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under

                                       5

<PAGE>   6
applicable law, any determination made by the Reviewing Party that Indemnitee
would not be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law, Indemnitee shall
have the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.

     4. CHANGE IN CONTROL. If there is a Change in Control (other than a Change
in Control which has been approved by a majority of the Board of Directors who
were directors immediately prior to such Change in Control) then (i) all
determinations by the Company pursuant to the first sentence of Section 3 hereof
and Section 145(d) of the DGCL shall be made by independent legal counsel in a
written opinion pursuant to Section 145(d) of the DGCL and (ii) with respect to
all matters thereafter arising concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or
By-law of the Company now or hereafter in effect relating to Claims for
Indemnifiable Events (including, but not limited to, any such legal opinion
provided under Section 145 (d) of the DGCL) the Company (including the Board of
Directors) shall seek legal advice from (and only from) special, independent
counsel selected by Indemnitee and approved by the Company (which approval shall
not be unreasonably withheld), and who has not otherwise performed services for
the Company (or any subsidiary of the Company) or an Acquiring Person (or any
affiliate or associate of such Acquiring Person) or Indemnitee within the last
five years (other than in connection with such matters). Unless Indemnitee has
theretofore selected counsel pursuant to this Section 4 and such counsel has
been approved by the Company, any Approved Law Firm selected by Indemnitee shall
be deemed to be approved by the Company. Such counsel, among other things, shall
render its written opinion to the Company, the Board of Directors and Indemnitee
as to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees
of the special, independent counsel referred to above and to fully indemnify
such counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto. As used in this Agreement, the terms "affiliate" and
"associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Act and in effect on the
date of this Agreement.

     5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within two business days of such request)
advance such expenses to Indemnitee, which are reasonably incurred by Indemnitee
in connection with any claim asserted or action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the

                                       6
<PAGE>   7
Company under this Agreement or any other agreement or By-law of the Company now
or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.

     6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of a Claim but not,
however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Moreover, notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in defense of any
or all Claims relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified, to the extent permitted by law, against all
Expenses incurred in connection with such Indemnifiable Event.

     7. BURDEN OF PROOF. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

     8. NO PRESUMPTION. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, whether civil or criminal, by judgment,
order, settlement (whether with or without court approval) or conviction, or
upon a plea of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of conduct or
have any particular belief or that a court has determined that indemnification
is not permitted by applicable law.

     9. NONEXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Certificate of
Incorporation of the Company, the DGCL, or otherwise. To the extent that a
change in the DGCL (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Certificate of Incorporation of the Company and this Agreement, it is the intent
of the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.

     10. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any director
or officer of the Company.

     11. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Company or any affiliate of the
Company

                                       7
<PAGE>   8
against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company or any
affiliate shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action, such shorter period shall govern.

     12. AMENDMENTS, ETC. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be effective
unless in writing and no written waiver shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.

     13. SUBROGATION. In the event of payment under the Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.

     14. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, By-law or otherwise) of the amounts otherwise
indemnifiable hereunder.

     15. SPECIFIC PERFORMANCE. The parties recognize that if any provision of
this Agreement is violated by the Company, Indemnitee may be without an adequate
remedy at law. Accordingly, in the event of any such violation, the Indemnitee
shall be entitled, if Indemnitee so elects, to institute proceedings, either in
law or at equity, to obtain damages, to enforce specific performance, to enjoin
such violation, or to obtain any relief or any combination of the foregoing as
Indemnitee may elect to pursue.

     16. BINDING EFFECT, ETC. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business and/or
assets of the Company), assigns, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any
other enterprise at the Company's request.

     17. SEVERABILITY. The provisions of this Agreement shall be severable if
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise

                                       8
<PAGE>   9

unenforceable, and the remaining provisions shall remain enforceable to the
fullest extent permitted by law.

     18. GOVERNING LAW. This Agreement shall be governed by, and be construed
and enforced in accordance with, the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

     19. EFFECTIVE TIME. This Agreement shall become effective as of the date
first above written. The contractual rights of Indemnitee with respect to
Indemnifiable Events occurring before the Effective Time are governed by the
Indemnification Agreement between Indemnitee and Payless ShoeSource, Inc., a
Missouri corporation or Payless ShoeSource, Inc., a Delaware corporation, if
any, (the "Prior Agreements") and Indemnitee shall have no rights under this
Agreement with respect to such Indemnifiable Events. The contractual rights of
Indemnitee with respect to Indemnifiable Events occurring after the Effective
Time are governed by this Agreement, and Indemnitee shall have no rights against
Payless ShoeSource, Inc., a Missouri corporation or Payless ShoeSource, Inc., a
Delaware corporation, under any Prior Agreements with respect to such
Indemnifiable Events.

     IN WITNESS WHEREOF, the Company and Indemnitee have executed this Agreement
as of the date first above written.

                               ------------------------------------

                               PAYLESS SHOESOURCE, INC.

                               By:
                                  ---------------------------------
                                  Name:    Steven J. Douglass
                                  Title:   Chairman and Chief Executive Officer

                                       9

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