SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

PORZIG ULLRICH E

(Last)

(First)

(Middle)

3231 S.E. SIXTH AVENUE

(Street)

TOPEKA

66607

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
PAYLESS SHOESOURCE INC /DE/ [ PSS ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Senior Vice President

3. Date of Earliest Transaction (Month/Day/Year)
03/29/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock								94,872	I	Trust and 401(k)⁽¹⁾
Common Stock	03/29/2007		A		2,175⁽²⁾	A	$0	12,765	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Stock Appreciation Right	$33.115	03/29/2007		A		10,400		⁽³⁾	03/29/2014	Common Stock	10,400	$0	10,400	D

Explanation of Responses:

1. The reporting person holds 86,852 shares indirectly in a trust account and approximately 8,020 indirectly under the Payless ShoeSource, Inc. 401(k) Plan (the "Plan") based on a statement provided by the Plan Administrator. Because the Common Stock Fund under the Plan holds both cash and Payless Common Stock, the actual number of shares allocable to each participant's accounts varies from statement to statement.

2. This grant of restricted stock is subject to the following vesting conditions (i) one half of the shares will begin to vest in equal increments on May 31, 2008, May 31, 2009 and May 31, 2010 if the Company's actual store-for-store sales for fiscal 2007 is greater than 0.0 percent and (ii) the remainder of the shares will vest in equal installments over the same period set forth in (i) in an amount equal to the remainder of shares multiplied by the ratio of fiscal 2007 positive store-for-store sales divided by 3.0. For example, if the Company's actual store-for-store for fiscal 2007 is 1.5 percent, 75 percent of the shares will vest over the three year period.

3. The stock appreciation right granted under the Payless ShoeSource, Inc. 2006 Stock Incentive Plan which provides for tax withholding rights in a transaction exempt under Rule 16b-3. The stock appreciation right vests in three equal installments over a three-year period on May 31st of each year following the date of the grant. The stock appreciation right is required to be settled in stock. Grants vest in equal increments on May 31 of 2008, 2009 and 2010 and expire 7 years from grant date.

Remarks:

	Ullrich E. Porzig	04/02/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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