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BWS > SEC Filings for BWS > Form 8-K on 18-Mar-2013All Recent SEC Filings

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Change in Directors or Principal Officers, Financial Statements and Exhibits

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 14, 2013, the Compensation Committee (the "Committee") of the Board of Directors of Brown Shoe Company, Inc. (the "Company") approved long-term incentive awards (the "awards") for 11 of its officers, including all of the executive officers who are currently employed by the Company and who were named in the Summary Compensation Table of the Company's 2012 Proxy Statement and its principal financial officer ("NEOs").

These awards will be made pursuant to the terms of the Company's Incentive Stock and Compensation Plan of 2011 (the "2011 Plan"). A change from awards in prior years is that the award has been divided into four distinct performance periods: fiscal 2013, fiscal 2014, fiscal 2015 and the three-year period of fiscal 2013 - 2015 with one-fourth of the target award allocated to each performance period. Any payout will be based on the Company's performance under two metrics during the relevant performance period. The primary metric for this award is "Adjusted EPS" (which is consolidated diluted earnings per share, as adjusted for non-recurring losses and recoveries). The second metric is the Company consolidated net sales.

For these awards, the Committee determined that the long-term performance award would be denominated in both performance units and cash. The awards will be payable in cash and the performance units will be valued using the fair market value of the Company's common stock on the date the payouts are approved by the Committee. If the Company achieves the performance goals for any of the performance periods, then the amount is earned, but would not be paid out until after the three-year performance period, provided that the NEO remains an employee through the payment date.

The target award levels for the NEOs are as follows:

                                     Target Number of
Name                                 Performance Units  Target
Diane M. Sullivan                         26,775       $964,800
  President and Chief Executive
Russell C. Hammer                          6,575       $233,350
 Senior Vice President and Chief
Financial Officer
Richard M. Ausick                         12,000       $426,000
 Division President, Retail
Douglas W. Koch                            4,700       $167,000
 Senior Vice President and Chief
Talent and Strategy Officer
John W. Schmidt                            4,000       $141,500
 Division President, Contemporary
Fashion Brands

The Committee set a minimum level of Adjusted EPS that must be achieved for each of the one-year performance periods and a minimum level of cumulative Adjusted EPS for the award to be payable for the three-year period; and also set Adjusted EPS levels (and a cumulative Adjusted EPS level) at which, depending on the Company' consolidated net sales, the maximum payout opportunity of 200% of the target can be achieved, while failure to attain the minimum level for each performance metric results in forfeiture of the associated opportunity. Thus, there is range of payout levels for each metric and for each performance period, depending on the Company's performance under both metrics.

The Committee will use interpolation to determine the exact payout percentage. In addition, the Committee has discretion to reduce the award payout percentage based on quality of earnings. If the Company's financial statements are restated, the Committee may require that any executive whose malfeasance contributed to the restatement return any proceeds earned from this award.

These awards are subject to the terms of the 2011 Plan and the foregoing summary is qualified by reference to the actual terms set forth in the 2011 Plan. The 2011 Plan is listed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The Committee also approved of payouts under the Company's Annual Incentive Plan ("AIP"). While several of the Company's businesses did not earn payouts under the AIP, the Committee decided to award discretionary bonuses to individuals it determined made contributions to the Company, including to John W. Schmidt of $100,000.

Item 9.01 Financial Statements and Exhibits

(c) Exhibit

10.1 Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2011, incorporated herein by reference to Exhibit A to the Company's definitive proxy materials filed with the Securities and Exchange Commission on Schedule 14A on April 15, 2011.

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