EMPLOYMENT AND NONCOMPETITION AGREEMENT


                  This EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement")
is made and entered into as of the 1st day of July, 2002, by and between SHOE
CARNIVAL, INC., an Indiana corporation with its principle offices located at
8233 Baumgart Road, Evansville, Indiana (the "Company"), and MARK L. LEMOND, an
individual residing at 11631 Bluegrass Rd., Evansville, Indiana (the
"Employee").


RECITALS

                  WHEREAS, the Company is one of the leading retailers of family
shoes in the United States;

                  WHEREAS, the Company desires to retain the services of the
Employee upon the terms and conditions set forth herein; and

                  WHEREAS, the Employee desires to be so employed by the
Company, to be eligible for potential compensation increases and potential bonus
payments for fiscal year 2002 and later, and to be given access to confidential
and proprietary information necessary to perform his job, but which the Company
would not make available to him but for his signing and agreeing to abide by the
terms of this Agreement as a condition of his continuing employment with the
Company; and

                  WHEREAS, the Company and the Employee desire to enter into
this Agreement to set forth the terms and conditions of the employment
relationship between the Company and the Employee; and

                  WHEREAS, in connection with its business, the Company has
expended a substantial amount of time, money, and effort to develop and maintain
its confidential, proprietary and trade secret information, and that this
information, if misused or disclosed, could be very harmful to Company's
business and its competitive position in the marketplace.

                                    AGREEMENT

                  1. Term of Employment. The Company hereby agrees to employ
Employee and Employee hereby agrees to be employed by the Company, in accordance
with the terms and conditions of this Agreement. This Agreement shall become
effective on July 1, 2002, and shall end on June 30, 2006. The term shall be
extended automatically for one (1) year on each July 1 ("Anniversary Date")
beginning July 1, 2003, unless either party hereto gives written notice to the
other party not more than ninety (90) days and not less than thirty (30) days
prior to an Anniversary Date, in which case no further automatic extension shall
occur and the term of this Agreement shall end four (4) years subsequent to the
Anniversary Date immediately following such written notice (such term, including
any extension is referred to as the "Term").
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Notwithstanding the foregoing, the Term shall end on the date of Employee's
voluntary retirement from the Company.

                  2. Duties. The Employee is engaged by the Company as its
President and Chief Executive Officer. Unless otherwise consented to by the
Employee, the Employee's positions with the Company shall be as its President
and Chief Executive Officer. The Employee shall have all the powers and agrees
to perform all of the duties associated with those positions, subject to the
direction of the Chairman of the Board and the Board of Directors of the
Company, and to the provisions of the Articles of Incorporation and Bylaws of
the Company. The Employee shall have general executive charge of the Company
with all such powers as may be reasonably incident to such responsibilities; and
he shall have such other powers and duties as designated in accordance with the
Company's Bylaws and as may be assigned to him from time to time by the Chairman
of the Board and the Board of Directors. The Employee shall report directly to
the Company's Chairman of the Board and the Board of Directors and any executive
committee of the Board. The Company agrees to provide the Employee with such
accommodations as are suitable to the character of his positions with the
Company and adequate for the performance of his duties.

                  During his employment under this Agreement, the Employee
agrees to devote substantially his full time, attention and energies to the
Company's business. This Agreement shall not be construed as preventing the
Employee from investing assets in such form or manner as will not require his
services in the daily operations of the affairs of the companies in which such
investments are made. This Agreement shall also not be construed as preventing
the Employee from serving as an outside director of up to two other for-profit
companies (and such additional companies as the Board of Directors may hereafter
approve) or from participating in charitable or other not-for-profit activities
as long as such activities do not materially interfere with his work for the
Company.

                  3. Compensation of Employee.  For all services rendered by the
Employee under this Agreement, the Company shall compensate the Employee as
follows:

                     3.1 Base Salary. The Base Salary payable to the Employee
         under this Agreement shall be that amount set forth in the minutes of
         the Compensation Committee of the Company's Board of Directors dated
         April 4, 2002 for the period beginning February 3, 2002 and ending
         February 1, 2003 ("Base Salary"), payable in accordance with the
         Company's usual payroll procedures, and subject to all taxes,
         withholdings and deductions as required by law and as the Employee may
         authorize. The Compensation Committee of the Company's Board of
         Directors will review the Base Salary on an annual basis during the
         Term to determine whether the Base Salary should be adjusted upward.
         Any such upward adjustment shall take effect at the beginning of each
         fiscal year.
                     3.2 Incentive Bonus. The Employee is entitled to
         participate in the Company's discretionary incentive bonus program in
         accordance with the terms contained in the then current Incentive Bonus
         Plan for his position, as may be amended or modified by the Company
         from time to time. However, Employee agrees that the failure of the
         Company to award any such bonus and/or other incentive compensation
         shall not give rise to any claim against the Company.

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                  4. Additional Compensation, Benefits, and Obligations. During
his employment under this Agreement, Employee is entitled to participate in any
and all employee welfare and health benefit plans (including, but not limited
to, life insurance, health and medical, dental and disability plans, and
Exec-U-Care) and other employee benefit plans, including but not limited to,
qualified pension plans, stock purchase plans, and nonqualified deferred
compensation plans, established by the Company from time to time; provided,
however, the Employee's participation in such plans is subject to the
eligibility requirements and other terms of such plans. The Company may change,
amend or discontinue any of its employee welfare and health benefit plans at any
time during the Term, and nothing in this Agreement shall obligate the Company
to institute, maintain or refrain from changing, amending or discontinuing any
such plans or programs.

                  5. Termination of Employment. Employee's employment may be
terminated as follows:

                     5.1 Termination Due to Death. If the Employee dies during
         the Term, this Agreement shall terminate as of the date of the
         Employee's death and the Employee's benefits shall be determined in
         accordance with the survivor's benefits, insurance and other applicable
         programs of the Company then in effect. Within fifteen (15) days of the
         Employee's death, the Company shall pay the Employee's designee or his
         estate (a) that portion of his Base Salary which shall have been earned
         through the termination date and (b) a bonus in an amount determined by
         multiplying the bonus earned by the Employee with respect to the
         Company's last completed fiscal year by a fraction, the numerator of
         which is the number of days elapsed in the Company's current fiscal
         year through the termination date and the denominator of which is 365.

                     5.2 Termination Due to Disability. If the Employee suffers
         a Disability (as defined in Section 6.2) during the Term, the Company
         shall have the right to terminate this Agreement by giving the Employee
         Notice of Termination to which has attached to it a copy of the medical
         opinion that forms the basis of the determination of Disability. The
         Employee's employment shall terminate at the close of business on the
         last day of the Notice Period (as defined in Section 6.6).

                         Upon the termination of this Agreement because of
         Disability, the Company shall pay the Employee within fifteen (15)
         business days of the termination date (a) that portion of his Base
         Salary, at the rate then in effect as provided, which shall have been
         earned through the termination date and (b) a bonus in an amount
         determined by multiplying the bonus earned by the Employee with respect
         to the Company's last completed fiscal year by a fraction, the
         numerator of which is the number of days elapsed in the Company's
         current fiscal year through the termination date and the denominator of
         which is 365. The Employee shall also be entitled to receive any
         applicable disability insurance benefits resulting from any insurance
         or other employee benefit programs of the Company.

                     5.3 Termination by the Company for "Cause" or by the
         Employee Without "Good Reason." At any time during the Term, the
         Company may terminate this Agreement for "Cause" as defined in Section

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         6.1 by giving the Employee a Notice of Termination, which has attached
         to it copies of the Board determination that forms the basis of the
         Company's action. The Employee's employment shall terminate at the
         close of business on the last day of the Notice Period.

                         At any time during the Term, the Employee may terminate
         this Agreement without "Good Reason" as defined in Section 6.3 hereof
         by giving the Board of Directors of the Company a Notice of
         Termination. The Employee's employment by the Company shall terminate
         at the close of business on the last day of the Notice Period.

                         Within fifteen (15) business days after such
         termination date, the Company shall pay the Employee that portion of
         his Base Salary, which shall have been earned through the termination
         date.

                     5.4 Termination by the Company Without "Cause" or by the
         Employee for Good Reason." At any time during the Term, the Board of
         Directors of the Company may terminate this Agreement without Cause by
         giving the Employee a Notice of Termination, and the Employee's
         employment by the Company shall terminate at the close of business on
         the last day of the Notice Period.

                         At any time during the Term, the Employee may terminate
         this Agreement with "Good Reason" by giving the Company a Notice of
         Termination which describes the actions, events or beliefs that form
         the basis of the Employee's action. The Employee's employment shall
         terminate at the close of business on the last day of the Notice
         Period.

                         Within five (5) business days after such termination
         date, the Company shall pay to the Employee (a) that portion of his
         Base Salary which shall have been earned through the termination date
         (b) a bonus in an amount determined by multiplying the bonus earned by
         the Employee with respect to the Company's last completed fiscal year
         by a fraction, the numerator of which is the number of days elapsed in
         the Company's current fiscal year through the termination date and the
         denominator of which is 365 and (c) an amount equal to two times the
         "Salary Continuation Benefit," as defined in Section 6.4. The Company
         shall also pay to the Employee an amount equal to one-twelfth of the
         Salary Continuation Benefit on the first day of each of the 24 calendar
         months following the date of termination. The Company shall also
         provide the Employee with the "Medical and Dental Benefits," as defined
         in Section 6.4, for the remainder of the Term. All of Employee's stock
         options granted after the date of this Agreement shall contain
         provisions requiring that such options shall automatically vest upon
         the termination of Employee under this Section 5.4 and all of such
         options shall be exercisable by Employee during the remainder of the
         Term. All of Employee's current stock options shall automatically vest
         upon the termination of Employee under this Section 5.4. Termination of
         this Agreement for Good Reason, shall not be deemed to be a voluntary
         termination by Employee for purposes of any stock option plans of the
         Company.

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                     5.5 Termination by the Employee Upon Retirement. At any
         time during the Term, the Employee may terminate this Agreement by
         giving the Company a Notice of Termination advising the Company that he
         intends to voluntarily retire in accordance with the Company's
         retirement policies on a date specified in the Notice of Termination.
         The Employee's employment shall terminate on the date specified in the
         Notice of Termination.

                         Within fifteen (15) business days after such
         termination date, the Company shall pay the Employee (a) that portion
         of his Base Salary which shall have been earned through the termination
         date and (b) a bonus in an amount determined by multiplying the bonus
         earned by the Employee with respect to the Company's last completed
         fiscal year by a fraction, the numerator of which is the number of days
         elapsed in the Company's current fiscal year through the termination
         date and the denominator of which is 365.

                     5.6 Split-Dollar Life Insurance. During the Term, the
         Company shall keep in effect the current split-dollar life insurance
         policy or policies on the life of Employee and his spouse in the face
         amount of $1,000,000. In the event of the termination of this Agreement
         pursuant to Section 5.2 or Section 5.4, the Company shall pay to
         Employee a bonus in the amount of (a) the "Company Investment," as
         defined in the Split Dollar Agreement and (b) an additional amount
         sufficient to reimburse Employee for all federal, state and local taxes
         imposed on the amount in (a) above. Employee shall, upon receipt of the
         above bonus, immediately reimburse the Company for the Company
         Investment and the Company shall relinquish all interests in the policy
         or policies.

                     5.7 Accrued Compensation and Benefits. Notwithstanding any
         other provision of this Agreement, upon termination of Employee's
         employment for any reason, Employee shall be entitled to receive all
         accrued but unpaid compensation, bonuses and benefits under all of the
         Company's compensation, bonus and benefit plans in which employee is a
         participant, all in accordance with the terms of such plans. These
         plans include, without limitation, the Company's 401(k) plan, deferred
         compensation plan and bonus plans which are earned in a fiscal year,
         but paid in the following year.

                     5.8 Internal Revenue Code Limits. Should any payments by
         the Company to or for the benefit of Employee under this Agreement
         constitute an "excess parachute payment" within the meaning of Section
         280G of the Internal Revenue Code of 1986, as amended (the "Code"),
         then the Company shall pay Employee an additional amount of money that
         will equal the sum of (a) all excise or other taxes imposed upon
         Employee by Section 4999 of the Code (excluding any penalties or
         interest) and (b) all additional state and federal taxes, interest
         and/or penalties attributable to the additional payments made to
         Employee pursuant to this Section 5. If an excise tax is imposed
         pursuant to the Internal Revenue Code of 1986, Employee agrees to
         immediately notify the Company within ten (10) days of the event, in
         writing, and Employee hereby gives the Company the right to challenge
         said imposition.

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                     5.9 Payroll Withholdings. The Company may withhold from any
         compensation or benefits payable under this Agreement all federal,
         state, city, or other taxes or deductions as may be required pursuant
         to any law or governmental regulation or ruling.

                     5.10 Compliance With Post-Employment Restrictions. If
         Employee breaches any of the covenants or provisions set forth in
         Sections 7 and 8 of this Agreement, then in such event the Company
         shall have the right immediately and permanently to discontinue payment
         and provision of any of the severance compensation and benefits payable
         under this Agreement. The Employee and Company acknowledge and agree
         that such remedy is in addition to, and not in lieu of, any and all
         other legal and/or equitable remedies that may be available to the
         Company in connection with the Employee's breach or threatened breach
         of any of the covenants or provisions of this Agreement.

                     5.11 Mitigation or Reduction of Benefits. Employee shall
         not be required to mitigate the amount of any payments provided for in
         this Section 5 by seeking other employment or otherwise. Except as
         specifically set forth herein, the amount of any payment for benefits
         provided in this Section 5 shall not be reduced by any compensation or
         benefits or the amount paid to or earned by the Employee as a result of
         employment by another employer after the Employee's termination date or
         otherwise.

                     5.12 Release Agreement. As a condition of receiving the
         severance benefits described in Section 5, Employee will be required to
         sign a standard release agreement acceptable to the Company in which he
         releases and waives all claims which he may have against the Company or
         any affiliate, employee, shareholder, officer, director, agent or
         representative of the Company (except for his rights under this
         Agreement or any other vested rights Employee may have under any
         insurance, pension, employee stock ownership or stock option plans
         sponsored or made available by the Company). The Company will provide
         such release agreement to Employee at the termination of Employee's
         employment with the Company. As part of the release agreement, Employee
         will be required (a) to agree to cooperate with the Company with
         respect to any business matters about which he has knowledge, including
         any litigation or threatened litigation (b) agree not to cooperate with
         any claimants against the Company unless required by law to do so, (c)
         agree not to make any negative or derogatory comments about the Company
         or its executives and (d) affirm his post-termination obligations under
         this Agreement, including without limitation the obligations set forth
         in Sections 7 and 8.

                  6.  Definitions.

                      6.1 "Cause" means the occurrence of any one or more of the
         following events: (a) Employee's conviction for a felony or other crime
         involving moral turpitude; (b) Employee's willful engaging in illegal
         conduct or gross misconduct which is injurious to the Company; (c)
         Employee's willful engaging in any fraudulent or dishonest conduct in
         his dealings with, or on behalf of, the Company; (d) Employee's willful
         failure or refusal to follow the lawful and reasonable instructions of
         the Company's Chairman of the Board or the Board of Directors if such

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         failure or refusal continues for a period of ten (10) days after the
         Company delivers to Employee a written notice stating the instructions
         which Employee has failed or refused to follow; (e) Employee's willful
         material breach of any of his obligations under this Agreement; (f)
         Employee's material breach of the Company's policies; (g) Employee's
         use of alcohol or drugs which substantially interferes with the
         performance of his duties for the Company or which compromises the
         integrity or reputation of the Company; or (h) Employee's willful
         engaging in any conduct, which as a result of such conduct, the
         Company's integrity or reputation is substantially compromised. No act
         or omission on the part of the Employee shall be considered "willful"
         unless it is done or omitted in bad faith or without reasonable belief
         that the action or omission was in the best interests of the Company.
         Notwithstanding the foregoing, the Employee shall not be deemed to have
         been terminated for Cause without (i) reasonable notice to the Employee
         setting forth the reasons for the Company's intention to terminate for
         Cause, (ii) an opportunity for the Employee, together with his counsel,
         to be heard before the Board of Directors, and (iii) delivery to the
         Employee of a Notice of Termination from the Board of Directors finding
         that in the good faith opinion of a majority of the Board of Directors
         the Employee was guilty of conduct set forth in one or more of the
         clauses above and specifying the particulars thereof in detail.

                      6.2 "Disability" means the inability, in the written
         opinion of a licensed physician chosen by the Board of Directors, of
         the Employee, because of injury, illness, disease or bodily or mental
         infirmity to perform a substantial portion of his ordinary duties and
         that this condition has existed for a least six months and will more
         probably than not extend for an additional six months into the future.

                      6.3 "Good Reason" means:

                           (a) without the Employee's express written consent
                  and excluding for this purpose an isolated, insubstantial and
                  inadvertent action not taken in bad faith and which is
                  remedied by the Company promptly after receipt of notice
                  thereof given by the Employee, (i) the assignment to the
                  Employee of any duties inconsistent in any respect with the
                  Employee's position, authority, duties or responsibilities as
                  contemplated by Section 2, (ii) any other action by the
                  Company which results in a significant diminution in such
                  position, authority, duties or responsibilities, or (iii) any
                  reduction in the Employee's Base Salary or any failure by the
                  Company to comply with any of the provisions of Section 5;

                           (b) any requirement for the Employee to relocate
                  outside of the metropolitan area of his current residence or
                  any relocation of the principal executive office of the
                  Company outside of Evansville, Indiana;

                           (c) any failure of the Company to comply with
                  and satisfy Section 14.1 hereof;

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                           (d) any breach by the Company of any other
                  material provision of this Agreement; or

                           (e) notice from the Company pursuant to Section 1 of
                  this Agreement that the Term shall not be automatically
                  extended, but only if Employee terminates his employment
                  within six month's after the date of such notice.

                      6.4 "Medical and Dental Benefits" refers to the coverage
         for the Employee and his spouse and dependants under the Company's
         group medical and dental plan, at no expense to the Employee, as if the
         Employee had continued as an employee, provided that such continued
         participation is possible under the terms and provisions of the group
         medical and dental plan. In the event that participation by the
         Employee as a former employee, or by his spouse and dependants, in the
         group medical and dental plan is barred, or if the benefits to the
         Employee and his spouse and dependants (after taking into account
         Medicare benefits provided by Title XVIII of the Social Security Act)
         are reduced to a level below what they were on the date of his
         termination, or if the Employee elects at any time by notice in writing
         to the Company, the Company shall arrange to provide the Employee and
         his spouse and dependants with benefits substantially similar to those
         which they were receiving under such group medical and dental plan
         immediately prior to the date of his termination, such benefits to be
         provided at the Company's expense by means of individual insurance
         policies, or if such policies cannot be obtained, from the Company's
         assets. If at any time after termination of his employment, the
         Employee should accept employment with another employer and if the
         Employee should become covered under that employer's medical benefit
         plan, then effective on the date that such coverage commences, the
         obligation of the Company to provide any medical and dental benefits to
         the Employee and his spouse and dependants, shall terminate. The
         medical and dental benefits provided to the Employee and his spouse and
         dependants after the date of the Employee's termination of employment
         are intended by the parties to be in lieu of the rights of the Employee
         to continuation coverage (commonly known as "COBRA") under Section 601
         et seq. of the Employee Retirement Income Security Act of 1974 (ERISA),
         and Section 4908B of the Internal Revenue Code of 1986, as amended (the
         "Code"), as either of the foregoing statutes may be amended.

                      6.5 "Notice of Termination" means a written notice
         delivered by one party notifying the other party of the notifying
         party's intention to terminate the Employee's employment pursuant to
         this Agreement. A Notice of Termination shall not be effective unless
         (a) it specifies the specific provision of Section 5 which forms the
         basis of the proposed termination; (b) sets forth a proposed
         termination date not less than fifteen (15) calendar days from the
         sending of the Notice of Termination, and (c) otherwise complies with
         the requirements of this Agreement.

                      6.6 "Notice Period" means the period between the sending
         of the Notice of Termination and the proposed termination date set
         forth in such Notice.

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                      6.7 "Salary Continuation Benefit" means an annual amount
         equal to the sum of: (a) the annualized Base Salary of the Employee in
         effect at the time of termination; plus (b) the largest of the annual
         bonuses paid to the Employee for the two fiscal years preceding the
         termination date, or 25% of the Base Salary in effect at the time of
         termination, whichever is greater.

                  7.  Non-competition.

                      7.1 General. Employee acknowledges that his position with
         the Company is special, unique and intellectual in character and his
         position in the Company places him in a position of confidence and
         trust with employees and customers of the Company. Employee further
         acknowledges, recognizes, and represents receipt of sufficient
         consideration for these restraints in the form of the increased Base
         Salary and other valuable consideration contained herein. The
         restrictions and obligations contained in this Section 6 shall survive
         the term of this Agreement.

                      7.2 Non-competition. Employee agrees that during his
         employment with the Company and for a period of two (2) years
         immediately after the termination of Employee's employment with the
         Company, whether such employment is pursuant to this Agreement or is
         without an agreement, thereafter Employee shall not:

                      7.2.1 Either alone or in concert with others, whether as
                  director, officer, consultant, principal, employee, agent or
                  otherwise, engage in or contribute Employee's knowledge and
                  abilities to any business or entity in competition with the
                  Company ("Competing Business");

                      7.2.2 Be employed by, work for, consult with, or act in
                  any other capacity for, any person or entity that is engaged
                  in any Competing Business if in such employment, work or
                  capacity Employee likely would, because of the nature of his
                  position with, or work for, the competitor and his knowledge
                  of the Company's Confidential Information, inevitably use
                  and/or disclose any of the Company's Confidential Information
                  in his work for or with such competitor;

                      7.2.3 Solicit, recruit, hire, employ or attempt to hire or
                  employ any person who is then or within the preceding thirty
                  (30) day period was, an employee of the Company, or otherwise
                  urge, induce or seek to induce any person to terminate his/her
                  employment with the Company;

                      7.2.4 Solicit, urge, induce or seek to induce any of the
                  Company's independent contractors, subcontractors, vendors,
                  suppliers, customers or consultants to terminate their
                  relationship with, or representation of, the Company or to
                  cancel, withdraw, reduce, limit or in any manner modify any
                  such person's or entity's business with or representation of,
                  the Company for whatever purpose or reason;

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                      7.2.5 Take any action intended to harm the Company or its
                  reputation, which the Company reasonably concludes could lead
                  to unwanted or unfavorable publicity to the Company;

                      7.2.6 The restrictive time periods set forth in this
                  Section 7.2 shall not expire during any period in which
                  Employee is in violation of any of the restrictive covenants
                  set forth in this Section 7.2, and all restrictions shall
                  automatically be extended by the period Employee was in
                  violation of any such restrictions;

                      7.2.7 The restrictive covenants contained in this Section
                  7.2 prohibit Employee from engaging in certain activities
                  directly or indirectly, whether on his own behalf or on behalf
                  of any other person or entity.

                      7.2.8 The covenants and restrictions in this Section 7.2
                  are separate and divisible, and to the extent any covenant,
                  provision or portion of Section 7.2 is determined to be
                  unenforceable or invalid for any reason, such unenforceability
                  or invalidity shall not affect the enforceability or validity
                  of the remainder of the Agreement. Should any particular
                  covenant, restriction, provision or portion of Section 7.2 be
                  held unreasonable or unenforceable for any reason, including,
                  without limitation, the time period, geographical area, and/or
                  scope of activity covered by any restrictive covenant,
                  provision or clause, such covenant, provision or clause shall
                  automatically be deemed reformed such that the contested
                  covenant, provision or portion will have the closest affect
                  permitted by applicable law to the original form and shall be
                  given effect and enforced as so reformed to the extent
                  reasonable and enforceable under applicable law.

                      7.3  Definition of "Competing Business":  The term
                  "Competing Business" shall include, but not be limited to:

                           7.3.1 Any retail business, or any company affiliated
                  with such a business, whether subsidiary, affiliated or a
                  joint venture, which sells footwear at retail to consumers at
                  price points competitive, or likely to be competitive with the
                  Company (including, without limitation, Payless ShoeSource,
                  Inc.; Brown Shoe Company, Inc.; Discount Shoe Warehouse, a
                  division of Value City Department Stores, Inc.; Rack Room
                  (dba); Kohls Corporation; Shoe Station (dba); Shoe City (dba);
                  Shoe Department (dba); Foot Star, Inc.; Finish Line, Inc.,
                  and/or any subsidiary or affiliate of any of the
                  aforementioned competitors) within 25 miles of any Company
                  store.

                           7.3.2 Ownership of an investment of less than 5% of
                  any class of equity or debt security of a publicly-held
                  Competing Business shall not constitute ownership or
                  participation in violation of the above.

                      7.4 Acknowledgment Regarding Restrictions. Employee
         acknowledges and agrees that he understands the restrictions in Section
         7; that they are reasonable and enforceable, in view of, among other

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         things, the Employee's position within the Company, the highly
         competitive nature of the Company's business, and the confidential
         nature of the information the Employee has been provided. Employee
         further agrees that the Company would not have adequate protection if
         Employee were permitted to work for its competitors in violation of the
         terms of this Agreement since the Company would be unable to verify
         whether its Confidential Information was being disclosed and/ or
         misused, and whether Employee was involved in diverting the Company's
         customers and/or its customer goodwill.

                       7.5 Disclosures Concerning New Employment. Employee
         agrees that he (a) will immediately, within ten (10) days, notify the
         Company in writing of his employment, engagement or other affiliation
         with any other business or entity during the two (2) years immediately
         following the termination of Employee's employment with the Company and
         (b) will provide a copy of Section 6 and 7 of this Agreement to any
         prospective employer before accepting employment or other work
         engagement with any such employer.

                  8.  Confidential or Proprietary Information

                      8.1 Confidentiality. As used in this Agreement, the term
         "Confidential Information" means any and all of the Company's trade
         secrets, confidential and proprietary information and all other
         information and data of the Company that is not generally known to
         third persons who could derive economic value from its use or
         disclosure, including, without limitation, the Company's profile of
         prospective or current vendors or customers, business methods and
         structure, details of the Company's contracts and business matters,
         employee compensation, personnel information, marketing strategies and
         plans, business plans, pricing information and strategies, costs
         information, and financial data, whether or not reduced to writing or
         other tangible medium of expression, including work product created by
         Employee in rendering services to the Company. During his employment
         with the Company and thereafter, Employee will not use or disclose to
         others any of the Confidential Information except as authorized in
         writing by the Company or in the performance of work assigned Employee
         by the Company. Employee also will abide by the Company's policies
         protecting the Confidential Information. Employee's confidentiality
         obligations shall continue as long as the Confidential Information
         remains confidential, and shall not apply to information which becomes
         generally known to the public through no fault or action of Employee.
         Employee agrees that the Company owns the Confidential Information and
         Employee has no rights, title or interest in any of the Confidential
         Information. At the Company's request or upon termination of Employee's
         employment with the Company for any reason, Employee will immediately
         deliver to the Company all materials (including all copies and
         electronically stored data) containing any Confidential Information in
         Employee's possession, custody or control.

                      8.2 Trade Secrets-Developments. All improvements,
         developments, concepts, and ideas ("Developments") relating to the
         Company's business, or capable of beneficial use by the Company,
         including, but not limited to, marketing, confidential and trade secret
         information, techniques, discoveries, slogans, designs, artwork, and

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         writings, which the Employee has made or will make during his
         employment with the Company are the sole and exclusive property of the
         Company without charge to the Company other than the Employee's
         compensation.

                      8.3 Acknowledgement. Employee agrees that the restrictions
         set forth in Sections 8.1 and 8.2 are reasonable and necessary to
         protect the trade secrets, confidential information, intellectual
         property rights and goodwill of the Company. The restrictions and
         obligations contained in this Section 8 shall survive the term of this
         Agreement.

                  9. Remedies. In the event of a breach or threatened breach by
the Employee of any of the provisions of Sections 7 or 8, the Company shall be
entitled to an injunction restraining Employee from such breach, in addition to
all other remedies which the Company shall be entitled to pursue. The Company
also shall be entitled to recover from Employee all litigation costs and
attorneys' fees incurred by the Company in any action or proceeding relating to
enforcement of the provisions of Sections 7 or 8 this Agreement in which the
Company prevails. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available for such breach, threatened breach,
or any breach of this Agreement.

                  10. Survival of Post-Termination Obligations. Employee
acknowledges and agrees that his post-termination obligations under this
Agreement, including without limitation Employee's non-competition and
confidentiality obligations set forth in Sections 7 and 8 of this Agreement,
shall survive the termination of Employee's employment with the Company,
regardless whether such termination is voluntary or involuntary, or is with or
without cause.

                  11. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered on the date personally delivered or the dated mailed,
postage prepaid, by certified mail, return receipt requested, or telegraphed and
confirmed, or faxed and confirmed, if addressed to the respective parties as
follows;

                  To Employee:              Mark L. Lemond
                                            11631 Bluegrass Rd.
                                            Evansville, Indiana 47725

                  To Company:               Chairman
                                            Shoe Carnival, Inc.
                                            8233 Baumgart Road
                                            Evansville, Indiana 47725

Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.

                  12. Waiver. The failure or delay of any party at any time or
times to require performance of, or to exercise any of its powers, rights or
remedies with respect to, any term or provision of this Agreement shall not
affect such party's right to later enforce any such term or provision.

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                  13. Entire Agreement. This Agreement cancels and supersedes
all prior negotiations, discussions, commitments and understandings between the
parties relating hereto, whether oral or written. This Agreement embodies the
entire agreement and understanding between such parties with respect to the
matters covered hereby. Neither party shall be bound by any term or condition
other than as is expressly set forth herein. This Agreement may not be amended,
supplemented or modified except by a written document signed by both Employee
and a duly authorized officer of the Company.

                  14. Assignment.

                      14.1 Assignment by Company. The Company will require any
         successor (whether direct or indirect, by purchase, merger,
         consolidation or otherwise) to all or substantially all of the capital
         stock, business and/or assets of the Company, by agreement in form and
         substance satisfactory to the Employee, expressly to assume 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. Failure of the Company to obtain such agreement prior
         to the effectiveness of any such succession shall be a breach of this
         Agreement and shall entitle the Employee to compensation from the
         Company in the same amount and on the same terms as the Employee would
         be entitled hereunder if the Employee terminated his employment for
         Good Reason, except that for purposes of implementing the foregoing,
         the date on which any such succession becomes effective shall be deemed
         the termination date. As used in this Agreement, "Company" shall mean
         the Company and any successor to its business and/or assets which
         executes and delivers the agreement provided for in this Section 14.1
         or which otherwise becomes bound by all the terms and provisions of
         this Agreement by operation of law.

                      14.2 Assignment by Employee. The services to be provided
         by the Employee to the Company hereunder are personal to the Employee,
         and the Employee's duties may not be assigned by the Employee;
         provided, however that this Agreement shall inure to the benefit of and
         be enforceable by the Employee's personal or legal representatives,
         executors, and administrators, successors, heirs, distributees,
         devisees and legatees. If the Employee dies while any amounts payable
         to the Employee hereunder remain outstanding, all such amounts, unless
         otherwise provided herein, shall be paid in accordance with the terms
         of this Agreement to the Employee's devisee, legatee, or other designee
         or, in the absence of such designee, to the Employee's estate.

                  15. Dispute Resolution.  Except as otherwise contemplated
by Section 9, the Employee agrees that any dispute or controversy arising under
or in connection with this Agreement shall be submitted to binding arbitration.

                  Such arbitration proceeding shall be conducted before an
arbitrator selected by mutual agreement of the Employee and the Company and
shall be governed by the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect. If the parties are unable to select an
arbitrator by mutual agreement within thirty (30) days, the arbitrator shall be
selected in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association then in effect. Such arbitration shall take
place in Evansville, Indiana. Judgment may be entered on the award of the

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arbitrator in any court having competent jurisdiction; provided, however, that
the Employee shall be entitled to seek specific performance of his right to any
payments or benefits to be provided until the date of termination of his
employment during the pendency of any dispute or controversy arising under or in
connection with this Agreement. All of the Employee's costs and expenses of
arbitration, including attorney's fees, shall be borne by the Company and paid
as incurred, whether or not the Employee prevails in the arbitration.

                  16. Governing Law: Forum Selection. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Indiana, without regard to the conflicts of law rules thereof. Any legal
action relating to this Agreement shall be commenced and maintained exclusively
before any appropriate state court of record in Vanderburgh County, Indiana, or,
if necessary because of a federal question mandating jurisdiction in the federal
courts is involved, the United States District Court for the Southern District
of Indiana, Evansville Division, and the parties hereby submit to the
jurisdiction of such courts and waive any right to challenge or otherwise raise
questions of personal jurisdiction or venue in any action commenced or
maintained in such courts.

                  17. Severability. The parties intend that the provisions of
this Agreement shall be enforced to the fullest extent permissible under the
applicable law. Should any provision of this Agreement be unenforceable or
invalid for any reason, such unenforceability or invalidity shall not affect the
enforceability or validity of the remainder of the Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.


SHOE CARNIVAL, INC.: "Company"              MARK L. LEMOND: "Employee"


By: /s/ J. Wayne Weaver                     /s/ Mark L. Lemond
    -------------------                     ------------------

Its: Chairman of the Board of Directors


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