Exhibit 10.4 Severance Agreement - Andrew M. Rosen


    
      

    

     

    Exhibit
      10.4

    


    SEVERANCE
      AGREEMENT

     

    This
      SEVERANCE AGREEMENT (the “Agreement”) is effective as of April 1, 2006
      (“Effective Date”) by and between Andrew M. Rosen (“Employee”) and Brown Shoe
      Company, Inc., a New York corporation (“Brown Shoe” and, together with its
      subsidiaries, the “Company”).

     

    WHEREAS,
      Brown Shoe is engaged, directly and indirectly through its subsidiaries, in
      the
      sourcing and retail and wholesale sale of footwear in the United States and
      throughout the world;

     

    WHEREAS,
      Employee is employed by Brown Shoe or a wholly-owned subsidiary of Brown Shoe
      in
      an executive capacity, possesses intimate knowledge of the business and affairs
      of the Company, and has acquired, and will continue to acquire, certain
      confidential, proprietary and trade secret information and data with respect
      to
      the Company;

     

    WHEREAS,
      Employee and Brown Shoe are currently parties to a severance agreement which
      Employee and Brown Shoe desire to terminate and replace with this Agreement
      (the
“Prior Agreement”);

     

    WHEREAS,
      Brown Shoe desires to insure, insofar as possible, that the Company will
      continue to have the benefit of Employee’s services and to protect the
      confidential information and goodwill of the Company; and

     

    WHEREAS,
      the Company recognizes that circumstances may arise in which a change in the
      control of Brown Shoe occurs, through acquisition or otherwise, thereby causing
      uncertainty of employment without regard to Employee’s competence or past
      contributions which uncertainty may result in the loss of valuable services
      of
      Employee to the detriment of the Company and Brown Shoe’s shareholders, and the
      Company and Employee wish to provide reasonable security to Employee against
      changes in Employee’s relationship with Brown Shoe in the event of any such
      change in control; and

     

    WHEREAS,
      both the Company and Employee are desirous that a proposal for any change of
      control or acquisition will be considered by Employee objectively and with
      reference only to the business interests of the Company and Brown Shoe’s
      shareholders; and

     

    WHEREAS,
      Employee will be in a better position to consider the best interests of the
      Company if Employee is afforded reasonable security, as provided in this
      Agreement, against altered conditions of employment which could result from
      any
      such change in control or acquisition.

     

    NOW,
      THEREFORE, in consideration of the foregoing and of the mutual covenants and
      agreements hereinafter set forth, the parties hereto mutually covenant and
      agree
      as follows:

     

    Section
      1.  Definitions

     

    1.1  “Board”
      means the Board of Directors of Brown Shoe.

     

    1.2  “Business
      Unit” means any direct or indirect subsidiary, operating division or business
      unit of Brown Shoe.

     

    1.3  “Cause”
      means (i) engaging by Employee in willful misconduct which is materially
      injurious to the Company; (ii) conviction of Employee of a felony; (iii)
      engaging by Employee in fraud, material dishonesty or gross misconduct in
      connection with the business of the Company; (iv) engaging by Employee in any
      act of moral turpitude reasonably likely to materially and adversely affect
      the
      Company or its business; (v) engaging by Employee in the illegal use of a
      controlled substance or using prescription medications unlawfully; or (vi)
      abuse
      by Employee of alcohol.

     

    1.4  “Change
      of Control” means the occurrence of any of the following events after the
      Effective Date:

     

    (a)  The
      acquisition by any Person of beneficial ownership (within the meaning of Rule
      13d-3 promulgated under the Exchange Act) of 30% or more of either (x) the
      then
      outstanding shares of common stock of Brown Shoe (the “Outstanding Company
      Common Stock”) or (y) the combined voting power of the then outstanding voting
      securities of Brown Shoe entitled to vote generally in the election of directors
      (the “Outstanding Company Voting Securities”); provided, however, that for
      purposes of this paragraph (a)
      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 corporation controlled by the Company,
      or
      (iv) any acquisition by any corporation pursuant to a transaction which complies
      with the exception set forth in paragraph (c)
      below;
      or

     

    (b)  Individuals
      who, as of the Effective Date of this Agreement, 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 Effective Date whose election, or nomination for election by the Company’s
      shareholders, 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)  Consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company or the acquisition of assets
      of another corporation (a “Business Combination”), in each case, unless,
      following such Business Combination, all or substantially all of the individuals
      and entities who were the beneficial owners, respectively, of the Outstanding
      Company Common Stock and Outstanding Company Voting Securities immediately
      prior
      to such Business Combination beneficially own, directly or indirectly, more
      than
      65% of, respectively, 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 which 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 Outstanding Company Voting Securities, as the case may be;
      or

     

    (d)  Approval
      by the shareholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

    1.5  “Code”
      means the Internal Revenue Code of 1986, as amended.

     

    1.6  “Competitor”
      means any Person which (a) in its prior fiscal year had annual gross sales
      volume or revenues of more than $20,000,000 attributable to the sale of footwear
      or (b) is reasonably expected to have such level of footwear sales or revenues
      in either the current fiscal year or the next following fiscal
      year.

     

    1.7  “Confidential
      Information” shall have the meaning set forth in Section
      10.

     

    1.8  “Customer”
      means any wholesale customer of Brown Shoe and/or any Business Unit which either
      purchased from Brown Shoe and/or any Business Unit during the one (1) year
      immediately preceding the Termination Date, or is reasonably expected by Brown
      Shoe and/or any Business Unit to purchase from Brown Shoe and/or any Business
      Unit in the one (1) year period immediately following the Termination Date,
      more
      than $1,000,000 in footwear. 

     

    1.9  “ERISA”
      means the Employee Retirement Income Security Act of 1974, as
      amended.

     

    1.10  “Good
      Reason,” when used with reference to a voluntary termination by Employee of
      Employee’s employment with the Company, means (i) a reduction in Employee’s base
      salary as in effect on the date hereof, or as the same may be increased from
      time to time; (ii) a reduction in Employee’s status, position, responsibilities
      or duties; (iii) the required relocation of Employee’s principal place of
      business, without Employee’s consent, to a location which is more than fifty
      (50) miles from Employee’s principal place of business on the Effective Date, or
      from such location to which Employee may transfer with Employee’s consent after
      the Effective Date; (iv) a material increase in the amount of time Employee
      is
      required to travel on behalf of the Company; (v) the failure of any successor
      of
      Brown Shoe to assume this Agreement, or (vi) a material breach of this Agreement
      by the Company. 

     

    1.11  “Person”
      means 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”)).

     

    1.12  “Termination
      Date” means the effective date as provided in this Agreement of the termination
      of Employee’s employment with the Company.

     

    Section
      2.  Term

     

    2.1  Subject
      to Section 2.2,
      the
      term of this Agreement (the “Term”) shall be a period of three (3) years
      commencing on the Effective Date.

     

    2.2  The
      Term
      shall be automatically extended for successive one (1) year periods unless
      either party to this Agreement provides the other party with notice of
      termination at least ninety (90) days prior to the expiration of the original
      three-year period or any one-year period thereafter.

     

    Section
      3.  Termination
      of Employment

     

    3.1  The
      Company may
      terminate Employee’s employment at any time for Cause, effective upon written
      notice to Employee specifying in reasonable detail the particulars of Employee’s
      conduct deemed by the Company and/or such subsidiary to justify such termination
      for Cause.

     

    3.2  The
      Company may terminate Employee’s employment without Cause at any time, effective
      upon written notice to Employee of termination specifying that such termination
      is without Cause.

     

    3.3  Employee
      may terminate Employee’s employment with the Company at any time, with or
      without Good Reason.

     

    Section
      4.  Separation
      Benefits

     

    4.1  If
      Employee’s employment is terminated by the Company for any reason other than for
      Cause, death or disability and Section 4.2
      does not
      apply, Employee shall be entitled to the following separation
      benefits:

     

    (a)  The
      Company shall pay, or cause to be paid, to Employee within 30 days of the
      Termination Date (i) the full base salary earned by Employee through, but unpaid
      at, the Termination Date, plus (ii) credit for any vacation earned by Employee
      but not used at the Termination Date, plus (iii) all other amounts owed by
      the
      Company to Employee (other than any bonus payment of any kind) but unpaid as
      of
      the Termination Date.

     

    (b)  The
      Company shall pay, or cause to be paid, to Employee (i) in a lump sum not later
      than thirty (30) days after the Termination Date an amount equal to 200% of
      the
      sum of (A) Employee’s base annual salary at the highest rate in effect at any
      time during the twelve (12) months immediately preceding the Termination Date,
      and (B) Employee’s targeted bonus for the current year, and (ii) Employee’s
      targeted bonus payment for the year of termination prorated to the Termination
      Date.

     

    (c)  The
      Company shall provide to Employee for a period of eighteen (18) months after
      the
      Termination Date medical and/or dental coverage under the Company’s medical
      and/or dental plans, without any cost to Employee in excess of any employee
      contribution that would be payable by Employee if Employee remained employed
      by
      a member of the Company; provided, however, that if Employee becomes employed
      with another employer during such eighteen (18)-month period and is eligible
      to
      receive medical and/or dental coverage under another employer-provided plan,
      the
      medical and/or dental coverage described herein shall be secondary to those
      provided under such other plan. In addition, on the last day of such eighteen
      (18)-month period, the Company shall pay, or cause to be paid, to Employee
      an
      amount in cash equal to the aggregate amount that would be payable by the
      Company for such medical and/or dental coverage for six (6) months if Employee
      remained employed by the Company for such period.

     

    (d)  The
      restrictions applicable to each share of non-vested restricted stock of Brown
      Shoe held by Employee that would have vested within the two (2) year period
      following the Termination Date had Employee remained employed by the Company
      shall lapse as of the Termination Date.

     

    (e)  Each
      non-vested option to purchase Brown Shoe stock held by Employee that would
      have
      vested within the two (2) year period following the Termination Date had
      Employee remained employed by the Company shall vest as of the Termination
      Date.

     

    (f)  The
      Company shall pay the reasonable costs of outplacement services selected by
      the
      Company for a reasonable period of time following the Termination Date;
      provided, however, that no such outplacement services shall be provided after
      the last day of the second calendar year following the calendar year in which
      the Termination Date occurs.

     

    4.2  If
      Employee’s employment is terminated within twenty-four (24) months after a
      Change of Control (x) by the Company for any reason other than for Cause, death
      or disability, or (y) by Employee within ninety (90) days after the occurrence
      of Good Reason, Employee shall be entitled to the following separation benefits
      in place of, and not in addition to, the benefits set forth in Section
4.1:

     

    (a)  The
      Company shall pay, or cause to be paid, to Employee within 30 days of the
      Termination Date (i) the full base salary earned by Employee through, but unpaid
      at, the Termination Date, plus (ii) credit for any vacation earned by Employee
      but not taken at the Termination Date, plus (iii) all other amounts owed by
      the
      Company to Employee (other than any bonus payment of any kind) but unpaid as
      of
      the Termination Date.

     

    (b)  The
      Company shall pay, or cause to be paid, to Employee (i) in a lump sum six (6)
      months after the Termination Date an amount equal to 300% of the sum of (A)
      Employee’s base annual salary at the highest rate in effect at any time during
      the twelve (12) months immediately preceding the Termination Date, and (B)
      Employee’s targeted bonus for the current year; and (ii) Employee’s targeted
      bonus payment for the year of termination prorated to the Termination
      Date.

     

    (c)  The
      Company shall provide to Employee for a period of eighteen (18) months after
      the
      Termination Date medical and/or dental coverage under the Company’s medical and
      dental plans, without any cost to Employee in excess of any employee
      contribution that would be payable by Employee if Employee remained employed
      by
      the Company; provided, however, that if Employee becomes employed with another
      employer during such eighteen (18)-month period and is eligible to receive
      medical and/or dental coverage under another employer-provided plan, the medical
      and/or dental coverage described herein shall be secondary to those provided
      under such other plan. In addition, on the last day of such eighteen (18)-month
      period, the Company shall pay, or cause to be paid, to Employee an amount in
      cash equal to the aggregate amount that would be payable by the Company for
      such
      medical and/or dental coverage for eighteen (18) months if Employee remained
      employed by the Company for such period.

     

    (d)  The
      restrictions applicable to each share of non-vested restricted stock of Brown
      Shoe held by Employee shall lapse and be exercisable as of the Termination
      Date.

     

    (e)  Each
      non-vested option to purchase Brown Shoe stock held by Employee shall vest
      and
      be exercisable as of the Termination Date.

     

    (f)  For
      purposes of determining Employee’s benefit under the Company’s Supplemental
      Employment Retirement Plan, an additional three (3) years of Credited Service
      shall be credited to Employee’s actual or deemed Credited Service. 

     

    (g)  The
      Company shall pay the reasonable costs of outplacement services selected by
      the
      Company for a reasonable period of time following the Termination Date;
      provided, however, that no such outplacement services shall be provided after
      the last day of the second calendar year following the calendar year in which
      the Termination Date occurs.

     

    4.3  If
      Employee’s employment is terminated for any reason other than such reasons
      specified in Sections 4.1
      and
4.2,
      the
      Company shall pay, or cause to be paid, to Employee within 30 days of the
      Termination Date (i) the full base salary earned by Employee through, but unpaid
      at, the Termination Date, plus (ii) credit for any vacation earned by Employee
      but not taken at the Termination Date, plus (iii) all other amounts owed by
      the
      Company to Employee (other than any bonus payment of any kind) but unpaid as
      of
      the Termination Date.

     

    4.4  The
      benefits set forth in Sections 4.1(c)
      and
4.2(c)
      shall
      run concurrently with any period of continuation coverage to which Employee
      is
      entitled under Section 601 of ERISA. Upon Employee’s re-employment during the
      period specified in each such Section, to the extent covered by the new
      employer’s plan, coverage under the Company’s plan shall lapse, subject to any
      continuation of coverage rights under Section 601 of ERISA. Employee’s
      participation in and/or coverage under all other employee benefit plans,
      programs or arrangements sponsored or maintained by the Company shall cease
      effective as of the Termination Date except as otherwise provided in such
      employee benefit plan, program or arrangement.

     

    Section
      5.  Mitigation
      or Reduction of Benefits

     

    Employee
      shall not be required to mitigate the amount of any payment provided for in
      Section
      4
      by
      seeking other employment or otherwise. Except as otherwise specifically set
      forth herein, the amount of any payment or benefits provided in Section
      4
      shall
      not be reduced by any compensation or benefits or other amounts paid to or
      earned by Employee as the result of employment by another employer after the
      Termination Date or otherwise.

     

    Section
      6.  Employee
      Expenses After Change in Control

     

    If
      Employee’s employment is terminated by the Company within twenty-four (24)
      months after a Change in Control and there is a dispute with respect to this
      Agreement, then all Employee’s costs and expenses (including reasonable legal
      and accounting fees) incurred by Employee (a) to defend the validity of this
      Agreement, (b) to contest any termination for Cause, (c) to contest any
      determinations by the Company concerning the amounts payable by or on behalf
      of
      the Company under this Agreement, or (d) to otherwise obtain or enforce any
      right or benefit provided to Employee by this Agreement, shall be paid by the
      Company to the extent Employee is the prevailing party with respect to such
      claim. Any such payments shall be paid no later than two and one-half months
      following the close of the calendar year in which any such dispute is
      final.

     

    Section
      7.  Release

     

    Notwithstanding
      anything to the contrary stated in this Agreement, no benefits will be paid
      pursuant to Section
      4
      except
      under Section 4.1(a),
      4.2(a)
      or
4.3
      prior to
      execution by Employee of a release of the Company substantially in the form
      attached as Exhibit
      A,
      with
      such changes as may be made by the Company in its sole discretion in order
      to
      comply with and stay current with applicable laws and regulations. 

     

    Section
      8.  Certain
      Additional Payments

     

    8.1  Notwithstanding
      anything to the contrary contained herein and except as set forth below, in
      the
      event it shall be determined that any payment or distribution by or on behalf
      of
      the Company to or for the benefit of Employee (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)
      (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
      Code or any interest or penalties are incurred by Employee with respect to
      such
      excise tax (such excise tax, together with any such interest and penalties,
      are
      hereinafter collectively referred to as the “Excise Tax”), then Employee shall
      be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
      such that after payment by Employee 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, Employee retains an amount
      of
      the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
      Notwithstanding the foregoing provisions of this Section 8.1,
      if it
      shall be determined that Employee is entitled to a Gross-Up Payment, but that
      the Payments do not exceed 110% of the greatest amount (the “Reduced Amount”)
      that could be paid to Employee such that the receipt of Payments will not give
      rise to any Excise Tax, then no Gross-Up Payment shall be made to Employee
      and
      the Payments, in the aggregate, shall be reduced to the Reduced
      Amount. 

     

    8.2  Subject
      to the provisions of Section 8.3,
      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 Ernst & Young LLP or such other certified
      public accounting firm, human resources consulting firm, or other consulting
      firm in the business of performing such calculations as may be designated by
      Employee with the consent of the Company, which consent shall not be
      unreasonably withheld (the “Consulting Firm”), which shall provide detailed
      supporting calculations both to the Company and Employee within fifteen (15)
      business days of the receipt of notice from Employee that there has been a
      Payment, or such earlier time as is requested by the Company. In the event
      that
      the Consulting Firm is serving as accountant or auditor for the individual,
      entity or group effecting the Change of Control, Employee, with the consent
      of
      the Company, which consent shall not be unreasonably withheld, shall appoint
      another nationally recognized accounting firm, human resources consulting firm,
      or other consulting firm in the business of performing such calculations to
      make
      the determinations required hereunder (which such firm shall then be referred
      to
      as the Consulting Firm hereunder). All fees and expenses of the Consulting
      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 Employee no later than two and one-half months
      following the Termination Date. Any determination by the Consulting Firm shall
      be binding upon the Company and Employee. As a result of the uncertainty in
      the
      application of Section 4999 of the Code at the time of the initial determination
      by the Consulting Firm hereunder, it is possible that Gross-Up Payments which
      will not have been made by the Company should have been made (“Underpayment”),
      consistent with the calculations required to be made hereunder. In the event
      that the Company exhausts its remedies pursuant to Section 8.3
      and
      Employee thereafter is required to make a payment of any Excise Tax, the
      Consulting 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 Employee within two and one-half months after the date the Company
      exhausts such remedies. 

     

    8.3  Employee
      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 thirty (30) days after Employee 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. Employee shall not pay such claim prior to the
      expiration of the thirty (30)-day period following the date on which Employee
      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
      Employee in writing prior to the expiration of such period that it desires
      to
      contest such claim, Employee shall:

     

    (a)  give
      the
      Company any information reasonably requested by the Company relating to such
      claim;

     

    (b)  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;

     

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

     

    (d)  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 Employee 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
8.3,
      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 taxing authority in respect
      of
      such claim and may, at its sole option, either direct Employee to pay the tax
      claimed and sue for a refund or contest the claim in any permissible manner,
      and
      Employee 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 Employee to pay such claim and sue for a refund, the Company
      shall advance the amount of such payment to Employee, on an interest-free basis
      and shall indemnify and hold Employee 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 further provided that any extension of the statute
      of limitations relating to payment of taxes for the taxable year of Employee
      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 a Gross-Up Payment
      would be payable hereunder and Employee 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.

     

    8.4  If,
      after
      the receipt by Employee of an amount advanced by the Company pursuant to Section
      8.3,
      Employee becomes entitled to receive any refund with respect to such claim,
      Employee shall (subject to the Company’s complying with the requirements of
      Section 8.3)
      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 Employee of an amount advanced by the Company pursuant to Section
      8.3,
      a
      determination is made that Employee shall not be entitled to any refund with
      respect to such claim and the Company does not notify Employee in writing of
      its
      intent to contest such denial of refund prior to the expiration of thirty (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.  Covenant
      Not to Compete

     

    9.1  During
      Employee’s employment with Brown Shoe and/or any Business Unit and for a period
      of two (2) years after the Termination Date (collectively, the “Restricted
      Period”), Employee will not, directly or indirectly, on Employee’s own behalf or
      on behalf of any other Person (whether as owner, partner, consultant, employee
      or otherwise):

     

    (a)  provide
      any executive, managerial, supervisory, and/or consulting services with respect
      to the footwear industry and/or the footwear business in the United States
      for
      any Competitor;

     

    (b)  hold
      any
      executive, managerial and/or supervisory position with any Competitor in the
      United States;

     

    (c)  assist
      any Competitor in competing against Brown Shoe and/or any Business Unit for
      which Employee performs or performed substantial work and/or has or had access
      to Confidential Information (each a “Relevant Business Unit”) (i) in the United
      States and/or (ii) in any other country in which Brown Shoe and/or any Relevant
      Business Unit is doing business in the one year immediately preceding the
      Termination Date (each a “Foreign Country”) if Employee had access to
      Confidential Information regarding the Company’s business in such Foreign
      Country; 

     

    (d)  engage
      in
      any research, development and/or planning activities or efforts for a
      Competitor, whether as an employee, consultant, independent contractor or
      otherwise, to assist the Competitor in competing (i) in the footwear industry
      in
      the United States or (ii) in any Foreign Country if Employee had access to
      Confidential Information regarding the Company’s business in such Foreign
      Country;

     

    (e)  cause
      or
      attempt to cause any Customer to divert, terminate, limit, modify or fail to
      enter into any existing or potential relationship with Brown Shoe and/or any
      Relevant Business Unit;

     

    (f)  assist
      any Competitor in connection with any plan, effort, activity or undertaking
      to
      cause or attempt to cause any Customer to divert, terminate, limit, modify
      or
      fail to enter into any existing or potential relationship with Brown Shoe and/or
      any Relevant Business Unit;

     

    (g)  cause
      or
      attempt to cause any footwear supplier or manufacturer of Brown Shoe and/or
      any
      Relevant Business Unit to divert, terminate, limit, modify or fail to enter
      into
      any existing or potential relationship with Brown Shoe and/or any Relevant
      Business Unit; 

     

    (h)  assist
      any Competitor in connection with any plan, effort, activity or undertaking
      to
      cause or attempt to cause any footwear supplier or manufacturer of Brown Shoe
      and/or any Relevant Business Unit to divert, terminate, limit, modify or fail
      to
      enter into any existing or potential relationship with Brown Shoe and/or any
      Relevant Business Unit; and/or

     

    (i)  solicit,
      entice, employ or seek to employ, in the footwear industry, any executive,
      managerial and/or supervisory employee of, or any consultant or advisor to,
      Brown Shoe and/or any Relevant Business Unit.

     

    9.2  Employee
      recognizes and agrees that the restraints contained in Section 9.1
      are
      reasonable and should be fully enforceable in view of, among other things,
      the
      high level positions Employee has had with Brown Shoe and/or any Relevant
      Business Unit(s), the national and international nature of both the Company’s
      collective business and competition in the footwear industry, and the legitimate
      interests of the Company in protecting its confidential, proprietary and trade
      secret information (“Confidential Information”) and their respective customer
      goodwill and relationships. Employee specifically hereby acknowledges and
      confirms that Employee is willing and intends to, and will, abide fully by
      the
      terms of Section 9.1.
      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, among other things, be unable to verify
      whether (i) its Confidential Information was being disclosed and/or misused,
      and/or (ii) Employee was involved in diverting or helping to divert the
      Company’s customers and/or customer goodwill.

     

    9.3  Employee
      agrees to disclose, during the Restricted Period, the terms of this Section
      9
      to any
      potential future employer.

     

    Section
      10.  Confidential
      Information. 

     

    10.1  Employee
      acknowledges and agrees that during Employee’s employment, Employee has been
      and/or will be provided and have access to certain Confidential Information
      of
      the Company. Employee agrees to keep secret and confidential, and not to use
      or
      disclose to any third-parties, except as directly required for Employee to
      perform Employee's employment responsibilities for the Company, any of the
      Company’s Confidential Information.

     

    10.2  Confidential
      Information includes all confidential and/or trade secret information of the
      Company (regardless of the form or medium in which it may exist or be stored
      or
      preserved) and includes, but is not limited to, all such information containing
      or reflecting any:

     

    (a)  lists
      or
      other identification of customers or prospective customers of Brown Shoe and/or
      any Relevant Business Unit (and/or key individuals employed or engaged by such
      parties);

     

    (b)  lists
      or
      other identification of sources or prospective sources of Brown Shoe’s and/or
      any Relevant Business Unit’s products or components thereof (and/or key
      individuals employed or engaged by such parties); 

     

    (c)  compilations,
      information, designs, drawings, files, formulae, lists, machines, maps, methods,
      models, notes or other writings, plans, records, regulatory compliance
      procedures, reports, specialized or technical data, schematics, source code,
      object code, documentation, and software relating to the development,
      manufacture, fabrication, assembly, marketing and/or sale of Brown Shoe’s and/or
      any Relevant Business Unit’s products;

     

    (d)  financial,
      distribution, sales and marketing information, data, plans, and/or strategies
      of
      Brown Shoe and/or any Relevant Business Unit;

     

    (e)  equipment,
      materials, procedures, processes, and techniques used in, or related to, the
      development, manufacture, assembly, fabrication or other production and quality
      control of the Brown Shoe’s and/or any Relevant Business Unit’s products and
      services;

     

    (f)  Brown
      Shoe’s and/or any Relevant Business Unit’s relations and/or dealings with its
      customers, prospective customers, suppliers and prospective suppliers and the
      nature and type of products or services rendered to such customers (or proposed
      to be rendered to prospective customers);

     

    (g)  Brown
      Shoe’s and/or any Relevant Business Unit’s relations with its employees
      (including, without limitation, salaries, job classifications and skill levels);
      and

     

    (h)  any
      other
      information designated by Brown Shoe and/or any Relevant Business Unit to be
      confidential, secret and/or proprietary (including without limitation,
      information provided by customers or suppliers of Brown Shoe and/or any Relevant
      Business Unit).

     

    Notwithstanding
      the foregoing, the term “Confidential Information” shall not consist of any data
      or other information which has been made publicly available or otherwise placed
      in the public domain other than by Employee in violation of this
      Agreement.

     

    10.3  Employee
      will not, directly or indirectly, copy, reproduce or otherwise duplicate,
      record, abstract, summarize or otherwise use for Employee or use for, or
      disclose to, any party other than Brown Shoe, or any subsidiary or affiliate
      of
      Brown Shoe, any Confidential Information, without Brown Shoe’s prior written
      permission or except as required for the proper performance of Employee’s duties
      on behalf of the Company.

     

    10.4  Employee
      understands that Confidential Information may or may not be labeled as
“confidential” and will treat all information as confidential unless otherwise
      informed by Brown Shoe.

     

    10.5  At
      the
      termination of Employee’s employment with the Company or at any other time Brown
      Shoe or any subsidiary or affiliate thereof may request, Employee shall promptly
      deliver to Brown Shoe all documents and other materials, whether in physical
      or
      electronic form (including all copies thereof), containing any Confidential
      Information.

     

    Section
      11.  Injunctive
      Relief

     

    In
      the
      event of a breach or threatened breach of any of Employee’s duties or
      obligations under the terms and provisions of Section
      9,
      Section
      10,
      Section
12.2
      or
      Section 12.9,
      the
      Company shall be entitled, in addition to any other legal or equitable remedies
      it may have in connection therewith (including any right to damages that it
      may
      suffer), to temporary, preliminary and permanent injunctive relief restraining
      such breach or threatened breach. Employee hereby expressly acknowledges that
      the harm that might result to the Company’s business as a result of
      noncompliance by Employee with any of the provisions of Section
      9,
      Section
      10,
      Section
12.2
      or
      Section 12.9
      would be
      largely irreparable. Employee specifically agrees that if there is a question
      as
      to the enforceability of any of the provisions of Section
      9,
      Section
      10,
      Section
12.2
      or
      Section 12.9,
      Employee will not engage in any conduct inconsistent with or contrary to such
      Sections until after the question has been resolved by a final judgment of
      a
      court of competent jurisdiction. Employee undertakes and agrees that if Employee
      breaches or threatens to breach the Agreement, Employee shall be liable for
      any
      attorneys’ fees and costs incurred by the Company in enforcing its rights
      hereunder.

     

    Section
      12.  Miscellaneous

     

    12.1  Notice.
      All
      notices hereunder shall be in writing and shall be deemed to have been duly
      given (a) when delivered personally or by courier, or (b) when received by
      facsimile (including electronic mail), receipt confirmed, or (c) on the third
      business day following the mailing thereof by registered or certified mail,
      postage prepaid, or (d) on the first business day following the mailing thereof
      by overnight delivery service, in each case addressed as set forth
      below:

     

    If
      to the
      Company:

     

    Brown
      Shoe Company, Inc.

    8300
      Maryland Avenue

    St.
      Louis, Missouri 63166-0029

    Attention:
      General Counsel

     

    If
      to
      Employee:

     

    Andrew
      M.
      Rosen

    308
      Wyndmoor Terrace

    Town
      and
      Country, MO 63141

     

    Any
      party
      may change the address to which notices are to be addressed by giving the other
      party written notice in the manner herein set forth.

     

    12.2  Successors;
      Binding Agreement.

     

    (a)  Brown
      Shoe shall require any successor to all or substantially all of the business
      and/or assets of the Company (whether such succession is direct or indirect,
      by
      purchase, merger, consolidation or otherwise), prior to or upon such succession,
      to expressly assume and agree to perform this Agreement in the same manner
      and
      to the same extent that the Company would have been required to perform it
      if no
      such succession had taken place. Failure of Brown Shoe to obtain such agreement
      upon or prior to the effectiveness of any such succession shall be a breach
      of
      this Agreement and shall entitle Employee to benefits from the Company in the
      same amounts and on the same terms as Employee would be entitled hereunder
      if
      Employee’s employment was terminated without Cause within twenty-four (24)
      months after a Change of Control. For purposes of the preceding sentence, the
      date on which any such succession becomes effective shall be deemed the
      Termination Date. 

     

    (b)  Brown
      Shoe shall also have the right, but not the obligation, to assign this
      Agreement, without Employee’s consent, to any successor to all or substantially
      all of the business and/or assets of a Business Unit for which Employee performs
      substantially all of Employee’s duties (whether such succession is direct or
      indirect, by purchase, merger, consolidation or otherwise). In the event, and
      only in the event, Brown Shoe elects to assign this Agreement to such successor
      of a Business Unit, a Change of Control will be deemed to have occurred and
      Brown Shoe shall require such successor to expressly assume and agree to perform
      this Agreement in the same manner and to the same extent that the Company would
      have been required to perform it if no such succession had taken place. No
      Change of Control shall be deemed to have occurred if Brown Shoe does not elect
      to assign this Agreement to such successor of a Business Unit.

     

    (c)  This
      Agreement is personal to Employee and Employee may not assign or delegate any
      part of Employee’s rights or duties hereunder to any other person, except that
      this Agreement shall inure to the benefit of and be enforceable by Employee’s
      legal representatives, executors, administrators, heirs and
      beneficiaries.

     

    12.3  Judicial
      Modification.
      If and
      to the extent that any Section, term and/or provision of this Agreement is
      determined by a court of competent jurisdiction to be unenforceable under
      applicable law, then such Section(s), term(s) and/or provision(s) shall not
      be
      void but instead shall be modified and, to the maximum extent permissible under
      applicable law, enforced. 

     

    12.4  Headings.
      The
      headings in this Agreement are inserted for convenience of reference only and
      shall not in any way affect the meaning or interpretation of this
      Agreement.

     

    12.5  Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original but all of which together shall constitute one and the same
      instrument.

     

    12.6  Waiver.
      Neither
      any course of dealing nor any failure or neglect of either party hereto in
      any
      instance to exercise any right, power or privilege hereunder or under law shall
      constitute a waiver of such right, power or privilege or of any other right,
      power or privilege or of the same right, power or privilege in any other
      instance. Without limiting the generality of the foregoing, Employee’s continued
      employment without objection shall not constitute Employee’s consent to, or a
      waiver of Employee’s rights with respect to, any circumstances constituting Good
      Reason. All waivers by either party hereto must be contained in a written
      instrument signed by the party to be charged therewith, and, in the case of
      the
      Company, by its duly authorized officer.

     

    12.7  Entire
      Agreement; Termination of Prior Agreement.
      This
      instrument constitutes the entire agreement of the parties in this matter and
      shall supersede any other agreement between the parties, oral or written,
      concerning the same subject matter. The Prior Agreement is hereby terminated
      and
      deemed by the parties to be void ab
      initio.
      

     

    12.8  Amendment.
      Subject
      to Section 12.3,
      no
      modification, amendment or waiver of any of the provisions of this Agreement
      shall be effective unless in writing specifically referring hereto, and signed
      by the parties hereto. 

     

    12.9  Governing
      Law.
      In
      light of Company’s and Employee’s substantial contacts with the State of
      Missouri, the facts that the Company is headquartered in Missouri and Employee
      resides in and/or reports to Company management in Missouri, the parties’
interests in ensuring that disputes regarding the interpretation, validity
      and
      enforceability of this Agreement are resolved on a uniform basis, and Brown
      Shoe’s execution of, and the making of, this Agreement in Missouri, the parties
      agree that: (i) any litigation involving any noncompliance with or breach of
      the
      Agreement, or regarding the interpretation, validity and/or enforceability
      of
      the Agreement, shall be filed and conducted exclusively in the state courts
      in
      St. Louis County, Missouri, or the U.S. District Court for the Eastern District
      of Missouri; and (ii) this Agreement shall be interpreted in accordance with
      and
      governed by the laws of the State of Missouri, without regard for any conflict
      of law principles. Employee agrees that Employee under no circumstances will,
      either alone or in conjunction with anyone else, file or pursue any such
      litigation other than in such state or federal courts in Missouri, and Employee
      hereby consents and agrees that any such litigation filed in any other court(s)
      shall be dismissed and that Employee may be enjoined from filing and/or pursuing
      any such action.

     

    12.10  Third
      Party Beneficiaries.
      Employee agrees that Brown Shoe’s subsidiaries are third party beneficiaries of
      this Agreement and hereby consents to the enforcement by any subsidiary of
      Brown
      Shoe of the provisions contained herein, including without limitation, the
      provisions of Section
      9
      and
Section
      10.

     

    IN
      WITNESS WHEREOF, Employee and Brown Shoe have executed this Agreement as of
      the
      day and year first above written.

     

    
      	
              Brown
                Shoe Company, Inc.

            	 	
              Employee

            
	
              By:

            	
              /s/
                Douglas W. Koch

            	 	
              /s/
                Andrew M. Rosen

            
	
              Name:

            	
              Douglas
                W. Koch

            	 	
              Andrew
                M. Rosen

            
	
              Title:

            	
              Senior
                Vice President and Chief Talent Officer

            	 	 
	
              Date:

            	
              March
                27, 2006

            	 	
              Date:

            	
              March
                23, 2006