exv10w4



 







Exhibit 10.4




NOTICE OF AWARD

OF PERFORMANCE SHARES




	 	 	 
	To:

	 	[Name]
	 
	 	 
	From:

	 	Compensation Committee of the Board of Directors (“Committee”)





Subject: Bakers Footwear Group, Inc. 2005 Incentive Compensation Plan (“Plan”)- [Award date] Award



1. Award. The Committee has awarded to you [100%] Performance Shares under the terms of
the Plan (the “Target Award” or “Award”). You will have the opportunity to earn up to 200% of the
Target Award as set forth in paragraph 2, below. The Award is subject to all of the terms and
conditions of the Plan, a copy of which has been delivered to you. Defined terms not otherwise
defined herein shall be as defined in the Plan.



2. Terms. The following are the terms of the Award:




     (a) If, at the end of the three fiscal year Period of the Award commencing on [          , 2006]
and ending on [          , 2009], (the “Performance Period”) the [ROAA (defined below)] reaches the
amount set forth in the vertical column and the [CAGR (defined below)] reaches the amount set forth
in the horizontal column you will earn the percentage of the Award indicated in the chart below
provided you comply with the terms of the remainder of this Notice of Award.



[CAGR]




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	[5.0%	 	7.5%	 	10.0%	 	13.0%	 	16.0%	 	20.0%	 	25.0%]
	 	 	 	 	 	 
	[R
	 	[4.0	%	 	 	[20	%	 	 	35	%	 	 	50	%	 	 	68	%	 	 	86	%	 	 	106	%	 	 	124	%
	O
	 	4.7	%	 	 	31	%	 	 	46	%	 	 	61	%	 	 	79	%	 	 	97	%	 	 	112	%	 	 	130	%
	A
	 	5.3	%	 	 	41	%	 	 	56	%	 	 	71	%	 	 	89	%	 	 	104	%	 	 	119	%	 	 	137	%
	A]
	 	6.0	%	 	 	52	%	 	 	67	%	 	 	82	%	 	 	100	%	 	 	111	%	 	 	125	%	 	 	143	%
	 
	 	8.0	%	 	 	84	%	 	 	99	%	 	 	108	%	 	 	119	%	 	 	130	%	 	 	144	%	 	 	162	%
	 
	 	10.0	%	 	 	109	%	 	 	118	%	 	 	127	%	 	 	138	%	 	 	149	%	 	 	163	%	 	 	181	%
	 
	 	12.0	%]	 	 	128	%	 	 	137	%	 	 	146	%	 	 	157	%	 	 	168	%	 	 	182	%	 	 	200	%]






     (b) If the ROAA and CAGR fall in between the percentages set forth above, you will receive
payment of the Award as determined by the Committee based upon the next lowest level in the above
chart; provided that the Committee may in its discretion award a proportionate percentage of the
Target Award, determined in the discretion of the Committee, for levels of achievement between the
levels specified above. If [ROAA] is less than [4.0%] or [CAGR] is less than [5.0%], then no
performance award shall be paid. Cash will be paid in lieu of fractional shares. You must be
employed at the end of the Performance Period to be entitled to the payment; provided that the
Committee may exercise its discretion to the extent set forth in



 









 




Section 7(d) of the Plan, as may
be modified by Section 10(e) if you are a “covered employee” for purposes of Section 162(m) of the
Code.




     (c) In accordance with the Plan, following determinations by the Committee as to whether the
performance objectives have been met at the end of the Performance Period, payment hereunder will
be within 2-1/2 months after the end of the calendar year in which the Performance Period ends.



     (d) Definitions.



          (1) [CAGR: “CAGR” shall mean the Company’s compound annual growth rate in net sales,
as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), expressed
as a percentage, as follows:




               CAGR = ((Ending Value/Beginning Value)^(1/3)) -1


For this purpose, the Ending Value shall be net sales for fiscal year 2008 and the Beginning Value
shall be net sales for fiscal year 2005.]




          (2) [ROAA: “ROAA” shall mean the Company’s return on average assets, as determined in
accordance with GAAP for the performance period, expressed as a percentage, calculated as the
average of the ratio of net income for each year in the performance period divided by average total
assets for that year, as follows:




               ROAA for any year = (net income for that year)/(total assets at the beginning of that year +
total assets at end of that year)/2



               ROAA for the performance period = sum of the ROAA for each year in the performance period
divided by 3.]



     (e) The Committee shall have plenary authority to interpret and implement the provisions of
the Plan and to calculate CAGR and ROAA, in its sole and absolute discretion, and to make any
adjustments it feels necessary for unusual events, nonrecurring or extraordinary items including
major corporate events.


3. Medium of Payment. Payment will be made hereunder in shares of Common Stock (which may
include stock with restrictions attached), or, if determined by the Committee at the time of
payment, in cash or a combination thereof. The Committee shall direct that any distribution shall
be made in accordance with the terms of the Plan.



4. Tax Withholding; Par Value. Stock or cash shall be withheld to satisfy the Company’s
tax withholding obligations for any award under the Plan. You must pay or have withheld by the
Company an amount of cash equivalent to any applicable par value with respect to any awards of
Common Stock received by you.




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5. Choice of Law. This Agreement shall be construed and administered in accordance with
the laws of the State of Missouri without regard to the principles of conflicts of law which might
otherwise apply. Any litigation concerning any aspect of this Agreement shall be conducted in the
State or Federal Courts in the State of Missouri.



6. Amendment. The Award may be amended by written consent between the Committee and you.



Executed this       day of                     , 2[006].




	 	 	 	 	 	 	 	 	 	 	 
	BAKERS FOOTWEAR GROUP, INC.	 	 	 	          AGREED TO AND ACCEPTED:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	[Chief Executive Officer]	 	 	 	Participant	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	[(Seal)	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Secretary]
	 	 	 	 	 	 







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