bws10k08ex10_5b1.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    EXHIBIT
10.5b(1)


    
 

    BROWN
SHOE COMPANY, INC.

    INCENTIVE
AND STOCK COMPENSATION PLAN OF 2002, as AMENDED and
RESTATED

     

    INCENTIVE STOCK OPTION AGREEMENT

    


    Brown
Shoe Company, Inc., a New York corporation (the “Company”), grants to Optionee,
an Incentive Stock Option to purchase shares of the Company’s Common Stock, $.01
par value (“Common Stock”), pursuant to the provisions of the Incentive and
Stock Compensation Plan of 2002, as Amended and Restated as of May 22, 2008 (the
“Plan”), and subject to the key terms set forth below and the attached General
Terms and Conditions (dated as of May 22, 2008), all of which constitute
part of this Agreement (the “Stock Option”), as follows:

    


    1.      Optionee: __________________


    2.      Date of Grant:
__________________

    


    3.      Option Shares: ________ shares
of Common Stock

    


    4.      Option Exercise
Price:_________________

    


    5.      Expiration Date of Stock
Option:  _________________ (10 years from Date of
Grant)

    


    6.      Vesting
Schedule:  Optionee has the right to purchase the Option Shares
as follows:

    
      	
               
      

            	
              _______________________

            


    

    
      	
               
      

            	
              ________________________

            


    

    
        

    

    7.      Exercise Following
Termination: see Section 1(c) of attached
General Terms and Conditions, but not later than Expiration
Date

     

    
      8.      Date of Compensation Committee
Approval:  __________________

       

    

    9.      Type of
Option:  Incentive Stock
Option

     

    
 

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 	BROWN SHOE COMPANY,
      INC.	 
	 	 	 	 
	
                                           

                                        	
                                          By:
      

                                        	 	 
	 	 	Sarah
      Stephenson, Vice President - Total Rewards	 
	 	 	 	 
	 Accepted:	 	 	 	 	 
	 	
                                          Optionee

                                        	 	 	 	 
	 	 	 	 	 	 
	 Date:   	 	 	 	 	 


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    General Terms and Conditions
(as of May 22, 2008) for Incentive Stock Options

    Incentive and Stock
Compensation Plan of 2002, as Amended and Restated as of May 22,
2008

    


    
      	
              1.

            	
              Conditions and
      Limitations on Right To Exercise
Option.

            


       

    

    
      	
               
      

            	
              (a)

            	
              Time for Exercise.  This
      Stock Option may not be exercised as to any Option Shares until such
      Option Shares are vested or after the Expiration
  Date.

            


       

    

    
      	
               
      

            	
              (b)

            	
              Exercise While on Leave of Absence.  This
      option may not be exercised by the Optionee while on a leave of absence
      until he has returned to active employment with the Company, unless such
      exercise is expressly approved in writing by the Compensation
      Committee.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Exercise if No Longer an Employee.

            


    

    
      	
               
      

            	
              (1)

            	
              Termination.  Except
      as set forth in subsection (c)(2), this Stock Option must be exercised by
      the Optionee only while he is an employee of the Company or one of its
      subsidiaries (as defined in Section 424(f) of the Internal Revenue Code of
      1986, as amended (the "Code”)), or within sixty (60) days after
      termination as an employee, but not later than the Expiration
      Date.

            


    

    


    
      	
               
      

            	
              (2)

            	
              Death.  If
      the Optionee dies while employed by the Company or one of its subsidiaries
      or dies within sixty (60) days after termination of such employment, this
      Stock Option may be exercised to the extent the Optionee was entitled to
      exercise it at the date of his death, by a legatee or legatees of the
      Optionee under his last will, or by his personal representatives or
      distributees at any time within one (1) year after his death, but not
      later than the Expiration Date.

            


    

    


    
      	
               
      2.

            	
              Method of Exercise of Option and Payment of Option Price.

            


    

    


    
      	
               
      

            	
              (a)

            	
              Exercise.  This
      Stock Option may be exercised (in whole or in part) at any time or from
      time to time after the option is vested and exercisable as provided in
      this Option Agreement and before the termination of said right, by
      delivering to the Vice President-Total Rewards of the Company or by
      sending by registered mail or Express Mail, postage prepaid or by
      recognized courier service to the Company to the attention of the Vice
      President-Total Rewards (i) using such form as the Company may require, a
      written request designating the number of Option Shares to be purchased,
      signed by the Optionee or the purchaser acting under Section 1(c)(2)
      hereof, (ii) payment to the Company of the full purchase price of the
      shares of Common Stock with respect to which the Stock Option is
      exercised, and (iii) payment of applicable tax amounts, if required as
      provided in Section 4.  A stock option exercise form will be
      provided upon request made to the Vice President-Total
      Rewards.

            


    

    


     

    
      
        	
                 
      

              	 	
                (b)

              	
                Payment.  The
      purchase price upon the exercise of this Stock Option may be paid as
      follows: (i) in cash, or (ii) by the tender (either actual or by
      attestation) to the Company of shares of the Common Stock owned by the
      Optionee, which shares are registered in the Optionee’s name and have a
      fair market value equal to the cash exercise price of the option being
      exercised; provided that no shares of Common
      Stock may be tendered in exercise of this Stock Option if such shares were
      acquired by Optionee through the exercise of an Incentive Stock Option,
      unless (x) such shares have been held by Optionee for at least one
      year, and (y) at least two years have elapsed since such Incentive
      Stock Option was granted; or (iii) in the discretion of the
      Compensation Committee, by any combination of the payment methods
      specified in clauses (i) and (ii) hereof, or (iv) cashless exercise as
      permitted under Federal Reserve Board’s Regulation T, subject to
      applicable securities law restrictions.  In addition, the
      Compensation Committee may determine, in its sole discretion, to allow all or a
      portion of the purchase price upon exercise of this Stock Option to be
      paid by having the Company withhold from the Option Shares otherwise
      issuable upon exercise of the Stock Option that number of Option Shares
      having a fair market value equal to the amount of the Option Price
      applicable to the exercise, provided that such “net exercise” might result
      in different tax treatment to the Optionee. Any determination of
      fair market value pursuant to this subsection 2(b) or Section 4 shall be
      made in such appropriate manner as may be determined by the Compensation
      Committee or as may be required in order to comply with, or to conform to
      the requirements of, any applicable law or
  regulation.

              


      

    

     

    
      	
              3.

            	Issuance and Delivery
      of Shares.

If and when the Company is required
to issue or deliver any Options Shares, such issuance shall be made by book
entry by the Company’s transfer agent and registrar, and a physical share
certificate shall not be issued or delivered unless specifically requested by
the Optionee.  The Company may condition the issuance or delivery of
the Option Shares, or impose restrictions on the transferability of Option
Shares, as it may deem advisable, including, without limitation, to comply with
applicable federal and securities laws or the requirements of any stock
applicable to the Option Shares.

    


    
      	
              4.

            	Withholding
      Tax.


    

    Upon
exercise of this Stock Option, the Company shall have the power and the right to
deduct or withhold, or require the Optionee to remit to the Company, an amount
sufficient to satisfy applicable taxes.  The Optionee may elect to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Option Shares having a fair market value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction.  All such elections shall be irrevocable, made in
writing on such form as the Company may require, signed by the Optionee, and
shall be subject to any restrictions or limitations that the Board, in its sole
discretion, deems appropriate.

    


    
      	
              5.

            	Miscellaneous.


    

     

    
      	
               
      

            	
              (a)

            	
              Rights in Shares Prior to Issuance.  Prior
      to issuance of the Option Shares pursuant to the exercise of rights
      granted hereunder, whether by book entry or by physical certificate,
      neither the Optionee nor his legatees, personal representatives, or
      distributees, shall be deemed to be a holder of any Option
      Shares.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Adjustment Upon Changes in Capitalization.  In
      the event that there is a change in the Common Stock of the Company by
      reason of stock dividends, split-ups, recapitalizations, mergers,
      consolidations, reorganizations, combinations or exchanges of shares, then
      the number and class of shares available for options and the number of
      shares subject to any outstanding options and the price thereof, shall be
      appropriately adjusted by the Compensation
  Committee.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Non-Assignability.  This
      Stock Option shall not be transferable by the Optionee otherwise than by
      will or by the laws of descent and distribution and may be exercised,
      during his lifetime, only by the
Optionee.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Right to Continued Employment.  Nothing
      in this Option Agreement shall confer on any individual any right to
      continue in the employ of the Company or a subsidiary or interfere with
      the right of the Company or a subsidiary to terminate his employment at
      any time.

            


    

    


    
      	
               
      

            	
              (e)

            	
              Interpretation.  The
      option granted herein shall in all respects be subject to and governed by
      the provisions of the Plan in effect from time to time, provided that no
      amendment or modification to the Plan made subsequent to the grant date of
      this Stock Option shall adversely affect
      in any material way this Stock Option without the written consent of the
      Optionee.  This Agreement shall in all respects be so
      interpreted and construed as to be consistent with this
      intention.  By way of an example, the Change of Control
      provisions set forth in the Plan shall apply to this
      option.  If there is any
      inconsistency between the terms of this Stock Option Agreement and the
      terms of the Plan, the Plan’s terms shall completely supersede and replace
      the conflicting terms of this Stock Option
    Agreement.

            


    

    


    
      	
               
      

            	
              (f)

            	
              Amendment.  The
      Stock Option may be amended by the Compensation Committee at any time (i)
      if the Compensation Committee determines, in its sole discretion, that
      amendment is necessary or advisable on account of any addition to, or
      change in, the Internal Revenue Code of 1986, as amended, or in the
      regulations issued thereunder, or any federal or state securities law or
      other law or regulation, which changes occurs after the Date of Grant and
      by its terms applies to this Stock  Option; or (ii) other than
      in the circumstances described in Clause (i) above, with the consent of
      the Optionee.

            


    

    


    
      	
               
      

            	
               (g)

            	
              Construction.  The
      validity, construction, interpretation and effect of this instrument shall
      be governed by and determined in accordance with the laws of the state of
      Missouri without respect to any conflict of laws doctrine which might
      otherwise apply.

            


    

    


    
      	
              (h)  

            	
              Incentive Stock
      Option.  This Option is intended by the parties to be,
      and shall be treated as, an incentive stock option (as such term is
      defined under Section 422 of the Internal Revenue Code of 1986, as
      amended).