bwss8121107ex4_1.htm


    
      

    


    Exhibit
      4.1

    


    BROWN
      SHOE COMPANY, INC.

    DEFERRED
      COMPENSATION PLAN

    


    WHEREAS,
      Brown Shoe Company, Inc.
      (“Company”) desires to establish the Brown Shoe Company, Inc. Deferred
      Compensation Plan for certain management and highly compensated
      employees;

    


    NOW,
      THEREFORE, effective January 1,
      2008, the Company hereby establishes the Brown Shoe Company, Inc. Deferred
      Compensation Plan as set forth below:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

    


    


     

    1.       PURPOSE 

    2.       DEFINITIONS 

    2.1          Account 

    2.2          Accounting
      Date 

    2.3          Beneficiary 

    2.4          Board 

    2.5          Business
      Day 

    2.6          Committee 

    2.7          Company 

    2.8          Company
      Credits 

    2.9         
      Compensation 

    2.10        Credit
      Date 

    2.11        Deferred
      Compensation 

    2.12        Election 

    2.13        Employee 

    2.14        Participant 

    2.15        Performance-Based
      Compensation 

    2.16        Plan 

    2.17        Plan
      Year 

    2.18        Specified
      Employee 

    2.19        Termination 

     

    3.       ADMINISTRATION 

     

    4.       ELIGIBILITY 

     

    5.       PARTICIPANT
      ACCOUNTS 

     

    6.       TERMS
      OF
      PARTICIPATION 

    6.1          In
      General 

    6.2          Investment
      Alternatives For Existing
      Balances

    6.3          Vesting 

     

    7.       DISTRIBUTION 

    7.1          In
      General 

    7.2          Death 

    7.3          Form
      of
      Distribution 

     

    8.       FINANCIAL
      HARDSHIP 

     

    9.       UNSECURED
      GENERAL CREDITOR
      STATUS OF EMPLOYEE

     

    10.          INALIENABILITY
      OF
      BENEFITS 

     

    11.          CLAIMS
      PROCEDURE 

     

    12.          GOVERNING
      LAW 

     

    13.          AMENDMENTS 

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    BROWN
      SHOE COMPANY, INC.

    DEFERRED
      COMPENSATION PLAN

    


    


    1.           PURPOSE

     

    The
      purpose of this Brown Shoe Company, Inc. Deferred Compensation Plan (“Plan”) is
      to provide eligible key employees of the Company with an opportunity to defer
      compensation to be earned by them from the Company as a means of saving for
      retirement or other future purposes and to provide such employees with
      competitive retirement and capital accumulation benefits.  In
      addition, the Plan is intended to provide eligible key employees additional
      incentive to remain employed by the Company and to attract certain
      executive-level employees.

     

    2.           DEFINITIONS

     

    The
      following definitions shall be applicable throughout the Plan:

     

    2.1           Account.

     

    “Account”
means
      a bookkeeping account
      established and maintained by the Company for each Participant reflecting
      Deferred Compensation and Company Credits (if any) and earnings and losses
      thereon in accordance with Section 5.

     

    2.2           Accounting
      Date

     

    “Accounting
      Date” means each Business Day on which a calculation concerning a Participant's
      Account is performed, or as otherwise defined by the Committee.

     

    2.3           Beneficiary

     

    “Beneficiary”
      means the person or persons designated by the Participant in accordance with
      Section 7.2, or if no person or persons are so designated, the estate of a
      deceased Participant.

     

    2.4           Board

     

    “Board”
      means the Board of Directors of Brown Shoe Company, Inc. or its designee or,
      if
      then in existence, the Committee.

     

    2.5           Business
      Day

     

    “Business
      Day” means a day on which the New York Stock Exchange is open for trading
      activity.

     

    2.6           Committee

     

    “Committee”
      means the Compensation Committee of the Board.

     

    2.7           Company

     

    “Company”
      means Brown Shoe Company, Inc., its divisions, subsidiaries and affiliates
      in
      which Brown Shoe Company, Inc. or a subsidiary owns at least 50% of the voting
      equity interests.

     

    2.8           Company
      Credits

     

    “Company
      Credits” means amounts, if any, credited to a Participant’s Account for a Plan
      Year, as determined by the Committee in its sole discretion from time to
      time.

     

    2.9           Compensation

     

    “Compensation”
      means any employee compensation determined by the Committee to be properly
      deferrable under the Plan.

     

    2.10           Credit
      Date

     

    “Credit
      Date” means each date on which Deferred Compensation of Company Credits are
      credited to an Account in accordance with rules prescribed by the
      Committee.

     

    2.11           Deferred
      Compensation

     

    “Deferred
      Compensation” means the Compensation elected by the Participant to be deferred
      pursuant to the Plan.

     

    2.12           Election

     

    “Election”
      means a Participant's delivery of a written notice of election to the Committee
      or its designee electing to defer payment of a specified percentage of his
      or
      her Compensation (in accordance with rules prescribed by the Committee) until
      such time as permitted by the Committee.

     

    2.13           Employee

     

    “Employee”
      means an individual classified by the Committee as a full-time, regular salaried
      employee of the Company.

     

    2.14           Participant

     

    “Participant”
      means an Employee who is selected by the Committee to be eligible to participate
      in the Plan and who has made an Election.

     

    2.15           Performance-Based
      Compensation

     

    “Performance-Based
      Compensation” means Compensation that (a) is based on services performed over a
      period of at least 12 months and (b) constitutes performance-based compensation
      as defined in Treasury Regulations issued under Code Section 409A.

     

    2.16           Plan

     

    “Plan”
      means this Brown Shoe Company, Inc. Deferred Compensation Plan, as amended
      from
      time to time.

     

    2.17           Plan
      Year

     

    “Plan
      Year” means the annual period commencing January 1 and ending the following
      December 31.

     

    2.18           Specified
      Employee

     

    “Specified
      Employee” means a key employee (as defined in Code Section 416(i) without regard
      to Code Section 416(i)(5)) determined in accordance with the meaning of such
      term under Code Section 409A and the regulations promulgated thereunder and
      the
      resolutions of the Board governing such determination.

     

    2.19           Termination

     

    “Termination”
      means termination of services as an Employee for any reason.  A
      Participant shall be deemed to have terminated employment if the Company and
      the
      Participant reasonably anticipate a permanent reduction in his or her level of
      bona fide services to a level less than 50% of the average level of bona fide
      services provided by the Participant in the immediately preceding 36-month
      period.  Notwithstanding the preceding sentence, no termination of
      employment shall occur (1) while the  Participant is on military
      leave, sick leave, or other bona fide leave-of-absence which does not exceed
      six
      months or such longer period during which the Participant retains a right to
      reemployment with the Company pursuant to law or by contract; or (2) while
      the
      Participant is on a leave-of-absence due to a medically determinable physical
      or
      mental impairment that can be expected to last for a continuous period of six
      months or more and results in the Participant being unable to perform services
      for the Company in his or her position or a substantially similar position
      and
      that does not exceed 29 months.  A leave of absence will be a bona
      fide leave-of-absence only if there is a reasonable expectation that the
      Participant will return to perform services for the Company.  A
      Participant who transfers employment to any subsidiary of the Company or other
      entity in which the Company has a twenty percent (20%) or greater ownership
      interest shall be deemed not to have terminated employment as long as such
      Participant is an employee of such a subsidiary or entity.

     

    3.           ADMINISTRATION

     

    Full
      power and discretionary authority to construe, interpret and administer the
      Plan
      shall be vested in the Committee.  This power and authority includes,
      but is not limited to, selecting which Employees are eligible to participate
      in
      the Plan, selecting Compensation eligible for deferral, selecting investment
      indices, establishing the level of Company Credits (if any) to the Plan,
      establishing deferral terms and conditions, receiving and approving beneficiary
      designation forms, and adopting modifications, amendments and procedures as
      may
      be deemed necessary, appropriate or convenient by the Committee. Decisions
      of
      the Committee shall be final, conclusive and binding upon all
      parties.  The Committee, in its sole discretion, may delegate
      day-to-day administration of the Plan to an employee or employees of the Company
      or to a third-party administrator.  The Committee may also rely on
      outside counsel, independent accountants or other consultants or advisors for
      advice and assistance in fulfilling its administrative duties under the
      Plan.

     

    4.           ELIGIBILITY

     

    The
      Committee shall have the authority to select from management and/or highly
      compensated employees those Employees who shall be eligible to participate
      in
      the Plan and the date on which such Employees may commence
      participation.

     

    5.           PARTICIPANT
      ACCOUNTS

     

    Upon
      a
      Participant’s initial election to participate in the Plan or, if earlier, upon
      the credit of a Company Credit, there shall be established an Account, as
      designated by the Participant, to which there shall be credited any Deferred
      Compensation and/or Company Credits as of each Credit Date.  The
      Account shall be credited or debited, as appropriate, on each Accounting Date
      with income or loss, as appropriate, based upon a hypothetical investment in
      any
      one or more of the investment options available under the Plan, as prescribed
      by
      the Committee for the particular Compensation credited.

     

    6.           TERMS
      OF PARTICIPATION

     

    6.1           In
      General

     

    (a)           General
      Election Rules.  Any Employee selected by the Committee to
      participate in the Plan may elect to do so by delivering to the Committee or
      its
      designee an Election on a form prescribed by the Committee, electing the timing
      and form of distribution (if applicable), and setting forth the manner in which
      such Deferred Compensation shall be credited with investment gains and losses
      in
      accordance with Section 5.  A Participant may elect to defer up to 50%
      of his or her Compensation which is base salary and up to 100% of all other
      Compensation which is not base salary; provided that, the minimum Deferred
      Compensation for a Plan Year is $5,000.  A Participant’s Election must
      be filed at such time as designated by the Committee, but in no event later
      than
      the December 31 preceding the first day of the Plan Year in which the services
      are performed which relate to the Compensation being deferred.  A
      Participant may submit a new Election with respect to Compensation earned in
      a
      subsequent Plan Year by filing a new Election no later than the December 31
      preceding the first day of the Plan Year in which the services are performed
      which relate to the Compensation subject to the new Election.  An
      effective Election may not be revoked or modified after the December 31
      preceding the first Plan Year in which services are performed which relate
      to
      the Compensation subject to such Election.  During a Plan Year, an
      Election shall be irrevocable, and the deferral percentage or amount elected
      by
      the Participant thereunder shall not be increased or decreased.  If an
      Election has not been made with respect to Compensation to be earned in any
      Plan
      Year, the Participant shall be deemed to have elected not to have Deferred
      Compensation credited to his or her Account for such Plan Year with respect
      to
      Compensation earned during such Plan Year.

     

    (b)           Performance-Based
      Compensation.  Notwithstanding subsection (a) above, in the case
      of an Election to defer Compensation which is Performance-Based Compensation,
      an
      Election must be made no later than a date (as determined by the Committee)
      that
      is six months before the end of the performance period, provided that, (1)
      the
      Participant continuously performs services from the date the performance
      criteria are established through the date the Participant makes his or her
      Election and (2) the Compensation is not substantially certain to be paid and
      is
      not readily ascertainable as of the date of such Election.

     

    (c)           Forfeitable
      Rights.  Notwithstanding subsection (a) or (b) above, if the
      Compensation is subject to a forfeiture condition requiring the Participant’s
      continued services for a period of at least 12 months from the date the
      Participant obtains the legally binding right to the Compensation, the Committee
      may permit a Participant to file an Election on or before the 30th day after
      the
      Participant obtains the legally binding right to the Compensation, provided
      that
      the Election is filed at least 12 months in advance of the earliest date at
      which the forfeiture condition could lapse.

     

    (d)           New
      Participants.  Notwithstanding subsections (a), (b) or (c) above,
      in the case of a Participant who first becomes eligible to participate in this
      Plan during a Plan Year, an election to defer Compensation may be made within
      30
      days after the date the Employee first becomes eligible to participate in the
      Plan, provided that the Employee has not previously become eligible to
      participate in any other nonqualified account balance plan maintained by the
      Company (as defined in Treasury Regulation Section 1.409A-1(c)(2)(i)(A)), with
      respect to Compensation paid for services to be performed subsequent to the
      Election, which shall be irrevocable during such initial year of
      participation.  With respect to Compensation which is earned based
      upon a specified performance period, such as an annual bonus, such initial
      Election shall apply only to the portion of such Compensation equal to the
      total
      amount of Compensation for the performance period multiplied by the ratio of
      the
      number of days remaining in the performance period after the Election over
      the
      total number of days in the performance period.  However, an election
      with respect to such Compensation may apply to the entire amount and/or be
      made
      at a later date, but only  if otherwise permitted under subsection (b)
      above.

     

    (e)           Suspension.  Notwithstanding
      any other provision of this Plan, if a Participant receives a safe harbor
      hardship distribution under any tax-qualified employee retirement plan
      maintained by his or her employer, all deferral elections of the Participant
      under the Plan shall be suspended for a period of at least 6 months, and the
      Participant shall not be eligible to resume deferrals hereunder until the Plan
      Year beginning after expiration of such 6-month period.

     

    6.2           Investment
      Alternatives For Existing
      Balances

     

    A
      Participant may elect to change an existing selection as to the investment
      alternatives in effect with respect to existing amounts in his or her Account
      (in increments prescribed by the Committee) as often, and with such
      restrictions, as determined by the Committee.

     

    6.3           Vesting.

     

    A
      Participant’s Deferred Compensation and earnings thereon shall be immediately
      one-hundred percent (100%) nonforfeitable upon being credited to such
      Participant’s Account.  At the time of contribution, the Committee
      shall specify the vesting schedule applicable to a Participant’s Company Credits
      and earnings thereon.

     

    7.           DISTRIBUTION

     

    7.1           In
      General

     

    (a)           Termination.  At
      the time that a Participant makes an Election to defer Compensation, he or
      she
      shall select a method for the distribution of the balance of that Deferred
      Compensation and any Company Credits credited during such Plan Year, including
      earnings on such amounts.  Upon Termination, the balance of the
      Participant’s Account shall be distributed to the Participant according to the
      pay-out method or methods selected by the Participant in his or her Elections,
      payable beginning with the first day of the first month following the month
      in
      which Termination occurs.  A Participant may elect to receive his
      account distribution as a lump sum or in substantially equal annual installments
      over a set period up to 15 years.  Notwithstanding a Participant’s
      election, payment of benefits shall not be made or commence under the Plan
      prior
      to the date which is 6 months after the date of a Participant’s Termination in
      the case of a Participant who is determined to be a Specified Employee at the
      time of his or her Termination.  In such case, the Specified
      Employee’s Account shall be credited with earnings or losses during such
      six-month period in accordance with Section 5 and distribution shall be made
      or
      commence on the day after the last day of such six-month period.

     

    (b)           Scheduled
      Payments.  At the time a Participant makes an Election under the
      Plan, he or she may elect for the distribution of amounts subject to such
      Election, and earnings thereon, to be made in a specified year.  The
      specified year must be at least three years after the year to which the deferral
      relates.  Distributions pursuant to this scheduled payment option
      shall be paid in a single lump sum on the January 1 of the specified year (or
      as
      soon as practicable thereafter during the same calendar year).  Upon a
      Participant’s Termination prior to the specified year applicable under a
      scheduled payment option election, amounts in his or her Account which are
      subject to the scheduled payment option election shall be paid upon Termination
      in a single lump sum on the first day of the month following the month in which
      Termination occurs.

     

    (c)           Subsequent
      Election Changes.  A Participant may elect to change his or her
      method of distribution with respect to one or more Elections in accordance
      with
      rules established by the Committee by making a subsequent
      Election.  If a Participant makes a subsequent Election, then (a) such
      election shall not take effect until at least 12 months after the date on which
      such election is made, and submitted to the Committee; (b) the first payment
      with respect to which such election is made shall be deferred for a period
      of
      not less than 5 years from the date such payment would otherwise have been
      made;
      (c) any election related to a payment that was otherwise to be made at a
      specified time may not be made less than 12 months prior to the date of the
      first scheduled payment; and (d) with respect to a change in payment form,
      such
      change may not impermissibly accelerate the time or schedule of any payment
      under the Plan, except as provided in regulations promulgated by the Secretary
      of Treasury.  For purposes of applying the provisions of this Section
      7.1(c), installment payments shall be considered a single payment for purposes
      of applying these subsequent election rules.

     

    7.2           Death

     

    In
      the
      event of the Participant’s death, the Company shall pay all amounts in such
      Participant’s Account to the Participant’s Beneficiary in a single lump sum no
      later than 30 days after the month in which the Participant’s death
      occurs.  Neither the Participant nor a Beneficiary shall have a right
      to designate the taxable year of the payment.

     

    A
      Participant may designate one or more persons (including a trust) to whom or
      to
      which payments are to be made if the Participant dies before receiving
      distribution of all amounts due under the Plan.  A Participant may, at
      any time, elect to change the designation of a Beneficiary.  A
      designation of Beneficiary will be effective only after the signed designation
      of Beneficiary is filed with the Committee or its designee while the Participant
      is alive and will cancel all designations of Beneficiary signed and filed
      earlier.  If the Participant fails to designate a Beneficiary as
      provided above or if all of a Participant's Beneficiaries predecease him or
      her
      and he or she fails to designate a new Beneficiary, the remaining unpaid amounts
      shall be paid to the estate of such Participant.

     

    7.3           Form
      of Distribution

     

    Distribution
      of a Participant’s Account shall be made in cash.

     

    8.           FINANCIAL
      HARDSHIP

     

    In
      the
event
      that a Participant (or in the case of the Participant’s death, his beneficiary)
      suffers a Financial Hardship, the Company may distribute on behalf of the
      Participant, his  beneficiary or his legal representative, any portion of
      the Participant’s Account, but in no event more than the amount reasonably
      necessary to relieve the Financial Hardship upon which the request is based,
      plus the federal and state taxes due on the withdrawal, with any such
      distribution to be  determined by the Committee if it deems advisable
      in its sole and absolute discretion.  Any such hardship distribution
      shall be made at such times as the Committee shall determine, and the
      Participant’s Account shall be reduced by the amount so distributed and/or
      utilized.  Financial Hardship means a severe financial hardship to a
      Participant resulting from an illness or accident of the Participant, his or
      her
      spouse or a dependent (as defined in Code Section 152(a)) of the Participant,
      loss of the Participant's property due to casualty, or other similar
      extraordinary and unforeseeable circumstances arising as a result of events
      beyond the control of the Participant.



    9.           UNSECURED
      GENERAL CREDITOR STATUS OF
      EMPLOYEE

     

    The
      payments to Participants and their
      Beneficiaries hereunder shall be made from the general corporate assets of
      the
      Company.  No person shall have any interest in any such assets by
      virtue of the provisions of this Plan.  The Company's obligation
      hereunder shall be an unfunded and unsecured promise to pay money in the
      future.  To the extent that any person acquires a right to receive
      payments from the Company under the provisions hereof, such right shall be
      no
      greater than the right of any unsecured general creditor of the Company; no
      such
      person shall have nor acquire any legal or equitable right, interest or claim
      in
      or to any property or assets of the Company.  Any accounts maintained
      under this Plan shall be hypothetical in nature and shall be maintained for
      bookkeeping purposes only.  Neither the Plan nor any account shall
      hold any actual funds or assets.

     

    10.           INALIENABILITY
      OF BENEFITS

     

    The
      interests of the Participants and their Beneficiaries under the Plan may not
      in
      any way be voluntarily or involuntarily transferred, alienated or assigned,
      nor
      subject to attachment, execution, garnishment or other such equitable or legal
      process.  A Participant or Beneficiary cannot waive the provisions of
      this Section 10.

     

    11.           CLAIMS
      PROCEDURE

     

    Any
      Participant, Beneficiary or any other person claiming benefits, eligibility,
      participation or any other right or interest under this Plan may file a written
      claim setting forth the basis of the claim with the Chief Executive Officer
      of
      the Company (“CEO”) at the Company’s then current address.  A written
      notice of the CEO’s disposition of any such claim shall be furnished to the
      claimant within a reasonable time (not to exceed ninety (90) days) after the
      claim is received by the CEO.  Notwithstanding the foregoing, the CEO
      may have additional time (not to exceed ninety (90) days) to decide the claim
      if
      special circumstances exist, provided that he advises the claimant, in writing
      and prior to the end of the initial ninety (90) day period, of the special
      circumstances giving rise to the need for additional time and the date on which
      he expects to decide the claim.  If the claim is denied, in whole or
      in part, the notice of disposition shall include the specific reason for the
      denial, identify the specific provisions of the Plan upon which the denial
      is
      based, describe any additional material or information necessary to perfect
      the
      claim, explain why that material or information is necessary and describe the
      Plan’s review procedures, including the timeframes thereunder for a claimant to
      file a request for review and for the Committee to decide the
      claim.  The notice shall also include a statement advising the
      claimant of his right to bring a civil action if his claim is denied, in whole
      or in part, upon review.

     

    Within
      sixty (60) days after receiving the written notice of the CEO’s disposition of
      the claim, the claimant may request, in writing, review by the Committee of
      the
      CEO’s decision regarding his claim.  Upon written request, the
      claimant shall be entitled to a review meeting with the Committee to present
      reasons why the claim should be allowed.  The claimant or his
      authorized representative may submit a written statement in support of his
      claim, together with such comments, information and material relating to the
      claim, as he deems necessary or appropriate.  The claimant or his duly
      authorized representative shall be provided, upon request and free of charge,
      reasonable access to, and copies of, all documents, records and other
      information which are relevant to the claimant’s claim and its
      review.  If the claimant does not request review within sixty (60)
      days after receiving written notice of the CEO’s disposition of the claim, the
      claimant shall be deemed to have accepted the CEO’s written
      disposition.

     

    The
      Committee shall make its decision on review and provide written notice thereof
      to the claimant within a reasonable time (not to exceed sixty (60) days) after
      the claim is received by the Committee.  Notwithstanding the
      foregoing, the Committee may have additional time (not to exceed sixty (60)
      days) to decide the claim if special circumstances exist provided that the
      Committee advises the claimant, in writing, prior to the end of the initial
      sixty (60) day period, of the special circumstances giving rise to the need
      for
      additional time and the date on which it expects to decide the
      claim.  In no event shall the Committee have more than one hundred
      twenty (120) days following its receipt of the claimant’s request for review to
      provide the claimant with written notice of its decision.  The
      Committee shall have the right to request of and receive from claimant such
      additional information, documents or other evidence as the Committee may
      reasonably require.  In the event that the Committee requests such
      additional information from the claimant, the period for making the benefit
      determination on review shall not take into account the period beginning on
      the
      date on which the Committee notifies the claimant in writing of the need for
      additional information and ending on the date on which the claimant responds
      to
      the request for additional information.

     

    If
      the
      claim is denied upon review, in whole or in part, the notice of disposition
      shall include the specific reason for the denial, identify the specific
      provision of the Plan upon which the denial is based, include a statement
      advising the claimant of his right to receive, upon written request and free
      of
      charge, reasonable access to and copies of all documents, records and other
      information which are relevant to the claimant’s claim and include a statement
      advising the claimant of his right to bring a civil action under Section 502(a)
      of the Employee Retirement Income Security Act of 1974, as amended if his claim
      is denied, in whole or in part, upon review.

     

    For
      purposes of this Section, a document, record or information will be considered
      “relevant’ if it (a) was relied upon by the CEO or Committee, as applicable, in
      making the benefit decision, (b) was submitted, considered or generated in
      the
      course of making such decision, even if it was not relied upon in making those
      decisions, or (c) demonstrates compliance with the administrative processes
      and
      safeguards established by the Plan to insure that the terms of the Plan have
      been followed and applied consistently.

     

    To
      the
      extent permitted by law, a decision on review by the Committee shall be binding
      and conclusive upon all persons whomsoever.  Completion of the claims
      procedure described in this Section shall be a mandatory precondition that
      must
      be complied with prior to commencement of a legal or equitable action in
      connection with the Plan by a person claiming rights under the Plan, or by
      another person claiming rights through such a person.  The Committee
      may, in its sole discretion, waive these procedures as a mandatory precondition
      to such an action.

     

    12.           GOVERNING
      LAW

     

    The
      provisions of this plan shall be interpreted and construed in accordance with
      the laws of the State of Missouri, except to the extent preempted by Federal
      law.

     

    13.           AMENDMENTS

     

    The
      Committee may amend, alter or terminate this Plan at any time without the prior
      approval of the Board.  Any distributions made due to termination of
      the Plan must comply with the termination rules under Code Section 409A and
      the regulations promulgated thereunder.

     

    IN
      WITNESS WHEREOF, this Plan is adopted effective the first day of January,
      2008.

    


    BROWN
      SHOE COMPANY, INC.

    


    By:                                                     

    
 

    Title: