# EDGAR Filing Document

**Accession Number:** 0000895447
**File Stem:** 0000950170-23-008453
**Filing Date:** 2023-3
**Character Count:** 97063
**Document Hash:** dce3919eed894f1e6e7384114596a2b0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-008453.hdr.sgml**: 20230316

**ACCESSION NUMBER**: 0000950170-23-008453

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230314

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230316

**DATE AS OF CHANGE**: 20230316

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SHOE CARNIVAL INC
- **CENTRAL INDEX KEY:** 0000895447
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-SHOE STORES [5661]
- **IRS NUMBER:** 351736614
- **STATE OF INCORPORATION:** IN
- **FISCAL YEAR END:** 0128

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-21360
- **FILM NUMBER:** 23738864

**BUSINESS ADDRESS:**
- **STREET 1:** 7500 EAST COLUMBIA STREET
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47715
- **BUSINESS PHONE:** 8128676471

**MAIL ADDRESS:**
- **STREET 1:** 7500 EAST COLUMBIA STREET
- **CITY:** EVANSVILLE
- **STATE:** IN
- **ZIP:** 47715

?xml version="1.0" encoding="ASCII"? 8-K

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

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**FORM** 8-K

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**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): March 16, 2023 (**March 14, 2023**)** 

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SHOE CARNIVAL, INC.

**(Exact name of Registrant as Specified in Its Charter)** 

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| | | |
|:---|:---|:---|
| Indiana | 0-21360 | 35-1736614 |
| **(State or Other Jurisdiction**<br>**of Incorporation)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |
| 7500 East Columbia Street<br>Evansville**,** Indiana |  | 47715 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

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**Registrant's Telephone Number, Including Area Code: (**812**)** 867-4034

**Not Applicable** 

**(Former Name or Former Address, if Changed Since Last Report)** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br>**Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.01 per share | SCVL | The Nasdaq Stock Market LLC |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**<u>Item 5.02</u> Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers**

Appointment of New Chief Financial Officer

On March 16, 2023, Shoe Carnival, Inc. (the "Company") announced the appointment of Erik Gast as the Company's Executive Vice President, Chief Financial Officer and its principal financial officer, effective as of April 24, 2023, to succeed W. Kerry Jackson. As previously announced, Mr. Jackson is retiring after 35 years of service with the Company. Mr. Jackson will continue to serve as the Company's Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer and as the Company's principal financial officer until April 24, 2023 and will remain with the Company as its Chief Administrative Officer until May 9, 2023 to assist with the transition.

Mr. Gast, age 54, will bring to the Company over 30 years of finance experience with both private and public companies, including several retail and customer facing brands. Mr. Gast has served as the Executive Vice President & Chief Financial Officer of Fleet Farm Group, LLC, a billion-dollar plus retailer of merchandise and services for active, outdoor, suburban and farm communities, since 2020. Prior to that, Mr. Gast served as the Senior Vice President, Finance & Chief Accounting Officer for Great Wolf Resorts, Inc., the owner and operator of indoor water park resorts, from 2018 until 2020; as the Vice President, Finance & Controller for Pilot Travel Centers LLC, a fuel supplier and operator of travel centers in North America, from 2015 until 2018; and in several finance roles for then-New York Stock Exchange-listed Family Dollar Stores, Inc., a retail chain of general merchandise retail discount stores, including serving as its Vice President, Finance & Controller responsible for its reporting with the Securities and Exchange Commission from 2013 until 2015, and as its Vice President, Finance & Treasurer during 2015. Mr. Gast also served in finance roles with retailers Ace Hardware Corporation from 2010 until 2012 and Limited Brands, Inc. from 2000 until 2010. Mr. Gast began his career in public accounting and is a Certified Public Accountant.

There are no family relationships between Mr. Gast and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K. There are no arrangements or understandings between Mr. Gast and any other person pursuant to which he was selected to become the Executive Vice President, Chief Financial Officer of the Company.

Employment Agreement with Mr. Gast

In connection with his appointment, Mr. Gast and the Company entered into an Employment and Noncompetition Agreement as of March 14, 2023 (the "Employment Agreement"). The Employment Agreement provides for an initial term of employment commencing on April 24, 2023 and ending on April 23, 2025 and automatically renews for successive one-year periods thereafter, unless earlier terminated in accordance with its terms. The Employment Agreement provides for the following compensation payable to Mr. Gast:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An annual base salary of $550,000, as adjusted from time to time by the Company's Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Eligibility to participate in the Company's Amended and Restated 2016 Executive Incentive Compensation Plan, as amended, with a target bonus of 75% of his base salary for fiscal 2023, prorated based on his start date of employment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Eligibility to participate in annual equity awards granted under the Company's 2017 Equity Incentive Plan (the "2017 Equity Plan"), commencing in fiscal 2023, at the discretion of the Compensation Committee of the Company's Board of Directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A one-time sign-on grant of 25,000 service-based restricted stock units, to be granted under the 2017 Equity Plan on his first date of employment, 10,000 of which will vest on the fourth anniversary of the grant date and 15,000 of which will vest on the fifth anniversary of the grant date, provided that he remains continuously employed with the Company through each applicable vesting date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Reimbursement of relocation expenses of up to $100,000, plus an amount equal to any additional out-of-pocket federal, state and local income taxes incurred in connection with such reimbursement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•An automobile allowance in the gross amount of $1,100 per month; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Eligibility to participate in all employee benefit plans, practices and programs generally provided to other executive officers of the Company.

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Pursuant to the Employment Agreement, upon the expiration of the term of the agreement, Mr. Gast will be entitled to receive (i) that portion of his base salary that is earned but unpaid through the termination date and (ii) any vested payments or benefits to which he is entitled (collectively, the "Accrued Obligations"). In addition, if the Company elects not to renew the Employment Agreement upon the expiration of its term and terminates Mr. Gast's employment (other than within two years following a change in control) without offering to pay him severance equal to 100% of his base salary, he will not be subject to the non-competition and non-solicitation provisions of the Employment Agreement.

If Mr. Gast's employment is terminated by the Company for cause (as defined in the Employment Agreement), by Mr. Gast without good reason (as defined below), or as a result of his death or disability, Mr. Gast will be entitled to receive the Accrued Obligations. If Mr. Gast's employment is terminated by the Company without cause or by Mr. Gast for good reason (in each case, other than within two years following a change in control), Mr. Gast will be entitled to the following: (a) the Accrued Obligations; and (b) subject to his compliance with the restrictive covenants set forth in the Employment Agreement and his execution of a release agreement, (i) a lump sum amount equal to 55% of his base salary for the fiscal year in which his termination occurs, multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the date of termination and the denominator of which is 365, (ii) a lump sum amount equal to 150% of his base salary for the fiscal year in which termination occurs, and (iii) an amount equal to 18 times the monthly amount charged, as of his termination date, for continuation coverage under the Company's group medical and dental plans pursuant to the Consolidated Omnibus Reconciliation Act of 1985 for the coverage options and coverage levels applicable to him and his covered dependents immediately prior to the termination date (the "COBRA Premium Rate"). Under the Employment Agreement, "good reason" is defined to include a material reduction by the Company in Mr. Gast's base salary, a material breach of the Employment Agreement by the Company, or if the Company relocates his principal place of employment to a location that is more than 50 miles from the Company office at which he was principally based prior to the relocation.

If, within two years following a change in control, Mr. Gast's employment is terminated by the Company without cause or by Mr. Gast for good reason, Mr. Gast will be entitled to the following: (a) the Accrued Obligations; and (b) subject to his compliance with the restrictive covenants set forth in the Employment Agreement and his execution of a release agreement, (i) a lump sum amount equal to 310% of his base salary for the fiscal year in which his termination occurs, (ii) an amount equal to 18 times the COBRA Premium Rate, and (iii) outplacement services not to exceed $2,500.

Under the Employment Agreement, Mr. Gast is subject to non-competition and non-solicitation provisions during the term of the Employment Agreement and for a period of one year following termination of his employment and non-disparagement provisions during the term of the Employment Agreement and for a period of five years following termination of his employment. Mr. Gast is also subject to customary confidentiality provisions.

The foregoing description of the terms of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

**Item 7.01. Regulation FD Disclosure.**

The following information shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

A copy of the press release issued by the Company on March 16, 2023, announcing the appointment of Mr. Gast as the new Executive Vice President, Chief Financial Officer of the Company effective as of April 24, 2023, is furnished as Exhibit 99.1, and the information set forth therein is incorporated herein by reference.

**<u>Item 9.01</u> Financial Statements and Exhibits**

(d) Exhibits:

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| | |
|:---|:---|
| <u>Exhibit No.</u> | <u>Exhibits</u> |
| [<u>10.1</u>](scvl-ex10_1.htm) | [<u>Employment and Noncompetition Agreement, entered into as of March 14, 2023, by and between the Company and Erik Gast</u>](scvl-ex10_1.htm) |
| [<u>99.1</u>](scvl-ex99_1.htm) | [<u>Press Release of the Company dated March 16, 2023</u>](scvl-ex99_1.htm) |
| 104 | Cover Page Interactive Data File, formatted in Inline Extensible Business Reporting Language (iXBRL) |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **SHOE CARNIVAL, INC.** | **SHOE CARNIVAL, INC.** |
|  |  | (Registrant) <br>|
| Date: March 16, 2023 | By: | /s/ W. Kerry Jackson |
|  |  | W. Kerry Jackson |
|  |  | Senior Executive Vice President |
|  |  | Chief Financial and Administrative Officer and Treasurer |

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## Ex-10

EX-10.1

**SHOE CARNIVAL, INC.**

**EMPLOYMENT AND NONCOMPETITION AGREEMENT**

This EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "**Agreement**") is made and entered into as of March 14, 2023, by and between **SHOE CARNIVAL, INC.**, an Indiana corporation with its principal offices located at 7500 East Columbia Street, Evansville, Indiana (the "**Company**"), and **ERIK GAST** ("**You**" or the "**Employee**").

**<u>RECITALS</u>**

**WHEREAS**, the Company is one of the largest retailers of family footwear in the United States; and

**WHEREAS**, the Company desires to employ You upon the terms and conditions set forth herein; and

**WHEREAS**, You desire to be so employed by the Company, to be eligible for opportunities of advancement, potential compensation increases and the potential payments provided for herein; and

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

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

NOW THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:

**AGREEMENT**

1.**<u>Term</u>**. The Company hereby agrees to employ You, and You hereby agree to be employed by the Company, in accordance with the terms and conditions of this Agreement, for a period of two (2) years commencing on April 24, 2023 (the "**Effective Date**") and ending on April 23, 2025, subject to earlier termination as expressly provided in this Agreement (the "**Initial Term**"). This Agreement shall automatically renew for successive one-year periods ("**Renewal Periods**"), unless either party provides written notice of its intention to not renew at least thirty (30) days prior to the end of the then current term. For purposes of this Agreement, the Initial Term together with any Renewal Period(s) shall be referred to as the "**Term**".

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ERIK GAST

2.**<u>Position and Duties</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 **<u>Position</u>**. You shall serve as the **Executive Vice President, Chief Financial Officer** of the Company or in such other or additional positions as the Company's President, Chief Executive Officer and/or Board of Directors (the "**Board**") may determine from time to time. In such position, You shall (a) report to the Company's President or such other person as the Company may designate from time to time, and (b) have such duties, authority and responsibility as shall be determined from time to time by the Company's President, Chief Executive Officer and/or Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 **<u>Duties</u>**. You agree to perform such duties incident to Your position, as well as any other duties for the Company as may be directed by the Company's President, Chief Executive Officer and/or Board, and to assume such other or additional title, duties, and/or responsibilities as the President, Chief Executive Officer or Board may determine. During the Term, You shall devote substantially all of Your business time and attention to the performance of Your duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the President, Chief Executive Officer or Board. Notwithstanding the foregoing, You will be permitted to act or serve as a volunteer, director, trustee, committee member or principal of any civic or charitable organization, provided such service does not interfere with Your work for the Company. You shall not engage in any activity that is competitive with the Company's business or make any preparations to engage in any competitive activity. You shall be supportive of the Company's business and its best interests and shall not, directly or indirectly, take any action which could reasonably be expected to have an adverse effect upon the business or best interests of the Company. You agree that You will at all times honestly and fairly conduct Your duties, and will at all times maintain the highest of professional standards in representing the interests of the Company. You will comply with Company policies, decisions, and instructions, which may be changed by the Company from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 **<u>Primary Work Location</u>.** You will primarily perform Your duties and responsibilities from the Company's South office presently located in Fort Mill, South Carolina; provided, however, You will be expected (a) to make regular working visits to the Company's headquarters office in Evansville, Indiana and (b) to engage in other business travel as may be necessary. The Company reserves the right to change Your primary work location.

3.**<u>Compensation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1**<u>Base Salary</u>**. The Company shall pay You an annual base salary of **Five Hundred Fifty Thousand Dollars ($550,000)**, payable in accordance with the Company's usual payroll practices, and subject to all taxes, withholdings and deductions as required by law and as You may authorize. The Company will review Your Base

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ERIK GAST

Salary on a periodic basis, approximately annually, during the Term to determine, in the Company's sole discretion, whether to adjust Your Base Salary upward or downward, and if so, the amount of such adjustment and the time at which such adjustment should take effect. The term "**Base Salary**" as used in this Agreement shall refer to Your annual base salary as in effect from time to time, including any adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2**<u>Incentive Bonus</u>**. You are entitled to participate in the Company's Amended and Restated 2016 Executive Incentive Compensation Plan, as amended, in accordance with the terms contained therein, and in any successor plan adopted by the Company from time to time. For fiscal year 2023, Your target bonus will be seventy-five percent (75%) of Your Base Salary; provided, however, Your bonus potential for fiscal year 2023 will be prorated based on Your start date of employment. This bonus is not guaranteed, and the Company retains discretion whether to award any bonus under the Company's Amended and Restated 2016 Executive Incentive Compensation Plan, as amended, for fiscal year 2023 or any other applicable fiscal year. You agree that the failure of the Company to award any such bonus and/or other incentive compensation shall not give rise to any claim against the Company. The Company, in its sole discretion, may adjust, modify or discontinue any bonus plan or program applicable to You from time to time during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3**<u>Equity Grants</u>.** You shall be eligible to participate in the Company's 2017 Equity Incentive Plan, for annual time-based and/or performance-based equity grants, subject to the approval of the Board. Any such grant will be made pursuant to and subject to the terms and conditions of an award agreement prepared by the Company and the terms and conditions of the 2017 Equity Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4**<u>Special Equity Grant</u>.** Subject to the approval of the Board, the Company will grant to You on Your first day of employment 25,000 restricted stock units ("**RSUs**"), which RSUs will be subject to a time-based vesting schedule pursuant to which 10,000 RSUs will vest on the fourth anniversary of the grant date and 15,000 RSUs will vest on the fifth anniversary of the grant date, provided that You remain continuously employed with the Company through each applicable vesting date. Such award will be made pursuant to and subject to the terms and conditions of an award agreement prepared by the Company and the terms and conditions of the 2017 Equity Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5**<u>Employee Benefits</u>.** You shall be eligible to participate in any employee benefit plans, practices and programs maintained by the Company ("**Employee Benefit Plans**"), commensurate with Your position with the Company and subject to the eligibility requirements and other terms and conditions of such plans and programs. The Company, in its sole discretion, may change, amend or discontinue any of its Employee Benefit Plans at any time during Your employment with the Company, and nothing contained herein shall obligate the Company to institute, maintain or refrain from changing, amending or discontinuing any Employee Benefit Plan.

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ERIK GAST

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6**<u>Reimbursement of Business Expenses</u>.** Subject to and consistent with the Company's expense reimbursement policies as in effect from time to time, the Company will reimburse You for all ordinary and necessary expenses, in a reasonable amount, which You incur in performing Your duties under this Agreement. Such expenses will be paid or reimbursed to You consistent with the expense reimbursement policies of the Company in effect from time to time, and You agree to abide by any such expense reimbursement policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7**<u>Reimbursement of Relocation Expenses</u>.** Subject to the terms and conditions of the Company's relocation policies, as in effect from time to time, You shall be eligible for reimbursement of certain reasonable relocation expenses in connection with relocating Your residence to the Fort Mill, South Carolina area, including customary closing costs in connection with the sale of Your current home, house hunting trips and temporary housing expenses. Relocation expenses shall be subject to a maximum reimbursement of One Hundred Thousand Dollars ($100,000). The Company shall also pay You such amounts as are necessary to compensate You for any additional out-of-pocket federal, state and local income taxes incurred by You with respect to any compensation attributed to You for the reimbursements provided under this Section 3.7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8**<u>Automobile Allowance</u>.** During the Term, the Company will pay You an automobile allowance in the gross amount of One Thousand One Hundred Dollars ($1,100) per month. Such automobile allowance will be paid monthly during the Term, less all applicable payroll tax withholdings, and will be prorated for any partial month of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9**<u>Paid Time Off</u>.** During the Term, You initially will be entitled to twenty (20) days of Paid Time Off ("**PTO**") per year, prorated for any partial year. Beginning April 2024, You will be entitled to twenty-five (25) days of PTO per year, prorated for any partial year. PTO may be taken at such times and intervals as You reasonably determine, subject to the business needs of the Company and approval by the Chief Executive Officer. The accrual, use, and administration of PTO will be governed by the Company's PTO policies applicable to its employees generally, as such policies may be stated in the Company's employee handbook or otherwise and as such policies may change from time to time.

4.**<u>Termination of Employment and Compensation Upon Termination</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1**<u>Expiration of the Agreement</u>**. Your employment with the Company may terminate by way of the expiration of the Term as a result of either party exercising the right not to renew. In the event of termination of Your employment by expiration of the Term, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the

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ERIK GAST

termination date; and (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2**<u>For Cause</u>**. The Company may terminate Your employment at any time effective immediately for "**Cause**." As used in this Agreement, the term "**Cause**" means the occurrence of any one or more of the following events: (a) Your failure to perform Your duties (other than any such failure resulting from incapacity due to physical or mental illness); (b) Your embezzlement, misappropriation or fraud, whether or not related to Your employment with Company; (c) Your conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony or other crime involving moral turpitude; (d) Your engaging in dishonesty, illegal conduct or gross misconduct which is in each case injurious to the Company or its affiliates; (e) Your failure or refusal to comply with any lawful and reasonable instructions of the Company's Chief Executive Officer, President, or other executive officer to whom You report; (f) Your material breach of any of Your obligations under this Agreement; (g) Your material breach of the Company's policies; (h) Your use of alcohol or drugs which interferes with the performance of Your duties for the Company or which compromises the integrity or reputation of the Company; or (i) Your engaging in any conduct tending to bring the Company into public disgrace or disrepute.

In the event of termination of Your employment by the Company for Cause, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (x) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (y) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3**<u>Unilateral – The Company without Cause</u>**. The Company may terminate Your employment at any time without Cause.

In the event the Company terminates Your employment without Cause, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, within thirty (30) calendar days following the date of termination, a lump sum amount equal to fifty-five percent (55%) of the product of (i) multiplied by (ii), where "**(i)**" is Your Base Salary for the fiscal year in which the termination occurs, and where "**(ii)**" is a fraction, the numerator of which is the number of days elapsed in such fiscal year through the date of termination and the denominator of which is 365; (d) the Company shall pay to You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to one hundred fifty percent (150%) of Your Base Salary for the fiscal year in which the termination occurs; and (e) the

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ERIK GAST

Company shall pay You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to eighteen (18) times the monthly "**COBRA Premium Rate**" (which is the monthly amount charged, as of the termination date, for continuation coverage under the Company's group medical and dental plans pursuant to the Consolidated Omnibus Reconciliation Act of 1985 ("**COBRA**") for the coverage options and coverage levels applicable to You and Your covered dependents immediately prior to the termination date). Payment of the severance compensation set forth in subparts (c), (d) and (e) of this Section 4.3 is subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4**<u>Unilateral – The Employee</u>**. You may terminate Your employment at any time with the Company by providing the Company with at least thirty (30) days' advance written notice of such termination (the "**Notice Period**"). At the sole option of the Company, such termination may be considered effective on the date such notice is given or at any other date the Company may designate during the Notice Period.

In the event that You unilaterally terminate Your employment, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5**<u>For Good Reason – The Employee</u>**. At any time during the Term, You may terminate Your employment for Good Reason if all of the following conditions are satisfied: (a) You give the Company a written notice of termination, which describes in reasonable detail the condition claimed to constitute Good Reason, within thirty (30) calendar days of the initial existence of the condition claimed to constitute Good Reason; (b) the Company does not remedy the condition within thirty (30) calendar days of the Company's receipt of Your written notice of termination (the "**Good Reason Cure Period**"); and (c) You give the Company a second written notice of termination within thirty (30) calendar days following the expiration of the Good Reason Cure Period. If You do not provide the notice of termination for Good Reason as described in subpart (a) of the preceding sentence within 30 days of the first occurrence of the applicable grounds, then You will be deemed to have waived Your right to terminate for Good Reason with respect to such grounds. For purposes of this Agreement, "**Good Reason**" means the occurrence, without Your written consent, of any of the following: (a) a material reduction by the Company in Your Base Salary; (b) a material breach by the Company of this Agreement; or (c) the Company relocates Your principal place of employment to a location that is more than fifty (50) miles from the Company office at which You were principally based immediately prior to such relocation .

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In the event You terminate Your employment for Good Reason, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, within thirty (30) calendar days following the date of termination, a lump sum amount equal to fifty-five percent (55%) of the product of (i) multiplied by (ii), where "**(i)**" is Your Base Salary for the fiscal year in which the termination occurs, and "**(ii)**" is a fraction, the numerator of which is the number of days elapsed in such fiscal year through the date of termination and the denominator of which is 365; (d) the Company shall pay to You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to one hundred fifty percent (150%) of Your Base Salary for the fiscal year in which the termination occurs; and (e) the Company shall pay You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to eighteen (18) times the monthly COBRA Premium Rate. Payment of the severance compensation set forth in subparts (c), (d) and (e) of this Section 4.5 is subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6**<u>Disability or Death</u>**. If You suffer a "**Disability**," the Company shall have the right to terminate Your employment by delivering to You a written notice of the Company's intent to terminate for Disability, specifying in such notice a termination date not less than ten (10) calendar days after the giving of the notice (the "**Disability Notice Period**"). Your employment shall terminate at the close of business on the last day of the Disability Notice Period. For purpose of this Agreement, the term "Disability" shall mean either (a) when You are deemed disabled in accordance with the long-term disability insurance policy or plan of the Company in effect at the time of the illness or injury causing the Disability, or (b) the inability of You, because of injury, illness, disease or bodily or mental infirmity, to perform the essential functions of Your job (with reasonable accommodation) for more than one hundred twenty (120) consecutive days. The existence of a Disability shall be determined by the Company. If You should die during the Term, this Agreement shall terminate as of the date of Your death.

In the event Your employment is terminated as a result of Your death or Disability, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7**<u>Timely Qualifying Termination Following a Change In Control</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.1 For purposes of this Agreement, a "**Timely Qualifying Termination**" shall mean either (a) a termination by the Company without Cause that occurs within

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two (2) years immediately following a Change In Control or (b) a termination by You for Good Reason that occurs within two (2) years immediately following a Change In Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.2 For purposes of this Agreement, "**Change In Control**" of the Company shall mean and shall be deemed to have occurred as of the first day on which any one of the following conditions has been satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)The acquisition, within a 12-month period ending on the date of the most recent acquisition, by 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**"), (a "**Person**") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act as in effect from time to time) of thirty percent (30%) or more of either (i) the then outstanding shares of common stock of the Company or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that the following acquisitions shall not constitute an acquisition of control: (a) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (b) any acquisition by the Company, (c) any acquisition by any employee benefit plan or related trust sponsored or maintained by the Company or any corporation controlled by the Company, (d) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (C) of this Section are satisfied, (e) any acquisition by any Person who, immediately before the commencement of the 12-month period, already held beneficial ownership of thirty percent (30%) or more of the outstanding voting securities of the Company ("**Affiliated Person**") or (f) upon the death of any shareholder who, on the date of this Agreement, is the beneficial owner of 10% or more of the outstanding voting securities of the Company, any acquisition triggered by the death of such shareholder by operation of law, by any testamentary bequest or by the terms of any trust or other contractual arrangement established by such shareholder; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Individuals who, as of the Effective Date, constitute the Board of Directors of the Company (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 either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the

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Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than fifty percent (50%) of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by 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 reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the outstanding Company stock and outstanding Company voting securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan or related trust of the Company or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, thirty percent (30%) or more of the outstanding Company common stock or outstanding voting securities, as the case may be) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which following such sale or other disposition (a) more than fifty percent (50%) of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by 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 sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition,

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of the outstanding Company common stock and outstanding Company voting securities, as the case may be, (b) no Person (excluding the Company and any employee benefit plan or related trust of the Company or such corporation, any Affiliated Person and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, thirty percent (30%) or more of the outstanding Company common stock or outstanding Company voting securities, as the case may be) beneficially owns, directly or indirectly, thirty percent (30%) or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (c) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.

Notwithstanding any other provision of this Section to the contrary, an occurrence shall not constitute a Change In Control if it does not constitute a change in the ownership or effective control of, or in the ownership of a substantial portion of the assets of, the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the "**Code**") and its interpretive regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7.3 In the event of a Timely Qualifying Termination, then, in lieu of all other benefits under this Agreement, the Company's obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, in a lump sum not later than thirty (30) calendar days after the termination date, an amount equal to two times one hundred fifty-five percent (155%) of Your Base Salary for the fiscal year in which the termination occurs; (d) the Company shall pay You, in a lump sum not later than thirty (30) calendar days after the termination date, an amount equal to eighteen (18) times the COBRA Premium Rate; and (e) the Company shall provide You with reasonable and appropriate out-placement services, as determined and coordinated by the Company, by paying a fee, not to exceed Two Thousand Five Hundred Dollars ($2,500.00), to an outplacement services provider selected by the Company, provided that such services shall not extend past the end of the second taxable year following the taxable year in which the Timely Qualifying Termination occurs. Payment and provision of the severance compensation and benefits set forth in subparts (c), (d) and (e) of this Section 4.7.3 are subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8**<u>Compensation Upon Termination in General</u>**. In the event of termination of Your employment as set forth herein, and subject to any lawful right of offset the Company may have against any such benefits, compensation, or severance amounts owed to You, whether the result of promissory notes, loans, or other financial arrangements the Company may have entered into with You or on Your behalf, and which are or would become due and payable on or after the termination date, to include the principal and interest pursuant to such arrangements (which right of offset cannot be inconsistent with the standards for nonqualified deferred compensation plans under Code Section 409A, to the extent applicable), the parties agree that the terms herein shall be the exclusive termination pay arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9**<u>Payroll Withholdings</u>.** The Company may withhold from any compensation or benefits payable under this Agreement all federal, state, city, or other taxes or deductions as may be required pursuant to any law or governmental regulation or ruling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10**<u>Release Agreement</u>**. Any payment or provision of the severance compensation or benefits described herein is subject to Your execution of (and, if a right of revocation applies to such release, not revoking) a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form provided by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11**<u>Delay of Separation Payments to You</u>**. Notwithstanding any other provisions of this Agreement, if any amount payable to You under this Agreement on account of Your separation from service with the Company constitutes deferred compensation within the meaning of Code Section 409A, and You are a specified employee, within the meaning of Code Section 409A(a)(2)(B)(i), on the date of Your separation from service, payment of the amount shall be delayed until the first business day that is at least six (6) months after the date on which Your separation from service occurred.

5.**<u>Confidential Information</u>**. You understand and acknowledge that during the Term, You will have access to and learn about Confidential Information, as defined below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1**<u>Definition</u>**. For purposes of this Agreement, "**Confidential Information**" includes, but is not limited to, all of the Company's trade secrets, confidential and proprietary information and all other information belonging to, maintained by or concerning the Company that is not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: the Company's business processes, practices, policies, plans, publications, documents, research, operations, services, strategies, techniques, agreements, contracts, know-how, trade secrets, computer programs, computer software, work-in-process, databases, manuals, records, systems, supplier information, vendor information, financial information, accounting information, employee information, legal information, marketing information, advertising information, pricing information, credit information, design information, payroll information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, security procedures, graphics, drawings, sketches, market studies, sales

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information, revenue, costs, formulae, notes, communications, algorithms, product plans, designs, styles, models, ideas, audiovisual programs, customer information, customer lists, manufacturing information, and factory information, of the Company or any existing customer, supplier, investor or other associated third party, or of any other person or entity that has entrusted information to the Company in confidence.

You understand that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.

You understand and agree that Confidential Information includes information developed by You in the course of Your employment by the Company as if the Company furnished the same Confidential Information to You in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to You; provided that, such information was not made available by, or is not known by the public as a result of, any direct or indirect fault of You or person(s) acting on Your behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2**<u>Company Creation and Use of Confidential Information</u>**. You understand and acknowledge that the Company has invested, and continues to invest, substantial time, money and specialized knowledge into developing its resources, creating a customer base, generating customer and potential customer lists, training its employees, and improving its offerings in the field of the retail sale of footwear and footwear related items. You understand and acknowledge that as a result of these efforts, the Company has created, and continues to use and create Confidential Information. This Confidential Information provides the Company with a competitive advantage over others in the marketplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 **<u>Disclosure and Use Restrictions</u>**. You agree and covenant: (a) to treat all Confidential Information as strictly confidential; (b) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or person whatsoever (including other employees of the Company) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside of the direct employ of the Company except as required in the performance of Your authorized employment duties to the Company or with the prior consent of the Chief Executive Officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and (c) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents,

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records, files, media or other resources from the premises or control of the Company, except (x) as required in the performance of Your authorized employment duties to the Company (and then, such disclosure shall be made only within the limits and in the ordinary course of such duties), (y) with the prior consent of the Chief Executive Officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such consent), or (z) in connection with Your reporting possible violations of law or regulations to any governmental agency or making other disclosures protected under any applicable whistleblower laws. Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid subpoena or order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. You shall, unless prohibited by applicable law, promptly provide written notice of any such subpoena or order to the Chief Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 **<u>Survival of Non-Disclosure Obligations</u>.** You understand and acknowledge that Your obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon You first having access to such Confidential Information (whether before or after You begin employment by the Company) and shall continue during and after Your employment by the Company until such time as such Confidential Information has become public knowledge other than as a result of Your breach of this Agreement or breach by those acting in concert with You or on Your behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 **<u>Defend Trade Secrets Act Notice</u>.** Notwithstanding anything to the contrary in this Section 5, any other provision of this Agreement or any policy of the Company, You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney if such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law or for pursuing an anti-retaliation lawsuit; or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and You do not disclose the trade secret except pursuant to a court order. In the event a disclosure is made, and You file a lawsuit against the Company alleging that the Company retaliated against You because of Your disclosure, You may disclose the relevant trade secret or Confidential Information to Your attorney and may use the same in the court proceeding only if (x) You ensure that any court filing that includes the trade secret or Confidential Information at issue is made under seal; and (y) You do not otherwise disclose the trade secret or Confidential Information except as required by court order

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 **<u>Other Permitted Disclosures</u>.** Notwithstanding anything to the contrary contained in this Agreement, nothing in this Agreement prohibits or restricts: (i) You from disclosing or discussing conduct You reasonably believe to be illegal harassment, illegal discrimination, illegal retaliation, wage and hour violations, or sexual assault, that is recognized as illegal under state, federal, or common law, or that is recognized as against the clear mandate of public policy, occurring in the workplace, at work-related events coordinated by or through the Company (or any of its affiliates), between employees, or between Company (or any of its affiliates) and any employee, whether on or off the work premises; (ii) You (or Your attorney) from filing a charge or complaint with the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other securities regulatory agency or authority, the Occupational Safety and Health Administration (OSHA), any other self-regulatory organization, or any other federal or state regulatory authority or law enforcement agency (collectively, "**Government Agencies**") if (A) You use commercially reasonable efforts to ensure that any filing that includes the trade secret or Confidential Information at issue is made under seal or other confidential manner and (B) You do not otherwise disclose the trade secret or Confidential Information except as required by order of the Government Agency; (iii) Your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency without notice to Company; or (iv) Your right to receive an award for information provided to any Government Agencies.

6.**<u>Restrictive Covenants</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1**<u>Acknowledgement</u>**. You acknowledge that Your position with the Company is special, unique and intellectual in character and Your position in the Company places You in a position of confidence and trust with employees, vendors and customers of the Company. You further acknowledge and agree that You have received adequate consideration for these restraints in the form of Your Base Salary and other valuable consideration contained herein. The restrictions and obligations contained in this Section 6 shall survive the Term of this Agreement. Notwithstanding the above, if the Company elects not to renew this Agreement and subsequently terminates Your employment without offering to pay You severance payments equivalent to 100% of Your Base Salary in effect at the time of termination, which offer of such severance compensation shall be subject to the terms and conditions of, and Your compliance with, Section 4.10, Section 5, Section 6 and Section 9 of this Agreement, You will not be subject to the restrictions and obligations of Section 6.2 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2**<u>Non-compete</u>**. You agree that during Your employment with the Company and for a period of one (1) year immediately after the termination of Your employment with the Company, You shall not:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1within the Restricted Geographic Area engage in (including, without limitation, being employed by, working for, or rendering services to) any Competing Business in any Prohibited Capacity; provided, however, if the Competing Business has multiple divisions, lines or segments, some of which are not competitive with the business of the Company, nothing herein shall prohibit You from being employed by, working for or assisting only that division, line or segment of such Competing Business that is not competitive with the business of the Company provided that Your work for such non-competitive division, line or segment of the Competing Business does not involve any products that are competitive with the products offered by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2(a) solicit, recruit, hire, employ, engage the services of, or attempt to hire, employ, or engage the services of, any Restricted Employee; (b) assist any Competing Business in the recruitment, hiring or engagement of any Restricted Employee; (c) urge, induce or seek to induce any Restricted Employee to terminate his/her employment with the Company; or (d) advise, suggest to or recommend to any Competing Business that it employ, engage the services of, or seek to employ, or engage the services of, any Restricted Employee; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3solicit, urge, induce or seek to induce any of the Company's independent contractors, subcontractors, vendors, suppliers, customers or consultants to terminate their relationship with, or representation of, the Company or to cancel, withdraw, reduce, limit or in any manner modify any such person's or entity's business with, or representation of, the Company for whatever purpose or reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.4The restrictive time periods set forth in this Section shall not expire during any period in which You are in violation of any of the restrictive covenants set forth in this Section, and all restrictions shall automatically be extended by the period You were in violation of any such restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.5The restrictive covenants contained in this Section prohibit You from engaging in certain activities directly or indirectly, whether on Your own behalf or on behalf of any other person or entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.6The covenants and restrictions in this Section are separate and divisible, and to the extent any covenant, provision or portion of this Section is determined to be unenforceable or invalid for any reason, such unenforceability or invalidity shall not affect the enforceability or validity of the remainder of the Agreement. Should any particular covenant, restriction, provision or portion of this Section be held unreasonable or unenforceable for any reason, including, without limitation, the time period, geographical area, and/or scope of activity covered by any restrictive covenant, provision or clause, such covenant, provision or clause shall automatically be deemed reformed such that the contested covenant, provision or portion will have the closest effect permitted by applicable law to the original

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form and shall be given effect and enforced as so reformed to the extent reasonable and enforceable under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3**<u>Non-Disparagement</u>:** You agree that during Your employment with the Company and for a period of five (5) years immediately after the termination of Your employment with the Company, You shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3.1make or publish any statement or comment that disparages or in any way injures the reputation and/or goodwill of the Company or any of its directors, officers or employees; provided, however, that nothing in this Section is intended to prohibit You from (a) making any disclosures as may be required or compelled by law or legal process or (b) making any disclosures or providing any information to a governmental agency or entity, including without limitation in connection with a complaint by You against the Company or the investigation of any complaint against the Company; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3.2take any action intended to harm the Company or its reputation, which the Company reasonably concludes could lead to unwanted or unfavorable publicity to the Company; provided, however, nothing in this Section is intended to prohibit You from (a) making any disclosures as may be required or compelled by law or legal process or (b) making any disclosures or providing any information to a governmental agency or entity, including without limitation in connection with a complaint by You against the Company or the investigation of any complaint against the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4**<u>Definitions</u>**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.1"**Competing Business**" means any of the following entities (which You acknowledge are direct competitors of the Company) and each of their respective subsidiaries and successors: (a) Payless; (b) Caleres, Inc.; (c) Designer Brands Inc.; (d) Rack Room; (e) Kohls Corporation; (f) Shoe Department; (g) Shoe City; (h) Shoe Pavilion, Inc.; (i) JD Sports Fashion plc; (j) Finish Line, Inc.; (k) Dick's Sporting Goods, Inc.; (l) Academy Sports + Outdoors; (m) Belk; (n) Off Broadway Shoe Warehouse; (o) Hibbett Sports; (p) Foot Locker Retail, Inc.; (q) Nike, Inc.; (r) Adidas AG; (s) Puma SE; (t) Crocs, Inc.; (u) Skechers USA, Inc.; (v) New Balance Athletics, Inc.; (w) Under Armour, Inc.; (x) Macy's, Inc.; and/or (y) Dillard's, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.2"**Prohibited Capacity**" means: (a) the same or similar capacity or function to that in which You worked for the Company at any time during the thirty-six (36) months immediately preceding the termination of Your employment with the Company; (b) any executive or officer capacity or function; (c) any managerial capacity or function; (d) any business consulting capacity or function; (e) any merchandizer or buyer capacity or function; (f) any ownership capacity, except You may own an investment of less than 5% of any class of equity or debt

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security of a publicly-held company; (g) any capacity or function in which You likely would inevitably use or disclose the Company's trade secrets or Confidential Information; or (h) any other capacity or function in which Your knowledge of the Confidential Information would facilitate or assist Your work for the Competing Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.3"**Restricted Employee**" means any individual employed with the Company during Your employment with the Company provided the following two conditions are satisfied with respect to such individual: (i) as of the time of the activity in question, such individual is then, or within the immediately preceding six (6) month period was, employed by the Company; and (ii) such individual received, helped create or had access to any of the Company's trade secrets and/or Confidential Information during his or her employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.4"**Restricted Geographic Area**" means: (a) the United States of America, including, but not limited to, each State in which the Company operates a retail store; (b) Puerto Rico; and (c) any other state, country, province or territory in which the Company operates a retail store as of the date of termination of Your employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5**<u>Acknowledgment of Restrictions</u>**. You acknowledge and agree that You understand the restrictions in this Section, and that they are reasonable and enforceable, in view of, among other things, Your position within the Company, the highly competitive nature of the Company's business, and the confidential nature of the information You have been provided. You further agree that the Company would not have adequate protection if You were permitted to work for its competitors in violation of the terms of this Agreement since the Company would be unable to verify whether its Confidential Information was being disclosed and/or misused, and whether You were involved in diverting the Company's customers and/or its customer goodwill.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6**<u>Required Disclosures Concerning New Employment</u>**. You agree that, during the one (1) year period immediately following the termination of Your employment with the Company for any reason, You (a) will within ten (10) days of acceptance of new employment, notify the Company in writing of Your employment, engagement or other affiliation with any other business or entity; <u>and</u> (b) will provide a copy of Sections 5 and 6 of this Agreement to any prospective employer before accepting employment or other work engagement with any such employer.

7.**<u>Proprietary Rights</u>**. All work performed by You and all inventions, discoveries, developments, work product, processes, improvements, creations, deliverables and all written, graphic or recorded material and works of authorship fixed in any tangible medium of expression made, created or prepared by You, alone or jointly with others, during Your employment with the Company and relating to the Company's business (collectively, the "**Works**") shall be the Company's exclusive property, shall be deemed a work made for hire, and all rights, title and

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interest in the Works shall vest in the Company. To the extent that the title or rights to any such Works may not, by operation of law, vest in the Company, You hereby irrevocably assign and transfer to the Company all rights, title and interest to such Works. All Works shall belong exclusively to the Company, and the Company shall have the right to obtain and hold in its own name, any patents, copyrights, registrations or such other intellectual property protections as may be appropriate to the subject matter. You will sign documents of assignment, declarations and other documents and take all other actions reasonably required by the Company, at the Company's expense, to perfect and enforce any of its proprietary rights and to vest all right, title and interest to the Works in the Company. This Section does not apply to an invention for which no equipment, supplies, facility, or Confidential Information of the Company was used and which was developed entirely on Your own time, unless (a) the invention relates (1) directly to the business of the Company, or (2) to the Company's actual or anticipated research or development, or (b) the invention results from any work performed by You for the Company.

8.**<u>Remedies</u>**. In the event of a breach or threatened breach by You of any of the above provisions, the Company shall be entitled to an injunction restraining You from such breach, in addition to all other remedies which the Company shall be entitled to in law or equity. The Company also shall be entitled to recover from You all litigation costs and attorneys' fees incurred by the Company in any action or proceeding relating to this Agreement in which the Company prevails, including, but not limited to, any action or proceeding in which the Company seeks enforcement of this Agreement or seeks relief from Your violation of this Agreement. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available for such breach, threatened breach, or any breach of this Agreement.

9.**<u>Post-Termination Obligations</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1**<u>Survival</u>**. You acknowledge and agree that Your post-termination obligations under this Agreement, including without limitation Your confidentiality, non-competition and return-of-property obligations set forth in Sections 5, 6 and 12.2 of this Agreement, shall survive the termination of Your employment with the Company, regardless of whether such termination is voluntary or involuntary, or is with or without Cause. You further acknowledge and agree that: (a) Your confidentiality, non-competition and return-of-property obligations set forth in Sections 5, 6 and 12.2 of this Agreement shall be construed as independent covenants and that no breach of any contractual or legal duty by the Company shall be held sufficient to excuse or terminate Your obligations under Sections 5, 6 and 12.2 of this Agreement or preclude the Company from obtaining injunctive relief for Your violation or threatened violation of such covenants; and (b) the existence of any claim or cause of action by You against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the Company's enforcement of Your confidentiality, non-competition, non-disparagement and return-of-property obligations set forth in Sections 5, 6 and 12.2 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2**<u>Compliance With Post-Employment Restrictions</u>**. In the event that You breach any of the covenants or provisions set forth in Sections 5, 6 and 12.2 of this

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Agreement (a) You will have forfeited Your right to receive, and the Company shall have the right immediately and permanently to discontinue payment and provision of, any of the severance compensation and benefits payable under this Agreement and (b) You shall be obligated to pay to the Company an amount equal to the amount of the severance compensation received by You pursuant to this Agreement, minus Five Hundred Dollars ($500.00), with such amount being due and payable immediately upon the Company making written demand on You for such payment You and the Company acknowledge and agree that such forfeiture and claw back is in addition to, and not in lieu of, any and all other legal and/or equitable remedies that may be available to the Company in connection with Your breach of any of the covenants or provisions of this Agreement.

10.**<u>Notices</u>**. All notices related to this Agreement shall be in writing and shall be deemed to have been delivered on the date personally delivered or the date mailed, postage prepaid, by certified mail, return receipt requested, or telegraphed and confirmed, or faxed and confirmed, to the following respective addresses:

To You: Erik Gast

[REDACTED]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[REDACTED]

To Company: Chief Executive Officer

Shoe Carnival, Inc.

7500 East Columbia Street

Evansville, IN 47715

Either party may designate a different address by providing written notice to the other party.

11.**<u>Assignment</u>**. The Company shall have the right to assign this Agreement. This Agreement shall inure to the benefit of, may be enforced by, and shall be binding on, any and all successors and assigns of the Company, including, without limitation, by asset assignment, stock sale, merger, consolidation or other corporate reorganization, and shall be binding on You, Your executors, administrators, personal representatives and other successors in interest. This Agreement is personal to You, and therefore You shall not have the right to assign this Agreement nor any of Your rights, powers, duties or obligations hereunder.

12.**<u>Security</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1**<u>Security and Access</u>**. You agree and covenant (a) to comply with all Company security policies and procedures in force from time to time including but not limited to those related information technology resources and facility access resources such as the employee identification card; (b) not to access or use any information technology resources and facility access resources except as authorized by the Company; and (c) not to access or use information technology resources and facility access resources in any manner after the termination of Your employment, whether termination is voluntary or

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involuntary. You agree to notify the Company promptly in the event that You learn of any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction or reverse engineering of, or tampering with information technology resources and facility access resources or other Company property or materials.

13.**<u>Code Section 409A Standards</u>.** It is the intent of the parties that payments and benefits under this Agreement subject to Code Section 409A ("**409A**") comply with 409A, and therefore, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance with 409A. Notwithstanding anything in this Agreement to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under 409A, You shall not be considered to have terminated employment with the Company for purposes of this Agreement until You would be considered to have incurred a "separation from service" from the Company within the meaning of 409A. Any payments described in this Agreement that are due within the "short-term deferral period" (as defined in 409A) shall not be treated as deferred compensation unless applicable law requires otherwise. Each amount to be paid or benefit to be provided to You pursuant to this Agreement that constitutes deferred compensation subject to 409A shall be construed as a separate identified payment for purposes of 409A.

14.**<u>Parachute Payment Restrictions</u>.** If any payment or benefit to be paid or provided to You under this Agreement, taken together with any payments or benefits otherwise paid or provided to You by the Company or any corporation that is a member of an "**affiliated group**" (as defined in Section 1504 of the Code without regard to Section 1504(b) of the Code) of which the Company is a member (the "**other arrangements**"), would collectively constitute a "**parachute payment**" (as defined in Section 280G(b)(2) of the Code), and if the net after-tax amount of such parachute payment to You is less than what the net after-tax amount to You would be if the aggregate payments and benefits otherwise constituting the parachute payment were limited to three times Your "**base amount**" (as defined in Section 280G(b)(3) of the Code) less $1.00, then the aggregate payments and benefits otherwise constituting the parachute payment shall be reduced to an amount that shall equal three times Your base amount, less $1.00. Should such a reduction in payments and benefits be required, You shall be entitled, subject to the following sentence, to designate those payments and benefits under this Agreement or the other

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ERIK GAST

arrangements that will be reduced or eliminated so as to achieve the specified reduction in aggregate payments and benefits to You and avoid characterization of such aggregate payments and benefits as a parachute payment. The Company will provide You with all information You reasonably request to permit You to make such designation. To the extent that Your ability to make such a designation would cause any of the payments and benefits to become subject to any additional tax under 409A, or if You fail to make such a designation within ten (10) business days of receiving the requested information from the Company, then the Company shall achieve the necessary reduction in such payments and benefits by first reducing or eliminating the portion of the payments and benefits that are payable in cash and then by reducing or eliminating the non-cash portion of the payments and benefits, in each case in reverse order beginning with payments and benefits which are to be paid or provided the furthest in time from the date of the Company's determination. For purposes of this Section, a net after-tax amount shall be determined by taking into account all applicable income, excise and employment taxes, whether imposed at the federal, state or local level, including the excise tax imposed under Section 4999 of the Code.

15.**<u>Entire Agreement</u>**. This Agreement contains all of the understandings and representations between the parties pertaining to the subject matter hereof, and supersedes all prior and contemporaneous negotiations, discussions, commitments and understandings between the parties relating hereto, whether oral or written. This Agreement supersedes and replaces the 2012 Employment Agreement.

16.**<u>Modification and Waiver</u>**. This Agreement may be amended or modified only in a writing signed by the parties. No waiver by either party of any breach by the other party shall be deemed a waiver of any other provision or condition, nor shall the failure of or delay by either party in exercising any right, power or privilege hereunder operate as a waiver or preclude any exercise thereof.

17.**<u>Governing Law; Forum Selection; Waiver of Jury Trial</u>**. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Indiana, without giving effect to any choice-of-law or conflict-of-law principle that would cause the application of the substantive law of any jurisdiction other than Indiana. Any legal action (whether based on contract, tort or other legal theory) arising out of or relating to this Agreement, Your employment with the Company or the termination of Your employment shall be commenced and maintained exclusively before any state or federal court having appropriate subject matter jurisdiction located in Evansville, Indiana, and You and the Company each consents and submits to the personal jurisdiction and venue of such courts located in Evansville, Indiana, and waives any right to challenge or otherwise object to personal jurisdiction or venue (including, without limitation, any objection based on inconvenient forum grounds) in any action commenced or maintained in such courts located in Evansville, Indiana. YOU AND THE COMPANY EACH HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR YOUR EMPLOYMENT WITH THE COMPANY.

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ERIK GAST

18.**<u>Severability</u>**. If any term or provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will remain effective and such term or provision shall be replaced with another term consistent with the purpose and intent of this Agreement.

19.**<u>Counterparts</u>.** This Agreement may be executed in separate counterparts, all of which taken together shall constitute one and the same agreement. Signatures transmitted by facsimile or other electronic means are acceptable the same as originals.

20.**<u>Representations of the Employee</u>**. You represent and warrant that Your acceptance of employment with the Company and the performance of Your duties hereunder will not violate any non-solicitation, non-competition, or other covenant or agreement of a prior employer and it will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement or understanding to which You are a party or are otherwise bound.

21.**<u>Acknowledgment and Full Understanding</u>**. YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE FULLY READ, UNDERSTAND AND VOLUNTARILY ENTER INTO THIS AGREEMENT. YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF YOUR CHOICE BEFORE SIGNING THIS AGREEMENT.

[Remainder of page intentionally left blank; signature page follows.]

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ERIK GAST

IN WITNESS WHEREOF, the parties have executed this Employment and Noncompetition Agreement as of the date set forth above.

**SHOE CARNIVAL, INC. EMPLOYEE**

By: <u>/s/ Mark J. Worden</u> <u>/s/ Erik Gast</u> <br> ERIK GAST

Its: President & CEO

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## Ex-99

EX-99.1

![img3742879_0.jpg](img3742879_0.jpg)

**SHOE CARNIVAL ANNOUNCES APPOINTMENT OF ERIK GAST AS CHIEF FINANCIAL OFFICER**

Gast to succeed W. Kerry Jackson, effective April 24, 2023

<br>Gast brings over 30 years of experience in finance, including with major retailers and customer facing brands

Evansville, Indiana, March 16, 2023 - Shoe Carnival, Inc. (Nasdaq: SCVL) (the "Company"), a leading retailer of footwear and accessories for the family, today announced that Erik Gast has been named the Company's Executive Vice President, Chief Financial Officer, effective April 24, 2023.

Bringing over 30 years of finance experience with both private and public companies, Mr. Gast will join the Company from Fleet Farm Group, LLC, where he has been the Executive Vice President & Chief Financial Officer since 2020. In that role, Mr. Gast was instrumental in driving improved financial performance and developing long term strategic plans. Prior to that position, Mr. Gast held numerous executive leadership roles at other major retailers and customer facing brands, including serving as the Senior Vice President, Finance & Chief Accounting Officer at Great Wolf Resorts and serving in Vice President, Finance, Controller and Treasurer positions at Pilot Travel Centers, Family Dollar and Ace Hardware. Mr. Gast holds a bachelor's degree in accounting from Bethany College and an MBA from The Ohio State University and is a Certified Public Accountant.

Mark J. Worden, the Company's President and Chief Executive Officer, commented, "We're excited to welcome Erik to our leadership team. His distinguished career in finance and accounting, along with his experience in strategic planning, mergers and acquisitions, and his deep knowledge of the retail industry, will play a key role in our strategic growth initiatives as we seek to become a multi-billion-dollar retailer."

Mr. Gast succeeds W. Kerry Jackson, who will be retiring after a 35-year career with the Company. Mr. Jackson will continue to serve as the Company's Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer until April 24, 2023, and will remain with the Company as its Chief Administrative Officer until his retirement on May 9, 2023 to assist with the transition.

Mr. Worden further commented, "On behalf of the Board of Directors and management, I'd also like to thank Kerry for his leadership and many contributions over the course of his career with Shoe Carnival. Kerry has helped Shoe Carnival accomplish numerous significant milestones, including our initial public offering in 1993, exceeding the $1 billion annual sales mark in fiscal 2016 and completing our first acquisition in the Company's history in 2021. We deeply appreciate his contributions and wish him the best in his well-earned retirement."

**About Shoe Carnival**

Shoe Carnival, Inc. is one of the nation's largest family footwear retailers, offering a broad assortment of dress, casual and athletic footwear for men, women and children with emphasis on national name brands. As of March 16, 2023, the Company operates 397 stores in 35 states and Puerto Rico under its Shoe Carnival and Shoe Station banners and offers shopping at www.shoecarnival.com and

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www.shoestation.com. Headquartered in Evansville, IN, Shoe Carnival, Inc. trades on The Nasdaq Stock Market LLC under the symbol SCVL. Press releases and the Company's annual report are available on the Company's website at www.shoecarnival.com.

**Contact Information**

W. Kerry Jackson

Shoe Carnival Investor Relations

(812) 867-4034

**Cautionary Statement Regarding Forward-Looking Information**

As used herein, "we", "our" and "us" refer to Shoe Carnival, Inc. This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties, including statements relating to expectations and projections regarding the Company's future performance. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: our ability to control costs and meet our labor needs in a rising wage, inflationary, and/or supply chain constrained environment; our ability to maintain current promotional intensity levels; the duration, spread and any remaining effects of the COVID-19 pandemic, mitigating efforts deployed, including the effects of government stimulus on consumer spending, and the pandemic's overall impact on our operations; our ability to achieve expected operating results, synergies, and other benefits from the Shoe Station acquisition within expected time frames, or at all; the potential impact of national and international security concerns, including those caused by war and terrorism, on the retail environment; general economic conditions in the areas of the continental United States and Puerto Rico where our stores are located; the effects and duration of economic downturns and unemployment rates; changes in the overall retail environment and more specifically in the apparel and footwear retail sectors; our ability to generate increased sales; our ability to successfully navigate the increasing use of online retailers for fashion purchases and the impact on traffic and transactions in our physical stores; the success of the open-air shopping centers where many of our stores are located and its impact on our ability to attract customers to our stores; our ability to attract customers to our e-commerce platform and to successfully grow our omnichannel sales; the effectiveness of our inventory management, including our ability to manage key merchandise vendor relationships and direct-to-consumer initiatives; changes in our relationships with other key suppliers; changes in the political and economic environments in, the status of trade relations with, and the impact of changes in trade policies and tariffs impacting, China and other countries which are the major manufacturers of footwear; the impact of competition and pricing; our ability to successfully manage and execute our marketing initiatives and maintain positive brand perception and recognition; our ability to successfully manage our current real estate portfolio and leasing obligations; changes in weather, including patterns impacted by climate change; changes in consumer buying trends and our ability to identify and respond to emerging fashion trends; the impact of disruptions in our distribution or information technology operations; the impact of natural disasters, other public health crises, political crises, civil unrest, and other catastrophic events on our operations and the operations of our suppliers, as well as on consumer confidence and purchasing in general; risks associated with the seasonality of the retail industry; the impact of unauthorized disclosure or misuse of personal and confidential information about our customers, vendors and employees, including as a result of a cybersecurity breach; our ability to successfully execute our business strategy, including the availability of desirable store locations at acceptable lease terms, our ability to identify, consummate or effectively integrate future acquisitions, our ability to implement and adapt to new technology and systems, our ability to open new stores in a timely and profitable manner, including our entry into major new markets, and the availability of sufficient funds to implement our business plans; higher than anticipated costs associated with the closing of underperforming stores; the inability of manufacturers to deliver products in a timely manner; an increase in the cost, or a disruption

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in the flow, of imported goods; the impact of regulatory changes in the United States, including minimum wage laws and regulations, and the countries where our manufacturers are located; the resolution of litigation or regulatory proceedings in which we are or may become involved; continued volatility and disruption in the capital and credit markets; future stock repurchases under our stock repurchase program and future dividend payments; and other factors described in the Company's SEC filings, including the Company's latest Annual Report on Form 10-K. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. Forward-looking statements can be identified by, among other things, the use of forward-looking terms such as "believes," "expects," "aims," "may," "will," "should," "seeks," "pro forma," "anticipates," "intends" or the negative of any of these terms, or comparable terminology, or by discussions of strategy or intentions. Given these uncertainties, we caution investors not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We disclaim any obligation to update any of these factors or to publicly announce any revisions to the forward-looking statements contained in this press release to reflect future events or developments.

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