Document:

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AND
NONCOMPETITION AGREEMENT 

          This AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is an amendment and
complete restatement of the Employment and Noncompetition Agreement made and
entered into as of the 31st day of December, 2006, by and between
SHOE CARNIVAL, INC., an Indiana corporation with its principal offices located at 7500 East
Columbia Street, Evansville, Indiana (the "Company"), and TIMOTHY BAKER, an
individual residing at 3243 Brookfield Drive, Newburgh, Indiana (the
"Employee"). This restatement is intended to conform the Agreement to the
applicable provisions of the final regulations interpreting Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”) and Revenue Ruling 2008-13.

RECITALS 

          WHEREAS, the Company is one of the leading retailers of family shoes
in the United States;

          WHEREAS, the Company desires to retain the services of the Employee
upon the terms and conditions set forth herein; and

          WHEREAS, the Employee desires 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 the Employee desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the Company and the Employee; 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 Company’s
business and its competitive position in the marketplace. 

AGREEMENT 

          1.
Term of Employment. The Company hereby agrees to employ Employee and Employee hereby agrees to be employed by the Company, in
accordance with the terms and conditions herein, for a period commencing on the
effective date of this Agreement up to and through January 31, 2009, subject,
however, to earlier termination as expressly provided in this Agreement (such
term, including any extension thereof, shall herein be referred to as the
"Term"). This Agreement shall be renewed automatically for successive terms of
one (1) year each unless either party provides written notice of non-renewal to
the other party not more than ninety (90) days and not less than thirty (30)
days before the end of the then current Term.

          2. Scope of
Duties. The Employee is currently serving
in the position of Executive Vice President, Operations. During the Term, the
Employee agrees to perform such other services for the Company as may be
directed by any superior officer of the Company, and to assume such other title,
duties, and/or responsibilities as the Board of Directors may determine. The
Employee 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. The Employee covenants that he will at all times honestly and fairly
conduct his duties, and will at all times maintain the highest of professional
standards in representing the interests of the Company. The Employee will comply
with Company policies, decisions, and instructions, which may be changed by the
Company over time. Employee shall perform all duties incident to his position,
as well as any other duties as may from time to time be assigned by the
President of the Company or his designee, and agrees to abide by all By-laws,
policies, practices, procedures or rules of the Company.

          3.
Compensation of
Employee. For all services rendered by
the Employee under this Agreement, the Company shall compensate the Employee as
follows: 

	     	
                3.1
      Base Salary. The base salary payable to the Employee under this
      Agreement shall be that amount of base salary payable as of the effective
      date of this Agreement ("Base Salary"), payable in accordance with the
      Company's usual payroll procedures, and subject to all taxes, withholdings
      and deductions as required by law and as the Employee may authorize. The
      Company will review the Base Salary on a periodic basis, approximately
      annually, during the Term to determine, in the discretion of the Company,
      whether the Base Salary should be adjusted, and if so, the amount of such
      adjustment and the time at which such adjustment should take effect.
      

                3.2
      Incentive Bonus. The Employee is entitled to participate in the
      Company’s 2006 Executive Incentive Compensation Plan in accordance with
      the terms contained therein, and in any successor plan adopted by the
      Company from time to time. However, Employee agrees 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.
  

          4.
Additional Compensation, Benefits, and
Obligations. During the Term, and so long
as the Employee serves in the position of Executive Vice President, Employee is
entitled to participate in any and all employee welfare and health benefit plans
(including, but not limited to, life insurance, health and medical, dental and
disability plans, and executive supplemental medical coverage) and other
employee benefit plans, including but not limited to, qualified pension plans,
stock purchase plans, and nonqualified deferred compensation plans, established
by the Company from time to time for the benefit of executives at his level and
position; provided, however, the Employee's participation in such plans is
subject to the eligibility requirements and other terms of such plans. The
Company may change, amend or discontinue any of its employee welfare and health
benefit plans at any time during the Term, and nothing in this Agreement shall
obligate the Company to institute, maintain or refrain from changing, amending
or discontinuing any such plans or programs.

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          5. Termination of
Employment. Employee’s employment may be
terminated as follows: 

	     	
                5.1
      For Cause. The Company may terminate Employee’s 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: (i) Employee's conviction for a felony or other crime involving
      moral turpitude; (ii) Employee's engaging in illegal conduct or gross
      misconduct which is injurious to the Company; (iii) Employee's engaging in
      any fraudulent or dishonest conduct in his dealings with, or on behalf of,
      the Company; (iv) Employee's failure or refusal to follow the lawful and
      reasonable instructions of the Company's Chief Executive Officer,
      President, or other executive officer to whom Employee reports, if such
      failure or refusal continues for a period of ten (10) days after the
      Company delivers to Employee a written notice stating the instructions
      which Employee has failed or refused to follow; (v) Employee's material
      breach of any of his obligations under this Agreement; (vi) Employee's
      material breach of the Company's policies; (vii) Employee's use of alcohol
      or drugs which interferes with the performance of his duties for the
      Company or which compromises the integrity or reputation of the Company;
      or (viii) Employee's engaging in any conduct tending to bring the Company
      into public disgrace or disrepute. 

                5.2
      Unilateral – The
      Company. The Company may terminate
      Employee’s employment at any time without Cause. 

                5.3
      Unilateral -
      Employee. Employee may terminate
      his employment at any time with the Company by providing the Company with
      thirty (30) days' advance written notice of such termination. At the sole
      option of the Company, such termination will be considered effective on
      the date such notice is given. 

                5.4
      For Good Reason -
      Employee. At any time during the
      Term, Employee may terminate this Agreement for Good Reason if all of the
      following conditions are satisfied: (a) Employee gives 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 Employee’s written notice of
      termination (the “Good Reason Cure Period”); and (c) Employee gives the
      Company a second written notice of termination within thirty (30) calendar
      days following the expiration of the Good Reason Cure Period. For purposes
      of this Agreement, for “Good Reason" means the occurrence, without
      Employee’s written consent, of a material reduction by the Company in
      Employee’s Base Salary . Termination of this Agreement without Cause or
      for Good Reason shall not be deemed to be a voluntary termination by
      Employee for purposes of any stock option or equity incentive plans of the
      Company.

                5.5
      Disability or
      Death. If Employee suffers a
      "Disability," the Company shall have the right to terminate Employee's
      employment by delivering to 

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      Employee 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"). The Employee's 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 Employee is 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 Employee, because of injury, illness, disease or bodily or
      mental infirmity, to perform the essential functions of his 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 the Employee should die during the Term, this Agreement shall terminate as of the date of Employee's
      death. 

                5.6 Compensation
      Upon Termination. In the event of
      termination of Employee’s 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 Employee, whether the result of
      promissory notes, loans, or other financial arrangements the Company may
      have entered into with or on the Employee’s 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 following terms shall be the exclusive severance
      arrangements: 

		     	
			
           5.6.1
      In the event of termination of Employee's employment by the Company for
      Cause pursuant to Section 5.1 or unilateral termination by the Employee
      pursuant to Section 5.3, the Company's obligation to pay and provide
      Employee compensation and benefits under this Agreement shall immediately
      terminate, except: (a) Employee shall be entitled to receive that portion
      of his then Base Salary which shall have been earned through the
      termination date; and (b) the Company shall pay or provide Employee such
      other payments and benefits, if any, which had accrued hereunder before
      the termination date. Other than the foregoing, the Company shall have no
      further obligations to Employee under this Agreement. 

           5.6.2 In the event the Company
      terminates Employee's employment without Cause pursuant to Section 5.2 or
      Employee terminates for Good Reason pursuant to Section 5.4 within thirty
      (30) calendar days of the expiration of the Good Reason Cure Period , at
      any time other than the two (2) year period immediately following a
      "Change in Control," the Company's obligation to pay and provide Employee
      compensation and benefits under this Agreement shall immediately
      terminate, except: (a) Employee shall be entitled to receive that portion
      of his then Base Salary which shall have been earned through the
      termination date; (b) the Company shall pay to Employee, 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) times (ii), where
      (i) is his annual 

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      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; (c) the Company shall
      pay or provide Employee such other payments and benefits, if any, which
      had accrued hereunder before the termination date; (d) the Company shall
      pay to Employee, within thirty (30) calendar days following the
      termination date, a lump sum payment in an amount equal to one hundred
      fifty percent (150%) of Employee's Base Salary for the fiscal year in
      which the termination occurs; (e) the Company shall pay Employee, within
      thirty (30) calendar days following the termination date, a lump sum
      payment in an amount equal to a total of (i) plus (ii), where (i) equals
      eighteen (18) times the monthly “COBRA Premium Rate” (which is the monthly
      amount charged, as of the termination date, for COBRA continuation
      coverage under the Company’s group medical and dental plans for the
      coverage options and coverage levels applicable to Employee and his
      covered dependents immediately prior to the termination date); and (ii) is
      an additional amount equal to the additional state and federal taxes that
      the Company determines Employee will incur as a result of the payment of
      the lump sum payment provided under this Section 5.6.2(e); (f) with
      respect to Company stock options granted after the date of this Agreement,
      Employee would immediately vest in any option that would have vested
      within twelve (12) months of Employee’s termination date had Employee not
      been terminated, and such option may be exercised pursuant to the
      provisions of the then current Company Stock Option and Incentive Plan
      (“Stock Option Plan”) as if the option were vested at the date of
      termination; and (g) all shares of restricted stock granted to the
      Employee after the date of this Agreement, which are not intended to
      qualify as “performance based compensation” under Section 162(m) of the
      Code shall contain provisions which shall provide for immediate vesting
      upon Termination without Cause or for Good Reason. Payment of the
      severance compensation described in subpart (d) and (e) of this Section
      5.6.2 is subject to the requirements of Sections 5.9 and 5.10. Other than
      the foregoing, the Company shall have no further obligations to Employee
      under this Agreement. 

           5.6.3
      In the event Employee's employment is terminated as a result of Employee's
      Death or Disability pursuant to Section 5.5, the Company's obligation to
      pay and provide the Employee compensation and benefits under this
      Agreement shall immediately terminate except: (a) Employee shall be
      entitled to receive that portion of his then Base Salary which shall have
      been earned through the termination date; and (b) the Company shall pay or
      provide Employee such other payments and benefits, if any, which had
      accrued hereunder before the termination date. Other than the foregoing,
      the Company shall have no further obligations to Employee under this
      Agreement. 

           5.6.4 In the event of a
      "Qualifying Termination" within two (2) years immediately following a
      "Change In Control," then, in lieu of all other benefits under this
      Agreement, the Company's obligation to pay and provide Employee
      compensation and benefits under this Agreement shall immediately
      terminate,

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      except: (a) Employee shall be
      entitled to receive that portion of his then Base Salary which shall have
      been earned through the termination date; (b) the Company shall pay or
      provide Employee such other payments and benefits, if any, which had
      accrued hereunder before the termination date; (c) the Company shall pay
      to Employee 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 his annual Base Salary for the fiscal year in which the
      termination occurs; (d) the Company shall pay Employee, in a lump sum not
      later than thirty (30) calendar days after the termination date, an amount
      equal to (i) plus (ii), where (i) equals eighteen (18) times the COBRA
      Premium Rate; and (ii) is an additional amount equal to the additional
      state and federal taxes that the Company determines Employee will incur as
      a result of the payment of the lump sum payment provided under this
      Section 5.6.4(d); (e) the Company shall provide Employee 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 Qualifying
      Termination occurs; and (f) Employee shall be allowed to exercise
      available stock options in accordance with the Stock Option Plan as if he
      were terminated without cause pursuant to the Stock Option Plan. Payment
      or provision of the severance compensation or benefits described in
      subparts (c), (d) and (e) of this Section 5.6.4 is subject to the
      requirements of Sections 5.9 and 5.10. Other than the foregoing, the
      Company shall have no further obligations to Employee under this
      Agreement. 

      For purposes of this Agreement, a
      "Qualifying Termination" shall mean either (i) a unilateral termination of
      Employee by the Company without Cause pursuant to Section 5.2 or (ii) a
      termination by Employee for Good Reason pursuant to Section 5.4 within
      thirty (30) calendar days of the expiration of the Good Reason Cure
      Period. 

      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 any one or more of the following conditions
      shall have been satisfied:

           (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
    

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      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 5.6.4 are
      satisfied, (e) any acquisition by any Person who, immediately before the
      commencement of the twelve (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

           (B)
      Individuals who, as of the date hereof, constitute the Board of Directors
      of the Company (the "Incumbent Board") cease for any reason to constitute
      at least a majority of the Board of Directors of the Company (the
      "Board"); provided, however, that any individual becoming a director
      subsequent to the date hereof 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 Exchange Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the Board; or

           (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,
  

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      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

           (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, 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 5.6.4 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 Code Section
      409A(a)(2)(A)(v) and its interpretive regulations.
  

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                5.7 Internal
      Revenue Code Limits.
      Should any payments by the Company to
      or for the benefit of Employee under this Agreement constitute an "excess
      parachute payment" within the meaning of Section 280G of the Internal
      Revenue Code of 1986, as amended (the "Code"), then the Company shall pay
      Employee an additional amount of money (the “Gross-Up Payment”) that will
      equal the sum of (a) all excise or other taxes imposed upon Employee by
      Section 4999 of the Code (excluding any penalties or interest) and (b) all
      additional state and federal taxes, interest and/or penalties attributable
      to the additional payments made to Employee pursuant to this Section 5.7.
      If an excise tax is imposed pursuant to Section 4999 of the Code, Employee
      agrees to immediately notify the Company within ten (10) days of the
      event, in writing, and Employee hereby gives the Company the right to
      challenge said imposition. Any Gross-Up Payment due under this Section 5.7
      shall be paid in a lump sum as soon as it can be calculated, but in no
      event later than 30 days after the date the Employee remits the related
      taxes. 

                5.8
      Payroll
      Withholdings. 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.

                5.9
      Compliance With Post-Employment
      Restrictions. If Employee breaches,
      or threatens to breach any of the covenants or provisions set forth in
      Sections 6 and 7 of this Agreement, then in such event 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. The Employee and Company acknowledge and agree that such
      remedy 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 the Employee's breach or threatened breach of any of the
      covenants or provisions of this Agreement. 

                5.10
      Release Agreement. As a condition of receiving the severance benefits
      described in Sections 5.6.2(c), 5.6.2(d), 5.6.4(c), 5.6.4(d), or 5.6.4(e),
      Employee will be required to sign a standard release agreement acceptable
      to the Company in which he releases and waives all claims which he may
      have against the Company or any affiliate, employee, shareholder, officer,
      director, agent or representative of the Company (except for his rights
      under this Agreement or any other vested rights Employee may have under
      any insurance, pension, employee stock ownership or stock option plans
      sponsored or made available by the Company). The Company will provide such
      release agreement to Employee at the termination of Employee's employment
      with the Company. As part of the release agreement, Employee will be
      required (a) to agree to cooperate with the Company with respect to any
      business matters about which he has knowledge, including any litigation or
      threatened litigation, (b) agree not to cooperate with any claimants
      against the Company unless required by law to do so, (c) agree not to make
      any negative or derogatory comments about the Company or its executives
      and (d) affirm his post-termination obligations under this Agreement,
      including without limitation the obligations set forth in Sections 6 and
      7. 

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                5.11 Delay of
      Separation Payments to Specified Employee. Notwithstanding any other provisions of this Agreement, if any
      amount payable to Employee under this Agreement on account of Employee’s
      separation from service with the Company constitutes deferred compensation
      within the meaning of Code Section 409A, and Employee is a specified
      employee, within the meaning of Code Section 409A(a)(2)(B)(i), on the date
      of his 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 Employee’s separation from service occurred.
  

		     	
	
                6.
      Non-competition. 

		 	
		
                6.1
      General. Employee acknowledges that his position with the
      Company is special, unique and intellectual in character and his position
      in the Company places him in a position of confidence and trust with
      employees and customers of the Company. Employee further acknowledges,
      recognizes, and represents receipt of sufficient consideration for these
      restraints in the form of the 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 terminates, or elects not to renew this Agreement,
      and subsequently terminates Employee’s employment without the payment of
      severance payments equivalent to 100% of Employee’s Base Salary in effect
      at the time of termination, which shall be payable in lump sum, the
      Employee will not be subject to the restrictions and obligations of this
      Section 6.

                6.2
      Non-competition. Employee agrees that during his employment with the
      Company and for a period of one (1) year
      immediately after the termination of
      Employee’s employment with the Company, whether such employment is
      pursuant to this Agreement or is without an Agreement, thereafter Employee
      shall not: 

		 	
			
           6.2.1
      Either alone or in concert with others, whether as director, officer,
      consultant, principal, employee, agent or otherwise, engage in or
      contribute Employee’s knowledge and abilities to any business or entity in
      competition with the Company (“Competing Business”);

           6.2.2 Be employed by, work
      for, consult with, or act in any other capacity for, any person or entity
      that is engaged in any Competing Business if in such employment, work or
      capacity Employee likely would, because of the nature of his position
      with, or work for, the competitor and his knowledge of the Company's
      Confidential Information, inevitably use and/or disclose any of the
      Company's Confidential Information in his work for or with such
      competitor;

           6.2.3 Solicit, recruit, hire,
      employ or attempt to hire or employ any person who is then or within the
      proceeding one (1) year period was, an employee of the Company, or
      otherwise urge, induce or seek to induce any person to terminate his/her
      employment with the Company;

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           6.2.4
      Solicit, 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;

           6.2.5 Take 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;

           6.2.6 The restrictive time
      periods set forth in this Section 6.2 shall not expire during any period
      in which Employee is in violation of any of the restrictive covenants set
      forth in this Section 6.2, and all restrictions shall automatically be
      extended by the period Employee was in violation of any such
      restrictions;

           6.2.7 The restrictive
      covenants contained in this Section 6.2 prohibit Employee from engaging in
      certain activities directly or indirectly, whether on his own behalf or on
      behalf of any other person or entity.

           6.2.8 The covenants and
      restrictions in this Section 6.2 are separate and divisible, and to the
      extent any covenant, provision or portion of Section 6.2 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 Section 6.2 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 form and shall be given effect and enforced as so
      reformed to the extent reasonable and enforceable under applicable
      law.

		 	 
		
                6.3 Definition of
      “Competing Business”: The term “Competing Business”
      shall mean: 

			 
			
           6.3.1
      The retail footwear business of Collective Brands, Inc.; Brown Shoe
      Company, Inc.; Designer Shoe Warehouse; Rack Room (dba); Kohls
      Corporation; Shoe Station (dba); Shoe City (dba); Shoe Pavilion, Inc.,
      Shoe Department (dba); Finish Line, Inc.; Foot Locker, Inc.; Dick’s
      Sporting Goods, Inc.; The Sports Authority, Inc.; Off Broadway Shoe
      Warehouse; and any other company which sells footwear at retail to
      consumers within 25 miles of any Company store at price points
      competitive, or likely to be competitive, with the
  

-11- 

	     	     	
      Company, where the footwear sales of
      such other company constitute at least fifteen percent (15%) of such
      company's annual revenues. 

           6.3.2 Ownership of an
      investment of less than 5% of any class of equity or debt security of a
      publicly-held Competing Business shall not constitute ownership or
      participation in violation of the above. 

		 	
		
                6.4
      Acknowledgment Regarding
      Restrictions. Employee acknowledges
      and agrees that he understands the restrictions in Section 6, and that
      they are reasonable and enforceable, in view of, among other things, the
      Employee’s position within the Company, the highly competitive nature of
      the Company's business, and the confidential nature of the information the
      Employee has been provided. Employee further agrees that the Company would
      not have adequate protection if Employee were permitted to work for its
      competitors in violation of the terms of this Agreement since the Company
      would be unable to verify whether its Confidential Information was being
      disclosed and/ or misused, and whether Employee was involved in diverting
      the Company’s customers and/or its customer goodwill. 

                6.5 Disclosures
      Concerning New Employment. Employee
      agrees that he (a) will immediately, within ten (10) days, notify the
      Company in writing of his employment, engagement or other affiliation with
      any other business or entity during the two (2) years immediately
      following the termination of Employee's employment with the Company and
      (b) will provide a copy of Section 6 and 7 of this Agreement to any
      prospective employer before accepting employment or other work engagement
      with any such employer. 

		 	
	
                7.
      Confidential or Proprietary
      Information

		 	
		
                7.1
      Confidentiality. As used in this Agreement, the term "Confidential
      Information" means any and all of the Company's trade secrets,
      confidential and proprietary information and all other information and
      data of the Company that is not generally known to third persons who could
      derive economic value from its use or disclosure, including, without
      limitation, the Company's profile of prospective or current vendors or
      customers, business methods and structure, details of the Company's
      contracts and business matters, employee compensation, personnel
      information, marketing strategies and plans, business plans, pricing
      information and strategies, costs information, and financial data, whether
      or not reduced to writing or other tangible medium of expression,
      including work product created by Employee in rendering services to the
      Company. During his employment with the Company and thereafter, Employee
      will not use or disclose to others any of the Confidential Information
      except as authorized in writing by the Company or in the performance of
      work assigned Employee by the Company. Employee also will abide by the
      Company's policies protecting the Confidential Information. Employee's
      confidentiality obligations shall continue as long as the Confidential
      Information remains confidential, and shall not apply to information which
      becomes generally known to the public through no fault or action of
      Employee. Employee agrees that the Company owns the Confidential
      

-12- 

	     	
      Information and Employee has no
      rights, title or interest in any of the Confidential Information. At the
      Company's request or upon termination of Employee's employment with the
      Company for any reason, Employee will immediately deliver to the Company
      all materials (including all copies and electronically stored data)
      containing any Confidential Information in Employee's possession, custody
      or control. 

                7.2 Trade
      Secrets-Developments. All
      improvements, developments, concepts, and ideas ("Developments") relating
      to the Company's business, or capable of beneficial use by the Company,
      including, but not limited to, marketing, confidential and trade secret
      information, techniques, discoveries, slogans, designs, artwork, and
      writings, which the Employee has made or will make during his employment
      with the Company are the sole and exclusive property of the Company
      without charge to the Company other than the Employee's compensation.
      

                7.3
      Acknowledgement. Employee agrees that the restrictions set forth in
      Sections 7.1 and 7.2 are reasonable and necessary to protect the trade
      secrets, confidential information, intellectual property rights and
      goodwill of the Company. The restrictions and obligations contained in
      this Section 7 shall survive the term of this Agreement.
  

          8.
Remedies. In the event of a breach or threatened breach by the Employee of any of
the above provisions, the Company shall be entitled to an injunction restraining
Employee from such breach, in addition to all other remedies which the Company
shall be entitled to pursue. The Company also shall be entitled to recover from
Employee 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 Employee's 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.
Survival of Post-Termination
Obligations. Employee acknowledges and
agrees that his post-termination obligations under this Agreement, including
without limitation Employee's non-competition and confidentiality obligations
set forth in Sections 6 and 7 of this Agreement, shall survive the termination
of Employee's employment with the Company, regardless whether such termination
is voluntary or involuntary, or is with or without Cause. 

          10.
Notices. All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be deemed to have been delivered on the
date personally delivered or the dated mailed, postage prepaid, by certified
mail, return receipt requested, or telegraphed and confirmed, or faxed and
confirmed, if addressed to the respective parties as follows; 

	          	To
      Employee:          	
      Timothy Baker
3243 Brookfield
      Drive
Newburgh, Indiana 47630 

-13- 

	          	
      To
      Company:          
	
      Chief Executive Officer
Shoe
      Carnival, Inc.
7500 East Columbia Street
Evansville, Indiana 47715
      

Either party hereto may designate a
different address by providing written notice of such new address to the other
party hereto. 

          11. Waiver. The failure or delay of
the Company at any time or times to require performance of, or to exercise any
of its powers, rights or remedies with respect to, any term or provision of this
Agreement or any other aspect of Employee’s conduct or employment shall not
affect the Company’s right to later enforce any such term or provision.

          12.
Assignment. 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 Employee, his executors,
administrators, personal representatives and other successors in interest.
Employee shall not have the right to assign this Agreement nor any of his
rights, powers, duties or obligations hereunder. 

          13.
Code Section 409A
Standards. This Agreement, and all other nonqualified deferred compensation plans in
which the Employee participates, are intended to comply with the standards for
nonqualified deferred compensation plans established by Code Section 409A and
its interpretive regulations and other regulatory guidance (the “Section 409A
Standards”), to the extent applicable, and this Agreement shall be construed
accordingly. In construing or interpreting any vague or ambiguous provisions of
this Agreement, the interpretation that will prevail is the interpretation that
will cause this Agreement to comply with the Section 409A Standards. Any
provision of this Agreement, or any deferred compensation provided under it,
that would fail to satisfy the Section 409A Standards shall not have any force
or effect until it is amended to comply with the applicable Section 409A
Standards, which amendment may be retroactive to the extent permissible under
the Section 409A Standards. 

          14.
Entire Agreement. This Agreement cancels and supersedes all prior
negotiations, discussions, commitments and understandings between the parties
relating hereto, whether oral or written. This Agreement embodies the entire
agreement and understanding between such parties with respect to the matters
covered hereby. Neither party shall be bound by any term or condition other than
as is expressly set forth herein. 

          15.
Amendment. This Agreement may be amended only by an instrument in writing executed
by the parties hereto. 

          16.
Governing Law: Forum
Selection. This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Indiana, without regard to the conflicts of law rules thereof. Any legal
action relating to this Agreement shall be

-14- 

commenced and maintained exclusively
before any appropriate state court of record in Vanderburgh County, Indiana, or,
if necessary because of a federal question mandating jurisdiction in the federal
courts is involved, the United States District Court for the Southern District
of Indiana, Evansville Division, and the parties hereby submit the jurisdiction
of such courts and waive any right to challenge or otherwise raise questions of
personal jurisdiction or venue in any action commenced or maintained in such
courts. 

          17. Severability. The parties intend
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under the applicable law. Should any provision of this Agreement be
unenforceable or invalid for any reason, such unenforceability or invalidity
shall not affect the enforceability or validity of the remainder of the
Agreement. 

          IN
WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Employment and Noncompetition Agreement on this 11th. day of December, 2008.

	SHOE CARNIVAL,
      INC.: "Company" 	          	TIMOTHY BAKER:
      "Employee" 
	 
	 
	By: 	  /s/ Mark L. Lemond 		  /s/ Timothy Baker 
	 				
	Its: 	  CEO and President 		Date:   	  December 11, 2008 
	 				
	Date:   	  December 11, 2008 			

-15-Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AND
NONCOMPETITION
AGREEMENT

          This AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is an amendment and
complete restatement of the Employment and Noncompetition Agreement made and
entered into as of the 31st day of December, 2006, by and between
SHOE CARNIVAL, INC., an Indiana corporation with its principal offices located at 7500 East
Columbia Street, Evansville, Indiana (the "Company"), and CLIFTON E. SIFFORD, an
individual residing at 3255 Brookfield Drive, Newburgh, Indiana (the
"Employee"). This restatement is intended to conform the Agreement to the
applicable provisions of the final regulations interpreting Section 409A of the
Internal Revenue Code of 1986, as amended ("Code") and Revenue Ruling
2008-13.

RECITALS

          WHEREAS, the Company is one of the leading retailers of family shoes
in the United States;

          WHEREAS, the Company desires to retain the services of the Employee
upon the terms and conditions set forth herein; and

          WHEREAS, the Employee desires 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 the Employee desire to enter into this
Agreement to set forth the terms and conditions of the employment relationship
between the Company and the Employee; 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 Company’s
business and its competitive position in the marketplace.

AGREEMENT

          1.
Term of
Employment. The
Company hereby agrees to employ Employee and
Employee hereby agrees to be employed by the Company, in accordance with the
terms and conditions herein, for a period commencing on the effective date of
this Agreement up to and through January 31, 2009, subject, however, to earlier
termination as expressly provided in this Agreement (such term, including any
extension thereof, shall herein be referred to as the "Term"). This Agreement
shall be renewed automatically for successive terms of one (1) year each unless
either party provides written notice of non-renewal to the other party not more
than ninety (90) days and not less than thirty (30) days before the end of the
then current Term.

          2. Scope of
Duties. The
Employee is currently serving in the position of Executive Vice President,
General Merchandise Manager. During the Term, the Employee agrees to perform
such other services for the Company as may be directed by any superior officer
of the Company, and to assume such other title, duties and/or responsibilities
as the Board of Directors may determine. The Employee 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. The Employee covenants that
he will at all times honestly and fairly conduct his duties, and will at all
times maintain the highest of professional standards in representing the
interests of the Company. The Employee will comply with Company policies,
decisions, and instructions, which may be changed by the Company over time.
Employee shall perform all duties incident to his position, as well as any other
duties as may from time to time be assigned by the President of the Company or
his designee, and agrees to abide by all By-laws, policies, practices,
procedures or rules of the Company.

          3.
Compensation of
Employee. For all
services rendered by the Employee under this Agreement, the Company shall
compensate the Employee as follows:

          3.1
Base Salary. The base salary payable to the Employee
under this Agreement shall be that amount of base salary payable as of the
effective date of this Agreement ("Base Salary"), payable in accordance with the
Company's usual payroll procedures, and subject to all taxes, withholdings and
deductions as required by law and as the Employee may authorize. The Company
will review the Base Salary on a periodic basis, approximately annually, during
the Term to determine, in the discretion of the Company, whether the Base Salary
should be adjusted, and if so, the amount of such adjustment and the time at
which such adjustment should take effect.

          3.2
Incentive
Bonus. The Employee
is entitled to participate in the Company’s 2006 Executive Incentive
Compensation Plan in accordance with the terms contained therein, and in any
successor plan adopted by the Company from time to time. However, Employee
agrees 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.

          4.
Additional Compensation, Benefits, and
Obligations. During
the Term, and so long as the Employee serves in the position of Executive Vice
President, Employee is entitled to participate in any and all employee welfare
and health benefit plans (including, but not limited to, life insurance, health
and medical, dental and disability plans, and executive supplemental medical
coverage) and other employee benefit plans, including but not limited to,
qualified pension plans, stock purchase plans, and nonqualified deferred
compensation plans, established by the Company from time to time for the benefit
of executives at his level and position; provided, however, the Employee's
participation in such plans is subject to the eligibility requirements and other
terms of such plans. The Company may change, amend or discontinue any of its
employee welfare and health benefit plans at any time during the Term, and
nothing in this Agreement shall obligate the Company to institute, maintain or
refrain from changing, amending or discontinuing any such plans or
programs.

-2-

          5. Termination of
Employment.
Employee’s employment may be terminated as follows:

          5.1
For Cause. The Company may terminate Employee’s
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: (i) Employee's conviction for a felony or other crime
involving moral turpitude; (ii) Employee's engaging in illegal conduct or gross
misconduct which is injurious to the Company; (iii) Employee's engaging in any
fraudulent or dishonest conduct in his dealings with, or on behalf of, the
Company; (iv) Employee's failure or refusal to follow the lawful and reasonable
instructions of the Company's Chief Executive Officer, President, or other
executive officer to whom Employee reports, if such failure or refusal continues
for a period of ten (10) days after the Company delivers to Employee a written
notice stating the instructions which Employee has failed or refused to follow;
(v) Employee's material breach of any of his obligations under this Agreement;
(vi) Employee's material breach of the Company's policies; (vii) Employee's use
of alcohol or drugs which interferes with the performance of his duties for the
Company or which compromises the integrity or reputation of the Company; or
(viii) Employee's engaging in any conduct tending to bring the Company into
public disgrace or disrepute.

          5.2
Unilateral - The
Company. The
Company may terminate Employee’s employment at any time without
Cause.

          5.3
Unilateral -
Employee. Employee
may terminate his employment at any time with the Company by providing the
Company with thirty (30) days' advance written notice of such termination. At
the sole option of the Company, such termination will be considered effective on
the date such notice is given.

          5.4
For Good Reason -
Employee. At any
time during the Term, Employee may terminate this Agreement for Good Reason if
all of the following conditions are satisfied: (a) Employee gives 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 Employee’s written notice of termination (the “Good
Reason Cure Period”); and (c) Employee gives the Company a second written notice
of termination within thirty (30) calendar days following the expiration of the
Good Reason Cure Period. For purposes of this Agreement, for “Good Reason" means
the occurrence, without Employee’s written consent, of a material reduction by
the Company in Employee’s Base Salary . Termination of this Agreement without
Cause or for Good Reason shall not be deemed to be a voluntary termination by
Employee for purposes of any stock option or equity incentive plans of the
Company.

          5.5
Disability or
Death. If Employee
suffers a "Disability," the Company shall have the right to terminate Employee's
employment by delivering to

-3-

Employee 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"). The Employee's 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 Employee is 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 Employee,
because of injury, illness, disease or bodily or mental infirmity, to perform
the essential functions of his 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 the Employee should die during the Term, this
Agreement shall terminate as of the date of
Employee's death.

          5.6 Compensation
Upon Termination.
In the event of termination of Employee’s 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 Employee, whether the
result of promissory notes, loans, or other financial arrangements the Company
may have entered into with or on the Employee’s 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 following terms shall be the exclusive severance arrangements:

     5.6.1 In the event of termination of
Employee's employment by the Company for Cause pursuant to Section 5.1 or
unilateral termination by the Employee pursuant to Section 5.3, the Company's
obligation to pay and provide Employee compensation and benefits under this
Agreement shall immediately terminate, except: (a) Employee shall be entitled to
receive that portion of his then Base Salary which shall have been earned
through the termination date; and (b) the Company shall pay or provide Employee
such other payments and benefits, if any, which had accrued hereunder before the
termination date. Other than the foregoing, the Company shall have no further
obligations to Employee under this Agreement.

     5.6.2 In the event the Company
terminates Employee's employment without Cause pursuant to Section 5.2 or
Employee terminates for Good Reason pursuant to Section 5.4 within thirty (30)
calendar days of the expiration of the Good Reason Cure Period, at any time
other than the two (2) year period immediately following a "Change in Control,"
the Company's obligation to pay and provide Employee compensation and benefits
under this Agreement shall immediately terminate, except: (a) Employee shall be
entitled to receive that portion of his then Base Salary which shall have been
earned through the termination date; (b) the Company shall pay to Employee,
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) times (ii), where
(i) is his annual

-4-

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; (c) the Company shall
pay or provide Employee such other payments and benefits, if any, which had
accrued hereunder before the termination date; (d) the Company shall pay to
Employee, within thirty (30) calendar days following the termination date, a
lump sum payment in an amount equal to one hundred fifty percent (150%) of
Employee's Base Salary for the fiscal year in which the termination occurs; (e)
the Company shall pay Employee, within thirty (30) calendar days following the
termination date, a lump sum payment in an amount equal to the total of (i) plus
(ii), where (i) equals eighteen (18) times the monthly "COBRA Premium Rate"
(which is the monthly amount charged, as of the termination date, for COBRA
continuation coverage under the Company's group medical and dental plans for the
coverage options and coverage levels applicable to Employee and his covered
dependents immediately prior to the termination date); and (ii) is an additional
amount equal to the additional state and federal taxes that the Company
determines Employee will incur as a result of the payment of the lump sum
payment provided under this Section 5.6.2(e); (f) with respect to Company stock
options granted after the date of this Agreement, Employee would immediately
vest in any option that would have vested within twelve (12) months of
Employee’s termination date had Employee not been terminated, and such option
may be exercised pursuant to the provisions of the then current Company Stock
Option and Incentive Plan (“Stock Option Plan”) as if the option were vested at
the date of termination; and (g) all shares of restricted stock granted to the
Employee after the date of this Agreement, which are not intended to qualify as
“performance based compensation” under Section 162(m) of the Code shall contain
provisions which shall provide for immediate vesting upon Termination without
Cause or for Good Reason. Payment of the severance compensation described in
subpart (d) and (e) of this Section 5.6.2 is subject to the requirements of
Sections 5.9 and 5.10. Other than the foregoing, the Company shall have no
further obligations to Employee under this Agreement.

     5.6.3 In the event Employee's employment is terminated as a
result of Employee's Death or Disability pursuant to Section 5.5, the Company's
obligation to pay and provide the Employee compensation and benefits under this
Agreement shall immediately terminate except: (a) Employee shall be entitled to
receive that portion of his then Base Salary which shall have been earned
through the termination date; and (b) the Company shall pay or provide Employee
such other payments and benefits, if any, which had accrued hereunder before the
termination date. Other than the foregoing, the Company shall have no further
obligations to Employee under this Agreement.

     5.6.4 In the event of a "Qualifying Termination" within two
(2) years immediately following a "Change In Control," then, in lieu of all
other benefits under this Agreement, the Company's obligation to pay and provide
Employee compensation and benefits under this Agreement shall immediately
terminate,

-5-

except: (a) Employee shall be entitled to
receive that portion of his then Base Salary which shall have been earned
through the termination date; (b) the Company shall pay or provide Employee such
other payments and benefits, if any, which had accrued hereunder before the
termination date; (c) the Company shall pay to Employee 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 his annual Base Salary for the
fiscal year in which the termination occurs; (d) the Company shall pay Employee,
in a lump sum not later than thirty (30) calendar days after the termination
date, an amount equal to (i) plus (ii), where (i) equals eighteen (18) times the
COBRA Premium Rate; and (ii) is an additional amount equal to the additional
state and federal taxes that the Company determines Employee will incur as a
result of the payment of the lump sum payment provided under this Section
5.6.4(d); (e) the Company shall provide Employee 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 Qualifying Termination occurs; and (f) Employee shall
be allowed to exercise available stock options in accordance with the Stock
Option Plan as if he were terminated without cause pursuant to the Stock Option
Plan. Payment or provision of the severance compensation or benefits described
in subparts (c), (d) and (e) of this Section 5.6.4 is subject to the
requirements of Sections 5.9 and 5.10. Other than the foregoing, the Company
shall have no further obligations to Employee under this Agreement. 

For purposes of this Agreement, a
"Qualifying Termination" shall mean either (i) a unilateral termination of
Employee by the Company without Cause pursuant to Section 5.2 or (ii) a
termination by Employee for Good Reason pursuant to Section 5.4 within thirty
(30) calendar days of the expiration of the Good Reason Cure Period. 

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 any one or more of the following conditions shall have been
satisfied:

     (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

-6-

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 5.6.4 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

     (B) Individuals who, as of the date
hereof, constitute the Board of Directors of the Company (the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board of Directors
of the Company (the "Board"); provided, however, that any individual becoming a
director subsequent to the date hereof 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
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or

     (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,

-7-

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

     (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, 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 5.6.4 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 Code Section 409A(a)(2)(A)(v) and its
interpretive regulations.

-8-

          5.7 Internal Revenue Code Limits.
Should any payments by the Company to or for
the benefit of Employee under this Agreement constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the Company shall pay Employee an additional
amount of money (the "Gross-Up Payment") that will equal the sum of (a) all
excise or other taxes imposed upon Employee by Section 4999 of the Code
(excluding any penalties or interest) and (b) all additional state and federal
taxes, interest and/or penalties attributable to the additional payments made to
Employee pursuant to this Section 5.7. If an excise tax is imposed pursuant to
Section 4999 of the Code, Employee agrees to immediately notify the Company
within ten (10) days of the event, in writing, and Employee hereby gives the
Company the right to challenge said imposition. Any Gross-Up Payment due under
this Section 5.7 shall be paid in a lump sum as soon as it can be calculated,
but in no event later than 30 days after the date the Employee remits the
related taxes.

          5.8 Payroll Withholdings.
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.

          5.9 Compliance With Post-Employment
Restrictions. If
Employee breaches, or threatens to breach any of the covenants or provisions set
forth in Sections 6 and 7 of this Agreement, then in such event 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. The Employee and Company acknowledge and agree that such remedy 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 the Employee's
breach or threatened breach of any of the covenants or provisions of this
Agreement.

          5.10 Release Agreement. As a condition of receiving the severance benefits
described in Sections 5.6.2(c), 5.6.2(d), 5.6.4(c), 5.6.4(d), or 5.6.4(e),
Employee will be required to sign a standard release agreement acceptable to the
Company in which he releases and waives all claims which he may have against the
Company or any affiliate, employee, shareholder, officer, director, agent or
representative of the Company (except for his rights under this Agreement or any
other vested rights Employee may have under any insurance, pension, employee
stock ownership or stock option plans sponsored or made available by the
Company). The Company will provide such release agreement to Employee at the
termination of Employee's employment with the Company. As part of the release
agreement, Employee will be required (a) to agree to cooperate with the Company
with respect to any business matters about which he has knowledge, including any
litigation or threatened litigation, (b) agree not to cooperate with any
claimants against the Company unless required by law to do so, (c) agree not to
make any negative or derogatory comments about the Company or its executives and
(d) affirm his post-termination obligations under this Agreement, including
without limitation the obligations set forth in Sections 6 and 7.

-9-

          5.11 Delay of Separation
Payments to Specified Employee. Notwithstanding any other provisions of this Agreement, if any amount
payable to Employee under this Agreement on account of Employee's separation
from service with the Company constitutes deferred compensation within the
meaning of Code Section 409A, and Employee is a specified employee, within the
meaning of Code Section 409A(a)(2)(B)(i), on the date of his 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 Employee's separation
from service occurred. 

          6.
Non-competition. 

          6.1
General. Employee acknowledges that his position
with the Company is special, unique and intellectual in character and his
position in the Company places him in a position of confidence and trust with
employees and customers of the Company. Employee further acknowledges,
recognizes, and represents receipt of sufficient consideration for these
restraints in the form of the 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 terminates, or elects not to renew this Agreement, and subsequently
terminates Employee’s employment without the payment of severance payments
equivalent to 100% of Employee’s Base Salary in effect at the time of
termination, which shall be payable in lump sum, the Employee will not be
subject to the restrictions and obligations of this Section 6.

          6.2
Non-competition. Employee agrees that during his employment with the
Company and for a period of one (1) year
immediately after the termination of
Employee’s employment with the Company, whether such employment is pursuant to
this Agreement or is without an Agreement, thereafter Employee shall
not:

     6.2.1 Either alone or in concert
with others, whether as director, officer, consultant, principal, employee,
agent or otherwise, engage in or contribute Employee’s knowledge and abilities
to any business or entity in competition with the Company (“Competing
Business”);

     6.2.2 Be employed by, work for,
consult with, or act in any other capacity for, any person or entity that is
engaged in any Competing Business if in such employment, work or capacity
Employee likely would, because of the nature of his position with, or work for,
the competitor and his knowledge of the Company's Confidential Information,
inevitably use and/or disclose any of the Company's Confidential Information in
his work for or with such competitor;

     6.2.3 Solicit, recruit, hire, employ
or attempt to hire or employ any person who is then or within the proceeding one
(1) year period was, an employee of the Company, or otherwise urge, induce or
seek to induce any person to terminate his/her employment with the
Company;

-10-

     6.2.4 Solicit, 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;

     6.2.5 Take 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;

     6.2.6 The restrictive time periods
set forth in this Section 6.2 shall not expire during any period in which
Employee is in violation of any of the restrictive covenants set forth in this
Section 6.2, and all restrictions shall automatically be extended by the period
Employee was in violation of any such restrictions;

     6.2.7 The restrictive covenants
contained in this Section 6.2 prohibit Employee from engaging in certain
activities directly or indirectly, whether on his own behalf or on behalf of any
other person or entity.

     6.2.8 The covenants and restrictions
in this Section 6.2 are separate and divisible, and to the extent any covenant,
provision or portion of Section 6.2 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 Section 6.2 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 form and shall be given effect and enforced as so reformed to the
extent reasonable and enforceable under applicable law.

          6.3
Definition of “Competing
Business”: The term “Competing Business” shall mean:

     6.3.1 The retail footwear business
of Collective Brands, Inc.; Brown Shoe Company, Inc.; Designer Shoe Warehouse;
Rack Room (dba); Kohls Corporation; Shoe Station (dba); Shoe City (dba); Shoe
Pavilion, Inc., Shoe Department (dba); Finish Line, Inc.; Foot Locker, Inc.;
Dick’s Sporting Goods, Inc.; The Sports Authority, Inc.; Off Broadway Shoe
Warehouse; and any other company which sells footwear at retail to consumers
within 25 miles of any Company store at price points competitive, or likely to
be competitive, with the

-11-

Company, where the footwear sales of
such other company constitute at least fifteen percent (15%) of such company's
annual revenues.

     6.3.2 Ownership of an investment
of less than 5% of any class of equity or debt security of a publicly-held
Competing Business shall not constitute ownership or participation in violation
of the above.

          6.4 Acknowledgment Regarding Restrictions. Employee acknowledges and agrees that he
understands the restrictions in Section 6, and that they are reasonable and
enforceable, in view of, among other things, the Employee’s position within the
Company, the highly competitive nature of the Company's business, and the
confidential nature of the information the Employee has been provided. Employee
further agrees that the Company would not have adequate protection if Employee
were permitted to work for its competitors in violation of the terms of this
Agreement since the Company would be unable to verify whether its Confidential
Information was being disclosed and/ or misused, and whether Employee was
involved in diverting the Company’s customers and/or its customer
goodwill.

          6.5 Disclosures
Concerning New Employment.
Employee agrees that he (a) will immediately, within ten (10) days,
notify the Company in writing of his employment, engagement or other affiliation
with any other business or entity during the two (2) years immediately following
the termination of Employee's employment with the Company and (b) will provide a
copy of Section 6 and 7 of this Agreement to any prospective employer before
accepting employment or other work engagement with any such employer.

          7.
Confidential or Proprietary
Information

          7.1
Confidentiality. As used in this Agreement, the term "Confidential
Information" means any and all of the Company's trade secrets, confidential and
proprietary information and all other information and data of the Company that
is not generally known to third persons who could derive economic value from its
use or disclosure, including, without limitation, the Company's profile of
prospective or current vendors or customers, business methods and structure,
details of the Company's contracts and business matters, employee compensation,
personnel information, marketing strategies and plans, business plans, pricing
information and strategies, costs information, and financial data, whether or
not reduced to writing or other tangible medium of expression, including work
product created by Employee in rendering services to the Company. During his
employment with the Company and thereafter, Employee will not use or disclose to
others any of the Confidential Information except as authorized in writing by
the Company or in the performance of work assigned Employee by the Company.
Employee also will abide by the Company's policies protecting the Confidential
Information. Employee's confidentiality obligations shall continue as long as
the Confidential Information remains confidential, and shall not apply to
information which becomes generally known to the public through no fault or
action of Employee. Employee agrees that the Company owns the
Confidential

-12- 

Information and Employee has no rights,
title or interest in any of the Confidential Information. At the Company's
request or upon termination of Employee's employment with the Company for any
reason, Employee will immediately deliver to the Company all materials
(including all copies and electronically stored data) containing any
Confidential Information in Employee's possession, custody or
control.

          7.2 Trade
Secrets-Developments. All improvements, developments, concepts, and ideas
("Developments") relating to the Company's business, or capable of beneficial
use by the Company, including, but not limited to, marketing, confidential and
trade secret information, techniques, discoveries, slogans, designs, artwork,
and writings, which the Employee has made or will make during his employment
with the Company are the sole and exclusive property of the Company without
charge to the Company other than the Employee's compensation.

          7.3
Acknowledgement. Employee agrees that the restrictions set forth in
Sections 7.1 and 7.2 are reasonable and necessary to protect the trade secrets,
confidential information, intellectual property rights and goodwill of the
Company. The restrictions and obligations contained in this Section 7 shall
survive the term of this Agreement.

          8.
Remedies. In the event of a breach or threatened
breach by the Employee of any of the above provisions, the Company shall be
entitled to an injunction restraining Employee from such breach, in addition to
all other remedies which the Company shall be entitled to pursue. The Company
also shall be entitled to recover from Employee 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 Employee's 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.
Survival of Post-Termination
Obligations.
Employee acknowledges and agrees that his post-termination obligations under
this Agreement, including without limitation Employee's non-competition and
confidentiality obligations set forth in Sections 6 and 7 of this Agreement,
shall survive the termination of Employee's employment with the Company,
regardless whether such termination is voluntary or involuntary, or is with or
without Cause.

          10.
Notices. All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be deemed to have been delivered on the
date personally delivered or the dated mailed, postage prepaid, by certified
mail, return receipt requested, or telegraphed and confirmed, or faxed and
confirmed, if addressed to the respective parties as follows;

	          	To Employee:  	      	Clifton E. Sifford  
		  		3255 Brookfield Drive 
  
		  		Newburgh, Indiana 47630 
  

-13-

	          	To Company: 	      	Chief Executive Officer 
  
		  		Shoe Carnival, Inc.  
		  		7500 East Columbia Street 
    
		  		Evansville, Indiana 47715 
    

Either party hereto may designate a
different address by providing written notice of such new address to the other
party hereto.

          11.
Waiver. The failure or delay of the Company at any
time or times to require performance of, or to exercise any of its powers,
rights or remedies with respect to, any term or provision of this Agreement or
any other aspect of Employee’s conduct or employment shall not affect the
Company’s right to later enforce any such term or provision.

          12.
Assignment. 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
Employee, his executors, administrators, personal representatives and other
successors in interest. Employee shall not have the right to assign this
Agreement nor any of his rights, powers, duties or obligations
hereunder.

          13.
Code Section 409A
Standards. This Agreement, and all other nonqualified deferred compensation plans in
which the Employee participates, are intended to comply with the standards for
nonqualified deferred compensation plans established by Code Section 409A and
its interpretive regulations and other regulatory guidance (the "Section 409A
Standards), to the extent applicable, and this Agreement shall be construed
accordingly. In construing or interpreting any vague or ambiguous provisions of
this Agreement, the interpretation that will prevail is the interpretation that
will cause this Agreement to comply with the Section 409A Standards. Any
provision of this Agreement, or any deferred compensation provided under it,
that would fail to satisfy the Section 409A Standards shall not have any force
or effect until it is amended to comply with the applicable Section 409A
Standards, which amendment may be retroactive to the extent permissible under
the Section 409A Standards.

          14.
Entire
Agreement. This
Agreement cancels and supersedes all prior negotiations, discussions,
commitments and understandings between the parties relating hereto, whether oral
or written. This Agreement embodies the entire agreement and understanding
between such parties with respect to the matters covered hereby. Neither party
shall be bound by any term or condition other than as is expressly set forth
herein.

          15.
Amendment. This Agreement may be amended only by an
instrument in writing executed by the parties hereto.

          16.
Governing Law: Forum
Selection. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of Indiana, without regard to the conflicts of law rules
thereof. Any legal action relating to this Agreement shall be

-14-

commenced and maintained exclusively
before any appropriate state court of record in Vanderburgh County, Indiana, or,
if necessary because of a federal question mandating jurisdiction in the federal
courts is involved, the United States District Court for the Southern District
of Indiana, Evansville Division, and the parties hereby submit the jurisdiction
of such courts and waive any right to challenge or otherwise raise questions of
personal jurisdiction or venue in any action commenced or maintained in such
courts.

          17. Severability. The parties intend that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the
applicable law. Should any provision of this Agreement be unenforceable or
invalid for any reason, such unenforceability or invalidity shall not affect the
enforceability or validity of the remainder of the Agreement.

          IN
WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Employment and Noncompetition Agreement on this 11th. day of December,
2008.

	SHOE
      CARNIVAL, INC.: "Company"  		CLIFTON E. SIFFORD: "Employee"  
	  
	By: 
    	  /s/ Mark L. Lemond 
    		  /s/ Clifton E.
      Sifford  
	 			
	Its: 
    	  CEO and President 
    	       	Date:   	  December 11, 2008 
    
	 				
	Date:   	  December 11, 2008 
    		  	 

-15-

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