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<SEC-DOCUMENT>0001206774-05-001101.txt : 20050617
<SEC-HEADER>0001206774-05-001101.hdr.sgml : 20050617
<ACCEPTANCE-DATETIME>20050617143221
ACCESSION NUMBER:		0001206774-05-001101
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050614
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050617
DATE AS OF CHANGE:		20050617

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHOE CARNIVAL INC
		CENTRAL INDEX KEY:			0000895447
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-SHOE STORES [5661]
		IRS NUMBER:				351736614
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21360
		FILM NUMBER:		05902665

	BUSINESS ADDRESS:	
		STREET 1:		8233 BAUMGART ROAD
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47725
		BUSINESS PHONE:		8128674039

	MAIL ADDRESS:	
		STREET 1:		8233 BAUMGART RD
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47725
</SEC-HEADER>
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<TYPE>8-K
<SEQUENCE>1
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<p  align="center"><font size="5" face="Times New Roman"><b>UNITED STATES<br> SECURITIES AND EXCHANGE COMMISSION</b></font>
<font size="3"><b><br> Washington, D.C. 20549</b></font></p>
<p  align="center">
<font size="5" face="Times New Roman"><b>FORM 8-K</b></font></p>
<p  align="center">
<font size="3" face="Times New Roman"><b>CURRENT REPORT<br> PURSUANT TO SECTION 13 OR 15(d) OF THE<br> SECURITIES EXCHANGE ACT OF 1934</b></font></p>
<p>
<font size="2" face="Times New Roman"><b>Date of Report (Date of earliest event reported)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June 14, 2005</b></font></p>
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<font size="6" face="Times New Roman"><b>SHOE   CARNIVAL, INC.</b></font></p>  </td>
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<font size="1" face="Times New Roman"><b>(Exact   name of registrant as specified in its charter)</b></font></p>  </td>
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<BR>
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<font size="2" face="Times New Roman"><b>Indiana</b></font></p>  </td>
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  <p style="margin-left:1em; text-indent:-1em"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="2" face="Times New Roman"><b>0-21360</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="2" face="Times New Roman"><b>35-1736614</b></font></p>  </td>
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    <p align=center><font size="1" face="Times New Roman"><b>(State or   other jurisdiction of incorporation)</b></font></p>  </td>
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  <p style="margin-left:1em; text-indent:-1em"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="1" face="Times New Roman"><b>(Commission   File Number)</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="1" face="Times New Roman"><b>(IRS   Employer Identification No.)</b></font></p>  </td>
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<font size="2" face="Times New Roman"><b>8233 Baumgart Road, Evansville, IN</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="2" face="Times New Roman"><b>47725</b></font></p>  </td>
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<font size="1" face="Times New Roman"><b>(Address   of principal executive offices)</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<font size="1" face="Times New Roman"><b>(Zip Code)</b></font></p>  </td>
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<p><font size="2" face="Times New Roman"><b>Registrant&#146;s telephone number, including area code&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(812) 867-6471</b></font></p>
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<font size="2" face="Times New Roman"><b>Not Applicable</b></font></p>  </td>
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<font size="1" face="Times New Roman"><b>(Former   name or former address if changed since last report)</b></font></p>  </td>
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<p>
<font size="2" face="Times New Roman">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<i>see </i>General Instruction A.2. below):</font></p>
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<font size="2" face="Wingdings">o</font></p>  </td>
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<font size="2" face="Times New Roman">Written communications pursuant to Rule 425 under   the Securities Act (17 CFR 230.425)</font></p>  </td>
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<font size="2" face="Wingdings">o</font></p>  </td>
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<font size="2" face="Times New Roman">Soliciting material pursuant to Rule 14a-12 under   the Exchange Act (17 CFR 240.14a-12)</font></p>  </td>
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<font size="2" face="Wingdings">o</font></p>  </td>
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<font size="2" face="Times New Roman">Pre-commencement communications pursuant to Rule   14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p>  </td>
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<font size="2" face="Wingdings">o</font></p>  </td>
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<font size="2" face="Times New Roman">Pre-commencement communications pursuant to Rule   13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p>  </td>
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<br>
<p><font size="2" face="Times New Roman"><b>Item 1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Entry into a Material Definitive Agreement.</b></font></p>
<p>
<font size="2" face="Times New Roman"><b>Shareholder Approval of Proposed Amendment</b></font></p>
<p>
<font size="2" face="Times New Roman">At the 2005 Annual Meeting of Shareholders of Shoe Carnival, Inc. (the &#147;Company&#148;) held on June 14, 2005, the Company&#146;s shareholders approved an amendment to the 2000 Stock Option and Incentive Plan (the &#147;Plan&#148;).&#160; The amendment includes Directors of the Company as individuals eligible to receive awards under the Plan; provides that the exercise price of all options granted under the Plan may not be less than the fair market value of the Company&#146;s Common Stock on the date that the option is granted; and deletes the provision permitting loans to participants in the Plan.&#160; The amendment to the Plan was approved by the Company&#146;s Board of Directors (the &#147;Board&#148;) on March 25, 2005, subject to shareholder approval.</font></p>
<p>
<font size="2" face="Times New Roman">A copy of the Plan, as amended, is attached hereto as Exhibit 10-O and the information set forth therein is incorporated herein by reference and constitutes a part of this report.</font></p>
<p>
<font size="2" face="Times New Roman"><b>Director Compensation</b></font></p>
<p>
<font size="2" face="Times New Roman">On June 14, 2005, the Company&#146;s Board, based on the recommendation of the Compensation Committee of the Board, approved the granting of 500 shares of restricted stock to each Director on the first business day of January 2006 and reassessing the reoccurrence of such a grant on an annual basis thereafter.&#160; The restricted shares will vest one year after date of grant.</font></p>
<p>
<font size="2" face="Times New Roman"><b>Base Salary for Named Executive Officer</b></font></p>
<p>
<font size="2" face="Times New Roman">On June 14, 2005, the Compensation Committee of the Company&#146;s Board approved an increase to the base salary of the Company&#146;s Executive Vice President, Chief Financial Officer and Treasurer, W. Kerry Jackson, from his previous base of $250,000 to $275,000.&#160; The salary increase will be effective on June 19, 2005.</font></p>

<p><font size="2" face="Times New Roman"><b>Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.</b></font></p>
<p>
<font size="2" face="Times New Roman">(c)&#160;&#160; Exhibits</font></p>
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  <p><font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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  <p><font size="1" face="Times New Roman"><b>Exhibits</b></font></p>  </td>
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  <p  align="center"><font size="2" face="Times New Roman">10-O</font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="left"><font size=2 face="Times New Roman">Shoe Carnival, Inc. 2000 Stock Option and Incentive Plan, as amended.</font></p> </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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<p  align="center">
<font size="2" face="Times New Roman">2</font></p>
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<p  align="center">
<font size="2" face="Times New Roman"><b>SIGNATURES</b></font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></p>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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<font size="2" face="Times New Roman"><b>S<small>HOE</small> C<small>ARNIVAL</small>, I<small>NC</small>.</b></font></p>  </td>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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<font size="2" face="Times New Roman">(Registrant)</font></p>  </td>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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<font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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  <p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated:&nbsp;&nbsp;June   17, 2005</font></p>  </td>
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  <p><font size="2" face="Times New Roman">By:</font></p>  </td>
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  <p  align="center"><font size="2" face="Times New Roman"><b>/s/ W.   K<small>ERRY</small> J<small>ACKSON</small></b></font></p>  </td>
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  <p><font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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  <p><font size="1" face="Times New Roman">&nbsp;</font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size="1" face="Times New Roman"><b>W. Kerry   Jackson</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size="1" face="Times New Roman"><b>Executive   Vice President and</b></font></p>  </td>
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  <p  align="center"><font size=1 face="Times New Roman">&nbsp;</font></p> </td>
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  <p  align="center"><font size="1" face="Times New Roman"><b>Chief   Financial Officer</b></font></p>  </td>
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<p  align="center"><font size="2" face="Times New Roman">3</font></p>



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<TYPE>EX-10.O
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<p  align=right><font size="2" face="Times New Roman"><b>Exhibit 10-O</b></font></p>
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<font size="2" face="Times New Roman"><b>SHOE CARNIVAL, INC.<br> 2000 STOCK OPTION AND INCENTIVE PLAN</b></font></p>
<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Plan Purpose</u></b>.&#160; The purpose of the Plan is to promote the long-term interests of the Company and its shareholders by providing a means for attracting and retaining Directors and officers and key employees of the Company and its Affiliates.</font></p>
<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Definitions</u></b>.&#160; The following definitions are applicable to the Plan:</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Affiliate&#148;&nbsp;-- means any &#147;parent corporation&#148; or &#147;subsidiary corporation&#148; of the Company as such terms are defined in Section&nbsp;424(e) and (f), respectively, of the Code.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Annual Return To Shareholders&#148; -- means the Company&#146;s return to shareholders as represented by share price appreciation plus dividends paid on one share of stock during any Year during a Restricted Period.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Award&#148; -- means the grant by the Committee of an Incentive Stock Option, a Non-Qualified Stock Option, or Restricted Stock, or any combination thereof, as provided in the Plan.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Board&#148;&nbsp;-- means the Board of Directors of the Company.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Business Criteria&#148; -- means any one or any combination of Annual Return to Shareholders, Total Net Sales, Net Earnings, Net Earnings before Nonrecurring Items, Return on Equity, Return on Assets, EPS, EBITDA or EBITDA before Nonrecurring Items, in each case during any Year during a Restricted Period.</font></p>

<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Change in Control&#148; -- means each of the events specified in the following clauses (i) through (iii):&#160; (i)&nbsp;any third person,&#160; including a &#147;group&#148; as defined in Section&nbsp;13(d)(3) of the Exchange Act shall, after the date of the adoption of the Plan by the Board, first become the beneficial owner of shares of the Company with respect to which 25% or more of the total number of votes for the election of the Board of Directors of the Company may be cast, (ii)&nbsp;as a result of, or in connection with, any cash tender offer, exchange offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Company shall cease to constitute a majority of the Board of Directors of the Company or (iii)&nbsp;the stockholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned entity or for a sale or other disposition of all or substantially all the assets of the Company; provided, however, that the occurrence of any of such events shall not be deemed a Change in Control if, prior to such occurrence, a resolution specifically providing that such occurrence shall not constitute a Change in Control under the Plan shall have been adopted by at least a majority of the Board of Directors of the Company.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Code&#148;&nbsp;-- means the Internal Revenue Code of 1986, as amended.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Committee&#148; -- means the Committee referred to in Section 3 hereof.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Company&#148;&nbsp;-- means Shoe Carnival, Inc., an Indiana corporation.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Continuous Service&#148;&nbsp;-- means the absence of any interruption or termination of service as a Director or an employee of the Company or an Affiliate.&#160; Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company or in the case of any transfer between the Company and an Affiliate or any successor to the Company.</font></p>

<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Director&#148;&nbsp;-- means any person who serves as a member of the Board.</font></p>
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<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;EBITDA&#148; for any Year means -- the consolidated earnings before interest, taxes, depreciation and amortization of the Company as reflected in the Company&#146;s audited consolidated financial statements for the Year.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;EBITDA before Nonrecurring Items&#148; means -- for any Year EBITDA of the Company before any extraordinary or unusual one-time nonrecurring expenses or other charges as reflected in the Company&#146;s audited consolidated financial statements for the Year.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Employee&#148;&nbsp;-- means any person, including an officer or Director, who is employed by the Company or any Affiliate.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;EPS&#148; for any Year means -- diluted earnings per share of the Company, as reported in the Company&#146;s audited consolidated financial statements for the Year.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Exchange Act&#148;&nbsp;-- means the Securities Exchange Act of 1934, as amended.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Exercise Price&#148;&nbsp;-- means the price per Share at which the Shares subject to an Option may be purchased upon exercise of such Option.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Incentive Stock Option&#148; -- means an option to purchase Shares granted by the Committee pursuant to the terms of the Plan which is intended to qualify under Section 422 of the Code.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Market Value&#148;&nbsp;-- means the last reported sale price on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) of one Share on the principal exchange on which the Shares are listed for trading, or if the Shares are not listed for trading on any exchange, on the NASDAQ National Market System or any similar system then in use, or, if the Shares are not listed on the NASDAQ National Market System, the mean between the closing high bid and low asked quotations of one Share on the date in question as reported by NASDAQ or any similar system then in use, or, if no such quotations are available, the fair market value on such date of one Share as the Committee shall determine.</font></p>

<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Net Earnings&#148; for any Year means -- the consolidated net earnings of the Company, as reported in the Company&#146;s audited consolidated financial statements for the Year.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Net Earnings before Nonrecurring Items&#148; means -- for any Year the Net Earnings of the Company before any extraordinary or unusual one-time nonrecurring expenses or other charges as reflected in the Company&#146;s audited consolidated financial statements for the Year.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Non-Qualified Stock Option&#148; -- means an option to purchase Shares granted by the Committee pursuant to the terms of the Plan, which option is not intended to qualify under Section 422 of the Code.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Option&#148;&nbsp;-- means an Incentive Stock Option or a Non-Qualified Stock Option.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Participant&#148; -- means any Director or any officer or key employee of the Company or any Affiliate who is selected by the Committee to receive an Award.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Performance Target(s)&#148; -- means the specific objective goal or goals (which may be cumulative and/or alternative) that are timely set forth in writing by the Committee for each Employee for the Restricted Period in respect of any one or more of the Business Criteria.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Plan&#148;&nbsp;-- means this 2000 Stock Option and Incentive Plan of the Company.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Reorganization&#148;&nbsp;-- means the liquidation or dissolution of the Company or any merger, consolidation or combination of the Company (other than a merger, consolidation or combination in which the Company is the continuing entity and which does not result in the outstanding Shares being converted into or exchanged for different securities, cash or other property or any combination thereof).</font></p>

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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Restricted Period&#148; -- means the period of time selected by the Committee for the purpose of determining when restrictions are in effect under Section 9 hereof with respect to Restricted Stock awarded under the Plan.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Restricted Stock&#148; -- means Shares which have been contingently awarded to a Participant by the Committee subject to the restrictions referred to in Section 9 hereof, so long as such restrictions are in effect.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Return on Assets&#148; for any Year means -- Net Earnings (as reported in the Company&#146;s audited consolidated financial statements for the Year) divided by the average of the total assets of the Company at the end of the fiscal quarters of the Year.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Return on Equity&#148; for any Year means -- the Net Earnings (as reported in the Company&#146;s audited consolidated financial statements for the Year) divided by the shareholders equity of the Company at the beginning of each Year.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Securities Act&#148;&nbsp;-- means the Securities Act of 1933, as amended.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;Shares&#148;&nbsp;-- means the Common Stock, $.01 par value, of the Company.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Total Net Sales&#148; for any Year -- means the Company&#146;s total net sales as reported in the Company&#146;s consolidated audited financial statements for the Year.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Year&#148; -- means any one or more fiscal years of the Company commencing on or after January&nbsp;30, 2000 that represent(s) the applicable Restricted Period.</font></p>

<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Administration</u>.</b>&#160; The Plan shall be administered by the Committee, which shall consist of two or more members of the Board, each of whom shall be a &#147;non-employee director&#148; as provided under Rule 16b-3 of the Exchange Act, and an &#147;outside director&#148; as provided under Code Section 162(m).&#160; The members of the Committee shall be appointed by the Board.&#160; Except as limited by the express provisions of the Plan, the Committee shall have sole and complete authority and discretion to (a)&nbsp;select Participants and grant Awards; (b) determine the number of Shares to be subject to types of Awards generally, as well as to individual Awards granted under the Plan; (c)&nbsp;determine the terms and conditions upon which Awards shall be granted under the Plan; (d)&nbsp;prescribe the form and terms of
instruments evidencing such grants; (e)&nbsp;establish procedures and regulations for the administration of the Plan; (f) interpret the Plan; and (g) make all determinations deemed necessary or advisable for the administration of the Plan.</font></p>
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<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by all members of the Committee without a meeting, shall be acts of the Committee.&#160; All determinations and decisions made by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by law.</font></p>
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<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Participants</u></b>.&#160; The Committee may select from time to time Participants in the Plan from those Directors and officers and key employees of the Company or its Affiliates who, in the opinion of the Committee, have the capacity for contributing in a substantial measure to the successful performance of the Company or its Affiliates.</font></p>
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<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Shares Subject to Plan</u></b>.&#160; Subject to adjustment by the operation of Section&nbsp;10 hereof, the maximum number of Shares with respect to which Awards may be made under the Plan is 1,500,000 Shares.&#160; The number of Shares which may be granted under the Plan to any Participant during any calendar year of the Plan under all forms of Awards shall not exceed 300,000 Shares.&#160; The Shares with respect to which Awards may be made under the Plan may either be authorized and unissued shares or unissued shares heretofore or hereafter reacquired and held as treasury shares.&#160; With respect to any Option which terminates or is surrendered for cancellation or with respect to Restricted Stock which is forfeited, new Awards may be granted under the Plan with respect to the number of Shares as to which such termination or forfeiture
has occurred.</font></p>

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<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>General Terms and Conditions of Options</u>.</b>&#160; The Committee shall have full and complete authority and discretion, except as expressly limited by the Plan, to grant Options and to provide the terms and conditions (which need not be identical among Participants) thereof.&#160; In particular, the Committee shall prescribe the following terms and conditions:&#160; (i) the Exercise Price (which shall not be less than the Market Value per Share on the date the Option is granted), (ii)&nbsp;the number of Shares subject to, and the expiration date of, any Option, (iii)&nbsp;the manner, time and rate (cumulative or otherwise) of exercise of such Option, and (iv)&nbsp;the restrictions, if any, to be placed upon such Option or upon Shares which may be issued upon exercise of such Option.</font></p>
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<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Exercise of Options</u></b>.</font></p>
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<font size="2" face="Times New Roman">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as   provided in Section&nbsp;13, an Option granted under the Plan shall be   exercisable during the lifetime of the Participant to whom such Option was   granted only by such Participant, and except as provided in   paragraphs&nbsp;(c), (d) and (e) of this Section&nbsp;7, no such Option may   be exercised unless at the time such Participant exercises such Option, such   Participant has maintained Continuous Service since the date of the grant of   such Option.</font></p>  </td>
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<font size="2" face="Times New Roman">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To exercise   an Option under the Plan, the Participant must give written notice to the   Company specifying the number of Shares with respect to which such   Participant elects to exercise such Option together with full payment of the   Exercise Price.&#160; The date of exercise   shall be the date on which such notice is received by the Company.&#160; Payment may be made either (i)&nbsp;in   cash (including check, bank draft or money order), (ii)&nbsp;by tendering   Shares already owned by the Participant and having a Market Value on the date   of exercise equal to the Exercise Price, or (iii)&nbsp;by any other means   determined by the Committee in its sole discretion, including permitting a   Participant to elect to pay the Exercise Price upon the exercise of an Option   by authorizing a third party to sell the Shares (or a sufficient portion of   the Shares) acquired upon exercise of the Option and remit to the Company
a   sufficient portion of the sale proceeds to pay the Exercise Price and any tax   withholding resulting from such exercise.</font></p>  </td>
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<font size="2" face="Times New Roman">(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the   Continuous Service of a Participant is terminated for cause, or voluntarily   by the Participant for any reason other than death, disability or retirement,   all rights under any Options granted to such Participant shall terminate   immediately upon such Participant&#146;s cessation of Continuous Service, and the   Participant shall (unless the Committee in its sole discretion waives this   requirement) repay to the Company within 10 days the amount of any gain realized   by the Participant upon any exercise within the 90-day period prior to the   cessation of Continuous Service of any Options granted to such Participant   under the Plan.&#160; If the Continuous   Service of a Participant is terminated by reason of death, disability or   retirement, such Participant may exercise such Option, but only to the extent   such Participant was entitled to exercise such Option at the date of such   cessation, at any time
during the remaining term of such Option, or, in the   case of Incentive Stock Options, during such shorter period as the Committee   may determine and so provide in the applicable instrument or instruments   evidencing the grant of such Option.&#160;   If a Participant shall cease to maintain Continuous Service for any   reason other than those set forth above in this paragraph&nbsp;(c) of this   Section&nbsp;7, such Participant may exercise such Option to the extent that   such Participant was entitled to exercise such Option at the date of such   cessation but only within 90 days immediately succeeding such cessation of   Continuous Service, and in no event after the expiration date of the subject   Option; provided, however, that such right of exercise after cessation of   Continuous Service shall not be available to a Participant if the Company   otherwise determines and so provides in the applicable instrument or   instruments evidencing the grant of such Option.</font></p>  </td>
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<font size="2" face="Times New Roman">(d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event   of the death of a Participant while in the Continuous Service of the Company   or an Affiliate, the person to whom any Option held by the Participant at the   time of his death is transferred by will or by the laws of descent and   distribution may exercise such Option on the same terms and conditions that   such Participant was entitled to exercise such Option.&#160; At the time of the death of the   Participant, all Options theretofore granted to the Participant and not fully   exercisable shall terminate. Following the death of any Participant to whom   an Option was granted under the Plan, the Committee, as an alternative means of   settlement of such Option, may elect to pay to the person to whom such Option   is transferred the amount by which the Market Value per Share on the date of   exercise of such Option shall exceed the Exercise Price of such Option,   multiplied by the number of Shares with
respect to which such Option is   properly exercised.&#160; Any such   settlement of an Option shall be considered an exercise of such Option for   all purposes of the Plan.</font></p>  </td>
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<font size="2" face="Times New Roman">(e)   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of the   foregoing paragraphs of this Section&nbsp;7, the Committee may, in its sole   discretion, establish different terms and conditions pertaining to the effect   of the cessation of Continuous Service, to the extent permitted by applicable   federal and state law.</font></p>  </td>
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<p><font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Incentive Stock Options</u>.</b>&#160; Incentive Stock Options may be granted only to Participants who are Employees.&#160; Any provisions of the Plan to the contrary notwithstanding, (i)&nbsp;no Incentive Stock Option shall be granted more than ten years from the date the Plan is adopted by the Board of Directors of the Company and no Incentive Stock Option shall be exercisable more than ten years from the date such Incentive Stock Option is granted, (ii)&nbsp;the Exercise Price of any Incentive Stock Option shall not be less than the Market Value per Share on the date such Incentive Stock Option is granted, (iii) any Incentive Stock Option shall not be transferable by the Participant to whom such Incentive Stock Option is granted other than by will or the laws of descent and distribution and shall be exercisable during such
Participant&#146;s lifetime only by such Participant, and (iv)&nbsp;no Incentive Stock Option shall be granted which would permit a Participant to acquire, through the exercise of Incentive Stock Options in any calendar year, Shares or shares of any capital stock of the Company or any Affiliate thereof having an aggregate Market Value (determined as of the time any Incentive Stock Option is granted) in excess of $100,000.&#160; The foregoing limitation shall be determined by assuming that the Participant will exercise each Incentive Stock Option on the date that such Option first becomes exercisable.&#160; Notwithstanding the foregoing, in the case of any Participant who, at the date of grant, owns stock possessing more than 10% of the total combined voting power of all classes of capital stock of the Company or any Affiliate, the Exercise Price of any Incentive Stock Option shall not be less than 110% of the Market Value per Share on the date such Incentive Stock Option is granted and such Incentive
Stock Option shall not be exercisable more than five years from the date such Incentive Stock Option is granted.&#160; Notwithstanding any other provisions of this Plan, if for any reason any Option granted under this Plan that is intended to be an Incentive Stock Option shall fail to qualify as an Incentive Stock Option, such Option shall be deemed to be a Non-Qualified Stock Option, and such Option shall be deemed to be fully authorized and validly issued under this Plan.</font></p>

<p><font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Terms and Conditions of Restricted Stock</u>.</b>&#160; The Committee shall have full and complete authority, subject to the limitations of the Plan, to grant awards of Restricted Stock and, in addition to the terms and conditions contained in paragraphs (a) through (g) of this Section 9, to provide such other terms and conditions (which need not be identical among Participants) in respect of such Awards, and the vesting thereof, as the Committee shall determine and provide in the agreement referred to in paragraph (d) of this Section 9.&#160; Notwithstanding any other provisions of this Plan, the Committee shall have full and complete discretion, at the time of the grant of an award of Restricted Stock, to determine whether or not the grant of Restricted Stock is intended to qualify as &#147;performance-based compensation&#148; under
Section 162(m) of the Code.</font></p>
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<font size="2" face="Times New Roman">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time   of an award of Restricted Stock, the Committee shall establish for each   Participant a Restricted Period during which or at the expiration of which,   the Shares of Restricted Stock shall vest.&#160;   The Committee may also restrict or prohibit the sale, assignment,   transfer, pledge or other encumbrance of the Shares of Restricted Stock by   the Participant during the Restricted Period.&#160; Except for such restrictions, and subject to paragraphs (c),   (d) and (e) of this</font></p>  </td>
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<font size="2" face="Times New Roman">Section 9 and Section 10 hereof, the Participant as   owner of such Shares shall have all the rights of a stockholder, including   but not limited to, the right to receive all dividends paid on such Shares   and the right to vote such Shares.&#160;   Except in the case of grants of Restricted Stock which are intended to   qualify as &#147;performance-based compensation&#148; under Section&nbsp;162(m) of the   Code, the Committee shall have the authority, in its discretion, to accelerate   the time at which any or all of the restrictions shall lapse with respect to   any Shares of Restricted Stock prior to the expiration of the Restricted   Period with respect thereto, or to remove any or all of such restrictions,   whenever it may determine that such action is appropriate by reason of   changes in applicable tax or other laws or other changes in circumstances   occurring after the commencement of such Restricted Period.</font></p>  </td>
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<font size="2" face="Times New Roman">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as   provided in Section 12 hereof, if a Participant ceases to maintain Continuous   Service for any reason (other than death, total or partial disability or   retirement) unless the Committee shall otherwise determine, all Shares of   Restricted Stock theretofore awarded to such Participant and which at the time   of such termination of Continuous Service are subject to the restrictions   imposed by paragraph (a) of this Section 9 shall upon such termination of   Continuous Service be forfeited and returned to the Company.&#160; If a Participant ceases to maintain   Continuous Service by reason of death or total or partial disability, then   the restrictions with respect to the Ratable Portion of the Shares of   Restricted Stock shall lapse and such Shares shall be free of restrictions   and shall not be forfeited.&#160; The   Ratable Portion shall be determined with respect to each separate Award of   Restricted
Stock issued and shall be equal to (i) the number of Shares of   Restricted Stock awarded to the Participant multiplied by the portion of the   Restricted Period that expired at the date of the Participant&#146;s death or   total or partial disability reduced by (ii) the number of Shares of   Restricted Stock awarded with respect to which the restrictions had lapsed as   of the date of the death or total or partial disability of the Participant.</font></p>  </td>
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<font size="2" face="Times New Roman">(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each   certificate issued in respect of Shares of Restricted Stock awarded under the   Plan shall be registered in the name of the Participant and deposited by the   Participant, together with a stock power endorsed in blank, with the Company   and shall bear the following (or a similar) legend:</font></p>  </td>
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<font size="2" face="Times New Roman">&#147;The transferability of this certificate and the   shares of stock represented hereby are subject to the terms and conditions   (including forfeiture) contained in the 2000 Stock Option and Incentive Plan   of Shoe Carnival, Inc., and an Agreement entered into between the registered   owner and Shoe Carnival, Inc.&#160; Copies   of such Plan and Agreement are on file in the office of the Secretary of Shoe   Carnival, Inc.</font></p>  </td>
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<font size="2" face="Times New Roman">(d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time   of an award of Shares of Restricted Stock, the Participant shall enter into   an Agreement with the Company in a form specified by the Committee, agreeing   to the terms and conditions of the award and to such other matters as the   Committee shall in its sole discretion determine.</font></p>  </td>
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<font size="2" face="Times New Roman">(e) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time   of an award of Shares of Restricted Stock, the Committee may, in its   discretion, determine that the payment to the Participant of dividends   declared or paid on such Shares by the Company or a specified portion   thereof, shall be deferred until the earlier to occur of (i) the lapsing of   the restrictions imposed under paragraph (a) of this Section 9 or (ii) the   forfeiture of such Shares under paragraph (b) of this Section 9, and shall be   held by the Company for the account of the Participant until such time.&#160; In the event of such deferral, there shall   be credited at the end of each year (or portion thereof) interest on the   amount of the account at the beginning of the year at a rate per annum as the   Committee, in its discretion, may determine.&#160;   Payment of deferred dividends, together with interest accrued thereon   as aforesaid, shall be made upon the earlier to occur of the events
specified   in (i) and (ii) of the first sentence of this paragraph (e).</font></p>  </td>
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<font size="2" face="Times New Roman">(f) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the expiration of the restrictions imposed by paragraph (a) of this Section 9,
the Company shall redeliver to the Participant (or where the relevant provision
of paragraph (b) of this Section 9 applies in the case of a deceased
Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 9 and the</font></p> </td>
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<font size="2" face="Times New Roman">Shares represented by such   certificate(s) shall be free of the restrictions referred to in paragraph (a)   of this Section 9.&#160; Notwithstanding   any other provision of this Section&nbsp;9 and Section&nbsp;11 to the   contrary, in the case of grants of Restricted Stock that are intended to   qualify as &#147;performance-based compensation&#148; under Section&nbsp;162(m) of the   Code, no Shares of Restricted Stock shall become vested unless the Performance   Targets with respect to such Restricted Stock shall have been satisfied and   unless the Committee has certified, by resolution or other appropriate action   in writing, that the Performance Targets previously established by the   Committee have been satisfied.&#160; If the   vesting of Shares of Restricted Stock is accelerated after the applicable   Performance Targets have been met, the amount of Restricted Stock distributed   shall be
discounted by the Committee to reasonably reflect the time value of   money in connection with such early vesting.</font></p>  </td>
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<font size="2" face="Times New Roman">(g)   &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of   this Section&nbsp;9 to the contrary, for purposes of qualifying grants of   Restricted Stock as &#147;performance-based compensation&#148; under   Section&nbsp;162(m) of the Code, the Committee shall establish restrictions   based upon the achievement of Performance Targets.&#160; The specific goal or goals under the Performance Targets that   must be satisfied for the Restricted Period to lapse or terminate shall be   set by the Committee on or before the latest date permissible to enable the   Restricted Stock to qualify as &#147;performance-based compensation&#148; under   Section&nbsp;162(m) of the Code.&#160; The   Business Criteria for Performance Targets under this Section&nbsp;9 shall be   any one or any combination of Annual Return to Shareholders, Total Net Sales,   Net Earnings, Net Earnings before Nonrecurring Items, Return on Equity,   Return on Assets, EPS, EBITDA or
EBITDA before Nonrecurring Items.&#160; In granting Restricted Stock that is   intended to qualify under Section&nbsp;162(m), the Committee shall follow any   procedures determined by it in its sole discretion from time to time to be   necessary, advisable or appropriate to ensure qualification of the Restricted   Stock under Section&nbsp;162(m) of the Code.</font></p>  </td>
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<p><font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Adjustments Upon Changes in Capitalization</u></b>.&#160; In the event of any change in the outstanding Shares subsequent to the effective date of the Plan by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or any change in the corporate structure or Shares of the Company, the maximum aggregate number and class of shares as to which Awards may be granted under the Plan and the number and class of shares with respect to which Awards theretofore have been granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive.&#160; Any shares of stock or other securities received, as a result of any of the foregoing, by a Participant with respect to Restricted Stock shall be subject to the same restrictions and
the certificate(s) or other instruments representing or evidencing such shares or securities shall be legended and deposited with the Company in the manner provided in Section 9 hereof.</font></p>
<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Reorganization.</u></b></font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards will be affected by a Reorganization as follows:</font></p>
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<font size="2" face="Times New Roman">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the   Reorganization is a dissolution or liquidation of the Company then   (i)&nbsp;the restrictions of Section&nbsp;9(a) on Shares of Restricted Stock   shall lapse and (ii)&nbsp;each outstanding Option shall terminate, but each   Participant to whom the Option was granted shall have the right, immediately   prior to such dissolution or liquidation to exercise his Option in full,   notwithstanding the provisions of Section&nbsp;8, and the Company shall   notify each Participant of such right within a reasonable period of time   prior to any such dissolution or liquidation.</font></p>  </td>
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<font size="2" face="Times New Roman">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the   Reorganization is a merger or consolidation, upon the effective date of such   Reorganization (i)&nbsp;each Optionee shall be entitled, upon exercise of his   Option in accordance with all of the terms and conditions of the Plan, to   receive in lieu of Shares, shares of such stock or other securities or   consideration as the holders of Shares shall be entitled to receive pursuant   to the terms of the Reorganization; and (ii)&nbsp;each holder of Restricted   Stock shall receive shares of such stock or other securities as the holders   of Shares received and the certificate(s) or other instruments representing   or evidencing such shares or securities shall be legended and deposited with   the Company in the manner provided in Section 9 hereof.</font></p>  </td>
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<font size="2" face="Times New Roman">The adjustments contained in this Section and the   manner of application of such provisions shall be determined solely by the   Committee.</font></p>  </td>
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<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Change of Control</u>.</b>&#160; If the Continuous Service of any Participant of the Company or any Affiliate is involuntarily terminated, for whatever reason, at any time within eighteen months after a Change in Control, unless the Committee shall have otherwise provided in the agreement referred to in paragraph (d) of Section 9 hereof, any Restricted Period with respect to Restricted Stock theretofore awarded to such Participant shall lapse upon such termination and all Shares awarded as Restricted Stock shall become fully vested in the Participant to whom such Shares were awarded.&#160; If a tender offer or exchange offer for Shares (other than such an offer by the Company) is commenced, or if an event specified in clause&nbsp;(ii) or clause&nbsp;(iii)&nbsp;of the definition of a Change in Control contained in Section 2
shall occur, unless the Committee shall have otherwise provided in the instrument evidencing the grant of an Option, all Options theretofore granted and not fully exercisable shall become exercisable in full upon the happening of such event and shall remain so exercisable in accordance with their terms; provided, however, that no Option which has previously been exercised or otherwise terminated shall become exercisable.</font></p>

<p><font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Assignments and Transfers</u></b>.&#160; Except as otherwise determined by the Committee, no Award nor any right or interest of a Participant under the Plan in any instrument evidencing any Award under the Plan may be assigned, encumbered or transferred except, in the event of the death of a Participant, by will or the laws of descent and distribution.</font></p>
<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Employee Rights Under the Plan</u></b>.&#160; No Director, officer, employee or other person shall have a right to be selected as a Participant nor, having been so selected, to be selected again as a Participant and no Director, officer, employee or other person shall have any claim or right to be granted an Award under the Plan or under any other incentive or similar plan of the Company or any Affiliate.&#160; Neither the Plan nor any action taken thereunder shall be construed as giving any employee any right to be retained in the employ of the Company or any Affiliate.</font></p>
<p>
<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Delivery
and Registration of Stock</u></b>.&#160; The Company&#146;s obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Company shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other applicable federal or state
securities legislation.&#160; It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under the Securities Act
or other securities legislation.&#160; The Company shall not be required to
deliver any Shares under the Plan prior to (i)&nbsp;the admission of such shares
to listing on any stock exchange or system on which Shares may then be listed,
and (ii)&nbsp;the completion of such registration or other qualification of such
Shares under any state or federal law, rule or regulation, as the Company shall
determine to be necessary or advisable.</font></p>

<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Withholding
Tax</u></b>.&#160; Upon the termination of the Restricted Period with respect to
any Shares of Restricted Stock (or at any such earlier time, if any, that an
election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such Shares in taxable
income), the Company may, in lieu of requiring the Participant or other person
receiving such Shares to pay the Company the amount of any taxes which the
Company is required to withhold with respect to such Shares, retain a sufficient
number of Shares held by it to cover the amount required to be withheld.&#160;
The Company shall have the right to deduct from all dividends paid with respect
to Shares of Restricted Stock the amount of any taxes which the Company is
required to withhold with respect to such dividend payments.</font></p>
<p>
<font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where a Participant or other person is entitled to receive Shares pursuant to the exercise of an Option pursuant to the Plan, the Company may, in lieu of requiring the Participant or such other person to pay the Company the amount of any taxes which the Company is required to withhold with respect to such Shares, retain a number of such Shares sufficient to cover the amount required to be withheld.</font></p>
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<font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Termination, Amendment and Modification of Plan</u></b>.&#160; The Board may at any time terminate, and may at any time and from time to time and in any respect amend or modify, the Plan; provided however, that to the extent necessary and desirable to comply with Section&nbsp;422 of the Code (or any other applicable law or regulation, including requirements of any stock exchange or Nasdaq system on which the Shares are listed or quoted) shareholder approval of any Plan amendment shall be obtained in such a manner and to such a degree as is required by the applicable law or regulation; and provided further, that no termination, amendment or modification of the Plan shall in any manner affect any Award theretofore granted pursuant to the Plan without the consent of the Participant to whom the Award was granted or transferee of the Award.
</font></p>

<p><font size="2" face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Section 162(m) Conditions; Bifurcation of Plan</u>.&#160; </b>It is the intent of the Company that the Plan and certain of the Awards granted hereunder satisfy and be interpreted in a manner that, in the case of Participants who are or may be persons whose compensation is subject to Section 162(m), satisfies any applicable requirements as performance-based compensation.&#160; Any provision, application or interpretation of the Plan inconsistent with this intent to satisfy the standards in Section 162(m) of the Code shall be disregarded.&#160; Notwithstanding anything to the contrary in the Plan, the provisions of the Plan may at any time be bifurcated by the Board of Directors of the Company or the Committee in any manner so that certain provision of the Plan or any Award intended (or required in order) to satisfy the applicable
requirements of Section 162(m) are only applicable to persons whose compensation is subject to Section 162(m).</font></p>
<p><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Effective Date and Term of Plan</u>. </b>&#160;The Plan shall become effective upon its adoption by the Board of Directors and shareholders of the Company.&#160; Unless sooner terminated under Section 17 hereof, no further Awards may be made under the Plan after ten years from the date of adoption.</font></p>
<p><font size="2" face="Times New Roman"><b>Adopted by the Board of Directors&#160; <br> of Shoe Carnival, Inc. as of May 1, 2000</b></font></p>
<p><font size="2" face="Times New Roman"><b>Adopted by the Shareholders of<br> Shoe Carnival, Inc. as of June 8, 2000</b></font></p>
<p><font size="2" face="Times New Roman"><b>Amended by the Board of Directors of Shoe Carnival, Inc.<br> as of March 10, 2004 and by the Shareholders of Shoe Carnival, Inc.<br> as of June 11, 2004.</b></font></p>
<p><font size="2" face="Times New Roman"><b>Amended by the Board of Directors of Shoe Carnival, Inc.<br> as of March 25, 2005 and by the Shareholders of Shoe Carnival, Inc.<br> as of June 14, 2005.</b></font></p>

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