ý	No fee required

¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)	Title of each class of securities to which transaction applies:

2)	Aggregate number of securities to which transaction applies:

3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

4)	Proposed maximum aggregate value of transaction:

5)	Total fee paid:

¨	Fee paid previously with preliminary materials

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)	Amount Previously Paid:

2)	Form, Schedule or Registration Statement No.:

3)	Filing Party:

4)	Date Filed:

---

---

1.	Elect ten members of Macy's board of directors;

2.	Ratify the appointment of KPMG LLP as Macy's independent registered public accounting firm for the fiscal year ending January 31, 2015;

3.	Cast an advisory vote to approve the compensation of our named executive officers;

4.	Vote to approve Macy's Amended and Restated 2009 Omnibus Incentive Compensation Plan; and

5.	Conduct such other business as may properly come before the annual meeting or any postponements or adjournments thereof.

---

---

Time and date:	11:00 a.m., Eastern Time, on May 16, 2014

Place:	Macy's, Inc., 7 West Seventh Street, Cincinnati, OH 45202

Record date:	March 21, 2014

How to vote:	In general, you may vote either in person at the annual meeting or by telephone, the Internet, or mail.

Common shares outstanding as of record date:	369,022,152 shares

---

•	Total sales for fiscal 2013 were $27.9 billion, up 0.9% from fiscal 2012 total sales of $27.7 billion. Fiscal 2013 includes 52 weeks and fiscal 2012 included 53 weeks.

•	On a comparable basis, sales in fiscal 2013 were up 1.9%, the fourth consecutive year of comparable sales growth. We calculate comparable sales as sales from stores in operation throughout fiscal 2012 and fiscal 2013, all internet sales and adjust for the 53rd week in fiscal 2012.

•

Comparable sales, together with sales of departments licensed to third parties, for fiscal 2013 were up 2.8% compared to fiscal 2012. See page 16 of the Company's Form 10-K for fiscal 2013 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information. We believe that this supplemental information is a key metric in measuring our ability to generate sales growth on a comparable basis whether a selling department is operated by the Company or a third party.

•

Fiscal 2013 earnings per diluted share were $4.00 per share, excluding impairments, store closing and other costs, up 16% from fiscal 2012 on a comparable basis. Fiscal 2012 earnings per diluted share were $3.46 per share, excluding impairments, store closing costs and the premium on early debt retirement. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

•

EBIT (or operating income) for fiscal 2013 totaled $2.766 billion, or 9.9% of sales, excluding impairments, store closing and other costs, an increase of 3.8% and 30 basis points as a percent of sales over fiscal 2012 on a comparable basis. For fiscal 2012, EBIT totaled $2.666 billion, or 9.6% of sales, excluding impairments and store closing costs. Fiscal 2013 includes 52 weeks and fiscal 2012 included 53 weeks. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

---

•

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding impairments, store closing and other costs) margin reached 13.6% in fiscal 2013, reflecting a steady improvement toward our goal of 14%, compared to an Adjusted EBITDA margin of 13.4% in fiscal 2012. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

•

Return on Invested Capital (ROIC) - a key measure of operating productivity - rose in fiscal 2013, the fifth consecutive year of improvement. ROIC reached 21.5% in fiscal 2013, compared to 21.2% in fiscal 2012. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

•	Our common stock price at the end of fiscal 2013 was $53.20 per share, a 34.6% increase from the closing price of $39.51 per share at the end of fiscal 2012.

•	Our one-year, three-year and five-year total shareholder return, or TSR, was 37.4%, 143.9% and 541.3%, respectively, which ranked in the 100th percentile, above the 98th percentile and above the 78th percentile, respectively, compared to the TSR of our fiscal 2013 executive compensation peer group for the same periods.

•	We returned approximately $1.9 billion to shareholders through dividends and share repurchases and increased our cash dividend by 25% in fiscal 2013, to an annualized $1.00 per share.

•	as in past years, a substantial majority of the named executive officers' compensation was in the form of long-term incentive awards, including stock options and performance-based restricted stock units;

•	the performance-based restricted stock units are subject to performance metrics to ensure a strong connection between compensation and the Company's performance over a three-year performance period:

•	the number of shares that vest at the end of the three-year performance period depends upon how well we have performed in relation to the performance metrics;

•	with respect to performance-based restricted stock units granted in 2011, our strong financial performance over the three-year (2011-2013) performance period with respect to cumulative EBITDA (earnings before interest, taxes, depreciation and amortization), average EBITDA margin and average ROIC performance metrics resulted in 148.5% of the targeted number of performance units being earned; and

•	with respect to performance-based restricted stock units granted in fiscal 2013, the CMD Committee used cumulative EBITDA, average EBITDA margin, average ROIC and relative TSR (total shareholder return) performance metrics for the three-year (2013-2015) performance period; and

•	annual bonus payouts were subject to achievement of targeted levels of financial results with respect to three key performance metrics included in our annual business plan (sales, earnings before interest and taxes (EBIT) and cash flow);

•	the CMD Committee awarded annual bonus payments with respect to fiscal 2013 performance to the named executive officers of 68% of their targeted bonus opportunity based on achievement of pre-determined goals.

---

---

•	if required by applicable law;

•	to persons engaged in the receipt, counting, tabulation or solicitation of proxies who have agreed to maintain shareholder confidentiality as provided in the policy;

•	in those instances in which shareholders write comments on their proxy cards or otherwise consent to the disclosure of their vote to Macy's management;

•	in the event of a proxy contest or a solicitation of proxies in opposition to the voting recommendations of the Board;

•	in respect of a shareholder proposal that the Nominating and Corporate Governance Committee of the Board, referred to as the NCG Committee, after having allowed the proponent of the proposal an opportunity to present its views, determines is not in the best interests of Macy's and its shareholders; and

•	in the event that representatives of Macy's determine in good faith that a bona fide dispute exists as to the authenticity or tabulation of voting materials.

•

Item 1. Director nominees must be elected by the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved. Any incumbent nominee for director who receives a greater number of votes cast "against" than votes cast "for" shall continue to serve on the Board pursuant to Delaware law, but, pursuant to our director resignation policy, shall tender his or her resignation for consideration by the NCG Committee. The NCG Committee will promptly consider such resignation and recommend to the Board the action to be taken with respect to the tendered resignation. The Board will publicly disclose its decision within 90 days after the certification of the election results. Any director who tenders his or her resignation pursuant to this policy would not participate in the NCG Committee's recommendation or the Board's consideration regarding whether or not to accept the tendered resignation.

---

•	Item 2. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm requires the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved.

•	Item 3. The advisory (non-binding) proposal to approve the compensation of our named executive officers, as disclosed in this proxy statement, requires the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved.

•	Item 4. The proposal to approve the Amended and Restated 2009 Omnibus Incentive Compensation Plan requires the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved.

•	FOR each of the director nominees (Item 1);

•	FOR the ratification of the appointment of our independent registered public accounting firm (Item 2);

•	FOR the advisory vote to approve the compensation of our named executive officers (Item 3); and

•	FOR the approval of our Amended and Restated 2009 Omnibus Incentive Compensation Plan (Item 4).

•	Internet:    You can vote over the Internet at the Web address shown on your proxy card up until 11:59 p.m., Eastern Time, on May 15, 2014. Internet voting is available 24 hours a day, seven days a week. When you vote over the Internet, you should not return your proxy card.

•	Telephone:    You can vote by telephone by calling the toll-free number on your proxy card up until 11:59 p.m., Eastern Time, on May 15, 2014. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. When you vote by telephone, you should not return your proxy card.

•	Mail:    You can vote by mail by simply signing, dating and mailing your proxy card in the postage-paid envelope included with this proxy statement. Your proxy card must be received prior to 11:59 p.m., Eastern Time, on May 15, 2014.

---

•	submitting evidence of your revocation to the Company's Corporate Secretary;

•	voting again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 15, 2014;

•	signing another proxy card bearing a later date and mailing it so that it is received prior to 11:59 p.m., Eastern Time, on May 15, 2014; or

•	voting in person at the annual meeting, although attendance at the annual meeting will not, in itself, revoke a proxy.

---

(1)	Based on a Schedule 13G/A dated January 17, 2014 and filed with the SEC by BlackRock on January 30, 2014. The Schedule 13G/A reports that, as of December 31, 2013, BlackRock had sole voting power over 16,844,133 shares and sole dispositive power over 20,399,851 shares of Macy's common stock.

(2)	Based on a Schedule 13G dated February 6, 2014 and filed with the SEC by Vanguard on February 12, 2014. The Schedule 13G reports that, as of December 31, 2013, Vanguard had sole voting power over 607,522 shares, sole dispositive power over 23,839,272 shares and shared dispositive power over 570,173 shares of Macy's common stock.

(1)

Aggregate number of shares of Macy's common stock currently held or which may be acquired within 60 days after March 21, 2014 (i) through the exercise of options granted under our 2009 Omnibus Incentive Compensation Plan, referred to as the 2009 Omnibus Plan, our 1995 Executive Equity Incentive Plan, referred to as the 1995 Equity Plan, or our 1994 Stock Incentive Plan, referred to as the 1994 Stock Plan and (ii) with respect to the Non-Employee Directors, through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period.

---

(2)

Number of shares of Macy's common stock which may be acquired within 60 days after March 21, 2014 (i) through the exercise of options granted under the 2009 Omnibus Plan, the 1995 Equity Plan and the 1994 Stock Plan and (ii) with respect to Non-Employee Directors, through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period.

---

---

---

•

The director may not be (and may not have been within the preceding 60 months) an employee and no member of the director's immediate family may be (and may not have been within the preceding 36 months) an executive officer of Macy's or any of its subsidiaries. For purposes of these Standards for Director Independence, "immediate family" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and

---

•	The director is not a party to any contract pursuant to which such director provides personal services (other than as a director) to Macy's or any of its subsidiaries.

•

Neither the director nor any member of his or her immediate family receives, or has received during any 12-month period within the preceding 36 months, direct compensation of more than $120,000 per year from Macy's or any of its subsidiaries (other than director and committee fees and pension or other forms of deferred compensation for prior service that is not contingent on continued service or, in the case of an immediate family member, compensation for service as a non-executive employee).

•

Neither the director nor any member of his or her immediate family is (and has not been within the preceding 60 months) affiliated with or employed in a professional capacity, including as an executive officer, partner or principal, by any corporation or other entity that is or was a paid adviser, consultant or provider of professional services to, or a substantial supplier of, Macy's or any of its subsidiaries.

•	The director is not a current employee and no member of his or her immediate family is a current executive officer of a company that makes payments to, or receives payments from, Macy's for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

•	The director is not employed by an organization that received, within the preceding 60 months, eleemosynary grants or endowments from Macy's or any of its subsidiaries in excess of $250,000 in any fiscal year of Macy's.

•	The director is not a parent, child, sibling, aunt, uncle, niece, nephew or first cousin of any other director of Macy's.

•	The director is not a party to any agreement binding him or her to vote, as a shareholder of Macy's, in accordance with the recommendations of the Board.

•	The director is not a director of any corporation or other entity (other than Macy's) of which Macy's Chairman or Chief Executive Officer is also a director.

•	Neither the director nor a member of the director's immediate family is employed as an executive officer (and has not been so employed for the preceding 36 months) by another company where any of Macy's present executive officers at the same time serves or served on that company's compensation committee.

---

•	presides over executive sessions of the Non-Employee Directors;

•	works with management to set the agenda for each executive session, considering any matters proposed by other Non-Employee Directors to be discussed at an executive session; and

•	meets separately with the Chairman and CEO within a reasonable period of time after an executive session to review the matters discussed during the executive session that require the Chairman and CEO's action or attention.

---

•	Pay philosophy, peer group and market positioning are appropriate in light of our business model and size relative to our peer group of companies.

•	The programs have an appropriate degree of balance with respect to the mix of cash and equity compensation and measure performance against both annual and multi-year standards.

•	Performance goals are set at levels that are sufficiently high to encourage strong performances and support the resulting compensation expense, but within reasonably attainable parameters to discourage pursuit of excessively risky business strategies.

•	The performance metrics focus participants on growth, profitability and asset efficiency, as well as absolute and relative stock price appreciation, thereby holding management accountable to achievement of key operational and strategic priorities that support our short- and long-term strategic objectives.

•	The CMD Committee has the ability to reduce amounts earned under the annual bonus program to reflect a subjective evaluation of the quality of earnings, individual performance and other factors that should influence earned compensation.

•	Meaningful risk mitigators are in place, including substantial stock ownership guidelines, the three-year relative TSR performance goal in the performance share program, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight, and engagement of an independent consultant that does no other work for the Company or management.

---

•	reviewing the professional services provided by our independent registered public accounting firm and the independence of such firm prior to initial engagement of the firm and annually thereafter;

•	reviewing the scope of the audit by our independent registered public accounting firm;

•	reviewing any proposed non-audit services by our independent registered public accounting firm to determine if the provision of such services is compatible with the maintenance of their independence, and approval of same;

•	reviewing our annual financial statements, systems of internal accounting controls, material legal developments relating thereto, and legal compliance policies and procedures;

•	discussing policies with respect to our risk assessment and risk management;

•	reviewing matters with respect to our legal, accounting, auditing and financial reporting practices and procedures as it may find appropriate or as brought to its attention, including our compliance with applicable laws and regulations;

•	monitoring the functions of our Compliance and Ethics organization, including review and discussing with management and the Board the organization's reports describing its on-going projects, the status of its communications and training programs, the status of pending compliance issues and other matters;

•	reviewing with members of our internal audit staff the internal audit department's staffing, responsibilities and performance, including its audit plans, audit results and actions taken with respect to those results; and

•	establishing procedures for the Audit Committee to receive, review and respond to complaints regarding accounting, internal accounting controls, and auditing matters, as well as confidential, anonymous submissions by employees of concerns related to questionable accounting or auditing matters.

•	reviewing the salaries of our chief executive officer and other executive officers and, either as a committee or together with the other independent directors (as directed by the Board), setting compensation levels for these executives;

•

administering our bonus, incentive and stock option plans, including (i) establishing any annual or long-term performance goals and objectives and maximum annual or long-term incentive awards for the chief executive officer and the other executives, (ii) determining whether and the extent to which annual and/or long-term performance goals and objectives have been achieved, and (iii) determining related annual and/or long-term incentive awards for the chief executive officer and the other executives;

•	reviewing and approving the benefits of the chief executive officer and our other executive officers;

---

•	reviewing and approving any proposed employment agreement with, and any proposed severance, termination or retention plans, agreements or payments applicable to, any of our executive officers;

•	advising and consulting with management regarding our pension, benefit and compensation plans, policies and practices;

•	establishing chief executive officer and key executive succession plans, including plans in the event of an emergency, resignation or retirement; and

•	reviewing and monitoring executive development strategies and practices for senior level positions and executives in order to assure the development of a pool of management and executive personnel for adequate and orderly management succession.

•	reviewing capital projects and other financial commitments and approving such projects and commitments above $25 million and below $50 million, reviewing and making recommendations to the Board with respect to approval of all such projects and commitments of $50 million and above, and reviewing and tracking the actual progress of approved capital projects against planned projections;

•	reporting to the Board on potential transactions affecting our capital structure, such as financings, refinancings and the issuance, redemption or repurchase of our debt or equity securities;

•	reporting to the Board on potential changes in our financial policy or structure which could have a material financial impact on the Company;

•	reviewing the financial considerations relating to acquisitions of businesses and operations involving projected costs above $25 million and below $50 million and approving all such transactions, and recommending to the Board on all such transactions involving projected costs of $50 million and above;

•	reviewing the financial considerations relating to dispositions of businesses and operations involving projected proceeds above $50 million, and endorsing and recommending to the Board all such transactions; and

•	reviewing the management and performance of the assets of our retirement plans.

•	identifying and screening candidates for future Board membership;

•	proposing candidates to the Board to fill vacancies as they occur, and proposing nominees to the Board for election by the shareholders at annual meetings;

•	reviewing our Corporate Governance Principles and recommending to the Board any modifications that the NCG Committee deems appropriate;

•	overseeing the evaluation of and reporting to the Board on the performance and effectiveness of the Board and its committees and other issues of corporate governance, and recommending to the Board any changes concerning the composition, size, structure and activities of the Board and the committees of the Board as the NCG Committee deems appropriate based on its evaluations;

---

•	reviewing and reporting to the Board with respect to director compensation and benefits and make recommendations to the Board as the NCG Committee deems appropriate; and

•	considering possible conflicts of interest of Board members and management and making recommendations to prevent, minimize, or eliminate such conflicts of interest.

•	personal qualities and characteristics, accomplishments and reputation in the business community;

•	knowledge of the retail industry or other industries relevant to our business;

•	relevant experience and background that would benefit the Company;

•	ability and willingness to commit adequate time to Board and committee matters;

•	the fit of the individual's skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to our needs; and

•	diversity of viewpoints, background, experience and demographics.

---

•

Leadership Experience: Directors with experience in significant senior leadership positions with large organizations over an extended period provide the Company with special insights. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. These individuals demonstrate a practical understanding of how large organizations operate, including the importance of succession planning, talent management and how employee and executive compensation is set. They possess skills for managing change and growth and demonstrate a practical understanding of organizations, operations, processes, strategy, risk management and methods to drive growth.

•

Finance Experience: An understanding of finance and related reporting processes is important for directors. We measure our operating and strategic performance by reference to financial goals, including for purposes of executive compensation. In addition, accurate financial reporting is critical to our success. Directors who are financially literate are better able to analyze our financial statements, capital structure and complex financial transactions and ensure the effective oversight of the Company's financial measures and internal control processes.

•

Industry Knowledge and Global Business Experience: We seek to have directors with experience as executives, directors or in other leadership positions in areas relevant to the retail industry on a global scale. We value directors with a global business perspective and those with experience in our high priority areas, including consumer products, customer service, licensing, human resource management and merchandising (including e-commerce and other channels of commerce).

•

Sales and Marketing Experience: Directors with experience in dealing with consumers, particularly in the areas of marketing, marketing-related technology, advertising or otherwise selling products or services to consumers, provide valuable insights to the Company. They understand consumer needs and are experienced in identifying and developing marketing campaigns that might resonate with consumers, the use of technology and emerging and non-traditional marketing media (such as social networking, viral marketing and e-commerce), and identifying potential changes in consumer trends and buying habits.

•	Technology Experience: Directors with an understanding of technology as it relates to the retail industry and/or marketing help the Company focus its efforts in developing and investing in new technologies.

•	Public Company Board Experience: Directors who have experience on other public company boards develop an understanding of corporate governance trends affecting public companies and the extensive and complex oversight responsibilities associated with the role of a public company director. They also bring to the Company an understanding of different business processes, challenges and strategies.

---

---

•	that the notice by the shareholder set forth certain information concerning such shareholder and the shareholder's nominees, including their names and addresses;

•	a representation that the shareholder is entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;

•	the class and number of shares of Macy's stock owned or beneficially owned by such shareholder;

•	a description of all arrangements or understandings between the shareholder and each nominee;

•	such other information as would be required to be included in a proxy statement soliciting proxies for the election of the nominees of such shareholder; and

•	the consent of each nominee to serve as a director of Macy's if so elected.

---

---

---

(1)	All cash compensation is reflected in the "Fees Earned or Paid in Cash" column, whether it is paid currently in cash or deferred under the Director Deferred Compensation Plan.

(2)	The Non-Employee Directors received 2,774 restricted stock units on May 17, 2013, valued at $48.67 per share, which was the closing price of our common stock on the grant date. The following table shows the number of stock options, stock credits and restricted stock units held by each of the Non-Employee Directors as of the end of fiscal 2013:

(3)

The present value of benefits under the retirement plan for Non-Employee Directors for each individual was determined as a deferred temporary life annuity based on years of Board service prior to May 16, 1997. The present value basis includes a discount rate of 4.5% and generational mortality rates under the RP2000CH table projected using scale AA. Scale AA defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Federal Civil Service and Social Security experience from 1977 through 1993. The increase in the actuarial present value of the pension benefit is mainly attributable to the fact that the annual retainer increased from $60,000 to $65,000 for fiscal 2013, and was offset by an increase in the mandatory retirement age from 72 to 74. The calculations assume that the annual retainer remains at $65,000 (the retainer at the end of fiscal 2013) and a retirement at age 74, the mandatory retirement age for Directors as of the end of fiscal 2013.

(4)	"All Other Compensation" consists of the items shown below. Merchandise discounts are credited to the Directors' Macy's charge accounts.

---

•	any shares beneficially owned by the director or members of the director's immediate family;

•	restricted stock or restricted stock units before the restrictions have lapsed; and

•	stock credits or other stock units credited to a director's account.

---

---

•	aligns executive compensation with shareholder value on an annual and long-term basis through a combination of base pay, annual bonus and long-term incentives;

•	includes a mix of direct compensation elements that emphasizes performance results, with 87% of the targeted compensation for the Chief Executive Officer and 70% on average of the targeted compensation for the other Named Executives being tied to changes in shareholder value and how well the Company performs against its business plans and objectives;

•	delivers annual bonus payouts to executives only when they achieve targeted levels of financial results with respect to three key performance metrics included in our annual business plan - sales, earnings before interest and taxes (EBIT) and cash flow;

•	encourages long-term decision-making by aligning the interests of executives with those of shareholders through long-term equity incentives that are subject to multi-year vesting and/or performance requirements that include financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time; and

•	includes features that mitigate risks to the Company, including limits on incentive awards, use of multiple performance measures in our incentive plans, substantial stock ownership guidelines, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight and engagement of an independent consultant that does no other work for the Company or management.

---

•	updates the performance criteria and methodology used to develop performance goals for awarding performance-based awards to covered employees that are intended to be exempt from the limitations of Section 162(m) of the Internal Revenue Code (the "Code");

•	includes a dollar limitation of $350,000 on awards that may be made to a Non-Employee Director during any fiscal year;

•	provides for an extension of the period of time to exercise a non-qualified option right or a stock appreciation right ("SAR") if the last day to exercise such award occurs during a blackout or lockup period or when otherwise prohibited by law to 30 days following the end of such impediment;

•	provides for a Plan term that expires on the tenth anniversary of shareholder approval (May 16, 2024); and

•	adds a definition of "Change in Control" that is consistent with the change in control definition in the Company's Change-in-Control Plan and permits the CMD Committee to include provisions in award agreements to address the treatment of an award in the event of a Change in Control of Macy's.

---

•	help Macy's attract and retain directors, officers, other key executives and employees and consultants and advisors; and

•	provide such persons incentives for performance.

•	officers, executives, and other employees of Macy's and its subsidiaries (or persons who have agreed to commence serving in any such capacity);

•	Macy's non-employee directors; and

•	certain consultants and advisors providing services to Macy's or its subsidiaries.

---

•	option rights, including incentive stock options ("ISOs"),

•	SARs,

•	restricted stock,

•	restricted stock units ("RSUs"),

•	performance shares, and

•	other stock-based awards.

•	decreased by one share for each share subject to an option right or SAR, and by 1.75 shares for each share subject to another award; and

•	increased by one share for each share subject to an option right or SAR, and by 1.75 shares for each share subject to another award, that is forfeited, expires or is settled for cash (in whole or in part).

•	Macy's common stock tendered or withheld in payment of the exercise price of an option right or to satisfy any tax withholding obligation for awards;

•	Macy's common stock subject to a SAR that is not issued when the SAR is exercised and settled in Macy's common stock; and

---

•	Macy's common stock purchased on the open market or otherwise with the proceeds from the exercise of option rights granted under the Amended Plan, the Original Plan, the 1995 Equity Plan or the 1994 Stock Plan.

•	ISOs. The aggregate number of shares of Macy's common stock actually issued or transferred upon the exercise of ISOs will not exceed 30,000,000 shares.

•	Option Rights and SARs. No participant will be granted option rights or SARs, in the aggregate, for more than 2,000,000 shares of Macy's common stock during any fiscal year of Macy's.

•	Restricted Stock, RSUs and Performance Shares. No participant will be granted Qualified Performance-Based Awards of restricted stock, RSUs, performance shares or other share-based awards, in the aggregate, for more than 1,000,000 shares of Macy's common stock during any fiscal year of Macy's.

•	Incentive Awards. No participant will be granted a Qualified Performance-Based Award that is an Incentive Award for any performance period (as described below) for more than, in the aggregate, $6 million.

•	Director Limits. The aggregate grant date fair value of all awards granted to any non-employee director in any fiscal year shall not exceed $350,000, excluding awards made at a director's election in lieu of annual and committee cash retainers.

•	in cash or by check or wire transfer at the time of exercise;

•	by the transfer to Macy's of shares of Macy's common stock owned by the optionee;

•	by a combination of such payment methods;

---

•	through broker facilitated cashless exercise procedures acceptable to the CMD Committee; or

•	by such other methods as may be approved by the CMD Committee.

---

---

•	sales;

•	comparable sales;

•	sales per square foot;

•	owned sales plus licensed sales or comparable owned sales plus licensed sales;

•	pre-tax income;

•	gross margin;

•	operating or other expenses;

•	earnings before interest and taxes (EBIT);

•	earnings before interest, taxes, depreciation and amortization (EBITDA);

•	EBITDA margin;

•	net income;

•	earnings per share (either basic or diluted);

•	cash flow or net cash flow (as provided by or used in one or more of operating activities, investing activities and financing activities or any combination thereof);

•	return on investment (determined with reference to one or more categories of income or cash flow and one or more categories of assets, capital or equity, including return on net assets, return on sales, return on equity and return on invested capital);

•	stock price (appreciation, fair market value);

•	operating income;

•	revenue;

•	total shareowner return;

•	customer satisfaction;

•	gross margin return on investment;

•	gross margin return on inventory;

•	inventory turn;

•	market share;

•	leverage ratio;

•	coverage ratio;

•	employee engagement;

•	employee turnover;

•	strategic business objectives; and

•	strategic plan implementation.

---

•	a person has become the beneficial owner of securities representing 30% or more of our combined voting power (subject to exceptions described in the Amended Plan); or

•

individuals who, on the effective date of the Amended Plan, constitute our directors or whose election as a director after such effective date was approved by at least two-thirds of the directors as of the effective date (or their successors or colleagues that have been so approved) cease for any reason to constitute at least a majority of the Board (subject to exceptions described in the Amended Plan); or

•

consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of our assets and, as a result of or immediately following such merger, consolidation, reorganization, sale or transfer, less than a majority of the voting power of the resulting entity immediately after the transaction is held in the aggregate by the holders of the voting stock of Macy's immediately prior to the transaction (subject to exceptions described in the Amended Plan); or

•	shareholders approve a complete liquidation or dissolution of the Company.

•	by will or the laws of descent and distribution;

•	pursuant to a qualified domestic relations order; or

•	to a fully revocable trust of which the participant is treated as the owner for federal income tax purposes;

---

---

•	the amendment would increase:

•	the maximum number of shares of Macy's common stock that may be issued under the Amended Plan;

•	the maximum number of shares of Macy's common stock that may be subject to option rights or SARs granted to any participant during any fiscal year of Macy's;

•	the maximum number of shares of Macy's common stock that may be granted as Qualified Performance-Based Awards of restricted stock or performance shares or with respect to Qualified Performance-Based Awards of RSUs during any fiscal year of Macy's; or

•	the maximum amount of any Incentive Award that may be awarded for any performance period;

•	the amendment would cause Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, to become inapplicable to the Amended Plan or awards granted under the Amended Plan; or

•	shareholder approval is required by applicable law or NYSE rules and regulations.

---

---

---

•	Terry J. Lundgren, Chairman, President and Chief Executive Officer. Mr. Lundgren has been with Macy's for over 32 years, and has served as our Chief Executive Officer for the last 11 years, making him one of the longest-tenured CEOs in the department stores industry. He is a Named Executive by reason of his position as our principal executive officer.

•	Karen M. Hoguet, Chief Financial Officer. Mrs. Hoguet has been with Macy's for over 31 years, and has been our Chief Financial Officer for 16 years. She is a Named Executive by reason of her position as our principal financial officer.

•	Our three additional most highly compensated executive officers at the end of fiscal 2013, who are Named Executives by reason of their level of compensation:

•	Timothy M. Adams, Chief Private Brand Officer. Mr. Adams has been with Macy's for over 30 years. He has been in his current position since February 2009. Some of his prior positions include Chairman and CEO of Macy's Home Store and Chairman of Macy's Florida.

•	Jeffrey Gennette, Chief Merchandising Officer. Mr. Gennette has been with Macy's for over 30 years. He has been in his current position since February 2009 and assumed additional responsibility for overseeing marketing and macys.com in February 2012.

•	Peter R. Sachse, Chief Stores Officer. Mr. Sachse has been with Macy's for over 30 years. He has been in his current position since February 2012. Prior to that time, he was Chief Marketing Officer and Chairman of macys.com.

•	The senior-most executives, including the Named Executives, are held most accountable to shareholders by varying the portion of variable, performance-based pay directly with each executive's level of responsibility:

•	87% of Mr. Lundgren's targeted total direct compensation for fiscal 2013 was tied to performance objectives and subject to forfeiture in the event the goals were not met.

---

•	On average, 70% of the targeted total direct compensation for fiscal 2013 of the other Named Executives was tied to performance objectives and subject to forfeiture in the event the goals were not met.

•	We emphasize equity-based long-term incentives to ensure that these executives are focused on longer-term operating and stock price performance in addition to shorter-term goals. The targeted value for long-term incentive awards for the Named Executives other than Mr. Lundgren is approximately twice the targeted value of their annual bonus awards and for Mr. Lundgren is approximately three times.

•

The value received from our variable, performance-based pay, if any, is directly related to our performance and reflects a combination of internal financial measures of success, such as operating income (which represents earnings before interest and taxes, or EBIT), sales, cash flow, return on invested capital (ROIC) and external measurements of success, such as stock price performance on an absolute and relative-to-peers basis.

•	To ensure that costs are affordable and reasonable in relation to our operating results, no payments are made under the annual bonus plan unless we have positive EBIT and achieve a net profit for the fiscal year.

•	Equity-based long-term incentive awards are subject to multi-year vesting and/or performance requirements to link compensation to performance measured by achievement of financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time.

•

To further reinforce the long-term alignment of executive interests with shareholders, we maintain policies that require executives to accumulate and hold substantial amounts of Macy's common stock and we prohibit executives from hedging the risk of such ownership or pledging such shares as collateral. We also maintain a robust clawback policy that enables the recapture of previously paid incentive compensation in the event of a financial restatement.

•	Total sales for fiscal 2013 were $27.9 billion, up 0.9% from fiscal 2012 total sales of $27.7 billion. Fiscal 2013 includes 52 weeks and fiscal 2012 included 53 weeks.

•	On a comparable basis, sales in fiscal 2013 were up 1.9%, the fourth consecutive year of comparable sales growth. We calculate comparable sales as sales from stores in operation throughout fiscal 2012 and fiscal 2013, all internet sales and adjust for the 53rd week in fiscal 2012.

•

Comparable sales, together with sales of departments licensed to third parties, for fiscal 2013 were up 2.8% compared to fiscal 2012. See page 16 of the Company's Form 10-K for fiscal 2013 for a reconciliation of this non-GAAP financial measures to the most comparable GAAP financial measures and other important information. We believe that this supplemental information is a key metric in measuring our ability to generate sales growth on a comparable basis whether a selling department is operated by the Company or a third party.

•

Fiscal 2013 earnings per diluted share were $4.00 per share, excluding impairments, store closing and other costs, up 16% from fiscal 2012 on a comparable basis. Fiscal 2012 earnings per diluted share were $3.46 per share, excluding impairments, store closing costs and the premium on early debt retirement. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

---

•

EBIT (or operating income) for fiscal 2013 totaled $2.766 billion, or 9.9% of sales, excluding impairments, store closing and other costs, an increase of 3.8% and 30 basis points as a percent of sales over fiscal 2012 on a comparable basis. For fiscal 2012, EBIT totaled $2.666 billion, or 9.6% of sales, excluding impairments and store closing costs. Fiscal 2013 includes 52 weeks and fiscal 2012 included 53 weeks. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

•

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding impairments, store closing and other costs) margin reached 13.6% in fiscal 2013, reflecting a steady improvement toward our goal of 14%, compared to an Adjusted EBITDA margin of 13.4% in fiscal 2012. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures and other important information.

•	ROIC - a key measure of operating productivity - rose in fiscal 2013, the fifth consecutive year of improvement. ROIC reached 21.5% in fiscal 2013, compared to 21.2% in fiscal 2012. See pages 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

•	Our common stock price at the end of fiscal 2013 was $53.20 per share, a 34.6% increase from the closing price of $39.51 per share at the end of fiscal 2012.

•	Our one-year, three-year and five-year total shareholder return, or TSR, was 37.4%, 143.9% and 541.3%, respectively, which ranked in the 100th percentile, above the 98th percentile and above the 78th percentile, respectively, compared to the TSR of our 10-company fiscal 2013 executive compensation peer group for the same periods.

•	We returned approximately $1.9 billion to shareholders through dividends and share repurchases and increased our cash dividend by 25% in fiscal 2013, to an annualized $1.00 per share.

•	increased base salaries of the Named Executives other than Mr. Lundgren;

•	increased Mr. Lundgren's targeted annual bonus award opportunity from 150% to 170% of base salary, with corresponding changes to his threshold and maximum bonus award opportunities;

•	made annual bonus award payments with respect to fiscal 2013 performance at 68% of the target performance level to the Named Executives based on achievement against pre-determined EBIT, Sales and Cash Flow goals;

•	granted performance-based restricted stock units and stock options to the Named Executives, with a mix of 60% performance-based restricted stock units and 40% stock options:

•

performance-based restricted stock units will be earned based on performance relative to average EBITDA margin, average ROIC and relative TSR goals and measured over a three-year (fiscal 2013-2015) performance period, subject to attainment of a 3-year cumulative EBITDA threshold (if the cumulative EBITDA threshold is not met, the entire award is forfeited regardless of performance against the other metrics);

•	stock options will vest over a four-year period and may be exercisable for up to 10 years following the grant date; and

---

•	determined that the Named Executives had earned 148.5% of the targeted number of performance-based restricted stock units granted in fiscal 2011, based on meeting the cumulative EBITDA threshold of $7.5 billion and the level of achievement against average EBITDA margin and average ROIC goals over the three-year (fiscal 2011-2013) performance period.

•	moved to double-trigger vesting of equity grants following a change in control;

•	discontinued use of executive employment agreements;

•	replaced individual change-in-control agreements with a more limited and standardized change-in-control plan that does not provide for golden parachute tax gross-ups on severance benefits;

•	placed a cap on the amount that can be earned on the EBIT component in our annual bonus plan so that all metrics, including the sales and cash flow components, are limited;

•	increased the weighting on the sales component under the annual bonus plan to support our sales growth initiative, which fuels top line growth and sustainable appreciation in earnings over the longer-term;

•

replaced performance-based stock credit awards that were payable in cash with more financially efficient awards that are settled in shares, which we anticipate will be fully deductible under IRC Section 162(m) and subject to fixed rather than variable equity accounting standards. These awards are granted annually and earned based on performance relative to cumulative EBITDA, average EBITDA margin, average ROIC, and relative-to-peer total shareholder return goals, each as measured over a three-year performance period;

•	further aligned our executives' interests with those of our shareholders by adding a relative-to-peer TSR component to the performance-based restricted stock units, as mentioned above, beginning with awards in fiscal 2012;

•	closed the Supplementary Executive Retirement Plan (SERP) to executives who would have first become eligible to participate in that plan on or after January 2, 2012;

•	determined to transition all employees, including the Named Executives, to a defined contribution-only retirement program by discontinuing future accruals under the Company's defined benefit pension plan and the SERP on December 31, 2013 (other than with respect to benefits relating to service prior to that date);

•

approved adoption of a new defined contribution plan, the Macy's, Inc. Deferred Compensation Plan, which became effective as of January 1, 2014, that will operate in a manner similar to the Company's 401(k) plan and provide for income deferral and company matching contribution opportunities with respect to compensation in excess of amounts eligible for such opportunities under the Company's 401(k) plan;

---

•	added a compensation recovery, or clawback, provision to the annual bonus and long-term incentive plans in the event of financial restatement coupled with executive fraud or intentional misconduct;

•	implemented an anti-hedging/pledging policy;

•	amended our change-in-control plan to eliminate the feature providing additional severance benefits based on assumed additional years of service; and

•

eliminated most executive perquisites, including the additional discount available to executives on the purchase of company merchandise and the provision of company cars (except with respect to the Company car and driver benefit provided to Mr. Lundgren), company-paid life insurance and financial counseling, and placed a cap on the cost to the company of the personal use of company aircraft by the chief executive officer.

•	Providing competitive and reasonable compensation opportunities;

•	Focusing on results and strategic objectives;

•	Fostering a pay-for-performance culture;

•	Attracting and retaining key executives; and

•	Balancing risk and reward and ensuring accountability to shareholders.

---

•	the design of our annual bonus and long-term incentive plans, including the degree to which the incentive plans support our business strategy and balance risk-taking with potential reward;

•	the setting of performance objectives;

•	peer group pay and performance comparisons;

•	the competitiveness of compensation provided to our key executives;

•	changes to the Named Executives' compensation levels;

---

•	the design of other forms of key executive compensation and benefits programs; and

•	the preparation of public filings related to executive compensation, including this CD&A and the accompanying tables and footnotes.

---

•	We have grown from being a $15 billion regional department store company to a national omnichannel retailer with over $27.9 billion in sales.

•	We have successfully integrated the acquisition of the May Company, which doubled the number of stores operated by the Company. This included the conversion of all the regional store nameplates to Macy's, and the development of a highly successful strategy of omnichannel marketing through the integration of stores, online and mobile resources.

•	We have returned to profitability levels and credit metrics experienced prior to the recent recession and are well positioned to move forward to both grow and continue to improve profitability.

•	We have successfully implemented the My Macy's business strategy, which commenced in 2008, to position the Company to be more competitive. Under the My Macy's transformation, we have concentrated more management talent in local markets and significantly increased the resources in the field to work with district planning and buying executives to better localize our merchandise offerings.

•	We have become a customer-centric organization that embraces localization, a seamless omnichannel blend of stores, online and mobile, and more meaningful customer engagement on the selling floor and all other customer interactions.

•	Operating income has grown from $1.1 billion or 4.5% of sales in fiscal 2009 to $2.7 billion or 9.6% of sales in fiscal 2013, an increase of over 150% and up 510 basis points as a percent of sales.

•	Diluted EPS has increased from $0.78 in fiscal 2009 to $3.86 in fiscal 2013, an increase of over almost 400%.

•	Comparable store sales growth was 4.6% in fiscal 2010 (the first full year after the strategy change), 5.3% in fiscal 2011, 3.7% in fiscal 2012 and 1.9% in fiscal 2013.

•

Comparable sales, together with sales of departments licensed to third parties, for fiscal 2013 were up 2.8% as compared to fiscal 2012, and were up 4.2% on a compound annual growth basis since fiscal 2009. See page 16 to 19 of the Company's Form 10-K for fiscal 2013 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

•	The stock price has reacted favorably during this time period on both an absolute and relative-to-peers basis, with total shareholder return over the 5-year period of 541.3%, which is above the 78th percentile versus our 10-company fiscal 2013 peer group over the same 5-year period.

---

•	of similar size in revenues and market capitalization,

•	within the same Global Industry Classification Standard group as Macy's,

•	with an omnichannel business model,

•	with similar products and customers, and

•	that compete with Macy's for executive talent and/or investor capital.

---

•	87% of Mr. Lundgren's targeted total direct compensation (salary, annual bonus and grant date value of long-term incentive awards) for fiscal 2013 was tied to financial performance, corporate objectives and/or stock price performance and subject to forfeiture in the event the performance goals were not met; and

•	for the other Named Executives, on average, approximately 70% of targeted total direct compensation for fiscal 2013 was tied to financial performance, corporate objectives and/or stock price performance and subject to forfeiture in the event the performance goals were not met.

---

---

---

•	The EBIT measure focuses the executives on maximizing operating income and is a good indicator of how effectively our annual business objectives and strategies, which focus on growth in profits, are being executed.

•

Sales, a priority for retailers, are a measure of growth and provide opportunities for the achievement of various other financial measures, including EBIT and cash flow. The Sales target under the Bonus Plan excludes certain items that are included in externally reported sales under GAAP, including, without limitation, licensed department income, shipping and handling fees and sales to third party retailers.

•	Cash Flow is indicative of the manner in which our operating activities, together with our investing activities, actually generate cash.

---

•	60% in performance-based restricted stock units that vest after a three-year performance period only if we meet predetermined financial performance and relative TSR goals; and

•	40% in stock options that vest in installments over a four-year period and have value only if our stock price increases over the grant price of the options.

•	establishing a direct link between compensation and the achievement of our long-term financial objectives and returns to shareholders on both absolute and relative basis;

•	the achievement of longer-term goals related to our three key strategies (the My Macy's localization initiative, driving the omnichannel business and embracing customer centricity, including engaging customers on the selling floor through the MAGIC selling program); and

•	enhancing retention by mitigating the impact of fluctuations in the price of the common stock with the use of performance-based restricted stock units in combination with stock options.

---

*	Straight-line interpolation will apply to performance levels between the ones shown.

•

With respect to EBITDA Margin, the Company has stated to investors that its objective is to achieve an EBITDA Margin rate in the 14% range, consistent with historic peak profit levels for the Company and above that of our key competitors. The achievement of this objective, assuming that it occurs, will be the result of a sustained focus on developing and executing multi-year strategies over a significant period of time.

•	ROIC is a measure of investment productivity and the efficiency in which assets are employed in the operation of the business. It is a very important measure of our performance over time because capital decisions need to be evaluated over an extended period. That is why we include it in our long-term incentive plan and not in our annual bonus plan.

•

Relative TSR is a good measure of shareholder value creation, especially when measured on a consistent basis over extended periods of time. In addition, peer-to-peer measurement is viewed as an executive compensation "best practice" by many proxy advisory firms and corporate governance experts. The CMD Committee determined that TSR should be measured against that of the compensation peer group since that group includes our primary competitors for business, talent and investor capital and results in a consistent group being used internally for pay and performance comparisons. The 20% weighting given to the relative TSR metric ensures that a meaningful amount of the grant is subject to relative TSR results.

---

---

---

(i)	in the Bonus Plan, including the Named Executives, to repay income, if any, derived from the annual bonus, and

(ii)	in the long-term incentive compensation program, including the Named Executives, to repay income derived from performance restricted stock units or stock options, if any,

•	Macy's stock beneficially owned (directly or indirectly) by the executive or owned jointly with any immediate family member of the executive;

•	Any stock credits or other stock units credited to an executive's account through deferrals under our deferred compensation program or otherwise;

•	Time-based restricted stock or restricted stock units granted to the executive, whether lapsed or unlapsed;

•	Time-based stock credits during the performance and holding periods under our stock credit plans;

•	Performance-based stock credits during the holding periods that follow the performance periods under the stock credit plans; and

•	The executive's proportionate share of the Macy's stock fund under our 401(k) plan.

---

---

---

(1)

The amounts in this column for fiscal 2013 include the fair value for performance-based restricted stock units awarded in fiscal 2013 determined by using a weighted average grant date price for the common stock of approximately $42.68 per share, assuming the "target" number of units is earned. Assuming that the "maximum" number of units is earned, the grant date fair value amounts for the performance-based restricted stock units would be $7,143,386 for Mr. Lundgren and $1,221,259 for each of the other Named Executives. See footnote (4) to the 2013 Grants of Plan-Based Awards table.

(2)	The amounts in this column reflect the grant date value of stock options determined using the Black-Scholes option pricing model in accordance with ASC Topic 718. See footnote (4) to the 2013 Grants of Plan-Based Awards table for the assumptions used in making this determination.

(3)

We did not pay above-market interest under our executive deferred compensation plan in 2013, therefore, the amounts reflected in this column relate to pension benefits only. The amounts reflected for fiscal 2013 in this column represent the change in fiscal 2013 in the actuarial present value of accumulated pension benefits under our cash balance pension plan and supplementary executive retirement plan. The assumptions used in determining the present value of benefits are the same assumptions used for financial reporting purposes. The present value of benefits was determined using a unit credit cost method, a 4.5% discount rate and generational mortality rates under the RP2000CH table projected using scale AA. Scale AA defines how future mortality improvements are incorporated into the projected mortality tables and is based on a blend of Federal Civil Service and Social Security experiences from 1977 through 1993. The assumed retirement age used for these calculations was the normal retirement age of 65, as defined by the plans, and each Named Executive was assumed to live to and retire at the normal retirement age.

---

(a)

Mr. Lundgren is the only Named Executive who is permitted to make personal use of company aircraft. The amount shown for aircraft usage is calculated based on the cost of fuel and other variable costs associated with the particular personal flights. Mr. Lundgren's wife and/or other guests accompany him on some flights. There are no additional incremental costs associated with their travel on those flights. Mr. Lundgren is required to reimburse the Company to the extent that the calculated incremental costs associated with his personal usage of Company aircraft exceed $75,000 in the aggregate. For purposes of calculating the incremental costs associated with Mr. Lundgren's personal usage of Company aircraft:

•	Flights were deemed business or personal based on whether there was a business purpose for the flight.

•	If a trip was deemed personal, ferry flights, if any, were included as personal.

•	If a trip included both business and personal destinations, we included as personal the excess, if any, of the aggregate expenses for the trip over the costs of flying to and from the originating airport to the business destination or destinations.

(b)

The amount shown reflects the costs relating to personal use by Mr. Lundgren of a dedicated car and driver that the Company makes available to him for safety reasons pursuant to the recommendation of a third-party security study. Prior to fiscal 2011, we used the services of a third party service to provide this benefit. Beginning with fiscal 2011, we determined that it was more cost effective to hire drivers who could provide business and personal transportation to Mr. Lundgren (and business transportation to other executives when not needed by Mr. Lundgren) rather than obtain these services through the third party provider. The incremental cost calculation for personal use of the car and driver includes driver overtime, tolls, gratuities, lodging for the drivers, maintenance and fuel costs incurred in connection with such personal use.

(c)	The amount shown includes reimbursement payments to Mr. Lundgren in calendar year 2013 for imputed income associated with travel by Mr. and Mrs. Lundgren on some of his flights on company aircraft that were deemed personal for tax reporting purposes, but which the Company determined had a business purpose.

(5)	On March 31, 2014, the Company announced that Jeffrey Gennette had been elected as the Company's President, effective immediately, whereupon Mr. Lundgren ceased to serve as the Company's President. Mr. Lundgren continues to hold the titles of Chairman and Chief Executive Officer.

---

(1)

The Named Executives are eligible for an annual cash bonus incentive award under our Bonus Plan, which is deemed a "non-equity incentive plan" under SEC rules. The plan provides that the Named Executives are eligible for a bonus award only if EBIT is positive. EBIT is defined to exclude the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or non-recurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable. Under the plan, the maximum award a Named Executive may receive for fiscal 2013 is 0.45% of EBIT, or $12.446 million, for Mr. Lundgren and 0.25% of EBIT, or $6.915 million, for each of the other Named Executives, subject in all instances to the Bonus Plan's per-person maximum of $7 million. The CMD Committee may exercise negative discretion to reduce the maximum awards based on the annual bonus award opportunity established for each Named Executive under the Bonus Plan. For a more detailed discussion of the Bonus Plan, see the "Annual Bonus" discussion in "Compensation Discussion & Analysis - Fiscal 2013 Compensation and Analysis."

(2)

The Named Executives received a grant of performance-based restricted stock units ("PRSU") on March 19, 2013. The PRSUs vest over a three-year performance period covering fiscal years 2013-2015. The number of PRSUs earned may range from 0% to 150% of the Target award opportunity based on performance against average EBITDA Margin, average ROIC and relative TSR objectives, and subject to attainment of a minimum cumulative EBITDA of $8.25 billion over the three-year performance period. PRSUs that are earned will be paid out as shares of Macy's common stock. Dividends, if any, paid on the Company's common stock will be credited to the Named Executives' PRSU accounts as additional restricted stock units and will be paid out as shares of Macy's common stock at the end of the three-year performance period only to the extent that the underlying PRSUs to which the dividends relate are earned. See the "Performance-Based Restricted Stock Units" discussion in "Compensation Discussion & Analysis - Fiscal 2013 Compensation and Analysis - Long-term equity compensation" and the "Restricted Stock and Restricted Stock Units" discussion in the narrative below.

(3)	The numbers reflected in this column represent the number of stock options granted to the Named Executives in fiscal 2013.

---

(4)	Stock options were valued as of the grant date using the Black-Scholes option pricing model in accordance with ASC Topic 718, using the following assumptions:

---

*	Straight-line interpolation will apply to performance levels between the ones shown.

---

•

EBITDA is defined as earnings before interest, taxes, depreciation and amortization, which is equal to the sum of operating income and depreciation and amortization as reported in our audited financial statements, adjusted to eliminate the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or non-recurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable.

•	EBITDA Margin is defined as EBITDA divided by Net Sales (with net sales being adjusted to exclude certain items that are included in externally reported sales under GAAP, including licensed department income, shipping and handling fees and sales to third party retailers, and to account for unplanned store closings).

•

ROIC is defined as EBITDAR divided by Total Average Gross Investment. EBITDAR is equal to the sum of EBITDA plus net rent expense (rent expense as reported in our audited financial statements less the deferred rent amortization related to contributions received from landlords). Total Average Gross Investment is equal to the sum of gross property, plant and equipment, capitalized value of non-capitalized leases, working capital - which includes receivables, merchandise inventories, prepaid expenses and other current assets - offset by merchandise accounts payable and accounts payable and accrued liabilities, and other assets (each as reported in our audited or unaudited financial statements).

•

TSR is defined as the change in the value of our common stock over the three-year performance period, taking into account both stock price appreciation and the reinvestment of dividends. The beginning and ending stock prices will be calculated based on a 20-day average stock price. Relative TSR is the percentile rank of our TSR compared to the TSR of our executive compensation peer group over the performance period. For Performance RSUs granted in fiscal 2012 and fiscal 2013, the executive compensation peer group consisted of the following 10 companies: Dillard's, Gap, J.C. Penney, Kohl's, L Brands, Nordstrom, Sears Holdings, Target, TJX Companies and Walmart.

---

---

---

(2)	Target number of Performance RSUs that vest following the conclusion of the three-year (fiscal 2012-2014) performance period, subject to the satisfaction of performance criteria. See the “Restricted Stock and Restricted Stock Units” discussion in the narrative following the 2013 Grants of Plan-Based Awards table.

(3)

Target number of Performance RSUs that vest following the conclusion of the three-year (fiscal 2013-2015) performance period, subject to the satisfaction of performance criteria. See the “Restricted Stock and Restricted Stock Units” discussion in the narrative following the 2013 Grants of Plan-Based Awards table and the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis - Fiscal 2013 Compensation and Analysis - Long-term equity compensation.”

(4)	Time-based restricted stock units that vest on March 23, 2015 following a three-year vesting period.

(1)

The amounts “realized” from option exercises reflect the appreciation on the date of exercise (based on the excess of the fair market value of the shares on the date of exercise over the exercise price). However, because the Named Executives may keep the shares they acquire upon the exercise of the option (or sell them at different prices), these amounts do not necessarily reflect cash actually realized upon the exercise of those options.

(2)

The value of the stock awards are presented as of the date of the certification of related performance results, and not as of the date the awards were granted. The Performance RSUs were valued at $57.86 per share, which was the closing price of our common stock on February 28, 2014, the date that the CMD Committee certified the performance results for the Performance RSUs. This closing price reflects the 147% increase in our stock price experienced by our shareholders during the three-year performance period for the Performance RSUs over their March 25, 2011 grant date price of $23.43 per share.

---

•	an opening cash balance for participants in the plan at December 31, 1996, equal to the lump sum present value, using stated actuarial assumptions, of the participant's accrued normal retirement benefit earned at December 31, 1996, under the applicable predecessor pension plan;

•	pay credits (credited annually, a percentage of eligible compensation generally based on length of service); and

•	interest credits (credited quarterly, based on the 30-Year Treasury Bond rate for the November prior to each calendar year, with a guaranteed minimum rate of 5.25% annually).

---

---

(1)	Deferrals under the DCP commenced as of January 1, 2014. The amounts listed are reported as compensation for fiscal 2013 in the Salary column of the Summary Compensation Table.

(2)	These amounts are not included in the 2013 Summary Compensation Table.

(3)

A portion of the compensation deferred by Mr. Adams and Mr. Gennette under the EDCP is deferred as stock credits and a portion is deferred as cash credits. The portion of the aggregate balance that is attributable to their contributions under the EDCP was deferred in years prior to those reported in the 2013 Summary Compensation Table. The portion of the aggregate balance attributable to compensation deferred by the Named Executives under the DCP are reported as compensation for fiscal 2013 in the Salary column of the 2013 Summary Compensation Table.

---

•	a cash severance payment (generally paid in the form of a lump sum) that will be equal to two times the sum of:

•	his or her base pay (at the higher of the rate in effect at the change in control or the rate in effect at termination) and

•	the average annual bonus (if any) received for the three full fiscal years preceding the change in control; plus

•	a lump sum payment of an annual bonus for the year of termination, at target, prorated to the date of termination (this feature applies to all executives in the Bonus Plan); plus

•	release of any restrictions on restricted stock or restricted stock units, including performance-based awards, upon termination following the change in control; plus

•	acceleration of any unvested stock options upon termination following the change in control (this feature applies to all participants with stock options granted under the 2009 Omnibus Plan in fiscal 2010 and thereafter) or upon the change in control (this feature applies to all participants with stock options granted under the 1995 Equity Plan or the 1994 Stock Plan prior to fiscal 2010); plus

---

•	a lump sum payment of all deferred compensation (this feature applies to all participants in the deferred compensation plan); plus

•	payment of all retirement, supplementary retirement and 401(k) benefits upon termination or retirement in accordance with any previously selected distribution schedule (this feature applies to all participants in the retirement, supplementary retirement and 401(k) plans); plus

•	a retiree discount for life if at least 55 years of age with 15 years of vesting service at termination (this feature applies generally to all associates).

•	a person has become the beneficial owner of securities representing 30% or more of our combined voting power; or

•	individuals who, on the effective date of the CIC Plan, constitute our directors or whose election as a director after such effective date was approved by at least two-thirds of the directors as of the effective date cease for any reason to constitute at least a majority of the Board; or

•

consummation of a reorganization, merger or consolidate or sale or other disposition of all or substantially all of our assets and, as a result of or immediately following such merger, consolidation, reorganization, sale or transfer, less than a majority of the voting power of the other corporation immediately after the transaction is held in the aggregate by the holders of the voting stock of Macy's immediately prior to the transaction; or

•	shareholders approve a complete liquidation or dissolution of the Company.

•	a material diminution in the executive's base compensation; or

•	a material diminution in the executive's authority, duties or responsibilities; or

•	a material change in the geographic location at which the executive must perform services to the Company; or

•	any other action or inaction that constitutes a material breach by us of an agreement under which the executive provides services.

•	the executive's employment terminated February 1, 2014;

•	the executive's salary continues as it existed on February 1, 2014;

•	the CIC Plan applies; and

•	the stock price for our common stock is $53.20 per share (the closing price on the last business day of fiscal 2013).

---

---

---

---

---

---

I.	Authority to Approve Non-Audit Services

II.	Disclosure of Permitted Non-Audit Services in Outside Auditor's Engagement Letter

•	Whether the service is being performed principally for the Audit Committee;

•	The effects of the service, if any, on audit effectiveness or on the quality and timeliness of Macy's financial reporting process;

•	Whether the service would be performed by specialists (e.g., technology specialists) who ordinarily also provide recurring audit support;

•	Whether the service would be performed by outside audit personnel and, if so, whether it will enhance their knowledge of Macy's business and operations;

•	Whether the role of those performing the service (e.g., a role where neutrality, impartiality and auditor skepticism are likely to be subverted) would be inconsistent with the outside auditor's role;

•	Whether the outside audit firm's personnel would be assuming a management role or creating a mutuality of interest with Macy's management;

---

•	Whether the outside auditors, in effect, would be auditing their own numbers;

•	Whether the project must be started and completed very quickly;

•	Whether the outside audit firm has unique expertise in the service;

•	Whether the service entails the outside auditor serving in an advocacy role for Macy's; and

•	The size of the fee(s) for the non-audit service(s).

III.	Annual Assessment of Policy

---

(a)	“Appreciation Right” means a right granted pursuant to Section 6 of the Plan and will include both Tandem Appreciation Rights and Free-Standing Appreciation Rights.

(b)	“Award” means a grant of an Incentive Award, an Option Right, an Appreciation Right, Restricted Stock, a Restricted Stock Unit, a Performance Share or an Other Award pursuant to the terms of the Plan.

(c)	“Base Price” means the price to be used as the basis for determining the Spread upon the exercise of an Appreciation Right.

(d)	“Board” means the Board of Directors of the Company.

(e)	“Change in Control” means a Change in Control of the Company as defined in Section 12(a) of the Plan.

(f)	“Code” means the Internal Revenue Code of 1986, as amended from time to time.

(g)	“Common Shares” means shares of common stock of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type referred to in Section 14 of the Plan.

(h)

“Compensation Committee” means a committee appointed by the Board in accordance with the by-laws of the Company consisting of at least three directors who qualify as “Non-Employee Directors” within the meaning of Rule 16b-3 and “outside directors” within the meaning of Section 162(m) of the Code, and who satisfy any applicable standards of independence under the federal securities and tax laws and the listing standards of the New York Stock Exchange (“NYSE”) or any other national securities exchange on which the Common Shares are listed as in effect from time to time.

(i)	“Covered Employee” means a Participant who is, or is determined by the Compensation Committee to be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any successor provision).

(j)	“Date of Grant” means the date specified by the Compensation Committee on which an Award becomes effective, which may be on or after (but not before) the date on which the Compensation Committee takes action with respect thereto.

(k)	“Director” means a member of the Board.

(l)

“Evidence of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Compensation Committee that sets forth the terms and conditions of the Award or Awards granted. An Evidence of Award may be in an electronic medium, may be limited to notation on the books and records of the Company and, unless otherwise determined by the Compensation Committee, need not be signed by a representative of the Company or a Participant.

(m)	“Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Section 6 of the Plan that is not granted in tandem with an Option Right.

---

(n)	“Immediate Family” has the meaning ascribed thereto in Rule 16a-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(o)	“Incentive Award” means a cash award granted pursuant to Section 9 of the Plan that is based on Performance Criteria and that has a Performance Period of more than one year.

(p)	“Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock options” under Section 422 of the Code or any successor provision.

(q)

“Market Value per Share” means as of any particular date the closing sale price of a Common Share as reported on the NYSE or, if not listed on the NYSE, on any other national securities exchange on which the Common Shares are listed. If there is a regular public trading market for the Common Shares but the Common Shares are not traded as of any given date, the Market Value per Share means the closing price for a Common Share on the principal exchange on which the Common Shares are traded for the immediately preceding date on which the Common Shares were traded. If there is no regular public trading market for the Common Shares, the Market Value per Share of the Common Shares shall be the fair market value of a Common Share as determined in good faith by the Compensation Committee. The Compensation Committee is authorized to adopt another fair market value pricing method, provided such method is stated in the Evidence of Award, and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.

(r)	“Non-Employee Director” means a Director who is not an employee of the Company.

(s)	“Nonqualified Stock Options” means Option Rights other than Incentive Stock Options.

(t)	“Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option Right.

(u)	“Option Price” means the purchase price payable on exercise of an Option Right.

(v)	“Option Right” means the right to purchase Common Shares upon exercise of an option granted pursuant to Section 5 of the Plan.

(w)	“Other Award” means an award granted pursuant to Section 10 of the Plan.

(x)	“Participant” means a person described in Section 4(a) of the Plan who is approved by the Compensation Committee pursuant to Section 4(b) of the Plan to receive an Award or Awards under the Plan.

(y)

“Performance Criteria” means the measurable performance objective or objectives established pursuant to the Plan in relation to grants of Awards pursuant to the Plan. Performance Criteria may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of one or more of the Company’s Subsidiaries, divisions, segments, departments, regions, functions or other organizational units within the Company or its Subsidiaries. The Performance Criteria may be made relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. The Compensation Committee may grant Awards subject to Performance Criteria that are either Qualified Performance-Based Awards or are not Qualified Performance-Based Awards.

(z)	“Performance Goal” means, for a Performance Period, the level of performance, whether absolute or relative, established by the Compensation Committee for purposes of determining whether or the extent to which an Award has been earned based on the level of performance attained with respect to one or more Performance Criteria.

---

(aa)

“Performance Period” means one or more periods of time as the Compensation Committee may designate over which the attainment of one or more Performance Criteria and Performance Goal(s) will be measured for the purpose of determining a Participant’s rights in respect of an Award with respect thereto. A Performance Period may overlap with prior and subsequent Performance Periods, and the commencement or conclusion of a Performance Period may coincide with the commencement or conclusion of another Performance Period.

(bb)	“Performance Share” means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 9 of the Plan.

(cc)	“Prior Plans” means both the Company’s 1995 Executive Equity Incentive Plan (As Amended and Restated as of June 1, 2007) (the “1995 Plan”) and the Company’s 1994 Stock Incentive Plan (As Amended and Restated as of June 1, 2007) (the “1994 Plan”).

(dd)	“Qualified Performance-Based Award” means any Award or portion of an Award to a Covered Employee that is intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m) of the Code.

(ee)	“Restricted Stock” means Common Shares granted or sold pursuant to Section 7 of the Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers referred to in Section 7 of the Plan has expired.

(ff)	“Restricted Stock Unit” means an award made pursuant to Section 8 of the Plan.

(gg)	“Restriction Period” means the period of time during which Restricted Stock or Restricted Stock Units may be subject to restrictions, as provided in Section 7 and Section 8 of the Plan.

(hh)	“Rule 16b-3” means Rule 16b-3 (or any successor rule substantially to the same effect) promulgated under the Exchange Act, as in effect from time to time.

(ii)	“Spread” means the excess of the Market Value per Share of the Common Shares on the date when an Appreciation Right is exercised over the Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively.

(jj)	“Subsidiary” has the meaning specified in Rule 405 promulgated under the Securities Act of 1933, as amended (or in any successor rule substantially to the same effect).

(kk)	“Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 6 of the Plan that is granted in tandem with an Option Right.

(a)	Maximum Shares Available Under the Plan.

(i)	Subject to adjustment as provided in Section 14 of the Plan, a total of 51,000,000 Common Shares shall be authorized for grant under the Plan less one Common Share for every one Common Share

---

(ii)

If (A) any Common Shares subject to an Award are forfeited, an Award expires or an Award is settled for cash (in whole or in part), or (B) after January 31, 2009, any Common Shares subject to an award under the Prior Plans are forfeited, or an award under the Prior Plans expires or is settled for cash (in whole or in part), the Common Shares subject to such Award or award under the Prior Plans shall, to the extent of such forfeiture, expiration or cash settlement, again be available for Awards under the Plan, in accordance with Section 3(a)(iv) of the Plan. Notwithstanding anything to the contrary contained herein, the following Common Shares shall not be added to the Common Shares authorized for grant under Section 3(a)(i) of the Plan: (X) Common Shares tendered by the Participant or withheld by the Company in payment of the Option Price or the purchase price of an option granted under the Prior Plans, or to satisfy any tax withholding obligation with respect to Awards or awards granted under the Prior Plans, (Y) Common Shares subject to an Appreciation Right or a stock appreciation right granted under the Prior Plans that are not issued or transferred in connection with its stock settlement on exercise thereof and (Z) Common Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights or options granted under the Prior Plans.

(iii)

Common Shares issued or transferred under Awards granted in connection with the assumption of or substitution or exchange for previously granted awards made by an entity acquired by the Company pursuant to a merger, acquisition or similar transaction (“Substitute Awards”) shall not reduce the Common Shares authorized for grant under the Plan, nor shall Common Shares subject to a Substitute Award again be available for Awards under the Plan to the extent of any forfeiture, expiration or cash settlement as provided in Section 3(a)(ii) of the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, to reflect the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Common Shares authorized for grant under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or combination.

(iv)

Each Common Share that again becomes available for grant pursuant to this Section 3 shall be added back as (A) one Common Share if such Common Share was subject to an Option Right or Appreciation Right granted under the Plan or an option or stock appreciation right granted under the Prior Plans, and (B) as 1.75 Common Shares if such Common Share was subject to an Award other than an Option Right or Appreciation Right granted under the Plan or an award other than an option or stock appreciation right granted under the Prior Plans.

(v)	Subject to adjustment as provided in Section 14 of the Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 30,000,000 Common Shares.

---

(b)	Individual Participant Limits. Notwithstanding anything in this Section 3, or elsewhere in the Plan, to the contrary, and subject to adjustment as provided in Section 14 of the Plan:

(i)	No Participant will be granted Option Rights or Appreciation Rights, in the aggregate, for more than 2,000,000 Common Shares during any fiscal year of the Company;

(ii)	No Participant will be awarded Qualified Performance-Based Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Other Awards, in the aggregate, for more than 1,000,000 Common Shares during any fiscal year of the Company;

(iii)	No Participant will, for any Performance Period, receive a Qualified Performance-Based Award that is an Incentive Award having an aggregate maximum value in excess of $6,000,000; and

(iv)

Notwithstanding any provision of the Plan to the contrary, the aggregate grant date fair value (computed as of the Date of Grant in accordance with applicable financial accounting rules) of all Awards granted to any Non-Employee Director under this Plan during any single fiscal year of the Company shall not exceed $350,000. However, such limit shall not apply to any Award granted pursuant to a Non-Employee Director’s voluntary election to receive Common Shares in lieu of cash fees.

(a)

The individuals who are eligible to receive Awards hereunder shall be limited to officers, executives, or other employees of the Company or any one or more of its Subsidiaries, persons who have agreed to commence serving in any of such capacities, Non-Employee Directors of the Company and consultants and advisors who provide services to the Company or any one or more of its Subsidiaries (provided that such consultants and advisors satisfy the Securities and Exchange Commission (“SEC”) Form S-8 requirements for consultants and advisors).

(b)	From time to time, the Compensation Committee shall, in its sole discretion, but subject to all of the provisions of the Plan, determine which of the persons described in Section 4(a) of the Plan are approved to receive an Award or Awards under the Plan, as well as the size, terms, conditions and/or restrictions of such Award or Awards.

(c)

The Compensation Committee may approve the grant of Awards subject to differing terms, conditions and/or restrictions to any person described in Section 4(a) of the Plan in any year. The Compensation Committee’s decision to approve the grant of an Award to a Participant in any year shall not require the Compensation Committee to approve the grant of an Award to that person in any other year or to any other person in any year; nor shall the Compensation Committee’s decision with respect to the size, terms, conditions and/or restrictions of any Award to be made to a Participant in any year require the Compensation Committee to approve the grant of an Award of the same size or with the same terms, conditions and/or restrictions to such person in any other year or to any other person in any year. The Compensation Committee shall not be precluded from approving the grant of an Award to any person described in Section 4(a) of the Plan solely because such person may previously have been granted an Award.

(a)

Each grant of Option Rights will specify the number of Common Shares to which it pertains, subject to the limitations set forth in Section 3 of the Plan, and the term during which the Option Rights will exist, which shall not exceed ten years from the Date of Grant. Notwithstanding the foregoing, in the event that on the last business day of the term of an Option Right, other than an Incentive Stock Option, (i) the exercise of the Option Right is prohibited by applicable law or (ii) Common Shares may not be purchased or sold by certain employees or Directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement, in each case to the extent any extension would not constitute the extension of a stock right under Section 409A of the Code.

---

(b)	Except with respect to Substitute Awards, each grant will specify an Option Price per share, which may not be less than the Market Value per Share as of the Date of Grant.

(c)

Each grant will specify whether the Option Price is payable (i) in cash or by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of nonforfeitable, unrestricted Common Shares already owned by the Optionee having a value as of the time of exercise as determined by the Compensation Committee or in accordance with the applicable Evidence of Award, equal to the total Option Price, (iii) by a combination of such methods of payment, (iv) through broker facilitated cashless exercise procedures acceptable to the Compensation Committee or (v) by such other methods as may be approved by the Compensation Committee.

(d)	To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the Common Shares to which such exercise relates.

(e)	Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.

(f)

Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary that is necessary before the Option Rights or installments thereof will become exercisable and may provide for the earlier exercise of such Option Rights in the event of the retirement, death or disability of an Optionee, a Change in Control, or a hardship or other special circumstances affecting an Optionee.

(g)	Option Rights granted under this Plan may be (i) Incentive Stock Options, (ii) Nonqualified Stock Options, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who are “employees” (under Section 3401(c) of the Code) of the Company or a subsidiary of the Company (under Section 424 of the Code).

(h)	Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of Award shall be subject to the Plan and shall contain such terms and provisions as the Compensation Committee may approve, except that in no event will any such Evidence of Award include any provision prohibited by the terms of the Plan.

(i)	No grant of Option Rights may provide for dividends, dividend equivalents or other similar distributions to be paid on such Option Rights.

(a)

The Compensation Committee may, from time to time and upon such terms and conditions as it may determine, also authorize the granting (i) to any Optionee, of Tandem Appreciation Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related Option Right, to receive from the Company an amount determined by the Compensation Committee, which will be expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise. Tandem Appreciation Rights may be granted at any time prior to the exercise or termination of the related Option Rights; provided, however, that a Tandem Appreciation Right awarded in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. A Free-Standing Appreciation Right will be a right of the Participant to receive from the Company an amount expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise.

(b)	Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(i)	Any grant may specify that the amount payable on exercise of an Appreciation Right may be paid by the Company in cash, in Common Shares or in any combination thereof and may retain for the Compensation Committee the right to elect among those alternatives.

(ii)	Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Compensation Committee at the Date of Grant.

---

(iii)	Any grant may specify waiting periods before exercise and permissible exercise dates or periods and may provide for the earlier exercise of such Appreciation Rights in the event of the retirement, death or disability of a Participant, a Change in Control, or a hardship or other special circumstances affecting a Participant.

(iv)

Each grant of Appreciation Rights will be evidenced by an Evidence of Award, which Evidence of Award will describe such Appreciation Rights, identify the related Option Rights (if applicable), and contain such other terms and provisions, consistent with this Plan, as the Compensation Committee may approve, except that in no event will any such Evidence of Award include any provision prohibited by the terms of the Plan.

(v)	No grant of Appreciation Rights may provide for dividends, dividend equivalents or other similar distributions to be paid on such Appreciation Rights.

(c)	Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights may be exercised only at a time when the related Option Right is also exercisable and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation.

(d)	Regarding Free-Standing Appreciation Rights only:

(i)	Except with respect to Substitute Awards, each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which will be equal to or greater than the Market Value per Share on the Date of Grant;

(ii)	Successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and

(iii)

No Free-Standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. Notwithstanding the foregoing, in the event that on the last business day of the term of an Appreciation Right, (i) the exercise of the Appreciation Right is prohibited by applicable law or (ii) Common Shares may not be purchased or sold by certain employees or Directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Appreciation Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement, in each case to the extent any extension would not constitute the extension of a stock right under Section 409A of the Code.

(a)	Each such grant or sale will constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture, restrictions on transfer and other provisions provided below.

(b)	Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant.

(c)

If the Compensation Committee has designated the Common Shares covered by a grant of Restricted Stock as “Performance Restricted Stock” (“Performance Restricted Stock”), then the Compensation Committee shall establish, at the Date of Grant, the Performance Period, Performance Goal(s) and Performance Criteria that would determine the extent to which restrictions set forth in Section 7(a) of the Plan shall lapse on any specified date; provided, however, that except with respect to grants to Non-Employee Directors, restrictions relating to Performance Restricted Stock may not terminate sooner than one year from the Date of Grant.

(d)	Each such grant or sale will provide that the Restricted Stock covered thereby that vests upon the passage of time will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a Restriction Period to be determined by the Compensation Committee at the Date of Grant or upon

---

(e)

Each such grant or sale will provide that during the Restriction Period, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent prescribed in or pursuant to the Evidence of Award (which restrictions may include, without limitation, rights of repurchase or first refusal or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in the hands of any transferee).

(f)	Notwithstanding anything to the contrary contained in this Plan, any grant of Restricted Stock may provide for the earlier termination of restrictions on such Restricted Stock in the event of the retirement, death or disability of a Participant, or Change in Control, or a hardship or other special circumstances affecting a Participant.

(g)

Any grant of Restricted Stock may require that any or all dividends or other distributions paid on such Restricted Stock during the Restriction Period be automatically deferred and reinvested in additional shares of Restricted Stock, which may be subject to the same restrictions as the underlying Award; provided, however, that dividends or other distributions on Performance Restricted Stock shall be deferred and held in escrow or reinvested in additional shares of Performance Restricted Stock until the achievement of the applicable Performance Goal(s).

(h)	Any grant of Restricted Stock made to a newly hired Participant to replace forfeited awards granted by such Participant’s prior employer and grants of Restricted Stock that are a form of payment of earned performance awards or other incentive compensation may provide for a minimum vesting period of one year.

(i)

Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with the Plan, as the Compensation Committee may approve, except that in no event will any such Evidence of Award include any provision prohibited by the terms of the Plan. Restricted Stock may be evidenced in such manner as the Compensation Committee shall determine. Unless otherwise directed by the Compensation Committee, (i) certificates representing shares of Restricted Stock will be held in custody by the Company until all restrictions thereon have lapsed, together with a stock power executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such Restricted Stock, and (ii) uncertificated shares of Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such shares of Restricted Stock.

(a)

Each Restricted Stock Unit shall represent the right of the Participant to receive a payment upon or after vesting of the Restricted Stock Unit equal to the Market Value per Share of a Common Share as of the Date of Grant, the vesting date or such other date subsequent to the Date of Grant as determined by the Compensation Committee at the Date of Grant. The Compensation Committee may, at the Date of Grant, provide a limitation on the amount payable in respect of each Restricted Stock Unit. The Compensation Committee may provide for the settlement of Restricted Stock Units in cash, in Common Shares, or in any combination thereof.

(b)	Each such grant may be made without additional consideration.

(c)

If the Compensation Committee has designated a Restricted Stock Unit as a “Performance Restricted Stock Unit” (a “Performance Restricted Stock Unit”), then the Compensation Committee shall establish, at the Date of Grant, the Performance Period, Performance Goal(s) and Performance Criteria that would determine the extent to which restrictions set forth in Section 8(a) of the Plan shall lapse on any specified

---

(d)

Each such grant will provide that the Restricted Stock Unit covered thereby will be subject to one or more vesting conditions for a Restriction Period to be determined by the Compensation Committee at the Date of Grant or upon achievement of Performance Goal(s) referred to in Section 8(c) of the Plan. If the elimination of restrictions is based only on the passage of time rather than the achievement of Performance Goal(s), the period of time will be no shorter than three years, except that the restrictions may be removed ratably during the three-year period, on an annual basis, as determined by the Compensation Committee at the Date of Grant; provided, however, that the provisions of this sentence will not apply to grants to Non-Employee Directors.

(e)

Each such grant will provide that the transferability of the Restricted Stock Units will be prohibited during the Restriction Period. During the Restriction Period, the Participant shall not have any rights of ownership in the Common Shares subject to the Restricted Stock Units, and shall not have any right to vote such Common Shares. The Compensation Committee may, on or after the Date of Grant, authorize the payment of dividend equivalents on such Common Shares in cash or additional Common Shares on a current, deferred or contingent basis; provided, however, that dividend equivalents on Performance Restricted Stock Units shall be deferred and held in escrow or deemed reinvested in additional Performance Restricted Stock Units until the achievement of the applicable Performance Goal(s).

(f)	Any grant of Restricted Stock Units made to a newly hired Participant to replace forfeited awards granted by such Participant’s prior employer and grants of Restricted Stock Units that are a form of payment of earned performance awards or other incentive compensation may provide for a minimum vesting period of one year.

(g)	Notwithstanding anything to the contrary contained in the Plan, any grant of Restricted Stock Units may provide for the earlier lapse or modification of the Restriction Period in the event of the retirement, death or disability of a Participant, a Change in Control, or a hardship or other special circumstances affecting a Participant.

(h)	Each issuance or transfer of Restricted Stock Units will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with the Plan, as the Compensation Committee may approve, except that in no event will any such Evidence of Award include any provision prohibited by the terms of the Plan.

(a)

Each grant will specify either the number of Common Shares, or amount of cash, payable with respect to Incentive Awards or Performance Shares to which it pertains, which number or amount payable may be subject to adjustment to reflect changes in compensation or other factors; provided, however, that no such adjustment will be made in the case of a Qualified Performance-Based Award of Incentive Awards or Performance Shares (other than in connection with the death or disability of the Participant or a Change in Control) where such action would result in the loss of the otherwise available exemption of the Qualified Performance-Based Award under Code Section 162(m).

(b)

The Performance Period with respect to each Incentive Award or Performance Share will be such period of time (not less than one year unless otherwise determined by the Compensation Committee in the case of Performance Shares) as will be determined by the Compensation Committee at the time of grant, which Performance Period may be subject to earlier lapse or other modification in the event of the retirement, death or disability of a Participant, a Change in Control, or a hardship or other special circumstances affecting a Participant.

(c)	Any grant of Incentive Awards or Performance Shares will specify Performance Criteria and Performance Goal(s) that, if achieved, will result in payment or early payment of the Award and may set forth a formula for determining the number of Common Shares, or amount of cash, payable with respect to Incentive

---

(d)	Each grant will specify the time and manner of payment of Incentive Awards or Performance Shares that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Shares or in any combination thereof and will retain in the Compensation Committee the right to elect among those alternatives.

(e)	Any grant of Incentive Awards or Performance Shares may specify that the amount payable or the number of Common Shares issued with respect thereto may not exceed maximums specified by the Compensation Committee at the Date of Grant.

(f)

The Compensation Committee may at the Date of Grant of Performance Shares provide for the payment of dividend equivalents to the holder thereof on either a current, deferred or contingent basis, either in cash or in additional Common Shares; provided, however, that dividend equivalents on Performance Shares shall be deferred and held in escrow or reinvested in additional Performance Shares until the achievement of the applicable Performance Goal(s).

(g)	Each grant of Incentive Awards and Performance Shares will be evidenced by an Evidence of Award and will contain such other terms and provisions, consistent with the Plan, as the Compensation Committee may approve, except that in no event will any such Evidence of Award include any provision prohibited by the terms of the Plan.

(a)

The Compensation Committee may, subject to limitations under applicable law, grant to any Participant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Shares or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Compensation Committee, and awards valued by reference to the book value of Common Shares or the value of securities of, or the performance of, specified Subsidiaries or affiliates or other business units of the Company. The Compensation Committee shall determine the terms and conditions of such awards. Common Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 10 shall be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Common Shares, other awards, notes or other property, as the Compensation Committee shall determine.

(b)	Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section 10.

(c)	The Compensation Committee may grant Common Shares as a bonus, or may grant other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Compensation Committee in a manner that complies with Section 409A of the Code.

(d)	Share-based awards pursuant to this Section 10 are not required to be subject to any minimum vesting period.

(e)

The Compensation Committee may at the Date of Grant of share-based other awards provide for the payment of dividend equivalents to the holder thereof on either a current, deferred or contingent basis, either in cash or in additional Common Shares; provided, however, that dividend equivalents on share-based other awards subject to the achievement of Performance Goal(s) shall be deferred and held in escrow or reinvested until the achievement of the applicable Performance Goal(s).

---

(a)

The Compensation Committee may determine, at the time of grant of any Award, to designate such Award as a Qualified Performance-Based Award (except such designation may not be required for Option Rights and Appreciation Rights that otherwise qualify for exemption under Code Section 162(m)). When such Qualified Performance-Based Awards are granted, the Compensation Committee shall establish in writing (i) the Performance Criteria, (ii) the Performance Period, (iii) the Performance Goal(s) for determining the attainment of the Performance Criteria for the Performance Period, and (iv) any other conditions that the Compensation Committee deems appropriate and consistent with the requirements of Section 162(m) of the Code.

(b)	The Performance Goals applicable to any Qualified Performance-Based Award to a Covered Employee will be based on one or more, or a combination, of the following Performance Criteria (including ratios or other relationships between one or more, or a combination, of the following Performance Criteria):

(i)	sales;

(ii)	comparable sales;

(iii)	sales per square foot;

(iv)	owned sales plus licensed sales or comparable owned sales plus licensed sales;

(v)	pre-tax income;

(vi)	gross margin;

(vii)	operating or other expenses;

(viii)	earnings before interest and taxes (EBIT);

(ix)	earnings before interest, taxes, depreciation and amortization (EBITDA);

(x)	EBITDA Margin;

(xi)	net income;

(xii)	earnings per share (either basic or diluted);

(xiii)	cash flow or net cash flow (as provided by or used in one or more of operating activities, investing activities and financing activities or any combination thereof);

(xiv)	return on investment (determined with reference to one or more categories of income or cash flow and one or more categories of assets, capital or equity, including return on net assets, return on sales, return on equity and return on invested capital);

(xv)	stock price (appreciation, fair market value);

(xvi)	operating income;

(xvii)	revenue;

(xviii)	total shareowner return;

(xix)	customer satisfaction;

(xx)	gross margin return on investment;

(xxi)	gross margin return on inventory;

(xxii)	inventory turn;

(xxiii)	market share;

(xxiv)	leverage ratio;

(xxv)	coverage ratio;

(xxvi)	employee engagement;

(xxvii)	employee turnover;

(xxviii)	strategic business objectives; and

(xxix)	strategic plan implementation.

(c)	Prior to settlement of a Qualified Performance-Based Award, the Compensation Committee shall certify, by resolution or other appropriate action in writing, the level of attainment of the Performance Goals.

(a)	Change in Control. Except as otherwise provided in the applicable Evidence of Award, a “Change in Control” of the Company means the occurrence of any of the following events:

(i)	The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the combined voting power of the then-

---

(A)	any acquisition of Voting Stock directly from the Company that is approved by a majority of the Incumbent Board (as defined in subsection (ii) below);

(B)	any acquisition of Voting Stock by any entity in which the Company, directly or indirectly, beneficially owns 50% or more ownership or other equity interest (a “CIC Subsidiary”);

(C)	any acquisition of Voting Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any CIC Subsidiary; or

(D)	any acquisition of Voting Stock by any Person pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iii) below;

(X)

if any Person is or becomes the beneficial owner of 30% or more of the Voting Stock as a result of a transaction described in clause (A) of this subsection (i), and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock, and after obtaining such additional beneficial ownership beneficially owns 30% or more of the Voting Stock, other than in an acquisition of Voting Stock directly from the Company that is approved by a majority of the Incumbent Board or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally, such subsequent acquisition will be treated as a Change in Control; and

(Y)

a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 30% or more of the Voting Stock as a result of a reduction in the number of shares of Voting Stock outstanding pursuant to a transaction or series of transactions approved by a majority of the Incumbent Board unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock, and after obtaining such additional beneficial ownership beneficially owns 30% or more of the Voting Stock, other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; or

(ii)

Individuals who, on the Effective Date, constitute the Board of Directors of the Company (as modified by this subsection (ii), the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director after the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board on the Effective Date, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii)	The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (each, a “Business Combination”), unless, in each case, immediately following such Business Combination,

(A)

all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Voting Stock immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more

---

(B)

no Person (excluding any employee benefit plan (or related trust) sponsored or maintained by the Company or any CIC Subsidiary or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination except to the extent that such ownership existed prior to the Business Combination, and

(C)	at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)	Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

(b)	Impact on Certain Awards. Unless otherwise provided in an Evidence of Award, the Compensation Committee shall have the right to provide that in the event of a Change in Control:

(i)	Option Rights and Appreciation Rights outstanding as of the date of the Change in Control shall be cancelled and terminated without payment if the Market Value per Share as of the date of the Change in Control is less than the per Share Option Price or Base Price, and

(ii)	All Incentive Awards, Performance Shares and other performance-based Awards (collectively, “Performance Awards”) shall be

(A)	considered to be earned and payable based on achievement of Performance Goals or based on target performance (either in full or pro rata based on the portion of the Performance Period completed as of the date of the Change in Control), and any limitations or other restrictions shall lapse and such Performance Awards shall be immediately settled or distributed, or

(B)	converted into Restricted Stock or Restricted Stock Unit Awards based on achievement of Performance Goals or based on target performance (either in full or pro rata based on the portion of the Performance Period completed as of the date of the Change in Control) that are subject to Section 12(c).

(c)	Assumption or Substitution of Certain Awards.

(i)

Unless otherwise provided in an Evidence of Award, in the event of a Change in Control that is a Business Combination in which the successor company assumes or substitutes for an Option Right, Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Award (or in which the Company is the ultimate parent corporation and continues the Award), if a Participant’s employment with such successor company (or the Company) or a subsidiary thereof terminates within 24 months following such Business Combination (or such other period set forth in the Evidence of Award, including prior thereto if applicable) and under the circumstances specified in the Evidence of Award:

---

(A)

Option Rights and Appreciation Rights outstanding as of the date of such termination of employment will immediately vest, become fully exercisable, and may thereafter be exercised for the period of time set forth in the Evidence of Award, but in no event beyond the end of the regularly scheduled term of such Option Rights or Appreciation Rights, unless the extension of the term provided for in Sections 5(a) and 6(d)(iii) applies,

(B)	the restrictions, limitations and other conditions applicable to Restricted Stock and Restricted Stock Units outstanding as of the date of such termination of employment shall lapse and the Restricted Stock and Restricted Stock Units shall become free of all restrictions, limitations and conditions and become fully vested, and

(C)	the restrictions, limitations and other conditions applicable to any Other Awards shall lapse, and such Other Awards shall become free of all restrictions, limitations and conditions and become fully vested and transferable to the full extent of the original grant.

(ii)

Unless otherwise provided in an Evidence of Award, in the event of a Change in Control that is a Business Combination in which the successor company does not assume or substitute for an Option Right, Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Other Award (or in which the Company is the ultimate parent corporation and does not continue the Award), then immediately prior to the Business Combination:

(A)	those Option Rights and Appreciation Rights outstanding as of the date of the Business Combination that are not assumed or substituted for (or continued) shall immediately vest and become fully exercisable,

(B)	restrictions, limitations and other conditions applicable to Restricted Stock and Restricted Stock Units that are not assumed or substituted for (or continued) shall lapse and the Restricted Stock and Restricted Stock Units shall become free of all restrictions, limitations and conditions and become fully vested, and

(C)

the restrictions, other limitations and other conditions applicable to any Common Share-based Other Awards or any other Awards that are not assumed or substituted for (or continued) shall lapse, and such Common Share-based Other Awards or such other Awards shall become free of all restrictions, limitations and conditions and become fully vested and transferable to the full extent of the original grant.

---

(a)

Except as otherwise determined by the Compensation Committee, no Award granted, issued, or transferred under the Plan will be transferable by the Participant otherwise than (i) upon death, by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order, as that term is defined in the Code or the rules thereunder or in Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules thereunder, or (iii) to a fully revocable trust of which the Participant is treated as the owner for federal income tax purposes, and in no event will any such Award granted under the Plan be transferred for value. Where transfer is permitted, references to “Participant” shall be construed, as the Compensation Committee deems appropriate, to include any permitted transferee to whom the Award is transferred.

(b)

Notwithstanding the provisions of Section 13(a) of the Plan, Awards will be transferable by a Participant who at the time of such transfer is eligible to earn “Long-Term Incentive (LTI) Awards” (“LTI Awards”) under the Company’s 1992 Incentive Bonus Plan, as amended (or any successor plan thereto) or the Senior Executive Incentive Compensation Plan (or any successor plan thereto), or to earn other long-term awards under another plan or program that limits eligibility to the same group as those who would otherwise have been eligible for such LTI Awards, or is a Non-Employee Director, without payment of consideration therefor by the transferee, to any one or more members of the Participant’s Immediate Family (or to one or more trusts established solely for the benefit of one or more members of the Participant’s Immediate Family or to one or more partnerships in which the only partners are members of the Participant’s Immediate Family); provided, however, that (i) no such transfer will be effective unless reasonable prior notice thereof is delivered to the Company and such transfer is thereafter effected in accordance with any terms and conditions that shall have been made applicable thereto by the Company or the Compensation Committee, (ii) any such transferee will be subject to the same terms and conditions hereunder as the Participant and (iii) in no event will any Award granted under the Plan be transferred for value.

(c)

The Compensation Committee may specify at the Date of Grant that part or all of the Common Shares that are to be issued by the Company upon the exercise of Option Rights or Appreciation Rights, that are no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7 of the Plan, or that are to be issued by the Company upon payment under any grant of Restricted Stock Units, Performance Shares or Other Awards, will be subject to further restrictions on transfer.

---

(a)

This Plan will be administered by the Compensation Committee, except with respect to such matters that are required to be administered by the Board pursuant to the Company’s constituent documents (including the charter of the Compensation Committee), in which case, to the extent appropriate, references in the Plan to the Compensation Committee will be deemed to be references to the Board. The Compensation Committee may from time to time delegate all or any part of its authority under this Plan to any subcommittee thereof. To the extent of any such delegation, references in the Plan to the Compensation Committee will be deemed to be references to such subcommittee.

(b)

The Compensation Committee may delegate to one or more of its members or to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Compensation Committee or any person to whom duties or powers have been delegated as aforesaid may employ one or more persons to render advice with respect to any responsibility the Compensation Committee or such person may have under the Plan. The Compensation Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as the Compensation Committee: (i) designate individuals to be recipients of Awards under this Plan or (ii) determine the size of any such Awards; provided, however, that (A) the Compensation Committee shall not delegate such responsibilities to any such officer for Awards granted to an individual who is an officer, Director, or more than 10% beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Compensation Committee in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization sets forth the total number of Common Shares or aggregate amount of Incentive Awards such officer(s) may grant; and (C) the officer(s) shall report periodically to the Compensation Committee regarding the nature and scope of the awards granted pursuant to the authority delegated.

(c)

The Compensation Committee will take such actions as are required to be taken by it hereunder, may take the actions permitted to be taken by it hereunder, and will have the authority from time to time to interpret this Plan and to adopt, amend, and rescind rules and regulations for implementing and administering this Plan. All such actions will be in the sole discretion of the Compensation Committee, and when taken, will be final, conclusive, and binding. Without limiting the generality or effect of the foregoing, the interpretation and construction by the Compensation Committee of any provision of this Plan or of any Evidence of Award or other agreement, notification or document evidencing the grant of any Award and any determination by the Compensation Committee pursuant to any provision of this Plan or of any such

---

(d)

The provisions of Sections 5, 6, 7, 8, 9 and 10 of the Plan will be interpreted as authorizing the Compensation Committee, in taking any action under or pursuant to this Plan, to take any action it determines in its sole discretion to be appropriate subject only to the express limitations therein contained and no authorization in any such Section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Compensation Committee.

(e)

The existence of this Plan or any right granted or other action taken pursuant hereto will not affect the authority of the Compensation Committee or the Company to take any other action, including in respect of the grant or award of any option, security, or other right or benefit, whether or not authorized by this Plan, subject only to limitations imposed by applicable law as from time to time applicable thereto.

(a)

To the extent applicable, it is intended that the Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. The Plan and any grants made hereunder shall be administered in a manner consistent with this intent. Any reference in the Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

(b)

Neither a Participant nor any of a Participant’s creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under the Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under the Plan and grants hereunder may not be reduced by, or offset against, any amount owing by a Participant to the Company or any of its affiliates.

(c)

If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the tenth business day of the seventh month after such separation from service.

(d)

Notwithstanding any provision of the Plan or any Evidence of Award to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Compensation Committee reserves the right to make amendments to the Plan and any Evidence of Award as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with the Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates shall have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.

---

(a)	Subject to applicable provisions of this Plan with respect to grants of Awards under the Plan, the Compensation Committee may grant Substitute Awards as described in Section 3(a)(iii) of the Plan.

(b)	The Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.

---

(c)	Except as provided specifically herein, a Participant or a transferee of an Award shall have no rights as a stockholder with respect to any Common Shares covered by any Award until the date as of which he or she is actually recorded as the holder of such Common Shares upon the stock records of the Company.

(d)

Except with respect to Section 23(f), to the extent that any provision of the Plan or any Evidence of Award would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of the Plan or any Evidence of Award.

(e)	No Award under the Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Compensation Committee, contrary to law or the regulations of any duly constituted authority having jurisdiction over the Plan.

(f)	Absence or leave approved by a duly constituted officer of the Company or any of its Subsidiaries shall not be considered interruption or termination of service of any employee for any purposes of the Plan or Awards granted hereunder.

(g)	The Compensation Committee may condition the grant of any Award or combination of Awards authorized under the Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.

(h)

If any provision of the Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Compensation Committee, it shall be stricken and the remainder of the Plan shall remain in full force and effect.

(i)	This Plan will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof. If any provision of this Plan is held to be invalid or unenforceable, no other provision of this Plan will be affected thereby.

(j)

If permitted by Section 409A of the Code and, in the case of a Qualified Performance-Based Award, Section 162(m) of the Code, in case of termination of employment by reason of death, disability, or normal or early retirement, or in the case of hardship or other special circumstances, of a Participant who holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock or Restricted Stock Units as to which the substantial risk of forfeiture or the prohibition or restriction on transfer or Restriction Period has not lapsed, or any Incentive Awards, Performance Shares or Other Awards that have not been fully earned, or who holds Common Shares subject to any transfer restriction imposed pursuant to Section 13(c) of the Plan, the Compensation Committee may, in its sole discretion, take such action as it deems equitable in the circumstances or in the best interests of the Company, including without limitation waiving or modifying any other limitation or requirement under any such Award.

---

---

---

---