EXHIBIT 10.2 DEFERRED COMPENSTION PLAN

 

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                                                                    EXHIBIT 10.2

 

                            DEFERRED COMPENSTION PLAN

                            (Amended March 18, 2005)

 

SECTION 1. PURPOSE.

 

The purpose of this Plan is to provide an additional incentive to the key

employees of The May Department Stores Company and its subsidiaries to achieve

superior performance.

 

SECTION 2. DEFINITIONS.

 

(a) Board means the Board of Directors of May, as hereinafter defined.

 

(b) Committee means the Committee appointed to administer the Plan, as

hereinafter defined, as provided in Section 8 hereof.

 

(c) Common Stock means the Common Stock of May, as hereinafter defined.

 

(d) Corporation means May, as hereinafter defined, or any subsidiary of May

which is an employer of an Executive, as hereinafter defined, who is a

Participant, as hereinafter defined, in the Plan, as hereinafter defined.

 

(e) Executive means any individual employed by the Corporation in an executive

capacity who receives regular stated compensation in respect of such

employer-employee relationship other than a pension, retainer or fee under a

contract.

 

(f) Fiscal Year means the fiscal year of the Corporation as established from

time to time.

 

(g) May means The May Department Stores Company, a Delaware corporation, its

successors and assigns.

 

(h) Participant means an Executive who has been designated by the Committee as

eligible, and who has elected to participate in the Plan, as hereinafter

defined.

 

(i) Plan means the Deferred Compensation Plan of the Corporation, as described

herein.

 

(j) Restricted Stock means shares of Common Stock described in Section 10

hereof.

 

(k) Stock Unit means an accounting equivalent of one share of Common Stock.

 

(l) Stock Unit Account means an account on the records of the Corporation in

respect of Stock Units which have been and/or may be allocated to a Participant

in the manner hereinafter set forth.

 

SECTION 3. METHODS OF PAYMENT.

 

(a) Except as hereinafter provided, prior to the commencement of the calendar

year that includes the first day of a Fiscal Year, each Participant shall be

afforded the opportunity of making an election to have any one or more of the

following alternative methods of payment applied to all or a part of any portion

(which such portion shall not exceed one-half, unless specifically provided for

to the contrary in the participant's written contract of employment) of any

compensation of which such Participant shall be the recipient in respect of his

performance during such Fiscal Year:

 

     (i) Alternative (i): Payment of any such compensation that is paid in the

     form of a bonus on the first day of April next following the close of such

     Fiscal Year or on such subsequent date as the amount thereof is

     ascertainable.

 

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     (ii)Alternative (ii): Payment thereof at a deferred date or dates either in

     a lump sum or in annual installments, as may be determined by the

     Committee, such payment when made to include interest, as hereinafter

     provided, from the first day of April next following the Fiscal Year in

     respect of which the compensation was payable to the date of payment.

 

     (iii) Alternative (iii): [reserved]

 

     (iv)Alternative (iv): Payment thereof at a deferred date or dates either in

     a lump sum or in annual installments, as may be determined by the

     Committee, and either in cash or in Common Stock or in both cash and Common

     Stock, as may be determined by the Committee, in respect of Stock Units to

     be allocated to the Participant as hereinafter provided.

 

If any Participant shall fail to make an election with respect to any year, he

shall be deemed to have elected not to defer any portion of his compensation for

such year. Notwithstanding the requirements imposed by this paragraph (a) with

respect to the time by which an election must be made, an employee who is

designated by the Committee as a Participant for the first time may, within 60

days of such designation, make any election otherwise permitted under this

paragraph (a) with respect to the Participant's compensation in respect of

employment subsequent to the date on which the election is made.

 

(b) In connection with all determinations to be made by the Committee as

respects Alternative (ii) and, except for the determination of whether payment

thereunder is to be made in cash or in Common Stock or in both cash and Common

Stock (which determination shall be in the absolute discretion to the

Committee), Alternative (iv), the Participant shall be given an opportunity at

the time he makes his election of indicating his preferences, which preferences

shall be taken into account by the Committee in making its determinations.

Except as provided in Section 13 and Section 14 in no event shall payments under

Alternative (ii) or (iv) commence prior to the earliest of the Participant's

retirement, termination of employment or death (or prior to the occurrence of a

severe financial hardship, as provided below).

 

The Committee shall make its determination with respect to the payment schedule

(i.e., a lump sum payment or payments in annual installments) under Alternative

(ii) or (iv) prior to the commencement of the calendar year that includes the

first day of the Fiscal Year for which such alternative is elected. Except in

the event of a severe financial hardship, as provided below, the Committee's

determination with respect to a payment schedule shall become irrevocable as of

the first day of the calendar year that includes the first day of the Fiscal

Year for which the determination is made. However, upon the written request of

the Participant (or if applicable, the beneficiary or distributee) the payment

schedule may be revised by the Committee, in its absolute discretion, in the

event that the Participant (or if applicable, the beneficiary or distributee)

incurs a severe financial hardship. Such severe financial hardship must have

been caused by an accident, illness or other event which was beyond the control

of the Participant (or, if applicable, the beneficiary or distributee); and the

Committee shall revise the payment schedule that it had previously established

only to the extent that the Committee considers necessary to eliminate the

severe financial hardship. Notwithstanding the requirements imposed by this

paragraph (b) regarding the date by which the Committee must make a

determination with respect to the payment schedule under Alternative (ii) or

(iv) and the date as of which such determination shall become irrevocable

(except in the event of a severe financial hardship), when a Participant makes

an election pursuant to the last sentence of paragraph (a) of this Section 3,

the Committee shall make its determination with respect to the payment schedule

at any time prior to the date as of which the Participant's election becomes

effective, and its determination shall become irrevocable (except in the event

of a severe financial hardship) as of such effective date.

 

(c) In the case of a Participant who elects to have all or any part of his

compensation for a particular Fiscal Year paid under Alternative (iv), Stock

Units shall be allocated to such Participant by crediting the same to his Stock

Unit Account, and the number of Stock Units to be so credited for such Fiscal

Year shall be the sum of the following:

 

     (i) the quotient, disregarding fractions, resulting from dividing the

     dollar amount of such portion of the Participant's compensation as is to be

     so applied to Alternative (iv) by the average closing price of the Common

     Stock on the New York Stock Exchange during the month of February ending in

     the Fiscal Year next following the Fiscal Year in respect of which such

     compensation was payable; plus

 

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     (ii)the quotient, disregarding fractions, resulting from dividing the

     aggregate dollar amount of cash dividends which would have been paid to the

     Participant during such Fiscal Year had the Stock Units standing in his

     Stock Unit Account from time to time during such Fiscal Year been shares of

     Common Stock by the average closing price of the Common Stock on the New

     York Stock Exchange during the month of February ending in the year next

     following such Fiscal Year; plus

 

     (iii) the number of shares of Common Stock, disregarding fractions, which

     would have been received by the Participant as stock dividends during such

     Fiscal Year had the Stock Units standing in his Stock Unit Account at the

     date or dates of payment of such stock dividend(s) been shares of Common

     Stock.

 

Any allocation of Stock Units to a Participant's Stock Unit Account required to

be made pursuant to this paragraph (c) shall be made as of the first day of

April next following the Fiscal Year in respect of which such compensation was

payable or such dividends were paid, as the case may be. The aggregate value of

the fraction or fractions remaining after making the applicable calculations

referred to in subparagraphs (c)(i), (c)(ii) and (c)(iii) of this Section 3

(based upon the average closing price of Common Stock on the Composite Tape for

New York Stock Exchange listed companies as reported in the Wall Street Journal,

or such other source as the Committee deems reliable, during the month of

February next preceding such month of April), shall not be converted into Stock

Units but shall be allocated and added to the amount elected by the Participant

to be paid to him under Alternative (ii) above, or, if the Participant shall

have made no such election under Alternative (ii), then such remaining amount

shall be paid to the Participant as if he had made an election under Alternative

(i) above to be so paid.

 

(d) Notwithstanding the provisions of Section 3(c) to the contrary, in the event

of a recapitalization of May pursuant to which the outstanding shares of Common

Stock shall be changed into a greater or smaller number of shares (including,

without limitation, a stock split or a stock dividend of 25% or more of the

number of outstanding shares of Common Stock), the number of Stock Units

credited to a Participant's Stock Unit Account shall be appropriately adjusted

as of the effective date of such recapitalization.

 

(e) Interest to be paid under Alternative (ii) shall be credited annually as of

April 1 of each year and shall be at the following rates:

 

     (i) to and including March 31, 1974, the rate shall be 3%, compounded

     annually, and

 

     (ii)after March 31, 1974, the rate shall be equal to the average yield on

     long-term United States Government Bonds (as determined by the Board of

     Governors of the Federal Reserve Board and published in the Federal Reserve

     Bulletin) for the calendar year prior to said April 1, compounded annually,

     provided, however, that if the method of calculation of such average yield

     shall be changed, or if the determination and/or the publication thereof be

     discontinued, then the Committee shall substitute therefor such alternative

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