Edgar Filing: SHOE CARNIVAL INC

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section
14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)

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Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant to ss.240.14a-12

SHOE CARNIVAL, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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Name of Person(s) Filing Proxy Statement if other than the Registrant)

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SHOE CARNIVAL, INC.

NOTICE OF ANNUAL MEETING OF COMMON SHAREHOLDERS
TO BE HELD ON JUNE 5, 2002

The annual meeting of common shareholders of Shoe Carnival, Inc. will be
held at the Evansville Marriott, 7101 North U.S. Route 41, Evansville, Indiana,
on Thursday, June 5, 2002, at 10:00 a.m., C.D.T., for the following purposes:

(1) To elect two Directors to serve until the 2005 annual
meeting of shareholders and until their successors are elected and
have qualified, as set forth in the accompanying Proxy Statement;

(2) To approve or disapprove the appointment of
Deloitte & Touche LLP, as auditors for the Company for fiscal
year 2002;

(3) To transact such other business as may properly come
before the meeting.

All common shareholders of record at the close of business on April
5, 2002 will be eligible to vote.

It is important that your stock be represented at this meeting. Whether or
not you expect to be present, please fill in, date, sign and return the enclosed
proxy form in the accompanying addressed, postage-prepaid envelope. If you
attend the meeting, your proxy will be canceled at your request.

David A. Kapp, Secretary

SHOE CARNIVAL, INC.
8233 Baumgart Road
Evansville, Indiana 47725

PROXY STATEMENT
Annual Meeting of Common Shareholders

June 5, 2002

This statement is being furnished to common shareholders on or about May 1,
2002, in connection with a solicitation by the Board of Directors of Shoe
Carnival, Inc. (the "Company") of proxies to be voted at the annual meeting of
common shareholders to be held at 10:00 a.m., C.D.T., Thursday, June 5, 2002, at
the Evansville Marriott, 7101 North U.S. Route 41, Evansville, Indiana, for the
purposes set forth in the accompanying Notice.

At the close of business on April 5, 2002, the record date for the meeting,
there were 12,515,794 shares of Common Stock of the Company outstanding and
entitled to vote at the meeting. On all matters, including the election of
Directors, each common shareholder will have one vote for each share held.

If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time insofar as it has not been exercised. The proxy may be
revoked by giving written notice of revocation to the Company, executing a
subsequently dated proxy that is delivered to the Company, or attending the
annual meeting and voting in person. Unless revoked, a proxy will be voted at
the meeting in accordance with the instructions of the shareholder in the proxy,
or, if no instructions are given, for the election as Directors of the nominees
listed under Proposal 1 and for Proposal 2. Election of the Directors will be
determined by the vote of the holders of a plurality of the shares voting on
such election. Approval of Proposal 2 will be subject to the vote of the holders
of a greater number of shares favoring approval than those opposing it. A proxy
may indicate that all or a portion of the shares represented by such proxy are
not being voted with respect to a specific proposal. This could occur, for
example, when a broker is not permitted to vote shares held in street name on
certain proposals in the absence of instructions from the beneficial owner.
Shares that are not voted with respect to a specific proposal will be considered
as not present and entitled to vote on such proposal, even though such shares
will be considered present for purposes of determining a quorum and voting on
other proposals. Abstentions on a specific proposal will be considered as
present, but not as voting in favor of such proposal. Neither broker non-votes
nor abstentions will have any effect on the vote required to approve any of the
proposals.

The Board of Directors knows of no matters, other than those reported
below, which are to be brought before the meeting. However, if other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote such proxy in accordance with their judgment
on such matters.

The cost of this solicitation of proxies will be borne by the Company.
Proxies may also be solicited personally or by telephone by Company employees
acting without additional compensation.

ELECTION OF DIRECTORS
Nominees

The Company currently has five Directors divided into three classes. Two
classes contain two Directors each, with the remaining class containing one
Director. The term of one class expires each year. Each Director holds office
for a three-year term expiring at the annual meeting of shareholders held in the
year that is three years after his election and thereafter until his successor
is elected and qualified.

The shareholders will be asked to elect two Directors. J. Wayne Weaver and
Gerald W. Schoor have been nominated by the Board of Directors for election as
Directors for a term to expire at the 2005 annual meeting of shareholders and
until his successor is elected and qualified. Mr. Weaver has served as a
Director since 1988 and Mr. Schoor since 1993. It is the intention of the
persons named in the accompanying form of proxy, absent contrary instructions
therein, to vote such proxy for the election to the Board of Directors of
Messrs. Weaver and Schoor.

Unless otherwise indicated in a footnote to the following table, the
principal occupation of each Director has been the same for the last five years,
and each Director possesses sole voting and investment power with respect to the
shares of Common Stock indicated as beneficially owned by him.

Shares
Beneficially
Present Owned on
Principal Director April 3, Percent
Name Age Occupation Since 2002(1) of Class
----------------- --- ---------------------- -------- ------------- --------

NOMINEES FOR DIRECTOR
(Nominee for three-year term to expire at the
annual meeting of shareholders in 2005)

J. Wayne Weaver 67 Chairman of the Board 1988 4,833,230 (2) 38.6%
of Company, Chairman
and Chief Executive
Officer of Jacksonville
Jaguars, LTD
(professional football
franchise), and
Chairman and Chief
Executive Officer of
LC Footwear, LLC
(footwear distributor) (3)

Gerald W. Schoor 67 Merchant Banker 1993 6,000 (4) *
(self-employed) (5)

DIRECTORS CONTINUING IN OFFICE
(Term expiring at the annual meeting of shareholders in 2003)

William E. Bindley 61 Chairman of the Board 1993 4,000 (6) *
Chief Executive Officer
of Bindley Capital
Partners, LLC(7)

(Term expiring at the annual meeting of shareholders in 2004)

Mark L. Lemond 47 President and Chief 1988 508,162 (8) 4.0%
Executive Officer of
the Company (9)

James A. Aschleman 57 Partner of Baker 2001 200 (10) *
(law firm) (11)

The Board of Directors recommends a vote FOR the nominees listed above.
------------------
* Less than 1%

(1) Does not include shares subject to options that are not presently
exercisable (i.e., within 60 days after April 3, 2002).

(2) Includes 2,000,000 shares directly owned by Mr. Weaver's spouse, 333,230
shares owned jointly with Mr. Weaver's spouse and 500,000 shares held in a
trust of which Mr. Weaver is a trustee.

(3) From 1978 until February 2, 1993, Mr. Weaver's principal occupation was as
president and chief executive officer of Nine West Group, Inc. ("Nine
West"), a designer, developer and marketer of women's footwear.

(4) Represents 3,000 shares held as co-trustee for the benefit of Mr. Schoor's
spouse and 3,000 shares issuable upon the exercise of presently
exercisable options granted under the Company's Outside Directors Stock
Option Plan.

5) Prior to January 1997, Mr. Schoor was employed as president of
Corporate Finance Associates, St. Louis (financial intermediary)
and as executive vice president of National Industrial Services, Inc.
(industrial asset management company).

(6) Includes 3,000 shares issuable upon the exercise of presently exercisable
options granted under the Company's Outside Directors Stock Option Plan.

(7) Mr. Bindley also serves on the Boards of Directors of Priority Healthcare
Corporation, a distributor and provider to the alternate site healthcare
market, and Cardinal Health, Inc., a health care service company. From
1968 until February 2001 Mr. Bindley's principal occupation was chairman
of the board and chief executive officer of Bindley Western Industries,
Inc. a pharmaceutical wholesale distribution company.

(8) Includes 11,500 shares directly owned by Mr. Lemond's spouse and 225,207
shares issuable upon the exercise of presently exercisable options granted
under the Company's 1993 Stock Option and Incentive Plan ("1993 Stock
Option Plan") and the Company's 2000 Stock Option and Incentive Plan
("2000 Stock Option Plan").

(9) Mr. Lemond became the President and Chief Executive Officer of the Company
on September 19, 1996. Prior to that time, Mr. Lemond served as the
Company's Chief Operating Officer and/or Chief Financial Officer.

(10) Represents shares owned by Mr. Aschleman's spouse.

(11) Mr. Aschleman was appointed to fill a vacant Director position
on May 10, 2001.

Meetings and Committees

During the 2001 fiscal year, the Board of Directors of the Company held
four meetings. All of the Directors were present at the meetings.

The Company has an Audit Committee, a Compensation Committee and a Stock
Option Committee. The Compensation Committee, which met twice during fiscal year
2001, consists of Messrs. Bindley and Schoor. The Stock Option Committee, which
did not meet in fiscal year 2001, consists of Messrs. Bindley and Schoor. The
Audit Committee, which met five times during fiscal year 2001, consists of
Messrs. Bindley, Schoor and Aschleman. The Audit Committee is responsible for
recommending independent auditors, reviewing with the independent auditors the
scope and results of the audit engagement, establishing and monitoring the
Company's financial policies and control procedures, reviewing and monitoring
the provision of non-audit services by the Company's auditors and reviewing all
potential conflict of interest situations, including the Company's relationships
with LC Footwear, LLC and PL Footwear, Inc. The Compensation Committee is
responsible for reviewing, determining and establishing the salaries, bonuses
and other compensation of the executive officers of the Company. The Stock
Option Committee is responsible for administering the Company's 1993 Stock
Option Plan, 2000 Stock Option Plan and Employee Stock Purchase Plan. The Board
of Directors does not have a nominating committee. All of the Directors attended
all of the meetings of the committees on which they served during the 2001
fiscal year.
5

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and Directors, and persons who own more than 10% of
Common Stock, to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Such persons are required
by Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.

Based solely on a review of the copies of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that during fiscal 2001 all filing requirements applicable to its
executive officers, Directors and greater than 10% shareholders were timely
satisfied.

Summary Compensation Table

The following table sets forth a summary of the compensation paid by the
Company for services rendered in all capacities to the Company during each of
the three most recent fiscal years, to the Company's Chief Executive Officer,
and to each of the Company's four other most highly compensated executive
officers, based on salary and bonuses earned during fiscal 2001 (the "Named
Executive Officers").

Summary Compensation Table
Long-Term
Compensation
------------
Annual Compensation (1) Awards
----------------------- ------------
Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary Bonus(2) Options (3) Compensation(4)
--------------------- ------ ------ -------- ---------- ------------

Mark L. Lemond, 2001 $496,250 $132,500 0 $ 22,760 (5)
President and Chief 2000 462,596 0 50,000 4,912 (6)
Executive Officer 1999 422,116 20,000 75,000 3,927 (7)

J. Wayne Weaver, 2001 $300,000 $ 0 0 $ 0
Chairman of the Board 2000 300,000 0 0 0
1999 300,000 0 0 0

Timothy T. Baker, 2001 $289,731 $ 63,600 0 $ 8,883 (5)
Executive Vice 2000 217,692 0 35,000 $ 3,213 (6)
President--Store 1999 197,692 18,000 20,000 $ 3,923 (7)

Clifton E. Sifford, 2001 $289,731 $ 63,600 0 $ 14,542 (5)
Executive Vice 2000 217,692 0 35,000 4,908 (6)
President--General 1999 195,692 18,000 15,000 3,914 (7)
Merchandise Manager

W. Kerry Jackson, 2001 $177,923 $ 33,400 0 $ 14,707 (5)
Senior Vice President 2000 158,885 0 15,000 8,827 (6)
-Chief Financial 1999 132,115 9,000 7,500 3,682 (7)
Officer and Treasurer
--------------

(1) The column for Other Annual Compensation is not included (as permitted
under applicable regulations) because the perquisites and other personal
benefits awarded, earned or paid to the Named Executive Officers did not
exceed the lesser of $50,000 or 10% of the total of annual salary and bonus
for each Named Executive Officer for any of the years listed.
(2) Represents bonuses earned during the fiscal year indicated, which bonuses
at times have been paid in the subsequent fiscal year.
(3) All of the amounts reflect option shares. The Company has never granted
SARs.
6

(4) Except as otherwise indicated, all amounts are compensation related to
life and disability insurance premiums.
(5) Of the amounts shown, $21,650 for Mr. Lemond, $7,774 for Mr. Baker,
$13,432 for Mr. Sifford and $13,693 for Mr. Jackson represent the Company's
matching contributions under the Company's 401(k) Plan and Deferred
Compensation Plan.
(6) Of the amounts shown, $3,986 for Mr. Lemond, $2,287 for Mr. Baker, $3,767
for Mr. Sifford and $8,141 for Mr. Jackson represent the Company's
matching contributions under the Company's 401(k) Plan and Deferred
Compensation Plan.
(7) Of the amounts shown, $3,064 for Mr. Lemond, $3,071 for Mr. Baker, $2,916
for Mr. Sifford and $3,096 for Mr. Jackson represent the Company's matching
contributions under the Company's 401(k) Plan.

Employment and Noncompetition Agreements

On January 15, 1993, the Company entered into a noncompetition agreement
with J. Wayne Weaver. As long as Mr. Weaver is an executive officer or Director
of the Company he may not engage directly or indirectly through any other
company or entity in the retail shoe business without the prior approval of the
Company's Audit Committee. The Audit Committee has approved Mr. Weaver's
association with LC Footwear, LLC and PL Footwear, Inc. Effective February 1,
1993, Mr. Weaver became an employee of the Company at an annual salary of
$300,000. Although Mr. Weaver will continue to be involved in other business
activities and will not devote full time to the Company, he will devote such
time to the Company as he deems necessary or appropriate to perform his duties
as Chairman of the Board.

On August 1, 2001, the Company entered into Employment and Noncompetition
Agreements with Mr. Baker and Mr. Sifford. The term of the agreements is through
December 31, 2003. The agreements will automatically be extended for successive
one-year periods unless either party gives notification prior to the end of the
then term of the agreement that the term of the agreement shall no longer be
extended. The agreements provide for an annual base salary equivalent to the
salary in effect as of August 1, 2001, subject to increase by the Compensation
Committee of the Company's Board of Directors. Messrs. Baker and Sifford are
entitled to participate in such bonus plans as the Company may establish from
time to time. Under each of the agreements, employment of the executive may be
terminated by the Company upon death or disability of the executive or by the
Company for "Cause" (as defined in the agreement) or without Cause. The
executive may terminate employment voluntarily or for "Good Reason" (defined as
a reduction in salary or position). If an executive is terminated for death,
disability, Cause or voluntarily terminates, the executive will receive only
amounts that are earned and unpaid as of the date of termination. If an
executive is terminated by the Company without Cause or terminates for Good
Reason, absent a "Change in Control," the executive will continue to receive his
bi-weekly salary for a period of twelve months and be reimbursed for health care
premiums for the lesser of twelve months or until the executive is reemployed
and is eligible for health care coverage. Additionally, any non-vested stock
options granted after the date of the agreement that would have vested within
twelve months of termination will become immediately exercisable. If the
executive is terminated by the Company without Cause or terminates for Good
Reason within two years of a "Change in Control" (as defined in the agreement),
the executive is entitled to a lump sum payment within 30 days of termination
equivalent to 200% of his base salary plus the highest bonus paid within the
past two years, which bonus amount will not be less than 25% of his base salary;
reimbursement for health care premiums for the lesser of eighteen months or
until the executive is reemployed and is eligible for health care coverage;
outplacement services; and any non-vested stock options that would have vested
within twelve months of termination will become immediately exercisable. If any
payment under the agreement would be subject to the excise tax under Section
4999 of the Internal Revenue Code, the executive would be entitled to receive
additional compensation from the Company to cover the excise taxes, interest and
penalties (if applicable) and other taxes arising from the additional
compensation. The benefits to the executive under the agreement are subject to
certain conditions, including the agreement by the executive not to compete with
the Company for a period of two years following the termination of the
executive's employment.

The Company does not currently have employment or noncompetition agreements
with any other executive officers. However, the Company expects to enter into
an employment and noncompetition agreement with Mr. Lemond, the terms of which
would be subject to the approval of the Compensation Committee of the Company's
Board of Directors.

Compensation of Directors

During 2001, the Company paid non-officer Directors an annual retainer of
$15,000 per year and a fee of $1,000 for each meeting of the Board or a
committee thereof attended. All Directors receive reimbursement of reasonable
out-of-pocket expenses incurred in connection with meetings of the Board. No
Director who is an officer or employee of the Company receives compensation for
services rendered as a Director.

On March 4, 1999, the Board of Directors approved the Outside Directors
Stock Option Plan. The plan calls for each non-employee director to be granted
on April 1 of each year an option to purchase 1,000 shares of the Company's
common stock at the market value on the date of the grant. The options will vest
six months from the date of grant and expire ten years from the date of grant.

Stock Options

The Company's Board of Directors and shareholders approved the 1993 Stock
Option Plan, effective January 15, 1993, and amended it at the 1997 annual
meeting of shareholders. The 1993 Stock Option Plan reserves 1,500,000 shares of
the Company's Common Stock for stock option grants (subject to adjustment for
subsequent stock splits, stock dividends and certain other changes in the Common
Stock).

The Company's Board of Directors and shareholders approved the 2000 Stock
Option Plan, effective June 8, 2000. The 2000 Stock Option Plan reserves
1,000,000 shares of the Company's Common Stock for stock option grants (subject
to adjustment for subsequent stock splits, stock dividends and certain other
changes in the Common Stock).

The Stock Option Committee of the Board of Directors administers and grants
incentive awards under the 1993 Stock Option Plan and the 2000 Stock Option
Plan. The 1993 Stock Option Plan and the 2000 Stock Option Plan provide for the
grant to officers and other key employees of the Company of incentive awards in
the form of stock options or restricted stock. Stock options granted under the
plans may be either options intended to qualify for federal income tax purposes
as "incentive stock options" or options not qualifying for favorable tax
treatment ("nonqualified stock options").

The following table sets forth information with respect to the exercise of
options held by the Named Executive Officers during fiscal year 2001 and
unexercised stock options held by such individuals at the end of the fiscal year
ended February 2, 2002.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money
Fiscal Options at Fiscal Year-End
Year-End (#) ($)(1)
---------------------------- ------------------------------
Shares Acquired Value
Name on Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
------------------ --------------- ------------ ----------- ------------- ----------- -------------

Mark L. Lemond 0 0 193,540 58,334 $1,291,193 $336,779
J. Wayne Weaver 0 0 0 0 0 0
Timothy T. Baker 15,665 86,309 33,334 30,001 $ 131,438 $215,756
Clifton E. Sifford 3,550 29,245 50,616 28,334 $ 308,637 $210,963
W. Kerry Jackson 0 0 32,349 12,501 $ 187,740 $ 89,453
---------------

(1) The closing price for the Company's Common Stock as reported by The Nasdaq
Stock Market on February 1, 2002 was $14.00. The value is calculated on the
basis of the difference between the Common Stock option exercise price and
$14.00, multiplied by the number of "in-the-money" shares of Common Stock
underlying the options

Compensation Report of the Compensation and Stock Option Committees

Executive Compensation Policy. In evaluating the performance of the
Company, the Compensation Committee focuses primarily on attained increases in
store growth, sales, operating income, net earnings and earnings per share as
compared to the Company's internal financial plan for the year approved by the
Board of Directors. In making compensation decisions, the Compensation Committee
also reviews executive compensation practices within the retail and footwear
industries with consideration given to, among other factors, differences in
sales, growth rates and total market capitalization.

The Company designs compensation programs to attract, retain and motivate
the finest talent possible for all levels of the organization. In addition, the
programs are designed to treat all employees fairly, to be cost-effective and to
assure that all compensation will continue to be tax deductible. To that end,
all programs, including those for executive officers, have the following
characteristics.

- Compensation is based on the level of job responsibility, the
individual's level of performance and Company performance. Members of management
have a greater portion of their pay based on Company performance than do
non-management employees.

- Compensation also takes into consideration the value of the job in the
marketplace. To retain its highly skilled work force, the Company strives to
remain competitive with the pay of employers of a similar stature who compete
with the Company for talent.

- The Company's 1993 and 2000 Stock Option Plans are intended to provide a
long-term incentive for executives and other key employees to maximize growth
and profitability to create shareholder value.

The basic components of executive compensation, including that of the Chief
Executive Officer, consist of salary, bonus, stock options and participation in
the Company's 401(k) Savings Plan, Deferred Compensation Plan, Employee Stock
Purchase Plan and Executive Medical Plan. The Company does not currently provide
for any defined benefit pension plan.

Cash Compensation. The Compensation Committee reviews and approves salaries
for the Chief Executive Officer and other executive officers on an annual basis
or at other times as necessary to accommodate the hiring of new employees,
promotions or other considerations. Recommended base salaries are reviewed and
set based on a number of factors, including job responsibilities, individual
industry experience, individual performance, Company performance, industry data
for comparable positions and recommendations by senior executive officers. No
predetermined weight is given to any of the above factors.

Salary increases for the Company's executive officers have averaged
approximately 13.3% annually for the past three years. Certain executive
officers have received greater salary increases corresponding to expanded
responsibilities as a result of the continued growth of the Company.

A portion of the cash compensation of executive officers and most other
salaried employees consists of bonus payments. Under the Company's Executive
Incentive Compensation Plan, most salaried employees, including all executive
officers, are eligible to receive a cash bonus equal to a specified percentage
of the participant's base salary if certain financial objectives are met. The
financial objectives for executive officers relate to the attainment of sales,
operating income, net earnings, earnings per share, return on equity, return on
invested capital and stock price appreciation goals established in advance by
the Company's management and approved by its Board of Directors. Based on the
Company's 2001 financial performance, bonuses under the plan were awarded to all
Named Executive Officers.

Stock Options. The Company considers equity compensation, in the form of
stock options, to be an important element in the overall compensation of its
executive officers and other key employees. The grant of stock options continues
the Company's practice of increasing management's equity ownership in order to
ensure that the interests of management remain closely aligned with those of the
Company's shareholders. Stock options also create an incentive for the Company's
key employees to remain with the Company for the long term because the options
are typically not immediately exercisable and, if not exercised, are forfeited
immediately if the employee is terminated for cause or voluntarily terminates
his employment (other than by reason of death, disability or retirement) or
within three months if employment is terminated for any other reason except
death, disability or retirement.
9

Options are granted pursuant to the Company's 1993 and 2000 Stock Option
Plans at the discretion of the Company's Stock Option Committee. The Stock
Option Committee relies in large part on the recommendation of the Chairman in
determining the number of option shares to be granted to executive officers,
based upon the Chairman's assessment of individual performance and the Company's
performance. With the exception of new employees, options are typically granted
on an annual basis. During 2001, four new employees were granted options to
purchase an aggregate of 13,000 shares. No options were granted to executive
officers during 2001.

Chief Executive Officer Compensation. The Chief Executive Officer's total
compensation is based upon the same factors as the compensation of other
executive officers, including his individual performance and the Company's
short-term and long-term performance, as measured principally by increases in
store growth, sales, operating income, net earnings, earnings per share, return
on equity, return on invested capital and stock price appreciation. In addition,
the Compensation Committee reviews the level of chief executives' compensation
within the retail and footwear industries with consideration given to, among
other factors, differences in sales, growth rates and total market
capitalization.

In March 2001, the Compensation Committee increased Mr. Lemond's salary 7%
from $467,500 to $500,000. Mr. Lemond did not receive a stock option grant in
2001, but based on the 2001 financial results, received a bonus of $132,500
under the quantitative Executive Incentive Compensation Plan. The bonus
represents 53% of the maximum that could be earned under the plan by Mr. Lemond.

Compensation Committee Stock Option Committee

William E. Bindley William E. Bindley
Gerald W. Schoor Gerald W. Schoor

Report of the Audit Committee

Management of the Company is responsible for the financial reporting
process, including the system of internal accounting and financial controls, and
for the preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States. The Company's
independent accountants, Deloitte & Touche LLP, are responsible for performing
the audit of the Company's consolidated financial statements and expressing an
opinion on those statements. The Audit Committee is responsible for oversight of
all aspects of the Company's financial reporting, internal controls and audit
processes. A copy of the current Audit Committee Charter is included in this
proxy statement as Appendix A. The Audit Committee is composed of three
"independent directors" as that term is defined by the listing standards of the
National Association of Securities Dealers, Inc.

In fulfillment of its responsibilities, the Audit Committee on a regular
basis discusses with both management and Deloitte & Touche LLP the adequacy and
effectiveness of the Company's internal accounting and financial controls. The
Audit Committee has reviewed and discussed the audited financial statements with
the Company's management and Deloitte & Touche LLP. In addition, the Audit
Committee has discussed with Deloitte & Touche LLP all matters required to be
discussed with audit committees by Statement on Auditing Standards No. 61,
"Communication with Audit Committees". Deloitte & Touche LLP also provided the
Audit Committee the written disclosures and the letter required by the
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees". The Audit Committee has discussed with Deloitte & Touche LLP
any relationships or services that might impact their objectivity and
independence.

Based on the Audit Committee's review and discussions referenced in this
report, the Audit Committee recommended to the Board that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended February 2, 2002 for filing with the Securities and Exchange
Commission.

Audit Committee

Gerald W. Schoor
William E. Bindley
James A. Aschleman
10

INDEPENDENT ACCOUNTANTS

The appointment of Deloitte & Touche LLP as auditors for the Company for
fiscal year 2002 is recommended by the Board of Directors and will be submitted
to the meeting in order to permit the shareholders to express their approval or
disapproval. In the event of a negative vote, a selection of other auditors will
be made by the Board. A representative of Deloitte & Touche LLP is expected to
be present at the meeting, will be given an opportunity to make a statement if
he desires and will respond to appropriate questions. Notwithstanding approval
by the shareholders, the Board of Directors reserves the right to replace the
auditors at any time upon the recommendation of the Audit Committee of the Board
of Directors.

The Board of Directors recommends a vote FOR the appointment of Deloitte &
Touche LLP as auditors for 2002.

For fiscal 2001, Deloitte & Touche LLP billed the Company for the following
services:

Audit Fees........................................................$106,538
Financial Information Systems Design and Implementation Fees......$ 0
All Other Fees....................................................$ 12,405

The Audit Committee believes that Deloitte & Touche LLP's provision of non-audit
services is compatible with maintaining such firm's independence.

Performance Graph

The performance graph set forth below compares the cumulative total
shareholder return on the Company's Common Stock with the Nasdaq Stock Market
Index and the Nasdaq Index for Retail Trade Stocks for the period from January
31, 1997 through February 1, 2002.

Comparison of Cumulative Total Return Among The Company,
Nasdaq Stock Market Index and Nasdaq Index for Retail Trade Stocks
----------------------------------------------------------------------------------------------------------------------------------

January 31, January 30, January 29, January 28, February 2, February 1,
1997 1998 1999 2000 2001 2002
-----------------------------------------------------------------------------------------------------------------------------------

The Nasdaq Stock Market (U.S.) 100 118 185 285 194 140
----------------------------------------------------------------------------------------------------------------------------------
Nasdaq Retail Trade Stocks 100 117 142 114 88 104
----------------------------------------------------------------------------------------------------------------------------------
Shoe Carnival, Inc. 100 148 248 280 235 415
----------------------------------------------------------------------------------------------------------------------------------

[PERFORMANCE GRAPH APPEARS HERE]

Compensation Committee Interlocks and Insider Participation

During fiscal 2001, the Compensation Committee consisted of Messrs. Bindley
and Schoor. Neither of the Compensation Committee members were involved in a
relationship requiring disclosure as an interlocking executive officer/director
or under Item 404 of Regulation S-K or as a former officer or employee of the
Company.
11

Certain Transactions

Mr. Weaver, along with Bradley W. Weaver, his son and the owner of 5.0% of
the outstanding shares of the Company's Common Stock, are the principal
shareholders of LC Footwear, LLC and PL Footwear, Inc. Mr. J. Wayne Weaver is
also Chairman of the Board and Chief Executive Officer of LC Footwear, LLC and
PL Footwear, Inc.

The Company purchases women's footwear from LC Footwear, LLC in the
ordinary course of business. During 2001, the Company purchased approximately
$146,000 of merchandise from LC Footwear, LLC. Management of the Company
believes that purchases from LC Footwear, LLC are on terms that are not less
favorable to the Company than could be obtained from unrelated third parties for
comparable merchandise.

PL Footwear, Inc., along with others, serve as import agents for the
Company. Import agents represent the Company on a commission basis in dealings
with shoe factories primarily in mainland China where most of the Company's
private label shoes are manufactured. As agents for the Company, PL Footwear,
Inc. and others visit shoe manufacturers, collect shoe samples, submit these
samples to the Company and advise the Company of market conditions and
availability of merchandise. They also help select leather, assist in detailing
and quality control and coordinate the production and delivery schedule of a
portion of the Company's private label merchandise. The Company pays PL
Footwear, Inc. 10% of the gross purchase price of shoes bought through that
company. Commissions paid to PL Footwear, Inc. were approximately $1.0 million
in 2001. Management of the Company believes that the arrangements with PL
Footwear, Inc. are on terms that are not less favorable to the Company than
could be obtained from unrelated parties.

Mr. Aschleman is a partner of the law firm of Baker & Daniels, which has in
the past, and continues to, provide legal services to the Company.

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of April 3, 2002, certain information
with respect to beneficial ownership of the Company's Common Stock by each
person (or group of affiliated persons) who is known by management to own
beneficially more than 5% of the Common Stock, by each Named Executive Officer
who is not a Director, and by all Directors and current executive officers as a
group. Except as otherwise noted, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock shown as
beneficially owned by them.

Number of Shares Percent of
Name Beneficially Owned Class
---- ------------------ ----------
J. Wayne Weaver and
Delores B. Weaver(1)............... 4,833,230 (2) 38.6%
Timothy T. Baker................... 50,926 (3) *
Clifton E. Sifford................. 40,490 (4) *
W. Kerry Jackson................... 27,966 (5) *

All current executive officers and
Directors as a group
(9 persons)........................ 5,493,907 (6) 42.7%

Scott A. Bommer, individually
and on behalf of SAB Capital
Partners, L.P., SAB Capital
Partners II, L.P., SAB Capital
Advisors, L.L.C., SAB Overseas
Capital Management, L.P. and
SAB Capital Management, L.L.C.
650 Madison Avenue, 26th Floor
New York, NY 10022**................. 1,084,840 8.7%

Dimensional Fund Advisors, Inc.
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401**............ 1,013,800 (7) 8.1%

Bradley W. Weaver(1)................. 625,000 5.0%
Leigh A. Weaver(1).................... 625,000 5.0%
----------
* Less than 1%

** Information is based solely on reports filed by such shareholder under
Section 13(d) or Section 13(g) of the Securities Exchange Act of 1934.

(1) J. Wayne Weaver and Delores B. Weaver are husband and wife, and Bradley
W. Weaver and Leigh A. Weaver are their adult children. Their address is
8233 Baumgart Road, Evansville, Indiana 47725.

(2) Mr. and Mrs. Weaver each individually own 2,000,000 shares and jointly own
333,230 shares. 500,000 shares are held in a trust of which Mr. and Mrs.
Weaver are both trustees.

(3) Includes 43,334 shares issuable upon the exercise of options.

(4) Includes 40,294 shares issuable upon the exercise of options.

(5) Includes 21,666 shares issuable upon the exercise of options.

(6) Includes 350,834 shares issuable upon the exercise of options.

(7) The shareholder is a registered investment advisor and has sole voting and
dispositive power with respect to the shares. All of the indicated shares
are owned by advisory clients of the shareholder, and the shareholder
disclaims beneficial ownership of such shares.

SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING

The date by which shareholder proposals must be received by the Company for
inclusion in proxy materials relating to the 2003 Annual Meeting of Common
Shareholders is January 1, 2003.

In order to be considered at the 2003 Annual Meeting, shareholder proposals
must comply with the advance notice and eligibility requirements contained in
the Company's By-Laws. The Company's By-Laws provide that shareholders are
required to give advance notice to the Company of any nomination by a
shareholder of candidates for election as directors and of any business to be
brought by a shareholder before an annual shareholders' meeting. Specifically,
the By-Laws provide that for a shareholder to nominate a person for election to
the Company's Board of Directors, the shareholder must be entitled to vote for
the election of directors at the meeting and must give timely written notice of
the nomination to the Secretary of the Company. The By-Laws also provide that
for business to be properly brought before an annual meeting by a shareholder,
the shareholder must have the legal right and authority to make the proposal for
consideration at the meeting and the shareholder must give timely written notice
thereof to the Secretary of the Company. In order to be timely, a shareholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Company not less than 30 days nor more than 60 days prior to the
meeting. In the event that less than 40 days' notice or prior public disclosure
of the date of the meeting is given or made to shareholders, notice by the
shareholder must be received not later than the close of business on the tenth
day following the day on which notice of the date of the meeting was mailed or
public disclosure was made. The notice must contain specified information about
each nominee or the proposed business and the shareholder making the nomination
or proposal.

The specific requirements of these advance notice and eligibility
provisions are set forth in Article II and Article III of the Company's By-Laws,
a copy of which is available upon request. Such request and any shareholder
proposals should be sent to the Secretary of the Company at the principal
executive offices of the Company.

INCORPORATION BY REFERENCE

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that may incorporate future filings (including
this proxy statement, in whole or in part), the Compensation Report of the
Compensation and Stock Option Committees, the Performance Graph and the Report
of the Audit Committee shall not be incorporated by reference in any such
filings.

ANNUAL REPORTS

The Annual Report to Shareholders for the 2001 fiscal year accompanies this
Proxy Statement. The Annual Report is not used as part of this solicitation
material and no action will be taken with respect to it at the Annual Meeting.
In addition, a copy of the Company's Annual Report on Form 10-K for the 2001
fiscal year as filed with the Securities and Exchange Commission, including
financial statements but excluding exhibits, may be obtained without charge upon
written request to David A. Kapp, Secretary, Shoe Carnival, Inc., 8233 Baumgart
Road, Evansville, Indiana 47725.
14

SHOE CARNIVAL, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS

One committee of the Board of Directors is the Audit Committee. Only independent
directors may serve on the Audit Committee.

The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its responsibilities. The function of the Audit
Committee is oversight. The management of the Company is responsible for the
preparation, presentation and integrity of the Company's financial statements.
Management is responsible for maintaining appropriate accounting and financial
reporting principles and policies and internal controls and procedures designed
to assure compliance with accounting standards and applicable laws and
regulations. The Company's independent accountant is responsible for planning
and carrying out a proper audit of the Company's annual financial statements,
timely reviews of the Company's quarterly financial statements prior to the
filing of each quarterly report on Form 10-Q, and other procedures. In
fulfilling their responsibilities hereunder, it is recognized that members of
the Audit Committee are not full-time employees of the Company and are not, and
do not represent themselves to be, accountants or auditors by profession or
experts in the fields of accounting or auditing including in respect of auditor
independence. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of auditing or
accounting reviews or procedures or to set auditor independence standards, and
each member of the Audit Committee shall be entitled to rely on (1) the
integrity of those persons and organizations within and outside the Company from
which it receives information, (2) the accuracy of the financial and other
information provided to the Audit Committee by such persons or organizations
absent actual knowledge to the contrary (which shall be promptly reported to the
Board of Directors) and (3) representations made by management as to any
information technology and other non-audit services provided by the independent
accountant to the Company.

GENERAL RESPONSIBILITIES

1. The Audit Committee will provide an open avenue of communication
between the independent accountant and the Board of Directors.

2. The Audit Committee will report all committee actions to the Board of
Directors and may make appropriate recommendations.

3. The Audit Committee has the power to conduct or authorize
investigations into matters within the committee's scope of
responsibilities. The committee is authorized to retain independent
legal counsel, accountants or others it needs to assist in an
investigation.

4. The Audit Committee will meet at least four times each year; more
frequently if circumstances make that preferable. The Audit Committee
chairman has the authority to call a committee meeting whenever he or
she thinks there is a need. The committee may ask members of management
or others to attend a meeting and is authorized to receive all
pertinent information from management.

MEMBERSHIP

The Audit Committee shall be comprised of at least three directors
appointed by the Board, each of whom shall be an "independent director" within
the meaning of the rules of the Nasdaq Stock Market applicable to National
Market issuers. "Independent director" means a person other than an officer or
employee of the Company or any other individual having a relationship which, in
the opinion of the Company's Board of Directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director. The following persons shall not be considered independent:

(a) a director who is employed by the Company or any affiliate of
the Company for the current year or any of the past three
years;

(b) a director who accepts any compensation from the Company or
any affiliate in excess of $60,000 during the previous fiscal
year, other than compensation for board service, benefits
under a tax-qualified retirement plan, or non-discretionary
compensation;

(c) a director who is a member of the immediate family of an
individual who is, or has been in any of the past three years,
employed by the Company or any affiliate as an executive
officer. Immediate family includes a person's spouse, parents,
children, siblings, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law, daughter-in-law,
and anyone who resides in such person's home;

(d) a director who is a partner in, or a controlling shareholder
or an executive officer, of, any for-profit business
organization to which the Company made, or from which the
business organization received, payments (other than those
arising solely from investments in the corporation's
securities) that exceed 5% of the Company's or business
organization's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years;
and

(e) a director who is employed as an executive of another entity
where any of the Company's executives serve on that entity's
compensation committee.

All members of the Audit Committee shall have a working familiarity with
basic finance and accounting practices, and at least one member of the Audit
Committee shall have accounting or related financial management expertise. Audit
Committee members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Company or an outside
consultant.

RESPONSIBILITIES FOR ENGAGING INDEPENDENT ACCOUNTANT

1. The Audit Committee will recommend the selection of the independent
accountant and the fees to be paid to the independent accountant. The
committee's recommendation is subject to approval by the Board of
Directors of the Company. The Audit Committee may also recommend
dismissal of the independent accountant by the Board of Directors.

2. The Audit Committee will seek confirmation of the independence of the
independent accountant, including a review of audit and non-audit
services provided by the independent accountant and the fees paid for
those services.

3. The Audit Committee will consider, in consultation with the independent
accountant, the audit scope and procedural plans made by the
independent accountant.

4. The Audit Committee will listen to management and the independent
accountant if either think there might be a need to engage additional
independent accountants. The Audit Committee will decide whether to
engage an additional independent accountant and, if so, which one.

RESPONSIBILITIES FOR REVIEWING THE ANNUAL EXTERNAL AUDIT AND QUARTERLY
AND ANNUAL FINANCIAL STATEMENTS

1. The Audit Committee will require the independent accountant to be
available to the Board of Directors at least annually and that it
provide the committee with a timely analysis of significant financial
reporting issues.

2. The Audit Committee will require the independent accountant to review
the Company's interim financial reports prior to the release of
quarterly earnings and all quarterly reports containing financial
information prior to their filing with the SEC.

3. The Audit Committee will ask management and the independent accountant
about significant risks and exposures and will assess management's
steps to minimize them.

4. The Audit Committee will regularly review the following with the
independent accountant:

(a) The adequacy of the Company's internal controls, including
computerized information system controls and security.

(b) Any significant findings and recommendations made by the
independent accountant, together with management's responses
to them.

5. Shortly after the annual examination is completed, the audit committee
will review the following with management and the independent
accountant:

(a) The Company's annual financial statements and related
footnotes.

(b) The independent accountant's audit of and report on those
financial statements.

(c) The independent accountant's qualitative judgments about the
quality and appropriateness, not just the acceptability, of
accounting principles and financial disclosures and how
aggressive (or conservative) the accounting principles and
underlying estimates are.

(d) Any serious difficulties or disputes with management
encountered during the course of the audit.

(e) Anything else about the audit procedures or findings that GAAS
requires the independent accountants to discuss with the
committee.

6. The Audit Committee will consider and review the following with
management:

(a) Any significant findings during the year and management's
responses to them.

(b) Any difficulties the independent accountant encountered while
conducting the audit, including any restrictions on the scope
of its work or access to required information.

7. The Audit Committee will review annual filings with the SEC containing
the Company's financial statements with management and will consider
whether the information in the filings is consistent with the
information in the financial statements.

8. As a whole, or through the Committee Chairman, the Audit Committee will
review interim financial reports with management.

PERIODIC RESPONSIBILITIES

1. Review and update the committee's charter annually.

2. Review legal and regulatory matters, including loss contingencies, that
may have a material effect on the Company's financial statements,
compliance policies and programs and reports from regulators and, if
appropriate, consult with counsel to the Company concerning such
matters.

3. Meet with the independent accountant and management in separate
executive sessions to discuss all matters the committee or these groups
believe should be discussed privately with the Audit Committee.

Amended and Restated: September 20, 2001

PROXY SHOE CARNIVAL, INC. PROXY

Proxy Solicited on Behalf of The Board of Directors
For The Annual Meeting of Shareholders -- June 5, 2002

The undersigned appoints Mark L. Lemond and J. Wayne Weaver, and each of
them, as proxies, with full power of substitution and revocation, to vote, as
designated on the reverse side hereof, all the Common Stock of Shoe Carnival,
Inc. which the undersigned has power to vote, with all powers which the
undersigned would possess if personally present, at the annual meeting of
shareholders thereof to be held at the Evansville Marriott, 7101 North U.S.
Route 41, Evansville, Indiana on June 5, 2002, or at any adjournment thereof.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. Unless otherwise marked, this proxy will
be voted FOR the election as Director of the nominees listed under Proposal 1
and FOR Proposal 2.

YOUR VOTE IS IMPORTANT!

PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

(Continued and to be signed on reverse side.)

SHOE CARNIVAL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]

For Withhold
1. Election of Directors --
Nominees: 01-J. Wayne Weaver [] []
02-Gerald W. Schoor [] []
------------------------------

For Against Abstain
2. Proposal to approve the [] [] []
appointment of Deloitte &
Touche LLP, as auditors for
the Company for 2002.

3. In their discretion, to [] [] []
transact such other business
that may properly come
before the meeting.

Dated: , 2002
-----------------------------------

Signature(s) ---------------------------------------------

---------------------------------------------

NOTE: When signing as attorney, executor,
administrator, trustee or guardian, please give full
title. If more than one trustee, all should sign.
All joint owners must sign.
--------------------------------------------------------------------------------
FOLD AND DETACH HERE

YOUR VOTE IS IMPORTANT!

PLEASE VOTE, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.