BROWN GROUP INC, DEF 14A, 1996-04-17

BROWN GROUP INC
DEF 14A, 1996-04-17
FOOTWEAR, (NO RUBBER)

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<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

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

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

BROWN GROUP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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 transactions 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:

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

<PAGE> 2

[ ] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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

(4) Date Filed:

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<PAGE> 3

Brown Group, Inc.
8300 Maryland Avenue, St. Louis, Missouri 63105

Notice of
Annual Meeting of Shareholders
May 23, 1996

The Annual Meeting of Shareholders of Brown Group, Inc. (the "Corporation")
will be held on the 23rd day of May, 1996, at 11:00 a.m., in the Brown Group,
Inc. Conference Center, located at 8300 Maryland Avenue, in Clayton, in St.
Louis County, Missouri, for the following purposes:

A. To elect six Directors;

B. To ratify and approve the prior adoption by the Board of Directors of an
amendment to the Brown Group, Inc. Stock Option and Restricted Stock Plan
of 1994, as described in the following Proxy Statement, the allocation of
an additional 825,000 shares of the Corporation's Common Stock to the Plan
and a proportional increase in the number of shares which may be granted to
any one Participant thereunder; and

C. To transact such other business as may properly come before the meeting.

On January 11, 1996, the Board of Directors of the Corporation amended
Article II, Section 1 of the Bylaws of the Corporation to increase the number
of Directors from eleven to twelve, and to classify the Directors in respect of
the time for which they shall severally hold office by dividing them into three
classes of four Directors each. At the same meeting, the Board of Directors
elected Mr. John Peters MacCarthy to fill the Directorial vacancy created by
this amendment to the Bylaws, to serve until the 1996 Annual Meeting of the
Shareholders of the Corporation. On March 7, 1996, the Board of Directors
further amended the Bylaws to reduce the number of Directors from twelve to
ten, effective on May 23, 1996, and to classify the Directors in respect of the
time for which they shall severally hold office by dividing them into two
classes of three Directors each and one class of four Directors. On April 11,
1996, the Board of Directors repealed the March 7, 1996 Bylaw amendment
reducing the number of Directors from twelve to ten and, instead, further
amended the Bylaws to change the number of Directors to eleven, effective on
May 23, 1996, and to classify the Directors in respect of the time for which
they shall severally hold office by dividing them into two classes of four
Directors each and one class of three Directors. Article II, Section 1 of the
Bylaws, as further so amended, is set forth in Exhibit 1 to the accompanying
Proxy Statement. At the same meeting on April 11, 1996, the Board of Directors
designated Mr. Jerry E. Ritter as the Board's nominee for election by the
Shareholders of the Corporation to fill the Directorial vacancy created by this
most recent amendment to the Bylaws, to serve, if elected by the Corporation's
Shareholders, until the 1997 Annual Meeting of the Shareholders of the
Corporation. As a result, the number of Directors from and after May 23, 1996
will be eleven.

<PAGE> 4

Holders of Common Stock of the Corporation whose names appear of record on
the books of the Corporation at the close of business on April 3, 1996 are
entitled to receive notice of and to vote at said meeting.

Robert D. Pickle
Vice President, General Counsel
and Corporate Secretary

8300 Maryland Avenue
St. Louis, Missouri 63105
April 17, 1996

Shareholders are urged to sign, date and return the enclosed Proxy as soon
as possible. A postage paid, return addressed envelope is enclosed for your
convenience.

<PAGE> 5

Brown Group, Inc.
8300 Maryland Avenue, St. Louis, Missouri 63105

PROXY STATEMENT

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

ANNUAL MEETING OF SHAREHOLDERS, MAY 23, 1996

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

This Proxy Statement is furnished to Shareholders of Brown Group, Inc. (the
"Corporation") in connection with the solicitation by the Board of Directors of
the Corporation of Proxies for use at the Annual Meeting of Shareholders to be
held on May 23, 1996, and at all adjournments thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders.

On the April 3, 1996 record date, the Corporation had outstanding
17,926,402 shares of Common Stock of the par value of $3.75 per share, each of
which is entitled to one vote. The Corporation's Annual Report for the Fiscal
Year ended February 3, 1996 accompanies this Proxy Statement. Such report
shall not, however, be considered as proxy soliciting material. This Proxy
Statement, the enclosed form of Proxy, and the Corporation's Annual Report to
Shareholders are being mailed to Shareholders of the Corporation on or about
April 17, 1996.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to each
person known by the Corporation, as of April 3, 1996, to beneficially own more
than 5% of the Common Stock of the Corporation:

Number of Percent of
Shares of Outstanding
Name and Address of Beneficial Owner Common Stock Common Stock
- --------------------------------------------------- ------------ ------------

John Hancock Mutual Life Insurance Company, through
its indirect, wholly-owned Subsidiaries ......... 1,681,698(1) 9.4%(1)
John Hancock Place
Post Office Box 111
Boston, Massachusetts 02117

Manning & Napier Advisors, Inc. ................... 1,912,312(2) 10.7%(2)
1100 Chase Square
Rochester, New York 14604

The State Teachers Retirement Board of Ohio........ 1,081,100(3) 6.0%(3)
275 East Broad Street
Columbus, Ohio 43215

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

(1) Based on written representations made to the Corporation by such
Shareholder, the named Shareholder, acting in various fiduciary capacities,
possessed sole voting authority over 769,141 shares and sole investment
authority over 1,681,698 shares.
<PAGE> 6

(2) Based on written representations made to the Corporation by such
Shareholder, the named Shareholder, acting in various fiduciary capacities,
possessed sole voting authority over 1,850,662 shares and sole investment
authority over 1,912,312 shares.

(3) Based on written representations made to the Corporation by such
Shareholder, the named Shareholder, acting in various fiduciary capacities,
possessed sole voting and investment authority over 1,081,100 shares.

SECURITY HOLDINGS OF MANAGEMENT

The following table sets forth, as of April 3, 1996, the amounts of Common
Stock of the Corporation beneficially owned by each Director of the
Corporation, each nominee for election as a Director of the Corporation,
certain Executive Officers of the Corporation who are listed in the Summary
Compensation Table on page 12 of this Proxy Statement, and all Directors and
Executive Officers of the Corporation as a Group, together with the number of
incentive options and non-qualified options to purchase shares of Common Stock
which are exercisable by such persons, either immediately or by June 2, 1996,
at prices ranging from $23.4375 to $38.625 per share, and which option shares
are considered to be beneficially owned by such persons pursuant to
Rule 13d-3(d) under the Securities Exchange Act of 1934:

Amount of Common Stock
Beneficially Owned
------------------------------
Number of Options
Shares Exercisable By
Name Owned June 2, 1996
- ----------------------------------------------- -------------- --------------

Joseph L. Bower ............................... 2,350 -0-
B. A. Bridgewater, Jr. ........................ 118,336 39,609
Brian C. Cook ................................. 55,224 16,080
Ronald N. Durchfort ........................... 9,250 3,000
Julie C. Esrey ................................ 1,250 -0-
Joan F. Lane .................................. 2,450 -0-
Richard A. Liddy .............................. 1,750 -0-
John Peters MacCarthy ......................... 3,000 -0-
John D. Macomber .............................. 3,250 -0-
William E. Maritz ............................. 2,250 -0-
General Edward C. Meyer, Retired .............. 2,250 -0-
Harry E. Rich ................................. 34,959 29,623
Jerry E. Ritter* .............................. -0- -0-
Morton I. Sosland ............................. 2,350 -0-
Daniel R. Toll ................................ 2,350 -0-
Thomas A. Williams ............................ 35,510 10,000
Directors and Executive Officers as a Group
(26 persons, including those named above) ... 370,433 176,795

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

* Subsequent to the April 3, 1996 record date, Mr. Ritter acquired 1,000
shares of the Corporation's Common Stock.

Each person identified in the preceding table is the beneficial owner of
less than 1% of the Corporation's Common Stock. The 26 persons comprising
<PAGE> 7

Directors and Executive Officers as a Group are, in the aggregate, the
beneficial owners of 3.0% of such outstanding Common Stock, when the shares
subject to the options described above are considered as beneficially owned by
such persons. Such option shares have been deemed to be outstanding as of
April 3, 1996, for purposes of calculating the aggregate percentage
beneficially owned by Directors and Executive Officers as a Group.

(A)
THE ELECTION OF DIRECTORS

The Board of Directors is divided into three classes, with the terms of
office of each class ending in successive years. This classified Board
structure was adopted on November 2, 1954. Four Directors are to be elected
for terms expiring at the Annual Meeting in 1999; one Director will be elected
for a term expiring at the Annual Meeting in 1998; three Directors will
continue in office for terms expiring at the Annual Meeting in 1998; one
Director will be elected for a term expiring at the Annual Meeting in 1997; and
two Directors will continue in office for terms expiring at the Annual Meeting
in 1997 (or, in the case of each Director, until such Director's successor has
been elected and qualified). It is intended that the votes will be cast
pursuant to the accompanying Proxy for the election of the nominees named
below, unless otherwise directed. In the event that any nominees for office
should for any reason become unavailable, although no reason is known why any
will be unable to serve, it is intended that votes will be cast pursuant to the
accompanying Proxy for substitute nominees designated by the Board of
Directors, except for Proxies marked to the contrary.

The nominees and the Directors who will continue in office, the terms for
which they are nominated or have been elected, their other positions or offices
with the Corporation, their ages, the respective years which marked the
commencement of their continuous service as Directors of the Corporation and
their principal current occupations are as set forth below. All nominees
except Messrs. John Peters MacCarthy and Jerry E. Ritter and all Directors
continuing in office previously have been elected by the Shareholders.

Mrs. Joan F. Lane and Mr. Morton I. Sosland have announced their
retirements from the Board of Directors, effective as of the Annual Meeting in
1996. The retirements of Mrs. Lane and Mr. Sosland, together with the Board's
action in creating an additional Directorial position effective on May 23,
1996, a position for election to which Mr. Jerry E. Ritter has been nominated,
will reduce the number of active Directors to eleven. In order that the
remaining Directors may serve in classes of approximately equal size,
(i) Mr. William E. Maritz, who was elected by the Shareholders in 1995 as a
Director for a term of office expiring at the Annual Meeting in 1998, is
standing at this time for election for a term of three years, expiring at the
Annual Meeting in 1999, (ii) Mr. Daniel R. Toll, whose term of office will
expire at the Annual Meeting in 1996, is standing at this time for election for
a term of two years, expiring at the Annual Meeting in 1998, (iii) Mr. John
Peters MacCarthy, who was elected as a Director by the Board of Directors on
January 11, 1996 for a term of office expiring at the Annual Meeting in 1996,
is standing at this time for election for a term of three years, expiring at
the Annual Meeting in 1999 and (iv) Mr. Jerry E. Ritter, who was nominated by
the Board of Directors on April 11, 1996 for election as a Director by the
Shareholders, accordingly is the Board's nominee for election for a term of one
year, expiring at the Annual Meeting in 1997.

TO BE ELECTED FOR A TERM
OF THREE YEARS

<CAPTION>
Name and Other Positions or Offices with the Corporation Age Director Continuously Since
-------------------------------------------------------- --- ---------------------------
<C> <C> <C> <C>

[PHOTOGRAPH] JOHN PETERS MacCARTHY 63 1996

[PHOTOGRAPH] JOHN D. MACOMBER

Member of the Corporation's Compensation Committee and
Member of the Corporation's Governance and Nominating
Committee............................................... 68 1993

[PHOTOGRAPH] WILLIAM E. MARITZ

Member of the Corporation's Audit Committee and
Member of the Corporation's Governance and Nominating
Committee............................................... 67 1983

[PHOTOGRAPH] GENERAL EDWARD C. MEYER, RETIRED

Member of the Corporation's Audit Committee and
Member of the Corporation's Governance and Nominating
Committee............................................... 67 1992

TO BE ELECTED FOR A TERM
OF TWO YEARS

[PHOTOGRAPH] DANIEL R. TOLL

Chairman of the Corporation's Audit Committee; Member of
the Corporation's Executive Committee and Member of the
Corporation's Compensation Committee.................... 68 1981

TO BE ELECTED FOR A TERM
OF ONE YEAR

[PHOTOGRAPH] JERRY E. RITTER......................................... 61 n/a

<PAGE> 9

TO CONTINUE IN OFFICE
FOR TWO YEARS

[PHOTOGRAPH] B. A. BRIDGEWATER, JR.

Chairman of the Board of Directors, President and
Chief Executive Officer; Chairman of the Corporation's
Executive Committee..................................... 62 1978

[PHOTOGRAPH] JULIE C. ESREY

Member of the Corporation's Audit Committee............. 57 1995

[PHOTOGRAPH] RICHARD A. LIDDY

Member of the Corporation's Audit Committee............. 60 1994

TO CONTINUE IN OFFICE
FOR ONE YEAR

[PHOTOGRAPH] JOSEPH L. BOWER

Chairman of the Corporation's Compensation Committee and
Member of the Corporation's Executive Committee......... 57 1987

[PHOTOGRAPH] HARRY E. RICH

Executive Vice President and Chief Financial Officer;
Member of the Corporation's Executive Committee......... 56 1985

</TABLE>

The following are brief summaries of the business experience, during the
period of the past five years, of each of the nominees for election as
Directors of the Corporation and of each of the present Directors of the
Corporation who are continuing in office, including, where applicable,
information as to the other company directorships currently held by each of
them:

Mr. Joseph L. Bower is, and for the period of the past five years has been,
the Donald Kirk David Professor of Business Administration at the Harvard
Business School. In addition, from September, 1985 until September, 1989, he
was Senior Associate Dean and Director of External Relations at that
institution, where, since September, 1989, he has been Chairman of Doctoral
Programs and Director of Research. Mr. Bower serves as a Director of Anika
Research, the M. L. Lee Acquisition Fund, the New America High Income Fund and

<PAGE> 10

Sonesta International Hotels Corporation and as a Trustee of the New England
Conservatory of Music and of the Dana DeCordova Museum.

Mr. B. A. Bridgewater, Jr. has been Chairman of the Board of Directors,
President and Chief Executive Officer of the Corporation during the past five
years. He serves also as a director of Boatmen's Bancshares, Inc., ENSERCH
Corporation and Enserch Exploration, Inc., FMC Corporation and McDonnell
Douglas Corporation.

Mrs. Julie C. Esrey serves as a director of various organizations. From
1962 to 1976, she was employed as an International Economist for Exxon
Corporation, where she subsequently was engaged as a consultant. Mrs. Esrey is
a member of the Executive Committee of the Board of Trustees of Duke
University, a director of the Duke Management Company and a member of the Board
of Visitors of the Duke University Medical Center. She also has recently
served as a director of Bank IV Kansas, National Association, in Wichita,
Kansas and as a member of the Central Governing Board for the Children's Mercy
Hospital, in Kansas City, Missouri.

Mr. Richard A. Liddy is a director and Chairman of the Board of Directors,
President and Chief Executive Officer of the General American Life Insurance
Company. He served as President and Chief Executive Officer of that
organization from 1992 until January 26, 1995, when he was elected to the
additional office of Chairman of the Board of Directors, and from 1988 until
1992 was President and Chief Operating Officer of the General American Life
Insurance Company. Mr. Liddy is a director and Chairman of the Board of the
Reinsurance Group of America, Inc., and of the registered investment companies
of the General American Capital Company and The Walnut Street Funds, Inc. Mr.
Liddy serves on the Boards of Directors of Union Electric Company, the Boy
Scouts of America, the Missouri Historical Society, the Repertory Theatre of
Saint Louis, the Saint Louis Art Museum, the United Way of Greater Saint Louis
and Webster University in Saint Louis. Additionally, he is a member of the
Board of Directors of the American Council of Life Insurance.

Mr. John Peters MacCarthy is the immediate past Chairman and Chief
Executive Officer of Boatmen's Trust Company, a position he held from 1988
until his retirement in 1994. He served as President and Chief Executive
Officer of Centerre Bank National Association from 1984 until 1988. He served
as an officer of Centerre Trust Company from 1969 until 1979, when he was named
Chief Executive Officer and a Director of Centerre Trust Company. He was a
Partner in the law firm of Bryan, Cave, McPheeters and McRoberts in Saint Louis
from 1959 to 1968. Mr. MacCarthy serves on the Boards of Directors of
Boatmen's Bancshares, Inc., Boatmen's Trust Company and Union Electric Company.
Mr. MacCarthy is a Trustee of Washington University and of the Saint Louis Art
Museum.

Mr. John D. Macomber has been Principal of JDM Investment Group, a private
investment firm, since 1992. From July, 1989 until November, 1992, Mr.
Macomber was Chairman and President of the Export-Import Bank of the United
States, in Washington, D.C., and, prior to that, was, successively, Chairman,
President and Chief Executive Officer of Celanese Corporation, in New York
City, and a Senior Partner with McKinsey & Company, Inc. He currently serves
as a director of Bristol-Myers Squibb Company, Lehman Brothers Holdings Inc.,
Pilkington, Ltd., Textron Inc. and Xerox Corporation; as a director of the
National Executive Services Corps, The Atlantic Council of the United States,
The French-American Foundation and the George Bush Presidential Library
Foundation; as Chairman of the Council for Excellence in Government, in
Washington, D.C.; as a member of the Advisory Boards of the Center for
<PAGE> 11

Strategic and International Studies, the Yale School of Management and STRIVE;
and as a Trustee of the Carnegie Institution of Washington and The Folger
Library.

Mr. William E. Maritz has been Chairman of the Board of Directors and Chief
Executive Officer of Maritz Inc., a motivation, travel, training,
communications and marketing research services company, during the past five
years. From prior to April, 1991, Mr. Maritz served also as President of
Maritz Inc., a position which he relinquished on July 9, 1991. Mr. Maritz
serves as a director of Maritz Inc., Boatmen's Bancshares, Inc., General
American Life Insurance Company and Petrolite Corporation and as a Trustee of
Washington University.

General Edward C. Meyer, Retired, served as Chief of Staff of the United
States Army until 1983. He currently is Chairman and a director of GRC
International, Inc., Chairman and a Trustee of MITRETEK Systems and Managing
Partner of Cilluffo Associates, L.P., a private investment group. He currently
is a director of ITT Corp., ITT Industries, Aegon USA, FMC Corporation, FMC--
Nurol Savinma Sanayii A.S. (an FMC Corporation-Turkish joint venture) and
United Defense, L.P. General Meyer is a Trustee of the George Catlett Marshall
Foundation, and a member of the Board of Governors of the Smith Richardson
Foundation, the Board of Overseers of the Hoover Institution and the Board of
Advisors of the Center for Strategic and International Studies, in Washington,
D.C., and is President of the Army Emergency Relief Association and Chairman of
the Association of Graduates of the United States Military Academy, at West
Point, New York.

Mr. Harry E. Rich has been Executive Vice President and Chief Financial
Officer of the Corporation during the past five years. Previously, Mr. Rich
served as Senior Vice President of the Corporation. Mr. Rich serves as a
director of The Boatmen's National Bank of St. Louis and the General American
Capital Company, a General American Life Insurance Company affiliate
organization.

Mr. Jerry E. Ritter is Executive Vice President, Chief Financial and
Administrative Officer of Anheuser-Busch Companies, Inc., a company engaged in
the brewing of beer and in providing family entertainment, positions in which
he has served during the past five years. Mr. Ritter is a director of
Boatmen's Bancshares, Inc., Boatmen's Trust Company and The Earthgrains
Company, and serves, also, as a member of the Board of Directors of the
Automobile Club of Missouri and as a member of the Board of Commissioners of
the Saint Louis Science Center.

Mr. Daniel R. Toll serves as a corporate and civic director. Until
March 31, 1985, Mr. Toll served as President of Heller International
Corporation, a financial services company which formerly was known as Walter E.
Heller International Corporation. Mr. Toll serves as a director of A.P. Green
Industries, Inc., Kemper National Insurance Companies, Lincoln National
Convertible Securities Fund, Inc., Lincoln National Income Fund, Inc.,
Mallinckrodt Group Inc. and NICOR Inc.

There are no family relationships between any Directors or Executive
Officers of the Corporation.

<PAGE> 12
EXECUTIVE COMPENSATION AND OTHER BENEFITS

The following information is given for the Fiscal Years ended February 3,
1996, January 28, 1995, and January 29, 1994 concerning annual and long-term
compensation for services rendered to the Corporation and its subsidiaries of
those persons who at February 3, 1996 were the Corporation's Chief Executive
Officer and the other four most highly compensated Executive Officers of the
Corporation whose total salary and bonuses exceeded $100,000:

<TABLE>
Summary Compensation Table
<CAPTION>
Long Term Compensation<F4>
----------------------------
Annual Compensation Awards
--------------------------------- ----------------------------
Securities
Other Annual Restricted Underlying All Other
Name and Bonus Compensation Stock Award(s) Options/SARs Compensation
Principal Position Year Salary ($) ($)<F1> ($)<F2> ($)<F3> (#) ($)<F5>
- ----------------------- ---- ---------- ------- ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>

B. A. Bridgewater, Jr. 1995 725,000 -0- -0- -0- -0- 11,101
Chairman of the Board, 1994 650,000 300,000 -0- 950,000 -0- 13,726
President and Chief 1993 650,000 130,000 -0- 470,625 -0- 15,186
Executive Officer

Brian C. Cook 1995 475,000 -0- -0- -0- 30,625 6,032
Corporate Vice 1994 425,000 145,350 -0- 570,000 -0- 6,186
President, Footwear 1993 350,000 196,000 -0- 282,375 -0- 6,755
Retailing, and
President, Famous
Footwear

Ronald N. Durchfort 1995 310,000 154,000 -0- -0- 15,000 5,304
President, Pagoda 1994 290,000 58,000 -0- 228,000 3,000 5,317
International 1993 267,083 93,000 -0- 78,438 -0- 13,758

Harry E. Rich 1995 400,000 -0- -0- -0- 25,000 5,893
Executive Vice 1994 350,000 165,000 -0- 380,000 -0- 6,277
President and Chief 1993 300,000 70,000 -0- 188,250 -0- 6,611
Financial Officer

Thomas A. Williams 1995 450,000 -0- -0- -0- 35,000 5,295
Corporate Vice 1994 400,000 140,000 -0- 646,000 5,000 5,434
President, Footwear 1993 327,500 191,400 -0- 251,000 -0- 13,897
Wholesaling; Chairman
Pagoda; and President
Brown Shoe Company
- ---------------
<FN>

<F1> Amounts are earned and accrued during the Fiscal Years indicated, and are paid subsequent to the end of
each Fiscal Year, pursuant to the Corporation's Annual Incentive Plan, described below.

<F2> The named Executive Officers received certain perquisites, none of which exceeded the lesser of $50,000
or 10% of any such Officer's salary and bonus.

<PAGE> 13

<F3> Restricted Stock Awards are valued by multiplying the closing market price of the Corporation's
unrestricted stock on the date of grant by the number of shares awarded. Dividends are paid on Restricted
Stock Awards at the same rate as paid to all Shareholders.

On February 3, 1996, Mr. Bridgewater held 52,500 Restricted Shares having a market value of $702,188,
Mr. Cook held 33,750 Restricted Shares having a market value of $451,406, Mr. Durchfort held 9,250
Restricted Shares having a market value of $123,719, Mr. Rich held 21,750 Restricted Shares having a market
value of $290,906, and Mr. Williams held 29,250 Restricted Shares having a market value of $391,219.

<F4> The Corporation has no long-term incentive plans other than those described below.

<F5> Includes in 1995 for Mr. Bridgewater: $5,306 to the Corporation's 401(k) Plan, $4,920 in Corporation-
paid group life insurance premiums and $875 in the Employee Stock Purchase Plan. Includes in 1995 for
Mr. Cook: $5,241 to the Corporation's 401(k) Plan and $791 in the Employee Stock Purchase Plan. Includes
in 1995 for Mr. Durchfort: $5,304 to the Corporation's 401(k) Plan. Includes in 1995 for Mr. Rich: $5,306
to the Corporation's 401(k) Plan and $587 in the Employee Stock Purchase Plan. Includes in 1995 for
Mr. Williams: $5,295 to the Corporation's 401(k) Plan. The Corporation has no other Plans providing for
other kinds of compensation entitlements, including split-dollar life insurance arrangements, which
otherwise would be required to be disclosed in this column.

</TABLE>

Annual Incentive Plan

The Corporation's Executive Officers and certain other key management
employees, as determined by the Compensation Committee of the Board of
Directors, are eligible to receive Incentive Awards granted under the
Corporation's Annual Incentive Plan. Payments are based one-half upon the
achievement of financial objectives with respect to earnings and return on
invested capital each year and one-half upon the achievement of specific
management objectives; payments may vary between zero and one hundred fifty
percent of such Incentive Awards in light of corporate or divisional
performance (as appropriate) with respect to such financial objectives, and in
light of each individual's actual performance with respect to his or her
management objectives during each year. Awards paid to Executive Officers
pursuant to the Corporation's Annual Incentive Plan are included in the amounts
stated in the second compensation column of the Summary Compensation Table on
page 12 of this Proxy Statement.

Restricted Stock Plans

The Corporation's Executive Officers and certain other key management
employees, as determined by the Compensation Committee of the Board of
Directors, are eligible to receive Restricted Stock granted under the Brown
Group, Inc. Stock Option and Restricted Stock Plan of 1994 (the "1994 Plan").
Awards of Restricted Stock have also been made to the Corporation's Executive
Officers and certain key management employees under the Brown Group, Inc. Stock
Option and Restricted Stock Plan of 1987, as amended (the "1987 Plan"). With
the 1994 Plan having been approved by the Shareholders of the Corporation at
the 1994 Annual Meeting of Shareholders, the Corporation is not making any
further Restricted Stock awards under the 1987 Plan.

Under both Plans, shares of Restricted Stock are granted at no cost to the
Participant and are delivered at the time of the grant, but are subject to

<PAGE> 14

forfeiture until certain specified conditions are met. Each certificate
representing shares of Restricted Stock bears a legend referring to the Plan
under which it was issued, the risk of forfeiture of the shares and the fact
that such shares are non-transferable until the restrictions have been
satisfied and the legend has been removed. The recipient of Restricted Stock
is entitled to full voting and dividend rights with respect to such shares from
the date of grant. Under both Plans, shares vest in the Participant and
restrictions lapse as follows: one-half of the shares after four years from
the date of grant, an additional one-fourth after six years and the remaining
one-fourth after eight years. A Participant in a Plan is entitled to receive
shares of Restricted Stock free of restrictions only if he is, at the time of
the lapse of such restrictions, in the employ of the Corporation and has been
continuously so employed since the date of grant, except in the case of
retirement or death. If employment is terminated because of disability, the
Participant will be treated as continuing in the employ of the Corporation for
purposes of fulfilling the applicable restriction period. In the event (1) any
person other than the Corporation acquires more than 25% of the Corporation's
Common Stock, (2) the Corporation is liquidated or dissolved following a sale
of all or substantially all of its assets, or (3) the Corporation is not the
surviving parent corporation resulting from any merger or consolidation to
which it is a party (each of which is deemed to be a "change of control"), then
any unvested shares of Restricted Stock granted under either Plan shall
immediately mature and vest in full.

The Summary Compensation Table on page 12 of this Proxy Statement sets out
in the fourth compensation column the value of the shares of Restricted Stock
granted under either the 1987 Plan or the 1994 Plan to persons named in that
table. Such shares have been included in the Stock Ownership Table on pages 3
and 4 of this Proxy Statement.

Retirement Plans

Substantially all salaried, full-time retail and store employees of the
Corporation and designated subsidiaries, as well as the Corporation's Executive
Officers, are eligible to participate in the Shareholder-approved Brown Group,
Inc. Retirement Plan (the "Retirement Plan") after twelve months' employment
and the attainment of 21 years of age. Terms of the Retirement Plan, which is
funded by the Corporation, include, among others, provisions for normal,
optional, early or deferred retirement benefits and for survivor benefits.

Under the Retirement Plan, pensions are computed on a two-rate formula
basis of .825 percent and 1.425 percent for each year of service. The .825
percent service credit is applied to that portion of the average annual salary
for the five highest consecutive years during the last ten-year period that
does not exceed the Social Security Wage Base (the portion of salary subject to
the Federal Social Security Act), and the 1.425 percent service credit is
applied to that portion of the average that exceeds said level.

Certain key employees and Executive Officers are also eligible to
participate in the Supplemental Executive Retirement Plan (the "Supplemental
Plan"). The purpose of the Supplemental Plan is to supplement the benefits
payable to Participants under the Retirement Plan which are otherwise reduced
on account of the limitations of Sections 415 and 401(a)(17) of the Internal
Revenue Code of 1986, as amended. Terms of the Supplemental Plan, among other
things, provide for: an increase in the formula basis for salary in excess of
the Social Security Wage Base; an early retirement benefit; the amount of
benefits payable under the Plan to equal the excess (if any) of the amount
<PAGE> 15

which would have been payable to the Participant as a normal retirement benefit
under the Retirement Plan without regard to the limitations of Sections 415 and
401(a)(17) of the Code less the Participant's normal retirement benefit under
the Retirement Plan, taking into account the limitations of Sections 415 and
401(a)(17) of the Code; and payment, in lump sum value, of all benefits in the
event of a "change of control" of the Corporation, defined in the same manner
as in the 1987 Plan and the 1994 Plan above. The Supplemental Plan is
unfunded. All payments to a Participant will be made from the general assets
of the Corporation.

In addition to the Retirement Plan and the Supplemental Plan, the
Corporation has, incident to hiring, entered into separate agreements with four
Executive Officers at various times, providing additional credited years of
service over those for which the Executive is actually employed. One such
Executive Officer currently is employed by the Corporation.

The following table shows the estimated annual retirement benefits payable
to Participants, including Executive Officers, in the Retirement Plan on a
straight life annuity basis, assuming normal retirement at age 65 during 1996.
The benefits shown in the table below are not subject to deduction for Social
Security or other offset amounts and also include benefits under the
Supplemental Plan. The table does not reflect the effect of profit sharing
balances on pension accounts. If the pension provided by the profit sharing
balance exceeds the formula benefit for the period of employment preceding
November 2, 1975, such excess is added to the total formula pension.

Pension Plan Table
Years of Service

Final Average
Salary 10 15 20 25 30 35 or More
- ----------------- -------- -------- -------- -------- -------- ----------

$100,000......... $ 12,885 $ 19,328 $ 25,770 $ 32,213 $ 38,655 $ 45,098
200,000.......... 27,535 41,303 55,070 68,838 82,605 96,373
300,000.......... 42,185 63,278 84,370 105,463 126,555 147,648
400,000.......... 56,835 85,253 113,670 142,088 170,505 198,923
500,000.......... 71,485 107,228 142,970 178,713 214,455 250,198
600,000.......... 86,135 129,203 172,270 215,338 258,405 301,473
700,000.......... 100,785 151,178 201,570 251,963 302,355 352,748
800,000.......... 115,435 173,153 230,870 288,588 346,305 404,023

The credited years of service (including service by agreement) for purposes
of determining benefits for each of the persons named in the Summary
Compensation Table on page 12 are as follows: Mr. B. A. Bridgewater, Jr.--32;
Mr. Brian C. Cook--15; Mr. Ronald N. Durchfort--6; Mr. Harry E. Rich--12; and
Mr. Thomas A. Williams--13. The dollar amounts shown in the first two columns
of the Summary Compensation Table on page 12 are substantially the same as the
compensation covered by the Retirement Plans.

In 1944, the Shareholders approved the adoption of a Retirement Trust to
which the Corporation, and those subsidiaries which had adopted the Trust,
annually contributed six percent of their consolidated profits before taxes.
The Corporation's final contribution was made for the Corporation's 1975 Fiscal
Year. All full-time salaried employees and certain retail employees
compensated by commissions with five years' service with the Corporation or
subsidiaries which had adopted the Trust were eligible to participate.

<PAGE> 16

The Corporation's annual contributions to the Trust were allocated to the
employees' accounts in proportion to each employee's salary.

All Participants' accounts, including the Corporation's contributions
thereto, became fully vested in the Participants on September 4, 1975. Cash
contributions by employees have been returned to each contributing employee
with interest at six percent per year to the date returned. The Retirement
Trust, after the Corporation's final contribution for the 1975 Fiscal Year, was
frozen on November 1, 1975, with account balances thereafter subject to change
solely for future earnings and market adjustments.

At retirement, each Participant under the Retirement Trust may receive his
or her Retirement Trust benefit in the form of either a lump sum or a monthly
annuity.

Employee Savings Plan

Under the Corporation's Employee Savings Plan, as amended, eligible
employees (those who are 21 years of age or older and who have attained one
year of service with the Corporation) may elect to have from 2 percent to 17
percent of their annual salaries, up to a present maximum amount of $9,500 per
Plan Participant, invested in the Plan. The Corporation matches 75 percent of
the first 2 percent investment and 50 percent of the additional investment up
to the 6 percent level. Plan members employed prior to January 1, 1994 are 100
percent vested in their account balances at all times. Plan members employed
on January 1, 1994 and thereafter are vested in the Corporation's matching
contribution after five years. The Summary Compensation Table on page 12 of
this Proxy Statement sets out in the last column the amounts of contributions
by the Corporation which were allocated to the persons named in that table,
exclusive of changes representing increases and declines during the periods in
the market price of the Corporation's Common Stock, offset and reduced by
dividends thereon and short-term interest derived from cash balances of
contributions awaiting investment in such Common Stock. The full value of each
Plan Participant's account is paid to each Plan member when he or she retires,
leaves the employ of the Corporation or becomes permanently and totally
disabled.

Directors' Compensation

The Corporation pays each non-employee Director of the Corporation an
annual cash retainer of $17,500 and also pays an additional annual cash
retainer of $2,000 to the Chairman of the Corporation's Audit Committee, the
Chairman of the Corporation's Compensation Committee and the Chairperson of the
Corporation's Governance and Nominating Committee.

The Corporation also pays each non-employee Director (a) a $1,000 fee for
attendance at each meeting of the Board of Directors, (b) a $1,000 fee for
attendance at each meeting of a standing committee of the Board of Directors
and (c) a $1,000 fee to each non-employee Director who is a member of the
Corporation's Executive Committee for attendance at each meeting of the
Executive Committee. The Corporation also pays the premiums for Directors' and
Officers' Liability insurance and Travel Accident insurance coverage for each
Director. The Corporation has no Directors' retirement plan, and pays no
additional Directors' remuneration to any Director who is an Officer or
employee of the Corporation.

<PAGE> 17

Under the 1994 Plan, which was approved by the Corporation's Shareholders
at the 1994 Annual Meeting of Shareholders, each non-employee Director in
office on May 26, 1994 (the date the Plan became effective) received a grant of
1,000 shares of Brown Group Common Stock. Thereafter, each newly appointed
non-employee Director is granted 1,000 shares on the date at which the Director
is first elected to serve. In addition, each non-employee Director is granted
250 shares of Brown Group Common Stock annually, and each non-employee Director
who serves as Chairman of the Corporation's Audit, Compensation or Governance
and Nominating Committee is annually granted an additional 100 shares of Brown
Group Common Stock.

Stock Option Plans

The Corporation has options outstanding under the 1994 Plan, the 1987 Plan
(both as described above) and the Stock Appreciation, Stock Option and
Performance Bonus Plan of 1983 ("1983 Plan"). These Plans are administered by
the Corporation's Compensation Committee. The Compensation Committee, in its
discretion, based upon such factors as levels of responsibility and individual
performance, makes determinations as to those persons who are considered to be
key employees and who are therefore eligible for awards under these Plans. All
options are granted at 100% of market value on the date of the grant and expire
ten years from the date of grant. Following the adoption and approval of the
1987 Plan, the Corporation made no further awards under the 1983 Plan, and with
the 1994 Plan having been approved by the Shareholders at the 1994 Annual
Meeting of Shareholders, the Corporation will make no further awards under the
1987 Plan. In the event that (1) any person other than the Corporation
acquires more than 25% of the Corporation's Common Stock, (2) the Corporation
is liquidated or dissolved following a sale of all or substantially all of its
assets, or (3) the Corporation is not the surviving parent corporation
resulting from any merger or consolidation to which it is a party, then any
unexercisable options awarded under the 1983 Plan or the 1987 Plan shall
immediately become exercisable, and any outstanding options under the 1994 Plan
shall be settled by the payment by the Corporation to the holder of such
options of an amount equal to the difference between the aggregate exercise
price of such options and the aggregate fair market value of the shares of the
Corporation's Common Stock subject thereto.

<PAGE> 18

The following table shows information with respect to the options and Stock
Appreciation Rights ("SARs") granted to the Executive Officers named in the
Summary Compensation Table on page 12 during the past Fiscal Year:

<TABLE>
Options/SAR Grants in Last Fiscal Year
<CAPTION>
Individual Grants Potential Realizable
---------------------------------------------------- Value at Assumed
% of Total Annual Rates of Stock
Options/SARs Price Appreciation
Granted to Average for Option Term
Options/SARs Employees in Exercise or Expiration ----------------------
Name Granted Fiscal Year Base Price Date 5%($) 10%($)
- ------------------------- ------------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>

B. A. Bridgewater, Jr. .. -0- n/a n/a n/a n/a n/a
Brian C. Cook ........... 32,500/7,152 7.9%/23.7% $16.54 2005/2006 $338,129 $856,885
Ronald N. Durchfort ..... 14,000/-0- 3.4%/n/a $17.04 2005/2006 $150,070 $380,307
Harry E. Rich ........... 25,000/-0- 6.1%/n/a $14.4375 2006 $226,992 $575,241
Thomas A. Williams ...... 35,000/16,690 8.5%/55.3% $17.04 2005/2006 $375,175 $950,767

</TABLE>

The table on the following page shows information with respect to the
unexercised options and SARs granted during the past Fiscal Year and in prior
years to the Executive Officers named in the Summary Compensation Table on
page 12 and with respect to option/SAR exercises by those persons during the
past Fiscal Year:

<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($) <F2>
Shares
Acquired On Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) <F1> Unexercisable Unexercisable
- ---------------------------------- ------------ ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>

B. A. Bridgewater, Jr. ........... -0- -0- 39,609/-0- -0-/-0-
Brian C. Cook .................... -0- -0- 16,080/30,625 -0-/-0-
Ronald N. Durchfort .............. -0- -0- 3,000/15,000 -0-/-0-
Harry E. Rich .................... -0- -0- 29,623/25,000 -0-/-0-
Thomas A. Williams ............... -0- -0- 10,000/35,000 -0-/-0-
- ---------------
<FN>

<F1> Based on the difference between the mean market price on the date of exercise and the option price.
<F2> Based on the difference between the mean price at Fiscal Year-end and the option price.
</TABLE>
<PAGE> 19

Long Term Incentive Plans

The Corporation has no long-term incentive plans under which any of the
Executive Officers named in the Summary Compensation Table on page 12 of this
Proxy Statement received any award during the periods covered.

Stock Purchase Plan of 1977

Substantially all salaried and commissioned employees, including Executive
Officers, may participate in the Stock Purchase Plan of 1977 after twelve
months' employment with the Corporation. Under this Plan, stock may be
purchased from the Corporation at 85 percent of its market value on the date of
purchase, or it may be purchased by the Trustee in the open market. In the
latter case, the Corporation and its participating subsidiaries contribute to
the Plan an amount equal to 17.647 percent of the Participants' contributions,
which is equivalent to 15 percent of the purchase price of the stock to the
Participants.

The Summary Compensation Table on page 12 of this Proxy Statement sets out
in the last column the amounts of contributions by the Corporation to the Plan
for the persons named in that table.

BOARD OF DIRECTORS AND STANDING
COMMITTEES OF THE BOARD

Board of Directors

During the Fiscal Year ended February 3, 1996, the Board of Directors of
the Corporation met at regular and special meetings on seven separate
occasions. Each of the Directors, except for Mr. Richard A. Liddy, attended
not less than seventy-five percent (75%) of the meetings of the Board of
Directors and of all committees of the Board of Directors of which each such
person was a member. The Board of Directors has established standing Audit,
Compensation, Executive and Governance and Nominating Committees.

Audit Committee

The Audit Committee of the Board of Directors presently is composed of six
members of the Board of Directors who are not Officers or employees of the
Corporation or of any of its subsidiaries. Each member of the Audit Committee
is regarded as independent of the management of the Corporation and as free
from any relationship which, in the opinion of the Board of Directors, would
interfere with the exercise of independent judgment as an Audit Committee
member. The Chairman of the Audit Committee is appointed by the Board of
Directors on the recommendation of the Board's Governance and Nominating
Committee. The members of the Audit Committee serve for a term of one year or
until their successors are appointed.

The responsibilities of the Audit Committee are: to select the independent
public accountants for the Corporation; to review with the independent public
accountants their annual audit plans, including the degree of coordination with
the Corporation's internal audit plans; to review proposed audit fees; to be
informed of the use of the independent public accountants for significant
management advisory services; to obtain explanations from management for all
significant variances in the financial statements between years; to request an
<PAGE> 20

explanation of changes in accounting standards or rules that have an effect on
the financial statements; to inquire about the existence and substance of any
significant accounting accruals, reserves or estimates made by management that
had a material impact on the financial statements; to inquire if there were any
significant financial reporting issues discussed during the accounting period
and, if so, how they were resolved; during private meetings with the
independent public accountants, to request of them their opinions on various
matters including the quality of financial and accounting personnel and the
internal audit staff; to discuss with management and the independent public
accountants the substance of any significant issues concerning litigation,
contingencies, claims or assessments including tax matters, and to understand
how such matters are reflected in the Corporation's financial statements; to
review with the independent public accountants their recommendations on
accounting procedures and internal controls arising from the annual audit as
well as management's response to such recommendations; to review the internal
audit plans and scopes; to review, at least annually, the status of compliance
with the Corporation's Business Conduct Policies and to inquire as to whether
there have been any reported cases of noncompliance or violations; and to
instruct the independent public accountants and the internal audit staff that
the Audit Committee expects to be advised if there are any areas that require
its special attention.

The members of the Audit Committee are Mr. Daniel R. Toll, Chairman; Mrs.
Julie C. Esrey; Mr. Richard A. Liddy; Mr. William E. Maritz; General Edward C.
Meyer, Retired; and Mr. Morton I. Sosland. During the Fiscal Year ended
February 3, 1996, the Audit Committee met on three separate occasions.

Compensation Committee

The Compensation Committee of the Board of Directors presently is composed
of five members of the Board of Directors who are not Officers or employees of
the Corporation or of any of its subsidiaries. The Chairman of the
Compensation Committee is appointed by the Board of Directors on the
recommendation of the Board's Governance and Nominating Committee. The members
of the Compensation Committee of the Board of Directors serve for a period of
one year or until their successors are appointed.

The responsibilities of the Compensation Committee are: to determine the
salaries and Annual Incentive Awards of the Officers and other executives and
key management employees of the Corporation and its subsidiaries; to review and
approve proposed changes in the salaries of other management employees; to
approve the participation of executives and other key management employees in
the Corporation's various compensation plans; to approve and recommend to the
Board of Directors (where appropriate) any changes which are indicated in the
Corporation's compensation programs; to monitor the Corporation's policies and
practices regarding promotion and management development; to counsel senior
management regarding assignment of responsibilities to managers; to ensure
continuity of experienced, qualified management at senior levels within the
Corporation; and to monitor the performance of the Chief Executive Officer and
assure continuity in this position, making appropriate recommendations to the
Board of Directors.

The members of the Compensation Committee are Mr. Joseph L. Bower,
Chairman; Mrs. Joan F. Lane; Mr. John D. Macomber; Mr. Morton I. Sosland; and
Mr. Daniel R. Toll. During the Fiscal Year ended February 3, 1996, the
Compensation Committee met on five separate occasions.

<PAGE> 21

Compensation Committee Interlocks and Insider Participation

Of the members of the Compensation Committee identified in the preceding
paragraph, none ever has been an employee of the Corporation.

Executive Committee

The Bylaws of the Corporation provide that the Executive Committee of the
Board of Directors, presently composed of Mr. B. A. Bridgewater, Jr., Chairman;
Mr. Joseph L. Bower; Mrs. Joan F. Lane; Mr. Harry E. Rich; and Mr. Daniel R.
Toll; shall have and may exercise, so far as is permitted by law, all of the
powers and duties of the Board in the direction of the management of the
business and affairs of the Corporation during the intervals between meetings
of the Board of Directors which may lawfully be delegated to it by the Board of
Directors, except with respect to certain categories of matters which expressly
have been reserved to the full Board of Directors. The Executive Committee of
the Board of Directors also performs Finance Committee functions. The
Executive Committee did not meet during the Fiscal Year ended February 3, 1996.

Governance and Nominating Committee

The Governance and Nominating Committee of the Board of Directors presently
is composed of four members of the Board of Directors who are not Officers or
employees of the Corporation or any of its subsidiaries. The Chairperson of
the Governance and Nominating Committee is appointed by the Board of Directors
on the recommendation of this Committee. Members of the Governance and
Nominating Committee serve for a period of one year or until their successors
are appointed.

The responsibilities of the Governance and Nominating Committee are: to
develop appropriate criteria for serving as a member of the Board of Directors
and to screen, interview and recommend to the Board of Directors suitable
candidates for positions on the Board of Directors; to evaluate the structure
and composition of the Board of Directors, including the number and
responsibilities of the Standing Committees of the Board and to recommend
changes as indicated by this evaluation; to recommend chairmen and committee
members of each of the Standing Committees of the Board of Directors; to review
the elements and levels of Director compensation and the service of Directors
and to recommend any changes as indicated by this review; and to recommend to
the Board of Directors, prior to each Annual Shareholders' Meeting, suitable
persons to be designated by the Board of Directors as nominees for election by
the Shareholders to the office of Director of the Corporation, together with
their placement within the Corporation's classified Board structure as it was
adopted on November 2, 1954.

The Governance and Nominating Committee will consider suggestions from all
sources, including Shareholders, regarding possible Directorial candidates.
Such suggestions should be submitted to the Vice President, General Counsel and
Corporate Secretary of the Corporation, in the manner and within the time
required by the Bylaws of the Corporation.

The members of the Governance and Nominating Committee are Mrs. Joan F.
Lane, Chairperson; Mr. John D. Macomber; Mr. William E. Maritz; and General
Edward C. Meyer, Retired. Upon the retirement of Mrs. Lane at the Annual
Shareholders' Meeting on May 23, 1996, Mr. Maritz will succeed Mrs. Lane as

<PAGE> 22

Chairperson of the Committee. During the Fiscal Year ended February 3, 1996,
the Governance and Nominating Committee met on two separate occasions.

COMPENSATION COMMITTEE REPORT

The policy of the Compensation Committee of the Board of Brown Group, Inc.
is to provide compensation programs that attract, motivate, and help retain a
highly qualified management team to meet the special management requirements of
this Corporation. These programs are not only central to the successful
operation of the stable and growing elements of the Corporation, but also
provide important incentives to management responsible for restructuring,
renewal and rebuilding. In these two ways the programs align closely the
interests of management with those of Shareholders.

Statement of Purpose

The Committee believes that compensation programs must be in place to
enable the Corporation to attract a limited number of executives with critical
experience for key positions, and to retain and motivate strong, capable
management during an extended period of change and rebuilding. At the same
time, the cost of management compensation must bear a reasonable relationship
to the performance of the company and the total return to shareholders on their
investment in the company. The purposes of the programs approved and actions
taken by the Compensation Committee continue to be as follows:

* Encourage and reward an entrepreneurial spirit and business success
each year in the operating divisions of the Corporation, and, at the
same time, build the structure and teamwork necessary for profitable
long-term growth in the footwear business.

* Recognize and reward success in identifying and implementing necessary
structural changes, including consolidation and closing of business
units, plants, and retail stores and associated overhead reduction
throughout the Corporation; and with special emphasis on developing
valuable new business initiatives. Success in making these changes
over time, and continued aggressive management of the Corporation's
growth businesses continue to position the Corporation to move forward
with encouraging prospects.

* Provide executives who succeed within the Corporation the opportunity
to build capital value through stock options and restricted stock, as
long as Shareholders build corresponding value; and, conversely, give
executives strong disincentives to join competitors in businesses
often characterized by executive job-switching.

Cash Pay Levels

To achieve these purposes, the Committee has set total cash compensation
levels that are reasonable in view of the practices of other footwear
companies, including the "Peer Group" companies reflected in the tables
following this report, and other large companies with whom Brown Group competes
for management. Competitive survey data for industry-related and other large
companies and "Peer Group" companies is provided by an independent compensation
consulting firm. In this total cash compensation program, a combination of the
executive's salary and a target annual incentive payment approximates
<PAGE> 23

competitive total cash pay. Salaries are reviewed annually and are determined
based on the committee's evaluation of this competitive survey data, specific
executive responsibilities, the changing nature of these responsibilities,
performance, and the competitive environment for attracting and retaining
footwear executives. Total cash compensation each year can be increased or
decreased substantially by the Committee by awarding an annual incentive
payment based on each recipient's performance in achieving financial and
management objectives.

The amount of the annual incentive payment portion of total cash
compensation each year has normally been based half upon the achievement of
specific financial objectives, and half upon the achievement of specific
management objectives, as explained on page 13 of this Proxy Statement. The
financial objectives are based on net earnings and on return on invested
capital. Management objectives have been related specifically to controllable
and, where possible, measurable elements of each participant's position.

The competitive survey data described above have indicated that these
practices placed Brown Group's cash pay levels generally near the median of the
"Peer Group" companies cited previously, and generally in the mid-range of
other large companies with whom Brown Group competes for management. However,
there has been a great deal of change among the companies with whom Brown Group
competes: of the original "Peer Group" of nine competitors, two have taken
bankruptcy and one has been acquired. Further, Brown Group has disposed of the
Fabric business, in which three of the original "Peer Group" companies
competed. Earnings of all similar companies have been under extreme pressure,
and current and future pay practices may differ from those disclosed by
historical survey data.

Considering these factors and the Company's financial performance in 1995,
the Committee approved payment of less than 10% of the planned incentive
payments for 1995. Further, a modified incentive plan has been put in place
for 1996 which is tied more closely to financial objectives, and provides lower
cash incentive payments unless demanding financial goals are achieved.
Conversely, to maintain strong management incentive to improve earnings and
total return to shareholders, more aggressive use has been made of stock
options, as is discussed in the following section.

Long-Term Stock Incentives

The Committee also administers a long-term restricted stock and stock
option program. Restricted stock awards to senior management in 1995, and the
past several years, have aligned the interest of management with those of the
Shareholders and, because of the 8-year holding period required prior to the
full lapse of restrictions, have been an important influence in Executive
retention. The size of restricted stock and stock option grants has been based
on comparison with the practices of other footwear companies, including the
"Peer Group" companies reflected in the table following this report, and other
large companies with whom Brown Group competes for management. Comparative
long-term stock incentive practices of these companies are surveyed
periodically by an independent compensation consulting firm, and such a survey
was conducted and reviewed by the committee in 1995. We observe that our
practices in granting stock awards have been generally competitive with those
of the "Peer Group" companies cited previously.

In 1995 the extensive decline in earnings and in the price of the company's
stock led the Committee to reduce cash incentive payments sharply, and to shift
<PAGE> 24

to greater emphasis on stock options to align management's interest as closely
as possible with those of the shareholders. The Committee, therefore, strongly
recommends shareholder approval of the amendments to the Stock Option and
Restricted Stock Plan of 1994 which are described on pages 26 to 29 of this
Proxy Statement.

CEO Compensation

In January, 1995, the Committee increased the salary of the Chief Executive
Officer to $725,000 in order to reflect the successful restructuring of the
Company and the survey data discussed above. His total compensation for 1995
was reduced, however, because no incentive payment was made for 1995. The
Company did not achieve financial performance levels required for a minimum
payout. But also, despite the achievement of several important management
objectives that might normally be the basis for an award, the Committee
concluded that in the circumstances of the severe decline in earnings and total
return to stockholders during 1995, no incentive payment to the Chief Executive
Officer or to most other members of Senior Management of the company was
appropriate.

Restricted Stock and Stock Option Awards

As noted above, Brown Group has made significant use of stock options as a
long-term incentive for management. For this reason, it is a long-standing
policy of the Company not to make option awards to executives over the age of
60. Because of his age, no stock option awards were made to the Chief
Executive Officer.

In 1995, restricted stock totaling 2,000 shares was made to one Executive
Officer and stock option grants for an aggregate of 225,000 shares were made to
fourteen Executive officers of the Corporation. The restricted stock awards
and the stock option grants made to the Executive Officers in 1995 were
determined by the Committee on the basis of the factors discussed above with
respect to the cash and long-term stock incentive compensation of the Executive
Officers, and on the Committee's judgment as to the level at which such awards
would, in each particular case, serve the purpose of restricted stock and stock
option grants: to continue to align the interest of management with those of
Shareholders, and to strengthen management's commitment to the Corporation.
The Committee notes that the continuing granting of Stock Options and
Restricted Stock to increase the stock ownership of Senior Management was
strongly endorsed by the Shareholders two years ago, when the Stock Option and
Restricted Stock Plan of 1994 was approved by the positive vote of 93 percent
of the votes cast by Shareholders.

The Omnibus Budget Reconciliation Act of 1993 limits deductibility of
certain compensation for the Chief Executive Officer and the additional four
Executive Officers who are highest paid and employed at year end to $1 million
per year, effective for tax years beginning on or after January 1, 1994. In
1995, no Brown Group executive received compensation of $1 million or more.
The policy of the Committee related to this statutory provision is to establish
and maintain a compensation program that maximizes the creation of long-term
Shareholder value. Action is expected to be taken to qualify the Corporation's
compensation approaches for deductibility to the extent consistent with the
objectives of the Corporation's executive compensation program and with
maintaining competitive compensation.

<PAGE> 25

The Committee believes the restricted stock and stock option plan has been
an important influence in enabling the Corporation to retain and motivate
strong management and that it will play an even more important role in the
future. We invite the Stockholders' attention to the eight-year holding period
required for a full lapse of restrictions on ownership, which is intended to
strengthen the management retention value of the plan. Also note the
limitation of 300,000 shares placed on prospective granting of restricted
stock. We recommend that the Stockholders approve its continuation by
approving the modifications to the Stock Option and Restricted Stock Plan of
1994 described on pages 26 to 29 of this Proxy Statement.

Respectfully submitted,

COMPENSATION COMMITTEE OF THE BROWN
GROUP, INC. BOARD OF DIRECTORS

Mr. Joseph L. Bower, Chairman
Mrs. Joan F. Lane, Member
Mr. John D. Macomber, Member
Mr. Morton I. Sosland, Member
Mr. Daniel R. Toll, Member

<PAGE> 26
PERFORMANCE OF THE CORPORATION

Set forth below is a line graph, for the last five years, comparing the
cumulative total Shareholder returns on the Corporation's Common Stock against
the cumulative total returns of two assumed Peer Group Indices and the Standard
& Poor's Composite-500 Index, with investment weighted based on market
capitalization. The Corporation's Fiscal Year ends on the Saturday nearest to
each January 31; accordingly, share prices are as of the last business day in
each Fiscal Year.

Comparison of 5-Year Cumulative Total Returns

1/31/92 1/29/93 1/28/94 1/27/95 02/02/96
-------- -------- -------- -------- --------

Brown Group, Inc. $111.61 $132.95 $165.14 $157.87 $ 70.35
Peer Group No. 1 $148.99 $142.62 $123.03 $106.57 $112.61
Peer Group No. 2 $157.99 $146.70 $117.91 $ 77.62 $ 70.32
S&P 500 Index $122.69 $135.67 $152.00 $153.47 $212.93

[PERFORMANCE GRAPH]

The following table is derived from the data shown in the foregoing line
graph and is intended to assist Shareholders in evaluating their total returns
on an annual basis for various holding periods.

Compound Annual Rate of Total Returns to Shareholders*

5 Year 4 Year 3 Year 2 Year 1 Year
-------- -------- -------- -------- --------

Brown Group, Inc. -6.79% -10.90% -19.12% -34.73% -55.44%
Peer Group No. 1 2.40% -6.76% -7.57% -4.33% 5.67%
Peer Group No. 2 -6.80% -18.32% -21.74% -22.77% -9.40%
S&P 500 Index 16.32% 14.78% 16.21% 18.36% 38.74%

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

* For indicated holding periods, in Fiscal Years of the Corporation
corresponding to the previous graph, ended February 2, 1996.

The Peer Group No. 1 Index depicted in the foregoing line graph and table
consists of six companies believed now to be engaged in similar businesses:
Edison Brothers Stores, Inc., GENESCO Inc., Nine West Group, Inc. (added to the
"Peer Group" in 1994), The Stride Rite Corporation, The United States Shoe
Corporation (through 1994; that company was dissolved in 1995) and Wolverine
World Wide, Inc. The Peer Group No. 2 Index depicted in the foregoing line
graph and table includes Edison Brothers Stores, Inc., GENESCO Inc., The Stride
Rite Corporation and Wolverine World Wide, Inc. This is the original peer
group established in 1992, adjusted to reflect the acquisition of The United
States Shoe Corporation's footwear business by Nine West Group, Inc. and the
Corporation's divestiture of its fabric business. Shareholders are cautioned
against drawing any conclusions from the data contained therein, as past
results are not necessarily indicative of future performance. These indices
are included for comparative purposes only and do not indicate an opinion of
management that such indices are necessarily an appropriate measure of the
relative performance of the Corporation's Common Stock.

<PAGE> 27

(B)
AMENDMENT TO THE BROWN GROUP, INC. STOCK OPTION AND
RESTRICTED STOCK PLAN OF 1994

The amendment to the Brown Group, Inc. Stock Option and Restricted Stock
Plan of 1994 (the "Plan") would increase the aggregate number of shares of
Common Stock available for purchase pursuant to the Plan from 750,000 to
1,575,000 shares (subject to adjustment for future stock dividends, stock
splits and other changes in capitalization as described in the Plan). In
conjunction with this proposed increase in the aggregate number of shares
available under the Plan, the amendment would increase the number of shares
which could be granted to any one Participant under the Plan from 75,000 to
157,500. The amendment, however, would allow no more than 300,000 of the
additional 825,000 shares of Common Stock to be used to satisfy Restricted
Stock grants under the Plan. The amendment would also remove a temporary
transition rule with respect to the composition of the Compensation Committee
which is no longer applicable. The Board of Directors of the Corporation at
its March 7, 1996 meeting adopted a resolution proposing the amendment to the
Plan (the "Amendment"), conditioned upon Shareholder approval. The amendment
which has been adopted by the Board of Directors is set out as Exhibit 2 to
this Proxy Statement. The Plan, as proposed to be amended, is set out in full
as Exhibit 3 to this Proxy Statement.

Summary of the Plan as Proposed to be Amended

The purposes of the Plan are to motivate certain key employees of the
Corporation to improve the performance of the Corporation and the value of its
stock through achieving gains in earnings, improvements in return on assets and
return on the equity of the Corporation, and to provide a means to enable the
Corporation to secure and retain valuable personnel by making such individuals
participants in the success of the Corporation. A further purpose of the Plan
is to provide for the granting of Common Stock to non-employee directors in
order to promote their equity interest in the Corporation.

The Plan is administered by the Compensation Committee, which is composed
of two or more directors appointed by the Board of Directors from those members
who are not eligible to receive, and who have not at any time within one year
prior to their appointment as Compensation Committee members received,
discretionary grants of the Corporation's equity securities pursuant to the
terms of the Plan or any other plan of the Corporation or its parent or
subsidiaries. In addition, with respect to the grant of stock options, stock
appreciation rights and Restricted Stock, no member of the Compensation
Committee making such grants shall: (1) be a current employee of the
Corporation, or a parent or subsidiary; (2) be a former employee of the
Corporation, or a parent or subsidiary, who receives compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
taxable year; (3) have been an Officer of the Corporation, or a parent or
subsidiary; or (4) receive remuneration from the Corporation, or a parent or
subsidiary, either directly or indirectly in any capacity other than as a
Director.

Key employees of the Corporation and its subsidiaries are eligible for
awards under the Plan. The Compensation Committee has full authority to
determine which employees are "key employees" for purposes of the Plan and to
determine, subject to the terms of the Plan, the amount and form of all awards.
If the proposed amendment is approved by the Shareholders, the maximum number
of shares for which options and Stock Appreciation Units could be granted to
<PAGE> 28

any one participant during the 10-year period beginning March 3, 1994 would be
157,500. In addition, if the proposed amendment is approved by the
Shareholders, no more than 300,000 of the additional 825,000 shares of Common
Stock covered by the Plan could be used to satisfy Restricted Stock grants
under the Plan. The shares available for use under the Plan consist of
authorized but unissued shares of the Corporation's Common Stock, reacquired
shares, or both.

The Plan also provides for the granting of Common Stock to non-employee
Directors ("Director Stock") in order to promote their equity interest in the
Corporation. Each new non-employee Director in office on the date the Plan
became effective was granted 1,000 shares of Director Stock. In addition,
under the terms of the Plan, each new non-employee Director is automatically
granted 1,000 shares of Director Stock on the date such new non-employee
Director assumes office. Thereafter, on the last business day before each
subsequent Annual Meeting of Shareholders of the Corporation, each non-employee
Director then in office, who is not the Chairman of a Committee of the Board of
Directors, is automatically granted 250 shares of Director Stock. Each non-
employee director then in office who is the Chairman of a Committee of the
Board of Directors is automatically granted 350 shares of Director Stock.

Stock Option Awards under the terms of the Plan are intended to qualify for
special tax treatment under Section 422 of the Internal Revenue Code of 1986,
as amended, to the extent such treatment is available. The aggregate fair
market value of Common Stock, valued at the time of grant, with respect to
which Incentive Stock Options granted to an individual (under the Plan or any
of the Corporation's other option plans) may become exercisable for the first
time in any calendar year shall not exceed $100,000. Options granted in excess
of this limitation do not qualify as Incentive Stock Options. All options are
awarded at an option price which is equal to the Fair Market Value, as defined
in the Plan, on the date on which the option is granted. The options are
exercisable as follows: after one year from the date of grant, the optionee
may purchase up to one-fourth of the total number of shares; after two years
from the date of grant, the optionee may purchase, on a cumulative basis, up to
one-half of the total number of shares; after three years from the date of
grant, the optionee may purchase, on a cumulative basis, up to three-fourths of
the total number of shares; and after four years, but prior to the end of the
tenth year from the date of grant, the optionee may purchase, on a cumulative
basis, up to 100 percent of the total number of shares.

The purchase price of an option may be paid in cash, or, in the discretion
of the Compensation Committee, by tender of shares of the Corporation's Common
Stock having a Fair Market Value equal to the option price or by any
combination of cash and stock; however, no shares of Common Stock may be
tendered in exercise of an Incentive Stock Option if such shares were acquired
by the optionee through the exercise of an Incentive Stock Option unless such
shares have been held by the optionee for at least one year and at least two
years have elapsed since such Incentive Stock Option was granted.

A stock appreciation award consists of a number of Stock Appreciation Units
determined by the Compensation Committee. An award is granted only in tandem
with a Stock Option and is for the same term as such underlying option. Each
stock appreciation award entitles the recipient thereof to be paid in cash or
Common Stock of the Corporation (or any combination thereof as determined by
the Compensation Committee) the amount by which a share of the Corporation's
Common Stock has appreciated in Fair Market Value from the date of the award
until the date on which the participant elects payment.

<PAGE> 29

The exercise of an option causes a corresponding reduction in Stock
Appreciation Units previously credited to the participant. In addition,
payment of a stock appreciation award causes a corresponding cancellation of
the same number of options.

Shares of Restricted Stock are granted at no cost to the participant and
delivered at the time of the grant but are subject to forfeiture until certain
specified conditions are met. Each certificate representing shares of
Restricted Stock bears a legend referring to the Plan, the risk of forfeiture
of the shares and the fact that such shares are non-transferable until the
restrictions have been satisfied and the legend has been removed. The
participant is entitled to full voting and dividend rights with respect to such
shares from the date of grant. Shares vest in the participant and the
restrictions lapse as follows: one-half of the shares after four years from
the date of grant, an additional one-fourth after six years, and the remaining
one-fourth after eight years.

A participant is entitled to receive shares of Restricted Stock free of
restrictions only if he is at the time of the lapse of such restrictions in the
employ of the Corporation (or a parent or subsidiary) and has been continuously
so employed since the date of grant except in the case of retirement or death.
If employment is terminated by retirement on or after age 65, or prior to age
65 with the consent of the Compensation Committee, all previously granted
shares of Restricted Stock still subject to the restrictions set forth above
become immediately free of such restrictions. If employment is terminated
because of disability, the participant is treated as continuing in the employ
of the Corporation for purposes of fulfilling the restriction period. In the
event of death, all shares of Restricted Stock not yet free of the restrictions
become immediately free of such restrictions.

The Plan terminates on March 3, 2004, which is ten years after the date on
which the plan was originally approved by the Board of Directors, and no
additional options, stock appreciation awards or shares of Restricted Stock may
be granted after that date. The termination of the Plan does not affect any
unexercised options, stock appreciation awards or shares of Restricted Stock
which have not vested and which are outstanding at the time of termination of
the Plan. The Board of Directors may, at any time prior to March 3, 2004,
terminate the Plan or, with certain exceptions, make such modifications to the
Plan as it considers appropriate.

In the event that (1) any person other than the Corporation acquires more
than 25 percent of the Corporation's Common Stock, (2) the Corporation is
liquidated or dissolved following a sale of all or substantially all of its
assets, or (3) the Corporation is not the surviving parent corporation
resulting from any merger or consolidation to which it is a party, then any
outstanding option, stock appreciation award or unvested shares of Restricted
Stock held by an employee of the Corporation or any parent or subsidiary of the
Corporation shall immediately mature and vest in full. In such event (1) in
the case of options of Stock Appreciation Units, payment will be made of an
amount equal to the difference between the aggregate exercise price of such
option or Unit and the aggregate Fair Market Value of the shares subject
thereto, or (2) in the case of Restricted Stock, all restrictions with respect
to such stock will be removed. The Board of Directors may, however, by
unanimous resolution provide that such maturity shall not result from any event
specified in clause (3) above.

Although it is not possible or appropriate at this time to determine the
identities or positions of those certain key management employees to whom
<PAGE> 30

shares of Restricted Stock under the Plan may be granted, it is intended that
such grants will be made to approximately 25 to 50 high performance, high
potential individuals each year during the life of the Plan who are best in a
position to cause significant improvements in the performance of the
Corporation.

Vote Required

The affirmative vote of a majority of the Corporation's Common Stock
outstanding will constitute approval of the Amendment to the Plan. The Board
of Directors of the Corporation recommends a VOTE FOR such approval of the
Amendment.

COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Executive Officers and Directors, and persons who own more than
ten percent of a registered class of the Corporation's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC") and with the New York and Chicago Stock
Exchanges. Executive Officers, Directors and greater-than-ten-percent
Shareholders are required by SEC regulations to furnish the Corporation with
copies of all Section 16(a) forms they file.

Based solely on review of the copies of such reports furnished to the
Corporation, or written representations that no such reports were required, the
Corporation believes that such persons complied with all Section 16(a) filing
requirements applicable to them with respect to transactions during the Fiscal
Year ended February 3, 1996.

VOTING

Under the New York Business Corporation Law (the "BCL") and the
Corporation's Certificate of Incorporation, the presence, in person or
represented by Proxy, of the holders of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum of Shareholders to take action
at the Annual Meeting. For these purposes, shares which are present, or
represented by Proxy, at the Annual Meeting will be counted as present,
regardless of whether the holder of the shares or Proxy fails to vote on a
particular matter or whether a broker with discretionary voting authority fails
to exercise such authority with respect to any particular matter. Once a
quorum of Shareholders is established, the affirmative vote of a plurality of
the shares which are present in person or represented by Proxy at the Annual
Meeting is required to elect each Director. The affirmative vote of a majority
of the shares which are present in person or represented by Proxy and entitled
to vote at the Annual Meeting is required to act on any other matter properly
brought before the Annual Meeting.

Shares represented by Proxies which are marked "vote withheld" with respect
to the election of any person to serve on the Board of Directors will not be
considered in determining whether such a person has received the affirmative
vote of a plurality of the shares. Shares represented by Proxies which are
marked "abstain" with respect to any other proposal will not be considered in
determining whether such proposal has received the affirmative vote of a
<PAGE> 31

majority of the shares and such Proxies will not have the effect of a "no"
vote. Shares represented by Proxies which deny the Proxy-holder discretionary
authority to vote on a proposal will not be considered in determining whether
such proposal has received the affirmative vote of a majority of the shares and
such Proxies will not have the effect of a "no" vote.

The Corporation knows of no other matters to come before the Annual
Meeting. If any other matters properly come before the Annual Meeting, the
Proxies solicited hereby will be voted on such matters in accordance with the
judgment of the persons voting such Proxies.

SHAREHOLDER PROPOSALS
FOR 1997 ANNUAL MEETING

Proposals of eligible Shareholders intended to be presented at the 1997
Annual Meeting, currently scheduled to be held on May 22, 1997, must be
received by the Corporation by December 18, 1996 for inclusion in the
Corporation's Proxy Statement and Proxy relating to that meeting. Upon receipt
of any such proposal, the Corporation will determine whether or not to include
such proposal in the Proxy Statement and Proxy in accordance with regulations
governing the solicitation of proxies.

In order for a Shareholder to nominate a candidate for Director, under the
Corporation's Bylaws timely notice of the nomination must be received by the
Corporation in advance of the meeting. Ordinarily, such notice must be
received by the Corporation not less than 60 days nor more than 90 days prior
to the meeting; provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the meeting is given or made
to Shareholders, notice by such Shareholder to be timely must be so received
not later than the close of business on the 10th day following the day on which
such notice of the date of the Annual Meeting was mailed or such public
disclosure was made. The Shareholder filing the notice of nomination must
describe various matters regarding the nominee, including such information as
(a) the name, age, business and residence addresses, occupation and shares held
of such person; (b) any other information relating to such nominee required to
be disclosed in the Proxy Statement; and (c) the name, address and shares held
by the Shareholder.

In order for a Shareholder to bring other business before a Shareholder
meeting, under the Corporation's Bylaws timely notice must be received by the
Corporation within the time limits described above. A Shareholder's notice
shall set forth as to each matter the Shareholder proposes to bring before the
Annual Meeting various information regarding the proposal, including (a) a
brief description of the business desired to be brought before the Annual
Meeting and the reasons therefor, (b) the name and address of such Shareholder
proposing such business, (c) the number of shares of Common Stock of the
Corporation which are beneficially owned by such Shareholder and (d) any
material interest of such Shareholder in such business. These requirements are
separate from and in addition to the requirements a Shareholder must meet to
have a proposal included in the Corporation's Proxy Statement.

In each case, notice must be given to the Vice President, General Counsel
and Corporate Secretary of the Corporation, whose address is 8300 Maryland
Avenue, St. Louis, Missouri 63105. Any Shareholder desiring a copy of the
Corporation's Bylaws will be forwarded one without charge upon written request
from such individual.

<PAGE> 32
INDEPENDENT AUDITORS

Ernst & Young LLP were the auditors for the Corporation for the year ended
February 3, 1996, and the Board of Directors, on the recommendation of its
Audit Committee, has engaged that firm as auditors for the year ending
February 1, 1997. Representatives of that firm will be present at the Annual
Meeting to respond to appropriate questions that may be raised, and they will
have an opportunity to make a statement, if they so desire.

MISCELLANEOUS

The Corporation will bear the cost of solicitation of Proxies. Proxies
will be solicited by mail. They also may be solicited by Executive Officers
and regular employees of the Corporation personally or by telephone or
telegram, but such persons will not be specifically compensated for such
services. It is contemplated that brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the soliciting material to the
beneficial owners of stock held of record by such persons and will be
reimbursed for their reasonable expenses incurred therein.

Even though you plan to attend the meeting in person, please sign, date and
return the enclosed Proxy promptly. The person giving a Proxy has the power to
revoke it, at any time before it is exercised, by giving written notice of
revocation to the Vice President, General Counsel and Corporate Secretary of
the Corporation or by duly executing and delivering a Proxy bearing a later
date, or by attending the Annual Meeting and casting a contrary vote. All
shares represented by Proxies received in time to be counted at the Annual
Meeting will be voted. A postage paid, return addressed envelope is enclosed
for your convenience. Your cooperation in giving this your immediate attention
will be appreciated.

Robert D. Pickle
Vice President, General Counsel
and Corporate Secretary

St. Louis, Missouri 63105
April 17, 1996

<PAGE> 33
EXHIBIT 1

ARTICLE II

"Section 1. Number. The number of directors within the maximum and
minimum limits provided for in the Certificate of Incorporation may be changed
from time to time by the shareholders or by the Board of Directors by an
amendment to these Bylaws. Subject to amendment of these Bylaws, as aforesaid,
the number of directors of the Corporation shall be eleven. Such directors
shall be classified in respect of the time for which they shall severally hold
office, by dividing them into two classes consisting of four directors each and
one class consisting of three directors. At each annual election, the
successors of the directors of the class whose term shall expire in that year,
shall be elected to hold office for the term of three years so that the term of
office of one class of directors shall expire in each year. The Board of
Directors shall not choose as a director to fill a temporary vacancy any person
over the age of seventy years, and shall not recommend to the stockholders any
person for election as a director for a term extending beyond the Annual
Meeting of Stockholders following the end of the calendar year during which he
attains his seventieth birthday, provided, however, that this shall not apply
to directors elected or holding office at the time of the Annual Meeting of
Stockholders in 1967; and provided further, that this shall not prevent the
designation by the Board of such person as an Honorary Director, to serve
without vote."

<PAGE> 34
EXHIBIT 2

AMENDMENT TO THE BROWN GROUP, INC.
STOCK OPTION AND RESTRICTED STOCK PLAN OF 1994

WHEREAS, Brown Group, Inc. ("Company") previously adopted the Brown Group,
Inc. Stock Option and Restricted Stock Plan of 1994 ("Plan"); and

WHEREAS, the Company retained the right to amend the Plan pursuant to
Section XII thereof; and

WHEREAS, the Company desires to amend the Plan to make an additional
825,000 shares of Company Common Stock available for use under the Plan, no
more than 300,000 of which may be used for grants of Restricted Stock, to
increase the number of shares for which options and stock appreciation rights
may be granted to any one Participant during the ten-year period beginning
March 3, 1994 to 157,500, and to make certain other amendments effective as of
March 7, 1996;

NOW, THEREFORE, effective as of March 7, 1996, the Plan is amended as
follows:

1. Section III is deleted and replaced with the following:

The stock which may be issued and either granted or sold under this
Plan or pursuant to which stock appreciation awards may be satisfied shall
not exceed, in the aggregate, 1,575,000 shares of the Company's Common
Stock. Notwithstanding the preceding sentence, no more than 300,000 of the
825,000 additional shares of the Company's Common Stock authorized to be
issued, granted or sold under this Plan pursuant to this Amendment may be
granted as Restricted Stock. If an option and/or stock appreciation award
expires or is terminated or surrendered without having been fully exercised
or shares of Restricted Stock are forfeited, the unpurchased shares or
forfeited shares of Common Stock subject to the option, stock appreciation
award or grant of Restricted Stock shall again be available for the
purposes of the Plan provided, however, that such shares shall be available
for grants of Restricted Stock only to the extent previously available to
be issued as Restricted Stock. The number of shares for which options and
stock appreciation rights can be granted to any one Participant during the
ten-year period beginning March 3, 1994 shall be 157,500 shares.

2. The first three paragraphs of Section X are deleted and replaced with
the following:

A. Composition. The Compensation Committee shall consist of two or
more members of the Board of Directors who are not eligible to receive and
who have not at any time within one year prior to their appointment as
Compensation Committee members received discretionary grants of the
Company's equity securities pursuant to the terms of this Plan or any other
plan of the Company or its Parent or Subsidiaries. In addition, with
respect to the grant of stock options, stock appreciation rights and
Restricted Stock, such member ("Outside Director") shall not:

(1) be a current employee of the Company, or a Parent or Subsidiary;

(2) be a former employee of the Company, or a Parent or Subsidiary,
who receives compensation for prior services (other than benefits
under a tax-qualified retirement plan) during the taxable year;

<PAGE> 35

(3) have been an officer of the Company, or a Parent or Subsidiary;

(4) receive Remuneration from the Company, or a Parent or Subsidiary,
either directly or indirectly in any capacity other than as
director.

The Outside Directors may be a sub-committee of the Compensation
Committee or comprise the whole committee. If a sub-committee, their
deliberations shall be separate and reported directly to the full Board of
Directors for any further action required. "Remuneration" and "Officer" as
used herein shall be determined in accordance with Treasury Regulation
Section 1.162-27(e)(3) or any successor thereto.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed
and become effective as of the 7th day of March, 1996.

BROWN GROUP, INC.

By /s/ B. A. BRIDGEWATER, JR.
---------------------------------
B. A. Bridgewater, Jr.
Chairman of the Board of
Directors, President and Chief
Executive Officer
[SEAL]

ATTEST:

/s/ ROBERT D. PICKLE
- ---------------------------------
Robert D. Pickle
Vice President, General Counsel
and Corporate Secretary

<PAGE> 36
EXHIBIT 3

BROWN GROUP, INC. STOCK OPTION AND RESTRICTED
STOCK PLAN OF 1994, AS PROPOSED TO BE AMENDED

SECTION I. PURPOSE

The purpose of this Plan is to provide an incentive to and to encourage
ownership of the Company's stock by the grant of stock options, restricted
stock and stock appreciation awards to certain "Key Employees" and by the grant
of Director Stock to "Non-Employee Directors" of the Company or its
subsidiaries. It is intended that all options granted pursuant to the Plan
will qualify as Incentive Stock Options, as defined in Section 422(b) of the
Internal Revenue Code of 1986, except for those options granted pursuant to the
Plan which are in excess of the limitations set forth in Section 422(d).

SECTION II. DEFINITIONS

A. "Board of Directors" means the board of directors of the Company.

B. "Company Stock" means shares of the Common Stock, par value $3.75 per
share, of the Company.

C. "Company" means Brown Group, Inc., a New York corporation, or any
successor thereto.

D. "Compensation Committee" means the committee established by the Board
of Directors of the Company pursuant to Section IX.

E. "Director Stock" means shares of Common Stock granted to a Non-
Employee Director pursuant to Section VIII of the Plan.

F. "Effective Date" means May 26, 1994.

G. "Fair Market Value" as of a given date, means the mean between the
high and low selling prices on the New York Stock Exchange of Common Stock on
such given date. In the absence of actual sales on a given date, "Fair Market
Value" means the mean between the high and low selling prices on the New York
Stock Exchange of Common Stock on the last day preceding such given date on
which a sale of the Common Stock occurred.

H. "Key Employee" means a person who is employed in a position of
administrative or managerial responsibility by the Company or a Subsidiary.

I. "Non-Employee Director" means a director of the Company who is not an
employee of the Company or a Subsidiary.

J. "Parent" means any corporation (other than the Company or a
Subsidiary) in an unbroken chain of corporations ending with the Company if at
the time of the grant of an option each of the corporations, other than the
Company or a Subsidiary, owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

K. "Participant" means a Key Employee who is awarded a Stock Appreciation
Unit and/or a stock option and/or shares of Restricted Stock hereunder.

<PAGE> 37

L. "Plan" means this Brown Group, Inc. Stock Option and Restricted Stock
Plan of 1994.

M. "Restricted Stock" means shares of Common Stock granted to a Key
Employee pursuant to Section VII of the Plan.

N. "Stock Appreciation Unit" means, to the extent provided in this Plan
and only to that extent, a share of Common Stock.

O. "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if, at the time of
grant of an option hereunder, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

SECTION III. STOCK

The stock which may be issued and either granted or sold under this Plan or
pursuant to which stock appreciation awards may be satisfied shall not exceed,
in the aggregate, 1,575,000 shares of the Company's Common Stock.
Notwithstanding the preceding sentence, no more than 300,000 of the 825,000
additional shares of the Company's Common Stock authorized to be issued,
granted or sold under this Plan pursuant to this Amendment may be granted as
Restricted Stock. If an option and/or stock appreciation award expires or is
terminated or surrendered without having been fully exercised or shares of
Restricted Stock are forfeited, the unpurchased shares or forfeited shares of
Common Stock subject to the option, stock appreciation award or grant of
Restricted Stock shall again be available for the purposes of the Plan
provided, however, that such shares shall be available for grants of Restricted
Stock only to the extent previously available to be issued as Restricted Stock.
The number of shares for which options and stock appreciation rights can be
granted to any one Participant during the ten-year period beginning March 3,
1994 shall be 157,500 shares.

SECTION IV. ELIGIBILITY

A. A share of Restricted Stock, a stock option, or a stock option in
tandem with a stock appreciation award may be granted under the Plan only to a
Key Employee.

B. A share of Director Stock may be granted under the Plan only to a Non-
Employee Director.

SECTION V. STOCK OPTIONS

A. Option Price. The purchase price for shares of Common Stock under any
option granted under this Plan shall be the Fair Market Value for such shares
on the date on which such option was granted. Such Fair Market Value shall be
set forth in the Option Agreement.

B. Term and Exercise of Options. An option may be exercised during an
option period commencing in the second year and ending ten years from the date
on which an option is granted, as follows:

<PAGE> 38

(1) After one year from the date of grant, the optionee may purchase
up to one-fourth of the total number of shares to which his option relates;

(2) After two years from the date of grant, the optionee may purchase,
on a cumulative basis, up to one-half of the total number of shares to
which his option relates;

(3) After three years from the date of grant, the optionee may
purchase, on a cumulative basis, up to three-fourths of the total number of
shares to which his option relates;

(4) After four years but prior to the end of the tenth year from the
date on which the option is granted, the optionee may purchase, on a
cumulative basis, up to 100% of the total number of shares to which his
option relates;

provided, however, that except as set forth in Subsections E and F and
Section XIII, no option may be exercised unless the optionee is then in the
employ of the Company, a Parent or Subsidiary and shall have been continuously
so employed since the date of the grant of his option.

C. Non-Transferability of Options. Each option granted under the Plan
shall by its terms be non-transferable other than by will or by the laws of
descent and distribution, and an option may be exercised, during the lifetime
of the optionee, only by him.

D. Termination of Employment. If the employment of an optionee is
terminated other than by reason of his death, he may exercise his option, to
the extent that he was entitled to exercise it at the date of such termination
of employment, at any time within 60 days after such termination; provided,
however, that no exercise of any option may take place any later than ten years
from the date of the grant of such option. No change in the duties of an
optionee, while in the employ of the Company, a Parent or a Subsidiary, or
transfer, if still employed after the transfer by the Company, a Parent or a
Subsidiary, shall constitute termination of employment.

E. Death of Optionee. In the event of the death of an optionee, while he
is entitled to exercise an option granted under the Plan, his option may be
exercised, to the extent that he was entitled to exercise it as of the date of
his death, by his estate, or by any person who acquired the right to exercise
such option by bequest or inheritance or by reason of the death of the
optionee, at any time within a period of one year after his death, but in no
event after ten years from the date of the grant of the option.

F. Leaves of Absence. The option agreements issued pursuant to the Plan
may contain such provisions as the Compensation Committee shall determine with
respect to approved leaves of absence.

G. Payment of Option Price. The purchase price is to be paid in full
upon the exercise of an option, either (i) in cash; or (ii) in the discretion
of the Compensation Committee, by the tender to the Company of shares of the
Common Stock owned by the optionee and registered in his name (other than
Restricted Stock which has not yet vested) having a Fair Market Value equal to
the cash exercise price of the option being exercised; or (iii) in the
discretion of the Compensation Committee, by any combination of the payment
methods specified in clauses (i) and (ii) hereof; provided, however, that no
shares of Common Stock may be tendered in exercise of an Incentive Stock Option
if such shares were acquired by the optionee through the exercise of an
<PAGE> 39

Incentive Stock Option unless (i) such shares have been held by the optionee
for at least one year; and (ii) at least two years have elapsed since such
Incentive Stock Option was granted. The proceeds of sale of stock subject to
option are to be added to the general funds of the Company or to the shares of
the Common Stock held in treasury, and used for the corporate purposes of the
Company as the Board of Directors shall determine.

H. Limitation on Exercise of Options. The maximum aggregate Fair Market
Value (determined as of the time an option is granted) of Common Stock with
respect to which Incentive Stock Options are first exercisable by an optionee
in any calendar year (under all option plans of the Company, its Parent and its
Subsidiaries) shall not exceed an aggregate Fair Market Value of $100,000.

SECTION VI. STOCK APPRECIATION AWARDS

A. Description. A stock appreciation award shall be that number of Stock
Appreciation Units as the Compensation Committee shall from time to time grant.
The right to elect to receive such award may be based on criteria determined by
the Committee. After the criteria have been met which allow a Participant to
elect to receive payment, such election may be made at any time during the
remainder of the term of the award. Upon electing to receive payment of a
stock appreciation award, a Participant shall receive for such Stock
Appreciation Unit as to which payment is elected an amount in cash, in Common
Stock or in any combination thereof, as the Compensation Committee shall
determine, equal to the amount, if any, by which the Fair Market Value of one
share of Common Stock on the date on which such election is made exceeds the
Fair Market Value of one share of Common Stock on the date on which the stock
appreciation award was granted.

B. Grant of Award. The Compensation Committee may, in its sole
discretion, grant a Key Employee a stock appreciation award in tandem with a
stock option; provided, however, that the agreements evidencing the grant of
the stock appreciation award and the tandem stock option shall provide that the
exercise of an option granted in tandem with a stock appreciation award shall
cause a correlative reduction in Stock Appreciation Units theretofore standing
to a Participant's credit, and the payment of a stock appreciation award shall
cause a correlative cancellation of such option.

C. Term and Exercise of Award. When a stock appreciation award is
granted in tandem with a stock option, it shall have a term equal to the term
of such stock option and shall be payable, upon a Participant's election, at
the same times, and to the same extent, as such stock option; provided that,
notwithstanding the preceding, except as set forth in Subsection G and
Section XIII, no election to receive payment of a stock appreciation award may
be made unless the Participant is then in the employ of the Company, a Parent
or Subsidiary and shall have been continuously so employed since the date of
the grant of his stock appreciation award.

D. Establishment of Accounts. The Company shall establish a special
ledger and shall record the name of each Participant and the number and type of
Stock Appreciation Units awarded to such Participant in any year.

E. Payment of Award. A stock appreciation award shall be paid, to the
extent payment is elected by the Participant (and is otherwise due and
payable), as soon as practicable after the date on which such election is made.

<PAGE> 40

F. Non-Transferability of Award. Except as provided in Subsection G, no
stock appreciation award or the rights thereto shall be transferable.

G. Death. In the event a Participant who has been granted a stock
appreciation award in tandem with a stock option dies while still employed by
the Company, a Parent or Subsidiary, payment of his stock appreciation award
may be elected, to the extent that he was entitled to elect payment as of the
date of his death, by his estate, or by any person who acquired the right to
make such election by bequest or inheritance or by reason of the death of the
Participant, at any time within a period of one year after his death, but in no
event after ten years from the date of grant of the stock appreciation award.

H. Leaves of Absence. The stock appreciation award agreements issued
pursuant to the Plan may contain such provisions as the Compensation Committee
shall determine with respect to approved leaves of absence.

SECTION VII. RESTRICTED STOCK

A. Description. The Compensation Committee may grant to Key Employees
shares of the Common Stock reserved pursuant to Section III of the Plan as
Restricted Stock. Shares of Restricted Stock shall be issued and delivered at
the time of the grant but shall be subject to forfeiture until vested in
accordance with Subsection C. Each certificate representing shares of
Restricted Stock shall bear a legend referring to this Plan, the risk of
forfeiture of the shares and the fact that such shares are non-transferable
until vesting restrictions have been satisfied and the legend has been removed.
The grantee shall be entitled to full voting and dividend rights with respect
to all shares of Restricted Stock, beginning with the date of grant.

B. Cost of Restricted Stock. Grants of shares of Restricted Stock are
considered additional compensation to a Participant, and shares shall be at no
cost to the Participant.

C. Removal of Legend (Vesting). Shares of Restricted Stock granted
hereunder shall vest and the restrictions shall lapse as follows:

(a) after four years from the date of grant, restrictions shall lapse
for one-half of the total number of shares subject to the grant;

(b) after six years from the date of grant, restrictions shall lapse
for an additional one-fourth of the total number of shares subject to the
grant;

(c) after eight years from the date of grant, restrictions shall
lapse for the remaining one-fourth of the total number of shares subject to
the grant;

provided, however, that except as set forth in Subsections E and F and
Section XIII, or as otherwise set forth below, a grantee shall be entitled to
receive shares of Restricted Stock free of restrictions only if, at the time of
the lapse of such restrictions, such grantee is then in the employ of the
Company, a Parent or Subsidiary and shall have been continuously so employed
since the date of grant of the shares of Restricted Stock. If he is not so
employed, such shares shall be forfeited.

<PAGE> 41

D. Non-Transferability. Except as provided in Subsection F, shares of
Restricted Stock shall not be transferable by a grantee until after the removal
of the legend with respect to such shares.

E. Retirement. If the employment of grantee is terminated due to
retirement on or after age 65 or due to retirement prior to age 65 with the
consent of the Compensation Committee, all previously-granted shares of
Restricted Stock still subject to the restrictions of Subsection C, above,
shall become immediately free of such restrictions. If the employment of a
grantee is terminated due to retirement for disability, such grantee shall be
treated as continuing in the employment of the Company solely for purposes of
fulfilling the restrictions in Subsection C above.

F. Death. In the event of the death of a grantee, all previously-granted
shares of Restricted Stock, not yet free of the vesting restrictions of
Subsection C, above, shall become immediately free of such restrictions.

G. Leaves of Absence. The Restricted Stock agreements issued pursuant to
the Plan may contain such provisions as the Compensation Committee shall
determine with respect to approved leaves of absence.

SECTION VIII. DIRECTOR STOCK

A. Grant and Award. On the Effective Date, each Non-Employee Director
then in office will automatically be granted 1,000 shares of Director Stock.
In addition each new Non-Employee Director will automatically be granted 1,000
shares of Director Stock on the date such new Non-Employee Director assumes
office. Thereafter, on the last business day before each subsequent Annual
Meeting of Stockholders of the Company, each Non-Employee Director then in
office, who is not the Chairman of a Committee of the Board of Directors, will
automatically be granted 250 shares of Director Stock. Each Non-Employee
Director then in office who is the Chairman of a Committee of the Board of
Directors will automatically be granted 350 shares of Director Stock.

B. Amendment. The provisions of Section XII notwithstanding, in no event
may the provisions of this Section VIII be amended more than once every six
months other than to comply with changes in the Internal Revenue Code of 1986,
as amended, and the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.

SECTION IX. ADMINISTRATION

The Plan shall be administered by the Compensation Committee, except as set
forth in Section X. Subject to the express provisions of the Plan, the
Compensation Committee shall have complete authority to:

(A) determine the individuals to whom and the time or times when options
and stock appreciation awards and shares of Restricted Stock shall be
granted;

(B) determine the number of shares to be subject to each option, stock
appreciation award and grant of Restricted Stock and the terms and
provisions of each option, stock appreciation award and Restricted
Stock agreement;

(D) prescribe, amend and rescind rules and regulations relating to the
Plan; and

(E) make all determinations not specifically set forth in (A) through (D)
above which it considers necessary or advisable for the administration
of the Plan.

All determinations by the Compensation Committee with respect to (A) through
(E) above shall be final.

SECTION X. COMPENSATION COMMITTEE

A. Composition. The Compensation Committee shall consist of two or more
members of the Board of Directors who are not eligible to receive and who have
not at any time within one year prior to their appointment as Compensation
Committee members received discretionary grants of the Company's equity
securities pursuant to the terms of this Plan or any other plan of the Company
or its Parent or Subsidiaries. In addition, with respect to the grant of stock
options, stock appreciation rights and Restricted Stock, such member ("Outside
Director") shall not:

(1) be a current employee of the Company, or a Parent or Subsidiary;

(2) be a former employee of the Company, or a Parent or Subsidiary, who
receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year;

(3) have been an officer of the Company, or a Parent or Subsidiary;

(4) receive Remuneration from the Company, or a Parent or Subsidiary,
either directly or indirectly in any capacity other than as director.

The Outside Directors may be a sub-committee of the Compensation Committee
or comprise the whole committee. If a sub-committee, their deliberations shall
be separate and reported directly to the full Board of Directors for any
further action required. "Remuneration" and "Officer" as used herein shall be
determined in accordance with Treasury Regulation Section 1.162-27(e)(3) or any
successor thereto.

B. Appointment. The members of the Compensation Committee shall be
appointed by and shall serve at the pleasure of the Board of Directors, which
may from time to time appoint members in substitution for members previously
appointed and fill vacancies, however caused, in the Compensation Committee.

C. Chairman, Place of Meetings. The Compensation Committee and its
Outside Director or sub-committee (if any) may select one of its members as its
Chairman and shall hold its meetings at such times and places as it may
determine.

D. Quorum. A majority of its members shall constitute a quorum.

E. Determinations. All determinations of the Compensation Committee or
its sub-committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by a majority of the members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held.

<PAGE> 43

SECTION XI. EFFECT OF CHANGE IN STOCK

Notwithstanding any other provision in the Plan, if there is any change in
the Common Stock of the Company by reason of stock dividends, spinoffs, split-
ups, recapitalizations, mergers, consolidations, reorganizations, combinations
or exchanges of shares, the number of Stock Appreciation Units and number and
class of shares available for options and grants of Restricted Stock and
Director Stock and the number of shares subject to any outstanding options,
Stock Appreciation Units and prior grants of Restricted Stock not yet vested,
and the price thereof, as applicable, shall be appropriately adjusted by the
Compensation Committee.

SECTION XII. AMENDMENT OR TERMINATION

Unless the Plan shall theretofore have been terminated as hereinafter
provided,the Plan shall terminate, and no stock appreciation awards, stock
options or shares of Restricted Stock or Director Stock shall be granted
hereunder, after ten years from the date of its adoption by the Board of
Directors. Any stock appreciation awards, options, or grants of shares of
Restricted Stock outstanding at the termination of the Plan shall continue in
full force and effect and shall not be affected by such termination of the
Plan. The Board of Directors of the Company may, at any time prior to that
date, terminate the Plan or make such modifications of the Plan as it may deem
advisable; provided, however, that the Board of Directors may not, without
further approval by the holders of the Common Stock of the Company:
(a) materially increase the maximum number of shares for which options and
shares of Restricted Stock and Director Stock may be granted or pursuant to
which stock appreciation awards may be satisfied (except under the anti-
dilution provisions in Section XI), (b) change the class of employees to whom
options may be granted, (c) withdraw the authority to administer the Plan from
a committee whose members meet the requirements of Section X whether as Outside
Directors or otherwise, (d) materially increase the benefits accruing to
Participants or (e) increase the aggregate number of shares for which options
can be granted to any Key Employee.

SECTION XIII. CHANGE OF CONTROL

In the event that:

(A) any person other than the Company shall acquire more than 25% of
the Company's Common Stock through a tender offer, exchange offer
or otherwise, or

(B) the Company shall be liquidated or dissolved following a sale of
all or substantially all of its assets, or

(C) the Company shall not be the surviving parent corporation
resulting from any merger or consolidation to which it is a party,

any then outstanding stock option, stock appreciation award, or unvested shares
of Restricted Stock held by an employee of the Company or any Parent or
Subsidiary of the Company shall immediately mature and vest in full and shall
be settled by the payment to each employee participant of,

<PAGE> 44

(1) in the case of stock options or Stock Appreciation Units, an
amount equal to the difference between the aggregate exercise
price of such option or unit and the aggregate Fair Market Value
of the shares subject thereto on the Special Maturity Date, as
hereinafter defined; or

(2) in the case of Restricted Stock, removal of all restrictions with
respect to such stock;

provided, however, that the Board may, by unanimous resolution, provide that
such maturity shall not result from an event in clause (C) above. For purposes
of an event specified in clause (A) above, the Special Maturity Date for
purposes hereof shall be the date securities are first purchased by a tender or
exchange offer, or the date upon which the Company first receives written
notice of acquisition of 25% of its Common Stock, whichever shall first occur.
For purposes of an event specified in clause (B) or (C), the Special Maturity
Date shall be the effective date of the liquidation, dissolution, merger or
consolidation. Settlement shall be made in cash within not less than five days
following the Special Maturity Date; provided, however, that in the case of a
merger or consolidation in which the holders of the Company's Common Stock are
to receive securities of the surviving corporation, a Participant may, by
written notice to the Company not less than ten days prior to the Special
Maturity Date, elect to receive settlement either in cash or in shares of the
Company's Common Stock having a Fair Market Value, immediately prior to the
time such merger or consolidation becomes effective, equal to the amount due;
provided, however, that any such election for a cash settlement shall be
subject to the approval of the Compensation Committee or, in the case of any
plans not administered by the Compensation Committee, another committee
composed of not less than three disinterested members of the Board. Settlement
of any such election shall be made immediately prior to the time such merger or
consolidation is to become effective.

SECTION XIV. WITHHOLDING

The Company, at the time any distribution is made under the Plan, whether
in cash or in shares of stock, may withhold from such payment any amount
necessary to satisfy federal and state income tax withholding requirements with
respect to such distribution. Such withholding may be in cash or in shares of
stock.

SECTION XV. TERMINATION OF EMPLOYMENT

Nothing in the Plan or in any option, stock appreciation award or the grant
of Restricted Stock shall be deemed to create any limitation or restriction on
such rights as the Company, Parent or Subsidiary, otherwise would have to
terminate the employment of any person at any time for any reason.

<PAGE> 45

IN WITNESS WHEREOF, the Company has caused this Plan to be executed and
become effective as of the 26th day of May, 1994, the Effective Date.

BROWN GROUP, INC.

By /s/ B. A. BRIDGEWATER, JR.
-------------------------------------
B. A. Bridgewater, Jr.
[SEAL] Chairman of the Board of Directors,
President and Chief Executive Officer

ATTEST:

/s/ ROBERT D. PICKLE
- ---------------------------------
Robert D. Pickle
Vice President, General Counsel
and Corporate Secretary

<PAGE> 46
ANNEX A
FORM OF PROXY
[FRONT]

Brown Group, Inc.
8300 Maryland Avenue, St. Louis, Missouri 63105

April 17, 1996

Dear Shareholder:

The Annual Meeting of Shareholders of Brown Group, Inc. will be held on the
23rd day of May, 1996, at 11:00 a.m., in the Brown Group, Inc. Conference
Center, located at 8300 Maryland Avenue, in St. Louis County, Missouri.

It is important your shares be represented at this meeting. Whether or not
you plan to attend the meeting, please review the enclosed proxy materials,
complete the attached proxy form below, and return it promptly in the envelope
provided.

PLEASE DETACH PROXY HERE, SIGN AND MAIL

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

BROWN GROUP, INC.

Proxy Solicited on behalf of the Board of Directors of the Corporation
for Annual Meeting May 23, 1996

The undersigned hereby constitutes and appoints B.A. Bridgewater, Jr., Harry E.
Rich and Robert D. Pickle, and each of them, his true and lawful agents and
proxies, with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Shareholders of BROWN GROUP, INC., to be held in the
Brown Group, Inc. Conference Center, located at 8300 Maryland Avenue, in
Clayton, in St. Louis County, Missouri, on Thursday, May 23, 1996, at
11 o'clock a.m. and at any adjournments thereof, and to vote all the shares of
Common Stock of the Corporation standing on the books of the Corporation in the
name of the undersigned as specified on the reverse side hereof and in their
discretion on such other business as may properly come before the meeting.

Date: , 1996
-----------------------------

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

-----------------------------------------
Signature of Shareholder

This Proxy Must be Signed Exactly as
Name Appears Hereon.

Executors, administrators, trustees, etc.
should give full titles as such. If the
signer is a corporation, please sign full
corporate name by duly authorized
officer.

(over)

<PAGE> 47
[BACK]

IT IS IMPORTANT THAT YOU VOTE, SIGN AND RETURN THE

PROXY BELOW AS SOON AS POSSIBLE.

BY DOING SO, YOU MAY SAVE THE CORPORATION THE

EXPENSE OF ADDITIONAL SOLICITATION.

PLEASE DETACH PROXY HERE, SIGN AND MAIL
- -------------------------------------------------------------------------------

MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:

1. ELECTION OF DIRECTORS:

Nominees: John Peters MacCarthy, John D. Macomber, William E. Maritz,
General Edward C. Meyer, Retired, Daniel R. Toll and
Jerry E. Ritter.

[ ] VOTE FOR all nominees listed.
[ ] VOTE FOR all nominees listed, except:
--------------------------------
[ ] VOTE WITHHELD from all nominees.

2. RATIFICATION AND APPROVAL OF AN AMENDMENT TO THE BROWN GROUP, INC. STOCK
OPTION AND RESTRICTED STOCK PLAN OF 1994, THE ALLOCATION OF AN ADDITIONAL
825,000 SHARES OF THE CORPORATION'S COMMON STOCK TO THE PLAN AND A
PROPORTIONAL INCREASE IN THE NUMBER OF SHARES WHICH MAY BE GRANTED TO ANY
ONE PARTICIPANT THEREUNDER:

FOR [ ] AGAINST [ ] ABSTAIN [ ]

This proxy when properly executed will be voted in the manner directed by the
undersigned Shareholder. If no direction is made, this proxy will be voted for
Proposals 1 and 2, as recommended by the Board of Directors.

-------------------------------------------------
| PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY |
| FORM PROMPTLY USING THE ENCLOSED ENVELOPE |
-------------------------------------------------