The board of directors of The May Department Stores Company ("May") has developed the following Board of Directors Governance Guidelines to assist the board in the exercise of its responsibilities and to serve the best interests of May and its shareowners. These Guidelines should be interpreted in the context of all applicable laws and May's Certificate of Incorporation, by-laws and other corporate governance documents. The board intends for the Guidelines to serve as a flexible framework within which the board may conduct its business and not as a set of legally binding obligations. The board may modify the Guidelines from time to time as the board deems appropriate and in the best interests of May and its shareowners or as required by applicable laws and regulations.



The board of directors is elected by the shareowners to oversee management's conduct of the business of May. Each member of the board has a fiduciary relationship to the shareowners of May, and must at all times exercise prudent, independent and objective judgment.

There is in today's society an increasing recognition that the practical, if not legal, obligation of a large publicly owned corporation such as May must extend beyond the corporation and its shareowners to include consideration of the total environment in which it exists. Corporations such as ours relate in varying ways to, and must consider the varied interests of, such interest groups as the shareowners, employees, general public, customers, suppliers and the communities in which our facilities are located.


Size of the Board. With the exceptions of the chief executive officer and the president, no position shall automatically imply board membership. While the size of the board may fluctuate from time-to-time, the board believes that the appropriate size of the board should be between 10 to 12 members, with not more than two to three members being management executives.

Director's Term of Office. The board of directors is divided into three classes. Once class will be elected every year, such that each class will serve for a three-year term. As an alternative to term limits, the nominating and governance committee will review each director's continuation on the board at the conclusion of the director's three year term.

Board Membership Criteria. The nominating and governance committee of the board, with direct input from the chairman of the board and chief executive officer, shall identify qualified individuals to become board members and recommend those individuals to the board for approval.

In selecting non-management directors, primary consideration will be given to the following qualifications:

(1)    outstanding and recognized competence in general management, as well as possible specialization in one or more of the following fields: science, finance, economics, public affairs, marketing, management development, advertising, ecology or the professions;
(2) an age at the time of first election to the board which generally would permit such person to serve May for not less than seven years prior to retirement pursuant to the retirement policy of the board; the "seven-year" period of minimum available service is intended as a guide rather than an inflexible minimum and, under appropriate circumstances, persons with less than seven years of service available from the time of first election may be elected;
(3) a willingness and availability to commit the time and energies necessary to satisfy the requirements of the board and committee memberships; and
(4) a commitment to represent May shareowners as a whole, without any particular constituency among such shareowners.

Director Independence. A majority of the directors shall satisfy the independence requirements under the listing standards of the New York Stock Exchange (the "NYSE"). The board will review annually the relationships that each director has with May (either directly or as a partner, shareowner or officer of an organization that has a relationship with May). Following such annual review, only those directors who the board affirmatively determines have no material relationship with May will be considered independent directors, subject to additional qualifications prescribed under the listing standards of the NYSE. The basis for any determination that a relationship is not material will be published in May's annual proxy statement.

When assessing the materiality of a director's relationship with May, the following is not a bar to an independence finding:

(1)    ownership, by itself, of a significant amount of May common stock; or
(2) affiliation by the director
(i)    with a company or firm doing business with May during a fiscal year, when that business accounts for less than 1% of May's and the company's or firm's gross revenues during the fiscal year; or
(ii) with an organization to which May makes charitable contributions during a fiscal year, when May's contributions account for less than 1% of the total contributions to that organization during the fiscal year; or
(iii) with an entity to which May makes payments for property or services, when the rates or charges involved in the transaction are determined by competitive bids, or the transaction involves the rendering of services as a common contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; or
(3) payments during a fiscal year by May to a law firm with which the director is affiliated (as a partner or Of Counsel) for legal services provided to May, so long as
(i)    May does not pay fees to the firm for legal services performed by
the director or his or her immediate family for May; and
(ii) the fees paid by May to the firm do not exceed 1% of the firm's gross revenues for the fiscal year.


(1)    No non-management director shall serve as a director after the annual meeting next following the director's 72nd birthday.
(2) Except as set forth in 3. below, each management director shall retire from the board coincident with such employee's retirement as an employee of May, regardless of age.
(3) Any
      (A)    non-management director who shall experience a significant change in occupational status, including by reason of resignation or retirement from his or her full-time position,
  (B) CEO of May who shall leave the position of CEO of May, including by reason of resignation or retirement from his or her CEO position, or
  (C) director who shall violate any of the policies in the then-current Policy on Business Conduct as it applies to the directors,
  shall tender a resignation, together with a request to the nominating and governance committee that such person not again be designated a management nominee for re-election to the board; the nominating and governance committee shall evaluate such tender and request and recommend appropriate action to the full board. [This provision shall be deemed supplemental to, not in lieu of, Section 11, Article II of May's By-laws. That section provides that any director may resign his or her office at any time, such resignation to be made in writing and delivered to the chairman of the board, the president, the vice chairman of the board, or the secretary.]


In carrying out their various fiduciary and other related duties, the directors of May individually and collectively accept the responsibility of utilizing their broad range of skills and experience to provide objective and independent oversight and evaluation of management's performance in the conduct of May's business.

Attendance. Each director is expected to regularly attend meetings of the board and committees on which the director sits, with the understanding that on occasion a director may be unable to attend a meeting.

Board Agenda. The chairman and chief executive officer shall establish the agenda for board meeting, in consultation with other board members, management or others as determined by the chairman and chief executive officer.

Advance Review of Meeting Materials. May shall, to the extent practicable, distribute presentation materials relevant to each board meeting, sufficiently in advance of meetings to permit prior review by the directors. On those occasions in which the subject matter is extremely confidential, the presentation will be discussed at the meeting. In the event of a pressing need for the board to meet on short notice, it is recognized that written materials may not be available in advance of the meeting.

Basic Duties and Responsibilities. In carrying out its oversight and evaluative functions, the board, acting as a whole and through its various standing committees, shall:

(1)   review management's determination of May's basic objectives, strategies, policies and plans for all segments of May's business;
(2) elect and remove, and approve compensation arrangements for, senior management personnel;
(3) review management's plans for the guarding and preservation of the assets of May, including such intangibles as its reputation and the ability to establish and maintain a reservoir of successor management talent;
(4) review and approve management's plans for major changes in senior corporate organizational structure;
(5) review and approve management's annual and seasonal profit plans and annual corporate objectives and conduct continuing appraisals of management's performance against plans and objectives;
(6) recommend to the shareowners for approval the appointment of May's outside auditors;
(7) review and approve management's plans for action on major financial matters (subject to shareowner approval) including:
- recommended changes in the corporate financial structure affecting balance sheet items;
- capital stock and surplus, including the issuance and repurchase of stock, classification of equity issues and authorized limits thereof;
- the amount of dividends to be paid on various classes of stock, the record date of such payments, and the source of required funds, whether from earnings or surplus;
- designation of transfer agents, registrars and the exchanges on which May's stock shall be listed; and
- price and financial methods to be used for proposed acquisitions, mergers and divestitures;
(8) designate and appoint from among its number members of standing committees of the board, establish appropriate limits of authority for such committees, provide for the periodic rotation of directors among the various committees of the board, and receive scheduled reports from such committees, reviewing and approving recommendations where necessary;
(9) review management's recommendations for the maintenance and revision, as required, of May's Certificate of Incorporation and By-laws; and
(10) review the nominating and governance committee's recommendations for perpetuation of a sound board through planned and orderly recruitment activities, regular elections, and the filling of interim vacancies.


Interaction with Management. The board, particularly the non-management directors, and the management of May, shall have a policy of open communication in order that the board shall be fully informed with respect to the affairs of May. As a part of this communication, it is expected that the non-management directors will from time-to-time initiate with management ideas which they believe worthy of consideration with respect to the fulfillment by the board and management of their respective duties and responsibilities to May and its shareowners, and to the larger community in which May functions.

The board encourages the chief executive officer to bring members of management to board meetings from time-to-time to (i) provide management insight into items being discussed by the board which involve the manager, (ii) make presentations to the board on matters which involve the manager; and (iii) bring managers with significant potential into contact with the board. Attendance of non-directors at board meetings is at the discretion of the board. Use of Consultants. The board may hire outside consultants and experts as the board deems necessary to assist it in evaluating proposals, transactions and information supplied by management.


(1)    Board meetings will customarily be held on the following days:
- January third Friday
- February ten days after the end of the fiscal year
- March third Friday
- May third Friday after the first Monday
- August third Friday
- November second Friday
(2) Locations of the board meetings will be established prior to January 1st of each respective calendar year. Generally, at least one board meeting each year shall be held in a city where May conducts business.
(3) Committee meetings will be held at such times and places as shall be determined by each such committee. Generally, such committee meetings will, when feasible, be scheduled for the afternoon preceding the day of a board meeting or for the morning of the day, and prior to the commencement, of a board meeting.
(4) The board will meet as often as may be appropriate with management, but at least annually, for the purpose of reviewing long-range plans. The date of each such long-range planning meeting will be established in January of each year, generally as an extension of the regular August board meeting. Such other long-range planning meetings as may be required shall be scheduled by the chairman of the board.


The non-management directors shall meet in executive session without management following each regularly scheduled board meeting. At the beginning of each executive session, the independent directors will designate one or more of their members to preside at that executive session. The presiding director(s) will brief the chief executive officer regarding the executive session discussion following the meeting.


Management board members shall not receive any compensation or fees for attending board or committee meetings. Non-management board members will receive such compensation as the board shall from time-to-time determine. Non-management directors will also be reimbursed for expenses in connection with attendance at all board and committee meetings.

The board sets the level of compensation, based on the recommendation of the nominating and governance committee of the board. The nominating and governance committee reviews annually the amount and form of compensation paid to non-management directors, taking into account the compensation paid to directors of other companies in May's peer group and other large United States companies. The committee's review is conducted with the assistance of outside experts in the field of executive compensation. In reviewing the adequacy of director compensation, the committee and the board will consider, among other things, that non-management directors are expected not only to participate in board and committee meetings, but additionally, to render consultation and advisory activities in assisting management with respect to various matters in which such activities are appropriate.


May shall provide new directors with a director orientation program to familiarize such directors with, among other things, the company's business, strategic plans, significant financial, accounting and risk management issues, compliance programs, conflicts of interest policies, codes of business conduct and ethics, corporate governance guidelines, principal officers, internal auditors and independent auditors.

Each director will participate in continuing education to maintain the necessary level of expertise to perform his or her responsibilities as a director.


The board shall conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. All directors are free to make suggestions on improving the board's practices at any time and are encouraged to do so.


The board establishes committees to assist the board in overseeing the affairs of the company.

(1)    The standing committees of the board shall include, but not be limited to, the following:
-   audit committee
- executive compensation and development committee
- finance committee
- nominating and governance committee.

The board may appoint such additional standing or temporary committees from time to time as the directors see fit and shall determine the composition and areas of competence of such committees.

(2) The audit committee, the executive compensation and development committee and the nominating and governance committee shall each be (i) comprised entirely of independent directors as required under applicable law or prescribed under the NYSE listing standards and (ii) chaired by an independent director appointed by a majority of the entire board.
(3) Each standing committee of the board shall have its own written charter in compliance with the NYSE listing standards. The charter will state the purpose and responsibilities of each committee.
(4) In addition to serving on committees under circumstances not in conflict with the above, corporate executive personnel may be specifically assigned to act as liaison and/or staff to each committee. Corporate personnel shall also be available at board and committee meetings as sources of information and counsel.


CEO Succession Planning. With respect to the chief executive officer position, the board shall establish such procedures as it deems necessary or appropriate from time-to-time (including establishing an ad hoc committee).

Management Development. The board shall monitor and review management development efforts.

Evaluation of the Chief Executive Officer. The executive compensation and development committee annually reviews and evaluates the performance of the chief executive officer. The review is based upon objective criteria, including performance of the business and accomplishment of objectives previously established in consultation with the chief executive officer. The executive compensation and development committee reports to the board on the evaluation in executive session. The results of the review and evaluation are used by the committee and the board when considering the compensation of the chief executive officer.


May shall adopt and disclose on its Web site a code of business conduct and ethics for directors, officers and employees . At a minimum, the code will address conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of company assets, compliance with laws, rules and regulations, and encouraging the reporting of any illegal or unethical behavior. The board or a committee of the board shall approve all waivers of the code for executive officers and directors. Any waivers of the code for executive officers and directors shall be promptly disclosed to shareowners.


The Corporate Governance Guidelines, the charters for each of the board committees and the company's Policy on Business Conduct shall be posted on May's Web site.