UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

Limited Brands, 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):

Notice of

Annual Meeting of Stockholders

and Proxy Statement

May 26, 201124, 2012

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 26, 2011:24, 2012: The proxy statement and annual report to stockholders are available athttp://www.proxyvote.com.

April 11, 201112, 2012

DEAR STOCKHOLDER:

You are cordially invited to attend our 20112012 annual meeting of stockholders to be held at 9:00 a.m., Eastern Time, on May 26, 2011,24, 2012, at our offices located at Three Limited Parkway, Columbus, Ohio 43230. Our Investor Relations telephone number is 614-415-6400 should you require assistance in finding the location of the meeting. The formal Notice of Annual Meeting of Stockholders and proxy statement are attached. If you plan to attend, please bring the Admittance Slip located at the back of this booklet and a picture I.D., and review the attendance information provided. I hope that you will be able to attend and participate in the meeting, at which time I will have the opportunity to review the business and operations of Limited Brands.

The matters to be acted upon by our stockholders are discussed in the Notice of Annual Meeting of Stockholders. It is important that your shares be represented and voted at the meeting. Accordingly, after reading the attached proxy statement, would you kindly sign, date and return the enclosed proxy card or vote by telephone or via the Internet as described on the enclosed proxy card. Your vote is important regardless of the number of shares you own.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

May 26, 201124, 2012

April 11, 201112, 2012

TO OUR STOCKHOLDERS:

We are pleased to invite you to attend our 20112012 annual meeting of stockholders to:

Stockholders of record at the close of business on March 28, 2011April 4, 2012 may vote at the meeting.If you plan to attend, please bring the Admittance Slip located at the back of this booklet and a picture I.D., and review the attendance information provided.

Your vote is important. Stockholders of record can give proxies by calling a toll-free telephone number, by using the Internet or by mailing their signed proxy cards. Whether or not you plan to attend the meeting, please vote by telephone or via the Internet or sign, date and return the enclosed proxy card in the envelope provided. Instructions are included on your proxy card. You may change your vote by submitting a later dated proxy (including a proxy via telephone or the Internet) or by attending the meeting and voting in person.

PROXY STATEMENT TABLE OF CONTENTS

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

The Board of Directors of Limited Brands, Inc. is soliciting your proxy to vote at our 20112012 annual meeting of stockholders (or at any adjournment of the meeting). This proxy statement summarizes the information you need to know to vote at the meeting. In this proxy statement, “we,” “our,” “Limited Brands” and the “Company” refer to Limited Brands, Inc.

We began mailing this proxy statement and the enclosed proxy card, or the Notice of Internet Availability of Proxy Materials (the “Notice”), on or about April 11, 201112, 2012 to all stockholders entitled to vote. Limited Brands’ 20102011 Annual Report on Form 10-K, which includes our financial statements, is being sent with this proxy statement and is available in paper copy by request or in electronic form.

Date, Time and Place of Meeting

Attending the Meeting

Stockholders who plan to attend the meeting in person must bring photo identification and the Admittance Slip located at the back of this booklet. Because of necessary security precautions, bags, purses and briefcases may be subject to inspection. To speed the admissions process, stockholders are encouraged to bring only essential items. Cameras, camcorders or video taping equipment are not allowed.

Shares Entitled to Vote

Stockholders entitled to vote are those who owned Limited Brands common stock (which we refer to throughout this proxy statement as “Common Stock”) at the close of business on the record date, March 28, 2011.April 4, 2012. As of the record date, there were 318,415,578293,314,043 shares of Common Stock outstanding. Each share of Common Stock that you own entitles you to one vote.

Voting Your Shares

Whether or not you plan to attend the annual meeting, we urge you to vote. Stockholders of record can give proxies by calling a toll-free telephone number, by using the Internet or by mailing their signed proxy cards. The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly. If you are voting by mail, please complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you are voting by telephone or via the Internet, please use the telephone or Internet voting procedures set forth on the enclosed proxy card. Returning the proxy card or voting via telephone or the Internet will not affect your right to attend the meeting and vote.

The enclosed proxy card indicates the number of shares that you own.

Voting instructions are included on your proxy card. If you properly fill in your proxy card and send it to us or vote via telephone or the Internet in time to vote, one of the individuals named on your proxy card (your “proxy”) will vote your shares as you have directed. If you sign the proxy card or vote via telephone or the Internet but do not make specific choices, your proxy will follow the Board’s recommendations and vote your shares in the following manner:

If any other matter is properly presented at the meeting, your proxy will vote in accordance with his or her best judgment. At the time this proxy statement went to press, we knew of no other matters to be acted on at the meeting. See “Vote Necessary to Approve Proposals” for a discussion of the votes required to approve these items.

Certain stockholders received a Notice containing instructions on how to access this proxy statement and our Annual Report on Form 10-K via the Internet. Those stockholders should refer to the Notice for instructions on how to vote.

Revoking Your Proxy

You may revoke your proxy by:

Voting in Person

If you plan to vote in person, a ballot will be available when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, you must bring an account statement or letter from the nominee indicating that you were the beneficial owner of the shares at the close of business on March 28, 2011,April 4, 2012, the record date for voting.voting, as well as a proxy, executed in your favor, from the nominee.

Appointing Your Own Proxy

If you want to give your proxy to someone other than the individuals named as proxies on the proxy card, you may cross out the names of those individuals and insert the name of the individual you are authorizing to vote. Either you or that authorized individual must present the proxy card at the meeting.

Quorum Requirement

A quorum of stockholders is necessary to hold a valid meeting. The presence in person or by proxy at the meeting of holders of shares representing at least one-third of the votes of the Common Stock entitled to vote constitutes a quorum. Abstentions and “broker non-votes” are counted as present for establishing a quorum. A broker non-vote occurs on an item when a broker is not permitted to vote on that item absent instruction from the beneficial owner of the shares and no instruction is given.

Vote Necessary to Approve Proposals

continue to serve on the Board as a “holdover director.” As required by the Company’s Bylaws, each director has submitted an irrevocable letter of resignation as director that becomes effective if he or she does not receive a majority of votes cast in an election and the Board accepts the resignation. If a director is not elected, the Nominating & Governance Committee will consider the director’s resignation and recommend to the Board whether to accept or reject the resignation.

Impact of Abstentions and Broker Non-Votes

You may “abstain” from voting for any nominee in the election of directors and on the other proposals, and advisory votes. Abstentionsyour abstention will not count as a vote castcast. However, abstentions with respect to the proposal to amend the Certificate of Incorporation will have the same effect as a vote against the proposal. Abstentions with respect to the election of directors and on the other proposals or the advisory votes. Abstentions with respect to the other proposals and advisory votes will be excluded entirely from the vote and will have no effect.

In addition, under New York Stock Exchange (“NYSE”) rules, if your broker holds your shares in its name, your broker is permitted to vote your shares on the proposals and the advisory votes, exceptproposal to ratify Ernst & Young LLP as described below,our independent registered public accountant, even if it doesdid not receive voting instructions from you. Your broker may not vote your shares on any of the other proposals for the election of directors, the 2011 Stock Option Performance and Incentive Plan, the 2011 Cash Incentive Compensation Performance Plan, the advisory vote on executive compensation, the advisory vote to determine the frequency of future advisory votes on executive compensation or the shareholder proposal.without specific instruction. A “broker non-vote” occurs when a broker submits a proxy but refrains from voting. Shares represented by broker

non-votes are counted as present or represented for purposes of determining the presence of a quorum but are not counted as otherwise present or represented.

Obtaining Additional Copies of the Proxy Materials

We have adopted a procedure called “householding.” Under this procedure, stockholders who share the same last name and reside at the same mailing address will receive one Notice or one set of proxy materials (if they have elected to receive hard copies of the proxy materials), unless one of the stockholders at that address has notified us that they wish to receive individual copies. Stockholders who participate in householding continue to receive separate control numbers for voting. Householding does not in any way affect dividend check mailings.

If you hold Limited Brands Common Stock and currently are subject to householding, but prefer to receive separate copies of proxy materials and other stockholder communications from Limited Brands, or if you are sharing an address with another stockholder and would like to consent to householding, you may revoke or grant your consent to householding as appropriate at any time by calling toll-free at 1-800-579-1639.1-800-579-1639 or notifying our Secretary at our principal executive offices at Three Limited Parkway, Columbus, Ohio 43230.

A number of brokerages and other institutional holders of record have implemented householding. If you hold your shares beneficially in street name, please contact your broker or other intermediary holder of record to request information about householding.

PROPOSAL 1:    ELECTION OF DIRECTORS

The Board of Directors has nominated three directors for election at the annual meeting. If you elect the three nominees, they will hold office for a three-year term expiring at the 20142015 annual meeting or until their successors have been elected. All nominees are currently serving on our Board of Directors.

We believe that our Board as a whole possesses the right diversity of experience, qualifications and skills to oversee and address the key issues facing our Company. In addition, we believe that each of our directors possesses key attributes that we seek in a director, including strong and effective decision-making, communication and leadership skills. Set forth below is additional information about the experience and qualifications of each of the nominees for director, as well as each of the current members of the Board, that led the Nominating & Governance Committee and Board of Directors to conclude, at the time each individual was nominated to serve on the Board of Directors, that he or she would provide valuable insight and guidance as a member of the Board of Directors.

Your proxy will vote for each of the nominees unless you specify otherwise. If any nominee is unable to serve, your proxy may vote for another nominee proposed by the Board of Directors. We do not know of any nominee of the Board of Directors who would be unable to serve as a director if elected.

The Board of Directors Recommends a VoteFOR the Election of All of the Following Nominees of the Board of Directors:

Nominees and Directors

Nominees of the Board of Directors at the 2011 Annual Meeting

In April 2006, Ms. James established Lardon & Associates LLC, a business and executive advisory services firm, where she is Managing Director. Ms. James served as the President of Nationwide Strategic Investments, a division of Nationwide Mutual Insurance Company (“Nationwide”), from 2003 through March 31, 2006. Ms. James served as Executive Vice President and Chief Administrative Officer of Nationwide and National Financial Services from 2000 until 2003. Ms. James served as Chairman of Financial Settlement Services Agency, Inc. from 2005 through 2006. She is a director of Coca-Cola Enterprises Inc., a nonalcoholic beverages company, CNO Financial (f/k/a Conseco, Inc.), an insurance company, and Time Warner Cable Inc., a provider of video, data and voice services. Ms. James’s nomination is supported by her executive experience, financial expertise, service on several boards of directors and experience with respect to corporate diversity and related issues.

Mr. Miro has been a senior partner of the Honigman Miller Schwartz and Cohn LLP law firm since November 2004. He was a partner and Chairman of the law firm of Miro Weiner & Kramer from 1981 until November 2004. He is an Adjunct Professor of Law at The University of Michigan Law School, teaching courses in taxation and corporate governance. Mr. Miro is a director of M/I Homes, Inc., a national home building company, and was a director of Sotheby’s Holdings, Inc. until May 2006. Mr. Miro’s nomination is supported by his legal expertise, particularly with respect to corporate governance and real estate, which are matters of considerable importance to the Company.

Raymond Zimmerman		Director since 1984		Age 78

Mr. Zimmerman is the Chief Executive Officer of Service Merchandise LLC, a retail company. Mr. Zimmerman was Chairman of the Board and Chief Executive Officer of 99¢ Stuff, LLC from 1999 to 2003 and the Chairman of the Board and Chief Executive Officer of 99¢ Stuff, Inc. from 2003 to 2008. In January 2007, 99¢ Stuff, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code, and in October 2007, 99¢ Stuff, Inc. emerged from bankruptcy. Mr. Zimmerman’s nomination is supported by his financial expertise and broad business experience, particularly in the retail sector.

Directors Whose Terms Continue until the 2012 Annual Meeting

ProfessorMr. Heskett is a Baker Foundation Professor Emeritus at the Harvard University Graduate School of Business Administration, where he has served on the faculty and administration since 1965. ProfessorMr. Heskett served as a member of the Board of Directors of Office Depot, Inc. through 2006 and as a member of the Board of Directors of Intelliseek through 2005. ProfessorMr. Heskett’s nomination wasis supported by his broad expertise with respect to a range of management and organizational matters, including logistics, customer relationship management, service management and entrepreneurship.

Mr. Tessler has been Chairman of the Board and Chief Executive Officer of International Financial Group, Inc., an international merchant banking firm, since 1987. He has been Chairman of the Board of Epoch Investment Partners, Inc., an investment management company and formerly J Net Enterprises, since 2004. He was Chief Executive Officer and Chairman of the Board of J Net Enterprises from 2000 to 2004. Mr. Tessler was Chairman of the Board of InterWorld Corporation from 2001 to 2004. Mr. Tessler was Chairman of Checker Holdings Corp. IV from 1997 to 2009. Mr. Tessler has served as a director of TD Ameritrade, a securities brokerage company, since November 2006. Mr. Tessler serves on TD Ameritrade’s Audit Committee. He has served as a director of Steel Partners Holding GP, Inc., a general partner of a global diversified holding company, since 2010, and currently serves as Chairman of the Board of both Teton Financial Services, a financial services company, and Rocky Mountain Bank, a Wyoming bank. Mr. Tessler’s nomination wasis supported by his broad business experience and financial expertise, together with his involvement in various public policy issues.

Mrs. Wexner is Chair of the Boards of Directors of Nationwide Children’s Hospital Inc. and Nationwide Children’s Hospital; Founder and Chair of the Boards of the The Center for Family Safety & Healing (f/k/a

Columbus Coalition Against Family Violence,Violence), KidsOhio.org and the Center for Child and Family Advocacy; Vice Chair of the Board of KIPP Journey Academy; and a Trustee of The Wexner Center Foundation and the United States Equestrian Team Foundation. Mrs. Wexner is the wife of Leslie H. Wexner. Mrs. Wexner’s nomination wasis supported by her executive and legal experience, as well as her expertise with respect to a wide range of diversity, philanthropic and public policy issues.

Directors Whose Terms Continue until the 2013 Annual Meeting

Mr. Hersch is President of N.A. Property, Inc., through which he acts as a business advisor to Mr. and Mrs. Wexner, and has done so since February 2008. He also serves as a trustee of several trusts established by Mr. and Mrs. Wexner. He was a Managing Director of JPMorgan Securities Inc., an investment bank, from December 2005 through January 2008, where he served as the Global Chairman of its Mergers & Acquisitions Department. Mr. Hersch was a partner of Davis Polk & Wardwell LLP, a New York law firm, from 1978 until

December 2005. Mr. Hersch has been a director of Clearwire Corporation, a wireless, high-speed Internet service provider, since November 2008 and a director at Sprout Foods, Inc., a producer of organic baby food, since 2009. Mr. Hersch’s nomination was supported by his legal and financial expertise, as well as his considerable experience with corporate governance matters, strategic issues and corporate transactions.

Dr. Kollat has been Chairman of 22, Inc., a management consulting firm, since 1987. He ishas also aserved as director of Big Lots, Inc., a retailer, since 1990; Select Comfort Corporation, a bed manufacturing company,designer, manufacturer and retailer of premium beds and bedding accessories, since 1994; and Wolverine World Wide, Inc., a global footwear, athletic apparel and accessories manufacturing company.designer, manufacturer and retailer, since 1992. In addition to his broad business experience (including service on several boards of directors) and marketing expertise, Dr. Kollat’s nomination was supported by his particular experience in the retail, apparel and other related industries, both at the management and board levels.

Mr. Loomis serves as Senior Advisor to China International Capital Corporation, an investment bank, and to Lazard LLC, an investment bank. He has also been an independent financial advisor since January 2009. Mr. Loomis served as a director for(and member of the Audit Committee) of Pacific Capital Bancorp, a banking and financial services firm, sincefrom 2010 where he serves on the Audit Committee.to 2012. Mr. Loomis was a General Partner or Managing Director of Lazard Freres & Co., an investment bank, from 1984 to 2002. After the formation of Lazard LLC in 2000, he became the Chief Executive Officer of the new entity. Mr. Loomis became a Limited Managing Director of Lazard LLC in 2002 and resigned from that position in March 2004. Through 2005,Until 2007, Mr. Loomis was a member of the Board of Directors of Alcan, Inc. Since January 2009, Mr. Loomis has been, an independent financial advisor.aluminum and packaging company. Mr. Loomis’s nomination was supported by his executive experience, financial expertise and substantial history as a senior strategic advisor to complex businesses and multiple executives.

Mr. Wexner has been Chief Executive Officer of Limited Brands since he founded the Company in 1963, and Chairman of the Board for more than forty years. Mr. Wexner is the husband of Abigail S. Wexner. Mr. Wexner’s nomination was supported by his leadership of the Company since its inception, demonstrated throughby its substantial growth.

Directors Whose Terms Continue until the 2014 Annual Meeting

In April 2006, Ms. James established Lardon & Associates LLC, a business and executive advisory services firm, where she is Managing Director. Ms. James served as the President of Nationwide Strategic Investments, a division of Nationwide Mutual Insurance Company (“Nationwide”), from 2003 through March 31, 2006. Ms. James served as Executive Vice President and Chief Administrative Officer of Nationwide and National Financial Services from 2000 until 2003. Ms. James served as Chairman of Financial Settlement Services Agency, Inc. from 2005 through 2006. She is a director of Coca-Cola Enterprises Inc., a nonalcoholic beverages company; Time Warner Cable Inc., a provider of video, data and voice services; and Marathon Petroleum Corp., a transportation fuels refiner. Ms. James serves on the Audit Committees of Coca-Cola Enterprises Inc. and Time Warner Cable Inc. Ms. James’ service as a director and member of the Audit Committee of Coca-Cola Enterprises will end in May 2012. Effective May 2012, Ms. James will join the Audit Committee of Marathon Petroleum Corp. and become the Chairperson of the Audit Committee at Time Warner Cable Inc. Ms. James’s nomination was supported by her executive experience, financial expertise, service on several boards of directors and experience with respect to corporate diversity and related issues.

Mr. Miro has been a senior partner of the Honigman Miller Schwartz and Cohn LLP law firm since November 2004. He was a partner and Chairman of the law firm of Miro Weiner & Kramer from 1981 until November 2004. He is an Adjunct Professor of Law at The University of Michigan Law School, teaching courses in taxation and corporate governance. Mr. Miro is a director of M/I Homes, Inc., a national home building company, and was a director of Sotheby’s Holdings, Inc., an auctioneer of art, jewelry, and collectibles, until May 2006. Mr. Miro’s nomination was supported by his legal expertise, particularly with respect to corporate governance and real estate, which are matters of considerable importance to the Company.

Mr. Zimmerman is the Chief Executive Officer of Service Merchandise LLC, a retail company. Mr. Zimmerman was Chairman of the Board and Chief Executive Officer of 99¢ Stuff, LLC from 1999 to 2003 and the Chairman of the Board and Chief Executive Officer of 99¢ Stuff, Inc. from 2003 to 2008. In January 2007, 99¢ Stuff, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code, and in October 2007, 99¢ Stuff, Inc. emerged from bankruptcy. Mr. Zimmerman’s nomination was supported by his financial expertise and broad business experience, particularly in the retail sector.

Director Independence

The Board has determined that each of the individuals nominated to serve on the Board of Directors, together with each of the members of the Board who will continue to serve after the 20112012 annual meeting of stockholders (except for Dennis S. Hersch, Abigail S. Wexner and Leslie H. Wexner), has no material relationship with the Company other than in his or her capacity as a director of the Company and that each is “independent” in accordance with applicable NYSE standards. Following the annual meeting of stockholders, if all director nominees are elected to serve as our directors, independent directors will constitute more than two-thirds of our Board.

In making these determinations, the Board took into account all factors and circumstances that it considered relevant, including, where applicable, the existence of any employment relationship between the director (or nominee) or a member of the director’s (or nominee’s) immediate family and the Company; whether within the past three years the director (or nominee) has served as an executive officer of the Company; whether the director (or nominee) or a member of the director’s (or nominee’s) immediate family has received, during any twelve-monthtwelve-

month period within the last three years, direct compensation from the Company in excess of $120,000; whether the director (or nominee) or a member of the director’s (or nominee’s) immediate family has been, within the last three years, a partner or an employee of the Company’s internal or external auditors; and whether the director (or nominee) or a member of the director’s (or nominee’s) immediate family is employed by an entity that is engaged in business dealings with the Company. The Board has not adopted categorical standards with respect to

director independence. The Board believes that it is more appropriate to make independence determinations on a case-by-case basis in light of all relevant factors.

Board Leadership Structure

Mr. Leslie H. Wexner serves as Chairman of the Board and Chief Executive Officer of the Company. Mr. Wexner is the founder of the Company and has served as its Chairman and Chief Executive Officer for over forty years. Mr. Wexner (through his personal holdings and associated trusts) is also the Company’s largest stockholder. The Board believes that Mr. Wexner’s experience and expertise in the Company’s business and operations is unrivaled and that he is uniquely qualified to lead the Company. Accordingly, the Company believes that Mr. Wexner’s service as both Chairman of the Board and Chief Executive Officer is a significant benefit to the Company and provides more effective leadership than could be achieved in another leadership structure.

The Board has designated Allan R. Tessler, the Chairperson of the Nominating & Governance Committee, to serve as the lead independent director. As lead independent director, Mr. Tessler, among other things, presides over all executive sessions of non-management directors.directors, which neither Mr. Wexner nor Mrs. Wexner attends, and approves the agenda for Board meetings. The Company believes that the lead independent director structure, including Mr. Tessler’s service as lead independent director, offers independent oversight of the Company’s management to complement the leadership that Mr. Wexner provides to the Board as its Chairman.

Risk Oversight; Certain Compensation Matters

The Company’s Board of Directors, directly and through the Audit Committee and other Committees of the Board, takes an active role in the oversight of the Company’s policies with respect to the assessment and management of enterprise risk. Among other things, the Board has policies in place for identifying the senior executive responsible for key risks as well as the Board Committees with oversight responsibility for particular key risks. In a number of cases, oversight is conducted by the full Board.

Among other things, the Company, including the Compensation Committee of the Board, has evaluated the Company’s compensation structure from the perspective of enterprise risk. The Company, including the Compensation Committee, believes that the Company’s compensation structures are appropriate and do not incentivize inappropriate taking of business risks.

Information Concerning the Board of Directors

Meeting Attendance

Our Board of Directors held 78 meetings in fiscal year 2010.2011. During fiscal year 2010,2011, all of the directors attended 75% or more of the total number of meetings of the Board and of the committees of the Board on which they served.

Committees of the Board of Directors

Audit Committee

The Audit Committee of the Board is instrumental in the Board’s fulfillment of its oversight responsibilities relating to (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and

regulatory requirements, (iii) the qualifications, independence and performance of the Company’s independent auditors and (iv) the performance of the Company’s internal audit function. The current members of the Audit Committee are Ms. James (Chair) and Messrs. Loomis, Tessler and Zimmerman. The Board has determined that each of the Audit Committee members meets the independence, expertise and experience standards established by the NYSE and the Securities and Exchange Commission (the “Commission”) for service on the Audit

Committee of the Company’s Board of Directors and for designation as an “audit committee financial expert” within the meaning of the regulations promulgated by the Commission.

The Report of the Audit Committee can be found on page 6365 of this proxy statement. The Audit Committee held 1613 meetings in fiscal year 2010.2011.

Compensation Committee

The Compensation Committee of the Board (i) oversees the Company’s compensation and benefits philosophy and policies generally, (ii) evaluates the Chief Executive Officer’s (the “CEO”) performance and oversees and sets compensation for the CEO, (iii) oversees the evaluation process and compensation structure for other members of the Company’s senior management and (iv) fulfills the other responsibilities set forth in its charter. The current members of the Compensation Committee are Mr. Heskett (Chair), Mr. Miro and Dr. Kollat. The Board has determined that each of the Compensation Committee members is “independent” in accordance with applicable NYSE standards.

The Report of the Compensation Committee can be found on page 5860 of this proxy statement. The Compensation Committee held 89 meetings in fiscal year 2010.

Executive Committee

The Executive Committee of the Board may exercise, to the fullest extent permitted by law, all of the powers and authority granted to the Board. Among other things, the Executive Committee may declare dividends, authorize the issuance of stock and authorize the seal of Limited Brands to be affixed to papers that require it. The current members of the Executive Committee are Messrs. Wexner (Chair) and Tessler.

Finance Committee

The Finance Committee of the Board periodically reviews our financial position and financial arrangements with banks and other financial institutions. The Finance Committee also makes recommendations on financial matters that it believes are necessary, advisable or appropriate. The current members of the Finance Committee are Mr. Tessler (Chair), Mr. Hersch, Dr. Kollat, Mr. Loomis, Mrs. Wexner and Mr. Zimmerman.

The Finance Committee held 2 meetings in fiscal year 2010.2011.

Nominating & Governance Committee

The Nominating & Governance Committee of the Board identifies and recommends to the Board candidates who are qualified to serve on the Board and its committees. The Nominating & Governance Committee considers and reviews the qualifications of any individual nominated for election to the Board by stockholders. It also proposes a slate of candidates for election as directors at each annual meeting of stockholders. The Nominating & Governance Committee also develops and recommends to the Board, and reviews from time to time, a set of corporate governance principles for the Company and monitors compliance with those principles. The current members of the Nominating & Governance Committee are Mr. Tessler (Chair), Mr. Heskett, Ms. James and Mr. Miro. The Board has determined that each of the Nominating & Governance Committee members is “independent” in accordance with applicable NYSE standards.

The Nominating & Governance Committee develops and recommends to the Board criteria and procedures for the selection and evaluation of new individuals to serve as directors and committee members. It also reviews and periodically makes recommendations to the Board regarding the composition, size, structure, practices, policies and activities of the Board and its committees. In making its assessment and in identifying and evaluating director nominees, the Nominating & Governance Committee takes into account the qualifications of

existing directors for continuing service or re-nomination, which may be affected by, among other things, the quality of their contributions, their attendance records, changes in their primary employment or other business affiliations, the number of boards of publicly held companies on which they serve, or other competing demands on their time and attention. While the Board has not established any specific minimum qualifications for director nominees, as indicated in the Company’s corporate governance principles, the directors and any potential nominees should be individuals of diverse backgrounds who possess the integrity, judgment, skills, experience and other characteristics that are deemed necessary or desirable for the effective performance of the Board’s oversight function. Certain of the skills, qualifications and particular areas of expertise considered with respect to the members of the Board of Directors at the time each Director was nominated are summarized in the director biographies found on pages 54 through 76 of this proxy statement. Although the Nominating & Governance

Committee considers diversity as a factor in the selection of Board nominees, the Committee has no formal policy regarding the role of diversity in its selection process.

The Nominating & Governance Committee does not have a formal policy on the consideration of director candidates recommended by stockholders. The Board believes that it is more appropriate to give the Nominating & Governance Committee flexibility in evaluating stockholder recommendations. In the event that a director nominee is recommended by a stockholder, the Nominating & Governance Committee will give due consideration to the director nominee and will use the same criteria used for evaluating Board director nominees, in addition to considering the information relating to the director nominee provided by the stockholder.

To date, the Company has not engaged third parties to identify or evaluate or assist in identifying potential director nominees, although the Company reserves the right in the future to retain a third-party search firm, if appropriate.

The Nominating & Governance Committee held 3 meetings in fiscal year 2010.2011.

Executive Committee

The Executive Committee of the Board may exercise, to the fullest extent permitted by law, all of the powers and authority granted to the Board. Among other things, the Executive Committee may declare dividends, authorize the issuance of stock and authorize the seal of Limited Brands to be affixed to papers that require it. The current members of the Executive Committee are Messrs. Wexner (Chair) and Tessler.

Finance Committee

The Finance Committee of the Board periodically reviews our financial position and financial arrangements with banks and other financial institutions. The Finance Committee also makes recommendations on financial matters that it believes are necessary, advisable or appropriate. The current members of the Finance Committee are Mr. Tessler (Chair), Mr. Hersch, Dr. Kollat, Mr. Loomis, Mrs. Wexner and Mr. Zimmerman.

Inclusion Committee

The Inclusion Committee of the Board is instrumental in the Board’s fulfillment of its oversight responsibilities relating to, among other things, (i) the Company’s commitment to diversity and inclusion and (ii) the performance of the Company’s Office of Inclusion. The current members of the Inclusion Committee are Mrs. Wexner (Chair) and Ms. James. As appropriate, Mr. Alex Shumate, a former director of the Board, also participates in the Committee’s work.

Meetings of the Company’s Non-Management Directors

The non-management directors of the Board meet in executive session in connection with each regularly scheduled Board meeting. The director who is the Chairperson of the Nominating & Governance CommitteeMr. Tessler serves as the chair of those meetings.meetings, which neither Mr. Wexner nor Mrs. Wexner attends.

Communications with the Board

The Board provides a process for interested parties to send communications to the full Board, the non-management members of the Board, the lead independent director, and the members of the Audit Committee. Any director may be contacted by writing to him or her c/o Limited Brands, Inc., Three Limited Parkway, Columbus, Ohio 43230 or emailing atboardofdirectors@limitedbrands.com. Any stockholder wishing to contact non-management directors or Audit Committee members may send an email tononmanagementdirectors@limitedbrands.com orauditcommittee@limitedbrands.com, respectively.

Communications that are not related to a director’s duties and responsibilities as a Board member, a non-management director or an Audit Committee member may be excluded by the Office of the General Counsel, including, without limitation, solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and any other material that is determined to be illegal or otherwise inappropriate. The directors to whom such information is addressed are informed that the information has been removed and that it will be made available to such directors upon request.

Attendance at Annual Meetings

The Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company’s annual meeting of stockholders. However, it encourages directors to attend and historically mostnearly all have done so. All of the then-current Board members attended the 20102011 annual meeting, with the exception of

Dr. Kollat.except for Messrs. Kollat and Miro. Each director is expected to dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including by attending meetings of the Board and the committees of which he or she is a member.

Code of Conduct and Related Person Transaction Policy

The Company has a code of conduct that is applicable to all employees of the Company, including the Company’s CEO, Chief Administrative Officer and Chief Financial Officer, and to members of the Board of Directors. Any amendments to the code or any waivers from any provisions of the code granted to executive officers or directors will be promptly disclosed to stockholders through posting on the Company’s website athttp://www.limitedbrands.com.

The Board has adopted the Limited Brands’Brands Related Person Transaction Policy (the “Related Person Transaction Policy”). Under the Related Person Transaction Policy, subject to certain exceptions, directors and executive officers of the Company are required to notify the Company of the existence or potential existence of any financial or commercial transaction, agreement or relationship involving the Company in which a director or executive officer or his or her immediate family members has a direct or indirect material interest. Each such transaction must be approved by the Board or a committee consisting solely of independent directors after consideration of all material facts and circumstances.

The Company is engaged in several projects designed to increase our speed and agility in producing products that satisfy our customers. As part of these efforts, the Company has sought opportunities to co-locate facilities and operations with appropriate suppliers. In the case of its personal care and beauty businesses, the development of supplier facilities in close proximity to our headquarters and distribution facilities in Columbus, Ohio, is considered to be highly desirable. The New Albany Company, a business beneficially owned by affiliates of Mr. Wexner, our Chairman and Chief Executive Officer, is in the business of developing real estate, including industrial parks, and has sold land (and may in the future sell land) to certain vendors or third party developers in that connection. Given New Albany’s involvement, thisThis matter was evaluated by the Audit Committee of the Board of Directors, which concluded that the underlying transactions were in the best interests of the Company and its shareholders.stockholders. The Audit Committee continues to monitor the matter on an ongoing basis.

Copies of the Company’s Code of Conduct, Corporate Governance Principles, Related Person Transaction Policy and Committee Charters

The Company’s code of conduct, corporate governance principles, Related Person Transaction Policy, as well as the charters of the Audit Committee, Compensation Committee and Nominating & Governance Committee of the Board of Directors, are available on the Company’s website athttp://www.limitedbrands.com. Stockholders may also request a copy of any such document from: Limited Brands, Inc., Attention: Investor Relations, Three Limited Parkway, Columbus, Ohio 43230.

PROPOSAL 2:    RATIFICATION OF THE APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The Audit Committee has appointed Ernst & Young LLP to serve as the Company’s independent registered public accountants for the fiscal year ending January 28, 2012.February 2, 2013. We are asking you to ratify this appointment, although your ratification is not required. A representative of Ernst & Young LLP will be present at the meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions.

Additional information concerning the Company’s engagement of Ernst & Young LLP is included on page 64.66.

The Board of Directors Recommends a VoteFOR the Ratification of the Appointment of Ernst & Young LLP as the Company’s Independent Registered Public Accountants.

PROPOSAL 3:    2011 STOCK OPTION AND PERFORMANCE INCENTIVE PLANADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

SubjectThe Dodd-Frank Wall Street Reform and Consumer Protection Act requires us to provide an advisory stockholder approval,vote to approve the compensation of the Company’s named executive officers, as such compensation is disclosed pursuant to the disclosure rules of the Securities and Exchange Commission. After the Company’s 2011 annual meeting, the Board has adopteddetermined to hold this advisory “say-on-pay” vote every year. Accordingly, the Company is providing its shareholders with the opportunity to cast an advisory vote on the fiscal 2011 Stock Option and Performance Incentive Plan (the “2011 Plan”), which would replace our 2009 Restatement of the 1993 Stock Option and Performance Incentive Plan (the “1993 Plan”). The Board believes that an effective equity compensation program is a key component of our named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis (the “CD&A”), the compensation philosophytables and requestsother narrative executive compensation disclosures.

Stockholders are being asked to vote on the following resolution:

“RESOLVED, that the stockholders approve the 2011 Plan.

The Board believes that the 1993 Plan has been effective in attracting and retaining high caliber employees. The Board further believes that the terms of the 2011 Plan update the 1993 Plan for developments in corporate governance and applicable law. The 1993 Plan was approved by the Company’s stockholders and, along with its predecessor plans, has served as an important partcompensation of the Company’s overallexecutive officers named in the Summary Compensation Table, as disclosed pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures).”

The Limited Brands executive compensation program through its enabling of granting stock options and other equity-based awardsis designed to employees and advisors.

As of April 1, 2011, there were 9,855,895 shares of Common Stock of the Company available for future awards under the 1993 Plan and 72,675 shares of Common Stock available for future awards under the 2003 Stock Award and Deferred Compensation Plan for Non-Associate Directors, not including shares of our Common Stockensure that may be forfeited, terminated, surrendered or canceled without the delivery of shares of Common Stock under outstanding awards. As of April 1, 2011, there were 12,730,127 options to purchase the Company’s Common Stock outstanding and no stock appreciation rights outstanding. The options have a weighted average exercise price of $17.71 per share and a weighted average remaining term of 6.3 years. There were 10,416,848 shares of Common Stock outstanding in connection with unvested full value awards as of April 1, 2011. There were 318,415,578 shares of Common Stock outstanding on March 28, 2011, the record date for the 2011 annual meeting. Upon stockholder approval of the 2011 Plan, the 2011 Plan will become effective immediately and no further awards will be made under the 1993 Plan.

The following summary of the material terms of the 2011 Plan, a copy of which is attached hereto as Appendix A, does not purport to be complete and is qualified in its entirety by the terms of the 2011 Plan. In the event that the 2011 Plan is not approved by our stockholders, awards will continue to be made under the 1993 Plan.

The Board of Directors Recommends a VoteFOR Approval of the 2011 Stock Option and Performance Incentive Plan.

Purpose of the 2011 Plan

The purpose of the 2011 Plan is to attract and retain the best available executive and key management associates, consultants and other advisors for Limited Brands and its subsidiaries and affiliates and to encourage the highest level of performance by such associates, consultants and other advisors, thereby enhancing the value of Limited Brands for the benefit of its stockholders. The 2011 Plan is also intended to motivate executive and key management associates, consultants and other advisors to contribute to Limited Brands’ future growth and profitability and to reward their performance in a manner that provides them with a means to increase their holdings of Common Stock and aligns their interest with the interests of our executive officers are closely aligned with those of our stockholders. We believe that our program is effective in allowing us to attract, motivate and retain highly qualified senior talent who can successfully deliver outstanding business performance, and we compensate them accordingly. Our executives are in high demand from our competitors, including some of the world’s leading retailers. Ensuring the development and retention of our core leadership team is fundamental to our success.

In fiscal 2011, the Company performed extremely well despite continued economic challenges, achieving record-setting sales and profitability performance for our major brands for the second straight year. Our strong performance allowed us to provide significant returns to our stockholders, including an increase in our stock price of 43% and payment of special and regular dividends totaling $3.80 per share, resulting in a total return for stockholders of Limited Brands.58%. Our returns to stockholders over the last several years have consistently outperformed our peer companies, the S&P Retailing Index, and the S&P 500 Index.

AdministrationWe believe in paying for performance and that our performance-based compensation policies provided incentives for the superior performance which contributed to the Company’s success. Our strong performance results for fiscal 2011 resulted in actual compensation that was above targeted levels.

With the goal of the 2011 Plan

The 2011 Plan will be administered byproviding incentive for continued superior performance, the Compensation Committee of the Board (the “Compensation Committee”). Thetook the following actions during fiscal 2011:

In determining the annual compensation of our Chairman and CEO, the Compensation Committee willfeels that Mr. Wexner should be composedfairly compensated based on his significant contributions and strong leadership. The alignment of directors who qualify as “non-employee directors” within the meaningMr. Wexner’s interests with those of the SecuritiesCompany’s other stockholders is also a very significant factor for the Compensation Committee as the vast majority of Mr. Wexner’s wealth is derived from his stock holdings in the Company and Exchange Act of 1934, as amended (the “Exchange Act”), as “outside directors” within the meaning of Section 162(m)not his direct compensation. Given Mr. Wexner’s significant share ownership, his financial and governance interests are undeniably aligned with those of the Internal Revenue Code of 1986, as amended (the “Code”) and “independent” toCompany’s other stockholders.

Although the extent required by applicable law or rules ofadvisory stockholder vote on executive compensation is non-binding, the New York Stock Exchange. The Compensation Committee has considered and will continue to consider the power in its discretion to grant awards under the 2011 Plan, to determine the terms thereof, to interpret the provisionsoutcome of the 2011 Planvote and feedback received from stockholders when making compensation decisions for named executive officers. We have a policy of robust engagement with stockholders, including continuing outreach to take action as it deems necessary or advisable forand dialogue with all of our major institutional stockholders. While investors expressed satisfaction with the administrationstrong performance of the Company, some investors had concerns about compensation programs that have been addressed in fiscal year 2011, Plan.including:

To help ensure that all stockholder views are well understood by the Board, the Company encourages stockholders to use any of a number of direct communication mechanisms to effectively raise specific issues or concerns with regard to our executive compensation principles and practices.

In summary, fiscal year 2011 was a year of continued strong financial and operational performance for our Company. Our total return to stockholders for fiscal 2011 was 58% and, despite continued economic challenges, we achieved record-setting sales and profitability performance for our major brands. We took the views expressed by our stockholders into account, and took the actions summarized above in respect of their views. We believe our performance-based compensation policies incentivized superior performance, which delivered exceptional returns to and created long-term value for our stockholders.

Please refer to the CD&A for a detailed discussion of the Company’s executive compensation principles and practices and the fiscal 2011 compensation of our named executive officers.

The Board Recommends a VoteFOR this Proposal.

PROPOSAL 4:    PROPOSAL TO AMEND OUR CERTIFICATE OF INCORPORATION TO REMOVE

SUPERMAJORITY VOTING REQUIREMENTS

Number of Authorized SharesBackground; Governance Considerations

TheThis proposal is being submitted to stockholders following a vote at the Company’s 2011 Plan provides for awardsannual meeting on a stockholder proposal addressing the same topic. While the stockholder proposal last year did not receive sufficient votes to implement the change, it did receive a majority vote. Accordingly, consistent with respectits strong commitment to the careful consideration of stockholder views and recognizing that there are different perspectives on the majority vote issue, the Board has elected to submit the proposal described below to a maximumstockholder vote.

The Board of 16,855,897 sharesDirectors has evaluated the Company’s voting requirements on numerous occasions to ensure that they are in the best interests of Common Stock to associates of Limited Brandsthe Company and its subsidiariesstockholders. In this regard, the Board has consistently determined that the retention of a supermajority vote standard for certain extraordinary matters was the best way to ensure that interests of all stockholders are fully protected. The Board has consistently concluded that extraordinary transactions and affiliates (composedfundamental changes to corporate governance should have the support of 7,000,000 shares fora broad consensus of the Company’s stockholders rather than just a simple majority, and that supermajority vote requirements protect stockholders against the potentially self-interested actions of short-term investors. The Board has also concluded that the Company’s existing supermajority voting provisions encourage persons or firms making unsolicited takeover proposals to negotiate directly with the Board, which stockholder approval is being requested, which constitutes 2.2% of Limited Brands’ outstanding 318,415,578 shares of Common Stock as of March 28, 2011, plus 9,855,895 previously authorized and unissued shares underprovides the 1993 Plan as of April 1, 2011), plus shares of Common Stock issuable uponBoard with increased leverage in the exercise of Substitute Awards.its fiduciary duties to negotiate the best possible return for stockholders, and which prevents the use of potentially coercive or abusive takeover tactics.

On the other hand, the Board is aware that significant stockholders and institutions disagree. These entities generally argue that a majority stockholder vote should be sufficient for any corporate action requiring stockholder approval, regardless of the considerations outlined above. This proposal reflects the Board’s determination to respond to, and address, that difference in perspective.

Proposed Amendment

If approved, the proposal would amend the Company’s Certificate of Incorporation (the “Charter”) to provide for the elimination of each voting requirement that calls for a greater than simple majority vote (the “Amendment”).

Under the Company’s existing governance documents, a simple majority vote requirement already applies to most matters submitted for stockholder approval. The Charter provides that a supermajority vote of the stockholders is required to approve actions related to a small number of fundamental matters of corporate structure and classgovernance. These matters include: (i) approval of shares available undercertain business combinations with an individual, entity or group that collectively owns 20% or more of the 2011 Plan and/Company’s voting securities; (ii) approval of certain fundamental transactions, including mergers, a sale of substantially all of the Company’s assets or subjectdissolution of the Company; (iii) removal of a director for cause; (iv) an alteration, amendment or repeal of the bylaws or any amendment to outstanding awards maythe certificate of incorporation that contravenes any existing bylaw; and (v) an amendment to certain provisions in the Charter.

If the proposed Amendment is adopted, each of the foregoing supermajority voting requirements would be adjustedremoved from the Charter. Instead, any matter voted upon at any meeting of the stockholders would be decided by the Compensation Committee to prevent dilution or enlargementmajority of rightsthe stockholders voting upon such matter, unless otherwise provided by law. The default voting requirement in the eventBylaws, contained in Section 1.10(c) therein, states, “At any meeting of various changesthe stockholders all matters, except as otherwise provided in the capitalizationcertificate of Limited Brands. “Substitute Awards” are awards grantedincorporation, in assumptionthese bylaws, or by law, shall be decided by the vote of ora majority in substitution for any outstanding awards granted by a company acquired by Limited Brands or with which Limited Brands combines. Shares of Common Stock granted under the 2011 Plan or the 1993 Plan, other than under Substitute Awards, attributable to: (i) unexercised Options (as hereinafter defined) which expire or are terminated, surrendered or cancelled (other than in connection with the exercise of stock appreciation rights (“SARs”)); (ii) shares of Common Stock of Limited Brands subject to certain restrictions (“Restricted Shares”) which are forfeited to Limited Brands, including shares relating to Restricted Share Units (as hereinafter defined); (iii) units representing shares of Common Stock (“Performance Units”) which are not earned and paid; and (iv) awards settled in cash in lieu of shares of Common Stock, may be available for subsequent award under the 2011 Plan at the Compensation Committee’s discretion to the extent permissible under Rule 16b-3voting interest of the Exchange Act.stockholders present in person or by proxy and voting thereon, a quorum being present.”

Eligibility and Participation

Eligibility to participate in the 2011 Plan is limited to associates, consultants, directors and other advisors or individuals who provide services to (i) the Company or any of its subsidiaries or affiliates, or (ii) any joint venture in which the Company or any of its subsidiaries or affiliates holds at least a 40% interest, and who, in each case, are selected to participate in the 2011 Plan by the Compensation Committee. Currently, approximately 5,500 individuals are within the classes eligible to participate in the 2011 Plan. Limited Brands anticipates that approximately 23% of those eligible will participate in the 2011 Plan. Participation in the 2011 Plan is at the discretionThe text of the Compensation Committeeproposed Amendment, which would remove Articles 5.2, 8, 11.1, and shall be based upon the person’s present and potential contributions to the success of Limited Brands and its subsidiaries and such other factors as the Compensation Committee deems relevant. No participant may be granted in any calendar year, awards covering more than 2,000,000 shares of Common Stock.

Type of Awards Under the 2011 Plan

The 2011 Plan provides that the Compensation Committee may grant awards to eligible participants in any14 of the following forms, subjectCompany’s Charter in their entirety, and modify Articles 10, 11.2, and 13 is attached as Appendix A to such terms, conditions and provisions as the Compensation Committee may determine to be necessary or desirable: (i) incentive stock options (“ISOs”), (ii) nonstatutory stock options (“NSOs”), (iii) SARs, (iv) Restricted Shares, which may be granted in the form of Restricted Share Units, (v) Performance Units and (vi) shares of unrestricted Common Stock (“Unrestricted Shares”).

Grant of Options and SARs

The Compensation Committee may award ISOs and/or NSOs (collectively, “Options”) to eligible participants. ISOs may be awarded only to eligible associates. SARs may be awarded either in tandem with Options (“Tandem SARs”) or on a stand-alone basis (“Nontandem SARs”). Tandem SARs may be awarded by the Compensation Committee either at the time the related Option is granted or thereafter at any time prior to the exercise, termination or expiration of the related Option.

Exercise Price

The exercise price with respect to an Option is determined by the Compensation Committee at the time of grant. The exercise price determined with respect to an Option shall also be applicable in connection with the exercise of any Tandem SAR granted with respect to such Option. At the time of grant of a Nontandem SAR, the Compensation Committee will specify the base price of the shares of Common Stock to be issued for determining the amount of cash or number of shares of Common Stock to be distributed upon the exercise of such Nontandem SAR. Except with respect to Substitute Awards, neither the exercise price per share of Common Stock nor the base price of Nontandem SARs will be less than 100% of the fair market value per share of the Common Stock underlying the award on the date of grant. Information as to awards granted under the 1993 Plan to named executive officers and other participants in respect of the 2010 fiscal year is set forth elsewhere in this proxy statement.

Vesting

The Compensation Committee may determine at the time of grant and at any time thereafter, the terms under which Options and SARs shall vest and become exercisable.

Special Limitations on ISOs

No ISO may be granted to an associate who owns, at the time of the grant, stock representing more than 10% of the total combined voting power of all classes of stock of Limited Brands (a “10% Stockholder”), unless the exercise price per share of Common Stock for the shares subject to such ISO is at least 110% of the fair market value per share of Common Stock on the date of grant and such ISO award is not exercisable more than five years after its date of grant. In addition, the total fair market value of shares of Common Stock subject to ISOs which are exercisable for the first time by an eligible associate in a given calendar year shall not exceed $100,000, valued as of the date of the ISOs’ grant. ISOs may not be granted more than 10 years after the date of adoption of the 2011 Plan by the Board.

Exercise of Options and SARs

An Option may be exercised by written notice to the Compensation Committee or its designee stating the number of shares of Common Stock with respect to which the Option is being exercised, and tendering payment therefor. The Compensation Committee may, at its discretion, accept shares of Common Stock as payment (valued at their fair market value on the date of exercise).

Tandem SARs are exercisable only to the extent that the related Option is exercisable and only for the period determined by the Compensation Committee (which period may expire prior to the expiration date of the related Option). Upon the exercise of all or a portion of Tandem SARs, the related Option shall be cancelled with respect to an equal number of shares of Common Stock. Similarly, upon exercise of all or a portion of an Option, the related Tandem SARs shall be cancelled with respect to an equal number of shares of Common Stock. Nontandem SARs shall be exercisable for the period determined by the Compensation Committee.

Surrender or Exchange of SARs

Upon the surrender of a Tandem SAR and cancellation of the related unexercised Option, the participant will be entitled to receive shares of Common Stock having an aggregate fair market value equal to (A) the excess of (i) the fair market value of one share of Common Stock as of the date the Tandem SAR is exercised over (ii) the exercise price per share specified in such Option, multiplied by (B) the number of shares of Common Stock subject to the Option, or portion thereof, which is surrendered. Upon surrender of a Nontandem SAR, the associate will be entitled to receive shares of Common Stock having an aggregate fair market value equal to (A) the excess of (i) the fair market value of one share of Common Stock as of the date on which the Nontandem

SAR is exercised over (ii) the base price of the shares covered by the Nontandem SAR multiplied by (B) the number of shares of Common Stock covered by the Nontandem SAR, or the portion thereof being exercised. The Compensation Committee, in its discretion, may cause all or any portion of Limited Brands’ obligation to a participant in respect of the exercise of an SAR to be satisfied in cash in lieu of Common Stock. Any fractional shares resulting from the exercise of an SAR will be paid in cash.

Nontransferability of Options and SARs

Options and SARs may not be transferred, assigned, pledged or hypothecated except by will or applicable laws of descent and distribution, provided that the Committee may determine that NSOs may be transferred to or for the benefit of members of a Participant’s immediate family.

Expiration of Options

Options will expire at such time as the Compensation Committee determines; provided, however, that no Option may be exercised more than 10 years from the date of grant, unless an ISO is held by a 10% Stockholder, in which case such ISO may not be exercised more than five years from the date of grant.

Expiration of SARs

SARs will expire at such time as the Compensation Committee determines; provided, however, that no SAR may be exercised more than 10 years from the date of grant.

Termination of Options and SARs

Except as the Compensation Committee may at any time provide, Options and SARs may be exercised at any time within one year (30 days if termination of employment is for cause, as defined in the 2011 Plan) after the termination of a participant’s employment (other than by death or total disability), to the extent then exercisable, but in no case later than the term specified in the grant. Except as the Compensation Committee may at any time provide, upon the death of a participant while employed by Limited Brands or its subsidiaries or affiliates, Options and SARs shall become fully exercisable and shall remain exercisable for one year following such participant’s death, but in no case later than the term specified in the grant. Except as the Compensation Committee may at any time provide, in the event that a participant to whom an Option or SAR has been granted under the 2011 Plan shall become totally disabled, such Option or SAR may be exercised, to the extent then exercisable, at any time within one year after the participant’s employment is terminated as a result of such total disability, but in no case later than the term specified in the grant, and provided that such termination occurs after nine months of absence from work due to the total disability.

Restricted Shares

Restricted Shares granted to participants under the 2011 Plan may not be sold, transferred, pledged or otherwise encumbered or disposed of during the restricted period established by the Compensation Committee. The Compensation Committee may also impose additional restrictions on a participant’s right to dispose of or to encumber Restricted Shares, which may include satisfaction of performance objectives. Performance objectives under the 2011 Plan will be determined by the Compensation Committee and will be based on any one or more of the following: price of Common Stock or the common stock of any affiliate, stockholder return, return on equity, return on investment, return on capital, sales productivity, comparable store sales growth, economic profit, economic value added, net income, operating income, gross margin, sales, free cash flow, earnings per share, operating Company contribution or market share. These factors shall have a minimum performance standard below which no payments will be made, and a maximum performance standard at or above which no incremental payments will be made. These performance goals may be based on an analysis of historical performance and growth expectations for the business, financial results of other comparable businesses, and

progress towards achieving the long-range strategic plan for the business. These performance goals and determination of results shall be based entirely on financial measures. The Compensation Committee may not use any discretion to modify award results except as permitted under Section 162(m) of the Code.

Except as the Compensation Committee may at any time provide, holders of Restricted Shares may not exercise the rights of a stockholder, such as the right to vote the shares or receive dividends and other distributions, prior to the vesting of the shares.

Upon the death of a participant, the restrictions applicable to Restricted Shares held by such participant will lapse. Except as the Compensation Committee may at any time provide, upon termination of the participant’s employment with Limited Brands, Restricted Shares granted to such participant shall be forfeited.

Restricted Share Units

A “Restricted Share Unit” represents the right to receive a share of Common Stock (or cash equivalent, if applicable) in the future, provided that the restrictions and conditions designated by the Compensation Committee at the time of the grant are satisfied. Except as determined otherwise by the Compensation Committee, during the restricted period with respect to such Restricted Share Units, participants shall not have the right to vote or receive dividends with respect to such Restricted Share Units. After the end of the restricted period, and prior to the time that shares of Common Stock are transferred to the participant, the participant shall be credited with “dividend equivalents” with respect to each outstanding Restricted Share Unit in an amount equal to the amount the participant would have received as dividends if the Restricted Share Units were actual shares of Common Stock. Such dividend equivalents will be converted into additional Restricted Share Units based on the value of the Common Stock on the dividend payment date, in accordance with the procedures established by the Compensation Committee.

Performance Units

The Compensation Committee may award to participants Performance Units which will have a specified value or formula-based value at the end of a performance period. Performance Units so awarded will be credited to an account established and maintained for the participant. The Compensation Committee will determine performance periods and performance objectives in connection with each grant of Performance Units.

Vesting of awards of Performance Units will occur upon achievement of the applicable objectives within the applicable performance period. The Compensation Committee may, at its discretion, permit vesting in the event performance objectives are partially met, or grant additional vested Performance Units in the event performance objectives are surpassed. Payment of vested Performance Units may be made in cash, Common Stock or any combination thereof, as determined by the Compensation Committee.

No voting or dividend rights attach to the Performance Units; however, the Compensation Committee may credit a participant’s Performance Unit account with additional Performance Units equivalent to the fair market value of any dividends on an equivalent number of shares of Common Stock, payment of which shall be subject to prior satisfaction of the applicable performance objectives.

Unrestricted Shares

Unrestricted Shares may also be granted at the discretion of the Compensation Committee. Except as required by applicable law, no payment will be required for Unrestricted Shares.

Tax Withholding

The Compensation Committee may require payment, or withhold payments made under the 2011 Plan, in order to satisfy applicable withholding tax requirements.

Effect of Change in Control

In the event a participant’s employment or service is terminated by Limited Brands other than for cause during the 24 month period beginning on the date of a change in control, (i) Options and SARs granted to any participant which are not yet exercisable shall become fully exercisable and (ii) any restrictions applicable to any Restricted Shares and Restricted Share Units awarded to such participant shall be deemed to have been satisfied at target and the Restricted Period, if any, applicable to such Restricted Shares and Restricted Share Units held by such participant shall be deemed to have expired.

Term of 2011 Plan

Unless earlier terminated by the Board, the 2011 Plan will terminate on May 25, 2021.

Clawback of Awards

The Compensation Committee may clawback outstanding awards under the 2011 Plan or compensation paid out under the 2011 Plan if (1) required by applicable law or (2) (i) a participant engaged in fraudulent conduct or activities relating to the Company, (ii) a participant has knowledge of such conduct or activities, or (iii) a participant, based upon the participant’s position, duties or responsibilities, should have had knowledge of such conduct or activities.

Amendment and Termination

The Board may suspend, amend, modify or terminate the 2011 Plan;provided, however, that Limited Brands’ stockholders shall be required to approve any amendment that would constitute a “material revision” under applicable NYSE rules. Other than in connection with a corporate transaction involving the Company, the terms of outstanding awards may not be amended to reduce the exercise price of Options or SARs or cancel Options or SARs in exchange for cash, other awards or Options or SARs with an exercise price less than the original Option or SAR without stockholder approval.

Awards granted prior to a termination of the 2011 Plan shall continue in accordance with their terms following such termination. No amendment, suspension or termination of the 2011 Plan shall adversely affect the rights of a participant in awards previously granted without such participant’s consent, except to the extent any such action is required by applicable law or stock exchange rules.

New Plan Benefits

Any awards granted under the 2011 Plan will be at the discretion of the Compensation Committee. Therefore, it is not possible at present to determine the amount or form of any award that will be available for grant to any individual during the term of the 2011 Plan or that would have been granted during the last fiscal year had the 2011 Plan been in effect.

As an example, set forth below is a summary of the awards that were made in respect of fiscal 2010 pursuant to the 1993 Plan.

2010 Awards under the 1993 Plan Table

Federal Income Tax Consequences

Stock Options

There will be no federal income tax consequences to the participant or Limited Brands upon the grant of either an ISO or an NSO under the 2011 Plan. Upon exercise of an NSO, a participant generally will recognize ordinary income in an amount equal to (i) the fair market value, on the date of exercise, of the acquired shares of Common Stock, less (ii) the exercise price of the NSO. Subject to Section 162(m) of the Code and the participant including such compensation in income or Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a tax deduction in the same amount.

Upon the exercise of an ISO, an associate recognizes no immediate taxable income. Income recognition is deferred until the associate sells the shares of Common Stock. If the ISO is exercised no later than three months after the termination of the associate’s employment, and the associate does not dispose of the shares acquired pursuant to the exercise of the ISO within two years from the date the ISO was granted and within one year after the exercise of the ISO, the gain on the sale will be treated as long-term capital gain. Certain of these holding periods and employment requirements are liberalized in the event of an associate’s death or disability while employed by Limited Brands. The Company is not entitled to any tax deduction with respect to the grant or exercise of ISOs, except that if the Common Stock is not held for the full term of the holding period outlined above, the gain on the sale of such Common Stock, being the lesser of: (i) the fair market value of the Common Stock on the date of exercise minus the exercise price or (ii) the amount realized on disposition minus the exercise price, will be taxed to the associate as ordinary income and, subject to Section 162(m) of the Code and the associate including such compensation in income and Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a deduction in the same amount. The excess of the fair market value of the Common Stock acquired upon exercise of an ISO over the exercise price therefor constitutes a tax preference item for purposes of computing the “alternative minimum tax” under the Code.

Stock Appreciation Rights

There will be no federal income tax consequences to either the participant or Limited Brands upon the grant of a SAR. However, the participant generally will recognize ordinary income upon the exercise of a SAR in an amount equal to the aggregate amount of cash and the fair market value of the shares of Common Stock received upon exercise. Subject to Section 162(m) of the Code and the participant including such compensation in income and Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a deduction equal to the amount includible in the participant’s income.

Restricted Shares

There will be no federal income tax consequences to either the participant or Limited Brands upon the grant of Restricted Shares until expiration of the restricted period and the satisfaction of any other conditions applicable to the Restricted Shares. At that time, the participant generally will recognize taxable income equal to the then fair market value for the Common Stock and, subject to Section 162(m) of the Code and the participant including such compensation in income and Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a corresponding deduction.

Performance Units and Restricted Share Units

There will be no federal income tax consequences to the participant or Limited Brands upon the grant of Performance Units or Restricted Share Units. Participants generally will recognize taxable income at the time when payment for the Performance Units or Restricted Share Units is received in an amount equal to the aggregate amount of cash and the fair market value of shares of Common Stock acquired. Subject to Section 162(m) of the Code and the participant including such compensation in income and Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a deduction equal to the amount includible in the participant’s income.

Unrestricted Shares.

Participants generally will recognize taxable income at the time Unrestricted Shares are received. Subject to Section 162(m) of the Code and the participant including such compensation in income and Limited Brands satisfying applicable reporting requirements, Limited Brands will be entitled to a deduction equal to the amount includible in the participant’s income.

Special rules may apply to participants who are subject to Section 16 of the Exchange Act.

Required Vote

See “Information AboutFor the Annual Meeting and Voting—Vote NecessaryAmendment to Approve Proposals” for a discussionbecome effective, this proposal must receive the affirmative vote of at least 75% of the outstanding shares entitled to vote at the meeting. If the proposal is approved by the required stockholder vote, the Board will take the necessary steps to adoptamend the 2011 Plan.

The BoardCompany’s Charter as set forth in Appendix A. If the Amendment does not receive this level of Directors Recommends a VoteFOR Approval of the 2011 Plan.

PROPOSAL 4:    2011 CASH INCENTIVE COMPENSATION PERFORMANCE PLAN

Our Board has adopted and is presenting for stockholder approval, the Limited Brands, Inc. 2011 Cash Incentive Compensation Performance Plan (the “Plan”). The Plan replaces our 2007 Cash Incentive Compensation Performance Plan. The following summary ofAmendment will not be implemented and the material terms of the Plan, a copy of which is attached hereto as Appendix B, does not purport to be complete and is qualifiedCompany’s current voting requirements will remain in its entirety by the terms of the Plan.

The Board of Directors Recommends A VoteFOR Approval of the 2011 Cash Incentive Compensation Performance Plan.place.

Purpose

The Plan is intended to enhance our ability to attract and retain highly qualified executive and managerial-level associates and to provide additional financial incentives to such associates to promote the success of the Company and its subsidiaries. Incentive compensation payable under the Plan is intended to constitute “qualified performance-based compensation” for purposes of Code Section 162(m). In general, Code Section 162(m) disallows deductions for compensation in excess of $1 million paid to any of the five executives of a public corporation required to be named in its proxy statement (a “Section 162(m) Executive”) unless the compensation is based on attainment of objective performance criteria. However, the Company reserves the right to pay discretionary bonuses, or other types of compensation outside of the Plan, including under the Company’s then effective Stock Option and Performance Incentive Plan.

AdministrationBoard Recommendation

The Plan will be administered by our Compensation Committee, which will haveBoard continues to believe that the power and authority to construe, interpret and administer the Plan and the exclusive right to establish, adjust, pay or decline to pay incentive compensation for each participant. The Compensation Committee may exercise its discretion to reduce by any amount the incentive compensation payable to any participant. In no event, however, will the exercise of discretion with respect to any Section 162(m) Executive increase incentive compensation payable to any other Section 162(m) Executive. Decisionsretention of the Compensation Committee willCompany’s existing supermajority vote requirements for certain extraordinary matters provides stockholders with very meaningful protections against actions that may not be final.

Eligibility

All Section 162(m) Executives will be participants in their best interests. On the Plan unlessother hand, the Compensation Committee, for any fiscal year, determines otherwise. In addition, the Compensation Committee may designate other associates as eligibleBoard recognizes that significant stockholders and institutions disagree and also believes that responsiveness to participate in the Plan.

Plan Awards

The Compensation Committeethis perspective is authorized to establish performance goals with respect to each performance period. Performance goals for a performance period and amounts payable on the extent to which the goals are achieved or exceeded (and interpolation guidelines for calculating amounts payable, if any) will be established by the Compensation Committee in writing either prior to or within specified times following commencementan important matter of a performance period. A performance period will be each Spring and Fall selling season, the fiscal yearcorporate governance. Accordingly, after careful consideration of the Company, or any other periodissue in accordance with its fiduciary duties, the Board has determined, in recognition of time (not less than one calendar quarter or more than five years), as determined bylast year’s vote, to recommend a vote to approve the Compensation Committee.Amendment.

Performance goals will be based on specified levels of or changesWhile the Board believes there is a strong argument to the contrary, the Board has elected to recommend that stockholders vote “FOR” the proposed Amendment in any one or morerecognition of the following criteria, which may be expressed with respect tostockholder vote at the Company or one or more of our operating units or groups: the price of our Common Stock or the common stock of any affiliate; stockholder return; return on equity; return on investment; return on capital; sales productivity; comparable store sales growth; economic profit; economic value added; net income; operating income; gross margin; sales; free cash flow; earnings per share; operating Company contribution; and market share. Performance goals will include a minimum performance standard

(performance below which will result in no payment of incentive compensation under the Plan), and a maximum performance standard (performance in excess of which will not increase payable incentive compensation). Performance goals may be based on an analysis of historical performance and growth expectations for the business, financial results of other comparable businesses, and progress toward achieving the strategic plan for the business. The Compensation Committee may adjust performance goals for items specified in the Plan (see Exhibit B), but only if such an adjustment would not cause a payment of incentive compensation to fail to qualify as performance-based compensation under Code Section 162(m).

Annual incentive compensation targets shall be established for participants ranging from 0% to 300% of each participant’s base salary. The terms of the objective formula or standard setting such targets must prevent any discretion from being exercised by the Compensation Committee to later increase the amount otherwise payable to any Section 162(m) Executive, but may allow discretion to decrease the amount payable. Participants may earn their target incentive compensation if the business achieves the pre-established performance goals. The target incentive compensation percentage for each participant will be based on the level and functional responsibility of the participant’s position, size of the business for which the participant is responsible and competitive practices. The amount of incentive compensation paid to participants may range from zero to double their targets, based upon the extent to which performance goals are achieved or exceeded.

Payment of Incentive Compensation

The selection of participants to whom incentive compensation may be paid and the amount of the incentive compensation actually paid to a participant for a performance period will be determined by the Compensation Committee, in its sole discretion, including zero. The aggregate actual amount of all incentive compensation awards payable under the Plan to any participant in any fiscal year of the Company may not exceed $15 million. Incentive compensation will be paid in cash at such times and on such terms as are determined by the Compensation Committee, but not later than sixty (60) days following the end of the applicable performance period. To the extent determined by the Compensation Committee,Company’s 2011 annual incentive compensation may be paid in shares of our Common Stock under our then effective equity incentive plan, or may be deferred under our Supplemental Retirement Plan, subject to the terms and conditions of such plans.

Clawback of Incentive Compensation

The Compensation Committee may clawback outstanding awards under the Plan or compensation paid out under the Plan if (1) required by applicable law or (2) (i) a participant engaged in fraudulent conduct or activities relating to the Company, (ii) a participant has knowledge of such conduct or activities, or (iii) a participant, based upon the participant’s position, duties or responsibilities, should have had knowledge of such conduct or activities.

Adoption, Amendment and Termination

Subject to the approval of the Plan by our stockholders, the Plan will be effective for payments made with respect to performance periods that commence during our 2011 fiscal year and thereafter, and will continue in effect until terminated as provided below.

Our Board may at any time suspend or terminate the Plan and may amend it from time to time in such respects as the Board may deem advisable, subject, with respect to any Section 162(m) Executive, to any requirement for stockholder approval imposed by applicable law. No amendment, suspension or termination of the Plan may, without the consent of the person affected thereby, materially adversely alter or impair any rights or obligations under any incentive compensation previously awarded under the Plan, except to the extent required by applicable law or stock exchange rules.

Performance awards have been granted under the Plan in respect of our 2011 fiscal year Spring selling season, subject to stockholder approval. If the Plan is not approved, the conditional awards will be canceled, no further awards will be made under the Plan, and the Compensation Committee will consider other alternatives.

Assuming (i) that the Plan is approved by stockholders and (ii) that target performance for our 2011 fiscal year Spring selling season is attained, the table below summarizes the resulting amounts that would be payable pursuant to the conditional awards granted under the Plan in respect of our Spring selling season of our 2011 fiscal year. No awards have been made in respect of our 2011 fiscal year Fall selling season.

Name and Position		Spring Selling Season Dollar Value Payable at Target ($)
Leslie H. Wexner, Chairman of the Board, CEO		$	1,423,760
Sharen J. Turney, Executive Vice President, CEO/President, Victoria’s Secret			884,000
Martyn R. Redgrave, Executive Vice President, Chief Administrative Officer			582,400
Diane L. Neal, Executive Vice President, CEO, Bath & Body Works			535,600
Stuart B. Burgdoerfer, Executive Vice President, Chief Financial Officer			360,000
All Executive Officers as a Group			4,010,760
All Current Directors Who are Not Executive Officers as a Group			0
Associates Other than Executive Officers as a Group			5,441,752

The Board of Directors Recommends A VoteFOR Approval of the Plan.meeting.

PROPOSAL 5:    ADVISORY VOTE ON EXECUTIVE COMPENSATIONSTOCKHOLDER PROPOSAL REGARDING

AN INDEPENDENT BOARD CHAIRMAN

The Dodd-Frank WallAFL-CIO Reserve Fund, 815 Sixteenth Street, Reform and Consumer Protection Act requires us to provide an advisory stockholder vote to approve the compensationNW, Washington, DC 20006, owner of 181 shares of the Company’s named executive officers, as such compensation is disclosed pursuantCommon Stock, has notified the Company that it intends to submit the disclosurefollowing proposal at this year’s meeting:

RESOLVED: Shareholders of Limited Brands, Inc. (the “Company”) urge the Board of Directors (the “Board”) to take the steps necessary to modify the Company’s Corporate Governance Guidelines to require that an independent director (as defined by the rules of the SecuritiesNew York Stock Exchange) be its Chairman. The policy should be implemented so as not to violate any contractual obligations. The policy should also specify the process for selecting a new independent Chairman if the current Chairman ceases to be independent between annual meetings of shareholders; or if no independent director is available and Exchange Commission. Accordingly,willing to serve as Chairman.

Supporting Statement of AFL-CIO Reserve Fund

Leslie H. Wexner has served as both Chairman and CEO of our Company for over forty years. We believe it is the responsibility of the Board to protect shareholders’ long-term interests by providing independent oversight of management in directing the Company’s business and affairs. In our opinion, the designation of a lead independent director is not an adequate substitution for an independent Board Chairman. We believe an independent Chairman can enhance investor confidence in our Company and strengthen the independent leadership of the Board.

The Chairmen’s Forum, an organization of non-executive board chairmen, has called on North American public companies to voluntarily adopt independent chairmanship as the default model. An independent chairman “curbs conflicts of interest, promotes oversight of risk, manages the relationship between the board and the CEO, serves as a conduit for regular communication with shareowners, and is a logical next step in the development of an independent board.” (Millstein Center for Corporate Governance and Performance, Yale School of Management,Chairing the Board: The Case for Independent Leadership in Corporate North America, 2009).

In our view, when the CEO serves as Chairman, this arrangement may hinder the ability of the Board to monitor the CEO’s performance and to provide the CEO with objective feedback and guidance. Andrew Grove, former Chairman and CEO of Intel Corporation, has stated: “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the board. The chairman runs the board. How can the CEO be his own boss?” (Jeffrey E. Garten, “Don’t Let the CEO Run the Board, Too,”Business Week, November 11, 2002).

For these reasons, we urge you to vote FOR this resolution.

Our Response—Statement in Opposition to Stockholder Proposal Regarding an Independent Board Chairman

The Board has carefully considered the above proposal and believes that it is not in the best interests of our stockholders. Consequently, the Board recommends a voteAGAINST the proposal.

Limited Brands and its stockholders are best served by having Mr. Leslie H. Wexner serve as Chairman of the Board of Directors.

Mr. Wexner has served as the Chief Executive Officer (the “CEO”) of Limited Brands since he founded the Company is providing its shareholders with the opportunity to cast an advisory vote on the fiscal 2010 compensation of our named executive officersin 1963, and as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures.

Stockholders are being asked to vote on the following resolution:

“RESOLVED, that the stockholders approve the compensationChairman of the Company’s executive officers namedBoard for more than forty years. The Board believes that Mr. Wexner’s experience and expertise in the Summary Compensation Table, as disclosed pursuantCompany’s business and operations is unparalleled and that he is uniquely qualified to Item 402lead the Company. Mr. Wexner is a recognized innovator and leader in the retail industry. Through his leadership, the retail concepts Mr. Wexner has created continue to flourish even under the most challenging of Regulation S-K (which disclosure includesenvironments. Under his leadership, Limited Brands has experienced sustained long-term growth and, in the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures).”

Inmost recent fiscal 2010,year alone, the Company performed strongly despite continued economic challenges, which allowed us to provideachieved record-setting sales and profitability performance for its major brands and provided significant returns to our stockholders. We believestockholders, including an increase in payingour stock price of 43% and payment of special and regular dividends totaling $3.80 per share, resulting in a total return for performance and that our performance-based compensation policies incentivized superior performance, which contributed to the Company’s success. Please refer to the section entitled “Compensation-Related Matters”stockholders of this proxy statement for a detailed discussion58%.

The alignment of Mr. Wexner’s interests with those of the Company’s other stockholders is also a very significant factor in the Board’s consideration of corporate governance-related matters, including the proposal. First, the vast majority of Mr. Wexner’s wealth is derived from his stock holdings in the Company and not his direct compensation. Mr. Wexner is the Company’s largest stockholder and beneficially owns approximately 18% of the outstanding Common Stock. Second, he holds the same class of Common Stock as all stockholders, and neither he nor Mrs. Wexner holds a class of shares with special voting privileges. His financial and governance interests are undeniably aligned with those of the Company’s other stockholders.

In addition, Mr. Wexner’s combined role as Chairman and CEO provides unified leadership for the Company and promotes stability and consistency by avoiding confusion regarding leadership roles. This structure enables the CEO to act as a bridge between the Board of Directors and executive management, helping both to act with a common purpose. Our leadership structure is quite common: According to the 2011 Stuart Board Index (Nov. 2011), 59% of S&P 500 companies are led by a CEO who also serves as Chairman.

Although the stockholder proposal includes several quotes in support of its position, we note that many academic studies have not found any systematic relationship between firm performance and the separation of the roles of CEO and Chairman. (See,e.g., Dahya, Garcia & van Bommel, 2009; Dalton, Hitt, Certo & Dalton, 2007.) In the case of Limited Brands, however, the evidence is clear that Mr. Wexner’s combined role has generated considerable stockholder value.

Limited Brands’ independent Board of Directors provides vigorous oversight of Limited Brands’ business and affairs.

Requiring that the Chairman be an independent director is not necessary to ensure our Board of Directors provides independent and effective oversight of Limited Brands’ business and affairs. Such oversight is maintained at Limited Brands through the composition of our Board and our highly effective corporate governance structures and processes already in place.

For example, two out of the three individuals currently standing for reelection to the Board of Directors, together with five out of the seven members of the Board who will continue to serve after the 2012 annual meeting, are “independent” in accordance with applicable New York Stock Exchange standards. Each of the Board’s Audit, Compensation, and Nominating & Governance Committees are composed entirely of independent directors. As set forth in their charters, these committees have oversight and similar responsibility for critical

matters such as the integrity of our financial statements, the Company’s compliance with legal and regulatory requirements, the compensation of executive management, including Mr. Wexner, the selection and evaluation of directors, the development of corporate governance principles, and practicesthe evaluation of Mr. Wexner’s performance as CEO. Pursuant to the “Corporate Governance Principles”, which are available on the Company’s website athttp://www.limitedbrands.com, each individual member of the Board is entitled to direct access to management, and the fiscal 2010 compensationBoard and each committee have the authority to retain, at the Company’s expense, their own independent advisors as they deem appropriate. Furthermore, in connection with each regularly scheduled Board meeting, the non-management directors of our namedthe Board attend an executive officers. Highlightssession, which neither Mr. Wexner nor Mrs. Wexner attends.

Limited Brands’ lead independent director effectively functions as an independent Chairman.

Allan R. Tessler, the lead independent director of our compensation principlesthe Company, offers independent oversight of the Company’s management and practices includecomplements the following:leadership that Mr. Wexner provides as Chairman. As lead independent director, Mr. Tessler performs many of the same functions as an independent Chairman: He is actively engaged with both the Company and its CEO, approves the agenda for meetings of the Board of the Directors, and chairs each executive session of the Board’s non-management directors. Furthermore, Mr. Tessler serves with Mr. Wexner on the Executive Committee, and is also the Chairman of the Finance Committee and the Nominating and Governance Committee. The Board of Directors chose Mr. Tessler for this role as lead independent director because of his broad business experience and financial expertise.

We encourage ownershipIn summary, the Board believes that having Mr. Wexner serve as Chairman and CEO of our Common StockLimited Brands is in the best interests of the Company and have instituted stock ownership guidelines for our named executive officers.

We pay competitivelyits stockholders. Mr. Wexner is a recognized innovator and annually compare our pay practicesleader in the retail industry and, as the Company’s founder and largest shareholder, his interests are undeniably aligned with those of other leading retail organizations.

We pay for performance through short-term performance-based cash incentive compensationstockholders. Furthermore, Mr. Tessler performs many of the same functions as an independent Chairman and long-term equity-based compensation. In fiscal 2010, short-term incentive payments exceeded the target level due to superior performance.

We pay equitably and consider the depth and scopeour independent Board of accountability, complexity of responsibility and performance when making compensation decisions.

This vote is not intended to address any specific item of compensation, but rather the overall compensation principles and practices and the fiscal 2010 compensationDirectors provides vigorous oversight of the Company’s named executive officers.

Although, as an advisory vote, this proposal is not binding upon the Company or the Board, the Compensation Committee, which is comprised solely of independent directorsbusiness and is responsible for making decisions regarding the amount and form of compensation paid to the Company’s executive officers, will carefully consider the shareholder vote on this matter, along with all other expressions of shareholder views it receives on specific policies and desirable actions.

To help ensure that all shareholder views are well understood by the Board, the Company also encourages stockholders to use any of a number of direct communication mechanisms to effectively raise specific issues or concerns with regard to our executive compensation principles and practices.affairs through its existing corporate governance structures.

The Board Recommends a VoteFORAGAINST this Proposal.the Stockholder Proposal Regarding an Independent Board Chairman.

PROPOSAL 6:    ADVISORY VOTE TO DETERMINE THE FREQUENCY OFSTOCKHOLDER PROPOSAL REGARDING OUR CLASSIFIED BOARD

FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION

The Dodd-Frank WallIllinois State Board of Investment, 180 North LaSalle Street, Reform and Consumer Protection Act requires us to provide an advisory stockholder vote with respect to how often to present the advisory stockholder vote to approve the compensationSuite 2015, Chicago, IL 60601, owner of 17,956 shares of the Company’s named executive officers (the “say-on-pay vote”). We must solicit your advisory vote on whether to have the say-on-pay vote every 1, 2 or 3 years.

Accordingly,Common Stock, has notified the Company that it intends to submit the following proposal at this year’s meeting:

Proposal To Repeal Classified Board

RESOLVED, that shareholders of Limited Brands, Inc. urge the Board of Directors to take all necessary steps (other than any steps that must be taken by shareholders) to eliminate the classification of the Board of Directors and to require that all directors elected at or after the annual meeting held in 2013 be elected on an annual basis. Implementation of this proposal should not prevent any director elected prior to the annual meeting held in 2013 from completing the term for which such director was elected.

Supporting Statement of the Illinois State Board of Investment

This resolution was submitted by the Illinois State Board of Investment. The Harvard Law School Shareholder Rights Project represented and advised the Illinois State Board of Investment in connection with this resolution.

The resolution urges the board of directors to facilitate a declassification of the board. Such a change would enable shareholders to register their views on the performance of all directors at each annual meeting. Having directors stand for elections annually makes directors more accountable to shareholders, and could thereby contribute to improving performance and increasing firm value.

Over the past decade, many S&P 500 companies have declassified their board of directors. According to data from FactSet Research Systems, the number of S&P 500 companies with classified boards declined by more than 50%; and the average percentage of votes cast in favor of shareholder proposals to declassify the boards of S&P 500 companies during the period January 1, 2010—June 30, 2011 exceeded 75%.

The significant shareholder support for proposals to declassify boards is consistent with empirical studies reporting that classified boards could be associated with lower firm valuation and/or worse corporate decision-making. Studies report that:

Classified boards are associated with lower firm valuation (Bebchuk and Cohen, 2005; confirmed by Faleye (2007) and Frakes (2007));

Takeover targets with classified boards are associated with lower gains to shareholders (Bebchuk, Coates, and Subramanian, 2002);

Firms with classified boards are more likely to be associated with value-decreasing acquisition decisions (Masulis, Wang, and Xie, 2007); and

Classified boards are associated with lower sensitivity of compensation to performance and lower sensitivity of CEO turnover to firm performance (Faleye, 2007).

Please vote for this proposal to make directors more accountable to shareholders.

Our Response—Statement in Opposition to Stockholder Proposal Regarding Our Classified Board

The Board has carefully considered the above proposal and believes that it is not in the best interests of our stockholders. Consequently, the Board recommends a voteAGAINST the proposal.

In accordance with the Company’s Charter, the Company’s directors are divided into three classes that serve staggered three-year terms, meaning that one-third of the directors stand for election each year. This classified board structure has been in place continuously since the Company became a public company in 1982, and we believe that it best serves the interests of the Company and our stockholders for the following reasons:

Stability and Continuity:The classified board structure is designed to provide stability and ensure that, at any given time, a majority of the directors serving on the Board of Directors have substantial knowledge of the Company, its business and its strategic goals. Directors who have experience with the Company and deep knowledge about its business and affairs are a valuable resource and are better positioned to make the fundamental decisions that are best for the Company and its stockholders. The Board also believes that the classified board structure assists in recruiting highly qualified directors who are willing to commit the time and resources to develop a deep understanding of our diverse businesses.

Protecting Stockholder Value: The classified board structure is also designed to safeguard the Company against the efforts of a third party intent on quickly taking control of, and not paying fair value for, the business and assets of the Company. Our classified board allows the Board of Directors the flexibility, time and leverage it needs to evaluate the fairness of a takeover proposal, negotiate on behalf of all stockholders, and weigh alternatives in order to provide maximum value for our stockholders.

Independence: The Board of Directors believes that electing directors to three-year terms, rather than one-year terms, enhances the independence of non-management directors by providing itsthem with a longer assured term of office, thereby insulating them from pressures from special interest groups that might have an agenda contrary to the long-term interests of our stockholders.

Accountability to the Company’s Stockholders: A classified board remains accountable to the Company’s stockholders. At each annual meeting, the Company’s stockholders withhave the opportunity to cast an advisory vote asevaluate and elect one third of the Board of Directors. All directors are required by law to uphold their fiduciary duties to the appropriate frequencyCompany and its stockholders, regardless of the length of their term of office.

While we acknowledge that board declassification is a complex issue and some academics have argued against classified boards, we also note that many academics have recognized that classified boards can be beneficial to stockholders for the say-on-pay vote. reasons explained above. For example, in a 2007 article published in the New York Times, Guhan Subramanian, a professor of business and law at Harvard and one of the authors of the 2002 study relied on by the proponent, conceded that “staggered boards offer many benefits over unitary boards: greater stability, improved independence of outside directors and a longer-term perspective.” One empirical study found that “overall, the evidence is inconsistent with the view that board classification is associated with managerial entrenchment, and instead suggests that classification may improve the relative bargaining power of target managers on behalf of their constituent shareholders.” (Bates, Becher and Lemmon, 2007.)

Stockholders may vote as to whethershould be aware that, in accordance with Delaware law, the say-on-pay vote should occur every 1, 2 or 3 years, or may abstain from voting on the matter.

The Company values the opinioncannot declassify its Board of its stockholders and believes that an annual say-on-pay vote will best reinforce the Company’s desire to communicate with its stockholders. An annual say-on-pay vote will allowDirectors unless the Company’s stockholders to regularly expressapprove an amendment that would repeal the applicable portions of our Charter. After considering a view onsimilar stockholder proposal that was presented at the Company’s compensation policies and practices.

Although, as an advisory vote, this proposal is not binding upon the Company or2007 annual meeting, the Board decided to submit such an amendment to a stockholder vote at the Compensation Committee, which is comprised solely of independent directors and is responsible for making decisions regarding the amount and form of compensation paid2009 annual meeting. The amendment did not receive enough support to the Company’s executive officers, or the Nominating & Governance Committee, which is comprised solely of independent directors and is responsible for periodically reviewing the Company’s corporate governance principles, will each carefully consider the shareholder vote on this matter, along with all other expressions of shareholder views received on this matter.pass.

The Board Recommends a Vote of “1 YearAGAINST” for the Frequency of Future Advisory Say-On-Pay Votes.Stockholder Proposal Regarding Our Classified Board.

PROPOSAL 7:    STOCKHOLDER PROPOSAL REGARDING SPECIAL MEETINGS OF STOCKHOLDERS

John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, owner of 240 shares of the Company’s Common Stock, has notified the Company that he intends to submit the following proposal at this year’s meeting:

Adopt Simple Majority Vote7—Special Shareowner Meetings

RESOLVED, Shareholders request thatShareowners ask our board to take the steps necessary sounilaterally (to the fullest extent permitted by law) to amend our bylaws and each appropriate governing document that each shareholder voting requirement impacting our company, that calls for a greaterenables one or more shareholders, holding not less than simple majority vote (including our 75% hurdles), be changed to a majorityone-tenth* of the votes cast for and againstvoting power of the Corporation, to call a special meeting. *Or the lowest percentage of our outstanding common stock permitted by state law.

This includes that such bylaw and/or charter text will not have any exclusionary or prohibitive language in regard to calling a special meeting that apply only to shareowners but not to management and/or the board (to the fullest extent permitted by law).

Adoption of this proposal in compliance with applicable laws.can be accomplished by adding a few enabling words to Section 1.02, the special meeting provision of our bylaws

Supporting Statement of John Chevedden

Corporate governance proceduresSpecial meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. Shareowner input on the timing of shareowner meetings is especially important when events unfold quickly and practices, andissues may become moot by the level of accountability they impose, are closely relatednext annual meeting. This proposal does not impact our board’s current power to financial performance. Shareowners are willing to paycall a premium for shares of corporations that have excellent corporate governance. Supermajority voting requirements have been found to be one of six entrenching mechanisms that are negatively related with company performance. See “What Matters in Corporate Governance?” Lucien Bebchuk, Alma Cohen & Allen Ferrell, Harvard Law School, Discussion Paper No. 491 (09/2004, revised 03/2005).special meeting.

This proposal topic won from 74% to 88%more than 60% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-HillCVS, Sprint and Macy’s. The proponents of these proposals included William Steiner, James McRitchie and Ray T. Chevedden.

If our Company were to remove required supermajority, it would be a strong statement that our Company is committed to good corporate governance and its long-term financial performance.Safeway.

The merit of this Simple Majority VoteSpecial Shareowner Meeting proposal should also be considered in the context of the needopportunity for additional improvement in our company’s 20102011 reported corporate governance status:in order to make our company more competitive:

The Corporate Library, www.thecorporatelibrary.com, an independent investment research firm rated our company “D” with “High Governance Risk,” “High Concern” in Board Composition and “Very High Concern” in Executive Pay. The $10Pay—$20 million for our CEO Leslie Wexner.

Mr. Wexner’s 2010 total summary compensation (TSC) was over four times the median TSC for our other Named Executive Officers and included, among other things, over $6.3 million in annual incentive pay that was based on six-month operating seasons. Moreover, despite Mr. Wexner vast stock ownership, he continued to receive time-vesting equity pay in the form of market-priced options and restricted stock pay. Finally, our CEO was among the highest for CEO’s of retail apparel companies. There waspotentially entitled to $25 million if there is a lack of performance-based incentives tied to actual long-term performance. These facts suggest that executive pay practices were not aligned with the long-term interest of shareholders.change in control.

Five directors were age 7172 to 77.78. Four directors had 2324 to 4748 years of long-tenure, including Founder, Chair, and CEO LeslieMr. Wexner (47-years)(48-years). AbigailMrs. Wexner, age 48 and the founder’s wife, was on the49, had 14 years board for 13 years. Long-tenure raised concerns about director entrenchment.tenure.

Three directors, age 72 to age 77, had no other current major corporate directorship experience. This could indicate a significant lack of current transferable director experience. Donna James, Raymond Zimmerman and Jeffrey Miro attracted our highest negative votes (18%) and were still allowed 5 seats on our most important board committees.

WithWe had no Lead Director we also had no shareholder right to proxy access, no cumulative voting, no right to call a special shareholder meeting, no shareholder written consent and no right to hold our directors accountable on an annual basis.

The shareholder proposal for simple majority vote won our 68%-support at our 2011 annual meeting. It was the only proposal on each director annually.the ballot that management did not identify by topic.

Please encourage our board to respond positively to this proposal to initiate improved governance:Adopt Simple Majority Vote—corporate governance and make our company more competitive:

Special Shareowner Meetings—Yes on 7.

Our Response—Statement in Opposition to the Stockholder Proposal Regarding Special Meetings of Stockholders

The Board has carefully considered the above proposal and believes that it is not in the best interests of our stockholders. Consequently, the Board recommends a voteAGAINST the proposal.

Voting Requirements. UnderSpecial meetings should be held in relation to extraordinary events that are important to a broad group of our stockholders.

The proposal would provide stockholders holding one tenth of the Company’s existing governance documents,voting power of the Company, or the lowest percentage of our outstanding common stock permitted by state law, with an unfettered right to call a simple majority vote requirement already applies to most matters submitted for stockholder approval.special meeting. The Board believes that supermajority votes are appropriatecalling a special meeting is not a matter to be taken lightly. Organizing and necessary with respectpreparing for a special meeting involves a significant management commitment of time and focus, and imposes substantial legal, administrative and distribution costs on the Company. Given these costs, the Board believes that special meetings should only be held in relation to a small number of fundamental matters of corporate structure and governance. These matters include: (i) approval of certain business combinations withextraordinary events, when fiduciary, strategic or similar considerations dictate that the matter be addressed on an individual, entity or group that collectively owns 20% or moreexpedited basis.

The proposal, if implemented, would permit stockholders holding one tenth of the Company’s voting securities; (ii) approval of certain fundamental transactions, including mergers, a sale of substantially all of the Company’s assets or dissolution of the Company; (iii) removal of a director for cause; (iv) an alteration, amendment or repeal of the bylaws or any amendment to the certificate of incorporation that contravenes any existing bylaw; and (v) an amendment to certain provisions in the Company’s certificate of incorporation.

Broad Consensus of All Stockholders. Delaware law permits supermajority voting requirements, and a number of publicly traded companies have adopted these provisions to preserve and maximize long-term value for all stockholders. The Board strongly believes that extraordinary transactions and fundamental changes to corporate governance should have the support of a broad consensus of the Company’s stockholders rather than just a simple majority. The Board also believes that the supermajority vote requirements protect stockholders, particularly minority stockholders, against the potentially self-interested actions of short-term investors. Without these provisions, it would be possible for a group of short-term stockholders to approve an extraordinary transaction that is not in the best interestspower of the Company, or the lowest percentage of our outstanding common stock permitted by state law, to call a special meeting at any time and is opposed by nearly halfwith any frequency, to cover agenda items that do not warrant immediate action. Moreover, because of the Company’s stockholders.

Fiduciary Duty. The Board is subject to fiduciary duties under the law to act inlow threshold, a manner that it believes to be in the best interests of the Company and its stockholders. Stockholders, on the other hand, do not have the same fiduciary duties as the Directors. As a result, asmall group of short-term stockholders, may act inor even a single stockholder, with narrow interests that are different from stockholders generally, would be permitted to call a special meeting and to propose items that are only relevant to themselves or their own self-interest to the detriment of other stockholders. Accordingly, our supermajority voting standards are necessary to safeguard the long-term interests of the Company and its stockholders.particular constituency.

Protection Against Certain Takeovers. Our supermajority voting provisions further protect the Company’s stockholders by encouraging persons or firms making unsolicited takeover proposals to negotiate directly with the Board. Seven of the Company’s ten Board members are independent under the standards adopted by the New York Stock Exchange. The Company believes that its independent Board is in the best positioncommitted to evaluate proposed offers,responding to consider alternatives, to protect stockholders against abusive tactics during a takeover process and, as appropriate, to negotiate the best possible return for all stockholders. Elimination of these supermajority provisions would make it more difficult for the Company’s independent, stockholder-elected Board to preserve and maximize value for all stockholders in the event of an unsolicited takeover bid by decreasing the acquirer’s incentive to negotiate with the Board and reducing the Board’s leverage in these negotiations.stockholder perspectives.

Corporate Governance Practices. The Company’s Nominating & Governance Committee regularly considers and evaluates corporate governance developments and recommends appropriate changesLimited Brands is strongly committed to the Board. As discussed in this proxy statement, the Board operates under corporate governance principles and practices that are designed to maximize long-term stockholder value, align the interests of the Board and management with those of our stockholders, and promote high ethical conduct among our Directors and employees. The Company’s governance policies and practices fully comply with all corporate governance standards of the NYSE and the Commission. The Board believes that implementation of this proposal would adversely impact the Company’s carefully considered corporategood governance practices and therefore, is notkeenly interested in the best interestsviews and concerns of our stockholders. Stockholders have frequently used our annual meetings to propose business by, for example, submitting proposals to a vote through the proxy rules (such as this one). The Company also uses various means to seek out stockholder views outside the confines of formal stockholder meetings.

The Company is very responsive to stockholder perspectives, whether raised at meetings or otherwise, and acts upon them accordingly. For example, although the advisory stockholder vote on executive compensation at the 2011 annual meeting was non-binding, the Compensation Committee considered, and will continue to consider, the outcome of the Companyvote and its stockholders.

feedback received from stockholders when making compensation decisions for named executive officers. Our engagement with stockholders included outreach to all of our major institutional investors and meetings or teleconferences with several of their governance departments. In response to stockholder feedback, the Compensation Committee took action on tax gross-up provisions, stock plan structure, hedging, perquisites and executive benefits, and performance metrics for CEO compensation. For a description of the actions taken by the Compensation Committee, please see the section entitled “Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation.”

The Proponent’s False Claims. To bolster his argument that the Company’s corporate governance structure is inadequate, the proponent falsely states that the Company has no lead director. This statement is simply untrue. As has been clearly disclosed in our proxy statements for the proxy statement,past several years, Allan R. Tessler, the Chairperson of the Nominating & Governance Committee, serves as the Company’s lead independent director. The proponent also makes objectively false claimsCertain of the proponent’s statements about Mr. Wexner’s compensation. compensation and the qualifications of our directors are misleading, and we urge stockholders to consult the sections entitled “Proposal 1: Election of Directors” and “Compensation-Related Matters” for more information about these topics.

The Board urges stockholders not to be misledproposal is vague and indefinite, and it requests alternative and inconsistent actions by the proponent’s blatant misrepresentations when considering the proposal.Board.

Effect of Proposal. ItThe proposal’s operative language is important to noteinternally inconsistent. The proposal requests that stockholder approval of this proposal would not in itself remove the supermajority vote standards. Under the law of Delaware, the Company’s state of incorporation, the Board must first authorize an amendment to the Company’s certificate of incorporation that would be submitted to stockholders at a subsequent meeting. To implement the proposal, stockholders would have to approve the amendment by an affirmative vote ofenable one or more shareholders holding not less (i) than 75%one tenth of the outstanding shares entitled to vote.

Board Recommendation. After careful consideration, the Board has determined that retention of our few supermajority voting requirements remains in the long-term best interestspower of the Company and its stockholders. The Board believes thator (ii) the substantial benefitslowest

percentage of our common stock permitted by state law, to call a special meeting, but the proposal does not provide any guidance as to which of these voting requirements do not come at the expense of prudent corporate governance. To the contrary, the voting requirements are designed to protect the interests of all stockholders. Moreover, the strong financial performance of the Company, and the various corporate governance measures alreadytwo standards should be implemented by the Board, confirmor whether the Board’s commitmentBoard can choose a standard at its discretion. It is not even clear as to ensuringhow the Company would implement the second standard because Delaware law does not specify a minimum percentage of common stock that is required to call a special meeting.

We note that the Company is governed in a mannerCommission has permitted other corporations to exclude proposals containing identical language from their respective proxy statements due to the belief that furthersneither shareholders nor the interests of all of its stockholders.company would be able to determine with any reasonable certainty exactly what actions the proposal requires.

The Board Recommends a VoteAGAINST the Stockholder Proposal Regarding Special Meetings of Stockholders.

PROPOSAL 8:    STOCKHOLDER PROPOSAL REGARDING SHARE RETENTION POLICY

The International Brotherhood of Electrical Workers’ Pension Benefit Fund, 900 Seventh Street, NW, Washington, DC 20001, owner of 63,338 shares of the Company’s Common Stock, has notified the Company that it intends to submit the following proposal at this year’s meeting:

Share Retention—Limited Brands

RESOLVED: That shareholders of Limited Brands, Inc. (the “Company”) urge the Compensation Committee of the Board of Directors (the “Committee”) to adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity compensation programs until reaching normal retirement age and to report to shareholders regarding the policy before the Company’s 2013 annual meeting of shareholders. For the purpose of this policy, normal retirement age shall be defined by the Company’s qualified retirement plan that has the largest number of plan participants. The shareholders recommend that the Committee adopt a share retention percentage requirement of at least 75% of net after-tax shares. The policy should prohibit hedging transactions for shares subject to this policy which are not sales but reduce the risk of loss to the executive. This policy shall supplement any other share ownership requirements that have been established for senior executives, and should be implemented so as not to violate the Company’s existing contractual obligations or the terms of any compensation or benefit plan currently in effect.

Supporting Statement of International Brotherhood of Electrical Workers’ Pension Benefit Fund

We believe there is a link between shareholder wealth and executive wealth that correlates to direct stock ownership by executives. According to an analysis conducted by Watson Wyatt Worldwide, companies whose CFOs held more shares generally showed higher stock returns and better operating performance. (Alix Stuart, ‘Skin in the Game,’ CFO Magazine, March 1, 2008.)

Requiring senior executives to hold a significant portion of shares obtained through compensation plans as long as they are members of senior management would focus them on the Company’s long-term success and better align their interests with those of the Company’s shareholders. In the context of the ongoing financial crisis, we believe it is imperative that companies reshape their compensation policies and practices to promote long-term, sustainable value creation. A 2009 report by the Conference Board Task Force on Executive Compensation stated that hold-to-retirement requirements give executives ‘an ever-growing incentive to focus on long-term stock price performance.’ (http://www.conference­board.org/pdf_free/ExecCompensation2009.pdf).

Our Company has a minimum stock ownership guideline requiring executives to own Company stock valued at a multiple of salary within five years. CEO Leslie H. Wexner is required to own five times his annual base salary. We believe this policy does not go far enough to ensure that equity compensation builds executive ownership. We view a retention requirement approach as superior to a stock ownership guideline because a guideline loses effectiveness once it has been satisfied.

Several major companies have already adopted this best practice, including Citigroup, Goldman Sachs, and Morgan Stanley.

We urge shareholders to voteFOR this proposal.

Our Response—Statement in Opposition to Stockholder Proposal.Proposal Regarding Share Retention Policy

The Board has carefully considered the above proposal and believes that it is not in the best interests of our stockholders. Consequently, the Board recommends a voteAGAINST the proposal.

As discussed in the section entitled “Compensation Discussion and Analysis” beginning on page 27, our Compensation Committee seeks to closely align the interests of the Company’s executives with those of its stockholders by providing compensation packages that emphasize performance, while also attracting and retaining the highest caliber of talent. We believe that the proposed share retention policy, with its high retention threshold (regardless of the value of the Company stock held by each executive) and indefinite holding period, does not achieve the desired balance.

In order to align the interests of the Company’s executives with those of its stockholders, a significant portion of the Company’s executives’ compensation is paid in the form of options and performance-based restricted stock units, that vest over three to five years. As a result, at any given time, an executive holds a large portion of unvested equity-based awards, the value of which are partially or wholly dependent on the price of the Company’s common stock, which has the effect of closely aligning the interests of the executives with those of other stockholders.

In addition, in order to further encourage stock ownership by the Company’s executives and to promote a long-term focus on performance and discourage inappropriate risk-taking, the Compensation Committee has already adopted a share retention policy. Under the Company’s policy, which has been in effect for over seven years, each executive must own shares of the Company’s common stock equal to a multiple of his or her annual base salary (5x for the Chief Executive Officer and 3x for the other named executive officers). As the Company’s largest stockholder, Mr. Wexner’s beneficial ownership of approximately 18% of the outstanding Common Stock, worth over $2.0 billion, puts him well in excess of the policy’s required stock ownership. Each executive has five years from the time that he or she becomes a named executive officer to comply with the Company’s policy.

We do not believe that implementation of the share retention restrictions contained in this proposed policy would meaningfully improve our existing compensation practices, which already align executives’ interests with those of the Company’s stockholders. In fact, we believe that the adoption of this proposed policy will hinder our ability to effectively attract and retain the highest caliber of talent and may make executives more willing to leave their jobs with the Company in order to realize the value of their equity compensation.

Further, the Board also believes that implementation of this policy, as proposed, is impractical, as the proposal lacks specificity as to the meaning of key terms such as “75% of net after-tax shares” and “equity compensation programs”, and fails to explain what shares the proposal intends to include or exclude in its share retention calculation. Consequently, the proposal is unclear as to what and how many shares would be required to be retained by the Company’s executive officers.

Our Board opposes this proposal because our directors believe that the Company’s compensation practices and policies, as described above, firmly align the interests of our executives with those of our stockholders, encourage a focus on the long-term performance of the Company, and avoid the adverse consequences that the Board believes may result from the proposal.

The Board Recommends a VoteAGAINST the Stockholder Proposal Regarding Share Retention Policy.

COMPENSATION-RELATED MATTERS

Compensation Discussion and Analysis

Executive Summary

The Limited Brands’Brands executive compensation program is designed to ensure that the interests of our executive officers are closely aligned with those of our stockholders. We believe that our program is effective in allowing us to attract, motivate and retain highly qualified senior talent who can successfully deliver outstanding business performance.performance, and we compensate them accordingly. Our executives are in high demand from our competitors, including some of the world’s leading retailers. Ensuring the development and retention of our core leadership team is fundamental to our success.

We target total compensation for ourOur named executive officers between the 50^thfor 2011 were: Leslie H. Wexner (Chief Executive Officer and 75^th percentileChairman of the competitive marketBoard), Sharen J. Turney (CEO/President, Victoria’s Secret), Martyn R. Redgrave (Executive Vice President, Chief Administrative Officer), Charles C. McGuigan (CEO/President, Mast Global) and believe that this practice allows us to attract and retain highly skilled executive officers and to provide rewards that are competitive based on the market value for skills needed to manage our complex and increasingly diverse business. In addition, we believe that this practice is appropriate in lightStuart B. Burgdoerfer (Executive Vice President, Chief Financial Officer).

2011: A Year of the high level of commitment, job demands and the expected performance contribution required from each of our executive officers in our extremely competitive marketplace.Continued Strong Performance

In fiscal 2010, the Company’s net2011, we delivered strong operating performance and generated a total return of 58% for our stockholders.

		FY 2009				FY 2010				FY 2011				Percent Increase										An important part of our culture is improving lives through volunteerism and philanthropy. When we do well financially, we also do great good in the communities where we live and work. We impact not just our own lives, but the lives of all the people in the Limited Brands family all over the world: we can offer better brands and better products for our customers; create more jobs; provide associates with more opportunities to develop their careers; help partners and vendors grow their businesses; and return more value to our shareholders. This year, our enterprise’s strong results enabled significant contributions to non-profit organizations such as United Way, universities, cancer research, and international agencies and orphanages that help underprivileged women and children.
		($ in millions, except per share amounts)												2 Year				1 Year
Net sales		$	8,632			$	9,613			$	10,364				20	%			8	%
Comparable Store Sales			-4	%			9	%			10	%
Operating Income (as reported)		$	868			$	1,284			$	1,238				43	%			-4	%
Operating Income (adjusted)1		$	859			$	1,284			$	1,546				80	%			20	%
Earnings per Share (as reported)		$	1.37			$	2.42			$	2.70				97	%			12	%
Earnings per Share (adjusted)1		$	1.23			$	2.06			$	2.60				111	%			26	%
Dividends per Share		$	0.60			$	4.60			$	3.80				533	%			-17	%
Stock Price at fiscal year end		$	19.02			$	28.91			$	41.46				118	%			43	%
Total Shareholder Return			148	%			76	%			58	%

These results reflect a second straight year of record-setting sales were $9.613 billion, an increase of 11% compared to net sales in fiscal 2009. Fiscal 2010 net income was $805 million, which was an increase of 80% compared to net incomeand profitability performance for fiscal 2009. In fiscal 2010, earnings per diluted share were $2.42 per share, an increase of 77% compared to earnings per diluted share in fiscal 2009.*

We had consistent growth in profitability during fiscal 2010our major brands, and extraordinary returns for our stockholders. Our strong performance generated significant free cash flow which allowed us to generate significant free cash flow. This cash flow has allowed usreturn $4.2 billion to provide significant returns to our stockholders during fiscal 2010 withsince February 2009, including the payment of two special dividends totaling $1.2 billion or $4.00$7.00 per share in special dividends and $1.4 billion in share repurchases, demonstrating our commitment to return excess cash to stockholders. This return of cash to stockholders is in addition to a 52%the 43% increase in our stock price from $19.02over the last fiscal year.

1

Adjusted operating income and adjusted earnings per share are non-GAAP measurements which present operating income and earnings per share in 2011, 2010 and 2009 on an adjusted basis which removes certain special items. The Company believes that these special items are not indicative of its ongoing operations due to their size and nature. The Company uses adjusted financial information as a key performance measure of results for purposes of evaluating performance internally. (Please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Limited Brands’ 2011 Annual Report on Form 10-K, which is being sent with this proxy statement, for a reconciliation to measures determined in accordance with GAAP).

Our returns to stockholders over the last three years have consistently outperformed our peer companies (listed on January 29, 2010page 32), the S&P Retailing Index, and the S&P 500 Index:

		Total Shareholder Return
		One Year				Three Year				Five Year
Limited Brands			58	%			92	%			16	%
Limited Brands Peer Companies Median			24	%			54	%			0	%
S&P Retailing Index Median			22	%			40	%			7	%
S&P 500 Index Median			5	%			19	%			0	%

The Link between Performance and Pay

For fiscal 2011, our named executive officers’ total direct compensation at target, including base salary, short-term performance-based incentive compensation and equity-based incentives, was strategically positioned above the median when compared to $28.92our peer group. Actual performance results for fiscal 2011 were above targeted levels and, as a result, actual compensation was above targeted levels.

The chart below shows the close alignment between our CEO pay (as disclosed in the Summary Compensation Table) and stockholder return (calculated based on January 28, 2011.

During 2010, recognizing the successful performanceappreciation in value of $100 invested at the beginning of the 2009period, including reinvested dividends:

Although there is no formal policy for a specific allocation between short- and 2010long-term, fixed and at-risk, or between cash and non-cash compensation, the Compensation Committee seeks a pay mix that places greater emphasis on performance-based and equity compensation than on base salary. We believe that increased emphasis on short-term, performance-based incentive compensation contributed to the Company’s strong financial performance in fiscal years in2011.

The charts below illustrate the context of continued economic challengesfixed and withvariable compensation components that make up the total direct compensation at target for our CEO and other named executive officers.

With the goal of incentivizingincenting continued superior performance, the Compensation Committee of the Board took the following actions:

Did not award salary increases to four of the five executive officers named in our 2010 Summary Compensation Table. Ms. Neal received a base salary increase of 7.9% in recognition of her contributions to the significant improvement in the financial performance of the Bath & Body Works brand which included operating income growth of 67% inactions during fiscal 2009.2011:

 

Increased short-term performance-based incentive compensation target percentages of base salary for each of the named executive officers.

 

Increased annual long-term equity-based incentive awards for certain named executive officers.

Provided modest or no base salary increases for the named executive officers thereby further ensuring that a higher proportion of pay was performance-based.

Established a rigorous performance metric for the stock incentive award granted in January 2012 to our CEO, as further described on pages 37 through 39 of this section. The Compensation Committee intends to use forward looking performance metrics for fiscal 2012 stock based incentive awards to our CEO.

At the Compensation Committee’s request, Towers Watson performed an analysis of our long- and short-term incentive pay-for-performance for our named executive officers. We evaluated the percentile rank of our incentive compensation and financial performance across four key measures (operating income, earnings per share, total stockholder return and return on invested capital) over the relevant time period relative to our peer group, in order to assess whether the Company’s performance and the realizable incentive compensation paid to our named executive officers were aligned.

This analysis found that, generally, both our long-term incentive pay and financial performance ranked between the 50th and 75th percentile of our peer group and both our short-term incentive pay and performance ranked in the 75th percentile of our peer group. Based on above targetthese results, the Compensation Committee believes that the long-term and short-term incentive compensation realized by our named executive officers is aligned with performance paid short-term performance-basedand is reasonable based on the competitive market, achievement of performance goals and total returns delivered to our stockholders.

The Role of Stockholder Advisory Vote on Executive Compensation

Although the advisory stockholder vote on executive compensation above targetis non-binding, the Compensation Committee has considered and will continue to consider, the outcome of the vote and feedback received from

stockholders when making compensation decisions for each season.

named executive officers. We have a policy of robust engagement with stockholders, including continuing outreach to and dialogue with all of our major institutional investors. While investors expressed satisfaction with the strong performance of the Company, some investors had concerns about aspects of its compensation programs, including tax gross-ups, single trigger vesting upon a change in control, and the performance metric on long-term equity incentives. Recent responses to the specific stockholder feedback include the following:

 

*
Area of Feedback		Compensation Committee Response
Tax Gross-Up Provisions		In fiscal 2010, net income included•     Removed the two existing tax gross-up provisions contained in employment agreements with our named executive officers.
Stock Plan Structure		•     Added the following items:provisions to our new stock plan: –     Require a three-year minimum vesting period for full value awards that are based on the passage of time; –   Require a one-year minimum vesting period for full value awards that are based on performance; –     Provide that accelerated vesting of awards upon a change in control will no longer be single trigger but will only occur if there is also a termination of employment (double trigger); and –     Provide for the clawback of outstanding or settled awards in certain circumstances.
Perquisites and Executive Benefits		•  Eliminated the reimbursement of medical costs not covered under the Company’s standard health benefit package. •     Eliminated payment for the CEO’s security services which are not business-related.
Anti-Hedging Policy		•     Strengthened a policy prohibiting directors and officers from engaging in hedging transactions.
CEO Compensation		•     Significantly expanded disclosure of the considerations, criteria and processes employed by the Compensation Committee to determine the components of CEO compensation. •     Established a rigorous performance metric for long-term equity incentive awards for our CEO to drive future performance and further align executive and stockholder interests, as further described on pages 37 through 39 of this section.

a $ 52 million pre-tax gain related to the initial public offering of Express, including the sale of a portion of our shares;

a $49 million pre-tax gain related to a $57 million cash distribution from Express;

a $45 million pre-tax gain related to the sale of Express stock;

a $25 million pre-tax loss associatedIn accordance with the early retirement of portions of our 2012 and 2014 notes;

a $20 million pre-tax gain associated withadvisory vote on the sale of our remaining 25% ownership interest in Limited Stores; and

a $7 million pre-tax gain related to a dividend payment from Express.

(The corresponding results determined in accordance with generally accepted accounting principles are included in Item 8frequency of the Financial Statements and Supplementary Data of Limited Brands’ 2010 Annual Reportvote on Form 10-K which is being sent with this proxy statement).

Basedexecutive compensation, the Board has adopted an annual frequency for the stockholder advisory vote on record-setting financial performance along with the progress toward the achievement of the Company’s strategic business plan and other objectives, in Januaryexecutive compensation.For fiscal 2011, the Compensation Committee awarded Mr. Wexner stock options and performance-based restricted stock units with a value of $8.8 million. Additional information about this award is described below under the heading “CEO Compensation.”

We believewe recommend that the increased emphasis on short-term performance-based incentive compensation contributed to strong financial results in fiscal 2010.

The following Compensation Discussion and Analysis outlines additional details regardingstockholders vote “FOR” our executive compensation program and policies. The Compensation Committee has provided oversight to the design and administration of our program and policies, participated in the preparation of the Compensation Discussion and Analysis and recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.program.

Executive Compensation Philosophy

The Compensation Committee believes that executive compensation programs should be built on a philosophy reflected in clearly articulated guiding principles. We have designed our executive compensation programs

Philosophical Element		Guiding Principles
Pay Level		•     Pay competitively and equitably. •     Recognize depth and scope of accountability and complexity of responsibility. •     Attract and retain superior leaders.
Pay Mix		•  Structure total compensation such that a smaller proportion is fixed compensation and a larger proportion is performance-contingent and/or equity-based.
Pay for Performance Orientation		•     Recognize and reward Company, brand and individual performance. •     Incent achievement of Spring and Fall seasonal goals, reflecting the short-cycle nature of our business by setting targets and paying bonuses twice a year. •     Create long-term value for stockholders through the consistent achievement of short-term goals. •  Reward past performance and achieve retention through long-term equity incentive awards. •     Create wealth-building opportunity over time. •     Align executive interests with stockholder interests. •  Require executives to own a significant level of the Company’s Common Stock.

The Market for Talent

Our peer group companies are chosen because of their general similarity to Limited Brands in total revenue, market capitalization, business and merchandise focus, geographic location and/or their competition with the following guiding principles in mind:

To PayCompany for Performance

We believe in paying for results. Accordingly, the primary goal of the compensation program is to link total executive compensation to performance that enhances stockholder value. Our executives are compensated based on a combination of total Company, brand and individual performance factors.

Total Company and brand performance are evaluated primarily based on the degree by which pre-established financial targets are met. In fiscal 2010, this philosophy resulted in short-term incentive payments that exceeded the targeted level due to superior performance.

Individual performance is evaluated based upon several leadership factors, including:

Building brand identity;

Attaining specific merchandise and financial objectives;

Building and developing a strong leadership team;

Developing an effective infrastructure to support future business growth and profitability; and

Commitment to living the values of Limited Brands.

To Pay Competitively

We are committed to providing a total compensation program designed to attract superior leaders to the Company and to retain performers of the highest caliber. To achieve this goal, we annually compare our pay practices and overall pay levels with other leading retail organizations as well as, where appropriate, with non-retail organizations when establishing our pay guidelines.

To Pay Equitably

talent. We believe that it is important that we benchmark our compensation practices primarily against companies with innovative and aspirational brands that have strong emotional content, because our success depends on the unique skills and talent required to apply generally consistent guidelinescreate an emotional experience for allour customers. With the assistance of Towers Watson, we review our peer group annually to ensure that it remains appropriate.

Our review of market practice consists of a comparison of the target and actual compensation for each of our named executive officerofficers to publicly available data on base salary, bonus and long-term incentive compensation for executives from a peer group consisting of 20 specialty and department store retail organizations. These data and comparisons are used to benchmark the appropriateness and competitiveness of our executive compensation programs.

Our peer group below is unchanged from the prior fiscal year.

Abercrombie & Fitch		Liz Claiborne		JCPenney		Ralph Lauren
Aeropostale		Coach		Kohl’s		Starbucks
American Eagle Outfitters		DSW		Macy’s		Target
Ann Inc.		Estee Lauder		Nike		TJX Companies
Avon		Gap		Nordstrom		Williams-Sonoma

Based on 2010 fiscal year results, Limited Brands ranked between the 50th and 60th percentile of this peer group in terms of revenue, net income and market capitalization. Some, but not all, of our peer group companies are included in the S&P Retailing Index represented in the Comparison of Cumulative 5-Year Total Return graph included in our Annual Report on Form 10-K for the 2011 fiscal year.

We believe that this peer group best reflects our market for executive talent – the companies that our executives are potentially attracted from and lost to. However, we recognize that certain external advisory firms may use alternative peer groups in making determinations about our compensation programs. These firms tend to focus solely on a broad industry category with similarity of size in terms of revenue and/or market capitalization. This selection methodology does not take into account similarity in business and merchandising focus and, in particular, dilutes the distinguishing characteristic of businesses whose success depends on brands with strong emotional content. Accordingly, we do not believe that these dissimilar companies provide an appropriate basis for comparison.

Overview of CEO Pay

Mr. Wexner holds a unique position as the founder of our Company almost fifty years ago and the creative talent behind our long record of successful brand-building. As the beneficial owner of approximately 18% of our outstanding Common Stock, Mr. Wexner is by far the largest single stockholder of the Company. Unlike the typical managerial CEO, his executive compensation is dwarfed by his ownership of the Company’s Common Stock. In orderaddition, Mr. Wexner has never utilized a special voting class of shares to deliver equitablerepresent his interests. Therefore, in all governance as well as economic respects his interests are in full alignment with those of other stockholders.

Mr. Wexner is a recognized innovator and leader in the retail industry. He expanded the Limited Brands business portfolio through both invention and acquisition, becoming a leading U.S. retailer with numerous powerful brands and brand extensions. The retail concepts he has created continue to flourish even under the most challenging of environments. His long record of success in leading the Company is unmatched in scope and duration by any other retailer. The Compensation Committee believes that his significant contributions as the Company’s CEO deserve to be fully reflected in his compensation. For fiscal 2011, the components of the CEO’s pay levels,were as follows:

Element of Compensation		2011 Fiscal Year Target				% of Total Direct Compensation				2011 Fiscal Year Actual				% of Total Direct Compensation				2010 Fiscal Year Actual				% Change (Actual FY 2010 to FY 2011)
Base Salary		$	1,924,000				15	%		$	1,924,000				10	%		$	1,924,000				0	%
Short-Term Performance Based Incentive			3,559,400				27	%			4,899,158				27	%			6,302,351				-22	%
Long-Term Equity-Based Incentive			7,696,000				58	%			11,418,236				63	%			11,646,368				-2	%
Total Direct Compensation			13,179,400				100	%			18,241,394				100	%			19,872,719				-8	%

Although the Company achieved strong performance for the 2011 fiscal year, Mr. Wexner’s total direct compensation decreased by approximately 8% from fiscal 2010. The decrease is primarily attributable to the

rigorous and challenging performance targets instituted for our fiscal 2011 short-term performance-based incentive program. These goals, at target, required significant growth in operating income over the record setting results we achieved in fiscal 2010.

In addition, the largest component of Mr. Wexner’s compensation is long-term performance-based equity that vests over time assuming performance conditions are met. Therefore, equity compensation is not realizable on an annual basis. Further, the value of Mr. Wexner’s long-term equity is dependent on two performance components. The first consists of qualitative, objective and financial performance criteria used by the Compensation Committee considers depth and scopeto determine the size of accountability, complexitythe award. The second is a forward looking performance objective, achievement of responsibility, and executive officer performance, both individually and collectively as a team.

To Encourage Ownership of Company Common Stock

We design compensation policies and practiceswhich is required if the award is to encourage ownership of Common Stock. The Compensation Committee previously instituted stock ownership guidelines for our executive officers. The guidelines, described in more detailultimately vest. More information is provided under the heading “Stock Ownership Guidelines” below, set a minimum level of ownership value according to the position and responsibility ranging from three to five times an executive’s annual base salary.

According to these principles, we generally have structured our total compensation for executive officers such that a smaller proportion is fixed compensation and a larger proportion is performance-contingent, based on brand and/or total Company operating income and Common Stock performance.“CEO Equity Award Determination” below.

ExecutiveComponents of Compensation Practices

The principal elements of our executive compensation programs are base salary, short-term performance-based cash incentive compensation and long-term equity-based incentive compensation. The Compensation Committee continually reviews our executive compensation programs to ensure they best reflect our compensation philosophy. The programs are reviewed in relation to market practice considering the scope of each executive’s role and such executive’s performance.

Market practice consideration consists of a comparison of the target and actual compensation for each of our named executive officers to publicly available data on base salary, bonus and long-term incentive compensation for executives from a peer group consisting of 20 specialty and department store retail organizations. This data and comparison are used to benchmark the appropriateness and competitiveness of our executive compensation programs.

In 2010, with the assistance of Towers Watson, this peer group was updated to replace Tween Brands (due to its acquisition) and Bed Bath & Beyond with Aeropostale and Starbucks. These changes do not have a material impact on our relative ranking within the peer groupAs in terms of revenue, income or market capitalization. Our peer group companies were chosen because of their general similarity to Limited Brands in total revenue, business and merchandise focus, geographic location and/or their competition with the Company for executive talent. For fiscal 2010, the complete list of companies in our peer group is as follows:

Abercrombie & Fitch		DSW		Nordstrom
Aeropostale		Estee Lauder		Polo Ralph Lauren
American Eagle Outfitters		Gap		Starbucks
Ann Taylor		JCPenney		Target
Avon		Kohl’s		TJX Companies
Liz Claiborne		Macy’s		Williams-Sonoma
Coach		Nike

Our peer group includes a subset of companies in the S&P 500 Retail Composite Index represented in the Comparison of Cumulative 5-Year Total Return graph included in our Annual Report on Form 10-K for the 2010 fiscal year.

At the Compensation Committee’s request, Towers Watson analyzed (i) our long-term equity compensation program and its relationship to our performance over the three-year period ending in fiscal 2009 and (ii) our short-term cash incentive compensation program and its relationship to our 2009 fiscal year performance. Our compensation levels and performance over the relevant time period was compared on a relative basis to that of our peer group described above. Based on this analysis,previous years, the Compensation Committee believes that the short-term and long-term compensation realized by our named executive officers is aligned with performance and is reasonable based on the competitive market, achievementreviewed a three-year history of performance goals and total returns delivered to our stockholders.

For fiscal 2010, our named executive officers’ total direct compensation at target, including base salary, short-term performance-based incentive compensation and equity-based incentives, was strategically positioned above the median when compared to our peer group. Actual performance results for fiscal 2010 were above targeted levels and as a result, actual compensation was above targeted levels.

Although there is no formal policy for a specific allocation between short- and long-term, fixed and at-risk, or between cash and non-cash compensation, the Compensation Committee seeks a pay mix that places greater emphasis on performance-based and equity compensation. This pay mix is designed to generally reflect market practice, the needs of our workforce and to provide executive officers with attractive levels of current pay while encouraging officers to remain with our Company for the long-term. In addition, we believe the structure of our pay mix appropriately motivates our executives without encouraging unnecessary risk-taking.

The Compensation Committee reviewed all of the components of the named executive officers’ compensation, for the years 2008, 2009 and 2010, including salary, short-term incentive compensation, realized and unrealized gains on stock options and restricted stock units, the cost to the Company of all perquisites, payout obligations under the Company’s non-qualified deferred compensation plan and supplemental executive retirement plan and potential payouts under several potential severance and change-in-control scenarios. Tally sheets including all of the above components were reviewed by the Compensation Committee to determine the reasonableness of the compensation of the named executive officers. The Compensation Committee concluded that compensation levels are reasonable and in the best interests of Limited Brands and its stockholders. The Compensation Committee will continue to review tally sheets at least annually.

We would seek to recover, under the relevant provisions of the Sarbanes-Oxley Act, previously awarded bonuses or equity-based compensation or profits in the event of a restatement of financial or other performance results.

Base Salary

The Compensation Committee annually reviews and approves the base salary of each named executive officer. In determining base salary adjustments, the Compensation Committee considers the sizescope and responsibility of the officer’s position, total Company and brand performance, the officer’s overall performance and future potential and the level of overall compensation paid by competitors for comparable positions. Individual performance is measured against the following factors: seasonal and annual business goals; brand strategy execution and business growth goals; recruitment and development of leadership talent; and commitment to living the values of Limited Brands. These factors are considered subjectively in the aggregate, and none of these factors are assigned a formula weight.

In response to continued economic challenges and consistent with the Compensation Committee’s emphasis on compensation that is performance-based, for the secondthird straight year no change was made to the base salaries for four of the five named executive officers in fiscal 2010. Accordingly, these four named executive officers have notMr. Wexner and Mr. Redgrave. Ms. Turney and Mr. Burgdoerfer received amodest base salary increase since 2008. Ms. Neal received a base salary increase of 7.9%increases in recognition of hertheir contributions to the significant improvement in thecontinued successful financial performance of the Bath & Body Works brand which included operating income growthCompany. Mr. McGuigan’s increase reflects his promotion to Chief Executive Officer of 67% in 2009.Mast Global.

 

		2009 Base Salary ($)				2010 Base Salary ($)				% Increase				2010 Base Salary ($)				2011 Base Salary ($)				% Increase
Mr. Wexner		$	1,924,000			$	1,924,000				0.0	%			1,924,000				1,924,000				0.0	%
Ms. Turney			1,250,000				1,250,000				0.0	%			1,250,000				1,300,000				4.0	%
Mr. Redgrave			1,040,000				1,040,000				0.0	%			1,040,000				1,040,000				0.0	%
Ms. Neal			927,000				1,000,000				7.9	%
Mr. McGuigan															858,000				900,000				4.9	%
Mr. Burgdoerfer			725,000				725,000				0.0	%			725,000				750,000				3.4	%

Short-Term Performance-Based Incentive Compensation.

Our short-term performance-based incentive compensation program for executive officers provides for incentive payments for each six-month operating season, reflecting the seasonal nature of our business. These incentive payments are based on the attainment of pre-established objective financial goals and are intended to motivate executives to work effectively to achieve financial performance objectives and reward them when objectives are met and results are certifiedwarrant. It is our belief and experience that by the Compensation Committee.achieving our short-term goals season after season, we create long-term value for our stockholders. These incentive payments are paid in cash, unless the executive elects to defer a portion and/or to receive a portion in Common Stock as discussed below.

The target short-term performance-based incentive compensation opportunity for each eligible executive is set at a percentage of base salary. ForThe amount earned can range from zero to double the incentive target, based upon the extent to which the pre-established financial goals are achieved or exceeded. Consistent with our focus on performance-based compensation, for fiscal 2010,2011, the Compensation Committee approved an increase in the short-term performance-based incentive compensation target percentages for each of the named executive officers:

 

Mr. Wexner		Increase from 160% of base salary to 175%
Ms. Turney		Increase from 150% of base salary to 160%
Mr. Redgrave		Increase from 130% of base salary to 135%
Ms. Neal		Increase from 110% of base salary to 120%
Mr. Burgdoerfer		Increase from 100% of base salary to 110%

The Compensation Committee approved these changes to provide increased motivation for the achievement of the Company’s financial goals and to offset the impact of three years at the same base salary.

The amount of short-term performance-based incentive compensation earned by participating executives can range from zero to double their incentive target, based upon the extent to which the pre-established financial goals are achieved or exceeded. The threshold, target and maximum short-term performance-based non-equity incentive payout opportunities of our named executive officers for fiscal 2010 are set forth below and in the Grants of Plan-Based Awards for Fiscal 2010 table below. Actual payouts under this plan for fiscal 2010 are set forth below and in the “Non-Equity Incentive Plan Compensation” column of the 2010 Summary Compensation Table below.

Executive Officer		Minimum ($)				Threshold ($)				Target($)				Maximum ($)				Actual ($)
																						Fiscal 2010 Target Incentive				Fiscal 2011 Target Incentive
Mr. Wexner		$	0			$	673,400			$	3,367,000			$	6,734,000			$	6,302,351				175	%			185	%
Ms. Turney			0				400,000				2,000,000				4,000,000				3,998,400				160	%			170	%
Mr. Redgrave			0				280,800				1,404,000				2,808,000				2,628,007				135	%			140	%
Ms. Neal			0				240,000				1,200,000				2,400,000				1,981,920
Mr. McGuigan																							95	%			110	%
Mr. Burgdoerfer			0				159,500				797,500				1,595,000				1,492,761				110	%			120	%

The pre-established objective financial targets under this program for fiscal 20102011 were based on operating income, subject to adjustments for extraordinary items aspursuant to the 2011 Cash Incentive Compensation Performance Plan and approved by the Compensation Committee. Operating income is used because it measuresis a performance measure over which executives can have significant impact. Operating incomeimpact and is also directly linked to the Company’s long-range growth plan and to performance that drives stockholder value. For executives that are dedicated to a single brand, their targets are based solely on their brand’s operating income.

For executives that have enterprise-wide responsibility, their targets are based 80% on a weighted average of the percentage achievement of major brand operating income targets and 20% on total Company operating income.

The following table shows each named executive officer’s incentive compensation target percentage of base salary and the operating income performance incentive targets and weighting used to determine the incentive payment:

 

Executive Officer		Target % of Base Salary				Short-Term Performance Incentive Target Weighting and Metric
Mr. Wexner		80% weighted average of major brand performance:
175	%		53%65% Victoria’s Secret operating income target, 20% Bath & Body Works operating income target, 7% LaSenza and Mast operating income targets and 20% total Limited Brands operating income target
Mr. Redgrave		25% Bath & Body Works operating income
	135	%	10% Mast Global and International operating income
Mr. Burgdoerfer			110	%	20% total Limited Brands operating income
Ms. Turney			160	%		100% Victoria’s Secret operating income target
Ms. Neal			120 75% Mast Global operating income
%  Mr. McGuigan		100% Bath & Body Works operating income target 25% weighted average of major brand performance

We setThe Compensation Committee sets operating income targets at the beginning of each six-month season based on an analysis of historical performance, income expectations for that brand, financial results of other comparable businesses and progress toward achieving our strategic plan.

In fiscal 2010,2011, the Compensation Committee set targets that reflected the uncertain economic environment and provided incentive to maximize sales and manage expenses. The seasonal operating income targets for Spring and Fall, respectively (by brand), for each of Messrs. Wexner, Burgdoerfer and Redgrave were: Victoria’s Secret, $261 million, $435 million; Bath & Body Works, $79 million, $334 million; LaSenza and Mast, $55 million, $84 million; and total Limited Brands (including our remaining smaller brands and corporate expenses), $271 million, $732 million. The operating income targets for Ms. Turney are based solely on Victoria’s Secret and for Ms. Neal are based solely on Bath & Body Works.

These targets represented significant growth in operating income over the record setting results we achieved in fiscal 2009, and Fall season targets were set at a level which, if achieved, would represent record-setting seasonal operating income for the brands.2010. The targets were designed to reflect stretch performance that was achievable based on operating plans and to not encourage our executive officers not to take unnecessary or excessive risks.

We believe

Spring Season

Fall Season

Operating Income Target

Actual Performance1

Operating Income Target

Actual Performance1

Total Limited Brands

$

467 million

$

574 million

$

929 million

$

973 million

Victoria’s Secret

406 million

486 million

585 million

597 million

Bath & Body Works

110 million

123 million

391 million

388 million

Mast Global2

75 million

89 million

88 million

114 million

1

Actual performance presents operating income on an adjusted basis which removes certain special items. The Company believes that these special items are not indicative of its ongoing operations due to their size and their nature. The Company uses adjusted financial information as key performance measures of results for purposes of evaluating performance internally.

2	Mast Global operating income represents an internal performance measure which does not correspond to amounts reported externally.

Threshold performance levels are set ranging from 85% of target to 89% of target. Maximum performance levels are set ranging from 109% of target to 122% of target.

Actual payouts based on the incentives under our short-term performance-based incentive compensation program contributed to executive officerabove performance that delivered operating income growth, significant improvementfor fiscal 2011 are set forth below and in merchandise margin rates, reduction in expenses and an increase in operating cash flow during fiscal 2010.the “Non-Equity Incentive Plan Compensation” column of the 2011 Summary Compensation Table below.

We do not believe that disclosure of our 2011 performance targets is relevant to an understanding of compensation for our 2010 fiscal year.

														Total Fiscal 2011 Incentive Payout
		Fiscal 2011 Target Incentive				Spring Incentive Payout				Fall Incentive Payout				Total Payout				% of     Target
Mr. Wexner		$	3,559,400			$	2,430,358			$	2,468,800			$	4,899,158				138	%
Ms. Turney			2,210,000				1,555,840				1,495,728				3,051,568				138	%
Mr. Redgrave			1,456,000				994,157				1,009,881				2,004,038				138	%
Mr. McGuigan			990,000				737,352				1,062,666				1,800,018				182	%
Mr. Burgdoerfer			900,000				614,520				624,240				1,238,760				138	%

To encourage stock ownership and to foster executive retention, executives who elect to receive up to 25% of their short-term performance-based incentive compensation in the form of Common Stock will also receive a matching restricted stock unit grant of 25% of the amount the executive elected to receive in Common Stock, (i.e. a match of up to 6.25%), which will cliff vest in full at the end of three years, subject to continued employment.

Equity-BasedLong-Term Performance-Based Incentive ProgramsProgram

The Compensation Committee believes thatOur long-term equity-based compensationperformance incentive program rewards past performance and encourages performance that enhances stockholder value as the ultimate value of equity awards realized by ensuring that our executive officers realize similar gains and losses as our stockholders. Weexecutives is determined by the stock price upon exercise or vesting. Additionally, we believe that the vesting requirement of our long-term equity compensation substantially increases the likelihood that we will be able to retain top performers. Our equity-based incentive program can include stock options, performance-based restricted stock units and time-vested restricted stock units. Executives are awarded

In determining the size of each named executive officer’s equity as partaward, the Compensation Committee considers individual performance, each officer’s contribution to the success of our annual merit review process based on general guidelines which includethe 2010 fiscal year while also taking into account competitive practice, the Company’s performance, the individual’s performanceoverall budget for equity compensation expense and responsibility level, competitive practice and the market price of our Common Stock.stockholder dilution. In fiscal 2010,2011, based on an evaluation of named executive officer and Company

performance in fiscal 2009,2010, stock options and restricted stock units were awarded to the named executive officersas set forth below and are detailed below in the Grants of Plan-Based Awards for Fiscal 20102011 table.

Equity awards are dated effective the later

		Value of Restricted Stock Units				Value of Stock Options				Total FY 2011 Equity Award Value
Ms. Turney		$	3,266,112			$	1,075,458			$	4,341,570
Mr. Redgrave			850,736				245,803				1,096,539
Mr. McGuigan			2,027,810				638,175				2,665,985
Mr. Burgdoerfer			1,076,722				354,534				1,431,256

Note: The equity award for our Chairman and CEO is determined on a different basis than that of the date of approval or the effective date for grantsour other named executive officers. The CEO award is described in connection with hirings, promotions, etc.

In connection with the payment to stockholders of the extraordinary cash dividends on April 19, 2010 and December 21, 2010, the Committee equitably adjusted (i) the number of shares available for grant under the 1993 Plan as well as (ii) outstanding awards under the 1993 Plan (which, in the case of options, included adjustments to both the number of shares of Common Stock covered by the option as well as the exercise price), in each case pursuant to the terms of the 1993 Plan.detail below.

Stock Options

Stock options generally comprise 25% of the value of theeach executive’s annual equity-based long-term incentive opportunity award. Stock options are awarded to align executive interests with stockholder interests by creating a direct link between compensation and stockholder return and to help retain executives. In fiscal 2010, stock options were awarded to our named executive officers in the amounts set forth below in the Grants of Plan-Based Awards for Fiscal 2010 table. Unless noted otherwise,Stock options granted to each named executive officer vest over three to five years, subject to continued employment, in three equal installments beginning on the first anniversary of the grant date.employment. The exercise price for these options is equal to the closing price of the underlying Common Stock on the grant date.

Restricted Stock Units

Restricted stock units generally comprise 75% of the value of executives’each executive’s annual equity-based long-term incentive opportunity award. Restricted stock units are awarded to encourage ownershipalign executive rewards with those realized by stockholders (through the market value of Common Stock,our stock), retain superior executive talent (through the time vesting requirements) and reward exceptional executive performance.individual performance (through the annual determination of the size of the award).

Restricted stock units granted to our executive officers are subject to a performance metric, specifically operating income. The operating income performance target required for our named executive officers to earn their performance-based restricted stock units was achievement of $100 million of operating income for the 20102011 fiscal year. ThisThe primary purpose of this predetermined performance hurdleobjective is intended to satisfy the requirements for tax deductibility under Code Section 162(m). In order toTo ensure the retentive value of the program, ifonce the performance metric is(as described above) was achieved the restricted stock units generally cliffin fiscal 2011, these awards vest on the third anniversaryover a period of the grant date,three to five years, subject to continued employment.

As noted above, time-vested restricted stock units are awarded to executives as a match on his or her election to receive a portion of his or her short-term performance-based incentive compensation in stock,Common Stock, rather than cash, and as deemed appropriate by the Compensation Committee.

Equity Award Mechanics

Equity awards are dated effective the date of approval unless the approval occurs before the hire or other relevant effective date, in which case, the later date applies.

In connection with the payment to stockholders of extraordinary cash dividends on July 1, 2011 and December 23, 2011, pursuant to the terms of our equity plan, we equitably adjusted (i) the number of shares available for grant under the 2011 Stock Option and Performance Incentive Plan (2011 Plan) as well as

(ii) outstanding awards under the 1993 Stock Option and Performance Incentive Plan (1993 Plan) and the 2011 Plan (which, in the case of options, included adjustments to both the number of shares of Common Stock covered by the option as well as the exercise price).

CEO Equity Award Determination

Beginning with the 2010 fiscal year, the Compensation Committee implemented a process in which Mr. Wexner’s equity grant would be a “split grant” delivered in two parts—one in March at the same time other senior executives receive equity grants, and one in the following January. Mr. Wexner’s total annual equity grant value, including both the March and January grants, is targeted at 4.0 times his base salary, and the value can range between 1.6 times to 8.0 times his base salary, depending on individual and Company performance.

The total value of the equity compensation awarded to Mr. Wexner is based on pre-established Company and individual performance factors described below and is designed to further align with stockholder interests. The Compensation Committee seeks to ensure that the objective performance measures for both the March and January performance-based restricted stock units satisfy the requirements for tax deductibility under Code Section 162(m) while the performance considerations described below determine the size of the overall grant.

The table below outlines the split of Mr. Wexner’s equity grant and its timing of delivery:

		Award as a   Multiple of Pay		Award Structure		Considerations
March		1.6		75% Performance-based RSUs 25% Stock Options Vests over three years		•     A “baseline award” •     Below market competitiveness •     Performance metric designed to meet the requirements for tax deductibility under Code Section 162(m)
January		0 to 6.4		75% Performance-based RSUs 25% Stock Options Vests over five years		•     Size of the award determined based on qualitative, objective and financial measurements •     Target value is 2.4 times base salary based on performance at the “Meets Objectives” level. When combined with the March grant, total value at target is 4.0 times base salary. •     Performance metric designed to provide incentive to maximize operating income and outperform other retailing companies.

The Compensation Committee has determined that the performance measures applicable to the January 2012 restricted stock unit award will also be applicable to Mr. Wexner’s March 2012 restricted stock unit award, if any. It is the intent of the Compensation Committee that similar performance measures will apply to Mr. Wexner’s January restricted stock unit award granted at the end of fiscal 2012, if any. The composition of each award—March and January—is described further below.

March 2011 Award

The value of the March equity grant is set below the competitive market at a value of approximately 1.6 times Mr. Wexner’s base salary. This grant is intended to provide a baseline award. The Compensation Committee awarded our named executive officersMr. Wexner an equity grant in March 2011 with a value of $2.8 million. This award was

delivered 75% in the form of performance-based restricted stock units in fiscal 2010and 25% in the amountsform of stock options. The objective performance measure for Mr. Wexner to earn the March performance-based restricted stock units has been set forth below inat achievement of at least $100 million of operating income for the Grants of Plan-Based Awards for Fiscal 2010 table. 2011, 2012 or 2013 fiscal years.

Since the performance metric (as described above)condition was achievedmet in fiscal 2010, these awardsyear 2011, the restricted stock units will vest 100% on the third anniversary of the grant date,date. Stock options vest pro-rata over a three year period. All awards are subject to continued employment.

Individual EquityJanuary 2012 Award Determinations

InThe January equity grant is intended to recognize financial, strategic and operational performance for the fiscal year with a value ranging from zero to a multiple of 6.4 times Mr. Wexner’s base salary, as determined by the Compensation Committee based on the performance considerations outlined below. These objectives were established as a component of management’s and Mr. Wexner’s annual performance scorecard. As the fiscal year draws to a close, the Compensation Committee carefully and thoroughly assesses both Mr. Wexner’s performance and the Company’s performance, considering these objectives, and if appropriate, awards Mr. Wexner an equity grant in January.

The range in values for the January grant is determined based on a benchmark of equity grant values of CEO’s in our peer group. The top of the range (a multiple of 6.4 times base salary) has been strategically positioned so that if all qualitative, objective and financial performance targets for the year are exceeded, Mr. Wexner’s equity grant value would be at the top of our peer competitors. Conversely, if performance is below targeted levels, Mr. Wexner’s equity grant value would be below the median of the peer group. At the “Meets Objectives” level Mr. Wexner’s equity award would generally reflect the median of our peers. For example, if the Company’s performance is less than 20% of target, Mr. Wexner would receive little or no equity grant. Thus, while factors other than performance against financial targets are considered in determining the size of each named executive officer’slong-term equity award,grant, the Compensation Committee considered individualconsiders these other factors, including such things as leadership talent development, the development of new business opportunities, and success in fostering a productive culture, as adjustments from the base provided by financial performance. In addition, once the size of the grant was determined, the Compensation Committee imposed rigorous performance each officer’s contributionmetrics that the Company must achieve over the vesting period in order for Mr. Wexner to vest in the grant.

Performance Considerations		Value of January Equity Grant
Income, strategic business and personal objectives not met		No equity grant
Income objectives met at target for both the spring and fall seasons, achievement of strategic business objectives, personal, leadership development and recruiting and retention objectives met		2.4 times base salary
Income objectives exceeded for both the spring and fall seasons, strategic business objectives exceeded, personal, leadership development and recruiting and retention objectives exceeded		Up to 6.4 times base salary

In January 2012, the Compensation Committee awarded Mr. Wexner an equity grant with a reported value of $8.4 million based on the performance of the Company and his role and leadership in its accomplishments for the current fiscal year (with no particular weighting or formula), including:

Maximizing the profitability of our core brands through increased sales, careful inventory management and improved execution;

Expansion of company owned operations outside the United States;

Growth of new brand concepts;

Accomplishment of talent and cultural objectives;

Implementation of infrastructure and systems to enhance productivity and enable future growth; and

Optimization of capital structure.

Similar to the successMarch award, the January award was delivered 75% in the form of performance-based restricted stock units and 25% in the form of stock options. The Compensation Committee determined that the performance measures applicable to Mr. Wexner’s January 2012 restricted stock unit grant require that, for the vesting periods beginning January 26, 2012 and ending on the last day of the 2009Company’s 2013, 2014, 2015 and 2016 fiscal years, the Company’s cumulative adjusted operating income, as a percentage of cumulative sales, be in the top 1/3 of the S&P Retailing Index for such periods, also determined on a cumulative and adjusted basis. The outcome of such performance measure will be subject to review by an independent registered public accounting firm. The restricted stock units are eligible to vest over five years, with 20% eligible to vest on the second and third anniversaries of the grant date, and 30% on the fourth and fifth anniversaries, in each case subject to the performance measures being satisfied and continued employment. To the extent any tranche of the award that is eligible for vesting based on Company performance does not vest in any fiscal year, while taking into accountsuch tranche may vest in future years, subject to satisfaction of the Company’s overall budget forprescribed performance measure.

As previously noted, the largest component of Mr. Wexner’s compensation is long-term performance-based equity compensation expensethat vests over time, assuming performance conditions are met, and, stockholder dilution.

therefore, is not realizable on an annual basis. Further, the ultimate value, if any, is dependent on future performance. In addition, the Compensation Committee has determined that the performance measures applicable to the January 2012 restricted stock unit award will also be applicable to Mr. Wexner’s March 2012 restricted stock unit award, if any. It is the intent of the Compensation Committee that similar performance measures will apply to Mr. Wexner’s January restricted stock unit award granted at the end of fiscal 2012, if any.

Retirement Planand Other Post-Employment Benefits

The Compensation Committee believes that, in addition to short- and long-term compensation, it is important to provide our executive officers with competitive post-employment compensation. Post-employment compensation consists of two main types—qualified and non-qualified defined contribution retirement plan benefits and termination benefits. The Compensation Committee believes that retirement plan benefits and termination benefits are important components in a well-structured executive officer compensation package, and the Compensation Committee also seeks to ensure that the combined package is competitive at the time the package is negotiated with each executive officer.

The Company does not sponsor a defined benefit retirement plan as we do not believe that such a plan best serves the needs of our associates or the business. Retirement Plan Benefits

The Company sponsors both a tax-qualified defined contribution retirement plan and a non-qualified supplemental retirement plan. Participation in the qualified plan is available to associates who meet certain age and service requirements. Participation in the non-qualified plan is made available to associates who meet certain age, service, job level and compensation requirements. Our named executive officers participate in both plans.

The qualified plan permits participating associates to elect contributions up to the maximum limits allowable under the Code. The Company matches associates’ contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates’ eligible annual compensation and years of service. Associates’ contributions and Company matching contributions to the qualified plan vest immediately. Additional Company contributions and the related investment earnings are subject to vesting based on years of service.

The non-qualified plan is an unfunded plan which provides benefits beyond the Code limits for qualified defined contribution plans. The plan permits participating associates to elect contributions up to a maximum percentage of eligible compensation. The Company matches associates’ contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates’ eligible compensation and years of service. The plan also permits participating associates to defer additional compensation up to a maximum amount which the Company does not match.

Associates’ accounts are credited with interest using a rate determined annually based on factors which include an evaluation of the 10-year and 30-year borrowing rates available to the Company and the long-term Applicable Federal Rate published by the Internal Revenue Service. We believe that borrowing rates are an important consideration in determining the rate because unfunded associate contributions to the plan have a positive impact on Company cash flow, thus reducing the borrowing needs of the Company. The application of a long-term borrowing rate formula generally results in a rate that is considered “above market” as defined by SEC guidelines.

Associates’ contributions to the non-qualified plan and the related interest vest immediately. Company contributions and credits to the non-qualified plan and the related interest are subject to vesting based on years of service. Associates generally may elect in-service distributions for the unmatched deferred compensation component only. The remaining vested portion of associates’ accounts in the plan will be distributed upon termination of employment in either a lump sum or in equal annual installments over a specified period of up to 10 years.

Additional tabular disclosure of certain termination benefits is set forth below under the heading “Retirement and Other Post-Employment Benefits.”

Perquisites

We provide our executive officersAssociates’ accounts are credited with perquisites that the Compensation Committee believes are reasonable and in the best interests of the Company and its stockholders. We provide our executive officers

reimbursement of financial planning costs of up to $15,000. For fiscal 2010, we also provided reimbursement of up to $10,000 of eligible medical costs not covered under the Company’s standard health benefit package. This benefit has been discontinued in fiscal 2011. Ms. Turney hasinterest using a life insurance policy with premiums that are paid by the Company. We also provide for tax equalization payments on certain taxable income in order to maximize the benefit provided by such items. The value of these benefits, to the extent utilized by our named executive officers, is disclosed below in footnote (6) to the 2010 Summary Compensation Table.

The Board of Directors has approved a security program (the “Security Program”) that provides security services to Mr. Wexner and his family. We require these security measures for the benefit of the Company and believe these security costs are appropriate given the risks associated with Mr. Wexner’s role and position. We periodically hire a third party to review our Security Program to verify that a bona fide business oriented security concern exists and that the Security Program costs are reasonable and consistent with these concerns. The Security Program requires Mr. Wexner to use corporate provided aircraft, or private aircraft that is in compliance with the Security Program, whether the purpose of the travel is business or personal.

The cost of security services which are not business related have been reimbursed to the Company by Mr. Wexner. In addition, to the extent that corporate provided aircraft is used by Mr. Wexner or any executive officer for personal purposes, he or she has reimbursed the Companyrate determined annually based on the greaterlong-term Applicable Federal Rate published by the Internal Revenue Service. In general, the rate is set at what is considered “above market” as defined by SEC guidelines. We believe that an above market rate is appropriate based on the fact that unfunded associate contributions to the plan have a positive impact on Company cash flow, thus reducing the borrowing needs of the amount established by the IRS as reasonable for personal use or the aggregate incremental cost associated with the personal use of the corporate owned aircraft as determined by an independent, third party aircraft costing service.Company.

Termination Benefits: Severance Agreements and Change in Control Agreements

The Compensation Committee believes that severance and change in control arrangements have unique characteristics and value. For example, severance agreements provide protection for prospective executives who may forego significant bonuses and equity awards at the companies they are leaving or who face relocation expenses and family disruption. Generally, executives are not willing to accept such risks and costs without protection in the event their employment is terminated due to unanticipated changes, including a change in control. Additionally, executives often look to severance agreements to provide protection for lost professional opportunities in the event of a change in control and consequently assign significant value to them.

The Compensation Committee believes that severance arrangements protect stockholder interests by retaining management should periods of uncertainty arise. Because our severance arrangements are structured to serve the above purposes and because severance agreements represent a contractual obligation of our Company, decisions relating to other elements of compensation have minimal effect on decisions relating to existing severance agreements.

Due to his unique role as the founder of the Company, Mr. Wexner is not covered by a severance or change in control agreement. However, consistent with the treatment for all stock plan participants under the terms of both our 1993 Plan in the event of a change in control or death,and our 2011 Plan, all of Mr. Wexner’s unvested stock options and restricted stock units will become vested. Also under the 1993 Plan,vested upon death. Upon retirement Mr. Wexner’sor disability, restricted stock units will vest pro-rata based on the fraction of whole months he worked from the grant date over the full vesting period (i.e.(i.e., one-third will vest if twelve full months are completed from the grant date for a grant that would otherwise would vest 100% three years from the grant date). In the event of a change in control, all awards granted under the 1993 Plan will become vested and awards granted under the 2011 Plan will become vested if Mr. Wexner’s employment is terminated other than for cause within 24 months of the change in control.

We have entered into severance and change in control agreements with all of our named executive officers other than Mr. Wexner as noted above. The benefits payable under these arrangements in certain circumstances are disclosed below under the heading “Estimated Post-Employment Payments and Benefits.” These agreements generally provide that, if we fail to extend the executive’s agreement or terminate the executive’s employment without cause, or if the executive terminates his or her employment for good reason, the executive will continue to receive his or her base salary for one year after the termination date. If the executive agrees to execute a general release of claims against the Company, the executive will also be entitled to receive an

additional year of salary continuation and the amount of incentive compensation that the executive would have otherwise received during the first year after termination.

In connection with a change in control of Limited Brands, in the event that the executive’s employment is terminated either by us without cause or by the executive for good reason, subject to the executive’s execution of a general release of claims against us, the executive would be entitled to a severance benefit equal to two times the executive’s base salary, plus an amount equal to the sum of the executive’s four previous semi-annual payouts under our short-term performance-based incentive compensation plan, together with a pro-rata amount for the short-term incentive compensation performance period in which the executive’s employment terminated. In addition, any unvested stock awards wouldgranted under the 1993 Plan will become vested. Invested and awards granted under the 2011 Plan will become vested if the executive’s employment is terminated other than for cause within 24 months of the change in control. During fiscal 2011, Ms. Turney’s and Mr. Burgdoerfer’s employment agreements were amended to

remove the provision for tax reimbursement payments in the event any “parachute” excise tax is imposed on payments made in connection with a change in control. Consequently, none of our named executive officers are entitled to a tax gross-up upon a change in control. It is the Company’s policy not to enter into any new arrangements providing for change in control excise tax gross-up payments.

Additional tabular disclosure of certain termination benefits is set forth below under the heading “Retirement and Other Post-Employment Benefits.”

Perquisites

We provide our executive officers with minimal perquisites that the Compensation Committee believes are reasonable and in the best interests of the Company and its stockholders. These perquisites include the reimbursement of financial planning costs of up to $15,000, payment of life insurance policy premiums for Ms. Turney and tax equalization payments on certain taxable contributions to the non-qualified retirement plan in order to maximize the benefit provided by such items. This benefit is provided to all participants in the plan. The value of these benefits, to the extent utilized by our named executive officers, is disclosed below in footnote (6) to the 2011 Summary Compensation Table.

The Board of Directors has approved a security program (the “Security Program”) that provides security services to Mr. Wexner and his family. We require these security measures for the benefit of the Company and believe these security costs are appropriate given the risks associated with Mr. Wexner’s role and position. We periodically hire a third party to review our Security Program to verify that a bona fide business oriented security concern exists and that the Security Program costs are reasonable and consistent with these concerns. The Security Program requires Mr. Wexner to use corporate provided aircraft, or private aircraft that is in compliance with the Security Program, whether the purpose of the travel is business or personal.

The cost of security services which are not business related have been reimbursed to the Company by Mr. Burgdoerfer, suchWexner. In addition, to the extent that corporate provided aircraft is used by Mr. Wexner or any executive will be entitled to tax reimbursement payments.officer for personal purposes, he or she has reimbursed the Company based on the greater of the amount established by the IRS as reasonable for personal use or the aggregate incremental cost associated with the personal use of the corporate owned aircraft as determined by an independent, third party aircraft costing service.

Common Stock Ownership Guidelines

The Compensation Committee strongly encourages stock ownership of shares of Common Stock by the Company’s named executive officers. In January 2005, the Company introducedOur named executive officers are subject to minimum stockholding guidelines to be met by 2010 for the named executive officer group.guidelines. Any individual promoted or hired into a position subject to these guidelines will have a five-year period in which to meet the stock ownership requirements. The stockholding requirements reflect the value of Common Stock held and can be met through direct or beneficial ownership of Common Stock, including shares of Common Stock held through the Company’s stock and retirement plans. In addition to aligning the interests of our named executive officers with those of our stockholders, the stock ownership guidelines promote a long-term focus and discourage inappropriate risk-taking.

The minimum guideline for the CEO is ownership of Common Stock with a value of five times his base salary. Mr. Wexner’s Common Stock ownership far exceeds this minimum requirement.

Title		Share Ownership Guideline
Chief Executive Officer		5 times base salary
Other Named Executive Officers		3 times base salary

The minimum guideline for the other named executive officers is ownership of Common Stock with a value of three times his or her base salary. All of the named executive officers hold shares of Common Stock with a value in excess of the ownership guidelines as of the end of the 20102011 fiscal year. Details regarding the ownership of shares of Common Stock by the named executive officers are set forth below in the Security Ownership of Directors and Management table.

In addition to stock ownership guidelines for executives, after four years of membership on the Board, members of our Board of Directors must maintain ownership of at least the number of shares of Common Stock received as Board compensation over the previous four years. All non-executive members of our Board are in compliance with this policy.

Recovery of Compensation Awards

We would seek to recover, under the relevant provisions of the Sarbanes-Oxley Act, previously awarded bonuses or equity-based compensation or profits in the event of a restatement of financial or other performance results.

Tax Deductibility

The Compensation Committee generally seeks to structure executive compensation in a tax efficient manner. The Limited Brands 20072011 Cash Incentive Compensation Performance Plan and the 19932011 Plan are intended to qualify payments under the Company’s performance-based cash incentive compensation program and equity-based incentive program, respectively, for tax deductibility under Code Section 162(m). Successors to these plans are being submitted to stockholders for approval at the meeting to which this proxy statement relates in order to continue compliance with certain provisions under Code Section 162(m). The Compensation Committee has not elected not to adopt a policy requiring all compensation to be tax deductible to maintain flexibility in structuring executive compensation to attract highly qualified executive talent and to further our business goals and compensation philosophy.

CEO Compensation

Mr. Wexner has been CEO since founding the Company in 1963. Our compensation consultant, Towers Watson conducts a competitive review and analysis to determine base salary and short- and long-term incentive guidelines for Mr. Wexner’s position using the peer group companies listed above.

In fiscal 2010, as in prior years, in establishing Mr. Wexner’s compensation package the Compensation Committee considered competitive practices, the extent to which the Company achieved operating income and sales objectives, progress regarding brand strategy, and the continued recruitment and development of key leadership talent. These factors are considered in the aggregate and are not assigned a specific weight.

As described earlier, the Compensation Committee continues to emphasize variable, performance-based compensation components for all executives, including Mr. Wexner. Accordingly, Mr. Wexner did not receive any increase to his base salary during fiscal 2009 or fiscal 2010. In March 2010, Mr. Wexner was awarded stock options and restricted stock units and his incentive compensation target was increased from 160% to 175%.

The Compensation Committee awarded Mr. Wexner’s annual equity grant in March 2010 consistent with the level awarded in 2009 using the same considerations used to determine the equity awards for the other named executive officers; this award was valued at $2.9 million and delivered 75% in performance-based restricted stock units and 25% in stock options. In addition, as discussed in the “Executive Summary” above, the Compensation Committee awarded Mr. Wexner an equity grant in January 2011 based on the performance of the Company and his role and leadership in its accomplishments for the 2010 fiscal year, including:

Maximizing the profitability of our core brands through increased sales and merchandise margins, careful inventory management and improved execution;

Expansion of company owned operations into Canada;

Growth of new brand concepts;

Implementation of infrastructure and systems to enhance productivity and enable future growth; and

Accomplishment of talent retention objectives.

The January 2011 award was valued at $8.8 million. 75% of the value was awarded as performance-based restricted stock units and 25% of the value was awarded as stock options. The quantitative performance measure for Mr. Wexner to earn the performance-based restricted stock units is achievement of at least $100 million of operating income for the 2011, 2012, 2013, 2014 or 2015 fiscal years. This objective performance measure is intended to satisfy the requirements for tax deductibility under Section 162(m). If the performance condition is met, the restricted stock units and option awards will vest 20% on the second and third anniversaries of the grant date and 30% on the fourth and fifth anniversaries of the grant date. In each case, vesting is subject to continued employment.

It is the Compensation Committee’s current intent to continue to assess the Company’s performance as each fiscal year draws to a close and, if appropriate, award Mr. Wexner an equity grant. The Committee has not established a specific formula for determining the size or composition of any potential second annual award but it will broadly consider the Company’s and Mr. Wexner’s market position and:

Financial performance as indicated by the achievement of seasonal operating income targets;

Achievement of the Company’s strategic business plan objectives;

Achievement of individual performance goals for both Mr. Wexner and his direct reports; and

Other factors as determined by the Compensation Committee.

While the performance measures provide a framework for determining the size of Mr. Wexner’s equity award, the Compensation Committee retains discretion over the size of the grant, including making no award at all.

Compensation Governance

Our executive compensation program is overseen by the Compensation Committee of the Board. Compensation Committee members are appointed by our Board and meet the independence and other

requirements of the NYSE and other applicable laws and regulations. Compensation Committee members are selected based on their knowledge and experience in compensation matters from their professional roles and their roles on other boards.

As part of its self-evaluation process, the Compensation Committee considers best practices and compliance with the highest governance standards. The Compensation Committee continued its work to enhance communication with the Board and maximize the effectiveness of the Compensation Committee. The role of the Compensation Committee and information about its meetings are set forth elsewhere in this proxy statement.

The Compensation Committee participated in the preparation of the Compensation Discussion and Analysis and recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement

The Compensation Committee’s charter is available on our website athttp://www.limitedbrands.com.

Committee Delegation

Company management, including the Executive Vice President of Human Resources and the Senior Vice President of Talent Management and Total Rewards, generally prepare the materials for and attend Compensation Committee meetings, along with a representative from the Office of the General Counsel who records the minutes of the meeting, the Chief Administrative Officer and the Chief Financial Officer. This management team proposes compensation program design and recommends compensation levels and stock awards for executives.executives other than for themselves. The CEO does not play a role in recommending his own compensation. The Compensation Committee makes the final determination regarding management’s proposals. The Compensation Committee regularly meets in executive session without management present.

The Compensation Committee may delegate its authority to subcommittees or the Chair of the Compensation Committee when it deems appropriate and in the best interests of the Company. In accordance with its charter, the Compensation Committee has delegated to our Executive Vice President of Human Resources the authority to make grants of stock rights or options under and in accordance with the Company’s stock incentive plan with a value up to $250,000$400,000 in any year to any associate who is not a Section 16 officer of the Company or a senior leadership team member.

Compensation Consultant

As permitted by its charter, the Compensation Committee retained Towers Watson as its independent executive compensation consultant to assist in its evaluation of CEO and executive officer compensation levels, severance arrangements and program design. The Compensation Committee, considering recommendations from our management team, determines the work to be performed by the consultant. The consultant works with management to gather data required in preparing analyses for Compensation Committee review.

Specifically, the consultant provides the Compensation Committee with the following services, including but not limited to:

market trend information allowing the Committee to stay abreast of changing market practices;

data and recommendations to enable the Compensation Committee to make informed decisions and to stay abreast of changing market practices. Towers Watson worked with the Compensation Committee in thedecisions;

program design ofassistance, including the January 20112012 stock award for Mr. Wexner. In addition, Towers Watson provided Wexner;

analysis on the alignment of pay and performance, provided performance;

consultation on our executive compensation strategy and peer group selectionselection; and assisted

assistance in the processpreparation of preparing this disclosure.

The Compensation Committee has the sole authority to retain and terminate any independent executive compensation consultant. To that end, it periodically reviews the performance of the consultant and considers alternative consultants. In considering the advice provided by an executive compensation consultant, and whether to retain or continue the retention of an executive compensation consultant, the Compensation Committee requires that the Company regularly inform the Compensation Committee of all work provided or to be provided by the consulting firm and its affiliates to the Company in addition to the executive compensation services provided to the Compensation Committee. Additionally, the Compensation Committee reviews all bills rendered by the compensation consulting firm to the Company for services provided to both the Company and the

Compensation Committee. In addition to the services provided at the request of the Compensation Committee, a separate division of Towers Watson provides a call center tracking system for which we pay quarterly software usage fees, aggregating less than $120,000 annually. The Compensation Committee believes that the provision of this work by Towers Watson is not material and does not impair the independence and objectivity of advice provided to the Compensation Committee on executive compensation matters.

Conclusion

In summary, fiscal 2011 was a year of continued strong financial and operational performance for our Company. We continue to deliver exceptional returns and are committed to creating long-term value for our stockholders. As we have demonstrated in the above disclosure, our pay levels and programs are highly aligned with the performance of the Company. We believe when we deliver above target results, our executives should receive above target compensation.

Based on the above, we recommend stockholders vote “FOR” our executive compensation program.

20102011 Summary Compensation Table

The following table sets forth information concerning total compensation earned by or paid to our Chief Executive Officer, Chief Financial Officer and our three other most highly compensated executive officers during the fiscal year ended January 29, 201128, 2012 (the “named executive officers”).

 

Name and Principal Position		Year				Salary ($)				Bonus ($)(1)				Stock Awards ($)(2)(3)				Option Awards ($)(2)(3)				Non-Equity Incentive Plan Compen- sation ($)(4)				Change in Pension Value and Non- qualified Deferred Compen- sation Earnings ($)(5)				All Other Compen- sation ($)(6)				Total ($)				Year				Salary ($)				Bonus ($)(1)				Stock Awards ($)(2)(3)				Option Awards ($)(2)(3)				Non-Equity Incentive Plan Compen- sation ($)(4)				Change in Pension Value and Non- qualified Deferred Compen- sation Earnings ($)(5)				All Other Compen- sation ($)(6)				Total ($) (1)(2)(3) (4)(5)(6)
Leslie H. Wexner			2010			$	1,924,000			$	0			$	8,658,055			$	2,988,313			$	6,302,351			$	323,871			$	311,900			$	20,508,490				2011			$	1,924,000			$	0			$	8,822,133			$	2,596,103			$	4,899,158			$	339,918			$	649,172			$	19,230,484
Chairman of the Board, CEO			2009				1,924,000				0				1,882,327				507,794				4,897,119				388,325				1,222,405				10,821,970				2010				1,924,000				0				8,658,055				2,988,313				6,302,351				323,871				311,900				20,508,490
			2008				1,909,769				0				1,329,447				585,386				1,523,192				252,015				1,312,532				6,912,341				2009				1,924,000				0				1,882,327				507,794				4,897,119				388,325				1,222,405				10,821,970
Sharen J. Turney			2010				1,250,000				0				870,856				299,939				3,998,400				163,204				485,799				7,068,198				2011				1,290,385				0				3,266,112				1,075,458				3,051,568				181,168				730,224				9,594,915
Executive Vice President, CEO/President, Victoria’s Secret			2009				1,250,000				1,925,023				955,093				257,654				2,682,750				185,320				383,754				7,639,594
			2008				1,240,385				2,006,173				15,260,956				198,527				1,090,500				112,060				458,882				20,367,483
CEO/President, Victoria’s Secret																																							2010				1,250,000				0				870,856				299,939				3,998,400				163,204				485,799				7,068,198
																																							2009				1,250,000				1,925,023				955,093				257,654				2,682,750				185,320				383,754				7,639,594
Martyn R. Redgrave			2010				1,040,000				0				817,059				249,552				2,628,007				24,038				371,479				5,130,135				2011				1,040,000				0				850,736				245,803				2,004,038				35,280				509,352				4,685,209
Executive Vice President, Chief Administrative Officer			2009				1,040,000				0				651,251				171,545				2,150,762				29,117				210,571				4,253,246				2010				1,040,000				0				817,059				249,552				2,628,007				24,038				371,479				5,130,135
			2008				1,032,308				0				2,912,045				237,318				668,970				45,465				219,797				5,115,903				2009				1,040,000				0				651,251				171,545				2,150,762				29,117				210,571				4,253,246
Diane L. Neal			2010				985,962				0				696,677				239,947				1,981,920				40,452				275,336				4,220,294
Executive Vice President, CEO, Bath & Body Works			2009				927,000				0				566,805				152,906				2,039,400				35,820				163,366				3,885,297
			2008				921,808				0				2,334,992				141,022				241,873				16,683				121,047				3,777,425
Charles C. McGuigan(7) CEO/President, Mast Global																																							2011				891,923				0				2,027,810				638,175				1,800,018				31,624				347,252				5,736,802
Stuart B. Burgdoerfer			2010				725,000				0				548,145				173,964				1,492,761				11,708				232,541				3,184,119				2011				745,192				0				1,076,722				354,534				1,238,760				18,119				313,011				3,746,338
Executive Vice President, Chief Financial Officer			2009				725,000				0				573,938				149,280				1,153,330				9,037				159,378				2,769,963				2010				725,000				0				548,145				173,964				1,492,761				11,708				232,541				3,184,119
			2008				710,577				0				1,572,102				110,291				358,730				3,336				174,315				2,929,351				2009				725,000				0				573,938				149,280				1,153,330				9,037				159,378				2,769,963

 

(1)	Performance-based incentive compensation bonuses are disclosed in this table under the Non-Equity Incentive Plan Compensation column. None of our named executive officers received a nonperformance-based award in fiscal 2010.2011.

 

(2)

The value of stock and option awards reflects the aggregate grant date fair value, excluding estimated forfeitures, computed in accordance with Accounting Standards Codification (“ASC”) Subtopic 718Compensation—Stock Compensation,, for each award. Stock options are valued using the Black-Scholes option pricing model. See Note 20 to the Company’s financial statements filed on March 18, 201123, 2012 on Form 10-K for the related assumptions for stock options granted during the 2011, 2010 2009 and 20082009 fiscal years and for a discussion of our assumptions in determining the aggregate grant date fair value of these awards. Long-term equity awards vest over time and, therefore, are not realizable on an annual basis nor is the ultimate value determinable without reference to future performance.

 

(3)	Stock and option awards were granted to each named executive officer under the Company’s amended and restated 1993 Plan and the 2011 Plan. Awards are long-term compensation, vesting over periods from three to five years and are not realizable on an annual basis.

The value of stock awards granted in 2008 includes special performance-based restricted stock unit grants awarded to Ms. Turney, Mr. Redgrave, Ms. Neal and Mr. Burgdoerfer intended to assure retention, drive performance and further alignment with stockholder interests. These awards, with the exception of the grant to Ms. Turney, vest 100% three years from the date of grant, subject to continued employment. Ms. Turney’s award was designed to provide significant retentive value and vests over seven years (40% after four years and 20% after each of five, six and seven years), subject to continued employment. In addition to the vesting requirement, these awards were earned based on the achievement of operating income as a percentage of sales above the median of this performance measure for the companies listed in the S&P 500 Retailing Index in 2008.

(4)

Represents the aggregate of the non-equity performance-based incentive compensation for the applicable fiscal Spring and Fall selling seasons. Incentive compensation targets are set based on a percentage of base salary and are paid seasonally based on the achievement of operating income results. The following table illustrates the amount of the compensation paid in cash, stock and voluntarily deferred:

 

		Paid in Cash ($)				Paid in Stock ($)				Deferred Cash ($)				Deferred Stock ($)				Total ($)				Paid in Cash ($)				Paid in Stock ($)				Deferred Cash ($)				Deferred Stock ($)				Total ($)
Mr. Wexner		$	6,302,351			$	0			$	0			$	0			$	6,302,351			$	4,899,158			$	0			$	0			$	0			$	4,899,158
Ms. Turney			3,880,029				0				118,371				0				3,998,400				2,961,371				0				90,197				0				3,051,568
Mr. Redgrave			2,160,342				391,375				76,290				0				2,628,007				1,946,467				0				57,571				0				2,004,038
Ms. Neal			1,925,197				0				56,723				0				1,981,920
Mr. McGuigan																							1,322,512				241,123				236,383				0				1,800,018
Mr. Burgdoerfer			1,446,643				0				46,118				0				1,492,761				1,200,101				0				38,659				0				1,238,760

 

(5)

Limited Brands does not sponsor any tax-qualified or non-qualified defined benefit retirement plans. For fiscal 2010,2011, the amounts shown represent the amount by which earnings, at a rate equivalent to 6.82%5.99% compounded monthly on each named executive officer’s non-qualified deferred compensation account balance, exceeds 120% of the applicable federal long-term rate.

 

(6)	The following table details all other compensation paid to each named executive officer during our last fiscal year:

 

		Financial planning services provided to executive ($)				Life insurance premiums paid on executive’s behalf ($)				Tax equal- ization payments ($)				Reimburse- ment of medical costs not covered  by the Company’s standard health plan ($)				Cash payout of fractional shares due to special dividend stock award adjustment ($)				Company contributions to the executive’s qualified and non-qualified retirement plan account ($)				Total ($)				Financial planning services provided to executive ($)				Life insurance premiums paid on executive’s behalf ($)				Tax equalization payments ($)				Reimbursement of medical costs not covered by the Company’s standard health plan ($)				Cash payout of fractional shares due to special dividend stock award adjustment ($)				Company contributions to the executive’s qualified and non-qualified retirement plan account ($)				Total ($)
Mr. Wexner		$	0			$	0			$	11,398			$	7,262			$	93			$	293,147			$	311,900			$	0			$	0			$	24,808			$	575			$	537			$	623,252			$	649,172
Ms. Turney			4,750				7,730				20,742				1,772				292				450,513				485,799				9,500				7,730				23,156				609				496				688,733				730,224
Mr. Redgrave			9,100				0				13,109				2,007				268				346,995				371,479				0				0				18,892				40				455				489,965				509,352
Ms. Neal			0				0				7,737				485				164				266,950				275,336
Mr. McGuigan																															2,150				0				11,168				69				380				333,485				347,252
Mr. Burgdoerfer			7,000				0				7,438				10,000				311				207,792				232,541				7,000				0				10,889				1,208				335				293,579				313,011

(7)	Mr. McGuigan was not a named executive officer for fiscal 2009 or fiscal 2010 and, therefore his compensation is not disclosed for those years.

Grants of Plan-Based Awards for Fiscal 20102011

The following table provides information relating to plan-based awards and opportunities granted to the named executive officers during the fiscal year ended January 29, 2011.28, 2012.

 

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards(2)												All Other Stock Awards: Number of Shares of Stock or Units (#)(3)				All Other Option Awards: Number of Securities Underlying Options (#)(4)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(5)
Name																																													Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards(1)												All Other Stock Awards: Number of Shares of Stock or Units (#)(3)				All Other Option Awards: Number of Securities Underlying Options (#)(4)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(5)
		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)				All Other Stock Awards: Number of Shares of Stock or Units (#)(3)				All Other Option Awards: Number of Securities Underlying Options (#)(4)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(5)				Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)						Maximum (#)
Leslie H. Wexner			3/31/2010																0				0				0														3/31/2011																			0				0				0				0				75,613			$	30.5341			$	760,909
			3/31/2010																				102,592								102,592				0				0				2,144,676				3/31/2011																				75,613												0				0				2,245,804
			1/27/2011																0				0				0				0				245,325				29.41				2,249,630				1/26/2012																0				0				0				0				174,867				41.26				1,835,195
			1/27/2011																				245,325																				6,513,379				1/26/2012																				174,867																				6,576,328
						$	673,400			$	3,367,000			$	6,734,000																																			$	711,880			$	3,559,400			$	7,118,800
Sharen J. Turney			3/31/2010																0				0				0				0				41,657				22.50				299,939				3/31/2011																0				0				0				0				111,758				30.5341				1,075,458
			3/31/2010																				41,658								41,658				0				0				870,856				3/31/2011																				111,759												0				0				3,266,112
							400,000				2,000,000				4,000,000																																				442,000				2,210,000				4,420,000
Martyn R. Redgrave			3/5/2010																0				0				0				1,704				0				0				32,224				3/4/2011																0				0				0				3,158				0				0				92,046
			3/31/2010																0				0				0				0				34,659				22.50				249,552				3/31/2011																0				0				0				0				25,543				30.5341				245,803
			3/31/2010																				34,660								34,660				0				0				724,564				3/31/2011																				25,544												0				0				758,690
			9/3/2010																0				0				0				2,699				0				0				60,271								291,200				1,456,000				2,912,000
Charles C. McGuigan																																															3/4/2011																0				0				0				1,732				0				0				50,482
							280,800				1,404,000				2,808,000																																3/31/2011																0				0				0				0				66,317				30.5341				638,175
Diane L. Neal			3/31/2010																0				0				0				0				33,325				22.50				239,947
																																															3/31/2011																0				66,319				0								0				0				1,938,146
			3/31/2010																				33,326								33,326				0				0				696,677				9/2/2011																				0								1,171				0				0				39,182
							240,000				1,200,000				2,400,000																																				198,000				990,000				1,980,000
Stuart B. Burgdoerfer			3/5/2010																0				0				0				2,276				0				0				43,041				3/31/2011																0				0				0				0				36,842				30.5341				354,534
			3/31/2010																0				0				0				0				24,161				22.50				173,964				3/31/2011																				36,843												0				0				1,076,722
			3/31/2010																				24,162								24,162				0				0				505,104								180,000				900,000				1,800,000
							159,500				797,500				1,595,000

 

(1)

Non-Equity Incentive Plan Awards represent the Threshold, Target and Maximum opportunities under the Company’s 20072011 Cash Incentive Compensation Performance Plan for the 20102011 Spring and Fall seasons. The actual amount earned under this plan is disclosed in the 20102011 Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column.

 

(2)

Equity Incentive Plan Awards represent the Threshold, Target and Maximum payments of performance-based restricted stock units for the 20102011 fiscal year. For awards granted on 3/31/2010,2011, the actual number of performance-based restricted stock units earned is disclosed in the “All Other Stock Awards: Number of Shares of Stock or Units” column of this table.

Stock Awards granted to Mr. Wexner on January 27, 201126, 2012 are subject to achievement of at least $100 millionthe Company’s achievement of operating income foras a percentage of sales ranking in the 2011,top 1/3 of the S&P Retailing Index in each of the 2012, 2013, 2014, or 2015 and 2016 fiscal years.years, determined on a cumulative basis. If the performance condition is met, the restricted stock units will vest 20% on the second and third anniversaries of the grant date and 30% on the fourth and fifth anniversaries of the grant date, subject to continued employment.

Stock Awards granted to each of the named executive officers are earned based on achievement of the operating income target for fiscal 2011. The operating income target for fiscal 2011 was achieved and therefore, subject to continued employment, Stock Awards granted to Mr. Wexner and Mr. Redgrave on March 31, 2011 vest on March 31, 2013 and Stock Awards granted to Ms. Turney, Mr. McGuigan and Mr. Burgdoerfer vest over five years with 20% vesting on the second and third anniversaries of the grant date and 30% vesting on the fourth and fifth anniversaries of the grant date.

(3)	Stock Awards were granted pursuant to the Company’s amended and restated 1993 Plan and 2011 Plan.

Stock Awards granted to each of the named executive officers on March 31, 2010 were earned based on achievement of the operating income target for fiscal 2010 and vest on March 31, 2013.

Stock Awards granted on March 5, 20104, 2011 to Messrs. Redgrave and BurgdoerferMcGuigan and September 3, 20102, 2011 to Mr. Redgrave,McGuigan, represent awards made in connection with each of their elections to receive a portion of his or hertheir cash-based incentive compensation bonus in shares of Common Stock. The grants were made based

on the Fall 20092010 bonus paid on March 5, 20104, 2011 and the Spring 20102011 bonus paid on September 3, 2010.2, 2011. These grants vest 100% three years from the grant date, dependent on each named executive officer retaining the stock paid in lieu of cash.

In each case, the vesting of these awards is subject to continued employment.

Dividends are not paid or accrued on stock awards or stock units until such shares vest.

 

(4)

Option Awards were granted pursuant to the Company’s amended and restated 1993 Stock OptionPlan and Performance Incentive2011 Plan. Option grant dates were established on the date the grants were approved by the Compensation Committee of the Board and the exercise price is the closing price of Common Stock on the grant date.

Option Awards granted to each of the named executive officersMessrs. Wexner and Redgrave on March 31, 2010, were granted in connection with the Company’s long-term incentive program. These grants2011 vest in three equal installments beginning on the first anniversary of the grant date.

Option Awards granted to Ms. Turney and Messrs. McGuigan Burgdoerfer on March 31, 2011 and Mr. Wexner on January 27, 2011 will vest 20% on the second and third anniversaries of the grant date and 30% on the fourth and fifth anniversaries of the grant date.

In each case, the vesting of these awards is subject to continued employment.

 

(5)

The value of stock and option awards reflects the grant date fair value under ASC Subtopic 718Compensation—Stock Compensation for each award. Options are valued using the Black-Scholes option pricing model with the following assumptions as set forth in the Company’s financial statements filed on March 18, 2011,23, 2012, on Form 10-K for the 20102011 fiscal year: dividend yield of 3.3%4.1%, volatility of 49%48%, risk free interest rate of 2.3%1.9% and expected life of 4.55.0 years. Restricted stock units are valued based on the fair market value of a share of Common Stock on the date of grant, adjusted for anticipated dividend yields.

Outstanding Equity Awards at Fiscal Year-End for Fiscal 20102011

The following table provides information relating to outstanding equity awards granted to the named executive officers atas of fiscal year end, January 29, 2011.28, 2012.

 

		Option Awards																								Restricted Stock Awards																				Option Awards																								Restricted Stock Awards
Name		Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Un-exercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Grant Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(15)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(15)				Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Unexercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Grant Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(19)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(19)
Leslie H. Wexner			2/4/2002				479,771				0				0			$	14.80				2/4/2012																								2/4/2002				516,630				0				0				13.74				2/4/2012
																																															2/3/2003				464,967				0				0				9.80				2/3/2013
																																															2/2/2004				464,967				0				0				14.51				2/2/2014
																																															3/31/2005				404,384				0				0				19.83				3/31/2015
			2/3/2003				431,794				0				0				10.56				2/3/2013																								3/31/2006				101,094				0				0				19.96				3/31/2016
			2/2/2004				431,794				0				0				15.62				2/2/2014																								3/30/2007				130,504				0				0				21.27				3/30/2017
			3/31/2005				375,533				0				0				21.35				3/31/2015																								3/31/2008				155,108				51,705	(1)			0				13.95				3/31/2018
			3/31/2006				93,882				0				0				21.49				3/31/2016																								3/31/2009				221,895				110,948	(1)			0				7.10				3/31/2019
			3/30/2007				90,894				30,300	(1)			0				22.90				3/30/2017																								3/31/2010				36,824				73,649	(2)			0				20.90				3/31/2020
			3/31/2008				96,029				96,029	(2)			0				15.03				3/31/2018																								1/27/2011				0				264,172	(3)			0				27.31				1/27/2021
			3/31/2009				103,031				206,066	(2)			0				7.65				3/31/2019																								3/31/2011				0				75,613	(4)			0				30.53				3/31/2021
			3/31/2010				0				102,592	(3)			0				22.50				3/31/2020																								1/26/2012				0				174,867	(5)			0				41.26				1/26/2022
			1/27/2011				0				245,325	(4)			0				29.41				1/27/2021																																																3/31/2009				332,843	(7)			13,799,671				0				0
																											3/31/2009				309,097	(6)		$	8,939,085				0				0																												3/31/2010				110,473	(8)			4,580,211				0				0
																											3/31/2010				102,592	(7)			2,966,961				0				0																												1/27/2011				264,167	(9)			10,952,364				0				0
																											1/27/2011				0				0				245,325	(8)			7,094,799																												3/31/2011				75,613	(10)			3,134,915				0				0
																																																																							1/26/2012				0				0				174,867	(11)			7,249,986
Sharen J. Turney			3/31/2005				113,797				0				0				21.35				3/31/2015																								3/31/2008				7,754				17,535	(1)			0				13.95				3/31/2018
			3/31/2006				12,801				0				0				21.49				3/31/2016																								3/31/2009				2				56,294	(1)			0				7.10				3/31/2019
			3/31/2008				549				32,566	(2)			0				15.03				3/31/2018																								3/31/2010				14,952				29,903	(2)			0				20.90				3/31/2020
			3/31/2009				1				104,557	(2)			0				7.65				3/31/2019																								3/31/2011				0				111,758	(6)			0				30.53				3/31/2021
			3/31/2010				0				41,657	(3)			0				22.50				3/31/2020																																																3/31/2008				1,225,398	(12)			50,805,001				0				0
																											3/31/2008				12,643	(9)			365,636				0				0																												3/31/2009				168,883	(7)			7,001,889				0				0
																											3/31/2008				1,137,976	(10)			32,910,266				0				0																												3/31/2010				44,858	(8)			1,859,813				0				0
																											3/31/2009				156,835	(6)			4,535,668				0				0																												3/31/2011				111,759	(13)			4,633,528				0				0
																											3/31/2010				41,658	(7)			1,204,749				0				0
Martyn R. Redgrave			3/30/2007				3,274				24,553	(1)			0				22.90				3/30/2017																0				0				3/30/2007				29,962				0				0				21.27				3/30/2017																0				0
			3/31/2008				3,326				38,931	(2)			0				15.03				3/31/2018																0				0				3/31/2008				24,543				20,959	(1)			0				13.95				3/31/2018																0				0
			3/31/2009				34,806				69,613	(2)			0				7.65				3/31/2019																0				0				3/31/2009				74,962				37,478	(1)			0				7.10				3/31/2019																0				0
			3/31/2010				0				34,659	(3)			0				22.50				3/31/2020																0				0				3/31/2010				12,440				24,880	(2)			0				20.90				3/31/2020																0				0
																											3/31/2008				173,086	(9)			5,005,647				0				0				3/31/2011				0				25,543	(4)			0				30.53				3/31/2021
																											9/5/2008				2,299	(11)			66,487				0				0																												3/31/2009				112,442	(7)			4,661,845				0				0
																											3/31/2009				104,420	(6)			3,019,826				0				0																												9/4/2009				1,381	(14)			57,256				0				0
																											9/4/2009				1,284	(12)			37,133				0				0																												3/5/2010				1,834	(15)			76,038				0				0
																											3/5/2010				1,704	(13)			49,280				0				0																												3/31/2010				37,322	(8)			1,547,370				0				0
																											3/31/2010				34,660	(7)			1,002,367				0				0																												9/3/2010				2,906	(16)			120,483				0				0
																											9/3/2010				2,699	(14)			78,055				0				0																												3/4/2011				3,158	(17)			130,931				0				0
																																																																							3/31/2011				25,544	(10)			1,059,054				0				0
Diane L. Neal			11/20/2006				28,448				0				0				26.95				11/20/2016
			3/30/2007				5,974				1,991	(1)			0				22.90				3/30/2017
			3/31/2008				0				23,133	(2)			0				15.03				3/31/2018
			3/31/2009				1				62,049	(2)			0				7.65				3/31/2019
			3/31/2010				0				33,325	(3)			0				22.50				3/31/2020
																											3/31/2008				154,309	(9)			4,462,616				0				0
																											3/31/2009				93,074	(6)			2,691,700				0				0
																											3/31/2010				33,326	(7)			963,788				0				0

		Option Awards																								Restricted Stock Awards																				Option Awards																								Restricted Stock Awards
Name		Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Un-exercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Grant Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(15)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(15)				Grant Date				Number of Securities Underlying Unexercised Options Exercisable (#)				Number of Securities Underlying Unexercised Options Unexercisable (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Grant Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(19)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(19)
Charles C. McGuigan																																															3/31/2008				0				4,637	(1)			0				13.95				3/31/2018
																																															3/31/2009				0				11,999	(1)			0				7.10				3/31/2019
																																															3/31/2010				0				7,183	(2)			0				20.90				3/31/2020
																																															3/31/2011				0				66,317	(6)			0				30.53				3/31/2021
																																																																							3/31/2009				36,000	(7)			1,492,560				0				0
																																																																							3/31/2010				10,775	(8)			446,732				0				0
																																																																							9/3/2010				1,555	(16)			64,470				0				0
																																																																							3/4/2011				1,732	(17)			71,809				0				0
																																																																							3/31/2011				66,319	(13)			2,749,586				0				0
																																																																							9/2/2011				1,171	(18)			48,550				0				0
Stuart B. Burgdoerfer			11/2/2006				56,897				0				0				26.06				11/2/2016																								4/9/2007				3,825				0				0				21.92				4/9/2017
			4/9/2007				10,665				3,554	(5)			0				23.60				4/9/2017																								3/31/2008				0				9,739	(1)			0				13.95				3/31/2018
			3/31/2008				18,091				18,092	(2)			0				15.03				3/31/2018																								3/31/2009				2				32,615	(1)			0				7.10				3/31/2019
			3/31/2009				30,288				60,578	(2)			0				7.65				3/31/2019																								3/31/2010				0				17,342	(2)			0				20.90				3/31/2020
			3/31/2010				0				24,161	(3)			0				22.50				3/31/2020																								3/31/2011				0				36,842	(6)			0				30.53				3/31/2021
																											3/31/2008				96,499	(9)			2,790,751				0				0																												3/31/2009				97,846	(7)			4,056,695				0				0
																											9/5/2008				1,195	(11)			34,559				0				0																												9/4/2009				1,851	(14)			76,742				0				0
																											3/31/2009				90,866	(6)			2,627,845				0				0																												3/5/2010				2,450	(15)			101,577				0				0
																											9/4/2009				1,720	(12)			49,742				0				0																												3/31/2010				26,018	(8)			1,078,706				0				0
																											3/5/2010				2,276	(13)			65,822				0				0																												3/31/2011				36,843	(13)			1,527,511				0				0
																											3/31/2010				24,162	(7)			698,765				0				0

 

(1)	Options vest 100% on March 30, 2011.31, 2012.

 

(2)	Options vest 50% on March 31, 20112012 and 50% on March 31, 2012.2013.

 

(3)	Options vest 1/3rd on March 31, 2011, 1/3rd on March 31, 2012 and 1/3rd on March 31, 2013.

(4)	Options vest 20% on January 27, 2013, 20% on January 27, 2014, 30% on January 27, 2015 and 30% on January 27, 2016.

 

(4)	Options vest 1/3rd on March 31, 2012, 1/3rd on March 31, 2013 and 1/3rd on March 31, 2014.

(5)	Options vest 100%20% on April 9, 2011.January 26, 2014, 20% on January 26, 2015, 30% on January 26, 2016 and 30% on January 26, 2017.

 

(6)	Options vest 20% on March 31, 2013, 20% on March 31, 2014, 30% on March 31, 2015 and 30% on March 31, 2016.

(7)	Shares vest 100% on March 31, 2012.

 

(7)(8)

Shares vest 100% on March 31, 2013.

 

(8)(9)

Subject to achievement of a performance condition, sharesShares vest 20% on January 27, 2013, 20% on January 27, 2014, 30% on January 27, 2015 and 30% on January 27, 2016.

 

(9)(10)

Shares vest 100% on March 31, 2011.2014.

 

(10)(11)

Subject to achievement of a performance condition, shares vest 20% on January 26, 2014, 20% on January 26, 2015, 30% on January 26, 2016 and 30% on January 26, 2017.

(12)	Shares vest 40% on March 31, 2012, 20% on March 31, 2013, 20% on March 31, 2014 and 20% on March 31, 2015.

 

(11)(13)

Shares vest 100%20% on September 5, 2011.March 31, 2013, 20% on March 31, 2014, 30% on March 31, 2015 and 30% on March 31, 2016.

 

(12)(14)

Shares vest 100% on September 4, 2012.

 

(13)(15)

Shares vest 100% on March 5, 2013.

 

(14)(16)

Shares vest 100% on September 3, 2013.

 

(15)(17)

Shares vest 100% on March 4, 2014.

(18)	Shares vest 100% on September 2, 2014.

(19)	Market value based on the $28.92$41.46 fair market value of a share of Common Stock on the last trading day of the fiscal year (January 28, 2011)27, 2012).

Option Exercises and Stock Vested Information for Fiscal 20102011

The following table provides information relating to Option Awards exercised and Restricted Stock Unit Awards vested during the fiscal year ended January 29, 2011.28, 2012.

 

		Option Awards								Restricted Stock Awards								Option Awards								Restricted Stock Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)(1)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)(2)				Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)(1)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)(2)
Leslie H. Wexner			0			$	0				87,808			$	2,157,404				0			$	0				0			$	0
Sharen J. Turney			181,445				2,773,128				56,983				1,416,070				193,762				5,179,182				12,643				415,702
Martyn R. Redgrave			404,126				3,773,923				36,121				888,196				0				0				175,449				5,775,781
Diane L. Neal			49,501				1,024,933				25,829				649,020
Charles McGuigan																			83,605				1,365,676				119,833				4,524,436
Stuart B. Burgdoerfer			0				0				24,835				629,640				163,328				2,663,839				97,727				3,216,911

 

(1)

Option Award Value Realized is calculated based on the difference between (a) the sale price and the option exercise price for shares that were sold upon exercise and (b) the closing price on the day prior to the date of exercise and the option exercise price for shares that were held upon exercise.

 

(2)	Restricted Stock Award Value Realized is calculated based on the closing stock price on the date the restricted stock units vested.

Retirement and Other Post-Employment Benefits

Non-qualified Deferred Compensation for Fiscal 2010⁽¹⁾2011(1)

 

Name		Executive Contributions in Last FY ($)(2)				Registrant Contributions in Last FY ($)(3)				Aggregate Earnings in Last FY ($)(4)				Aggregate Withdrawals/ Distributions ($)(5)				Aggregate Balance at Last FYE ($)(6)				Executive Contributions in Last FY ($)(2)				Registrant Contributions in Last FY ($)(3)				Aggregate Earnings in Last FY ($)(4)				Aggregate Withdrawals/ Distributions ($)(5)				Aggregate Balance at Last FYE ($)(6)
Leslie H. Wexner		$	0			$	277,819			$	1,081,672			$	0			$	16,508,514			$	0			$	607,924			$	1,018,054			$	0			$	18,134,492
Sharen J. Turney			929,028				425,385				796,617				0				10,307,429				149,921				663,605				786,216				0				12,700,972
Martyn R. Redgrave			98,936				321,867				324,052				0				3,091,798				100,504				464,837				337,317				0				4,749,271
Diane L. Neal			326,810				255,454				135,102				0				2,322,314
Charles C. McGuigan																							328,839				308,357				94,713				0				1,927,588
Stuart B. Burgdoerfer			55,682				182,664				39,103				0				692,567				59,983				268,451				54,266				0				1,075,267

 

(1)

Amounts disclosed include non-qualified cash deferrals, Company matching contributions, retirement credits and earnings under the Company’s Supplemental Retirement Plan (a non-qualified defined contribution plan) and stock deferrals and related reinvested dividend earnings under the Company’s 1993 Plan and 2011 Plan. Executive Contributions and related matching Registrant Contributions represent 20102011 calendar year deferrals and match on incentive compensation payments earned based on performance for the Fall 20092010 season, which was paid in March 2010,2011, and for the Spring 20102011 season, which was paid in September 2010.2011.

 

(2)

CashAll of the contributions in the amount of $133,655, $98,936, $326,810 and $55,682 for Ms. Turney, Mr. Redgrave, Ms. Neal and Mr. Burgdoerfer, respectively, are reported in the 20102011 Summary Compensation Table under the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns. Deferred stock unit contribution of $795,374 for Ms. Turney relates to her election to defer receipt of restricted stock units that vested on March 31, 2010, and is included in the Option Exercises and Stock Vested Information for Fiscal 2010 table.

 

(3)

Reflects the Company’s 200% match of associate contributions of up to 3% of base salary and bonus above the IRS qualified plan maximum compensation limit and the Company’s retirement contribution of 6% for less than 5 years of service or 8% for 5 or more years of service of compensation above the IRS qualified plan maximum compensation limit. Associates become fully vested in these contributions after six years of service. These contributions are also included under the “All Other Compensation” column of the 20102011 Summary Compensation Table.

 

(4)

Non-qualified deferred cash compensation balances earn a fixed rate of interest determined prior to the beginning of each year. For fiscal 2010,2011, the rate was equivalent to 6.82%, compounded monthly.5.99%. The portion of the earnings on deferred cash compensation that exceeds 120% of the applicable federal long-term rate in the amount of $339,918, $181,168, $35,280, $31,624 and $18,119 for Mr. Wexner, Ms. Turney and Messrs. Redgrave, McGuigan and Burgdoerfer, respectively, is disclosed in the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the 20102011 Summary Compensation Table.

Balance includes dividends earned on deferred stock and restricted stock unit balances in the amount of $251,544$243,618 and $243,769$231,653 for Ms. Turney and Mr. Redgrave, respectively. Dividends are reinvested into additional stock units based on the closing market price of the Company’s Common Stock on the dividend payment date.

 

(5)	Participants may elect to receive the funds in a lump sum or in up to ten annual installments following termination of employment, but generally may not make withdrawals during their employment. Deferrals under the Supplemental Retirement Plan, the 1993 Plan and the 19932011 Plan are unfunded.

 

(6)

Balance includes the value of deferred stock and restricted stock units at calendar year-end in the amount of $1,794,023$2,831,442 and $1,705,914$2,692,383 for Ms. Turney and Mr. Redgrave, respectively. Value is calculated based on a stock price of $28.92$41.46 per share of Common Stock on January 28, 2011.27, 2012.

Estimated Post-Employment Payments and Benefits

We have entered into certain agreements with our executive officers that will require us to provide compensation in the event of a termination of employment, including a termination following a change in control of our Company. Mr. Wexner is not covered by such an agreement but is entitled to certain termination

compensation under the terms of our benefit and stock plans. The following tables set forth the expected benefit to be received by each named executive officer in the event of his or her termination resulting from various scenarios, assuming a termination date of January 29, 201128, 2012 and a stock price of $28.92,$41.46, the price of our Common Stock on January 28, 2011.27, 2012.

Assumptions and explanations of the numbers set forth in the tables below are set forth in additional text following the tables.

Leslie H. Wexner

 

		Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)				Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)
					w/out     Release     ($)				& Signed     Release ($)																w/out     Release     ($)								& Signed     Release ($)
Cash Severance(1)
Base Salary		$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0
Bonus(2)			0				0				0				0				0				0				0				0				0				0				0				0				0				0
Total Cash Severance			0				0				0				0				0				0				0				0				0				0				0				0				0				0
Long Term Incentives
Gain of Accelerated Stock Options(3)			0				0				0				6,558,748				6,558,748				0				0				0				0				0				11,347,363				11,347,363				0				0
Value of Accelerated Restricted Stock Units(3)			0				0				5,956,219				19,000,845				19,000,845				5,956,219				5,956,219				0				0				18,295,676				39,717,146				39,717,146				18,295,676				18,295,676
Total Value of Long-Term Incentives			0				0				5,956,219				25,559,593				25,559,593				5,956,219				5,956,219				0				0				18,295,676				51,064,509				51,064,509				18,295,676				18,295,676
Benefits and Perquisites(4)			0				0				0				0				2,000,000				796,000				0				0				0				0				0				2,000,000				225,000				0
Tax Gross-Up			N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A
Total		$	0			$	0			$	5,956,219			$	25,559,593			$	27,559,593			$	6,752,219			$	5,956,219			$	0			$	0			$	18,295,676			$	51,064,509			$	53,064,509			$	18,520,676			$	18,295,676

Sharen J. Turney

 

		Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)				Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)
					w/out     Release     ($)				& Signed     Release ($)																w/out      Release     ($)								& Signed     Release ($)
Cash Severance(1)
Base Salary		$	0			$	1,250,000			$	2,500,000			$	2,500,000			$	0			$	0			$	0			$	0			$	1,300,000			$	2,600,000			$	2,600,000			$	0			$	0			$	0
Bonus(2)			0				0				2,000,000				6,681,150				0				0				0				0				0				2,210,000				7,049,968				0				0				0
Total Cash Severance			0				1,250,000				4,500,000				9,181,150				0				0				0				0				1,300,000				4,810,000				9,649,968				0				0				0
Long Term Incentives
Gain of Accelerated Stock Options(3)			0				0				0				2,944,128				2,944,128				0				0				0				0				0				4,252,474				4,252,474				0				0
Value of Accelerated Restricted Stock Units(3)			0				0				15,998,139				39,016,319				39,016,319				15,998,139				0				0				0				35,095,061				64,300,231				64,300,231				35,095,061				35,095,061
Total Value of Long-Term Incentives			0				0				15,998,139				41,960,447				41,960,447				15,998,139				0				0				0				35,095,061				68,552,705				68,552,705				35,095,061				35,095,061
Benefits and Perquisites(4)			7,086				28,116				38,630				38,630				5,000,000				1,262,344				7,086				7,086				29,186				40,236				40,236				5,000,000				987,611				7,086
Tax Gross-Up			N/A				N/A				N/A				8,849,623				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A
Total		$	7,086			$	1,278,116			$	20,536,769			$	60,029,850			$	46,960,447			$	17,260,483			$	7,086			$	7,086			$	1,329,186			$	39,945,297			$	78,242,909			$	73,552,705			$	36,082,672			$	35,102,147

Martyn R. Redgrave

 

		Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)				Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)
					w/out     Release     ($)				& Signed     Release ($)																w/out      Release     ($)								& Signed     Release ($)
Cash Severance(1)
Base Salary		$	0			$	1,040,000			$	2,080,000			$	2,080,000			$	0			$	0			$	0			$	0			$	1,040,000			$	2,080,000			$	2,080,000			$	0			$	0			$	0
Bonus(2)			0				0				1,404,000				4,778,769				0				0				0				0				0				1,456,000				4,632,045				0				0				0
Total Cash Severance			0				1,040,000				3,484,000				6,858,769				0				0				0				0				1,040,000				3,536,000				6,712,045				0				0				0
Long Term Incentives
Gain of Accelerated Stock Options(3)			0				0				0				2,392,040				2,392,040				0				0				0				0				0				2,654,877				2,654,877				0				0
Value of Accelerated Restricted Stock Units(3)			0				0				6,691,249				9,258,796				9,258,796				6,691,249				0				0				0				5,621,686				7,652,977				7,652,977				5,621,686				0
Total Value of Long-Term Incentives			0				0				6,691,249				11,650,836				11,650,836				6,691,249				0				0				0				5,621,686				10,307,854				10,307,854				5,621,686				0
Benefits and Perquisites(4)			0				18,921				28,381				28,381				2,000,000				579,730				0				0				19,832				29,749				29,749				2,000,000				319,959				0
Tax Gross-Up			N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A
Total		$	0			$	1,058,921			$	10,203,630			$	18,537,986			$	13,650,836			$	7,270,979			$	0			$	0			$	1,059,832			$	9,187,435			$	17,049,648			$	12,307,854			$	5,941,645			$	0

Diane L. NealCharles McGuigan

 

		Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control(5) ($)				Death ($)				Disability ($)				Retirement ($)				Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)
					w/out     Release     ($)				& Signed     Release ($)																w/out      Release     ($)								& Signed     Release ($)
Cash Severance(1)
Base Salary		$	0			$	1,000,000			$	2,000,000			$	2,000,000			$	0			$	0			$	0			$	0			$	900,000			$	1,800,000			$	1,800,000			$	0			$	0			$	0
Bonus(2)			0				0				1,200,000				1,200,000				0				0				0				0				0				990,000				3,396,799				0				0				0
Total Cash Severance			0				1,000,000				3,200,000				3,200,000				0				0				0				0				900,000				2,790,000				5,196,799				0				0				0
Long Term Incentives
Gain of Accelerated Stock Options(3)			0				0				0				1,867,255				1,867,255				0				0				0				0				0				1,412,094				1,412,094				0				0
Value of Accelerated Restricted Stock Units(3)			0				0				5,901,849				8,118,104				8,118,104				5,901,849				0				0				0				2,095,181				4,873,706				4,873,706				2,095,181				2,095,181
Total Value of Long-Term Incentives			0				0				5,901,849				9,985,359				9,985,359				5,901,849				0				0				0				2,095,181				6,285,800				6,285,800				2,095,181				2,095,181
Benefits and Perquisites(4)			0				16,176				16,176				16,176				2,212,870				781,914				0				0				21,954				32,931				32,931				2,700,000				320,488				0
Tax Gross-Up			N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A
Total		$	0			$	1,016,176			$	9,118,025			$	13,201,535			$	12,198,229			$	6,683,763			$	0			$	0			$	921,954			$	4,918,112			$	11,515,530			$	8,985,800			$	2,415,669			$	2,095,181

Stuart B. Burgdoerfer

 

		Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)				Voluntary Resignation ($)				Involuntary w/out Cause or Voluntary w/Good Reason								Involuntary w/out Cause following Change in Control ($)				Death ($)				Disability ($)				Retirement ($)
					w/out     Release     ($)				& Signed     Release ($)																w/out      Release     ($)								& Signed     Release ($)
Cash Severance(1)
Base Salary		$	0			$	725,000			$	1,450,000			$	1,450,000			$	0			$	0			$	0			$	0			$	750,000			$	1,500,000			$	1,500,000			$	0			$	0			$	0
Bonus(2)			0				0				797,500				2,646,091				0				0				0				0				0				900,000				2,731,521				0				0				0
Total Cash Severance			0				725,000				2,247,500				4,096,091				0				0				0				0				750,000				2,400,000				4,231,521				0				0				0
Long Term Incentives
Gain of Accelerated Stock Options(3)			0				0				0				1,714,042				1,714,042				0				0				0				0				0				2,147,635				2,147,635				0				0
Value of Accelerated Restricted Stock Units(3)			0				0				4,333,026				6,267,485				6,267,485				4,333,026				0				0				0				4,698,745				6,841,232				6,841,232				4,698,745				0
Total Value of Long-Term Incentives			0				0				4,333,026				7,981,527				7,981,527				4,333,026				0				0				0				4,698,745				8,988,867				8,988,867				4,698,745				0
Benefits and Perquisites(4)			0				20,607				30,911				30,911				1,450,000				411,402				0				0				21,734				32,601				32,601				1,500,000				230,434				0
Tax Gross-Up			N/A				N/A				N/A				1,782,431				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A				N/A
Total		$	0			$	745,607			$	6,611,437			$	13,890,960			$	9,431,527			$	4,744,428			$	0			$	0			$	771,734			$	7,131,346			$	13,252,989			$	10,488,867			$	4,929,179			$	0

 

(1)	Assumes a termination date of January 29, 2011.28, 2012.

(2)

Bonus amounts assumed at target. Under “Involuntary w/out Cause or Voluntary w/Good Reason” termination scenarios, actual bonus payments willwould be equal to the bonus payment the named executive officer would have received if he or she had remained employed with Limited Brands for a period of one year after the termination date of January 29, 2011.28, 2012. Under an “Involuntary w/out Cause following Change in Control”, bonus payments for Ms. Turney, Mr. Redgrave, Mr. McGuigan and Mr. Burgdoerfer will be equal to the sum of the last four seasonal bonus payments received.

 

(3)	Calculated based on the $28.92$41.46 fair market value of a share of Common Stock on the last trading day of the fiscal year (January 28, 2011)27, 2012).

 

(4)

Estimates for benefits and perquisites include the continuation of medical, dental and other insurance benefits. Under the “Death” and “Disability” scenarios, includes proceeds from life and disability insurance policies, and value of unvested restricted stock units and retirement balances that would become vested.

(5)

Ms. Neal’s bonus payment following an involuntary termination after a Change in Control is assumed to be the same as the payment for an involuntary termination not following a Change in Control (with a signed release). Ms. Neal’s employment agreement does not provide for a tax gross-up upon a Change in Control.

Assumptions and Explanations of Numbers in Tables

The Compensation Committee retains discretion to provide, and in the past has provided, additional benefits to named executive officers upon termination or resignation if it determines the circumstances so warrant.

We calculated Code Section 280G tax gross-ups with a discount rate equal to 120% of the semi-annual Applicable Federal Rate as of February 2011.

The tables do not include the payment of the aggregate balance of the named executive officers’ non-qualified deferred compensation that is disclosed in the Non-qualified Deferred Compensation for Fiscal 20102011 table above.

Confidentiality, Non-Competition and Non-Solicitation Agreements

As a condition to each named executive officer’s entitlement to receive certain severance payments and equity vesting acceleration upon certain termination scenarios, the executive is required to execute a release of claims against us and shall be bound by the terms of certain restrictive covenants, including non-competition and non-solicitation agreements which prohibit the executive from soliciting or diverting any current or potential employee, customer, or supplier or competing with any of our businesses in which he or she has been employed for a period of one year from the date of termination.

Termination Provisions—Definitions of Cause and Good Reason

The employment agreements for all named executive officers other than Mr. Wexner, who does not have an employment agreement, contain customary definitions of cause and good reason. “Cause” shall generally mean that the named executive officer (1) willfully failed to perform his or her duties with the Company (other than a failure resulting from the executive’s incapacity due to physical or mental illness); (2) has plead “guilty” or “no contest” to or has been convicted of an act which is defined as a felony under federal or state law; or (3) engaged in willful misconduct in bad faith which could reasonably be expected to materially harm the Company’s business or its reputation.

“Good Reason” means (1) the failure to continue by the executive in a capacity originally contemplated in the executive’s employment agreement; (2) the assignment to the executive of any duties materially inconsistent with the executive’s position, duties, authority, responsibilities or reporting requirements, as set out in his or her employment agreement; (3) a reduction in or a material delay in payment of the executive’s total cash compensation and benefits from those required to be provided; (4) the requirement that the executive be based

outside of the United States, other than for travel that is reasonably required to carry out the executive’s duties; or (5) the failure by the Company to obtain the assumption in writing of its obligation to perform the employment agreement by a successor. The definition of “Good Reason” under Mr. Redgrave’s employment agreement further defines “Good Reason” to include the delivery of a Preliminary Notice of Good Reason by Mr. Redgrave to the Company after April 1, 2010 that must be accepted by the Company within six months.

Payments Upon a Termination in Connection with a Change in Control

A Change in Control of the Company will be deemed to have occurred upon the first to occur of any of the following events:

 

a)

Anyany person, together with all affiliates, becomes a beneficial owner of securities representing 33% or more of the combined voting power of the voting stock then outstanding;

 

b)

Duringduring any period of 24 consecutive months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute a majority of directors then constituting the Board;

 

c)

Aa reorganization, merger or consolidation of the Company is consummated, unless more than 50% of the outstanding shares of Common Stock is beneficially owned by individuals and entities who owned Common Stock just prior to the such reorganization, merger or consolidation; or

 

d)

Thethe consummation of a complete liquidation or dissolution of the Company.

Tax Gross-up

In the event of a termination following a Change in Control, we have agreednone of our named executive officers is entitled to reimburse Ms. Turney and Mr. Burgdoerferreimbursement or gross-up for all excise taxes imposed under Code Section 280G and any income and excise taxes that are payable as a result of any reimbursements for Code Section 280G excise taxes. In 2008, Mr. Redgrave agreed to relinquish the Code Section 280G tax gross-up provision of his employment agreement. The total Code Section 280G tax gross-up amount in the above tables assumes that the named executive officer is entitled to a full reimbursement by us of (i) any excise taxes imposed as a result of the Change in Control, (ii) any income and excise taxes imposed as a result of our reimbursement of the excise tax amount and (iii) any additional income and excise taxes imposed as a result of our reimbursement for any excise or income taxes. The calculation of the Code Section 280G gross-up amount in the above tables is based upon a Code Section 280G excise tax rate of 20%, a 35% federal income tax rate, a 1.45% Medicare tax rate and a 6.56% state income tax rate. For purposes of the Code Section 280G calculation, it is assumed that no amounts will be discounted as attributable to reasonable compensation and no value will be attributed to the executive executing a non-competition agreement. The calculation of the Code Section 280G tax gross-up assumes that amounts will be payable to the named executive officer for any excise tax incurred regardless of whether the named executive officer’s employment is terminated. However, the amount of the Code Section 280G tax gross-up will change based upon whether the named executive officer’s employment with us is terminated because the amount of compensation subject to Code Section 280G will change.280G.

Fiscal 20102011 Director Compensation

The following table sets forth compensation earned by the individuals who served as directors of the Company during fiscal 2010.⁽¹⁾2011.(1)

 

Name		Fees Earned or Paid in Cash ($)(2)				Stock Awards ($)(3)				Total ($)(4)				Fees Earned or Paid in Cash ($)(2)				Stock Awards ($)(3)				Total ($)(4)
Dennis S. Hersch		$	60,000			$	60,024			$	120,024			$	80,000			$	80,030			$	160,030
James L. Heskett			85,000				70,019				155,019				107,500				92,524				200,024
Donna A. James			98,250				82,502				180,752				117,500				102,520				220,020
David T. Kollat			70,006				70,019				140,025				92,528				92,524				185,052
William R. Loomis, Jr.			72,500				72,506				145,006				93,250				92,524				185,774
Jeffrey H. Miro			70,000				70,019				140,019				92,500				92,524				185,024
Jeffrey B. Swartz (5)			12,500				0				12,500
Allan R. Tessler			112,505				92,522				205,207				143,250				122,511				265,761
Abigail S. Wexner			80,006				70,019				150,025				100,010				90,025				190,035
Raymond Zimmerman			73,256				72,506				145,762				94,028				92,524				186,552

 

(1)

Directors who are also associates receive no additional compensation for their service as directors. Our current Board of Directors’ compensation plan does not provide for stock option awards, non-equity incentive plan compensation, pension or non-qualified deferred compensation. At the end of four years of membership on the Board of Directors, each member must maintain ownership of Common Stock equal to the amount of Common Stock received as director compensation over the four-year period.

In 2011, based on a review of market-based compensation for Board members including the same peer companies used to evaluate executive compensation, the decision was made to increase Board member compensation in 2011 for the first time in six years. For further detail, see footnote (2).

 

(2)

Directors receive an annual cash retainer of $50,000;$70,000; directors receive an additional annual cash retainer of $12,500 for membership on the Audit Committeeand Compensation Committees and $10,000 for all other committee memberships; committee chairs receive an additional $15,000 for the Audit and Compensation Committees and $10,000 for other committees. Directors also receive feescommittees; the lead independent director receives an additional cash retainer of $4,000 for each Board of Directors meeting attended in excess of ten during a fiscal year and $1,500 for each committee meeting attended in excess of ten during a fiscal year.$10,000.

Beginning in fiscal 2011, the directors’ annual cash retainer will increase to $70,000, the additional annual cash retainer for Compensation Committee members will increase to $12,500 and the lead independent director will receive an additional annual cash retainer of $10,000. In connection with these changes, the Board agreed to eliminate the payment of meeting fees for Board and committee meetings in excess of ten during a fiscal year.

 

(3)

Directors receive an annual stock retainer worth $50,000;$70,000; directors receive an additional annual stock grant worth $12,500 for membership on the Audit Committeeand Compensation Committees and worth $10,000 for other committee memberships.memberships; the lead independent director receives and additional stock retainer of $10,000. Stock retainers arewere granted under the Limited Brands, Inc. 2003 Stock Award and Deferred Compensation Plan for Non-Associate Directors. The number of shares issued is calculated based on the fair market value of Common Stock on the first day of the fiscal year and are issued in quarterly installments over the fiscal year. The value reported reflects the fair market value of our Common Stock on the daysdate the shares were issued. The value of stock awards reflects the aggregate grant date fair value, excluding estimated forfeitures, computed in accordance with ASC Subtopic 718 Compensation-Stock Compensation, for each award. See note 20 to the Company’s financial statements filed on March 23, 2012 on Form 10-K for a discussion of our assumptions in determining the aggregate grant date fair value of these awards.

Beginning in fiscal 2011, the directors’ annual stock retainer will increase to $70,000, the additional annual stock retainer for Compensation Committee members will increase to $12,500 and the lead independent director will receive an additional annual stock retainer of $10,000.

 

(4)

Under a previous Board of Directors compensation plan, directors received annual stock option awards. This plan ended and the current plan was adopted in 2003. The aggregate number of stock option awards outstanding at January 29, 2011 for each director is zero except as follows: Dr. Kollat, 1,199 options; Mr. Tessler, 299 options; Mrs. Wexner, 2,398 options; and Mr. Zimmerman 1,199 options.

(5)	Mr. Swartz retired fromhad 1,290 stock options outstanding as of January 28, 2012 under the Board effective May 27, 2010, at the conclusion of our 2010 annual meeting.previous plan.

Equity Compensation Plan Information

The following table summarizes share and exercise price information about Limited Brands’ equity compensation plans as of January 29, 2011.28, 2012.

 

Plan category		(a) Number of Securities  to be issued upon exercise of outstanding options, warrants and rights				(b) Weighted-average exercise price of outstanding options, warrants and rights				(c) Number of  securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a))				(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights				(b) Weighted-average exercise price of outstanding options, warrants and rights				(c) Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)			22,892,356			$	16.01	(2)			13,211,386
Equity compensation plans approved by security holders(1)															20,482,054			$	17.26	(2)			18,919,191
Equity compensation plans not approved by security holders			0				0				0				0				0				0
Total			22,892,356			$	16.01				13,211,386				20,482,054			$	17.26				18,919,191

 

(1)

Includes the following plans: Limited Brands, Inc. 2011 Stock Option and Performance Incentive Plan, Limited Brands, Inc. 1993 Stock Option and Performance Incentive Plan (2009 Restatement), Limited Brands, Inc. 1996 Stock Plan for Non-Associate Directors and 2003 Stock Award and Deferred Compensation Plan for Non-Associate Directors, and Intimate Brands, Inc. 1995 Stock Option and Performance Incentive Plan. In March 2002, awards then outstanding under the Intimate Brands, Inc. plan were converted into awards relating to 15,561,339 shares of Common Stock in connection with the merger of Intimate Brands, Inc. and a subsidiary of the Company.Directors.

 

(2)	Does not include outstanding rights to receive Common Stock upon the vesting of restricted stock unit awards.awards or settlement of deferred stock units.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Limited Brands Board of Directors is composed of three directors who are independent, as defined under the rules of the Commission and NYSE listing standards. Additionally, each member of the Compensation Committee is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code and a “non-employee director” with the meaning of Section 16b-3 under the Exchange Act. The Compensation Committee reviews Limited Brands’ Compensation Discussion and Analysis on behalf of the Board of Directors.

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Limited Brands’ annual report on Form 10-K for the year ended January 29, 201128, 2012 and the Company’s proxy statement.

Compensation Committee

James L. Heskett, Chair

David T. Kollat

Jeffrey H. Miro

David T. Kollat

SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table shows certain information about the securities ownership of all directors (and nominees) of Limited Brands, the executive officers of Limited Brands named in the “Summary Compensation Table” above and all directors and executive officers of Limited Brands as a group.

 

Name of Beneficial Owner

Number of Shares of Common Stock Beneficially Owned(a)(b)

Percent of Class

Number of Shares of Common Stock Beneficially Owned(a)(b)

Percent of Class

Stuart B. Burgdoerfer

186,361

(c)

*

18,303

(c)

*

Dennis S. Hersch

9,502,055

(d)(e)

2.9

%

13,753,516

(d)(f)

4.6

%

James L. Heskett

68,095

(d)

*

76,627

(d)

*

Donna A. James

38,655

(d)

*

42,261

(d)

*

David T. Kollat

108,033

(c)

*

110,938

(c)

*

William R. Loomis, Jr.

110,332

(d)

*

64,778

(d)

*

Charles McGuigan.

49,349

*

Jeffrey H. Miro

63,141

(d)

*

73,025

(d)

*

Diane L. Neal

36,414

(c)

*

Jane Ramsey

122,817

(c)(d)

Martyn R. Redgrave

206,229

(c)

*

293,469

(c)(e)

*

Allan R. Tessler

88,068

(c)

*

87,894

*

Sharen J. Turney

394,396

(c)

*

183,355

(c)(e)

*

Abigail S. Wexner

11,696,747

(c)(f)

3.6

%

10,078,801

(g)

3.4

%

Leslie H. Wexner

53,212,094

(c)(g)(h)

16.5

%

53,729,188

(c)(h)(i)

17.9

%

Raymond Zimmerman

90,213

(c)(d)(i)

*

101,516

(c)(d)(j)

*

All directors and executive officers as a group

54,762,457

(c)-(i)

16.9

%

55,048,434

(c)-(j)

18.4

%

 

*	Less than 1%.

 

(a)

Unless otherwise indicated, each named person has voting and investment power over the listed shares and such voting and investment power is exercised solely by the named person or shared with a spouse. However, each named person has investment but not voting power over the listed shares held in the Limited Brands Savings and Retirement Plan.

 

(b)	Reflects beneficial ownership of shares of Common Stock, and shares outstanding, as of January 29, 2011.28, 2012.

 

(c)

Includes the following number of shares issuable within 60 days of January 29, 2011,28, 2012, upon the exercise or vesting of outstanding stock awards: Mr. Burgdoerfer, 115,941;3,827; Dr. Kollat, 1,199; Ms. Neal, 36,414; Ms. Ramsey, 73,046;1,290; Mr. Redgrave, 65,959; Mr. Tessler, 299;141,907; Ms. Turney, 127,148; Mrs. Wexner, 2,398;22,708; Mr. Wexner, 2,135,426 (includes 2,398 shares issuable to Mrs. Wexner);2,496,373; Mr. Zimmerman, 1,199;1,290; and all directors and executive officers as a group, 2,556,631.2,739,065.

 

(d)

Includes the following number of deferred stock units credited to directors’ accounts under the 2003 Stock Award and Deferred Compensation Plan for Non-Associate Directors that could be convertible into Common Stock within 60 days after termination from the Board: Mr. Hersch, 37,070;45,636; Mr. Heskett, 54,041;62,573; Ms. James, 19,139;24,481; Mr. Loomis, 51,618;62,454; Mr. Miro, 42,602; and52,486; Mr. Zimmerman, 55,138.66,350; and all directors as a group, 313,980.

 

(e)

Includes 9,464,446the following number of deferred stock units credited to executives’ accounts under the Company’s Supplemental Retirement Plan that could be convertible into Common Stock within 60 days after termination of employment with the Company: Mr. Redgrave, 21,646; Ms. Turney, 68,293; and all executives as a group, 107,699. Mr. Redgrave has elected to receive pay-out of his deferred stock units over three years, and his total represents 1/3 of the units which he would be owed after termination.

(f)	Includes 13,705,880 shares held by The Linden Trust for which Mr. Hersch is trustee. Excludes 2,875,491trustee and shares held by each of Cyprus Trustvoting and Dogwood Trust for whichinvestment power with Mr. Hersch is co-trustee and as to which Mr. Hersch disclaims beneficial ownership.Wexner.

 

(f)(g)

Excludes 41,515,34743,650,387 shares beneficially owned by Mr. Wexner as to which Mrs. Wexner disclaims beneficial ownership. Includes 2,875,491478,115 shares held by DogwoodThe Wexner Children’s Trust II and 1,000,000 shares held by The Wexner Family Charitable Fund, in each case, as to which Mrs. Wexner shares voting and investment power with others; 478,115 shares held by Wexner Children’s Trust II; and 500,000 shares held by Wexner Family Charitable Fund.Mr. Wexner. Includes 7,840,7438,600,686 shares directly owned by Mrs. Wexner.

(g)(h)

Includes 1,564,0891,682,962 shares held in the Limited Brands Savings and Retirement Plan (as of December 31, 2010)2011), over which Mr. Wexner has investment but not voting power.

 

(h)(i)

Includes 2,875,491478,115 shares held by Cyprus Trust; 2,875,491The Wexner Children’s Trust II; 1,000,000 shares held by Dogwood Trust; 9,464,446The Wexner Family Charitable Fund; and 13,705,880 shares held by The Linden Trust; and 500,000 shares held by Wexner Family Charitable Fund.Trust. Mr. Wexner shares voting and investment power with othersMrs. Wexner with respect to shares held by CyprusThe Wexner Children’s Trust Dogwood Trust, Linden TrustII and theThe Wexner Family Charitable Fund.Fund, and shares voting and investment power with Mr. Hersch with respect to shares held by The Linden Trust. Includes 4,892,608 shares held by the Wexner Personal Holdings Corporation, of which Mr. Wexner asis the sole stockholder, director and officer of Wexner Personal Holdings Corporation.officer. Includes 7,840,7438,600,686 shares directly owned by Mrs. Wexner.Wexner, as to which Mr. Wexner may be deemed to share voting and investment power with respect to the shares directly owned by Mrs. Wexner.power. Includes 20,585,68520,872,564 shares directly owned by Mr. Wexner.

 

(i)(j)

Includes 2,400 shares which are Mr. Zimmerman’s pro rata share of 7,200 shares owned by a corporation of which Mr. Zimmerman is president and a 33% stockholder. Mr. Zimmerman has pledged 28,000 shares in connection with an agreement providing a $1,000,000 line of credit.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Limited Brands’ executive officers and directors, and persons who own more than ten percent of a registered class of Limited Brands’ equity securities, must file reports of ownership and changes in ownership of Limited Brands’ equity securities with the Commission. Copies of those reports must also be furnished to Limited Brands. Based solely on a review of the copies of reports furnished to Limited Brands and written representations of the Company’s executive officers and directors that no other reports were required, we believe that during fiscal 20102011 our executive officers, directors and greater than ten percent beneficial owners complied with these filing requirements, with the exception that Ms. Neal was late in filing one Form 4 reporting one transaction and, due to the Company’s administrative error, Ms. Turney and Messrs. Hersch, Loomis, Miro and ZimmermanMs. Ramsey were each were late in filing one Form 4 reporting one transaction.

SHARE OWNERSHIP OF PRINCIPAL STOCKHOLDERS

The following table sets forth the names of all persons who, as of the date indicated below, were known by Limited Brands to be the beneficial owners (as defined in the rules of the Commission) of more than 5% of the shares of Common Stock.

 

Name and Address of Beneficial Owner		Amount Beneficially Owned				Percent of Class(4)				Amount Beneficially Owned				Percent of Class
Leslie H. Wexner(1)			53,212,094				16.5	%			53,729,188				17.9	%
Three Limited Parkway P.O. Box 16000 Columbus, OH 43216
Three Limited Parkway
P.O. Box 16000
Columbus, OH 43216
Janus Capital Management LLC(2)			34,414,980				10.6	%			30,156,584				10.2	%
151 Detroit Street Denver, CO 80206
151 Detroit Street
Denver, CO 80206
BlackRock, Inc.(3)			24,677,034				7.6	%			23,404,476				7.9	%
40 East 52nd Street New York, NY 10022
40 East 52nd Street
New York, NY 10022
FMR LLC(4)											21,634,048				7.3	%
82 Devonshire Street
Boston, MA 02109
The Vanguard Group, Inc.(5)											14,913,901				5.0	%
100 Vanguard Blvd.
Malvern, PA 19355

 

(1)	For a description of Mr. Wexner’s beneficial ownership, see “Security Ownership of Directors and Management” on pages 5961 and 60.62.

 

(2)

As of December 31, 2010,2011, based on information set forth in the Schedule 13G filed February 14, 20112012 by Janus Capital Management LLC. Janus Capital Management LLC has sole dispositive power over 26,494,96024,125,813 shares and sole voting power over 26,494,96024,125,813 shares, and has shared dispositive power over 6,030,771 shares and shared voting power over 6,030,771 shares.

 

(3)	As of December 31, 2010,2011, based on information set forth in the Schedule 13G filed February 7, 201113, 2012 by BlackRock, Inc. BlackRock, Inc. has sole dispositive power over 23,344,03423,404,476 shares and sole voting power over 23,344,03423,404,476 shares.

 

(4)	BasedAs of December 31, 2011, based on information set forth in the numberSchedule 13G filed February 14, 2012 by FMR LLC. FMR LLC has sole dispositive power over 21,634,048 shares and sole voting power over 103,299 shares.

(5)	As of December 31, 2011, based on information set forth in the Schedule 13G filed February 9, 2012 by The Vanguard Group, Inc. The Vanguard Group, Inc. has sole dispositive power over 14,563,297 shares outstanding as of January 29, 2011.and sole voting power over 350,604 shares.

REPORT OF THE AUDIT COMMITTEE

As provided in our written charter, the Audit Committee is instrumental in the Board’s fulfillment of its oversight responsibilities relating to (i) the integrity of the Company’s financial statements, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications, independence and performance of the Company’s independent auditors and (iv) the performance of the Company’s internal audit function. We have the sole authority to appoint, compensate, retain, oversee and terminate the Company’s independent auditors. We pre-approve the audit services and non-audit services to be provided by the Company’s independent auditors. In addition, we evaluate the independent auditors’ qualifications, performance and independence and present our conclusions with respect to the independent auditors to the full Board on at least an annual basis.

It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors. Furthermore, while we are responsible for reviewing the Company’s policies and practices with respect to risk assessment and management, it is the responsibility of the CEO and senior management to determine the appropriate level of the Company’s exposure to risk.

We have reviewed and discussed Limited Brands’ audited financial statements as of and for the year ended January 29, 201128, 2012 and met with both management and our independent auditors to discuss the financial statements. Management has represented to us that the financial statements were prepared in accordance with generally accepted accounting principles. We have reviewed with the internal auditors and independent auditors the overall scope and plans for their respective audits. We also met with the internal auditors and independent auditors, with and without management present, to discuss the results of their examinations and their evaluations of the Company’s internal controls.

We have also discussed with the independent auditors all matters required to be discussed with audit committees by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Company’s independent auditors also provided to us the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the audit committee concerning independence, and we discussed with the independent auditors their independence from the Company. We considered whether the provision of non-audit services by the independent auditors to the Company is compatible with maintaining their independence.

Based on the reviews and discussions summarized in this Report, and subject to the limitations on our role and responsibilities, certain of which are referred to above and in the Audit Committee charter, we recommended to the Board that Limited Brands’ audited financial statements be included in our annual report on Form 10-K for the year ended January 29, 201128, 2012 for filing with the Commission.

We have appointed Ernst & Young LLP as Limited Brand’sBrands’ independent registered public accountants.

Audit Committee

Donna A. James, Chair

William R. Loomis, Jr.

Allan R. Tessler

Raymond Zimmerman

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

During our 20102011 fiscal year, Ernst & Young LLP served as the Company’s independent registered public accountants and in that capacity rendered an opinion on our consolidated financial statements as of and for the fiscal year ended January 29, 2011.28, 2012. The Audit Committee annually reviews the selection of independent registered public accountants and has selected Ernst & Young LLP as the Company’s independent registered public accountants for the current fiscal year.

Audit Fees

The aggregate audit fees payable to Ernst & Young LLP for the fiscal years ended 20102011 and 20092010 were approximately $4,233,000$4,240,000 and $5,041,000$4,233,000, respectively. These amounts include fees for professional services rendered by Ernst & Young LLP in connection with the audit of our consolidated financial statements and reviews of our unaudited consolidated interim financial statements as well as fees for services that generally only the independent auditor can reasonably be expected to provide, including comfort letters and consultation regarding financial accounting and/or reporting standards. These amounts also include fees for services rendered in connection with the audit of our internal control over financial reporting and fees for services rendered in connection with statutory audits of our international subsidiaries’ financial statements.

Audit Related Fees

The aggregate fees for assurance and related services rendered by Ernst & Young LLP that were reasonably related to the audit of our consolidated financial statements for the fiscal years ended 20102011 and 20092010 were approximately $173,000 and $206,000,$173,000, respectively. The fees under this category are for assurance and related services that are traditionally performed by the independent auditor and include audits of employee benefit plans, agreed upon procedures and other attest engagements.

Tax Fees

The aggregate fees for tax services rendered by Ernst & Young LLP for the fiscal years ended 20102011 and 20092010 were approximately $1,246,000$550,000 and $10,000,$1,246,000, respectively. Tax fees include tax compliance and advisory services.

All Other Fees

Other than as described above, there were noThe aggregate fees for all other services rendered by Ernst & Young LLP for the fiscal years ended 2011 and 2010 or 2009.were approximately $124,000 and $0, respectively. The fiscal year 2011 amount includes fees for due diligence services.

Pre-approval Policies and Procedures

The Audit Committee pre-approves all audit and non-audit services to be provided by Ernst & Young LLP in a given fiscal year.

OTHER MATTERS

The Board of Directors knows of no other matters to be brought before the annual meeting. However, if other matters should come before the meeting, each of the persons named as a proxy intends to vote in accordance with his or her judgment on such matters.

STOCKHOLDER PROPOSALS FOR NEXT YEAR

Stockholder Proposals Pursuant to Rule 14a-8

Proposals submitted for inclusion in the proxy statement for the 20122013 annual meeting must be received by the Secretary of Limited Brands at our principal executive offices on or before the close of business on December 13, 2011.2012.

Other Stockholder Proposals

If a stockholder intends to present a proposal or nominate a person for election as a director at the 20122013 annual meeting other than as described above, the stockholder must comply with the requirements set forth in our Bylaws. The Bylaws require, among other things, that the Secretary receive written notice of the intent to present a proposal or nomination no earlier than February 26, 201223, 2013 and no later than March 27, 2012.25, 2013. The notice must contain the information required by the Bylaws.

SOLICITATION EXPENSES

We are soliciting this proxy on behalf of our Board of Directors and will paybear the expense of preparing, assembling, printing and mailing the proxy form and the form of material used in solicitation of proxies.expenses. Our directors or employees may solicit proxies by telephone, facsimile and personal solicitation, in addition to the use of the mail. We do not expectwill, upon request, reimburse banks, brokerage houses and other institutions, nominees, and fiduciaries for their expenses in forwarding proxy materials to pay any compensation for the solicitation of proxies.beneficial owners.

 

By Order of the Board of Directors,

/s/ Leslie H. Wexner

Leslie H. Wexner

Chairman of the Board

Appendix A

LIMITED BRANDS, INC.

2011 STOCK OPTION AND PERFORMANCE INCENTIVE PLANPROPOSED AMENDMENT TO THE CHARTER TO REMOVE SUPERMAJORITY VOTING

ARTICLE IREQUIREMENTS

ESTABLISHMENT AND PURPOSEArticles EIGHTH and FOURTEENTH and Section 2 of Article FIFTH and Section 1 of Article ELEVENTH are hereby removed in their entirety, and the remaining articles of the Charter are hereby renumbered accordingly. Articles EIGHTH and FOURTEENTH and Section 2 of Article FIFTH and Section 1 of Article ELEVENTH, which are hereby repealed, are shown below:

1.01.Establishment and Effective Date. Effective on May 26, 2011, Limited Brands, Inc., a Delaware corporation (including any successor in name or interest thereto,FIFTH. Section 2.Amendment of Bylaws by the “Company”), established this stock incentive plan known as the “Limited Brands, Inc. 2011 Stock Option and Performance Incentive Plan.” (the “Plan”).

1.02.PurposeStockholders. The Company desiresbylaws shall not be made, repealed, altered, amended or rescinded by the stockholders of the Corporation except by the vote of the holders of not less than 75 percent of the outstanding shares of the Corporation entitled to attract and retainvote thereon. Any amendment to the best available executive and key management associates, consultants andCertificate of Incorporation which shall contravene any bylaw in existence on the record date of the stockholders meeting at which such amendment is to be voted upon by the stockholders shall require the vote of the holders of not less than 75 percent of the outstanding shares entitled to vote thereon.

EIGHTH. The affirmative vote of the holders of not less than 75 percent of the outstanding shares of the Corporation entitled to vote thereon shall be required for the approval of any proposal that (1) the Corporation merge or consolidate with any other advisors, for itselfcorporation or any affiliate of such other corporation if such other corporation and its subsidiariesaffiliates singly or in the aggregate are directly or indirectly the beneficial owners of more than five percent of the outstanding shares of any class of stock of the Corporation entitled to vote in the election of directors (such other corporation and affiliatesany affiliate thereof being herein referred to as a “Related Corporation”), or (2) the Corporation sell, lease or exchange all or substantially all of its assets or business to or with such Related Corporation, or (3) the Corporation issue or deliver any stock or other securities of its issue in exchange or payment for any properties or assets of any such Related Corporation or securities issued by any such Related Corporation or in a merger of any affiliate of the Corporation with or into any such Related Corporation, or (4) the Corporation dissolve, and to encourageeffect such transaction the highest levelapproval of performance by such associates in order to serve the best interestsstockholders of the CompanyCorporation is required by law or by any agreement between the Corporation and its stockholders. The Plan is expectedany national securities exchange; provided, however, that the foregoing clauses (1), (2), (3) and (4) shall not apply (i) to contributeany such merger, consolidation, sale, lease, or exchange, or issuance or delivery of assets or other securities which was approved by resolution of the Board of Directors of the Corporation prior to the attainmentacquisition of these objectivesthe beneficial ownership of more than five percent of such transaction solely between the Corporation and another corporation 50 percent or more of the voting power of which is owned by offering eligible associates, consultantsthe Corporation provided that the Certificate of Incorporation of the surviving corporation contains provisions substantially similar to those provided in Articles FIFTH, SIXTH, Section 1, SEVENTH, EIGHTH, NINTH, TENTH, and other advisorsELEVENTH or (ii) to any transaction between this Corporation and either (a) any stockholder who owned in excess of 10 percent of the opportunityCommon Stock of the Corporation immediately after the merger of Limited Interim, Ohio, Inc., an Ohio corporation, into The Limited Stores, Inc. an Ohio corporation or (b) any affiliate from time to acquire stocktime organized, established, or incorporated of a stockholder referred to in (ii) (a) above. For the purposes hereof, an “affiliate” is any person (including a corporation, partnership, association, trust, business entity, estate or individual) who directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified; “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership interestsof voting securities, by contract, or otherwise; and in computing the Company,percentage of outstanding Common Stock beneficially owned by any person, the shares outstanding and other rightsthe shares owned shall be determined as of the record date fixed to determine the stockholders entitled to vote or express consent with respect to such proposal. The stockholder vote, if any, required for mergers, consolidations, sales, leases, or exchanges of assets or issuances of stock or other securities not expressly provided for in this Article, shall be such as may be required by applicable law.

ELEVENTH. Section 1.Amendment of Certain Articles. The provisions set forth in this Article ELEVENTH and in Article FIFTH (dealing with the amendment of bylaws), SIXTH, Section 1 (dealing with the classified Board), SEVENTH (dealing with the prohibition against stockholder action without meetings), EIGHTH (dealing with the 75 percent vote of stockholders required for certain reorganizations), NINTH (dealing with certain matters to be considered by the Board in evaluating certain offers), and TENTH (dealing with the removal of any director) may not be amended, altered, changed, or repealed in any respect unless such repeal or amendment is approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of the Corporation entitled to vote thereon.

FOURTEENTH. The provisions set forth in Article THIRTEENTH and in this Article FOURTEENTH may not be amended, altered, changed or repealed in any respect unless such action is approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of Voting Stock (as defined in Article THIRTEENTH) of the Corporation at a meeting of the stockholders duly called for the consideration of such amendment, alteration, change or repeal; provided, however, that if there is an Interested Person (as defined in Article THIRTEENTH), such action must also be approved by the affirmative vote of the holders of not less than 75 percent of the outstanding shares of Voting Stock held by the stockholders other than the Interested Person.

Articles TENTH, THIRTEENTH, and Section 2 of Article ELEVENTH are hereby amended as shown below (with deletions highlighted in strike-through text and additions highlighted in underlined text):

TENTH. Any director may be removed at any annual or special stockholders’ meeting upon theaffirmative vote of the holdersof a majority in voting interest of the stockholders present in person or by proxy and voting thereon, a quorum being presentof not less than 75 percent of the outstanding shares of voting stock of the Company,Corporation at that time entitled to vote thereon; provided, however, that such director may be removed only for cause and to thereby provide them with incentives to put forth maximum effort for the successshall receive a copy of the Company and its subsidiaries.

ARTICLE II

AWARDS

2.01.Form of Awards. Awards under the Plan may be granted in any onecharges against him, delivered to him personally or all of the following forms: (i) incentive stock options (“Incentive Stock Options”) meeting the requirements of Code Section 422; (ii) nonstatutory stock options (“Nonstatutory Stock Options”) (unless otherwise indicated, references in the Plan to Options shall include both Incentive Stock Options and Nonstatutory Stock Options); (iii) stock appreciation rights (“Stock Appreciation Rights”), as described in Article VII, which may be awarded either in tandem with Options (“Tandem Stock Appreciation Rights”) or on a stand-alone basis (“Nontandem Stock Appreciation Rights”); (iv) units representing shares of common stock of the Company (“Common Stock”) which are restricted as provided in Article XI (“Restricted Share Units”); (v) units representing shares of Common Stock, as described in Article XII (“Performance Units”) and (vi) shares of unrestricted Common Stock (“Unrestricted Shares”), as described in Article XIV. In addition, awards may be granted as “Substitute Awards,” which are awards granted in assumption of, or in substitution for, any outstanding awards previously granted by a company acquired by the Company (or a subsidiary or affiliate thereof) or with which the Company (or a subsidiary or affiliate thereof) combines. Substitute Awards shall be granted in accordance with procedures complying with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder.

2.02.Maximum Shares Available. The maximum aggregate number of shares of Common Stock available for award under this Plan as of the Plan’s effective date is 7,000,000 subject to adjustment pursuant to Article XV, plus shares of Common Stock issuable upon the exercise of Substitute Awards, plus the number of shares of Common Stock reserved for issuance under the 1993 Stock Option and Performance Plan (the “Preexisting Plan”) to the extent (A) that such shares were available for grants of awards under the Preexisting Plan immediatelymail at his last known address at least 10 days prior to the Plan’s effective date of the stockholders’ meeting; provided further, that directors who shall have been elected by the holders of a series or (B) that were subject to outstanding awards under the Preexisting Plan on the Plan’s effective date and thereafter an event occurs (including expiration or forfeiture) which would result in such shares again being available for awards under the Plan (as determined below). All shares available for award under the Plan mayclass of Preferred Stock, voting separately as a class, shall be awarded in the form of Incentive Stock Options. Shares of

Common Stock issuedremoved only pursuant to the Plan mayprovisions establishing the rights of such series or class to elect such directors.

THIRTEENTH. Section 1.Vote Required for Certain Business Combinations. The affirmative vote of the holders of not less than75 percenta majority of the outstanding shares of “Voting Stock” (as hereinafter defined) held by stockholders other than an “Interested Person” (as hereinafter defined) shall be required for the approval or authorization of any “Business Combination” (as hereinafter defined) of the Corporation with any Interested Person; provided, however, that the75 percentexclusion of “Interested Persons” from this voting requirement shall not be applicable if:

(a) the “Continuing Directors” (as hereinafter defined) of the Corporation by at least a two-thirds vote (i) have expressly approved in advance the acquisition of the outstanding shares of Voting Stock that caused such Interested Person to become an Interested Person, or (ii) have expressly approved such Business Combination either authorized but unissued sharesin advance of or issued shares reacquiredsubsequent to such Interested Person’s having become an Interested Person; or

(b) the cash or fair market value (as determined by at least two-thirds of the Continuing Directors) of the property, securities or “Other Consideration to be Received” (as hereinafter defined) per share by holders of Voting Stock of the Corporation in the Business Combination is not less than the “Fair Price” (as hereinafter defined) paid by the Company. InInterested Person in acquiring any of its holdings of the event that priorCorporation’s Voting Stock.

Section 2.Definitions. Certain words and terms as used in this Article THIRTEENTH shall have the meanings given to them by the definitions and descriptions in this Section.

2.1.Business Combination. The term “Business Combination” shall mean (a) any merger or consolidation of the Corporation or a subsidiary of the Corporation with or into an Interested Person, (b) any

sale, lease, exchange, transfer or other disposition, including without limitation, a mortgage or any other security device, of all or any “Substantial Part” (as hereinafter defined) of the assets either of the Corporation (including without limitation, any voting securities of a subsidiary) or of a subsidiary of the Corporation to an Interested Person, (c) any merger or consolidation of an Interested Person, with or into the Corporation or a subsidiary of the Corporation, (d) any sale, lease, exchange, transfer or other disposition, including without limitation, a mortgage or other security device, of all or any Substantial Part of the assets of an Interested Person to the endCorporation or a subsidiary of the period during which Options may be granted underCorporation, (e) the Plan, any Optionissuance or transfer by the Corporation or any Nontandemsubsidiary of any securities of the Corporation or a subsidiary of the Corporation to an Interested Person, (f) any reclassification of securities, recapitalization or other comparable transaction involving the Corporation that would have the effect of increasing the Voting power of any Interested Person with respect to Voting Stock Appreciation Right granted underof the PlanCorporation, and (g) any agreement, contract or Preexisting Plan or granted and outstanding under the Plan or Preexisting Plan expires unexercised or is terminated, surrendered or canceled (other than in connection with the exercise of a Stock Appreciation Right) without being exercised in whole or in partother arrangement providing for any reason, or any Restricted Share Units or Performance Units are forfeited, or if such awards are settled in cash in lieu of shares of Common Stock, then the shares to which any such award relates may, at the discretion of the Committeetransactions described in this definition of Business Combination.

2.2.Interested Person. The term “Interested Person” shall mean and include any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined below) toin Rule 12b-2 of the extent permissible under Rule 16b-3General Rules and Regulations under the Securities Exchange Act of 1934 as amended (the “Act”)in effect at the date of the adoption of this Article THIRTEENTH by the stockholders of the Corporation), be made available for subsequent awards“Beneficially Owns” (as defined in Rule 13d-3 of the General Rules and Regulations under the Plan,Securities Exchange Act of 1934 as in effect at the date of the adoption of this Article THIRTEENTH by the stockholders of the Corporation) in the aggregate 20 percent or more of the outstanding Voting Stock of the Corporation, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Without limitation, any share of Voting Stock of the Corporation that any Interested Person has the right to acquire at any time (notwithstanding that Rule 13d-3 deems such shares to be beneficially owned only if such right may be exercised within 60 days) pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed to be Beneficially Owned by the Interested Person and to be outstanding for purposes of this definition. An Interested Person shall be deemed to have acquired a share of the Voting Stock of the Corporation at the time when such terms asInterested Person became the Committee may determine;provided, however, thatBeneficial Owner thereof. With respect to the shares owned by Affiliates, Associates or other persons whose ownership is attributed to an Interested Person under the foregoing shalldefinition of Interested Person, if the price paid by such Interested Person for such shares is not apply to or in respectdeterminable by two-thirds of Substitute Awards.

ARTICLE III

ADMINISTRATION

3.01.Committee. The Planthe Continuing Directors, the price so paid shall be administered by a Committee (the “Committee”) appointeddeemed to be the higher of (a) the price paid upon the acquisition thereof by the Company’s Board of Directors (the “Board”) and consisting of not less than two (2) members ofAffiliate, Associate or other person or (b) the Board. Each member of the Committee shall be an “outside director” (within the meaning of Code Section 162(m)), a “non-employee director” (within the meaning of Rule 16b-3(b)(3)(i) under the Act) and “independent” to the extent required by applicable law or rules of the New York Stock Exchange.

3.02.Powers of Committee. Subject to the express provisions of the Plan, the Committee shall have the power and authority (i) to grant Options and to determine the purchasemarket price of the Commonshares in question at the time when the Interested Person became the Beneficial Owner thereof.

2.3Voting Stock covered by each Option,. The term “Voting Stock” shall mean all of the term of each Option, the number ofoutstanding shares of Common Stock to be covered by each Optionof the Corporation and any performance objectives or vesting standards applicableoutstanding shares of Preferred Stock entitled to vote on each Option; (ii) to designate Options as Incentivematter on which the holders of record of Common Stock Options or Nonstatutory Stock Options and to determine which Options, if any, shall be accompanied by Tandem Stock Appreciation Rights; (iii) to grant Tandem Stock Appreciation Rights and Nontandem Stock Appreciation Rights and to determine the terms and conditions of such rights; (iv) to grant Restricted Share Units and to determine the term of the restricted period and other conditions and restrictions applicable to such shares; (v) to grant Performance Units and to determine the performance objectives, performance periods and other conditions applicable to such units; (vi) to grant Unrestricted Shares; and (vii) to determine the associates to whom, and the time or times at which, Options, Stock Appreciation Rights, Restricted Share Units, Performance Units and Unrestricted Shares shall be granted.

3.03.Delegation. The Committee may delegate to one or more of its members or to any other person or persons such ministerial duties as it may deem advisable;provided, however, that the Committee may not delegate any of its responsibilities hereunder if such delegation will cause (i) transactions under the Plan to fail to comply with Section 16 of the Act or (ii) the Committee to fail to qualify as “outside directors” under Code Section 162(m). The Committee may also employ attorneys, consultants, accountants or other professional advisors and shall be entitled to rely uponvote, and each reference to a proportion of Shares of Voting Stock shall refer to such proportion of the advice, opinionsvotes entitled to be cast by such shares.

2.4Continuing Director. The term “Continuing Director” shall mean a Director who was a member of the Board of Directors of the Corporation immediately prior to the time that the Interested Person involved in a Business Combination became an interested Person, or valuationsa Director who was elected or appointed to fill a vacancy after the date the Interested Person became an Interested Person by a majority of the then-current Continuing Directors.

2.5Fair Price. The term “Fair Price” shall mean the following: If there is only one class of capital stock of the Corporation issued and outstanding, the Fair Price shall mean the highest price that can be determined by a majority of the Continuing Directors to have been paid at any time by the Interested Person for any share or shares of that class of capital stock. If there is more than one class of capital stock of the Corporation issued and outstanding, the Fair Price shall mean with respect to each class and series of capital stock of the Corporation, the amount determined by a majority of the Continuing Directors to be the highest per share price equivalent of the highest price that can be determined to have been paid at any time by the Interested Person for any share or shares of any such advisors.class or series of capital stock of the Corporation. In determining the Fair Price, all purchases by the Interested Person shall be taken into account regardless of

whether the shares were purchased before or after the Interested Person became an Interested Person. Also, the Fair Price shall include any brokerage commissions, transfer taxes and soliciting dealers’ fees paid by the Interested Person with respect to the shares of capital stock of the Corporation acquired by the Interested Person. In the case of any Business Combination with an Interested Person, a majority of the Continuing Directors shall determine the Fair Price for each class and series of the capital stock of the Corporation. The Fair Price shall also include interest compounded annually from the date an Interested Person became an Interested Person through the date the Business Combination is consummated at the publicly announced base rate of interest of Morgan Guaranty Trust Company of New York less the aggregate amount of any cash dividends paid, and the fair market value of any dividends paid in other than cash, on each share of capital stock in the same time period, in an amount up to but not exceeding the amount of interest so payable per share of capital stock.

2.6.Substantial Part. The term “Substantial Part” shall mean more than 20 percent of the fair market value as determined by two-thirds of the Continuing Directors of the total consolidated assets of the Corporation and its subsidiaries taken as a whole as of the end of its most recent fiscal year ended prior to the time the determination is being made.

3.04.Interpretations2.7.Other Consideration to be Received. The Committeeterm “Other Consideration to be Received” shall have sole discretionary authority to interpret the termsinclude, without limitation, Common Stock or other capital stock of the Plan,Corporation retained by its existing stockholders other than Interested Persons or other parties to adoptsuch Business Combination in the event of a Business Combination in which the Corporation is the surviving corporation.

Section 3.Determinations by the Continuing Directors. In making any determinations, the Continuing Directors may engage such persons, including investment banking firms and revise rules, regulations and policies to administer the Plan and to make any other factual determinations which it believes to be necessary or advisable forindependent accountants who have reported on the administrationmost recent financial statements of the Plan. All actions takenCorporation, and interpretationsutilize employees and agents of the Corporation, who will, in the judgment of the Continuing Directors, be of assistance to the Continuing Directors. Any determinations made by the CommitteeContinuing Directors, acting in good faith on the basis of such information and assistance as was then reasonably available for such purposes, shall be finalconclusive and binding upon the Company, all associates who have received awards under the PlanCorporation and all other interested persons.its stockholders, including any Interested Person.

3.05.Liability; Indemnification. No member of the Committee, nor any person to whom duties have been delegated, shall be personally liable for any action, interpretation or determination made with respect to the Plan or awards made thereunder, and each member of the Committee shall be fully indemnified and protected by the

Company with respect to any liability he or she may incur with respect to any such action, interpretation or determination, to the extent permitted by applicable law and to the extent provided in the Company’s Certificate of Incorporation and Bylaws, as amended from time to time.

ARTICLE IV

ELIGIBILITY

4.01.Eligibility. Any associate, consultant, director or other advisor of, or any other individual who provides services to (x) the Company or any subsidiary or affiliate or (y) any joint venture in which the Company or any subsidiary or affiliate holds at least a 40% interest, shall be eligible to be selected to receive a compensatory award under or to be a “participant” in the Plan. In determining the individuals to whom awards shall be granted and the number of shares to be covered by each award, the Committee shall take into account the nature of the services rendered by such individuals, their present and potential contributions to the success of the Company and its subsidiaries and such other factors as the Committee in its sole discretion shall deem relevant. The Committee shall ensure that Common Stock underlying any award hereunder qualifies as “service recipient stock,” within the meaning of Code ELEVENTH.Section 409A and the regulations thereunder. “Participant” means any individual granted an award hereunder. No Participant may be granted in any calendar year awards covering more than 2,000,000 shares of Common Stock.

ARTICLE V

STOCK OPTIONS

5.01.Grant of Options. Options may be granted under the Plan for the purchase of shares of Common Stock. Options shall be granted in such form and upon such terms and conditions, including the satisfaction of corporate or individual performance objectives and other vesting standards, as the Committee shall from time to time determine. On or before the date of grant of an Option, the Committee shall designate the number of shares of Common Stock covered by such Option, the option price of such Option, and the recipient of the Option.

5.02.Option Price. The option price of each Option to purchase Common Stock shall be determined by the Committee not later than the date of the grant, but (except in the case of Substitute Awards) shall not be less than 100 percent of the Fair Market Value (as defined in Section 19.01) of the Common Stock subject to such Option on the date of grant. The option price so determined shall also be applicable in connection with the exercise of any Tandem Stock Appreciation Right granted with respect to such Option.

5.03.Term of Options. The term of each Option granted under the Plan shall not exceed ten (10) years from the date of grant, subject to earlier termination as provided in Articles IX and X, except as otherwise provided in Section 6.01 with respect to ten (10) percent stockholders of the Company.

5.04. Exercise of Options2.Amendments Generally. Subject to the provisions of Article XIX (“Miscellaneous Provisions”), an Option may be exercised, in whole or in part, at such time or times as the Committee shall determine. The Committee may, in its discretion, accelerate the exercisability of any Option at any time. Options may be exercised by a Participant by giving notice to the Committee, in writing or in such other manner as the Committee may permit, stating the number of shares of Common Stock with respect to which the Option is being exercised and tendering payment therefor. Payment for the shares of Common Stock issuable upon exercise of the Option shall be made in full in cash or by certified check or, if the Committee, in its sole discretion, permits, in shares of Common Stock (valued at Fair Market Value on the date of exercise). As soon as reasonably practicable following such exercise, a certificate representing the shares of Common Stock purchased, registered in the name of the Participant, shall be delivered to the Participant. Until the issuance of the shares of Common Stock, no right to

vote or receive dividends or any other rights as a shareholder shall exist with respect to the shares of Common Stock that are subject to the Option.

5.05.Cancellation of Stock Appreciation Rights. Upon exercise of all or a portion of an Option, the related Tandem Stock Appreciation Rights shall be canceled with respect to an equal number of shares of Common Stock.

ARTICLE VI

SPECIAL RULES APPLICABLE TO INCENTIVE STOCK OPTIONS

6.01.Ten Percent Stockholder. Notwithstanding any other provision of this Plan to the contrary, any associates who are full-time employees of the Company and its present and future subsidiaries, shall be eligible for awards of Incentive Stock Options. However, no such associate may receive an Incentive Stock Option under the Plan if such associate, at the time the award is granted, owns (after application of the rules contained in Code Section 424(d)) stock possessing more than ten (10) percent of the total combined voting power of all classes of stock of the Company or its subsidiaries, unless (i) the option price for such Incentive Stock Option is at least 110 percent of the Fair Market Value of the Common Stock subject to such Incentive Stock Option on the date of grant and (ii) such Option is not exercisable after the date five (5) years from the date such Incentive Stock Option is granted.

6.02.Limitation on Grants. The aggregate Fair Market Value (determined with respect to each Incentive Stock Option at the time such Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an associate during any calendar year (under this Plan or any other plan of the Company or a subsidiary) shall not exceed $100,000.

6.03.Limitations on Time of Grant. No grant of an Incentive Stock Option shall be made under this Plan more than ten (10) years after the earlier of the date of adoption of the Plan by the Board or the date the Plan is approved by stockholders.

ARTICLE VII

STOCK APPRECIATION RIGHTS

7.01.Grants of Stock Appreciation Rights. Tandem Stock Appreciation Rights may be awarded by the Committee in connection with any Option granted under the Plan, at the time the Option is granted, and shall be subject to the same terms and conditions as the related Option, except that the medium of payment may differ. Nontandem Stock Appreciation Rights may be granted by the Committee at any time. On or before the date of grant of a Nontandem Stock Appreciation Right, the Committee shall specify the number of shares of Common Stock covered by such right, the base price of shares of Common Stock to be used in connection with the calculation described in Section 7.04 below, and the recipient of the award. Except in the case of a Substitute Award, the base price of a Nontandem Stock Appreciation Right shall be not less than 100 percent of the Fair Market Value of a share of Common Stock on the date of grant. Stock Appreciation Rights shall be subject to such terms and conditions not inconsistent with the other provisions of this Plan as the Committee shall determine.

7.02.Limitations on Exercise. Subject to the provisions of Articles IX, X and XIX, a Tandem Stock Appreciation Right shall be exercisable only to the extent that the related Option is exercisable and shall be subject to the same exercise period as the related Option, which shall be set forth in the applicable agreement on or before the date of grant. Upon the exercise of all or a portion of Tandem Stock Appreciation Rights, the related Option shall be canceled with respect to an equal number of shares of Common Stock. Shares of Common

Stock subject to Options, or portions thereof, surrendered upon exercise of a Tandem Stock Appreciation Right, shall not be available for subsequent awards under the Plan. Subject to the provisions of Article XIX, a Nontandem Stock Appreciation Right shall be exercisable during such period as the Committee shall determine, which shall be set forth in the applicable agreement on or before the date of grant.

7.03.Term of Stock Appreciation Rights.The term of each Stock Appreciation Right granted under the Plan shall not exceed ten (10) years from the date of grant, subject to earlier termination as provided in Articles IX and X.

7.04.Surrender or Exchange of Tandem Stock Appreciation Rights. A Tandem Stock Appreciation Right shall entitle the Participant to surrender to the Company unexercised the related option, or any portion thereof, and to receive from the Company in exchange therefor that number of shares of Common Stock having an aggregate Fair Market Value equal to (A) the excess of (i) the Fair Market Value of one (1) share of Common Stock as of the date the Tandem Stock Appreciation Right is exercised over (ii) the option price per share specified in such Option, multiplied by (B) the number of shares of Common Stock subject to the Option, or portion thereof, which is surrendered. Cash shall be delivered in lieu of any fractional shares.

7.05.Exercise of Nontandem Stock Appreciation Rights. The exercise of a Nontandem Stock Appreciation Right shall entitle the Participant to receive from the Company that number of shares of Common Stock having an aggregate Fair Market Value equal to (A) the excess of (i) the Fair Market Value of one (1) share of Common Stock as of the date on which the Nontandem Stock Appreciation Right is exercised over (ii) the base price of the shares covered by the Nontandem Stock Appreciation Right, multiplied by (B) the number of shares of Common Stock covered by the Nontandem Stock Appreciation Right, or the portion thereof being exercised. Cash shall be delivered in lieu of any fractional shares.

7.06.Settlement of Stock Appreciation Rights. As soon as is reasonably practicable after the exercise of a Stock Appreciation Right, the Company shall (i) issue, in the name of the Participant, stock certificates representing the total number of full shares of Common Stock to which the Participant is entitled pursuant to Section 7.03 or 7.04 hereof, and cash in an amount equal to the Fair Market Value, as of the date of exercise, of any resulting fractional shares and (ii) if the Committee causes the Company to elect to settle all or part of its obligations arising out of the exercise of the Stock Appreciation Right in cash pursuant to Section 7.06, deliver to the Participant an amount in cash equal to the Fair Market Value, as of the date of exercise, of the shares of Common Stock it would otherwise be obligated to deliver.

7.07.Cash Settlement. The Committee, in its discretion, may cause the Company to settle all or any part of its obligation arising out of the exercise of a Stock Appreciation Right by the payment of cash in lieu of all or part of the shares of Common Stock it would otherwise be obligated to deliver in an amount equal to the Fair Market Value of such shares on the date of exercise.

ARTICLE VIII

NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS

8.01.Nontransferability of Options and Stock Appreciation Rights. Except to the extent permitted under Section 8.02, no Option or Stock Appreciation Right may be transferred, assigned, pledged or hypothecated (whether by operation of law or otherwise), except as provided by will or the applicable laws of descent and distribution, and no Option or Stock Appreciation Right shall be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of an Option or a Stock Appreciation Right not specifically permitted herein shall be null and void and without effect. An Option or Stock Appreciation Right may be exercised by a Participant only during the Participant’s lifetime, or following the Participant’s death pursuant to Article X.

8.02.Limited Exception to Nontransferability. Notwithstanding Section 8.01, the Committee may determine that a Nonstatutory Stock Option may be transferred by a Participant to one or more members of such Participant’s immediate family, to a partnership of which the only partners are members of such Participant’s immediate family, or to a trust established by a Participant for the benefit of one or more members of such Participant’s immediate family. For this purpose, immediate family means a Participant’s spouse, parents, children, grandchildren and the spouses of such parents, children and grandchildren. A transferee described in this Section 8.02 may not further transfer such Nonstatutory Stock Option. A trust described in this Section 8.02 may not be amended to benefit any person other than a member of the Participant’s immediate family. A Nonstatutory Stock Option transferred pursuant to this Section 8.02 shall remain subject to the provisions of the Plan, including, but not limited to, the provisions of Articles 9 and 10 relating to the effect on the Nonstatutory Stock Option of the Termination of Employment, disability or death of the Participant, and shall be subject to such other rules as the Committee shall determine.

ARTICLE IX

TERMINATION OF EMPLOYMENT

9.01.Exercise after Termination of Employment. “Termination of Employment” shall mean “separation from service” as that term is defined in Code Section 409A and the regulations thereunder. Except as the Committee may at any time provide, in the event that the employment of a Participant shall be terminated either by the Participant or by the Participant’s employer (for reasons other than death, disability or Cause), any Option or Stock Appreciation Right granted to such Participant may be exercised (to the extent that the Participant was entitled to do so at the time of Participant’s Termination of Employment) at any time within one (1) year after such Termination of Employment, but in no case later than the date of expiration of the original term of the Option or Stock Appreciation Right; provided, however, that if an Incentive Stock Option is not exercised within three (3) months following Termination of Employment, it shall be treated as a Nonstatutory Stock Option. If the Participant’s employment is terminated by the Participant’s employer for Cause, except as the Committee may at any time provide, any Option or Stock Appreciation Right may be exercised (to the extent that the Participant was entitled to do so at the time of the Termination of Employment) at any time within thirty (30) days after such Termination of Employment, but in no case later than the date of expiration of the original term of the Option or Stock Appreciation Right. Any Options or Stock Appreciation Rights that are not exercisable on the date of a Termination of Employment for any reason shall lapse. In no event may an Option or Stock Appreciation Right be exercised after the expiration of the original term of the Option or Stock Appreciation Right.

9.02.Total Disability. Except as the Committee may at any time provide, in the event that a Participant to whom an Option or Stock Appreciation Right has been granted under the Plan shall become totally disabled, such Option or Stock Appreciation Right may be exercised at any time within one (1) year after the Participant’s Termination of Employment due to total disability, to the extent that the Participant was entitled to do so at the time of his Termination of Employment (it being understood that such termination occurs after nine (9) months of absence from work due to the total disability), but in no case later than the date of expiration of the original term of the Option or Stock Appreciation Right. Notwithstanding the foregoing, for purposes of exercising Incentive Stock Options, a Participant shall be deemed to have a Termination of Employment if the Participant is absent from work for three (3) months due to total disability, where the date of such Termination of Employment shall be the last date of active employment before the three (3) month period; in this event, if such Participant fails to exercise his or her Incentive Stock Option within three (3) months following such deemed Termination of Employment, such Incentive Stock Option shall be treated as a Nonstatutory Stock Option. For purposes hereof, “total disability” shall have the definition set forth in the Limited Brands, Inc. Long-Term Disability Plan, which definition is hereby incorporated by reference.

ARTICLE X

DEATH OF PARTICIPANT

10.01.Death of Participant While Employed. If a Participant to whom an Option or Stock Appreciation Right has been granted under the Plan shall die while employed by or otherwise providing services to the Company or one of its subsidiaries or affiliates, such Option or Stock Appreciation Right shall become fully exercisable by the Participant’s beneficiary (as indicated on the appropriate form provided by the Company), or if no beneficiary is so indicated, then by the estate or person who acquires the right to exercise such Option or Stock Appreciation Right upon the Participant’s death by bequest or inheritance. Such exercise may occur at any time within one (1) year after the date of the Participant’s death (or such other period as the Committee may at any time provide), but in no case later than the date of expiration of the original term of the Option or Stock Appreciation Right.

10.02.Death of Participant Following Termination of Employment. If a Participant to whom an Option or Stock Appreciation Right has been granted under the Plan shall die after the date of the Participant’s Termination of Employment, but before the end of the period provided under the Plan by which a terminated Participant may exercise such Option or Stock Appreciation Right, such Option or Stock Appreciation Right may be exercised, to the extent that the Participant was entitled to do so at the time of the Participant’s death, by the Participant’s beneficiary (as indicated on the appropriate form provided by the Company), or if no beneficiary is so indicated, then by the estate or person who acquires the right to exercise such Option or Stock Appreciation Right upon the Participant’s death by bequest or inheritance. Such exercise may occur at any time within the period in which the terminated Participant could have exercised such Option or Stock Appreciation Right if the Participant had not died (or such other period as the Committee may at any time provide), but in no case later than the date of expiration of the original term of the Option or Stock Appreciation Right.

ARTICLE XI

RESTRICTED SHARE UNITS (“RSUs”)

11.01.Grant of Restricted Share Units. The Committee may from time to time cause the Company to grant RSUs under the Plan to Participants, subject to such restrictions, conditions and other terms as the Committee may determine. For purposes of clarification, grants under the Plan whose terms and conditions are entitled “Restricted Stock” and “Restricted Shares” may in fact be grants of RSUs and will be treated in a manner consistent with RSUs. RSU awards represent an unfunded promise to pay the Participant a specified number of shares of Common Stock (or cash equivalent, as applicable) in the future if the conditions of the RSU award are satisfied and the RSU award is not otherwise forfeited prior to the stated date of delivery, under the terms and conditions applicable to such award.

11.02.Restrictions. At the time a grant of RSUs is made, the Committee shall establish a period of time (the “Restricted Period”) applicable to such RSUs. Each grant of RSUs may be subject to a different Restricted Period. The Committee may, in its sole discretion, at the time a grant is made, prescribe restrictions in addition to or other than the expiration of the Restricted Period, including the satisfaction of corporate or individual service or performance objectives, which shall be applicable to all or any portion of the RSUs. Except with respect to grants of RSUs intended to qualify as performance-based compensation for purposes of Code Section 162(m), the Committee may also, in its sole discretion, waive any restrictions applicable to all or a portion of such RSUs, provided that the applicable terms and conditions are set forth on or before the date of grant of the award to the extent required to comply with Code Section 409A and the regulations thereunder. None of the RSUs may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of. Unless otherwise provided under the terms of the award, upon the death of a Participant, any conditions applicable to RSUs which have been granted to such Participant will be deemed to have been satisfied at target and the Restricted Period, if any, applicable to Restricted RSUs held by such Participant, will be deemed to have expired. Unless otherwise

provided under the terms of the award, upon the retirement of a Participant, the restrictions and conditions, if any, applicable to any RSUs which have been granted to such Participant will be deemed to have been satisfied with respect to that percentage of the RSUs equal to (i) the number of complete months between the first day of the Restricted Period and the date of the Participant’s retirement, divided by (ii) the number of complete months in the Restricted Period. Any RSUs granted to a Participant for which the restrictions and conditions are not deemed to have expired pursuant to the preceding sentence shall be forfeited in accordance with Section 11.05. For purposes1 of this Article XI, “retirement” shall mean a Participant’s Termination of Employment following the date on which a Participant has attained age 55 and completed seven years of service with the Company. An award may also provide for full or pro-rata vesting upon other events, such as upon a Change in Control or upon Termination of Employment as a result of total disability, or for other reasons, provided that any such applicable terms and conditions are set forth on or before the date of grant of the award.

11.03. [Reserved].

11.04.Rights of Holders of Restricted Share Units. Except as determined by the Committee not later than the date of grant of RSUs, Participants to whom RSUs have been granted shall not have the right to vote such shares or the right to receive any dividends with respect to such shares, except as provided in Section 11.08 with respect to dividend equivalents. All distributions, if any, received by a Participant with respect to RSUs as a result of any stock split-up, stock distribution, a combination of shares, or other similar transaction shall be subject to the restrictions of this Article XI and the adjustment provisions of Article XV.

11.05.Forfeiture Upon Termination of Employment. Except as provided in Section 11.02 and Article XVIII, and as the Committee may provide in the terms of any award on or before the date of grant, any RSUs granted to a Participant pursuant to the Plan shall be forfeited if the Participant experiences a Termination of Employment either by the Participant or the Participant’s employer for reasons other than death prior to the expiration of the Restricted Period and the satisfaction of any other conditions applicable to such RSUs. In addition, if the Participant’s Termination of Employment occurs as a result of retirement (as defined in Section 11.02), any RSUs which do not vest in accordance with Section 11.02 shall be forfeited.

11.06.Delivery of Shares. Unless an election is made under Section 11.08 to defer the settlement of RSUs, and unless otherwise provided in the terms of any award, upon the expiration or termination of the Restricted Period and the satisfaction of any other conditions prescribed by the Committee, RSUs shall be settled by delivery of a stock certificate for the number of shares associated with the award with respect to which the restrictions have expired or the terms and conditions have been satisfied to the Participant or the Participant’s beneficiary or estate, as the case may be. Such payment in settlement shall be made promptly, but in any event not later then (i) the end of the year in which the Restricted Period ended and the conditions were satisfied or (ii) if later, the 15^th day of the third calendar month following the date on which the Restricted Period ended, provided that the award holder will not be permitted, directly or indirectly, to designate the taxable year of settlement. The Participant may be required to execute a release of claims against the Company and its subsidiaries in this event. If an election is made under Section 11.08 to defer the settlement of RSUs, delivery shall occur as described here but upon the date or dates of delivery in accordance with Section 11.09 and the deferral election. Notwithstanding the above, if the Participant is a “specified employee,” as that term is defined in Code Section 409A and the regulations thereunder, and is entitled to receive a payment upon Termination of Employment or on a date determinable based on the date of Termination of Employment (and not a pre-determined fixed date or schedule), then, except in the event of the Participant’s death after such Termination of Employment, such payment shall be delayed by at least six (6) months after the date of such Participant’s Termination of Employment to the extent required by Code Section 409A and the regulations thereunder.

11.07.Performance-Based Objectives. At the time of the grant of RSUs to a Participant, and prior to the beginning of the performance period to which performance objectives relate, the Committee may establish performance objectives based on any one or more of the following, which may be expressed with respect to the Company or one or more operating units or groups, as the Committee may determine: price of Common Stock, or

the common stock of any affiliate, shareholder return, return on equity, return on investment, return on capital, sales productivity, comparable store sales growth, economic profit, economic value added, net income, operating income, gross margin, sales, free cash flow, earnings per share, operating company contribution or market share. These factors shall have a minimum performance standard below which, and a maximum performance standard above which, no payments will be made. These performance goals may be based on an analysis of historical performance and growth expectations for the business, financial results of other comparable businesses, and progress towards achieving the long-range strategic plan for the business. These performance goals and determination of results shall be based entirely on financial measures. The Committee shall specify how any performance objectives shall be adjusted to the extent necessary to prevent dilution or enlargement of any award as a result of extraordinary events or circumstances, as determined by the Committee, or to exclude the effects of extraordinary, unusual, or non-recurring items; changes in applicable laws, regulations, or accounting principles; currency fluctuations; discontinued operations; non-cash items, such as amortization, depreciation, or reserves; asset impairment; or any recapitalization, restructuring, reorganization, merger, acquisition, divestiture, consolidation, spin-off, split-up, combination, liquidation, dissolution, sale of assets, or other similar corporation transaction;provided, however, that no such adjustment will be made if the effect of such adjustment would cause an award to fail to qualify as performance-based compensation within the meaning of Code Section 162(m). The Committee may not use any discretion to modify award results except as permitted under Code Section 162(m). In addition, with respect to any RSUs granted that are intended to be “performance-based” for purposes of Code Section 162(m), such award shall not be payable upon Termination of Employment for any reason other than due to death, total disability (as defined in Article IX) or upon a Change in Control (as defined in Article XVIII), unless the payment is based on achievement of the associated performance objectives. To the extent that the award is subject to Code Section 409A, payment upon Termination of Employment in connection with a Change in Control must be made upon a Change in Control that satisfies the definition of “change in control event” in Code Section 409A and the regulations thereunder, unless otherwise permitted in satisfaction of the alternative payment rules under Code Section 409A and the regulations thereunder.

11.08.Deferred Restricted Share Units. The Committee may permit a Participant who has been designated to receive an RSU award to elect to defer the receipt of the shares in settlement of such RSU award as well as the form of payment of such deferred RSUs.

All elections under this Section 11.08 to defer the settlement of an RSU award must be made in accordance with the requirements of Code Section 409A and the regulations thereunder. Any election not in compliance with such requirements shall be treated as invalid and the deferral election shall be disregarded and distribution of the shares upon settlement of the awards shall be made as though the Participant did not elect to defer. For this purpose, an invalid deferral election shall include (but is not limited to) a deferral election that (i) is not executed (regardless of when received), (ii) is executed but received after the applicable irrevocable date or (iii) cannot otherwise become effective under applicable rules. If a valid deferral election is incomplete, the deferral election shall be honored and distribution of the shares attributable to the awards shall be made as though the Participant elected a deferred lump sum payment. For this purpose, a valid but incomplete deferral election is one that has been received and executed on or before the applicable irrevocable date, but does not indicate the form of payment (lump sum versus installments), or indicates an election for installment payments but not the number of installment payments. Unless the award agreement and terms and conditions accompanying specific awards indicate otherwise, or as otherwise provided in the Plan, the deferred RSUs shall be subject to the same restrictions, conditions and forfeiture provisions as the associated nondeferred RSUs.

Except as determined otherwise by the Committee on or before grant and as set forth in the terms and conditions accompanying such awards, during the Restricted Period with respect to RSUs, Participants shall not have the right to receive any dividends. After the end of the Restricted Period and prior to the time that shares of Common Stock are transferred to the Participant, within sixty (60) days after the date of payment of a dividend by the Company on its shares of Common Stock, the Participant shall be credited with “dividend equivalents” with respect to each outstanding RSU in an amount equal to the amount the Participant would have received as dividends if the RSUs were actual shares of Common Stock. Such dividend equivalents will be converted into

additional RSUs based on the value of the Common Stock on the dividend payment date, in accordance with the procedures established by the Committee, and paid at the same time and in the same manner as the underlying RSUs.

At no time shall any assets of the Company be segregated for payment of RSUs hereunder. Participants who have elected to defer the settlement of RSUs shall at all times have the status of general unsecured creditors of the Company and shall not have any rights in or against specific assets of the Company. The Plan constitutes a mere promise by the Company to make payments attributable to RSUs in the future, in accordance with the applicable terms and conditions.

11.09.Payment of Deferred Restricted Share Units. RSUs are payable solely in shares of unrestricted Common Stock, and shall be paid in accordance with the terms of delivery under Section 11.06 and this Section 11.09. Shares attributable to deferred RSUs that are vested in accordance with the terms and conditions applicable to such awards shall be transferred to the Participant at the time and in the form as elected by the Participant and as set forth in the terms and conditions applicable to such awards, which shall be either in a single payment or in up to ten (10) installment payments.

If a lump sum distribution is elected, the payment shall be made on the date provided in, and in accordance with, the terms and conditions applicable to the award. If installment distributions are elected, the initial installment shall be paid on the date provided in, and in accordance with, the terms and conditions applicable to the award. Subsequent installments shall be made on each anniversary of the initial installment and shall continue for the duration of the selected distribution period. If the Participant dies prior to the time all shares have been distributed, distribution shall be made to the Participant’s beneficiary or estate on the payment date provided in, and in accordance with, the terms and conditions applicable to the award. If Termination of Employment occurs during the Restricted Period, the terms and conditions shall set forth the rights of the Participant to payment, as well as the time and form of distribution of such awards, if any, to the Participant. A participant shall have no rights as a shareholder with respect to deferred RSUs until such time, if any, as shares of Common Stock are transferred to the Participant (or the Participant’s beneficiary or estate, if applicable). Notwithstanding the above, if the Participant is a specified employee and is entitled to receive payment upon Termination of Employment or on a date determinable based on the date of Termination of Employment (and not a pre-determined fixed date or schedule), then, except in the event of the Participant’s death after such Termination of Employment, such payment (or in the case of installments, the first payment) shall be delayed by at least six (6) months after the date of such Participant’s Termination of Employment, to the extent required by Code Section 409A and the regulations thereunder; in this event, subsequent installment payments shall occur on the anniversary of the first delayed installment payment.

Provided that the terms and conditions applicable to a deferred RSU award permit it, a Participant may change the Participant’s distribution election, provided such change in distribution election is made not less than 12 months before the date the payment (or in the case of installments, the first payment) is scheduled to be made, and is irrevocable after this date. Such an election may be made to change payment(s) from a single lump sum payment to installment payments, from installment payments to a single lump sum payment, or from one number of installment payments to another number of installment payments, by submitting such election to the Company;provided, (i) such election does not become effective until at least twelve (12) months after the date on which the election is made and (ii) except in the case of payment permissible upon the Participant’s death, the payment (or in the case of installments the first payment) must be deferred for a period of not less than five (5) years from the date such payment would have been made or commenced if there had been no election to change the form of payment. For this purpose, all installment payments are treated as a single payment. Any election not made in accordance with such procedures shall be treated as invalid, and the change in distribution election shall be disregarded and distribution of the shares attributable to the awards shall be made as though the Participant did not elect to change the time and form of distribution. For this purpose, an invalid change in distribution election shall include (but is not limited to) an election that (i) is not executed (regardless of when received), (ii) is executed but received after the applicable irrevocable date or (iii) cannot otherwise become effective under

applicable rules. If a valid change in distribution election is incomplete, the change in distribution election shall be honored and distribution of the shares attributable to the awards shall be made as though the associate elected a change in distribution to a deferred lump sum payment. For this purpose, a valid but incomplete change in distribution election is one that has been received and executed on or before the applicable irrevocable date, but does not indicate the form of payment (lump sum versus installments), or indicates an election for installment payments but not the number of installment payments.

ARTICLE XII

PERFORMANCE UNITS

12.01.Award of Performance Units. For each Performance Period (as defined in Section 12.02), Performance Units may be granted under the Plan to such Participants as the Committee shall determine. The award agreement covering such Performance Units shall specify a value for each Performance Unit or shall set forth a formula for determining the value of each Performance Unit at the time of payment (the “Ending Value”). If necessary to make the calculation of the amount to be paid to the Participant pursuant to Sections 12.03 and 12.04, the Committee shall also state in the award agreement the initial value of each Performance Unit (the “Initial Value”). The award agreement may also specify that each Performance Unit is deemed to be equivalent to one (1) share of Common Stock. Performance Units granted to a Participant shall be credited to an account (a “Performance Unit Account”) established and maintained for such Participant.

12.02.Performance Period. “Performance Period” shall mean such period of time as shall be determined by the Committee in its sole discretion. Different Performance Periods may be established for different Participants receiving Performance Units. Performance Periods may run consecutively or concurrently.

12.03.Right to Payment of Performance Units. All applicable terms and conditions shall be set forth in the award agreement and/or in accompanying terms and conditions on or before the date of grant of Performance Units. With respect to each award of Performance Units under this Plan, the Committee shall specify performance objectives (the “Performance Objectives”) which must be satisfied in order for the Participant to vest in the Performance Units which have been awarded to the Participant for the Performance Period. If the Performance Objectives established for a Participant for the Performance Period are partially but not fully met, the Committee may, nonetheless, in its sole discretion, determine that all or a portion of the Performance Units have vested but such determination shall not change the date of payment of the awards. If the Performance Objectives for a Performance Period are exceeded, the Committee may, in its sole discretion, grant additional, fully vested Performance Units to the Participant. On or before the date of grant, the Committee may also determine, in its sole discretion, that Performance Units awarded to a Participant shall become partially or fully vested upon the Participant’s death, total disability (as defined in Article IX) or retirement (as defined in Section 11.02), or upon the Participant’s Termination of Employment prior to the end of the Performance Period but such determination shall not change the date of payment of the awards. Performance Unit awards represent an unfunded promise to pay the Participant the value specified in the award agreement and/or applicable terms and conditions in the future if the conditions associated with the Performance Unit award are satisfied and the Performance Units are not otherwise forfeited prior to the stated date of payment, under the terms and conditions applicable to such award. The provisions of Section 11.07 shall apply to any Performance Units that are intended to qualify as performance-based in accordance with Code Section 162(m) and the regulations thereunder.

12.04.Payment for Performance Units. As soon as practicable following the end of a Performance Period but not later than 90 days after the end of a Performance Period, the Committee shall determine whether the Performance Objectives for the Performance Period have been achieved (or partially achieved to the extent necessary to permit partial vesting at the discretion of the Committee pursuant to Section 12.03). If the Performance Objectives for the Performance Period have been exceeded, the Committee shall determine whether additional Performance Units shall be granted to the Participant pursuant to Section 12.03. Within 90 days after

the end of a Performance Period, provided the Committee determines the Performance Objectives have been achieved or partially achieved pursuant to Section 12.03, if the award agreement specifies that each Performance Unit is deemed to be equivalent to one (1) share of Common Stock, the Company shall pay to the Participant an amount with respect to each vested Performance Unit equal to the Fair Market Value of a share of Common Stock on such payment date or, if the Committee shall so specify at the time of grant, an amount equal to (i) the Fair Market Value of a share of Common Stock on the payment date less (ii) the Fair Market Value of a share of Common Stock on the date of grant of the Performance Unit. If the award agreement specifies a value for each Performance Unit or sets forth a formula for determining the value of each Performance Unit at the time of payment, then within 90 days after the end of a Performance Period, provided the Committee determines the Performance Objectives have been achieved or partially achieved pursuant to Section 12.03, the Company shall pay to the Participant an amount with respect to each vested Performance Unit equal to the Ending Value of the Performance Unit or, if the Committee shall so specify at the time of grant, an amount equal to (i) the Ending Value of the Performance Unit less (ii) the Initial Value of the Performance Unit. Payment shall be made entirely in cash, entirely in Common Stock or in such combination of cash and Common Stock as the Committee shall determine.

12.05.Voting and Dividend Rights. Except as the Committee may otherwise provide, no Participant shall be entitled to any voting rights, to receive any dividends, or to have his or her Performance Unit Account credited or increased as a result of any dividends or other distribution with respect to Common Stock. Notwithstanding the foregoing, to the extent provided or set forth in the award agreement and/or applicable terms and conditions on or before the date of grant of a Performance Unit award, within sixty (60) days after the date of payment of a dividend by the Company on its shares of Common Stock, a Participant’s Performance Unit Account may be credited with additional Performance Units having an aggregate Fair Market Value equal to the dividend per share paid on the Common Stock multiplied by the number of Performance Units credited to the Participant’s account at the time the dividend was declared. Subject to the prior satisfaction of the applicable Performance Objectives, payment of such additional Performance Units shall be made at the same time and in the same manner as the Performance Units to which they relate.

ARTICLE XIII

UNRESTRICTED SHARES

13.01.Award of Unrestricted Shares. The Committee may cause the Company to grant Unrestricted Shares to associates at such time or times, in such amounts and for such reasons as the Committee, in its sole discretion, shall determine. No payment shall be required for Unrestricted Shares.

13.02.Delivery of Unrestricted Shares. The Company shall issue, in the name of each Participant to whom Unrestricted Shares have been granted, stock certificates representing the total number of Unrestricted Shares granted to the associate, and shall deliver such certificates to the Participant on a fixed or objectively determinable date of payment, which shall be set forth at the time of grant.

13.03.Deferred Share Units. The Committee may permit a Participant who has been designated to receive an Unrestricted Share award to elect to receive such Unrestricted Share award in the form of Deferred Share Units.

Any such election must be made on or before December 31 of the calendar year prior to the year the compensation attributable to such award (or any portion of such award) is earned, and shall be irrevocable after such date, and further shall comply with the rules set forth in Section 11.08, which apply to deferral elections, including such rules relating to invalid and valid but incomplete deferral elections. Each “Deferred Share Unit” represents the right to receive a share of Common Stock in the future. At no time shall any assets of the Company be segregated for payment of Deferred Share Units hereunder. Participants who have elected to receive Unrestricted Shares in the form of Deferred Share Units shall at all times have the status of general unsecured

creditors of the Company and shall not have any rights in or against specific assets of the Company. The Plan constitutes a mere promise by the Company to make payments on Deferred Share Units in the future.

After the award of Deferred Share Units to the Participant and prior to the time that shares of Common Stock are transferred to the Participant pursuant to Section 13.04, within sixty (60) days after the date of payment of a dividend by the Company on its shares of Common Stock, the Participant shall be credited with “dividend equivalents” with respect to each outstanding Deferred Share Unit in an amount equal to the amount the Participant would have received as dividends if the Deferred Share Units were actual shares of Common Stock. Such dividend equivalents will be converted into additional Deferred Share Units based on the value of the Common Stock on the dividend payment date, in accordance with the procedures established by the Committee, and paid at the same time and in the same manner as the underlying Deferred Share Units.

13.04.Payment of Deferred Share Units. Deferred Share Units are payable solely in shares of unrestricted Common Stock, and shall be paid in accordance with the terms of delivery under Section 13.03 and this Section 13.04. Shares applicable to such awards shall be transferred to the Participant at the time and in the form as elected by the Participant and as set forth in the terms and conditions applicable to such awards, which shall be either in a single payment or in up to ten (10) installment payments.

If a lump sum distribution is elected, the payment shall be made on the date provided in, and in accordance with, the terms and conditions applicable to the award. If installment distributions are elected, the initial installment shall be paid on the date provided in, and in accordance with, the terms and conditions applicable to the award. Subsequent installments shall be made on each anniversary of the initial installment and shall continue for the duration of the selected distribution period. If the Participant dies prior to the time all shares have been distributed, distribution shall be made to the Participant’s beneficiary or estate on the payment date provided in, and in accordance with, the terms and conditions applicable to the award. A Participant shall have no rights as a shareholder with respect to Deferred Share Units until such time, if any, as shares of Common Stock are transferred to the Participant (or the Participant’s beneficiary or estate, if applicable). Notwithstanding the above, if the Participant is a specified employee and is entitled to receive payment upon Termination of Employment or on a date determinable based on the date of Termination of Employment (and not a pre-determined fixed date or schedule), then, except in the event of the Participant’s death after such Termination of Employment, such payment (or in the case of installments, the first payment) shall be delayed by at least six (6) months after the date of such Participant’s Termination of Employment, to the extent required by Code Section 409A and the regulations thereunder; in this event, subsequent installment payments shall occur on the anniversary of the first delayed installment payment.

Provided that the terms and conditions applicable to a Deferred Share Unit award permit it, a Participant may change the Participant’s distribution election, provided such change in distribution election shall comply with the procedures and rules set forth in Section 11.09 which apply to change in distribution elections, including such rules relating to invalid and valid but incomplete change in distribution elections.

ARTICLE XIV

CLAWBACK

14.01.Clawback. If the Committee determines in good faith either that: (i) if required by applicable law with respect to a Participant or (ii) (x) a Participant engaged in fraudulent conduct or activities relating to the Company, (y) a Participant has knowledge of such conduct or activities or (z) a Participant, based upon the Participant’s position, duties or responsibilities, should have had knowledge of such conduct or activities, the Committee shall have the power and authority under the Plan to terminate without payment all outstanding awards under the Plan. If required by applicable law with respect to a Participant or if a Participant described in (ii) above has received any compensation pursuant to an award granted under the Plan that is based on or results

from such conduct or activities, such Participant shall promptly reimburse to the Company a sum equal to either an amount required by such law or the amount of such compensation paid in respect of the year in which such conduct or activities occurred, as applicable.

ARTICLE XV

ADJUSTMENTS; REPRICING

15.01.Adjustments. Notwithstanding any other provision of the Plan, the Committee shall make or provide for such adjustments to the Plan, to the number and class of shares available thereunder or to any outstanding Options, Stock Appreciation Rights, RSUs, Performance Units or other awards as it shall deem appropriate to prevent dilution or enlargement of rights, including adjustments in the event of changes in the number of shares of outstanding Common Stock by reason of stock dividends, extraordinary cash dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, liquidations and the like. However, any such adjustment with respect to Options and Stock Appreciation Rights shall satisfy the requirements of Reg. §1.409A-1(b)(5)(v)(D) and shall otherwise ensure that such awards continue to be exempt from Code Section 409A, and any such adjustment to awards that are subject to Code Section 409A, including RSUs and Performance Units, shall be made to the extent compliant with Code Section 409A and the regulations thereunder.

15.02.Repricing. Except as provided above in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights without stockholder approval.

ARTICLE XVI

AMENDMENT AND TERMINATION

16.01.Amendment and Termination. The Board may suspend, terminate, modify or amend the Plan, provided that any amendment that would constitute a “material revision” of the Plan within the meaning of New York Stock Exchange Rule 303A(8) shall be subject to the approval of the Company’s stockholders. If the Plan is terminated, the terms of the Plan shall, notwithstanding such termination, continue to apply to awards granted prior to such termination. No suspension, termination, modification or amendment of the Plan may, without the consent of the Participant to whom an award shall theretofore have been granted, materially adversely affect the rights of such Participant under such award, except to the extent any such action is undertaken to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations.

ARTICLE XVII

WRITTEN AGREEMENT

17.01.Written Agreements. Each award of Options, Stock Appreciation Rights, RSUs, Performance Units and Unrestricted Shares shall be evidenced by a written agreement, executed by the Participant and the Company, and containing such restrictions, terms and conditions, if any, as the Committee may require. In the event of any conflict between a written agreement and the Plan, the terms of the Plan shall govern.

ARTICLE XVIII

CHANGE IN CONTROL

18.01.Definition of Change in Control. For purposes of this Plan, a “Change in Control” means, and shall be deemed to have occurred upon, the occurrence of any of the following events:

(a)

Any Person (other than an Excluded Person) becomes, together with all “affiliates” and “associates” (each as defined under Rule 12b-2 of the Act) the “beneficial owner” (as defined under Rule 13d-3 of the Act) of securities representing 33% or more of the combined voting power of the Voting Stock of the Company then outstanding, unless such Person becomes the “beneficial owner” of 33% or more of the combined voting power of such Voting Stock then outstanding solely as a result of an acquisition of such Voting Stock by the Company which, by reducing the Voting Stock of the Company outstanding, increases the proportionate Voting Stock beneficially owned by such Person (together with all “affiliates” and “associates” of such Person) to 33% or more of the combined voting power of the Voting Stock of the Company then outstanding;provided that if a Person shall become the “beneficial owner” of 33% or more of the combined voting power of the Voting Stock of the Company then outstanding by reason of such Voting Stock acquisition by the Company and shall thereafter become the “beneficial owner” of any additional Voting Stock of the Company which causes the proportionate voting power of Voting Stock beneficially owned by such Person to increase to 33% or more of the combined voting power of the Voting Stock of the Company then outstanding, such Person shall, upon becoming the “beneficial owner” of such additional Voting Stock of the Company, be deemed to have become the “beneficial owner” of 33% or more of the combined voting power of the Voting Stock then outstanding other than solely as a result of such Voting Stock acquisition by the Company;

(b)

During any period of 24 consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company (and any new Director, whose election by such Board or nomination for election by the stockholders of the Company was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority of Directors then constituting such Board;

(c)

A reorganization, merger or consolidation of the Company is consummated, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 50% of, respectively, the then-outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the “beneficial owners” of the Voting Stock of the Company outstanding immediately prior to such reorganization, merger or consolidation, (ii) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 33% or more of the voting power of the outstanding Voting Stock of the Company) beneficially owns, directly or indirectly, 33% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board of Directors of the Company at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

(d)

The consummation of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to any corporation with respect to which, immediately following such sale or other disposition, (A) more than 50% of, respectively, the then-outstanding shares of common stock of such corporation and the combined

voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the “beneficial owners” of the Voting Stock of the Company outstanding immediately prior to such sale or other disposition of assets, (B) no Person (but excluding for this purpose any Excluded Person and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the voting power of the outstanding Voting Stock of the Company) beneficially owns, directly or indirectly, 33% or more of, respectively, the then-outstanding shares of common stock of such corporation or the combined voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Board of Directors of the Company at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.

Notwithstanding the foregoing, in no event shall a “Change in Control” be deemed to have occurred (i) as a result of the formation of a Holding Company or (ii) with respect to a Participant, if the Participant is part of a “group,” within the meaning of Section 13(d)(3) of the Act as in effect on the Plan’s effective date, which consummates the Change in Control transaction. In addition, for purposes of the definition of “Change in Control” a Person engaged in business as an underwriter of securities shall not be deemed to be the “beneficial owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty (40) days after the date of such acquisition. “Excluded Person” shall mean (i) the Company; (ii) any of the Company’s subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of the Company, any of its subsidiaries or a Holding Company; or (v) any Person organized, appointed or established by the Company, any of its subsidiaries or a Holding Company for or pursuant to the terms of any plan described in clause (iv). “Person” shall mean any individual composition, partnership, limited liability company, associations, trust or other entity or organization. “Holding Company” shall mean an entity that becomes a holding company for the Company or its businesses as a part of any reorganization, merger, consolidation or other transaction, provided that the outstanding shares of common stock of such entity and the combined voting power of the then-outstanding voting securities of such entity entitled to vote generally in the election of directors is, immediately after such reorganization, merger, consolidation or other transaction, beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the “beneficial owners,” respectively, of the Voting Stock of the Company outstanding immediately prior to such reorganization, merger, consolidation or other transaction in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, consolidation or other transaction, of such outstanding Voting Stock of the Company. “Voting Stock” shall mean securities of the Company entitled to vote generally in the election of the Company’s Board of Directors.

18.02.Effect of Change in Control. In the event that a Participant’s employment or service is terminated by the Company other than for cause during the 24-month period beginning on the date of a Change in Control, (i) Options and Stock Appreciation Rights granted to such Participant which are not yet exercisable shall become fully exercisable; and (ii) any restrictions applicable to any RSUs awarded to such Participant shall be deemed to have been satisfied at target and the Restricted Period, if any, applicable to such RSUs held by such Participant shall be deemed to have expired. Notwithstanding the foregoing, or the provisions of Section 11.06, if the accelerated settlement of any RSU would cause the application of additional taxes under Code Section 409A, such RSU will be settled on the date it would otherwise have been settled in the absence of a Change in Control, unless the transaction constituting the Change in Control falls within the definition of a “change in control event” within the meaning of Code Section 409A and the regulations thereunder.

ARTICLE XIX

MISCELLANEOUS PROVISIONS

19.01.Definitions: Fair Market Value and Cause. “Fair Market Value,” for purposes of this Plan, shall be the closing price of the Common Stock as reported on the principal exchange on which the shares are listed for the date on which the grant, exercise or other transaction occurs, or if there were no sales on such date, the most recent prior date on which there were sales. “Cause,” for purposes of this Plan, shall mean that the Participant (1) was grossly negligent in the performance of the Participant’s duties with the Company (other than a failure resulting from the Participant’s incapacity due to physical or mental illness); (2) has plead “guilty” or “no contest” to or has been convicted of an act which is defined as a felony under federal or state law; or (3) engaged in misconduct in bad faith which could reasonably be expected to materially harm the Company’s business or its reputation. The Participant shall be given written notice by the Company of a termination for Cause, which shall state in detail the particular act or acts or failures to act that constitute the grounds on which the termination for Cause is based.

19.02Awards to Participants Outside the United States. The Committee may modify the terms of any outstanding or new award under the Plan granted to a Participant who is, at the time of grant or during the term of the award, resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such award shall conform to laws, regulations and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad, shall be comparable to the value of such an award to a Participant who is resident or primarily employed in the United States. An award may be modified under this Section 19.03 in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation

19.03.Tax Withholding. The Company shall have the right to require Participants or their beneficiaries or legal representatives to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements, or to deduct from all payments under this Plan amounts sufficient to satisfy all withholding tax requirements. Whenever payments under the Plan are to be made to a Participant in cash, such payments shall be net of any amounts sufficient to satisfy all federal, state and local withholding tax requirements. The Committee may, in its discretion, permit a Participant to satisfy the Participant’s tax withholding obligation either by (i) surrendering shares of Common Stock owned by the Participant or (ii) having the Company withhold from shares of Common Stock otherwise deliverable to the Participant. Shares of Common Stock surrendered or withheld shall be valued at their Fair Market Value as of the date on which income is required to be recognized for income tax purposes. In the case of an award of Incentive Stock Options, the foregoing right shall be deemed to be provided to the Participant at the time of such award.

19.04.Compliance With Section 16(b) and Code Section 162(m). In the case of Participants who are or may be subject to Section 16 of the Act, it is the intent of the Company that the Plan and any award granted hereunder satisfy and be interpreted in a manner that satisfies the applicable requirements of Rule 16b-3 under the Act, so that such persons will be entitled to the benefits of Rule 16b-3 under the Act or other exemptive rules under Section 16 of the Act and will not be subjected to liability thereunder. If any provision of the Plan or any award would otherwise conflict with the intent expressed herein, that provision, to the extent possible, shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any remaining irreconcilable conflict with such intent, such provision shall be deemed void as applicable to Participants who are or may be subject to Section 16 of the Act. If any award hereunder is intended to qualify as performance-based for purposes of Code Section 162(m), the Committee shall not exercise any discretion to increase the payment under such award except to the extent permitted by Code Section 162(m) and the regulations thereunder.

19.05.Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and businesses of the Company. In the event of any of the foregoing, the Committee may, at its discretion prior to the consummation of the transaction, cancel, offer to purchase, exchange, adjust or modify any outstanding awards, at such time and in such manner as the Committee deems appropriate and in accordance with applicable law and the provisions of Article XV.

19.06.General Creditor Status. Participants shall have no right, title or interest whatsoever in or to any investments which the Participant may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant or beneficiary or legal representative of such Participant. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan.

19.07.No Right to Employment. Nothing in the Plan or in any written agreement entered into pursuant to Article XVII, nor the grant of any award, shall confer upon any Participant any right to continue in the employ of the Company or a subsidiary or to be entitled to any remuneration or benefits not set forth in the Plan or such written agreement or interfere with or limit the right of the Company or a subsidiary to modify the terms of or terminate such Participant’s employment at any time.

19.08.No Rights to Awards; No Rights to Additional Payments. No Participant shall have any claim to be granted any award under the Plan, and there is no obligation for uniformity of treatment of Participants. All grants of awards and deliveries of Common Stock, cash or other property under the Plan shall constitute a special discretionary incentive payment to the Participant and shall not be required to be taken into account in computing any contributions to or any benefits under any retirement, profit-sharing, severance or other benefit plan of the Company or any subsidiary or affiliate, unless the Committee expressly provides otherwise in writing.

19.09.Notices. Notices required or permitted to be made under the Plan shall be sufficiently made if sent by registered or certified mail addressed (a) to the Participant at the Participant’s address set forth in the books and records of the Company or its subsidiaries or (b) to the Company or the Committee at the principal office of the Company.

19.10.Severability. In the event that any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

19.11.Governing Law. To the extent not preempted by federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.

19.12.Term of Plan. Unless earlier terminated pursuant to Article XVI hereof, the Plan shall terminate on May 25, 2021.

Appendix B

LIMITED BRANDS, INC.

2011 CASH INCENTIVE COMPENSATION PERFORMANCE PLAN

Limited Brands, Inc., a Delaware corporation (including any successor in name or interest thereto, “Limited Brands”), hereby adopts the Limited Brands, Inc. 2011 Cash Incentive Compensation Performance Plan (the “Plan”) for the purpose of enhancing the Company’s ability to attract and retain highly qualified executive and managerial-level associates and to provide additional financial incentives to such associates to promote the success of the Company and its subsidiaries. Incentive Compensation payable under the Plan to Section 162(m) Executives (as defined below) is intended to constitute qualified “performance-based compensation” for purposes of Section 162(m) of the Code, and the Plan shall be construed consistently with such intention. However, the CompanyELEVENTH, tThe Corporation reserves the right to pay discretionary bonuses,amend, alter, change or other typesrepeal any provision contained in this Certificate of compensation outside of the Plan, including under the Company’s then effective Stock Option and Performance Incentive Plan or otherwise.

1.Definitions.As used herein, the following terms shall have the respective meanings indicated:

(a) “Board” shall mean the Board of Directors of the Company.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor federal internal revenue law, along with related rules, regulations and interpretations.

(c) “Common Stock” shall mean the common stock, $0.50 par value per share, of the Company.

(d) “Committee” shall mean the Compensation Committee of the Board or such other committee or subcommittee appointed by the Board to administer the Plan thatIncorporation, in the case of any actions taken with respect to any Incentive Compensation payable to any Section 162(m) Executive is comprised of not less than two directors of the Company, each of whom shall qualify inmanner now or hereafter prescribed by statue, and all respects as an “outside director” within the meaning of Section 162(m) of the Code.

(e) “Company” shall mean, collectively, Limited Brands and its subsidiaries.

(f) “Incentive Compensation” shall mean, for each Participant, compensation to be paid in the amount determined by the Committee pursuant to Section 6 below.

(g) “Participant” means, with respect to any fiscal year, an associate who is eligible to participate in the Plan for such fiscal year in accordance with Section 3.

(h) “Performance Goal” shall mean the performance goals established by the Committee pursuant to Section 4 hereof.

(i) “Performance Period” shall mean each Spring or Fall selling season or the fiscal year of the Company, or any other period of time (not less than one (1) calendar quarter or more than five (5) years) as will be established by the Committee pursuant to Section 4 of this Plan within which the Performance Goals relating to any award of Incentive Compensationrights conferred on stockholders herein are to be achieved. Any Performance Period may begranted subject to earlier lapse or other modification pursuant to Section 11 of this Plan in the event of Termination without Cause, resignation for Good Reason, Retirement, death or disability of the Participant or a Change in Control.

(j) “Section 162(m) Executive” shall mean any individual who the Committee determines, in its discretion, is or may be a “covered employee” of the Company within the meaning of Section 162(m) of the Code.

2.Administration of the Plan.The Plan shall be administered by the Committee, which shall have full power and authority to construe, interpret and administer the Plan and shall have the exclusive right to establish, adjust, pay or decline to pay Incentive Compensation for each Participant. Such power and authority shall include the right to exercise discretion to reduce by any amount the Incentive Compensation payable to any Participant;reservation.

provided, however, that the exercise of such discretion with respect to any Participant who is a Section 162(m) Executive shall not have the effect of increasing the Incentive Compensation that is payable to any other Section 162(m) Executive. Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Participant and any person claiming any benefit or right under the Plan.

3.Eligibility.All Section 162(m) Executives shall be Participants in the Plan unless the Committee, in its sole and absolute discretion, designates that a Section 162(m) Executive shall not be eligible for participation in the Plan for a fiscal year. In addition, all other associates designated by the Committee or other authorized individuals are eligible to participate in the Plan and shall be Participants.

4.Awards.The Committee shall establish Performance Goals with respect to each Performance Period. The Performance Goals for a Performance Period must be established, in writing, no later than forty-five (45) days after the commencement of any Performance Period based on the Spring or Fall selling season, and, for any other Performance Period, no later than the lesser of either ninety (90) days or the number of days equal to 25 percent of the Performance Period after the commencement of the Performance Period.

The Performance Goals established by the Committee shall be based on specified levels of or changes in any one or more of the following criteria, which may be expressed with respect to the Company or one or more operating units or groups, as the Committee may determine: price of Common Stock, or the common stock of any affiliate, shareholder return, return on equity, return on investment, return on capital, sales productivity, comparable store sales growth, economic profit, economic value added, net income, operating income, gross margin, sales, free cash flow, earnings per share, operating company contribution or market share. Performance Goals for a Performance Period shall include a minimum performance standard below which no payments of Incentive Compensation will be made, and a maximum performance standard in which any performance that exceeds this standard will not increase the payment of Incentive Compensation. These Performance Goals may be based on an analysis of historical performance and growth expectations for the business, financial results of other comparable businesses, and progress towards achieving the strategic plan for the business, or any other factors as determined by the Committee. Performance Goals shall be adjusted by the Committee for the following items, but only to the extent such adjustment would not cause a payment of Incentive Compensation to fail to qualify as performance-based compensation within the meaning of Section 162(m) of the Code:

(i)

all items of gain, loss or expense for the Performance Period determined to be extraordinary or unusual in nature or infrequent in occurrence;

(ii)

all items related to the disposal of a component of an entity or related to a change in accounting principles, as such are defined by generally accepted accounting principles and as identified in the Company’s audited financial statements, notes to such financial statements, in management’s discussion and analysis or any other filings with the Securities and Exchange Commission;

(iii)

impact from changes in accounting policies approved by the Audit Committee of the Board that were not contemplated in the initial Incentive Compensation targets;

(iv)

all items of gain, loss or expense for the Performance Period related to an exit activity as defined under current generally accepted accounting principles;

(v)

all items of gain, loss or expense for the Performance Period related to discontinued operations as defined under current generally accepted accounting principles;

(vi)

any profit or loss attributable to the business operations of any entity acquired or divested by the Company during the Performance Period;

(vii)

write-offs, accelerated depreciation or other operating expenses at the participating subsidiary level related to the testing of a new brand concept, not included in the original Incentive Compensation targets;

(viii)

impacts from unanticipated changes in legal or tax structure or unanticipated changes in jurisdictional tax rates of a participating subsidiary; and

(ix)

changes in applicable tax law.

Annual Incentive Compensation targets shall be established for Participants ranging from 0% to 300% of each Participant’s base salary (provided that the maximum projected adjustment that might be made during the Performance Period in the referenced amount of base salary of a Section 162(m) Executive is included in the initially established Performance Goal formula, so that no adjustment in base salary during the Performance Period could result in the loss of the otherwise available exemption of the Incentive Compensation under Section 162(m) of the Code). In the case of an award of Incentive Compensation to any Section 162(m) Executive, the terms of the objective formula or standard setting such targets must prevent any discretion from being exercised by the Committee to later increase the amount payable that would otherwise be due upon attainment of the targets, but may allow discretion to decrease the amount payable, including discretion that is exercised through the establishment of additional objective or subjective goals. Participants may earn their target Incentive Compensation if the business achieves the pre-established Performance Goals. The target Incentive Compensation percentage for each Participant will be based on the level and functional responsibility of his or her position, size of the business for which the Participant is responsible, and competitive practices. The amount of Incentive Compensation paid to Participants may range from zero to double their targets, based upon the extent to which Performance Goals are achieved or exceeded. Except as otherwise permitted by Section 162(m) of the Code, the minimum level at which a Participant will earn any Incentive Compensation, the level at which a Participant will earn the maximum Incentive Compensation of double the target, and the interpolation guidelines for calculating payments within that range must be established by the Committee, in writing, within forty-five (45) days after the commencement of any Performance Period based on the Spring or Fall selling season, and, for any other Performance Period, no later than the lesser of either ninety (90) days or the number of days equal to 25 percent of the Performance Period after the commencement of the Performance Period.

5.Committee Certification.As soon as reasonably practicable after the end of each Performance Period, and prior to the payment of any Incentive Compensation to a Section 162(m) Executive, the Committee shall certify, in writing, that the Performance Goals for such Performance Period were satisfied.

6.Payment of Incentive Compensation.The selection of Participants to whom Incentive Compensation shall actually be paid shall be conditioned upon each Participant’s continued employment with the Company through the last day of the Performance Period. The amount of the Incentive Compensation actually paid to a Participant for a Performance Period shall be such amount as determined by the Committee in its sole discretion, including zero, provided that the maximum aggregate actual payment for all Incentive Compensation awards payable to any Participant in any fiscal year of the Company shall be $15,000,000. For the purpose of calculating this fiscal year limit, the Award for any Performance Period of less than one year is deemed to be payable on the last day of the Performance Period, and the Award for any Performance Period of over one year is deemed to be payable ratably over the Performance Period. If, after amounts have been earned with respect to Incentive Compensation awards, the payment of such amounts is deferred, any additional amounts attributable to earnings during the deferral period shall be disregarded for purposes of this limit. Subject to the last sentence of this Section 6 and to Section 11 below, Incentive Compensation shall be paid in cash at such times and on such terms as are determined by the Committee in its sole and absolute discretion, but in no event later than sixty (60) days following the end of the Performance Period to which such Incentive Compensation relates. To the extent provided by the Committee, in its sole discretion, the annual Incentive Compensation may be paid in the form of shares of Common Stock under the Company’s then-effective Stock Option and Performance Incentive Plan, or may be deferred under the Company’s then-effective Supplemental Retirement Plan, subject to the terms and conditions of such plans.

7.No Right to Bonus or Continued Employment; Clawback.

(a) Neither the establishment of the Plan, the provision for or payment of any amounts hereunder, nor any action of the Company, the Board or the Committee with respect to the Plan shall be held or construed to confer upon any person (a) any legal right to receive, or any interest in, an Incentive Compensation or any other benefit under the Plan or (b) any legal right to continue to serve as an officer or associate of the Company or any affiliate of the Company.

(b) If the Committee determines in good faith either that: (i) if required by applicable law with respect to a Participant or (ii) (x) a Participant engaged in fraudulent conduct or activities relating to the Company, (y) a Participant has knowledge of such conduct or activities or (z) a Participant, based upon the Participant’s position, duties or responsibilities, should have had knowledge of such conduct or activities, the Committee shall have the power and authority under the Plan to terminate without payment all outstanding incentive awards under the Plan. If required by applicable law with respect to a Participant or if a Participant described in (ii) above has been paid Incentive Compensation that is based on or results from such conduct or activities, such Participant shall promptly reimburse to the Company a sum equal to either an amount required by such law or the amount of such Incentive Compensation paid in respect of the year in which such conduct or activities occurred, as applicable.

8.Withholding.The Company shall have the right to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any applicable federal, state, local or foreign withholding tax requirements imposed with respect to the payment of any Incentive Compensation. The Company shall also have the right to withhold from Incentive Compensation any amounts that may be required to be withheld from other taxable noncash compensation or taxable reimbursements payable to a Participant that may themselves have not been subjected to withholding at the time of payment.

9.Nontransferability.Except as expressly provided by the Committee, the rights and benefits under the Plan are personal to the Participant and shall not be subject to any voluntary or involuntary alienation, assignment, pledge, transfer or other disposition.

10.Unfunded Plan.The Company shall have no obligation to reserve or otherwise fund in advance any amounts that are or may in the future become payable under the Plan. Any funds that the Company, acting in its sole and absolute discretion, determines to reserve for future payments under the Plan may be commingled with other funds of the Company and need not in any way be segregated from other assets or funds held by the Company. A Participant’s rights to payment under the Plan shall be limited to those of a general unsecured creditor of the Company.

11.Adoption, Amendment, Suspension and Termination of the Plan.

(a) Subject to the approval of the Plan by the Company’s stockholders, the Plan shall be effective for payments made with respect to Performance Periods that commence during the Company’s 2011 fiscal year and thereafter and shall continue in effect until terminated as provided below;provided, however, that no payment of Incentive Compensation may be paid to Section 162(m) Executives prior to approval of the Plan at the Company’s 2011 Annual Meeting of Stockholders. If the Plan is not approved by stockholders at the Company’s 2011 Annual Meeting of Stockholders, any awards granted under the Plan to Section 162(m) Executives shall be null and void and of no effect.

(b) Subject to the limitations set forth in paragraph (c) below, the Board may at any time suspend or terminate the Plan and may amend it from time to time in such respects as the Board may deem advisable, subject, with respect to any Section 162(m) Executive, to any requirement for stockholder approval imposed by applicable law, including Section 162(m) of the Code.

(c) No amendment, suspension or termination of the Plan shall, without the consent of the person affected thereby, materially, adversely alter or impair any rights or obligations under any Incentive Compensation previously awarded under the Plan, except to the extent any such action is undertaken to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations.

12.Governing Law.The validity, interpretation and effect of the Plan, and the rights of all persons hereunder, shall be governed by and determined in accordance with the laws of the State of Ohio, other than the choice of law rules thereof.

ADMITTANCE SLIP

20112012 ANNUAL MEETING OF STOCKHOLDERS

Date, Time and Place of Meeting:

 

Date:		Thursday, May 26, 201124, 2012
Time:		9:00 a.m., Eastern Time
Place:		Limited Brands, Inc. Three Limited Parkway Columbus, Ohio 43230

Attending the Meeting:

Stockholders who plan to attend the meeting in person must bring this admittance slip and a photo identification to gain access. Because of necessary security precautions, bags, purses and briefcases may be subject to inspection. To speed the admissions process, stockholders are encouraged to bring only essential items. Cameras, camcorders or video taping equipment are not allowed. Photographs or video taken by Limited Brands at the meeting may be used by Limited Brands. By attending, you waive any claim or rights to these photographs.

For more information about attending the annual meeting, please visit the website athttp://www.limitedbrands.com/investors or contact Limited Brands Investor Relations at (614) 415-7073.

 

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LIMITED BRANDS, INC. INC CAROL DRESKA THREE LIMITED PARKWAY P.O. BOX 16000 COLUMBUS, OH 43230						VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DATED

The Board of Directors recommends you vote FOR the following:

1.

Election of Directors

For

Against

Abstain

01

Donna A. James

¨

¨

¨

02

Jeffrey H. Miro

¨

¨

¨

The Board of Directors recommends you vote 1 YEAR on the following proposal:

1 year

2 years

3 years

Abstain

03

Raymond Zimmerman

¨

¨

¨

6

The advisory vote on the frequency of future advisory votes on executive compensation

¨

¨

¨

¨

The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5.

For

Against

Abstain

2

The ratification of the appointment of the independent registered public accountants

¨

¨

¨

The Board of Directors recommends you vote AGAINST the following proposal:

For

Against

Abstain

3

The approval of the 2011 Stock Option Performance and Incentive Plan

¨

¨

¨

7

The stockholder proposal

¨

¨

¨

4

The approval of the 2011 Cash Incentive Compensation Performance Plan

¨

¨

¨

NOTE: Such other business as may properly come before the meeting or any adjournment thereof.

5

The advisory vote on executive compensation

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¨

¨

For address change/comments, mark here. (see reverse for instructions)

¨

Yes

No

Please indicate if you plan to attend this meeting

¨

¨

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

0000099677_1        R1.0.0.11699

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The Board of Directors recommends you vote FOR
the following:
1.     Election of Directors				For		Against		Abstain
01    James L. Heskett				¨		¨		¨
02    Allan R. Tessler				¨		¨		¨
03    Abigail S. Wexner				¨		¨		¨
The Board of Directors recommends you vote FOR
the following proposals:
2.     Ratification of the appointment of				For		Against		Abstain
independent registered public
accountants				¨		¨		¨
3.     Advisory vote to approve named executive				¨		¨		¨
officer compensation
4.     Proposal to amend our Certificate of				¨		¨		¨
Incorporation to remove supermajority
voting requirements
For address change/comments, mark here (see reverse for instructions)				¨
Please indicate if you plan to attend this meeting				Yes		No
				¨		¨

The Board of Directors recommends you vote AGAINST
the following proposals:
5.     Stockholder proposal		For		Against		Abstain
regarding an independent
board chairman		¨		¨		¨
6.     Stockholder proposal		¨		¨		¨
regarding our classified
board
7.     Stockholder proposal		¨		¨		¨
regarding special meetings
of stockholders
8.     Stockholder proposal		¨		¨		¨
regarding share retention policy
Note:Such other business as may		¨		¨		¨
properly come before the meeting
or any adjournment thereof.

 

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

 

Signature [PLEASE SIGN WITHIN BOX]		Date

Signature [Joint Owners]		Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The COMBINED Annual Report & Proxy Statement is/are available atwww.proxyvote.com.

 

 

 

LIMITED BRANDS, INC.

This Proxy is Solicited on behalf of the Board of Directors for the Annual Meeting of Stockholders on May 24, 2012

The undersigned hereby appoints Leslie H. Wexner, Stuart B. Burgdoerfer, and Martyn R. Redgrave, and each of them, proxies, with full power of substitution, to vote for the undersigned all shares of Common Stock of Limited Brands, Inc. which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held on May 24, 2012 at 9:00 a.m., Eastern Time, and at any adjournments thereof, upon the matters described in the accompanying Proxy Statement and upon any other business that may properly come before the meeting or any adjournments thereof.

SAID PROXIES ARE DIRECTED TO VOTE AS MARKED ON THE REVERSE SIDE AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THIS MEETING OR ANY ADJOURNMENTS THEREOF.

Address change/comments:

LIMITED BRANDS, INC.

This Proxy is Solicited on behalf of the Board of Directors for the Annual Meeting of Stockholders on May 26, 2011 The undersigned hereby appoints Leslie H. Wexner and Martyn R. Redgrave, and each of them, proxies, with full power of substitution, to vote for the undersigned all shares of Common Stock of Limited Brands, Inc. which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders to be held on May 26, 2011 at 9:00 a.m., Eastern Time, and at any adjournments thereof, upon the matters described in the accompanying Proxy Statement and upon any other business that may properly come before the meeting or any adjournments thereof. SAID PROXIES ARE DIRECTED TO VOTE AS MARKED ON THE REVERSE SIDE AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THIS MEETING OR ANY ADJOURNMENTS THEREOF.

Address change/comments:

(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)

(Continued and to be signed on reverse side)

0000099677_2        R1.0.0.11699If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)

(Continued and to be signed

on reverse side)