EMPLOYMENT AGREEMENT

1.           

Employment and Term . (a) The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, as its President and Chief Executive Officer, subject to the terms and conditions set forth herein. The term of this agreement shall commence on August 17, 2009 (the “Commencement Date”) and shall end on January 31, 2013 (the “Initial Term”), unless further extended or sooner terminated as hereinafter provided. Unless the Company notifies Executive or Executive notifies the Company on or before January 31, 2012, with regard to the Initial Term, and any January 31 of any year thereafter, with regard to renewal terms, that the term shall not be extended, then as of such date, the term of the agreement shall be automatically extended for an additional year. The Initial Term together with any renewal terms are hereinafter referred to as the “Employment Period”. If the fiscal year of the Company shall end on a day other than January 31, then the Employment Period shall end on the last day of the fiscal year of the Company closest to January 31. (b) Within 30 days of the Commencement Date, Executive shall be elected to the Board of Directors of the Company (the “Board”).

2.     

Position and Duties . (a) Executive shall serve as the President and Chief Executive Officer of the Company, reporting only to the Board. Executive shall have such responsibilities, duties, and authority as are commensurate with his status as President and Chief Executive Officer as may from time to time be determined or directed by the Board. Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company and its respective subsidiaries and affiliates; provided, however, that the Executive may serve on the boards of directors of other for-profit corporations, if such service does not conflict with his duties hereunder or his

fiduciary duty to the Company and the Board consents in advance to such service, which consent shall not be unreasonably withheld. It is further understood and agreed that nothing herein shall prevent the Executive from managing his passive personal investments (subject to applicable Company policies on permissible investments), and (subject to applicable Company policies) participating in charitable and civic endeavors, so long as such activities do not interfere in more than a de minimis manner with the Executive’s performance of his duties hereunder.

(b) Upon the request of the Board, the Executive shall also serve as an officer or director of subsidiaries and affiliates of the Company.

3.     

Place of Performance . (a) In connection with his employment by the Company, Executive shall be based at the principal executive offices of the Company in the New York metropolitan area, or such other place in the United States to which the Company may hereafter relocate its principal executive offices. In the event of such relocation outside of the New York metropolitan area, the Company will pay the reasonable costs of the relocation of the principal residence of Executive, and provide such other relocation assistance as the Company then provides to its comparably situated senior executives. (b) Within six months of the Commencement Date, Executive shall relocate his principal residence to the New York metropolitan area. The Company shall reimburse Executive for the expenses he incurs in such relocation pursuant to the provisions of its relocation policy applicable to senior executives, including reimbursement of reasonable temporary living expenses for up to six months and reimbursement of reasonable closing costs in connection with the purchase of one residence in the New York metropolitan area. (c) Any relocation undertaken pursuant to the provisions of this section shall be in accordance with the relocation policy of the Company applicable to senior executives, and any payments to Executive shall be made no later than the time specified in Section 12(c).

4.     

Compensation . As full compensation for the services of Executive hereunder, and subject to all of the provisions hereof:

(a)     

During the Employment Period, the Company shall pay Executive a base salary at such rate per year as may be fixed by the Compensation and Management Resources Committee of the Board (the “Compensation Committee”) from time to time, but in no event at a rate of less than $1,100,000 per year, to be paid in substantially equal monthly installments, in accordance with the normal payroll practices of the Company (the "Base Salary").

(b)     

During the Employment Period, Executive shall be entitled to participate in all bonus, incentive, and equity plans that are maintained by the Company from time to time during the Employment Period for its comparably situated

senior executives in accordance with the terms of such plans at the time of participation. The Company may, during the Employment Period, amend or terminate any such plan, to the extent permitted by the respective plan, if such termination or amendment applies to all comparably situated senior executives of the Company and does not result in a proportionally greater reduction in the rights or benefits of Executive as compared with any other comparably situated senior executives of the Company. During each year of the Employment Period, the annual bonus payable to Executive at target under the Annual Incentive Compensation Plan (the “AICP”) shall be 125 percent of Executive's then-current Base Salary. The bonus payable to Executive at target under the Long-Term Incentive Compensation Plan (the “LTIP”) for any three-year performance period shall be 90 percent of Executive’s Base Salary at the beginning of such performance period. Executive shall participate, on a pro rata basis, in the 2007-2009, 2008-2010, and 2009-2011 performance periods under the LTIP. Any bonuses shall be paid to the Executive in accordance with the terms of the applicable plans, but in no event later than two and one-half months following the end of the fiscal year of the Company in which any such bonus is earned. Notwithstanding the foregoing, for the fiscal year of the Company ending January 30, 2010, Executive’s annual bonus shall not be paid pursuant to the AICP, and Executive shall not be a participant therein. Rather, Executive shall be paid, no later than two and one-half months following January 30, 2010, a pro-rated annual bonus for the period from the Commencement Date to January 30, 2010 calculated as if Executive were a participant in the AICP, but in no event less than an amount equal to 125 percent of Base Salary paid to Executive for such period.

(c)     

During the Employment Period, Executive shall be eligible to participate in all pension, welfare, and fringe benefit plans, as well as perquisites, maintained by the Company from time to time for its comparably situated senior executives in accordance with their respective terms as in effect from time to time. These shall include (i) Company-paid life insurance in the amount of Executive’s annual Base Salary, (ii) long-term disability insurance coverage of $25,000 per month; (iii) annual out-of-pocket medical expense reimbursement of up to $7,500 per year; (iv) reimbursement of financial planning expense of up to $15,000 in the first year of the Employment Period and up to $7,500 per year thereafter; and (v) participation in the Supplemental Executive Retirement Plan (prorated for any partial plan year included in the Employment Period). Subject to Section 12(c) hereof, for the period from the Commencement Date to the date on which Executive is eligible to participate in the medical and dental insurance plans of the Company, the Company shall reimburse Executive for the difference between the monthly cost of participation in the Company’s medical and dental insurance plans and the amount Executive pays to his former employer for continued medical and dental insurance coverage under COBRA.

(d)           

During the Employment Period, Executive shall be entitled to receive reimbursement for all reasonable and customary expenses incurred by him in performing services hereunder, including all travel and living expenses while away from home on business at the request of the Company, provided such expenses are incurred and accounted for in accordance with the Company's applicable policies and procedures.

(e)     

Executive shall be entitled to 20 vacation days in each calendar year, pro- rated for any partial year. Unused vacation days shall be forfeited.

(f)     

During the Employment Period, Executive shall be eligible to receive stock option grants as may be determined from time to time by the Compensation Committee and subject to the provisions of the applicable stock option and award plan of the Company. To the extent permissible under the terms of such applicable plan, all stock options that may be granted to Executive during the Employment Period shall become immediately exercisable upon a change in control of the Company (as defined in the stock option and award plan of the Company under which such options are granted).

(g)     

During the Employment Period, Executive shall be eligible to receive grants of restricted stock or restricted stock units as may be determined from time to time by the Compensation Committee and subject to the provisions of the applicable stock option and award plan of the Company. To the extent permissible under the terms of such applicable plan, all restricted stock and restricted stock units that may be granted to Executive during the Employment Period shall become immediately vested upon a change in control of the Company (as defined in such applicable plan).

(h)     

Subject to Section 12(c) hereof, the Company shall reimburse Executive the reasonable legal fees (based on hourly rates) and disbursements incurred by him in connection with negotiating and preparing this employment agreement or any amendment hereto, provided that in no event shall the amount of such reimbursement exceed $15,000.

(i)     

Subject to Section 12(c) hereof, during the Employment Period, the Company shall reimburse Executive the costs associated with an automobile of a type to be reasonably agreed upon by the Company and Executive, such costs to include monthly lease payments, garaging, insurance, fuel, and maintenance; provided, however, that the total amount of such payments shall not exceed $40,000 per year.

(j)     

Subject to Section 12(c) hereof, during the Employment Period, the Company shall reimburse Executive for reasonable costs which he incurs for use of a car service for transportation in the New York metropolitan area.

(k)     

Within 30 days of his commencement of employment, Executive shall be granted 100,000 shares of restricted stock pursuant to, and subject to the provisions of, the Foot Locker 2007 Incentive Stock Plan (the “2007 Stock Plan”) and the terms of a restricted stock agreement in the Company’s usual form, such shares of restricted stock to become unrestricted on January 31, 2013, subject to the Executive’s continued employment by the Company as its Chief Executive Officer through such date.

(l)     

Within 30 days of his commencement of employment, Executive shall be granted nonqualified stock options under the 2007 Stock Plan to purchase 300,000 shares of the Company’s Common Stock (par value $.01 per share) at fair market value on the date of grant, as defined in such plan, such options to vest in three equal installments on the first, second, and third anniversary of the grant date, subject to the Executive’s continued employment by the Company as its Chief Executive Officer through each of such dates.

(m)     

As a bonus in connection with the execution of this contract and an inducement for Executive to commence employment with the Company: (i) Executive shall be paid, subject to withholding, $2,000,000, as follows: (A) $1,000,000 within 30 days of his commencement of employment with the Company; (B) $500,000 on the first anniversary of the Commencement Date, subject to Executive’s continued employment by the Company as its Chief Executive Officer through such date; and (C) $500,000 on the second anniversary of the Commencement Date, subject to Executive’s continued employment by the Company as its Chief Executive Officer through such date; (ii) within 30 days of his commencement of employment, Executive shall be granted 400,000 shares of restricted stock pursuant to, and subject to the provisions of, the 2007 Stock Plan and the terms of a restricted stock agreement in the Company’s usual form, such shares of restricted stock to become unrestricted as follows: 100,000 shares on January 31, 2011, 100,000 shares on January 31, 2012, and 200,000 shares on January 31, 2013, subject to the Executive’s continued employment by the Company as its Chief Executive Officer through such dates; and (iii) within 30 days of his commencement of employment, Executive shall be granted nonqualified stock options under the 2007 Incentive Stock Plan to purchase 300,000 shares of the Company’s Common Stock (par value $.01 per share) at fair market value on the date of grant, as defined in such plan, such options to vest as follows: 150,000 options on the six-month anniversary of the date of grant and 150,000 options on the one-year anniversary of the date of grant, subject to the Executive’s continued employment by the Company as its Chief Executive Officer though such dates.

(n)     

As used herein, “comparably situated senior executives” shall mean corporate officers holding the position of Senior Vice President or higher.

5.     

Termination .

(a)     

The Employment Period shall terminate upon the earliest of the following:

(i)        

the death of Executive;

(ii)     

if, as a result of the incapacity of Executive due to physical or mental illness, Executive shall have been absent from his duties hereunder on a full time basis for 180 days, and within 30 days after written notice of termination is given (which may occur before or after the end of such 180 day period) he shall not have returned to the performance of his duties hereunder on a full time basis; or

(iii)     

if the Company terminates the employment of Executive hereunder for Cause. For purposes of this agreement, the Company shall have "Cause" to terminate the employment of Executive hereunder upon (A) the refusal or willful failure by the Executive to substantially perform his duties; (B) with regard to the Company or any of its subsidiaries or affiliates or any of their assets or businesses, the Executive’s dishonesty, willful misconduct, misappropriation, breach of fiduciary duty, or fraud; (C) the willful breach by Execu